Semi-Annual Report 2012 of CIMC
CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD.
(Incorporated in the People’s Republic of China)
SEMI-ANNUAL REPORT 2012
I. Important Notes
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 we shall assume individual and joint liabilities for the authentication, accuracy and
integrity of the contents of this report.
All directors attended the board session for reviewing this report.
The financial report for the first half of 2012 has not been audited by a CPAs firm.
Mr. Li Jianhong, Principal of the Company, Mr. Jin Jianlong, Person-in-charge of the accounting work and
Person-in-charge of the accounting organ (Principal of accounting), hereby declare that the financial report
enclosed in this semi-annual report is true and complete.
English Translation for Reference Only. Should there be any discrepancy between the two versions, the Chinese
version shall prevail.
II. Company Profile
（I）Basic information
A-share code 000039 B-share code 200039
A-share abbreviation ZJJT B-share abbreviation ZJB
Stock exchange listed with Shenzhen Stock Exchange
Legal Chinese name of the
中国国际海运集装箱（集团）股份有限公司
Company
Abbr. of the legal Chinese
中集集团
name of the Company
Legal English name of the
CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD
Company
Abbr. of the legal English
CIMC
name of the Company
Legal representative of the
Li Jianhong
Company
R&D Center of CIMC, No. 2 Gangwan Avenue, Shekou, Nanshan District, Shenzhen, Guangdong
Registered address
Province, P.R.C
Postal code for the registered
518067
address
R&D Center of CIMC, No. 2 Gangwan Avenue, Shekou, Nanshan District, Shenzhen, Guangdong
Office address
Province, P.R.C
Postal code for the office
518067
address
Internet website of the
http://www.cimc.com
Company
Email address shareholder@cimc.com
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Semi-Annual Report 2012 of CIMC
（II）For contact
Company Secretary Securities Affairs Representative
Name Yu Yuqun Wang Xinjiu
R&D Center of CIMC, No. 2 Gangwan R&D Center of CIMC, No. 2 Gangwan
Contact address Avenue, Shekou, Nanshan District, Avenue, Shekou, Nanshan District,
Shenzhen, Guangdong Province, P.R.C Shenzhen, Guangdong Province, P.R.C
Tel. （86）755-2669 1130 （86）755-2680 2706
Fax （86）755-2682 6579 （86）755-2681 3950
E-mail shareholder@cimc.com shareholder@cimc.com
（III）About information disclosure and where the semi-annual report is placed
Newspapers designated by the Company for China Securities Journal, Securities Times, Shanghai Securities News and Hongkong
information disclosure Ta Kung Pao
Internet website designated by CSRC for
http://www.cninfo.com.cn
disclosing the semi-annual report
Where the semi-annual report is placed Company Secretary Office and Financial Management Dept.
III. Financial and Business Highlights
（I）Major accounting data and financial indexes
Any retrospective adjustment in previous financial statements?
□ Yes √ No □ Inapplicable
Major accounting data
Major accounting data Reporting period (Jan.-Jun.) Same period of last year Increase/decrease (%)
Gross operating revenues (RMB’000) 27,364,446.00 36,478,098.00 -24.98%
Operating profit (RMB’000) 1,439,124.00 3,729,782.00 -61.42%
Total profit (RMB’000) 1,493,051.00 3,817,519.00 -60.89%
Net profit attributable to shareholders of
933,710.00 2,807,629.00 -66.74%
the Company (RMB’000)
Net profit attributable to shareholders of
the Company after deducting non-recurring 906,470.00 2,798,284.00 -67.61%
gains and losses (RMB’000)
Net cash flow from operating activities
-2,107,043.00 -4,161,444.00 -49.37%
(RMB’000)
As at the end of this
As at the end of last year Increase/decrease (%)
reporting period
Total assets (RMB’000) 65,231,747.00 64,361,714.00 1.35%
Owners’ equity attributable to shareholders
18,415,496.00 18,633,154.00 -1.17%
of the Company (RMB’000)
Share capital (share) 2,662,396,051.00 2,662,396,051.00 0%
Major financial indexes
Major financial indexes Reporting period (Jan.-Jun.) Same period of last year Increase/decrease (%)
Basic EPS (RMB Yuan/share) 0.3507 1.0545 -66.74%
Diluted EPS (RMB Yuan/share) 0.3495 1.0545 -66.86%
Basic EPS after deducting non-recurring
0.3405 1.051 -67.6%
gains and losses (RMB Yuan/share)
Fully diluted ROE（%） 5.07% 15.07% -10%
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Semi-Annual Report 2012 of CIMC
Weighted average ROE（%） 4.93% 16.19% -11.26%
Fully diluted ROE after deducting
4.92% 15.02% -10.1%
non-recurring gains and losses（%）
Weighted average ROE after deducting
4.79% 16.14% -11.35%
non-recurring gains and losses（%）
Net cash flow per share from operating
-0.7914 -1.563 -49.37%
activities (RMB Yuan/share)
As at the end of this
As at the end of last year Increase/decrease (%)
reporting period
Net assets per share attributable to
shareholders of the Company (RMB 6.9169 6.9986 -1.17%
Yuan/share)
Liability/asset ratio（%） 68.2% 66.42% 1.78%
（II）Accounting data differences under the domestic and overseas accounting standards
1. Net profit and net asset differences between financial reports disclosed according to the international and
Chinese accounting standards respectively
√ Applicable □ Inapplicable
Unit: RMB’000
Net profit attributable to shareholders of listed Owners’ equity attributable to shareholders of
company listed company
As at the end of this As at the beginning of
Reporting period Same period of last year
reporting period this reporting period
As per Chinese accounting
933,710.00 2,807,629.00 18,415,496.00 18,633,154.00
standards
Items and amounts adjusted in accordance with international accounting standards:
Other 557.00 2,745.00 -4,771.00 -5,328.00
As per international
934,267.00 2,810,374.00 18,410,725.00 18,627,826.00
accounting standards
2. Net profit and net asset differences between financial reports disclosed according to the overseas and
Chinese accounting standards respectively
□ Applicable √ Inapplicable
3. Notes to accounting data differences under the domestic and overseas accounting standards
Mainly amortization of the revaluation surplus of fixed assets and intangible assets in previous years
（III）Items of non-recurring gains and losses
√Applicable □Inapplicable
Items Jan.-Jun. 2012 (RMB’000)
Gains and losses on disposal of non-current assets 4,705.00
Government grants recognized in the current year, except for those acquired in the ordinary
course of business or granted at certain quotas or amounts according to the country’s unified 36,027.00
standards
Capital occupation fees received from non-financial enterprises that are included in current
4,878.00
gains and losses
Gains and losses on fair value changes of transactional financial assets and liabilities, and
investment gains on disposal of transactional financial assets and liabilities and
-24,854.00
available-for-sale financial assets, except for the effective hedging business related to the
Company’s normal operation
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Semi-Annual Report 2012 of CIMC
Other non-operating incomes and expenses besides the items above 13,195.00
Minority interests effects -2,570.00
Income tax effects -4,141.00
Total 27,240.00
IV. Changes in Share Capital and Particulars about Shareholders
（I）Changes in share capital
1. Statement of changes of shares
√Applicable □Inapplicable
Before the change Increase/decrease (+, -) After the change
Capitaliz
Issuan
ation of
Proportion ce of Bonus Subtot Proportio
Number public Others Number
(%) new shares al n (%)
reserve
shares
fund
I. Shares subject to trading
372,826.00 0.01% 0.00 0.00 0.00 0.00 0.00 372,826.00 0.01%
moratorium
1. State-owned shares 0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
2. State-owned legal person
0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
shares
3. Other domestic shares 0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
Including: Shares held by
domestic non-state-owned 0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
legal persons
Shares held by
0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
domestic individuals
4. Shares held by overseas
0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
shareholders
Including: Shares held by
0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
overseas legal persons
Shares held by
0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
overseas individuals
5. Shares held by senior
372,826.00 0.01% 0.00 0.00 0.00 0.00 0.00 372,826.00 0.01%
management staff
II. Shares not subject to
2,662,023,225.00 99.99% 0.00 0.00 0.00 0.00 0.00 2,662,023,225.00 99.99%
trading moratorium
1. Ordinary shares
1,231,544,516.00 46.26% 0.00 0.00 0.00 0.00 0.00 1,231,544,516.00 46.26%
denominated in RMB
2. Domestically listed foreign
1,430,478,709.00 53.73% 0.00 0.00 0.00 0.00 0.00 1,430,478,709.00 53.73%
shares
3. Overseas listed foreign
0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
shares
4. Others 0.00 0% 0.00 0.00 0.00 0.00 0.00 0.00 0%
III. Total shares 2,662,396,051.00 100% 0.00 0.00 0.00 0.00 0.00 2,662,396,051.00 100%
2. Changes of shares subject to trading moratorium
□ Applicable √ Inapplicable
（II）Issuance and listing of securities
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Semi-Annual Report 2012 of CIMC
1. Securities issues in the previous three years
□Applicable √Inapplicable
2. Changes of the Company’s share number and structure, as well as the corresponding changes in its
asset-liability structure
□Applicable √Inapplicable
3. Existing employee shares
□Applicable √Inapplicable
（III）Shareholders and actual controller
1. Total number of shareholders at the end of the reporting period
The Company had 193,998.00 shareholders in total at the end of the reporting period, including 158,887 shareholders in A shares,
and 35,111 shareholders in B shares.
2. Shareholding of the top ten shareholders
Particulars about shares held by the top ten shareholders
Number of Pledged or frozen shares
shares held
Name of shareholder (full Nature of Shareholding Total shares held
subject to Status of Number of
name) shareholder percentage (%) at the period-end
trading shares shares
moratorium
CHINA MERCHANTS Foreign
(CIMC) INVESTMENT corporation 25.54% 679,927,917.00 0.00 - -
LIMITED
COSCO CONTAINER Foreign
16.23% 432,171,843.00 0.00 - -
INDUSTRIES LIMITED corporation
COSCO CONTAINER Foreign
5.57% 148,320,037.00 0.00 - -
INDUSTRIES LIMITED corporation
CMBLSA RE FTIF Foreign
TEMPLETON ASIAN corporation 3.42% 91,120,810.00 0.00 - -
GRW FD GTI 5496
LONG HONOUR Foreign
0.95% 25,322,106.00 0.00 - -
INVESTMENTS LIMITED corporation
GUOTAI JUNAN Foreign
SECURITIES(HONGKON corporation 0.91% 24,329,264.00 0.00 - -
G) LIMITED
NEW CHINA LIFE
INSURANCE CO.,
LTD–DIVIDEND Domestic non
DISTRIBUTION–INDIVID state-owned 0.9% 23,916,943.00 0.00 - -
UAL corporation
DIVIDEND-018L-FH002
SHEN
CHINA CONSTRUCTION
Domestic
BANK－CHINA
non-state-owned 0.7% 18,769,117.00 0.00 - -
ADVANTAGE GROWTH
corporation
STOCK FUND
BANK OF CHINA–E
FUND SHENZHEN Domestic
STOCK EXCHANGE 100 non-state-owned 0.55% 14,734,716.00 0.00 - -
EXCHANGE TRADED corporation
FUND
TEMPLETON EMERGING Foreign
MARKETS INVESTMENT corporation 0.48% 12,801,432.00 0.00 - -
TRUST
BBH A/C VANGUARD Foreign
EMERGING MARKETS corporation 0.44% 11,839,498.00 0.00 - -
STOCK INDEX FUND
Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium
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Semi-Annual Report 2012 of CIMC
√Applicable □Inapplicable
Number of shares held Type and number of shares
not subject to trading
Name of shareholder
moratorium at the Type Number
period-end
CHINA MERCHANTS (CIMC) INVESTMENT
679,927,917.00 B-share 679,927,917.00
LIMITED
COSCO CONTAINER INDUSTRIES LIMITED 432,171,843.00 A-share 432,171,843.00
COSCO CONTAINER INDUSTRIES LIMITED 148,320,037.00 B-share 148,320,037.00
CMBLSA RE FTIF TEMPLETON ASIAN GRW
91,120,810.00 B-share 91,120,810.00
FD GTI 5496
LONG HONOUR INVESTMENTS LIMITED 25,322,106.00 B-share 25,322,106.00
GUOTAI JUNAN SECURITIES(HONGKONG)
24,329,264.00 B-share 24,329,264.00
LIMITED
NEW CHINA LIFE INSURANCE CO.,
LTD–DIVIDEND
23,916,943.00 A-share 23,916,943.00
DISTRIBUTION–INDIVIDUAL
DIVIDEND-018L-FH002 SHEN
CHINA CONSTRUCTION BANK－CHINA
18,769,117.00 A-share 18,769,117.00
ADVANTAGE GROWTH STOCK FUND
BANK OF CHINA–E FUND SHENZHEN
STOCK EXCHANGE 100 EXCHANGE 14,734,716.00 A-share 14,734,716.00
TRADED FUND
TEMPLETON EMERGING MARKETS
12,801,432.00 B-share 12,801,432.00
INVESTMENT TRUST
BBH A/C VANGUARD EMERGING MARKETS
11,839,498.00 B-share 11,839,498.00
STOCK INDEX FUND
Explanation on associated relationship among the top ten shareholders or/and acting-in-concert:
Note 1: Association relationship and acting-in-concert person relation exist between COSCO Container Industries Limited and Long
Honour Investments Limited, where COSCO Container Industries Limited is subordinate wholly-owned subsidiary of COSCO
Pacific Limited under COSCO Group; Long Honour Investments Limited is subordinate wholly-owned subsidiary of COSCO Hong
Kong (hereinafter refer to as “COSCO Hong Kong”)under COSCO Group; These two and other shareholders are not
acting-in-concert person specified in “Regulatory Provisions on Disclosure of Information on Shareholding Change of Shareholders
for Listed Companies”.
Note 2: The Company is not aware of whether association relationship exists between other shareholders and whether they are
acting-in-concert person as specified in “Regulatory Provisions on Disclosure of Information on Shareholding Change of
Shareholders for Listed Companies”.
3. Controlling shareholder and actual controller
（1）Change of the controlling shareholder and actual controller
□Applicable √Inapplicable
（2）Particulars about the controlling shareholder and actual controller
The Company has no shareholder (controlling shareholder) with a shareholding over 30%.
Is there a new actual controller?
□ Yes √ No □ Inapplicable
Particulars:
(1) China Merchants (CIMC) Investment Limited is the wholly-owned subsidiary of China Merchants Holdings (International)
Limited. China Merchants Group Limited holds 55.14% equity of China Merchants Holdings (International) Limited. China
Merchants (CIMC) Investment Limited holds 25.54% equity of CIMC. Therefore China Merchants (CIMC) Holdings Limited
actually holds 25.54% equity of CIMC.
(2) As a liability limited company incorporated in British Virgin Islands, COSCO Container Industries Limited is a wholly-owned
subsidiary under COSCO Pacific Limited. COSCO Pacific Investment Holdings Limited holds 42.71％ equity of COSCO Pacific
Limited. COSCO Pacific Investment Holdings Limited is a subordinate wholly-owned subsidiary under China COSCO Holdings
Limited and COSCO Group holds 52.80% equity of China COSCO Holdings Limited. COSCO Container Industries Limited held
21.80% equity of CIMC through COSCO Containers Industries Limited; Long Honour Investments Limited is a subordinate
wholly-owned subsidiary under COSCO Hong Kong and holds 0.95% equity of CIMC.
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Semi-Annual Report 2012 of CIMC
(3) Property and controlling relation between actual controller and CIMC
（4）The actual controller controls the Company via trust or other ways of asset management.
□Applicable √Inapplicable
4. Other corporate shareholders with a shareholding over 10%
√Applicable □Inapplicable
Registere
d capital
Legal Incorporated Main operating business or
Name of corporate shareholder (RMB Currency
representative date management activities
Ten
thousand)
Huang Qianru,
China Merchants (CIMC) Investment
Zhang Rizhong, 17 Jan. 1995 Investment and holding 1 HKD
Limited
Lin Wuliu
Chen Keng, Zhang
COSCO Container Industries Limited 26 Apr. 2004 Investment and holding 0.0001 USD
Jie, Xu Jian
（IV）Convertible corporate bonds
□Applicable √Inapplicable
V. Directors, Supervisors and Senior Management
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Semi-Annual Report 2012 of CIMC
（I）Shareholding changes of directors, supervisors and senior management
Receives
Including:
Number of Number of Number of Number of Number of payment
Number of Reason
share held at share added share sold share held at share options from the
Beginning date of Ending date of office restricted of
Name Office title Gender Age the during the during the the granted in shareholder
office term term shares moveme
period-begin period period period-end the reporting unit or other
granted nt
（share） （share） （share） （share） period related
（share）
organizations
Director and
Mai Boliang Male 53 01 Apr. 2010 01 Apr. 2013 494,702.00 0.00 0.00 494,702.00 371,026.00 3,800,000.00 - No
president
Vice
Liu Xuebin Male 53 01 Apr. 2010 01 Apr. 2013 2,400.00 0.00 0.00 2,400.00 1,600.00 1,500,000.00 - No
president
合计 -- -- -- -- -- -- --
Equity incentives granted to directors, supervisors and senior management during the reporting period
√Applicable □Inapplicable
Number of Exercisable Number of Number of Number of
Number of Number of Granting price Number of
share options number of share options Exercise price restricted restricted
share options share options of the restricted restricted
Name Office title granted in the share options in exercised in the (RMB shares held at shares granted
held at the held at the shares (RMB shares held at
reporting the reporting reporting Yuan/share) the in the reporting
period-begin period-end Yuan/share) the period-end
period period period period-begin period
Director and
Mai Boliang 3,800,000.00 0.00 0.00 0.00 11.58 3,800,000.00 0.00 0.00 - 0.00
president
Zhao
Vice president 1,500,000.00 0.00 0.00 0.00 11.58 1,500,000.00 0.00 0.00 - 0.00
Qingsheng
Liu Xuebin Vice president 1,500,000.00 0.00 0.00 0.00 11.58 1,500,000.00 0.00 0.00 - 0.00
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Semi-Annual Report 2012 of CIMC
Wu Fapei Vice president 1,000,000.00 0.00 0.00 0.00 11.58 1,000,000.00 0.00 0.00 - 0.00
Li Yinhui Vice president 1,000,000.00 0.00 0.00 0.00 11.58 1,000,000.00 0.00 0.00 - 0.00
Yu Ya Vice president 1,000,000.00 0.00 0.00 0.00 11.58 1,000,000.00 0.00 0.00 - 0.00
Zhang Baoqing Vice president 1,000,000.00 0.00 0.00 0.00 11.58 1,000,000.00 0.00 0.00 - 0.00
Company
Yu Yuqun 1,000,000.00 0.00 0.00 0.00 11.58 1,000,000.00 0.00 0.00 - 0.00
Secretary
GM of the
Financial
Jin Jianlong 1,000,000.00 0.00 0.00 0.00 11.58 1,000,000.00 0.00 0.00 - 0.00
Management
Dept.
GM of the
Capital
Zeng Beihua 1,000,000.00 0.00 0.00 0.00 11.58 1,000,000.00 0.00 0.00 - 0.00
Management
Dept.
Total -- 13,800,000.00 0.00 0.00 0.00 -- 13,800,000.00 0.00 0.00 --
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Semi-Annual Report 2012 of CIMC
（II）Post-holding particulars
Post-holding in shareholders units
√Applicable □Inapplicable
Name of
the person
holding Receives payment
Position in the Beginning date of Ending date of
any post in Name of the shareholder unit from the shareholder
shareholder unit office term office term
any unit?
shareholde
r unit
Directing
China Merchants Group Limited 23 Aug. 2010 - Yes
President
Li
Executive
Jianhong China Merchants Holdings (International)
Director and Vice 14 Oct. 2012 - No
Limited
Chairman
Vice GM and
COSCO 17 Feb. 2011 - Yes
Sun Party member
Jiakang Executive
China COSCO Holdings Co., Ltd. 17 May 2011 - No
Director
Vice GM and
COSCO 17 Feb. 2011 - Yes
Party member
Xu Minjie
Executive
China COSCO Holdings Co., Ltd. 17 May 2011 - No
Director
Vice Chairman
Wang
COSCO Pacific Limited and Managing 11 Jul. 2011 - Yes
Xingru
Director
GM of the
Enterprise 1 Feb. 2011 -
China Merchants Group Limited Yes
Planning Dept.
Wang
Hong Chief Economist 1 Feb. 2012 -
China Merchants Holdings (International)
Director 1 May 2005 - No
Limited
Lu Shijie COSCO Pacific Limited CFO 14 Jan. 2008 - Yes
Huang China Merchants Holdings (International)
Vice GM 01Nov. 2004 - Yes
Qianru Limited
Post-holding in other units
√Applicable □Inapplicable
Name of
the person
Position in other Beginning date of Ending date of Receives payment
holding Name of other unit
unit office term office term from other unit?
any post in
other units
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Semi-Annual Report 2012 of CIMC
Li China Merchants Energy Shipping
Chairman 01 Nov.2010 - No
Jianhong Co., Ltd.
COSCO Container Lines Company
Chairman 9 Jan. 2012 - No
Limited
Xu Minjie
COSCO Logistics Co., Ltd Chairman 9 Jan. 2012 - No
COSCO Korea Co., Ltd. Chairman 17 Jan. 2012 - No
COSCO Pacific Investment Holdings
Director 12 Aug. 2011 - No
Limited
COSCO H.K. Investment Co., Ltd Director 12 Aug. 2011 - No
Concurrent positions in 34
Wang
subordinates of COSCO Pacific Director/Chairman 11 Jul. 2011 - No
Xingru
Limited
Concurrent positions in 8 joint control
Director/Chairman
entities and affiliated companies 11 Jul. 2011 - No
/Vice Chairman
under COSCO Pacific Limited
China Merchants Energy Shipping
Director 11 Apr. 2011 - No
Wang Co., Ltd
Hong China Merchants Property
Director 14 Oct. 2011 - No
Development Co., Ltd.
Beijing Jiaotong University Professor and
doctor tutor of
School of
Economics and
Director of
Ding Chinese
01 Jun. 2007 - Yes
Huiping Enterprise
Competitive
Power Research
Center in Beijing
Jiaotong
University
King & Wood Law Firm Senior partner 01 Jul. 2002 - Yes
Invesco Great Wall Fund Independent
01 Jun. 2003 - Yes
Management Company Limited Director
Jin Gemdale (Group) Co., Ltd. Independent
01 Oct. 2010 - Yes
Qingjun Director
Shenzhen Arbitration Committee Arbitrator 01 Oct. 2009 - Yes
China International Economic and
Arbitrator 01 Jul. 2007 - Yes
Trade Arbitration Commission
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Semi-Annual Report 2012 of CIMC
Shenzhen Jing’an Culture Chairman
Xu Jing’an 16 Apr. 1998 - Yes
Communication Co., Ltd.
Antwerp Gateway NV 08 Sep. 2008 - No
Director
Suez Canal Container Terminal S.A.E. 10 Oct. 2011 - No
COSCO Ports (Antwerp) NV 10 Jun. 2010 - No
COSCO Ports (Greece) S.à r.l. 17 Dec. 2008 - No
COSCO Ports (Panama) Limited 15 May. 2008 - No
COSCO Ports (Services) Limited 01 Feb. 2009 - No
Lu Shijie
COSCO Ports Services (Guangzhou)
Director/Chairman 12 Feb. 2009 - No
Limited
Florens Container Holdings Limited 19 Dec. 2011 - No
Piraeus Container Terminal S.A. 10 Nov. 2008 - No
Xiamen Ocean Gate Container
16 Dec. 2008 - No
Terminal Co., Ltd.
（III）Remuneration for directors, supervisors and senior management
Decision-making
procedure for the As stipulated in the Articles of Association, the remuneration for directors and supervisors is
remuneration of directors, determined by shareholders meetings and that for senior management is determined by the Board of
supervisors and senior Directors. In the reporting period, CIMC senior management get paid in CIMC or subsidiaries.
management
CIMC has established a complete remuneration system and incentive mechanism. First, we implement
annual-salary system for directors, supervisors and senior management who work for and get paid from
CIMC. Secondly, CIMC board of directors formulates “CIMC Leading Group Measurement and
Basis for determining the
Management Regulations” at the beginning of each year to implement performance measurement for
remuneration of directors,
relevant personnel and determine performance-based incentive amount at the end of each year.
supervisors and senior
Shareholders’ meeting authorizes the Board of Directors to determine the remuneration of chairman and
management
President Mai Boliang in compliance with “CIMC Leading Group Measurement and Management
Regulations” and president formulates proposals for performance-based bonus for other senior
management subject to approval by Remuneration Council under the Board of Directors.
Of the 8 directors, Mr. Mai Boliang holds the position as president and gets paid in CIMC and CIMC
paid no remuneration to any other directors in the reporting period. Based on approval by the
Actual payment of the
shareholders meeting and board of directors, independent directors Ding Huiping, Jin Qingjun and Xu
remuneration of directors,
Jing’an received RMB 120,000 as subsidy for independent directors in reporting period, while CIMC
supervisors and senior
paid no remuneration to any other independent directors in the reporting period. As staff supervisor, Mr.
management
Feng Wanguang gets paid in CIMC and no remuneration was paid to other supervisors in the reporting
period. Senior executives get paid by the Company on a monthly basis.
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Semi-Annual Report 2012 of CIMC
（IV）Change of directors, supervisors and senior management
Name Position Way of change Date of change Reason for change
Due to his personal career plan, he resigned as director
Sun Jiakang Vice Chairman Resignation 2 Feb. 2012
and vice chairman of the Company.
The Board of Directors nominated him at the re-election
Xu Minjie Vice Chairman Re-election 6 Mar. 2012 and the relevant proposal was reviewed and approved at a
special general meeting.
（V）Employees
Number of on-job employees 64,323
Number of retired employees for whom the Company shall bear
124
expenses
Function structure
Type of function Number of personnel
Management 314.00
Production 40,421.00
Sale 2,231.00
Technical 2,373.00
Financial 913.00
Administration 18,071.00
Level of education
Level of education Number of personnel
Doctors 25.00
Masters 715.00
Bachelors 6,799.00
Junior college graduates 7,240.00
High school graduates and below 49,544.00
VI. Report of the Board of Directors
（I）Discussion and analysis by the management
Analysis to operating results and financial data:
Unit: RMB’000
Item Jan.-Jun. 2012 Jan.-Jun. 2011 Increase/decrease ratio
(%)
Operating revenues 27,364,446 36,478,098 -24.98%
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Semi-Annual Report 2012 of CIMC
Operating profit 1,439,124 3,729,782 -61.42%
Net profit attributable to shareholders of 933,710 2,807,629 -66.74%
the Company
Net cash flows from operating activities -2,107,043 -4,161,444 -49.37%
Net increase in cash and cash equivalents -2,658,816 1,306,970 -303.43%
For the first half of the year, the Company achieved operating revenues of RMB 27,364,446,000, down 24.98%
over the same period of last year; and net profit attributable to shareholders of the Company of RMB 933,710,000,
down 66.74% from a year earlier. This is mainly because the first quarter in a year was usually a slack season for
container demand and the first quarter of 2012 saw a demand weaker than normal years; the relatively peak season
for demand kicked off in the second quarter, but the business figures for the same period of last year were higher
than normal, so a considerable year-on-year drop was caused in the business performance.
When compared with the same period of last year, in the first half of 2012, the Group’s container production scale
was smaller, with accounts receivable and expense on raw material procurement decreasing accordingly, as well
as decreased operating capital. However, when compared with the end of 2011, the operating capital utilization
rate increased while net cash flows from operating activities decreased. Affected by rising capital expenses, the
liability ratio of the Company increased over the end of 2011. As at 30 Jun. 2012, the overall liability ratio of the
Company stood at 68.20%, with the liability/equity ratio being 214.48%.
Discussion and analysis of significant events
——Macro-economy, prosperity degree of the industry, as well as its influence
In the first half year, the global economy remained weak, main economy entities grew lower than expected; the
euro-zone’s debt crisis continuously extended, financial risk raised, demands kept dropping down, and the
pressure of global economy recovery further increased. There’s still much uncertainty faced by the economy.
According to the World Economic Outlook issued by IMF in Jul. 2012, it’s anticipated that global economy
growth rate in 2012 would be 3.5%, the growth rate of advanced economies would be 1.4% growth, and the
growth rate of emerging and developing economies would decrease to 5.6%. In the first half year, domestic
economy growth slowed down, with YoY growth of GDP in Jan-Jun recording 7.8%. The export volume of China
increased by 9.2% YoY, representing large expansion of trade deficit. Cargo throughput of ports in national scale
or larger scale increased by 7.2% YoY. In line with custom statistics, in the first half year of 2012, an
accumulation of 1.27 million containers were exported from China, representing a YoY decrease of 26.5%.
Dragged down by euro-zone debt crisis and influenced by the downturn of shipping industry, shipping credit
squeezed, revenue of main shipping companies decreased, and their operating cost increased. The way of
container demands from main shipping companies were still in rental. Main customers purchasing containers were
mainly companies renting containers, which took 70% proportion of the total demand volume of purchase orders.
In 2012 to 2013, a great number of shipping capacity were still input, resulting in a remaining status where supply
exceeded demand. In consideration of absorbing surplus capacity, saving fuel cost, and reducing carbon emission,
shipping companies still kept low-speed policy. In the first half year, the container rate of shipping industry
reached low level, leading to low possibility of continuous low container rate in future. In Jul. 2012, CLARKSON,
a Britain institution analyzing trends of shipbuilding and ocean shipping updated its forecast, anticipating that the
growth rate of container trade for this year would decrease to 5.9% as affected by the sustainable euro-zone debt
crisis and the recovery slowdown of main economies in the world, and that the global trade volume of containers
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Semi-Annual Report 2012 of CIMC
in this year would reach 160 million TEU.
In this year, the overall capacity of the industry increased much, and the competition landscape in container
industry remained stable. Capacity of dry van containers and refrigeration containers increased by different
degrees, and capacity of special containers kept stable. In the first half year, affected by the weakness of overall
industrial demand, the factor of Spring Festival, as well as the structural shortage in domestic labor market, main
manufacturers could only realize partial double-class production, the capacity utilization rate of standard dry van
containers recorded obvious YoY decrease, the capacity utilization rate of refrigeration containers glided down,
and the capacity utilization rate of special containers was relatively stable. In the first half year, production
volume of containers of the total industry reached about 1.42 million TEU, of which the production volume of
standard dry van containers was about 1.21 million TEU, the production volume of registered containers was
about 70 thousand units, and the production volume of special containers was 38 thousand units.
In the first half year of 2012, Chinese economy growth continued to decelerate, industrial production decreased,
and the growth infrastructure construction and property investment slowed down, leading to continuous
decreasing trend in market demand for special vehicles in China as in 2011. Thereinto, the demand for logistic
special vehicles dropped by around 20%, and the demand for engineering special vehicles dropped by 40%.
Facing the severe market trend, enterprises in the industry successively chose volume over profit, bringing about
more competitive industrial competitions. The oversea market kept overall restorative growth trend, and the north
Americas market particularly achieved strong recovery.
In the first half year, the demand in global ocean engineering market kept high prosperity. According to
incomplete statistics, in the first half year, orders in global ocean engineering market reached USD 28 billion,
taking 55% proportion of the total trade volume for the whole last year. New oil service companies acted actively.
In view of order structure, orders for drilling platforms decreased, and orders for production platforms obviously
increased. In the first half year, 27 drilling platforms, which accounted for 30% of the total volume of last year,
were traded; 12 units of production platforms were newly built and refitted, exceeding the whole volume of last
year and recording record-high; and the market of ocean engineering ships kept at the normal level of recent years,
with 150 ships traded, maintaining the same as compared with same period of last year. In the first half year, as
investors held excessively pessimistic expectation for the prospect of market demand, the price of crude oil, the
wind vane for development of ocean oil and gas, fell largely. However, at present, the international oil price still
keeps at a high level of USD 100, showing that the development of deep-sea oil and gas will still be highly active.
In the second half year, although some uncertainty in politics and economy will exist, the external environment of
ocean engineering industry will keep stable. The international oil price is expected to remain high, which will give
remaining high enthusiasm for petroleum companies to invest the upstream industry of oil and gas. After the oil
leakage in the Gulf of Mexico, the regulatory and standard requirements for deep-sea exploration of countries like
the USA and Brazil becomes more and more strict. Current drilling equipment may not meet the new standards,
and as a result, the update speed of old equipment in the world will further accelerate.
——Changes in industry policies, laws and regulation of the Government and the influence thereof
In Jul. 212, the Ministry of Industry and Information Technology issued the Notice on Establishing Exit
Mechanism in Vehicle Industry, which firstly established the exit mechanism for behindhand enterprises in
Chinese vehicle industry, and would remit the loose, chaotic, and inferior competition landscape in the industry of
special vehicles.
The government has planned to raise the consumption proportion of natural gas to primary energy from 4% at
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Semi-Annual Report 2012 of CIMC
present to 9% in 2015 and 15% in 2020. The growth prospect in energy field, especially natural gas field, is clear.
As planned by National Development and Reform Committee, by 2015, China will have basically built
transportation network of national natural gas pipelines with diversified resources, flexible control, and stable
supply, effectively ensuring the huge future demand for natural gas in China in terms of delivery link.
In the first half year, significant middle-to-long term policies in national ocean engineering industry were
successively promulgated, creating a fine policy environment for healthy development of Chinese ocean
engineering industry and business of ocean engineering equipment of the Group. In Feb. 2012, the national
Middle-to-long Term Development Plan for Manufacture of Ocean Engineering Equipment (planning period is
2011～2020) was issued. The Plan put forward development targets – the first, the industry scale shall be among
the world’s largest, with annual sales revenue achieving over RMB 200 billion and market share of development
equipment of ocean oil and gas in the world reaching 20% in 2015. The Development Plan for High-end
Equipment Manufacture in the Twelfth Five-year Period issued in May clearly defined the focus of ocean
engineering equipment in the twelfth five-year period is the breakthrough in key technologies of 3,000-meter
deep-water equipment. The CIMC ocean engineering not only equips with the construction capability for
3,000-meter water-depth semi-submersible drilling platforms, but also has regarded deep-water semi-submersible
platforms as one of the key developing and strategic directions of the Company. In Jul, the State Council officially
promulgated the Development Plan for National Strategic Emerging Industries in the Twelfth Five-year Period,
and clearly described the path for future development of the industry of ocean engineering equipment – in 2015,
the capability of independently designing and establishing deep-water ocean engineering equipment and the
supporting capacity for key equipment shall be preliminarily possessed, and the products shall own international
competitiveness. In 2020, the capability of independently designing and establishing deep-water ocean
engineering equipment and the supporting capacity for key equipment shall be comprehensively possessed.
Whether the Company’s actual business performance is 20% lower or higher than any earning forecast or business
plan for the reporting period which has been publicly disclosed earlier:
□ Yes √ No □ Inapplicable
Analysis for operating status and business performance of the Company’s main businesses
In the reporting period, the operating status of the Group’s main businesses is summarized as below:
The Company and its subsidiaries (jointly referred to as “the Group” hereinafter) is mainly engaged in
manufacture and services in relation of modern traffic transportation equipment, energy, chemical, liquid food
equipment and ocean engineering equipment. In particular, these equipments are mainly involved in design,
manufacture and service for dry van containers meeting international standards, refrigeration containers, regional
special containers, tank containers, container wood floor, road tank transportation vehicles, gas equipment and
static storage tank, road transportation vehicles, jack up drilling platforms, semi-submersible drilling platforms,
special ships, and airport equipment. Other than the above, the Group is also engaged in manufacture and service
of logistic equipment, manufacture of freight train, real estate development, financing and leasing, etc. At present,
the production and sales volume of standard dry van containers, refrigeration containers, and tank containers of
the Group keeps ranking No.1 in the world. The Group is also the largest manufacturer of road transportation
vehicles in China, and one of the major enterprises manufacturing ocean engineering equipment in China.
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Semi-Annual Report 2012 of CIMC
Products contributing over 10% operating revenue or operating profit of the Group are containers, road
transportation vehicles, as well as equipment of energy, chemical, and liquid food.
——Container business
Besides container manufacture, the Group engages in container service, including service like stockpiling,
maintenance, refurbishment, and new service like old-for-new trade and retrofitting of old containers. In the first
half year, sales volume of normal dry van containers of the Group accumulated to 557.8 thousand TEU,
representing a YoY decrease of 42.92%. Sales volume of refrigeration containers accumulated to 81.5 thousand
TEU, representing a YoY decrease of 7.91%. Sales volume of special containers (excluding tank containers and
pallet containers) accumulated to 33 thousand units, representing a YoY decrease of 22.54%. In the first half year,
container business achieved operating revenue of RMB 13,671,291,000, representing a YoY decrease of 37.65%.
Net profit reached RMB 800,076,000, representing a YoY decrease of 72.57%.
In the first half year, the demand in container market in the first quarter shows weakness, and obviously rose again
in the second quarter, entering the relative peak season. The price gradually rose as the demand entered into the
peak season, and the price of dry van containers in the second quarter started to bottom out, approaching USD
2,600/standard container in the end of Jun. Due to the low price of steels, the expansion of production scale, as
well as its price appreciation, the gross profit of containers rose rapidly.
In the first half year, in terms of container business, the Company implemented strategy upgrade, transformed
traditional production craft process, improved automation level, lowered down labor intensity, adhered to the
concept of “safety, green, intelligence, and lightweight”, focused on promoting new environment-friendly
technologies, such as water paint and bamboo floor, realized energy-saving and emission reduction; and continued
to propel forms like lean production and ONE management with the purpose of improving production efficiency.
On the other hand, the Group positively enlarged new businesses, and put efforts on developing modular
architecture.
Respecting to product development in modular architecture, the Group realized the transformation from overseas
design to independent design, developed many core technologies, gained totally independent intellectual property,
and gradually established its unique competitiveness. As for modular architecture business, the Group will depend
on its globalized operation system to combine the brands, design, marketing resources in mainstream markets in
Europe and America with the advantages of Chinese manufacturing, and rely on the operating mode of “integrated
design, factory manufacture, and field installation” to show the concepts of new environment protection and
represent the new trends of industry development. The developing space would be large. The business of modular
architecture could synchronically develop with other businesses of the Group, and has become a key part in
strategic business combinations of the Group.
——Business of road transportation vehicles
In terms of business of road transportation vehicles, the Company has established 29 production bases extending
from North Americas, Europe, Australia, and Southeast Asia to central China, east China, south China, north
China, northwest China, and northeast China, and founded a marketing system covering 530 distributors and 4S
stores, as well as over 580 service stations. The Group now possesses annual capacity scale exceeding 230
thousand units of all kinds of vehicles, and has ranked No.1 in production and sales volume since 2006.
In the first half year, as affected by the slowdown of growth in domestic economy, vehicle business of the Group
descended largely in product sales and operating revenue. In the first half year, sales volume of road
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Semi-Annual Report 2012 of CIMC
transportation vehicles accumulated to 53.5 thousand units (sets), decreasing 39.68% YoY; the sales revenue
reached RMB 6,821,294,000, decreasing 29.62% YoY; and the net profit reached RMB 86,026,000, decreasing
75.03% YoY.
Despite the severe trends of decreasing market demand and more competitive industrial competitions, the Group
maintained its No.1 market position in China. Thereinto, the market share of main products, including flat-bed
trucks, bulk lorries, self-discharging wagons, powder tank vehicles, refrigeration vehicles, liquid tank vehicles,
topped the list in the industry. The oversea market kept overall restorative growth trend, and the north Americas
market particularly achieved strong recovery. As for vehicle business of the Group, the market share of skeleton
vehicle products kept No.1 in the market of Americas, and the production and sales volume of refrigeration
vehicles in the market of Americas exceeded 1,000 units.
In the first half year, in terms of vehicle business of the Group, the Group kept concentrating on resource
integration, improved asset operation efficiency and profitability of the Company; continued to advance
construction of marketing network, enriched distribution channels; expanded capacity of refrigeration vehicles in
Ji’nan and Qingdao in Shandong province; steadily progressed investment on and construction of the vehicle
logistic park, established markets of commercial vehicles in cities which are logistics centers, such as Chengdu,
Xi’an, Shanghai, and Shenzhen; and reinforced investment on new products, including snow removal trucks and
cleaning tankers. The Group has finished the development, manufacture, and preparation for product launch in the
market of the 3rd-generation semi-trailers, which represents the technology development direction of special
vehicles in the world, and is scheduled to be shown in the auto show in Hanover, Germany in Sept. The
3rdgeneration semi-trailers will also be launched in China and Europe.
It is expected that the overall operating environment of the enterprise in the second half year of 2012 would be
similar with that in the first half year. Domestic infrastructure construction and real estates, the two core upstream
industries, will maintain stable growth and continue to pull the demand for special vehicles. In overseas market,
especially in traditional market of Europe and America, the restorative growth trend will maintain. In emerging
markets, such as Southeast Asia, the Middle East, Africa, and South America, the growth trend will keep having
high prosperity. In the background of ease economy growth, it is expected that the price of bulk materials, for
example, steel, will fluctuate around low level, which will be good for the Group to keep low purchase cost.
In the first half year, domestic economy growth further slowed down, and the domestic market of heavy trucks
encountered downturn. Business of heavy trucks of C&C Trucks Co., Ltd., of which 45% equity is held by the
Company, also faced great pressure. In the first half year, the sales revenue exceeded RMB 300 million, but the
Company still faced losses. However, the Company adjusted operation strategies in time, and still made some
progress. The Company adjusted market positioning of products, lowering down product weight and pulling up
vehicle sales by developing middle-to-large weight products and lightweight products. The Company positively
took advantage of resources from shareholders, aimed at big clients in the industry to actively promote LNG
heavy truck, the strategic product, put efforts on cutting down cost of purchase and production, expanded
high-quality clients, and enhanced the product brand value. In the second half year, the Company will strive to
develop LNG heavy trucks, and launch a series of competitive products of middle-to-large weight trucks.
——Business of equipment of energy, chemical, and liquid food, as well as the service
In spite of the sustainable weakness of American and European economy, domestic demands for storage and
transportation equipment and engineering for natural gas, low-temperature equipment, and tank containers were
strong, mainly due to the downstream demand in energy field, especially the rapid growth in supply of gas
18
Semi-Annual Report 2012 of CIMC
resources of natural gas and its consumption. In 2012, business of equipment of energy, chemical, and liquid food
kept favorable growth trend. In the first half year, operating revenue achieved RMB 4,520,949,000, representing a
YoY increase of 21.14%. Net profit reached RMB 256,696,000, increasing by 3.73% YoY. Thereinto, the
business of energy (natural gas) equipment reached operating revenue of RMB 2,435,595, increasing by21.05%
YoY. The business of chemical equipment achieved operating revenue of RMB 1,550,368, rising by 14.32% YoY.
The business of liquid food equipment achieved operating revenue of RMB534,987, growing by 47.08% YoY.
Among them, caused by changes in product structure and sales structure, the gross margin in business of energy
equipment dropped; and benefited from scale effect brought by the uptrend of sales volume, the gross margin in
chemical equipment business achieved obvious growth. The gross margin in business of liquid food equipment
remained stable.
In the first half year, in order to enhance the strength of service and R&D of project engineering, in Jan. 2012,
CIMC Enric Holdings Limited acquired Nanjing Anza Petrochemical Design & Engineering Co., Ltd., further
realizing the overall planning and coordination in aspects of project engineering service, integration solution plans,
and product design and R&D, and boosting business expansion for upstream clients. In terms of energy equipment,
the Company strengthened R&D force in LNG refueling stations and LNG ship storage tanks, and successfully
developed brand-new manufacturing technologies of winding bottles and low-temperature gas cylinders, which all
attracted much market attention. In terms of chemical equipment business, the Company focused on development
of special tank containers and lightweight tank containers. Besides, the Company had close and strategic
cooperation with external research institutes and steel manufacturers.
In order to meet the continuing growth in supply of natural gas and demand for corresponding application
equipment, in the first half year, CIMC Enric Holdings Limited further expanded the capacity of energy
equipment, and has been establishing the production line of lightweight winding bottles in Shijiazhuang,
expanding LNG production equipment in Zhangjiagang, and enhancing production capability of LPG in Jingmen.
In the second half year, new plants and production lines in Shijiazhuang, Langfang and Bengbu in Aihua province
will be gradually put into operation.
While seizing the opportunity of rapid growth in domestic market, CIMC Enric Holdings Limited expanded
overseas market, focusing on developing emerging markets, such as Southeast Asia, Central Asia, and South
America, so as to enlarge overseas commercial chances and increase income resources.
In the reporting period, CIMC Enric Holdings Limited continuously executed projects of cost control and lean
management. As internal resources were more effectively distributed and shared among all operating units, the
operation efficiency and quality were advanced. In aspect of supply chain, centralized and synchronized purchase
strategies were adopted, and the purchase cost was cut down by optimization of product design and production
procedures.
Looking into the second half year and future, in spite of much uncertainty in global economy, the Company still
will still be optimistic about the prospect of business of energy and chemical. In future, the Company will put
more force on expanding project engineering business, especially on developing low-temperature storage tanks,
gas refueling station projects, projects of middle-to-small size liquidation, petrifaction storage of gas, and gas
disposal, chemical spheres, as well as nuclear special containers.
——Business of ocean engineering
As one of the world-leading manufacturers of ocean engineering equipment, the Group has been always
participating in global competitions in the market of international ocean engineering. Main products of the
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Semi-Annual Report 2012 of CIMC
Company include jack up drilling platforms, semi-submersible drilling platforms, and auxiliary ships in ocean
engineering. The Group has established integrated establishment base and business system of R&D and design
centers – YCRO is the base for establishment, general assembling, debugging, and delivery of semi-submersible
drilling platforms, LCRO is the production and establishment base for jack up platforms, and HCRO is the
modular establishment base. As branded by the National Bureau of Energy, the Group also has the National
Energy Marine Petroleum Drill Platform R&D (Experiment) Center, including CIMC Ocean Engineering
Research Institute Co., Ltd. in Yantai and CIMC Shipping and Ocean Engineering Design Research Institute in
Shanghai. At present, the establishment capability of ocean engineering business bases in the Group is 3 jacks up
drilling platforms and 3 semi-submersible drilling platforms per year, which is planned to be upgrade to 6 jack up
platforms and 4 semi-submersible platforms per year in 2015.
In the first half year, the sales revenue reached RMB 1.245 billion, increasing largely by 440.93% as compared
with RMB 230 million in the same period of last year. Losses reached RMB 147 million, decreasing largely by
74.75% YoY. Main reason for large increase of operating revenue and decrease of losses: the Company realized
sales of SUPREME DRILLER, the self-built jack up platform, and finished the delivery of COSL PROMOTER,
the deep-water semi-submersible drilling platform.
In the first half year of 2012, delivery of main products of the Group recorded favorable progress. In Apr. 2012,
COSL PROMOTER, the 3rd deep-water semi-submersible drilling platform built for the European drilling
company of China Oilfield Services Limited was smoothly delivered. In Mar. 2012, SUPREME DRILLER, the
jack up drilling platform of CIMC Raffles was delivered.
Regarding the expansion of new orders, Raffles now has orders in hand of over USD 1.68 billion, which cover 2
semi-submersible drilling platforms, 3 Super M2 jack up platforms, 2 JU2000E jack up platforms, and 2
semi-submersible transportation ships. Besides, there’re also some intentional orders. In Feb. 2012, CIMC Raffles
got the turn-key contract from Norway North Sea Rigs As Company for establishing North Dragon, the
deep-water semi-submersible drilling platform, marking the recognition for semi-submersible products of CIMC
Raffles from the North Sea, a mainstream international market, the capability improvement of turn-key projects,
as well as the realization of mass production. In future, the Group shall continue to participate in competitions in
overseas regional markets and strive for new orders in domestic market by short delivery term, favorable payment
terms, financing support, and low construction cost.
In respect of R&D and design of platforms, the Group has owned the proprietary intellectual property rights for
detail design and establishment of legs of jack up drilling platform. In future, the Group will follow up R&D
trends of new products in home and abroad, accelerate the learning for design concepts and methods, and develop
new products, such as semi-submersible drilling platforms in the North Sea and polar seas, and 400-feet jack up
platforms. The Group will also conduct research on deep-water semi-submersible drilling platforms suitable for
the state of the South China Sea, such as super-deep-water double-rig semi-submersible platforms and
middle-depth water semi-submersible drilling platforms, so as to meet the demand of national strategic
development.
——Business of airport equipment
In the first half year of 2012, Tianda Airport Support Co., Ltd., of which 70% equity is held by the Company,
achieved sales revenue of RMB 68.92 million, decreasing by 51% as compared with RMB 141 million in the
same period of last year. Losses reached RMB 32.18 million, increasing by RMB 20.02 million as compared with
RMB 12.16 million in the same period of last year. In the first half year of 2012, 20 boarding bridges were sold,
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Semi-Annual Report 2012 of CIMC
and 117 boarding bridges were actually produced. Main reason for revenue decrease and losses: on-site
installation and delivery were not finished after production of mass products, and revenue that could be confirmed
was low.
In the first half of 2012, business of airport equipment, including boarding bridges, in global aviation industry
gradually recovered from recession. The market demand showed uptrend in stability. It’s anticipated that the
recovery trend in aviation industry would remain for a period. CIMC Tianda still possessed absolute dominant
position in the market of boarding bridges in domestic market. In view of international market, the main
competitors would still be German and American enterprises. In the first half year, major orders of boarding
bridges were from overseas markets. Many orders in domestic market were acquired in aspects of airport luggage
system, civil logistics storage, solid carports, and boarding bridges for ships.
Looking into the second half year, the overseas aviation industry will keep recovering, and the domestic aviation
industry will continue to grow. The automation upgrade of Chinese manufacturing will boost the high-speed
growth in business of automated logistics equipment. Other than the market of boarding bridges for airports,
CIMC Tianda will continue to enlarge businesses including solid carports and airport ferry pushes. It is expected
that the sales revenue and net profit of CIMC Tianda in 2012 will achieve growth to certain degree.
——Other businesses
Business of logistics equipment and service: The Group devotes itself to providing special logistics equipment
and comprehensive logistics solution plans for clients in different industries. Logistics equipment products of the
Group mainly include pallet containers applicable in fields of autos, logistics, food, chemical, and agriculture, IBC
(Intermediate Bulk Container) applicable in chemical and food, and special logistics equipment, such as
equipment for logistics of wind-power products and automobile logistics of commercial vehicles.
In the first half year of 2012, the sales volume reached 410 thousand units/sets, down by 7% YoY. Operating
revenue reached RMB 760 million, down by 3.51% YoY. The gross margin slightly decreased.
As the average logistics cost in China is high, accounting for around 18% of the total GDP, which is almost 2
times larger than the level of Europe and America, highly effective logistics system, logistic equipment, and
solution plans are emergently needed. With the support of government policies, the industry of logistics
equipment and service in China is stepping into the fast growing period, providing large development space. In
2012, the State Council conducted pilot project of changing business tax for transportation industry and some
modern service industries to value-added tax, and extended it to 10 cities and provinces. In Jun. 2012, the country
issued the Implementation Opinion on Encouraging and Guiding Private Investment to Enter into Logistics Field,
encouraging and guiding private investment to enter into key logistics field and the infrastructure field. In Aug
2011, the State Council announced the opinion on deepening transformation of circulation system and
accelerating the development of circulating industry.
Business of real estate development: In the first half year of 2012, the country kept its force of regulation and
control in real estate market, and the synergistic effect is still maintaining. It is expected that there won’t be
substantial change in macro regulation and control by the country in real estate industry, and the market pressure
will be large. In the first half year, the Group’s projects in Jiangmen, Yangzou, Zhenjiang, Yangjiang and
Shenzhen will progress as scheduled. In the first half year, the operating revenue reached RMB 222.31 million,
and the net profit reached RMB 6.8 million.
Business of railway equipment manufacture: Dalian CIMC Railway Equipment Co., Ltd., the Group’s
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Semi-Annual Report 2012 of CIMC
subordinate company, dedicates to expansion of railway equipment business. In the first half year, the operating
revenue reached RMB 130,364,000, representing large YoY increase.
1. Main business lines and their operating results
（1）Main business lines classified by industries and products
Unit: RMB’000
Increase/decrease Increase/decrease
Increase/decrease
of operating of gross profit
of operating cost
Operating Gross profit rate revenue rate compared
Industries/products Operating cost compared with
revenue (%) compared with with the same
the same period
the same period period last year
last year (%)
last year (%) (%)
Industries
Containers 13,671,291.00 11,669,137.00 17.16% -37.65% -31.17% -5.52%
Road transport
6,821,294.00 5,886,186.00 15.89% -29.62% -29.14% 1.6%
vehicles
Equipments for
energy, chemicals 4,520,949.00 3,692,108.00 22.45% 21.14% 19.47% 5.26%
and liquefied food
Offshore
1,244,783.00 1,100,858.00 13.07% 440.93% 87.1% 168.75%
engineering
Airport equipment 68,923.00 48,026.00 43.51% -51.14% -49.27% 10.62%
Other 1,434,865.00 876,305.00 63.74% 6.25% -11.61% 37.15%
Combined offset -397,659.00 -259,023.00
Total 27,364,446.00 23,013,597.00 18.91% -24.98% -21.99% -0.22%
Products
Containers 13,671,291.00 11,669,137.00 17.16% -37.65% -31.17% -5.52%
Road transport
6,821,294.00 5,886,186.00 15.89% -29.62% -29.14% 1.6%
vehicles
Equipments for
energy, chemicals 4,520,949.00 3,692,108.00 22.45% 21.14% 19.47% 5.26%
and liquefied food
Offshore
1,244,783.00 1,100,858.00 13.07% 440.93% 87.1% 168.75%
engineering
Airport equipment 68,923.00 48,026.00 43.51% -51.14% -49.27% 10.62%
Other 1,434,865.00 876,305.00 63.74% 6.25% -11.61% 37.15%
Combined offset -397,659.00 -259,023.00
Total 27,364,446.00 23,013,597.00 18.91% -24.98% -21.99% -0.22%
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Semi-Annual Report 2012 of CIMC
（2）Main business lines classified by regions
Unit: RMB’000
Increase/decrease compared with the same
Region Operating revenue
period last year (%)
China 12,525,779.00 12.67%
Asia 2,414,136.00 -35.7%
America 5,432,811.00 -46.39%
Europe 5,909,950.00 -44.65%
Other 1,081,770.00 36.24%
Total 27,364,446.00 -24.98%
（3）Reasons for significant changes in main business and its structure
□Applicable √Inapplicable
（4）Reasons for significant changes in profitability of main business (gross profit rate) compared with that
in the last year
√Applicable □Inapplicable
Statement of major changes: Unit: RMB’000
30 Jun. 2012/ 31 Dec. 2011/ Rate of
Reasons for change
Jan.-Jun. 2012 Jan.-Jun. 2011 change
Transactional financial assets Investment cost and fair value of short-term
378,440 186,134 103.32% stock investments changed and fair value of
derivative financial instruments changed.
Bonds payable The issue of 2-billion medium-term notes in the
5,989,610 3,988,438 50.17%
reporting period
Dividend payable Dividends for public shareholders that had been
297,409 116,253 155.83% declared but were not yet paid in the reporting
period
Operating revenues The results of the container business for the
reporting period were poorer than normal years
27,364,446 36,478,098 -24.98%
and those of the same period of last year were
better than normal.
Operating costs The results of the container business for the
reporting period were poorer than normal years
23,013,597 29,499,900 -21.99%
and those of the same period of last year were
better than normal.
Gains/(Losses) on fair value Fair value changes of short-term stock
-14,934 -88,256 -83.08%
changes investments and derivative financial
23
Semi-Annual Report 2012 of CIMC
instruments
Income tax expense Profit before tax for the reporting period
485,373 1,024,118 -52.61%
decreased.
Net cash paid to acquire Cash paid to acquire some equity interests
718,944 49,936 1,339.73%
subsidiaries of the subsidiary—CIMC OFFSHORE
（5）Analysis on reasons of significant changes in profit breakdown compared with the last year
□Applicable √Inapplicable
（6）Business nature, main products/services, net profit and other particulars about subsidiaries which
made a contribution over 10% to the Company’s net profit for the reporting period
□Applicable √Inapplicable
Note: If the investment gain from a stock-participating subsidiary has a 10%-or-higher influence on the net profit of the Company,
please introduce the business nature, main products/services, net profit and other particulars about the subsidiary.
(7) Problems and difficulties encountered in operation
The continuous European debt crisis and the recovery slowdown of global main economies have affected
international trade and the container shipping industry. The growth slowdown of the global container trade volume
will affect the container demand growth within a certain period. Therefore, the Group will continue to make use of
its resource and cooperation advantages, promote lean management, enhance cost control and promote R&D and
transformation of the production and operation mode. Meanwhile, it will better its predictions regarding market
changes and improve its ability to deal with matters regarding the operating strategy and production management.
Recent years have seen a short supply of labor force and rising labor cost in coastal cities of China. Land
resources are decreasing and the government and the public have stricter requirements regarding energy
consumption and environmental protection, which builds up pressure for enterprises’ operation and earning. In
such a circumstance, the Group raises the salaries for workers at the production line, improves their working
conditions and keeps pushing forward and improving investment and construction of the new-typed automatic
production line so as to increase the production efficiency and reduce its reliance on the labor force and land
resources.
The offshore engineering equipment industry is a high-risk industry featuring high input and a long cycle and it
has high requirements for building facilities and experience, as well as capital and R&D strength. As offshore
engineering is included as one of the “strategic emerging industries” and receives policy support from the
government, more traditional ship builders or ventures will go to the offshore engineering equipment industry,
causing fierce competition.
Considering the aforesaid circumstance, the Group quickly accumulates building and managerial experience
through quite a few successful deliveries of drilling platforms, improves the basic management capability and
enhances cost control, which helps the Group improve its management efficiency and win recognition of clients at
home and abroad. Meanwhile, it accelerates the process for it to take hold of advanced R&D, design and building
24
Semi-Annual Report 2012 of CIMC
technologies through technological cooperation and R&D team building, improves the ability to design and
innovate on its own and carries out the product focusing strategy so as to form ability of mass building and
increase its competitiveness.
2. Internal control rules in relation to fair value measurement
√Applicable □Inapplicable
Items related to fair value measurement:
Unit: RMB’000
Gains/losses on Accumulative fair Impairment
fair value changes value changes provisions for
Item Opening amount Closing amount
in the reporting recorded into the reporting
period equity period
Financial assets
Including: 1. Financial assets
measured at fair value whose changes
176,383.00 -15,852.00 378,355.00
are recorded into current gains and
losses
Of which: derivative financial assets 32,691.00 -22,473.00 8,463.00
2. Available-for-sale financial assets 571,954.00 552,355.00 621,216.00
3. Hedging instruments 9,751.00 3,119.00 - 85.00
Subtotal of financial assets 758,088.00 -15,852.00 555,474.00 999,656.00
Financial liabilities -105,943.00 918.00 -105,025.00
Investing property
Production biological assets
Others
Total 652,145.00 -14,934.00 555,474.00 894,631.00
Where the value estimation technique was adopted to determine fair value for the same or similar items within the two years, is there
any significant difference between the value estimation results? If yes, please state in detail.
□ Yes √ No □ Inapplicable
3. Foreign-currency financial assets and liabilities held
√Applicable □Inapplicable
Unit: RMB’000
Item Opening amount Gains/losses on Accumulative fair Impairment Closing amount
25
Semi-Annual Report 2012 of CIMC
fair value value changes provisions for the
changes in the recorded into reporting period
reporting period equity
Financial assets
Including: 1. Financial assets
measured at fair value whose
176,383.00 -6,861.00 182,362.00
changes are recorded into current
gains and losses
Of which: derivative financial
32,691.00 -22,473.00 8,463.00
assets
2. Loans and receivables 7,910,913.00 -20,998.00 12,483,193.00
3. Available-for-sale financial
7,799.00 -687.00 7,982.00
assets
4. Held-to-maturity investments
5. Hedging instruments 9,751.00 3,119.00 85.00
Subtotal of financial assets 8,104,846.00 -6,861.00 2,432.00 -20,998.00 12,673,622.00
Financial liabilities -13,495,209.00 918.00 -18,086,364.00
（II）Investments
1. General utilization of the raised funds
□Applicable √Inapplicable
2. Projects promised to be invested with raised funds
□Applicable √Inapplicable
26
Semi-Annual Report 2012 of CIMC
3. Change of projects invested with raised funds
□Applicable √Inapplicable
4. Significant projects invested with non-raised funds
□Applicable √Inapplicable
（III）Revision of the Board of Directors’ business plan for the second half of the year
□Applicable √Inapplicable
（IV）Business performance estimate for Jan.-Sept. 2012
Warnings of estimated possible losses or major changes of the accumulative net profit achieved during the period from the beginning
of the year to the end of the next reporting period compared with the same period of last year, as well as the reasons
□Applicable √Inapplicable
（V）Explanation of the Board of Directors on “Non-standard Auditing Report” issued by the
CPA firm for the reporting period
□Applicable √Inapplicable
（VI）Explanation of the Board of Directors on changes and solutions of the issues involved in
the “Non-standard Auditing Report” issued by the CPA firm for last year
□Applicable √Inapplicable
（VII）State the discussion results of the Board of Directors on the reasons and influence of
the Company’s accounting policy and estimate alterations or significant accounting error
correction
□Applicable √Inapplicable
（VIII）Formulation and execution of the Company’s cash dividend policy
In order to fulfill the social responsibilities as a public company and build a good “blue-chip” image in the capital
market, try to become a world-class enterprise and enhance the confidence of investors and shareholders in the
future development of the Company, according to the CSRC Notice on Further Implementing Matters Related to
Cash Dividend Distribution of Listed Companies and the CSRC Shenzhen Bureau Notice on Strictly
Implementing the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed
Companies (Shen-Zheng-Ju-Gong-Si-Zi [2012] No. 43), the proposal regarding revising articles in relation to the
profit distribution policy in the Company’s Articles of Association was reviewed and approved at the 12th Session
27
Semi-Annual Report 2012 of CIMC
of the 6th Board of Directors for 2012. More specific rules were given regarding the profit distribution principle,
the specific policy for profit distribution, the review and approval procedure, the alteration of the profit
distribution policy, the principle for using the retained profit, etc.. The amendment proposal was reviewed and
approved at the 2nd Special Shareholders’ General Meeting for 2012 on 17 Aug. 2012.
The cash dividend policy of the Company is formulated and executed according to its Articles of Association and
the relevant resolution of the general meeting, with specific and explicit dividend standards and a complete
decision-making procedure. Independent directors faithfully fulfill their duties and play their role as they should.
Minority shareholders have their chance to fully express their opinions and requirements and their legal rights and
interests are fully safeguarded.
The Company will actively carry out a consistent and stable dividend distribution policy. In dividend distribution,
the Company will attach importance to giving investors rational investment returns and at the same time keep in
mind its sustainable development. In the future, the Company will try to distribute profit in cash more often.
In the reporting period, according to its Articles of Association, the Company carried out its 2011 annual equity
distribution plan, i.e. to, based on the total 2,662,396,051 shares of the Company as at the end of 2011, distribute a
cash dividend of RMB 4.60 (tax included) for every 10 shares, with the distributed dividends totaling RMB
1,224,702,183.46. Up until the end of the reporting period, the Company had completed all the distribution work.
（IX）Pre-plan for profit distribution or turning capital reserve into share capital
□Applicable √Inapplicable
（X）The accumulative retained profit as at the end of 2011 is a positive number but the
Company has not put forward a cash dividend pre-plan.
□Applicable √Inapplicable
（XI）Other matters that need to be disclosed
（ XII ） The Company’s liabilities, credit changes and future cash arrangements for
debt-clearing (Only listed companies with convertible corporate bonds are required to fill the
table below.)
□Applicable √Inapplicable
VII. Significant Events
（I）Corporate governance
During the reporting period, in strict compliance with applicable regulations of the government, as well as
regulations and documents newly promulgated by CSRC, CSRC Shenzhen Bureau and Shenzhen Stock Exchange,
the Company continued to improve its governance and keep it running in compliance with relevant rules.
During the reporting period, according to the CSRC Notice on Further Implementing Matters Related to Cash
28
Semi-Annual Report 2012 of CIMC
Dividend Distribution of Listed Companies and the CSRC Shenzhen Bureau Notice on Strictly Implementing the
CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed Companies
(Shen-Zheng-Ju-Gong-Si-Zi [2012] No. 43), the Company revised its Articles of Association and formulated the
Return for Shareholder Planning, so as to ensure a consistent and stable profit distribution policy, truly protect
legal rights and interests of minority shareholders while taking into account the sustainable development and
promote the long-term and rational investment ideology among investors.
In the first half of 2012, the Company continued to implement internal control regulations. With over 80% of the
internal control system building finished last year, the Company will try to cover all business entities with the
internal control system within 2012.
According to the requirements of CSRC Shenzhen Bureau and taking into account its strategic upgrading need,
the Company has put forward four internal control major tasks regarding the internal control talent development
system, the internal control brochures formulated for different tiers, the internal control goal-achieving project and
the IT application of KRI. It will also explore the possibility to integrate the internal control audit system into the
strategic control system.
As one of the 22 pilot companies for the implementation of the Basic Norms for Internal Control of Listed
Companies (the Internal Control Norms) promulgated by CSRC in 2011 and the mating guidelines, the Company
has followed the Internal Control Norms and formulated the Management Rules for Raised Funds, the Information
Insider Registration and Management Rules and the Management Rules for Related-party Transactions.
The Company and its two majority shareholders—China Merchants Holdings (International) Limited and COSCO
Pacific Limited and their related parties are completely independent in terms of business, personnel, assets,
institution and finance, which fully ensures the independent operation of the Company.
During the reporting period, the Company operated normatively in all aspects. And it will continue to strictly
follow the Company, the Securities Law and other applicable laws and regulations, with internal control
improvement as the key, enhance governance improvement and promote normative operation so as to achieve
sustainable development.
（II）Execution of the plans for profit distribution, turning capital reserve into share capital
or new share issuance which had been made in the previous period and were carried out in
the reporting period
√Applicable □Inapplicable
The 2011 Annual Dividend Distribution Plan was approved at the 2011 Annual Shareholders’ General Meeting on
25 May 2012, i.e. to distribute a cash dividend of RMB 4.60 (tax included) for every 10 shares based on the
existing total 2,662,396,051 shares of the Company. Up until the end of the reporting period, the Company had
completed all the distribution work. Please find the dividend distribution implementation announcement on China
Securities Journal, Shanghai Securities News, Securities Times and Ta Kung Pao (HK) on 14 Jun. 2012.
29
Semi-Annual Report 2012 of CIMC
(III) Significant lawsuits and arbitrations
√Applicable □Inapplicable
Amount
Joint Type of involved in
Basic information about the Lawsuit/Arbitration Execution of the
Suitor Respondent responsibility lawsuit/arbit the Judgment and influence
lawsuit/arbitration progress judgment
bearer ration lawsuit/arbit
ration
The deep-water semi-submersible oil According to the current lawsuit and
drilling platforms SS Pantanal and SS arbitration progress, the Company
Amazonia built by CIMC Raffles and CIMC Raffles and its holds an optimistic towards the
CIMC Raffles
its subordinate subsidiaries for the subordinate lawsuit and arbitration. In the lawsuit
Offshore
Baerfield subsidiaries of the Brazil-based US$ 0.208 subsidiaries suited at and arbitration process, the Company
(Singapore)
Drilling LLC& Schahin Lawsuit/ Schahin Holdings SA were delivered billion the end of 2011 will proactively take legal measures to
Limited; and Pending
Soratu Drilling Holdings SA Arbitration in Nov. 2010 and Apr. 2011 (about RMB Schahin Holdings SA protect shareholders’ interests. But the
Yantai CIMC
LLC respectively. CIMC Raffles and its 1.3 billion) and its 6 related case is still pending and thus there
Raffles Offshore
subordinate subsidiaries also provided parties in New York exists some uncertainty. The lawsuit
Ltd
loans for Schahin Holdings SA and its and London. and arbitration results may have some
6 related parties to build these drilling influence on the Company’s profit for
platforms. 2012 or subsequent periods.
Significant lawsuits and arbitrations in relation to the Company after the disclosure of the last annual report involved US$ 143 million.
Significant lawsuits and arbitrations that had been included in the last annual report but were then pending involved US$ 65 million.
The projected liabilities due to lawsuits and arbitrations were RMB 0.00.
30
Semi-Annual Report 2012 of CIMC
(IV) Bankruptcy or reorganization events
□Applicable √Inapplicable
(V) Holding equity of other listed companies and joint financial enterprises
1. Securities investment
√Applicable □Inapplicable
Proportion in
Initial Number of Closing the total Gain/loss in
Serial Variety of Code of Abbr. of investment shares held at carrying closing the reporting
No. securities securities securities amount the amount securities period
(RMB’000) period-end (RMB’000) investment (RMB’000)
amount (%)
1 Stock 600030 ZXZQ 71,816.00 5,480,000 70,054.00 18.94% -1,762.00
2 Stock 600383 JDJT 54,786.00 8,217,659 53,250.00 14.4% -1,536.00
3 Stock 000858 WLY 23,100.00 650,000 21,294.00 5.76% -1,806.00
4 Stock 000157 ZLZK 54,441.00 5,124,130 51,395.00 13.89% -3,046.00
5 Stock 200625 CAB 14,847.00 5,000,000 12,595.00 3.41% -2,252.00
6 Stock 200581 SWFB 49,737.00 3,000,000 40,203.00 10.87% -6,970.00
Sino-trans
7 Stock 00368 20,184.00 2,996,500 4,421.00 1.2% -195.00
Shipping H
8 Stock G05.SI GoodPack 101,307.00 13,500,000 116,297.00 31.44% 25,229.00
Other securities investments held at the period-end 606.00 -- 383.00 0.1% -1,041.00
Gain/loss on selling securities in the reporting period -- -- -- -- -3,268.00
Total 390,824.00 -- 369,892.00 100% 3,353.00
2. Holding equity of other listed companies
√Applicable □Inapplicable
Change of
Proportion in
Initial Closing Gain/loss in owners’
the
investment carrying the reporting equity during Accounting
Stock code Stock abbr. company’s Stock source
amount amount period the reporting title
total equity
(RMB’000) (RMB’000) (RMB’000) period
(%)
(RMB’000)
600036 ZSYH 25,461.00 0.53% 125,864.00 4,841.00 -8,212.00 Available-for Corporate
31
Semi-Annual Report 2012 of CIMC
-sale shares
financial
assets
Available-for
-sale Corporate
600999 ZSZQ 57,518.00 0.9% 487,370.00 45,021.00
financial shares
assets
Available-for
Purchased in
-sale
OEL Otto Energy 13,480.00 1.19% 7,982.00 the secondary
financial
market
assets
Total 96,459.00 -- 621,216.00 4,841.00 36,809.00 -- --
3. Holding equity of non-listed financial enterprises
□Applicable √Inapplicable
Notes to holding equity of non-listed financial enterprises
4. Trading stocks of other listed companies
□Applicable √Inapplicable
Notes to trading stocks of other listed companies:
(VI) Assets transaction events
1. Purchase of assets
□Applicable √Inapplicable
Notes to purchase of assets:
2. Sale of assets
□Applicable √Inapplicable
Notes to sale of assets:
3. Exchange of assets
□Applicable √Inapplicable
Notes to exchange of assets:
32
Semi-Annual Report 2012 of CIMC
4. Business combination
□Applicable √Inapplicable
5. Progress of these events after the publication of the assets reorganization report or public notices on the
purchases or sales of assets, as well as the influences of these events on the operation results and financial
status of the Company in this reporting period
□Applicable √Inapplicable
(VII) Explanation on shareholding increase scheme during the reporting period proposed or
implemented by the principal shareholders and act-in-concert persons
□Applicable √Inapplicable
(VIII) Implementation situation and influence of equity incentive plan of the Company
√Applicable □Inapplicable
54 million stock options were first granted to 181 senior executives and core
Incentive receivers in the reporting period technical personnel of the Company and 6 million stock options were reserved for
48 core technical personnel and middle management personnel.
Total equities granted in the reporting period
0.00
(share)
Total equities exercised in the reporting period
0.00
(share)
Total equates that expired in the reporting period
0.00
(share)
Cumulative equities granted but not yet
exercised by the end of the reporting period 60,000,000.00
(share)
Cumulative equities granted and exercised by
0.00
the end of the reporting period (share)
On 25 May 2012, the 2011 annual dividend distribution plan was reviewed and
approved at the 2011 Annual Shareholders’ General Meeting, i.e. to, based on the
Adjustments to the granting and exercise prices existing total 2,662,396,051 shares of the Company, distribute a cash dividend of
in the reporting period and the prices after RMB 4.60 (tax included) for every 10 shares. After the implementation of the
adjustments 2011 annual dividend distribution plan, the A-share option exercise price was
adjusted accordingly according to the following formula: P＝P0-V (P0= the
exercise price before the adjustment; V= the dividend amount for every share; P=
33
Semi-Annual Report 2012 of CIMC
the exercise price after the adjustment). According to the formula, the A-share
option exercise price after the adjustment is as follows: the exercise price for the
first stage of share options = RMB 12.04 – RMB 0.46= RMB 11.58; the exercise
for the reserved share options = RMB 17.57 – RMB 0.46 =RMB 17.11.
Equities received and exercised by directors, supervisors and senior management staff
Equities not yet exercised
Equities received in the Equities exercised in the
Name Office title in the reporting period
reporting period (share) reporting period (share)
(share)
Mai Boliang Director and president 0.00 0.00 3,800,000.00
Zhao Qingsheng Vice president 0.00 0.00 1,500,000.00
Liu Xuebin Vice president 0.00 0.00 1,500,000.00
Wu Fapei Vice president 0.00 0.00 1,000,000.00
Li Yinhui Vice president 0.00 0.00 1,000,000.00
Yu Ya Vice president 0.00 0.00 1,000,000.00
Zhang Baoqing Vice president 0.00 0.00 1,000,000.00
Yu Yuqun Company Secretary 0.00 0.00 1,000,000.00
GM of the Financial
Jin Jianlong 0.00 0.00 1,000,000.00
Department
GM of the Capital
Zeng Beihua 0.00 0.00 1,000,000.00
Management
Share capital changes due to the exercise of the
N/A
incentive receivers
The fair value of share options was estimated adopting the binomial lattice model.
The contract period for the share options was used as the input variable for this
Fair value measurement of equity tools
model. And this model also included estimation regarding exercising the options
at an earlier date.
Model, parameters and selection criteria adopted
N/A
for the estimation technique
Amortization period and result of the fair value
N/A
of equity tools
Equity incentive implementation and influence of subsidiaries:
Implementation of the equity trust plan of CIMC Vehicle Group:
1. As reviewed and approved at the general meeting held on 17 Oct. 2007, CIMC Vehicle Group, the Company’s
wholly-funded subsidiary, carried out an equity trust plan. According to the plan, the Company’s senior
management personnel in relation to the vehicle business and the core personnel of CIMC Vehicle Group
(“Plan-participating Staff”) have contributed RMB 220.70 million to the subsidiary and thus hold 20% equity
interests of the subsidiary via Shenzhen International Trust and Investment Co., Ltd..
2. The plan regarding core personnel of CIMC Vehicle Group holding its shares via the equity trust plan was
implemented in 2007. At the first stage, 43 million copies of beneficiary rights were granted, accounting for
34
Semi-Annual Report 2012 of CIMC
19.48% of the total beneficiary rights of the trust plan. At the second stage in 2009, 72.25 million copies of
beneficiary rights were granted, accounting for 32.74% of the total beneficiary rights of the trust plan. At the third
stage in 2011, 66.075 million copies of beneficiary rights were granted, accounting for 29.94% of the total
beneficiary rights of the trust plan. Up until 30 Jun. 2012, 213.115 million copies of beneficiary rights were
granted regarding the trust plan, accounting for 96.56% of the total beneficiary rights of the trust plan.
(IX) Significant related-party transactions
35
Semi-Annual Report 2012 of CIMC
1. Related-party transactions relevant to routine operation
√ Applicable □ Inapplicable
Type of the Content of the Transaction Proportion in same
Pricing principle of the related-party Transaction amount
Related party Relationship related-party related-party price kind of transactions
transaction (RMB ’000)
transaction transaction (RMB ’000) (%)
Other related party Other related party Purchase of goods Purchase of goods Following the audit procedures for ordinary N/A 10,804.00 0.05%
non-related party transactions
Other related party Other related party Purchase of goods Purchase of goods Following the audit procedures for ordinary N/A 2,914.00 0.32%
non-related party transactions
Key management personnel Key management Payment of Payment of N/A 25,033.00 -
personnel remuneration for remuneration for
labor service labor service
Other related party Other related party Sales of goods Sales of containers Following the audit procedures for ordinary N/A 607,078.00 2.96%
or vehicles non-related party transactions
Total -- -- 645,829.00 N/A
Related-party transactions relevant to routine operation
Selling products and providing labor services to related parties Purchasing products and receiving labor services from related parties
Related party Transaction amount Proportion in same kind of Proportion in same kind of
Transaction amount (RMB ’000)
(RMB ’000) transactions (%) transactions (%)
Other related party 607,078.00 2.96% 13,718.00 N/A
Total 607,078.00 2.96% 13,718.00 N/A
Of which: the total amount of related-party transactions of the Company selling products and providing labor services to the controlling shareholder and its
subsidiaries during the reporting period stood at RMB 0.
2. Related-party transactions regarding purchase and sales of assets
□Applicable √Inapplicable
36
Semi-Annual Report 2012 of CIMC
3. Significant related-party transitions with joint investments
□Applicable √Inapplicable
4. Significant credits and liabilities with related parties
√Applicable □Inapplicable
Was there any non-operating credit or liability with any related party?
□ Yes □ No
Providing funds to related parties (RMB ’000) Gaining funds from related parties (RMB ’000)
Interest Interest
Related party Relationship Opening Incurred Repaid Closing Interest Opening Incurred Repaid Closing Interest
expenditu expendit
balance amount amount balance income balance amount amount balance income
res ures
Non-operational
Minority shareholder
Gasfin of subsidiary of the 38,698.00 37,330.00
Company
Shanghai Fengyang Associated enterprise 172,550.00
167,672.00
of the Group
Xinyang Wood Associated enterprise 3,974.00
3,952.00
of the Group
PGM Minority shareholder 118,110.00
of subsidiary of the 122,438.00
Company
MSC Associated enterprise 289,308.00
288,217.00
of the Group
Subtotal 582,279.00 583,942.00 38,698.00 37,330.00
37
Semi-Annual Report 2012 of CIMC
Operational
Subtotal
Total 582,279.00 583,942.00 38,698.00 37,330.00
Shareholders’ operating loans at the same proportion; advance of increased capital investment to subsidiaries at the same proportion;
Reason of forming the credits and liabilities with related parties
shareholders’ operating loans;
Capital occupation during the report period and debt-clearing progress
□Applicable √Inapplicable
The accountability plan put forward by the Board of Directors when the Company had not completed collecting the capital occupied for non-operating purposes by
the end of the report period
□Applicable √Inapplicable
38
Semi-Annual Report 2012 of CIMC
5. Other significant related-party transactions
(X) Significant contracts and execution
1. The trust, contract and lease whose profits reaching more than 10% (including 10%) of the total
profits of the Company in the report period
(1) Status of trust
□Applicable √Inapplicable
（2）Particulars about contracting
□Applicable √Inapplicable
（3）Particulars about leasing
□Applicable √Inapplicable
2. Guarantees provided by the Company
√Applicable □Inapplicable
Unit: RMB Ten Thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Guarante
Actual
Disclosure date Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party of relevant guarantee related
guarantee (date of guarantee guarantee or not
announcement amount party or
agreement)
not
Customers of
subsidiaries of CIMC 23 Mar. 2012 250,000 1 Jan. 2012 65,207 Warranty 1-2 years No No
Vehicle Group
Total actual occurred amount
Total external guarantee line approved
46,000 of external guarantee during -31,153
during the reporting period (A1)
the reporting period (A2)
Total external guarantee line that has Total actual external guarantee
been approved at the end of the 250,000 balance at the end of the 65,207
reporting period (A3) reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure date Amount for Actual Actual Type of Period of Executed Guarante
Guaranteed party
of relevant guarantee occurrence date guarantee guarantee guarantee or not e for a
39
Semi-Annual Report 2012 of CIMC
announcement (date of amount related
agreement) party or
not
Subordinates of
23 Mar. 2012 553,394 1 Jan. 2012 272,005 Warranty 1-2 years No No
CIMC
Total guarantee line approved for the Total actual occurred amount
subsidiaries during the reporting of guarantee for the
4,636 134,337
period subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has been Total actual guarantee balance
approved for the subsidiaries at the 553,394 for the subsidiaries at the end 272,005
end of the reporting period (B3) of the reporting period (B4)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total actual occurred amount
Total guarantee line approved during
50,636 of guarantee during the 103,184
the reporting period (A1+B1)
reporting period (A2+B2)
Total guarantee line that has been
Total actual guarantee balance
approved at the end of the reporting
803,394 at the end of the reporting 337,212
period
period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net assets of
18.31%
the Company
Of which:
Amount of guarantee for shareholders, actual controller and related
0
parties (C)
Amount of debt guarantee provided for the guaranteed party whose
15,844
asset-liability ratio is not less than 70% directly or indirectly (D)
Part of the amount of the total guarantee over 50% of net assets (E) 0
Total amount of the above three guarantees (C+D+E) 15,844
Explanation on possible bearing joint responsibility of liquidation If the debtor can not pay off the debt, the guarantor would bear
due to immature guarantee joint liabilities for undue guarantees.
Explanation on provision of guarantees for external parties in
N/A
violation of the prescribed procedure
3. Entrusted financial management
□Applicable √Inapplicable
40
Semi-Annual Report 2012 of CIMC
4. Performance of significant contracts relevant to routine operation
□Applicable √Inapplicable
5. Other significant contracts
□Applicable √Inapplicable
(XI) Explanation on issuing corporate bonds
□Applicable √Inapplicable
(XII) Performance of commitments
1. Commitments made by the Company or shareholders holding over 5% of the Company’s shares
in the report period, or such commitments carried down into the report period
□Applicable √Inapplicable
2. The Company’s assets or projects exist profitable prediction and the report period is in such
prediction period, it states the profits from the assets or projects reaching original prediction and
relevant reasons
□Applicable √Inapplicable
(XIII) Items of other comprehensive income
Unit: RMB ’000
Items This report period Same period of last year
1. Profits/(losses) from available-for-sale financial assets 49,079.00 -15,815.00
Less: Effects on income tax generating from available-for-sale
12,270.00 -662.00
financial assets
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal 36,809.00 -15,153.00
2. Interests in the investee entities’ other comprehensive income as per
equity method
Less: Effects on income tax generating from the interests in the
investee entities’ other comprehensive income as per equity method
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal
3. Profits/(losses) from cash flow hedging instrument -9,665.00 9,735.00
Less: Effects on income tax generating from cash flow hedging
-1,450.00 2,542.00
instrument
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
The adjustment value that is the converted initial recognition amount of
arbitrage project
Subtotal -8,215.00 7,193.00
4. Converted amount of foreign currency financial statements 6,685.00 52,664.00
Less: Net value of disposal of oversea operations that recognized into
current profit and loss
Subtotal 6,685.00 52,664.00
5. Other 4,489.00
Less: Effects on income tax generating from the others that included
into other comprehensive income
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal 4,489.00
41
Semi-Annual Report 2012 of CIMC
Total 35,279.00 49,193.00
（XIV）Particulars about researches, visits and interviews received in this reporting
period
Main discussion and
Time of reception Place of reception Way of reception Visitor type Visitor materials provided by the
Company
The Company’s business
structure, the current
situation of the industry
Huatai United
10 Jan. 2012 The Company Field research Institution and the Company’s main
Securities
business, investment
progress, and outlook for
development in 2012
Strategy Summary of economy and
Seminar of business in 2011 and
11 Jan. 2012 Shenzhen Field research Institution
Industrial outlook for the financial
Securities environment in 2012
BNP Hong
Kong
13 Jan. 2012 Hong Kong Field research Institution Ditto
Communicatio
n
The Company’s business
structure, the current
Zeal Asset situation of the industry
9 Feb. 2012 The Company By phone Institution Management and the Company’s main
Co., Ltd. business, investment
progress, and outlook for
development in 2012
ChinaAMC,
9 Feb. 2012 The Company Field research Institution Hengtai Ditto
Securities
14 Feb. 2012 The Company Field research Institution Chartered Bank Ditto
Guangzhou
15 Feb. 2012 The Company Field research Institution Ditto
Securities
Harvest Fund,
Penghua Fund,
Fortune SG
Fund, Wanjia
Asset
Management,
Huashang
Fund,
CITIC-Prodenti
al Fund, CCB
17 Feb. 2012 The Company Field research Institution Principal Asset Ditto
Management,
Sinolink
Securities,
Dacheng Fund,
Rongtong
Fund, Guosen
Securities, Lion
Fund,
Zhongshan
Securities
China Post
20 Feb. 2012 The Company Field research Institution Ditto
Fund
23 Feb. 2012 The Company Field research Institution Goldman Ditto
42
Semi-Annual Report 2012 of CIMC
Sachs, Fidelity
Investments
Sumitomo
28 Feb. 2012 The eastern plant Field research Institution Mitsui Asset Ditto
Mgmt (Tokyo)
China Southern
28 Feb. 2012 The Company Field research Institution Ditto
Fund
The Company’s business
structure, the current
Ping An situation of the industry
6 Mar. 2012 The Company Field research Institution Securities, and the Company’s main
HSBC Jintrust business, investment
progress, and outlook for
development in 2012
Cathay
Securities
9 Mar. 2012 The Company Field research Institution Investment Ditto
Trust, Fubon
Securities
23 Mar. 2012 The Company By phone Institution J.P. Morgan Ditto
23 Mar. 2012 The Company Field research Institution Harvest Fund Ditto
Jefferies
Annual
2011 annual performance
26 Mar. 2012 Hong Kong Field research Institution Performance
communication
Communicatio
n
The Company’s business
structure, the current
situation of the industry
Allianz Global
26 Mar. 2012 The eastern plant Field research Institution and the Company’s main
Investors
business, investment
progress, and outlook for
development in 2012
UG
Investment,
Minsheng
Royal Fund,
29 Mar. 2012 The Company Field research Institution China Ditto
Merchants
Securities, First
State
Investments
30 Mar. 2012 The Company Field research Institution Dacheng Fund Ditto
Brown
6 Apr. 2012 The Company Field research Institution Ditto
Advisory
Ivy Asset
Management,
12 Apr. 2012 The Company Field research Institution Ditto
Heqi Asset
Management
Guosen
13 Apr. 2012 The eastern plant Field research Institution Ditto
Securities, etc.
Performance and business
Shenyin &
for the first quarter,
25 Apr. 2012 The Company By phone Institution Wanguo and its
outlook and
clients
communication
Clients of
CICC, GIC and
27 Apr. 2012 The Company Field research Institution Ditto
Morgan
Stanley
8 May 2012 The Company Field research Institution Tokiio Marine The Company’s business
43
Semi-Annual Report 2012 of CIMC
AM structure, the current
situation of the industry
and the Company’s main
business, investment
progress, and outlook for
development in 2012
The 17th China
Summary of companies’
Investment
business results in 2011
Forum of
15 May 2012 Beijing Field research Institution and outlook for the
CLSA
financial environment in
Asia-Pacific
2012
Markets
The Company’s business
structure, the current
situation of the industry
Cathay Life
16 May 2012 The Company Field research Institution and the Company’s main
Insurance
business, investment
progress, and outlook for
development in 2012
Alliance
18 May 2012 The Company Field research Institution Ditto
Bernstein
Foundation
Asset
18 May 2012 The Company By phone Institution Ditto
Management
HK
23 May 2012 The Company Field research Institution Guotai AMC Ditto
Shenyin &
Wanguo
“Mid-Cap Blue
Chip” Listed
Companies’
Meeting
(Caitong Fund,
Northeast
Securities,
Xiamen Trust, Summary of companies’
AIA China, business results in 2011
24 May 2012 Xiamen Field research Institution Bohai and outlook for the
Securities, financial environment in
Hongyuan 2012
Securities,
StarRock
Investment,
Daiwa Asset
Management,
Stockren
Securities,
CITIC
Securities
The Company’s business
structure, the current
situation of the industry
31 May 2012 The Company Field research Institution UOB Kay Hian and the Company’s main
business, investment
progress, and outlook for
development in 2012
Absolute Asia
4 Jun. 2012 The Company Field research Institution Asset Ditto
Management
Chengdu
Golden Nest
6 Jun. 2012 The Company Field research Institution Ditto
Capital
Management
44
Semi-Annual Report 2012 of CIMC
Recent development of
USB Asian
the transport industry as a
11 Jun. 2012 Hong Kong Field research Institution Transport
whole and outlook for the
Conference
industry
The Company’s business
structure, the current
situation of the industry
Guangzhou
18 Jun. 2012 The eastern plant Field research Institution and the Company’s main
Securities
business, investment
progress, and outlook for
development in 2012
Guosen
Securities and
Zhangjiagang CIMC
its clients and a
27 Jun. 2012 Sanctum Cryogenic Field research Institution Ditto
few of other
Equipment Co., Ltd.
institutional
investors
Guosen
Securities and
Shijiazhuang Enric
its clients and a
28 Jun. 2012 Gas Equipment Co., Field research Institution Ditto
few of other
Ltd.
institutional
investors
Guosen
Securities and
Yantai Raffles, its clients and a
29 Jun. 2012 Field research Institution Ditto
Longkou Raffles few of other
institutional
investors
(XV) Particulars about engagement and disengagement of CPAs firm
Has this semi-annual report been audited?
□ Yes √ No □ Inapplicable
Whether changed to engage the CPAs firm or not？
√Yes □No □Inapplicable
Whether changed the CPAs firm during the audit period or not?
√Yes □No □Inapplicable
Whether executed relevant audit procedure for changing the CPAs firm or not?
√Yes □No □Inapplicable
Notes of engagement and disengagement of CPAs firm:
The Company convened the 8th Session of the 6th Board of Directors for 2012 by way of
telecommunication on 2 May 2012, at which reviewed and approved the Proposal on Engagement of CPAs
Firm; and the Company convened the 2011 Annual Shareholders’ General Meeting on 25 May 2012, at
which approved to engage PricewaterhouseCoopers Consulting as the CPAs firm for the annual audit of the
Company in 2012.
(XVI) Particulars about punishment and rectification order received by the Company,
its directors, supervisors, senior executives, shareholders, actual controller and acquirer
□Applicable √Inapplicable
(XVII) Explanation on other significant events
□Applicable √Inapplicable
45
Semi-Annual Report 2012 of CIMC
(XVIII) Particulars about significant changes in the profitability, asset status and credit
status of the Company’s convertible bonds guarantor
(Only listed companies which issue convertible corporate bonds are required to fill the form below.)
□Applicable √Inapplicable
(XIX) Index for information disclosure
Internet website for disclosing
Newspapers for disclosing
Event Publishing date information and the searching
information and relevant page
approach
CIMC: Announcement on Mr. China Securities Journal,
Sun Jiakang Ceasing to be a Securities Times, Shanghai 3 Feb. 2012 http://www.cninfo.com.cn/
CIMC Director Securities News, Ta Kung Pao
CIMC: Announcement on
China Securities Journal,
Resolutions Made at the Third
Securities Times, Shanghai 14 Feb. 2012 http://www.cninfo.com.cn/
Session of the Sixth Board of
Securities News, Ta Kung Pao
Directors for 2012
CIMC: Notice on Convening China Securities Journal,
the First Special Shareholders’ Securities Times, Shanghai 14 Feb. 2012 http://www.cninfo.com.cn/
General Meeting in 2012 Securities News, Ta Kung Pao
CIMC: Management System China Securities Journal,
for Related Party Transactions Securities Times, Shanghai 14 Feb. 2012 http://www.cninfo.com.cn/
(Feb. 2012) Securities News, Ta Kung Pao
CIMC: Independent Opinion of
Independent Directors on China Securities Journal,
Nomination and Election of Securities Times, Shanghai 14 Feb. 2012 http://www.cninfo.com.cn/
Director Candidate for the Securities News, Ta Kung Pao
Sixth Board of Directors
CIMC: The Legal Opinion
China Securities Journal,
Letter for the First Special
Securities Times, Shanghai 2 Mar. 2012 http://www.cninfo.com.cn/
Shareholders’ General Meeting
Securities News, Ta Kung Pao
for 2012
CIMC: Announcement on
China Securities Journal,
Resolutions Made at the First
Securities Times, Shanghai 2 Mar. 2012 http://www.cninfo.com.cn/
Special Shareholders’ General
Securities News, Ta Kung Pao
Meeting for 2012
CIMC: Announcement on
China Securities Journal,
Resolutions Made at the Fifth
Securities Times, Shanghai 8 Mar. 2012 http://www.cninfo.com.cn/
Session of the Sixth Board of
Securities News, Ta Kung Pao
Directors for 2012
CIMC: Announcement on the China Securities Journal,
Postponed Disclosure of the Securities Times, Shanghai 20 Mar. 2012 http://www.cninfo.com.cn/
2011 Annual Report Securities News, Ta Kung Pao
CIMC: Corporate Social China Securities Journal,
Responsibility Report of CIMC Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
for Year 2011 Securities News, Ta Kung Pao
CIMC: Announcement on
China Securities Journal,
Resolutions of the 1st Session
Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
of the 6th Supervisory
Securities News, Ta Kung Pao
Committee for 2012
CIMC: Announcement on
China Securities Journal,
Resolutions of the Sixth
Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
Session of the Sixth Board of
Securities News, Ta Kung Pao
Directors for Year 2012
46
Semi-Annual Report 2012 of CIMC
CIMC: Self-appraisal Report China Securities Journal,
on Internal Control of the Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
Company for 2011 Securities News, Ta Kung Pao
CIMC: Specific Explanation on
China Securities Journal,
Particulars of Non-operational
Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
Capital Occupation and Other
Securities News, Ta Kung Pao
Intercourse in 2011
CIMC: Announcement on
Providing Guarantees for China Securities Journal,
Application of Subsidiaries, Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
Their Dealers and Customers Securities News, Ta Kung Pao
for Bank Credits in 2012
CIMC: Announcement on
Execution of Daily
China Securities Journal,
Related-Party Transactions in
Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
2011 and Expected Daily
Securities News, Ta Kung Pao
Related-Party Transactions in
2012
China Securities Journal,
CIMC: Work Report of
Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
Independent Directors for 2011
Securities News, Ta Kung Pao
CIMC: Auditor’s Report of China Securities Journal,
Internal Control as of 31 Dec. Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
2011 Securities News, Ta Kung Pao
China Securities Journal,
CIMC: Annual Report 2011
Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
(Summary)
Securities News, Ta Kung Pao
China Securities Journal,
CIMC: 2011 Annual Auditor’s
Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
Report
Securities News, Ta Kung Pao
China Securities Journal,
CIMC: Annual Report 2011 Securities Times, Shanghai 23 Mar. 2012 http://www.cninfo.com.cn/
Securities News, Ta Kung Pao
CIMC: Announcement on China Securities Journal,
Business Performance Forecast Securities Times, Shanghai 12 Apr. 2012 http://www.cninfo.com.cn/
for the First Quarter of 2012 Securities News, Ta Kung Pao
China Securities Journal,
CIMC: Summary of Report for
Securities Times, Shanghai 25 Apr. 2012 http://www.cninfo.com.cn/
the First Quarter of 2012
Securities News, Ta Kung Pao
China Securities Journal,
CIMC: Report for the First
Securities Times, Shanghai 25 Apr. 2012 http://www.cninfo.com.cn/
Quarter of 2012
Securities News, Ta Kung Pao
CIMC: Independent Opinion of China Securities Journal,
Independent Directors on Securities Times, Shanghai 4 May 2012 http://www.cninfo.com.cn/
Accounting Firm Engagement Securities News, Ta Kung Pao
CIMC: Notice on Convening China Securities Journal,
the 2011 Annual Shareholders’ Securities Times, Shanghai 4 May 2012 http://www.cninfo.com.cn/
General Meeting Securities News, Ta Kung Pao
CIMC: Announcement on
China Securities Journal,
Resolutions Made at the Eighth
Securities Times, Shanghai 4 May 2012 http://www.cninfo.com.cn/
Session of the Sixth Board of
Securities News, Ta Kung Pao
Directors for 2012
CIMC: Announcement on China Securities Journal,
Signing a Strategic Cooperation Securities Times, Shanghai 10 May 2012 http://www.cninfo.com.cn/
Agreement with Bank of China Securities News, Ta Kung Pao
CIMC: Suggestive Notice on China Securities Journal,
Convening the 2011 Annual Securities Times, Shanghai 22 May 2012 http://www.cninfo.com.cn/
Shareholders’ General Meeting Securities News, Ta Kung Pao
CIMC: The Legal Opinion China Securities Journal, 26 May 2012 http://www.cninfo.com.cn/
47
Semi-Annual Report 2012 of CIMC
Letter for the Annual Securities Times, Shanghai
Shareholders’ General Meeting Securities News, Ta Kung Pao
for 2011
CIMC: Announcement on
China Securities Journal,
Resolutions Made at the Annual
Securities Times, Shanghai 26 May 2012 http://www.cninfo.com.cn/
Shareholders’ General Meeting
Securities News, Ta Kung Pao
for 2011
CIMC: Announcement on China Securities Journal,
Implementation of Equity Securities Times, Shanghai 14 Jun. 2012 http://www.cninfo.com.cn/
Distribution for the Year 2011 Securities News, Ta Kung Pao
VIII. Financial Report
48
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Consolidated balance sheet as at 30 June 2012
30 June 2012 31 December 2011
Note RMB’000 RMB’000
Assets
Current assets
Cash at bank and on hand V.1 4,931,305 7,788,126
Financial assets held for trading V.2 378,440 186,134
Bills receivable V.3 557,965 1,030,528
Accounts receivable V.4 10,349,376 8,110,784
Prepayments V.6 2,035,275 1,930,496
Interest receivable 5,141 2,020
Other receivables V.5 2,298,503 2,709,665
Inventories V.7 16,749,710 15,468,352
Non-current assets due within one year V.8 3,142,843 2,635,287
Other current assets V.9 948,263 865,633
Total current assets 41,396,821 40,727,025
Non-current assets
Available-for-sale financial assets V.10 621,216 571,954
Long-term receivables V.11 1,996,331 2,311,235
Long-term equity investments V.12 1,941,456 1,957,187
Investment property V.13 145,493 126,983
Fixed assets V.14 10,805,255 10,885,435
Construction in progress V.15 2,287,206 1,898,330
Intangible assets V.16 3,270,125 3,172,222
Goodwill V.17 1,289,950 1,207,504
Long-term deferred expenses V.18 34,418 34,892
Deferred tax assets V.19 678,095 704,098
Other non-current assets V.20 765,381 764,849
Total non-current assets 23,834,926 23,634,689
Total assets 65,231,747 64,361,714
49
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Consolidated balance sheet as at 30 June 2012 (continued)
30 June 2012 31 December 2011
Note RMB’000 RMB’000
Liabilities and shareholders’equity
Current liabilities
Short-term loans V.23 7,190,444 8,030,912
Financial liabilities held for trading V.24 18,111 31,107
Bills payable V.25 1,370,738 3,295,226
Accounts payable V.26 8,041,510 7,328,966
Advances from customers V.27 3,127,090 2,662,742
Employee benefits payable V.28 1,913,019 2,012,608
Taxes payable V.29 666,997 916,118
Interest payable V.30 65,554 152,067
Dividends payable V.31 297,409 116,253
Other payables V.32 3,563,860 3,393,837
Provisions V.33 830,677 736,179
Non-current liabilities due within one year V.34 1,827,158 2,560,318
Total current liabilities 28,912,567 31,236,333
Non-current liabilities
Financial liabilities held for trading V.24 86,914 74,836
Long-term loans V.35 8,285,995 6,572,585
Bond payable V.36 5,989,610 3,988,438
Long-term payable V.37 350,182 86,846
Special payable V.38 10,730 8,940
Deferred tax liabilities V.19 653,453 581,500
Other non-current liabilities V.39 200,379 198,564
Total non-current liabilities 15,577,263 11,511,709
Total liabilities 44,489,830 42,748,042
Shareholders’ equity
Share capital V.40 2,662,396 2,662,396
Capital reserve V.41 854,158 799,261
Surplus reserve V.42 2,953,160 2,953,160
Retained earnings V.43 12,494,100 12,785,092
Foreign currency translation differences (548,318) (566,755)
Total equity attributable to equity holders of
18,415,496 18,633,154
the Company
Minority interests 2,326,421 2,980,518
Total equity 20,741,917 21,613,672
Total liabilities and shareholders’ equity 65,231,747 64,361,714
50
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Balance sheet as at 30 June 2012
RMB'000
Item Note Jun-30-2012 Dec-31-2011
Current assets
Cash at bank and on hand Ⅻ、1 1,026,534 430,350
Financial assets held for trading Ⅻ、2 195,993 -
Dividends receivable Ⅻ、3 5,313,114 5,403,255
Other receivables Ⅻ、4 7,417,830 6,798,779
Total current assets 13,953,471 12,632,384
Non-current assets
Available-for-sale financial assets Ⅻ、5 613,234 564,155
Long-term equity investments Ⅻ、6 4,835,214 4,341,151
Fixed assets 135,802 137,642
Construction in progress 10,294 14,457
Intangible assets 22,044 22,246
Long-term deferred expenses 6,733 5,683
Deferred tax assets Ⅻ、16 80,890 71,554
Total non-current assets 5,704,211 5,156,888
Total assets 19,657,682 17,789,272
51
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Balance sheet as at 30 June 2012 (continued)
RMB'000
Item Note Jun-30-2012 Dec-31-2011
Current liabilities
Short-term loans Ⅻ、7 570,000 363,009
Financial liabilities held for trading Ⅻ、8 - 21,290
Employee benefits payable Ⅻ、9 761,719 671,840
Taxes payable Ⅻ、10 164,791 63,652
Interest payable Ⅻ、11 24,394 133,106
Dividends payable Ⅻ、12 198,800 -
Other payables 43,868 72,733
Non-current liabilities due within one year Ⅻ、13 1,688,748 1,094,352
Total current liabilities 3,452,320 2,419,982
Non-current liabilities
Financial liabilities held for trading 84,518 74,836
Long-term loans Ⅻ、14 4,187,490 4,223,180
Bonds Payable Ⅴ、36 5,989,610 3,988,438
Deferred tax liabilities Ⅻ、16 - -
Total non-current liabilities 10,261,618 8,286,454
Total liabilities 13,713,938 10,706,436
Shareholders’ equity
Share capital V、40 2,662,396 2,662,396
Capital reserve Ⅻ、17 289,649 199,322
Surplus reserve V、42 2,953,160 2,953,160
Retained earnings
Translation differences of financial 38,539 1,267,958
statements denominated in foreign currency - -
Total equity 5,943,744 7,082,836
Total liabilities and Shareholders’ equity 19,657,682 17,789,272
52
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Consolidated income statement
for the period ended 30 June 2012
From 1 January to 30 June 2012 From 1 January to 30 June 2011
Item Note RMB’000 RMB’000
Operating income V.44 27,364,446 36,478,098
Less: Operating costs V.44 23,013,597 29,499,900
Business taxes and surcharges V.45 162,351 73,154
Selling and distribution expenses V.46 863,756 968,591
General and administrative expenses V.47 1,655,709 1,715,951
Financial expenses V.48 236,439 399,962
Impairment loss(reversal) V.51 (24,986) 73,709
Add: Gain from changes in fair value V.49 (14,934) (88,256)
Investment income V.50 (3,522) 71,207
(Including: Income from investment in
associates and jointly controlled
enterprises) (10,095) 28,739
Operating profit 1,439,124 3,729,782
Add: Non-operating income V.52 77,031 103,013
Less:Non-operating expenses V.53 23,104 15,276
(Including:Loss from non-current assets
disposal) 4,705 7,041
Profit before income tax 1,493,051 3,817,519
Less:Income tax expenses V.54 485,373 1,024,118
Net profit for the period 1,007,678 2,793,401
Attributable to:
Equity shareholders of the Company 933,710 2,807,629
Minority shareholders 73,968 (14,228)
Earnings per share
Basic earnings per share V.55 0.3507 1.0545
Diluted earnings per share V.55 0.3495 1.0545
Other comprehensive income V.56 35,279 49,193
Total comprehensive income 1,042,957 2,842,594
Attributable to:
Equity shareholders of the Company 980,741 2,794,047
Minority shareholders 62,216 48,547
53
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Income statement for the period ended 30 June 2012
RMB'000
Item Note From 1 January to 30 June 2012 From 1 January to 30 June 2011
Ⅰ .Operating income 233 700
Ⅱ .Operating costs 17 39
Business tax and surcharges 11,947 -
General and administrative expenses 277,077 285,548
Financial expenses 107,311 (36,153)
Add: Gains/(losses) from changes in fair
Ⅻ、18 3,458 (8,719)
value
Investment income Ⅻ、19 364,578 222,704
Ⅲ .Operating(loss)/ profit (28,083) (34,749)
Add: Non-operating income Ⅻ、20 2,082 1,186
Less: Non-operating Expenses 322 310
Including:Losses from disposal of non-
(1,319) (608)
current assets
Ⅳ .(Loss)/Profit before income tax (26,323) (33,873)
Less:Income tax expenses Ⅻ、21 (21,606) (37,687)
Ⅴ .Net profit for the period (4,718) 3,814
Ⅵ.Other comprehensive income Ⅻ、22 36,809 (15,153)
Ⅶ.Total comprehensive income 32,092 (11,339)
54
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Consolidated cash flow statement
for the period ended 30 June 2012
RMB’000
Item Note From 1 January to 30 June 2012 From 1 January to 30 June 2011
Cash flows from operating activities:
Cash received from sale of goods and rendering of
25,950,382 30,785,201
services
Refund of taxes 1,089,739 2,088,686
Other cash received relating to operating activities V.57（1） 152,728 227,162
Sub-total of cash inflows 27,192,849 33,101,049
Cash paid for goods and services 24,935,924 31,152,788
Cash paid to and for employees 2,051,733 2,195,235
Cash paid for all types of taxes 1,343,578 1,309,083
Other cash paid relating to operating activities V.57（2） 968,657 2,605,387
Sub-total of cash outflows 29,299,892 37,262,493
Net cash (outflow) / inflow from operating V.58（1） (2,107,043) (4,161,444)
Cash flows from investing activities:
Cash received from disposal of investments 68,353
Cash received from return on investments 26,100 24,617
Net cash received from disposal of fixed assets,
21,949 7,301
intangible assets and other long-term assets
Cash received from disposal of subsidiaries - -
Cash received relating to other investing activities - -
Sub-total of cash inflows 48,049 100,271
Cash paid for acquisition of fixed assets, intangible
870,260 1,083,498
assets and other long-term assets
Cash paid for acquisition of investments 244,528 295,502
Cash paid for acquisition of subsidiaries 718,944 49,936
Other cash paid relating to investing activities - -
Sub-total of cash outflows 1,833,732 1,428,936
Net cash outflow from investing activities (1,785,683) (1,328,665)
Cash flows from financing activities:
Cash received from investors - -
Including: Cash received from minority - -
Cash received from borrowings 15,241,020 20,968,220
Other cash received relating to financing activities - -
Sub-total of cash inflows 15,241,020 20,968,220
Cash repayments of borrowings 12,309,686 12,913,949
Cash paid for dividends, profits distribution or 1,581,590 1,252,464
Including: Dividends and profits paid to minority
23,224 214
shareholders of subsidiaries
Other cash paid relating to financing activities V.57（3） 14,460 -
Sub-total of cash outflows 13,905,736 14,166,413
Net cash inflow / (outflow) from financing 1,335,284 6,801,807
Effect of foreign exchange rate changes on cash
(101,374) (4,728)
and cash equivalents
Net increase / (decrease) in cash and cash V.58（1） (2,658,816) 1,306,970
Add:cash and cash equivalents at the beginning
6,563,253 3,797,415
of the period
Cash and cash equivalents at the end of the period 3,904,437 5,104,385
55
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Cash flow statement for the period ended 30 June 2012
RMB'000
Item Note from 1 January to 30 June 2012 from 1 January to 30 June 2011
Ⅰ .Cash flows from operating activities:
Other cash received relating to operating activities 8,948,916 5,852,855
Cash paid to and for employees 47,532 49,433
Cash paid for all types of taxes 16,801 7,420
Other cash paid relating to operating activities 9,860,729 7,983,815
Sub-total of cash outflows 9,925,062 8,040,668
Net cash inflow / (outflow) from operating activities Ⅻ、23 (976,146) (2,187,813)
Ⅱ .Cash flows from investing activities:
Cash received from disposal of investments - 45,853
Cash received from return on investments 427,796 133,002
Net cash received from disposal of fixed assets,
2,005 1,975
intangible assets and other long-term assets
Cash received from disposal of subsidiaries 4,218 -
Sub-total of cash inflows 434,019 180,830
Cash paid for acquisition of fixed assets, intangible
7,683 24,596
assets and other long-term assets
Cash paid for acquisition of investments 703,657 93,600
Sub-total of cash outflows
711,340 118,196
Net cash inflow /(outflow) from investing activities (277,321) 62,634
Ⅲ .Cash flows from financing activities:
Cash received from borrowings and subtotal of
3,997,130 7,732,083
cash inflows
Cash repayments of borrowings 784,267 3,626,511
Cash paid for dividends, profits distribution or
1,349,880 905,494
interest
Payments relating to other financing activities cash 14,461 -
Sub-total of cash outflows 2,148,608 4,532,005
Net cash inflow / (outflow) from financing activities 1,848,522 3,200,078
Ⅳ .Effect of foreign exchange rate changes on cash
916 (919)
and cash equivalents
Ⅴ .Net increase / (decrease) in cash and cash
Ⅻ、23 595,971 1,073,980
equivalents
Add:cash and cash equivalents at the beginning of
427,874 417,461
the year
Ⅵ .Cash and cash equivalents at 30 June 2012 Ⅻ、23 1,023,845 1,491,441
56
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Consolidated statement of changes in shareholders’ equity
for the period ended 30 June 2012
RMB'000
From 1 January to 30 June 2012 2011
Attributable to equity shareholders of the Company Attributable to equity s hareholders of the Company
Item
Share Capital Surplus Retained Foreign currency Minority Share Capital Surplus Retained Foreign currency Minority
Note capital reserve reserve earnings exc. Diff interests Total capital res erve reserve earnings exc. Diff interests Total
I.Balance at 1 January 2012 2,662,396 799,261 2,953,160 12,785,092 (566,755) 2,980,518 21,613,672 2,662,396 1,349,420 3,577,588 10,689,335 (2,055,682) 2,983,643 19,206,700
II.Changes in equity for the period - - - - - - - - - - - - - -
(I) Net profit for the period - - - 933,710 - 73,968 1,007,678 - - - 3,690,926 - (31,988) 3,658,938
(II)Other comprehensive income for the year V.56 - 28,594 - - 18,437 (11,752) 35,279 - (146,828) - - (241,160) (98,415) (486,403)
Sub-total of (I)&(II) - 28,594 - 933,710 18,437 62,216 1,042,957 - (146,828) - 3,690,926 (241,160) (130,403) 3,172,535
(III) Shareholders’ contributions and decrease of
capital - - - - - - - - - - - - - -
1.Contributions by minority Shareholders - - - - - - - - (58,964) - - - 353,660 294,696
2.Acquisition of minority interests of subsidiary - (33,003) - - - (684,774) (717,777) - - - - - - -
3.Increase in minority interests resulted from
acquisition of subsidiary - - - - - - - - - - - - - -
4.Decrease in minority interests resulted from
disposal of subsidiary - - - - - - - - - - - - - -
5.Decrease in retained earnings resulted from
acquisition of minority interests - - - - - - - - - - (19,843) - (29,856) (49,699)
6.Increase in shareholders’ equity resulted from
VII.2
share-based payments - 59,306 - - - - 59,306 - 117,805 - - - 4,333 122,138
(IV)Appropriation of profits - - - - - - - - - - - - - -
1.Appropriation for surplus reserve - - - - - - - - - 92,110 (92,110) - - -
2.Distributions to shareholders V.43 - - - (1,224,702) - (31,539) (1,256,241) - - - (931,839) - (200,859) (1,132,698)
(V) Effect of change in functional currency II.4 - - - - - - - - (462,172) (716,538) (551,377) 1,730,087 - -
III.Balance at 30 June 2012 2,662,396 854,158 2,953,160 12,494,100 (548,318) 2,326,421 20,741,917 2,662,396 799,261 2,953,160 12,785,092 (566,755) 2,980,518 21,613,672
57
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Statement of changes in shareholders’ equity
for the period ended 30 June 2012
RMB'000
from 1 January to 30 June 2012 from 1 January to 31 December 2011
Translation differences Translation differences
Item Note Share Capital Surplus Retained of financial statements Share Capital Surplus Retained of financial statements
Total Total
capital reserve reserve earnings denominated in foreign capital reserve reserve earnings denominated in foreign
currency currency
Ⅰ.Balance at 1 January 2012 2,662,396 199,322 2,953,160 1,267,958 - 7,082,836 2,662,396 852,264 3,577,588 1,579,889 (1,533,994) 7,138,143
Ⅱ.Changes in equity for the period - - - - - - - - - - - -
(Ⅰ)Net profit for the period - - - (4,717) - (4,717) - - - 921,095 - 921,095
(Ⅱ)Other comprehensive income for
Ⅻ、22
the period - 36,809 - - - 36,809 - (149,727) - - - (149,727)
Sub-total of (Ⅰ)&(Ⅱ) - 36,809 - (4,717) - 32,092 - (149,727) - 921,095 - 771,368
(Ⅲ) Shareholders' contributions and
decrease of capital - - - - - - - - - - - -
1.Increase in shareholders equity
resulted from sharebased payment Ⅶ、2 - 53,518 - - - 53,518 - 105,164 - - - 105,164
(Ⅳ) Appropriation of profits - - - (1,224,702) - (1,224,702) - - - - - -
(Ⅰ).Extracting surplus reserve V、42 - - - - - - - - 92,110 (92,110) - -
(Ⅱ). Distributions to shareholders V、43 - - - (1,224,702) - (1,224,702) - - - (931,839) - (931,839)
(V)Currency change - - - - - - - (608,379) (716,538) (209,077) 1,533,994 -
Ⅲ.Balance at 30 June 2012 2,662,396 289,649 2,953,160 38,539 - 5,943,744 2,662,396 199,322 2,953,160 1,267,958 - 7,082,836
58
Semi-Annual Report 2012 of CIMC
China International Marine Containers (Group) Co., Ltd.
Notes to the financial statements
(Expressed in thousands of Renminbi Yuan unless otherwise indicated)
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 2012, the share capital of the
Company amounted to 2,662,396,051 shares. Please refer to Note V.40 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 equipment such as pressure container and
compressor; providing integrated services for natural gas distribution; production of
static container and pot-type wharf equipment and providing EP+CS (engineering
procurement and construction supervision) technical service for the storage and
processing of LNG, LPG and other petrochemical gases. Apart from the above, the
Group is also engaged in manufacturing of logistic equipment and related services,
marine projects, railway trucks production and property development, etc.
CIMC Enric Holdings Limited, the subsidiary of the Group, is listed in the Main
Board of the Stock Exchange of Hong Kong Limited. The principal activities of the
Group are the design, development, manufacturing, engineering and sales of, and the
provision of technical maintenance service for, a wide spectrum of transportation,
storage and processing equipment that is widely used in energy, chemical and liquid
food industries.
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Semi-Annual Report 2012 of CIMC
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 2012 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 2011.
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 YEAR
The accounting year of the Group is from 1 January to 31 December.
4. FUNCTIONAL CURRENCY
Functional currency is determined by the Company and its subsidiaries on the basis of
the currency in which major income and costs are denominated and settled.
The functional currency of the Company and certain subsidiaries domiciled in PRC
was U.S dollar for the year of 2010 and prior years. Due to the fact that Renminbi
becomes the currency in which major income and costs are denominated and settled,
the functional currency of the Company and these subsidiaries was changed to be
Renminbi starting from 1 January 2011. Hong Kong and certain overseas subsidiaries
use local currencies as their functional currencies. Foreign currencies are defined as
currency other than functional currency.
Financial statements of the Company are presented in Renminbi. For subsidiaries
using currencies other than Renminbi as their functional currencies, the Company
translates the financial statements of these subsidiaries into Renminbi (see Note II.8).
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Semi-Annual Report 2012 of CIMC
II. BASIS OF PREPARATION (CONTINUED)
5. ACCOUNTING TREATMENTS FOR BUSINESS COMBINATIONS
INVOLVING ENTERPRISES UNDER AND THOSE NOT UNDER
COMMON CONTROL
(1) Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business
combination in which all of the combining enterprises are ultimately controlled by the
same party or parties both before and after the business combination, and that control
is not transitory. The assets and liabilities obtained are measured at the carrying
amounts as recorded by the enterprise being combined at the combination date. The
difference between the carrying amount of the net assets obtained and the carrying
amount of consideration paid for the combination (or the total face value of shares
issued) is adjusted to capital premium in the capital reserve. If the balance of the
capital premium is insufficient, any excess is adjusted to retained earnings. Any costs
directly attributable to the combination shall be recognised in profit or loss for the
current period when occurred. 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 at the
acquisition date 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 acquiree‘s
identifiable asset, liabilities and contingent liabilities, if satisfying the recognition
criteria, are recognised by the Group at their fair value at the acquisition date. The
acquisition date is the date on which the acquirer effectively obtains control of the
acquiree.
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Semi-Annual Report 2012 of CIMC
II. BASIS OF PREPARATION (CONTINUED)
6. PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
The scope of consolidated financial statements is based on control and the
consolidated financial statements comprise the Company and its subsidiaries.
Control is the power to govern the financial and operating policies of an enterprise 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 position, financial performance and
cash flows 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. The opening balances and the comparative figures of the consolidated
financial statements are also restated. In the preparation of the consolidated
financial statements, the subsidiary‘s assets and liabilities based on their carrying
amounts are included in the consolidated balance sheet, and financial performance is
included in the consolidated income statement, respectively, from the date that the
ultimate parent company of the Company obtains the control of the subsidiary to be
consolidated.
Where a subsidiary was acquired during the reporting period, through a business
combination involving enterprises not under common control, the identifiable assets
and liabilities of the acquired subsidiaries are included in the scope of consolidation
from the date that control commences, based on the fair value of those identifiable
assets and liabilities at the acquisition date.
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 (capital surplus) in the consolidated balance sheet. If the credit balance
of capital reserve (capital surplus) is insufficient, any excess is adjusted to retained
earnings.
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Semi-Annual Report 2012 of CIMC
II. BASIS OF PREPARATION (CONTINUED)
6. PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
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 Group derecognises assets, liabilities, minority interests and
other related items in owners’ equity in relation to that subsidiary. The remaining
equity investment is remeasured at its fair value at the date when control is lost. Any
gains or losses therefore incurred are recognised 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.
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.
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Semi-Annual Report 2012 of CIMC
II. BASIS OF PREPARATION (CONTINUED)
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, except for those arising from the principal and interest of specific foreign
currency borrowings for the purpose of acquisition, construction or production of
qualifying assets (see Note II.16), are recognised in profit or loss. 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 resulting exchange differences are recognised in profit or loss, except
for the differences arising from the translation of available-for-sale financial assets,
which are recognised as other comprehensive income in capital reserve.
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 translation differences are recognised in a separate
component of equity. Upon disposal of a foreign operation, the cumulative amount
of the translation 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, borrowings, debentures payable and share capital.
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Semi-Annual Report 2012 of CIMC
II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS (CONTINUED)
(1) Recognition and measurement of 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 related
directly attributable transaction costs are charged to profit or loss; for other categories
of financial assets and financial liabilities, any related directly 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.
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 measured at amortised cost
using the effective interest method.
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Semi-Annual Report 2012 of CIMC
II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS
(1) Recognition and measurement of financial assets and financial liabilities
(continued)
- 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.
Available-for-sale financial assets whose fair value cannot be measured
reliably are measured at cost subsequent to initial recognition. Other
available-for-sale financial assets are measured at fair value subsequent to
initial recognition 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 as other comprehensive
income in capital reserve. When an investment is derecognised, the
cumulative gain or loss is reclassified from equity to profit or loss. Dividend
income from the available-for-sale 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.
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 contingencies
(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.
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Semi-Annual Report 2012 of CIMC
II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS
(2) Offsetting a financial asset against a financial liability
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; and
- the Group intends either to settle on a net basis, or to realise the financial asset
and settle the financial liability simultaneously.
(3) Determination of fair value
If there is an active market for a financial asset or financial liability, the quoted price
in the active market is used to establish the fair value of the financial asset or
financial liability.
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, discounted cash flow
analysis, option pricing models, and etc. The Group calibrates the valuation technique
and tests it for validity periodically.
(4) 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:
- the 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, cancelled or expires.
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II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS (CONTINUED)
(5) Impairment of 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, an impairment loss is
recognised.
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:
- 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 reclassified to 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.
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II. BASIS OF PREPARATION (CONTINUED)
9. FINANCIAL INSTRUMENTS (CONTINUED)
(6) Equity instrument
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 shareholders’ equity.
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.
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.
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II. BASIS OF PREPARATION (CONTINUED)
10. IMPAIRMENT OF RECEIVABLES (CONTINUED)
(a) Receivables that are individually significant and impairment provided 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 impairment provided more of the total receivables.
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 impairment provided credit losses that have not been incurred)
on an individual basis. discounted at the original effective interest rate.
(b) Receivable that are individually insignificant but impairment provided 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 impairment provided unpaid after collection efforts or with unique
on an individual basis. characteristics.
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 impairment provided credit losses that have not been incurred)
on an individual basis. discounted at the original effective interest rate.
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II. BASIS OF PREPARATION (CONTINUED)
10. IMPAIRMENT OF RECEIVABLES (CONTINUED)
(c) Receivables that are assessed for impairment on a collective group basis:
The assessment is made collectively where receivables share similar credit
risk characteristics, including those having not been individually assessed as
impaired.
Determination method of Accounts receivable are divided into six groups of
the group based on credit containers, vehicles, energy and chemistry
risk characteristics equipment, offshore engineering, other business, and
due from related parties, land lease prepayments and
operating deposits according to the industry and
business nature of customers and the characteristics
of the receivables. As to offshore engineering groups
and other 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 percentage 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 equipment 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 - 5% 5% 5%
1 to 2 years
(inclusive) 30% 1.5 - 10% 30% 30%
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2 to 3 years
(inclusive) 100% 1.5 - 30% 100% 100%
Over 3 years 100% 100% 100% 100%
Note: Aforesaid ageing group, the provision of Group 2 is determined based
on natural age, while others are determined based on the overdue age.
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II. BASIS OF PREPARATION (CONTINUED)
11. INVENTORIES
(1) Classification
Inventories include raw materials, work in progress, semi-finished goods, finished
goods and reusable materials. Reusable materials include low-value consumables,
packaging materials and other materials, which can be used repeatedly but do not
meet the definition of fixed assets.
(2) Cost of inventories
Cost of inventories is calculated using the weighted average method.
(3) The underlying factors in the determination of net realisable value of inventories
and the basis of provision for decline in value of inventories
Inventories are initially measured at cost. Cost of inventories comprises all costs of
purchase, costs of conversion and other expenditures incurred in bringing the
inventories to their present location and condition. 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.
At the balance sheet date, inventories are carried at the lower of cost and net
realisable value.
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 in profit or loss as a provision for diminution in the value of inventories.
(4) Inventory system
The Group maintains a perpetual inventory system.
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II. BASIS OF PREPARATION (CONTINUED)
11. INVENTORIES (CONTINUED)
(5) Amortisation of reusable material including low-value consumables and packaging
materials
Reusable materials including low-value consumables and packaging materials are
amortised in full when received for use. The amounts of the amortisation are included
in the cost of the related assets or profit or loss.
12. LONG-TERM EQUITY INVESTMENTS
(1) Investment cost
(a) Long-term equity investments acquired through a business combination
- The initial investment cost of a long-term equity investment obtained
through a business combination involving entities under common
control is the Company’s share of the carrying amount 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, if it is
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; if it is achieved otherwise, the initial investment cost
comprises the aggregate of the fair value of assets transferred,
liabilities incurred or assumed, and equity securities issued by the
Company, in exchange for control of the acquiree.
(b) Long-term equity investments acquired otherwise than through a business
combination
- An investment in a subsidiary acquired otherwise than through a
business combination is initially recognised at actual payment cost if
the Group acquires the investment by cash, or at the fair value of the
equity securities issued if an investment is acquired by issuing equity
securities, or at the value stipulated in the investment contract or
agreement if an investment is contributed by shareholders.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) Subsequent measurement
(a) Investments in subsidiaries
In the Company’s separate financial statements, long-term equity investments
in subsidiaries are accounted for using the cost method. Except for cash
dividends or profit distributions 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 subsequently
accounted for using the equity method, unless the investment is classified as
held for sale (see Note II.28).
The Group makes the following accounting treatments when using the equity
method:
- Where the initial investment cost of a long-term equity investment
exceeds the Group’s interest in the fair value of the investee’s
identifiable net assets at the date of acquisition, the investment is
initially recognised at the initial investment cost. Where the initial
investment cost is less than the Group’s interest in the fair value of the
investee’s identifiable net assets at the date of acquisition, the
investment is initially recognised at the investor’s share of the fair
value of the investee’s identifiable net assets, and the difference is
charged to profit or loss.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) Subsequent measurement (continued)
(b) Investment in jointly controlled enterprises and associates (continued)
- After the acquisition of the investment, the Group recognises its share
of the investee’s profit or loss after deducting the amortisation of the
debit balance of equity investment difference, which was recognised
by the Group before the first-time adoption of CAS, as investment
income or losses, and adjusts the carrying amount of the investment
accordingly. The debit balance of the equity investment difference is
amortised using the straight-line method over the period of 10 years in
accordance with previous accounting standards. Once the investee
declares any cash dividends or profit 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.
- The Group adjusts the carrying amount of the long-term equity
investment for changes in owners’ equity of the investee other than
those arising from net profits or losses, and recognises the
corresponding adjustment in equity.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) Subsequent measurement (continued)
(c) Other long-term equity investments
Other long-term equity investments refer to investments where the Group
does not have control, joint control or significant influence over the investees,
and the investments are not quoted in an active market and their fair value
cannot be reliably measured.
Such investments are initially recognised at the cost determined in accordance
with the same principles as those for jointly controlled enterprises and
associates, and then accounted for using the cost method. Cash dividends or
profit distributions declared by subsidiaries and attributed to the Company
shall be recognised as investment income irrespective of whether these
represent the net profit realised by the investee before or after the investment,
except those that have been declared but unpaid at the time of acquisition and
therefore included in the price paid or the consideration.
(3) Basis for determining the existence of joint control or significant influence over an
investee
Joint control is the contractual agreed sharing of control over an investee’s economic
activity, and exists only when the strategic financial and operating decisions relating
to the activity require the unanimous consent of the parties sharing the control. The
following evidences shall be considered when determining whether the Group can
exercise joint control over an investee:
no single venturer is in a position to control the operating activities unilaterally;
operating decisions relating to the investee’s economic activity require the
unanimous consent of the parties sharing the control;
if the parties sharing the control appoint one venturer as the operator or manager of
the joint venture through the contractual arrangement, the operator must act
within the financial and operating policies that have been agreed by the
venturers in accordance with the contractual arrangement.
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II. BASIS OF PREPARATION (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(3) Basis for determining the existence of joint control or significant influence over an
investee (continued)
Significant influence is the power to participate in the financial and operating policy
decisions of an investee but is not control or joint control over those policies. The
following one or more evidences shall be considered when determining whether the
Group can exercise significant influence over an investee:
representation on the board of directors or equivalent governing body of the
investee;
participation in policy-making processes;
material transactions between the investor and the investee;
interchange of managerial personnel; or
provision of essential technical information.
(4) Method of impairment testing and measuring
For the method of impairment testing and measuring for subsidiaries, jointly
controlled enterprises and associates, refer to Note II.20.
For other long-term equity investments, the carrying amount is required to be tested
for impairment at the balance sheet date. If there is objective evidence that the
investments may be impaired, the impairment shall be assessed on an individual
basis. The impairment loss is measured as the amount by which the carrying amount
of the investment exceeds the present value of estimated future cash flows discounted
at the current market rate of return for a similar financial asset. Such impairment
loss is not reversed. The other long-term equity investments are stated at cost less
impairment losses in the balance sheet.
13. INVESTMENT PROPERTIES
Investment properties are properties held either to earn rental income or for capital
appreciation or for both. Investment properties are accounted for using the cost model
and stated in the balance sheet at cost less accumulated depreciation, amortisation and
impairment losses. An investment property is depreciated or amortised, less its
estimated residual value, using the straight line method over its estimated useful life,
unless the investment properties are classified as held for sale (see Note II.28). For
the method of impairment testing and measuring, refer to Note II.20.
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II. BASIS OF PREPARATION (CONTINUED)
13. INVESTMENT PROPERTIES (CONTINUED)
The useful lives, residual value rate and depreciation / amortisation rate of each class
of investment properties 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 to recognise fixed assets criteria
are satisfied, and the carrying amount of the replaced part is derecognised. The costs
of the day-to-day servicing of fixed assets are recognised in profit or loss as incurred.
Fixed assets are stated in the balance sheet at cost less accumulated depreciation and
impairment losses.
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II. BASIS OF PREPARATION (CONTINUED)
14. FIXED ASSETS (CONTINUED)
(2) Depreciation
Fixed assets are depreciated using the straight-line method over their estimated useful
lives, unless the fixed asset is classified as held for sale (see Note II.28). The
estimated useful lives, residual values and depreciation rates 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 value and depreciation methods are reviewed at least at each
year-end.
(3) For the method of impairment testing and measuring, refer to Note II.20.
(4) Criteria of recognition and method of measuring for fixed assets under a finance
lease
For criteria of recognition and method of measuring for fixed assets under a finance lease, refer to Note II 27(3).
(5) Disposal
The carrying amount of a fixed asset shall be derecognised:
on disposal; or
when no future economic benefits are expected to be generated from its use or
disposal.
Gains or losses arising from the retirement or disposal of an item of fixed asset are
determined as the difference between the net disposal proceeds and the carrying
amount of the item and are recognised in profit or loss on the date of retirement or
disposal.
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II. BASIS OF PREPARATION (CONTINUED)
15. CONSTRUCTION IN PROGRESS
The cost of self-constructed assets includes the cost of materials, direct labour,
capitalised borrowing costs (see Note II.16), and any other costs directly attributable
to bringing the asset to working condition for its intended use.
A self-constructed asset is included in construction in progress before it is transferred
to fixed asset when it is ready for its intended use. No depreciation is provided against
construction in progress. Construction in progress is stated in the balance sheet at cost
less impairment losses (see Note II.20).
16. BORROWING COSTS
Borrowing costs incurred directly attributable to the acquisition, construction or
production of a qualifying asset are capitalised as part of the cost of the asset.
Except for the above, other borrowing costs are recognised as financial expenses in
the income statement when incurred.
During the capitalisation period, the amount of interest (including amortisation of any
discount or premium on borrowing) to be capitalised in each accounting period is
determined as follows:
- Where funds are borrowed specifically for the acquisition, construction or
production of a qualifying asset, the amount of interest to be capitalised is the
interest expense calculated using effective interest rates during the period less
any interest income earned from depositing the borrowed funds or any
investment income on the temporary investment of those funds before being
used on the asset.
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II. BASIS OF PREPARATION (CONTINUED)
16. BORROWING COSTS (CONTINUED)
- Where funds are borrowed generally and used for the acquisition, construction
or production of a qualifying asset, the amount of interest to be capitalised on
such borrowings is determined by applying a capitalisation rate to the
weighted average of the excess amounts of cumulative expenditures on the
asset over the above amounts of specific borrowings. The capitalisation rate
is the weighted average of the interest rates applicable to the general-purpose
borrowings.
The effective interest rate is determined as the rate that exactly discounts
estimated future cash flow through the expected life of the borrowing or,
when appropriate, a shorter period to the initially recognised amount of the
borrowings.
During the capitalisation period, exchange differences related to the principal
and interest on a specific-purpose borrowing denominated in foreign currency
are capitalised as part of the cost of the qualifying asset. The exchange
differences related to the principal and interest on foreign currency
borrowings other than a specific-purpose borrowing are recognised as a
financial expense in the period in which they are incurred.
The capitalisation period is the period from the date of commencement of
capitalisation of borrowing costs to the date of cessation of capitalisation,
excluding any period over which capitalisation is suspended. Capitalisation
of borrowing costs commences when expenditure for the asset is being
incurred, borrowing costs are being incurred and activities of acquisition,
construction or production that are necessary to prepare the asset for its
intended use or sale are in progress, and ceases when the assets become ready
for their intended use or sale. Capitalisation of borrowing costs is suspended
when the acquisition, construction or production activities are interrupted
abnormally and the interruption lasts over three months.
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II. BASIS OF PREPARATION (CONTINUED)
17. INTANGIBLE ASSETS
Intangible assets are stated in the balance sheet at cost less accumulated amortisation
(where the estimated useful life is finite) and impairment losses (see Note II.20). For
an intangible asset with finite useful life, its cost less residual value and impairment
loss is amortised on the straight-line method or other more appropriate methods that
can reflect the pattern in which the asset’s economic benefits are expected to be
realised over its estimated useful life, unless the intangible asset is classified as held
for sale (see Note II.28).
The respective amortisation periods for such intangible assets are as follows:
Amortisation periods (years)
Land use rights 20 - 50
Maritime space use rights 40 - 50
Technological know-how and trademarks 5 - 10
Timber concession rights 20
Customer relationships 3-8
Customer contracts 3-4
An intangible asset is regarded as having an indefinite useful life and is not amortised
when there is no foreseeable limit to the period over which the asset is expected to
generate economic benefits for the Group. At the balance sheet date, the Group does
not have any intangible assets with indefinite useful lives.
Expenditures on an internal research and development project are classified into
expenditures on the research phase and expenditures on the development phase.
Research is original and planned investigation undertaken with the prospect of
gaining new scientific or technical knowledge and understanding. Development is
the application of research findings or other knowledge to a plan or design for the
production of new or substantially improved materials, devices, products or processes
before the start of commercial production or use.
Expenditures on research phase are recognised in profit or loss when incurred.
Expenditures on development phase are capitalised if development costs can be
measured reliably, the product or process is technically and commercially feasible,
and the Group intends to and has sufficient resources to complete development.
Capitalised development costs are stated at cost less impairment losses (see Note
II.20). Other development expenditures are recognised as expenses in the period in
which they are incurred.
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II. BASIS OF PREPARATION (CONTINUED)
18. GOODWILL
Goodwill represents the excess of cost of acquisition over the acquirer’s interest in
the fair value of the identifiable net assets of the acquiree under the business
combination involving entities not under common control.
Goodwill is not amortised and is stated at cost less accumulated impairment losses
(see Note II.20). On disposal of an asset group or a set of asset groups, any
attributable amount of purchased goodwill is written off and included in the
calculation of the profit or loss on disposal.
19. LONG-TERM DEFERRED EXPENSE
Long-term deferred expenses are amortised on a straight-line method within the
beneficial period:
Item Amortisation period
Water and electricity
capacity enlargement expenses 5-10 years
Rental 2-10 years
Others 5-10 years
20. IMPAIRMENT OF ASSETS OTHER THAN INVENTORIES,
FINANCIAL ASSETS AND OTHER LONG-TERM INVESTMENTS
The carrying amounts of the following assets are reviewed at each balance sheet date
based on the internal and external sources of information to determine whether there
is any indication of impairment:
- fixed assets
- construction in progress
- intangible assets
- investment properties measured using a cost model
- long-term equity investments in subsidiaries, associates and jointly controlled
enterprises
- goodwill and etc.
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. Goodwill is allocated to each asset group or set of asset groups, which
is expected to benefit from the synergies of the combination for the purpose of
impairment testing.
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II. BASIS OF PREPARATION (CONTINUED)
20. IMPAIRMENT OF ASSETS OTHER THAN INVENTORIES,
FINANCIAL ASSETS AND OTHER LONG-TERM INVESTMENTS
(CONTINUED)
The recoverable amount of an asset, asset group or set of asset groups is the higher of
its fair value less costs to sell and its present value of expected future cash flows.
An asset group is the smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other assets or asset groups. An
asset group is composed of assets directly relating to cash-generation. Identification
of an asset group is based on whether major cash inflows generated by the asset group
are largely independent of the cash inflows from other assets or asset groups. In
identifying an asset group, the Group also considers how management monitors the
Group’s operations and how management makes decisions about continuing or
disposing of the Group’s assets.
An asset’s fair value less costs to sell is the amount determined by the price of a sale
agreement in an arm’s length transaction, less the costs that are directly attributable to
the disposal of the asset. The present value of expected future cash flows of an asset
is determined by discounting the future cash flows, estimated to be derived from
continuing use of the asset and from its ultimate disposal, to their present value using
a pre-tax discount rate.
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 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, the
carrying amount of an impaired asset will not be lower than the greatest amount of its
individual fair value less costs to sell (if determinable), the present value of expected
future cash flows (if determinable) and zero.
Once an impairment loss is recognised, it is not reversed in a subsequent period.
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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 payment transactions in the Group are classified as equity-settled
share-based payments and cash-settled share-based payments.
(2) Method to determine the fair value of equity instruments
Fair value of stock option is estimated based on binomial lattice model. Contract term
of the stock option is used as the input variable of this model. And the binomial lattice
model includes estimation of early execution of the option. The following factors are
taken into account when using the binomial lattice model: (1) exercise price of the
option; (2) vesting period; (3) current price of basic stocks; (4) expected fluctuation
of stocks; (5) expected dividends of stocks; (6) risk-free rate within the option term.
(3) Basis of the best estimate of the number of equity instruments expected to vest
At each balance sheet date during the vesting period, the Group makes the best
estimation according to the latest information of the number of employees who are
granted to vest and revises the number of equity instruments expected to vest. On
vesting date, the estimate shall be equal to the number of equity instruments that
ultimately vested.
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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 vest immediately, the fair value
of the equity instruments granted is, on grant date, recognised as relevant cost
or expenses with a corresponding increase in capital reserve. 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.
- Cash-settled share-based payments
Where the Group receives services from employees by incurring a liability to
deliver cash or other assets for amounts that are determined based on the price
of shares or other equity instruments, the service received from employees is
measured at the fair value of the liability incurred. If the rights under a
cash-settled share-based payment 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,
recognises the services received for the current period as related costs or
expenses, with a corresponding increase in liability, at an amount equal to the
fair value of the liability based on the best estimate of the outcome of vesting.
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 a
cash-settled share-based payment transaction if it has an obligation to settle
the transaction and the awards granted to its employees are the equity
instruments of other entities within the same group.
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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.
(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 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.
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23. REVENUE RECOGNITION (CONTINUED)
(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 completion of a physical
proportion of the contract 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.
(4) Interest income
Interest income is recognised on a time proportion basis with reference to the
principal outstanding and the applicable effective interest rate.
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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 the cost of relevant assets or expenses in the current period.
(1) Social insurance and housing fund
Pursuant to the relevant laws and regulations of the PRC, employees of the Group
participate in the social insurance system established and managed by government
organisations. The Group makes social insurance contributions - including
contributions to basic pension insurance, basic medical insurance, unemployment
insurance, work-related injury insurance, maternity insurance and etc. - as well as
contributions to housing fund, at the applicable benchmarks and rates stipulated by
the government for the benefit of its employees. The social insurance and housing
fund contributions are recognised as part of the cost of assets or charged to profit or
loss on an accrual basis. Except for the above contributions, the Group does not have
any other obligations in this respect.
(2) Termination benefits
When the Group terminates the employment relationship with employees before the
employment contracts expire, 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
are 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
- The Group is not allowed to withdraw from termination plan or redundancy
offer unilaterally.
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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 TAX 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.
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. Such reduction is reversed to the extent that it
becomes probable that sufficient taxable profits will be available.
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26. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
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 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. 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 properties (see
Note II.13) are depreciated in accordance with the Group’s depreciation policies
described in Note II.14(2). Impairment losses are provided for in accordance with
the accounting policy described in Note II.20. Other leased out assets under
operating leases are amortised using the straight-line method. Income derived from
operating leases is recognised in the income statement using the straight-line method
over the lease term. If initial direct costs incurred in respect of the assets leased out
are material, the costs are initially capitalised and subsequently amortised in profit or
loss over the lease term on the same basis as the lease income. Otherwise, the costs
are charged to profit or loss immediately.
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27. OPERATING AND FINANCE LEASES (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 value and the present value of the minimum lease
payments, each determined at the inception of the lease. At the commencement of
the lease term, 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 principles 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 as long-term payables or non-current
liabilities due within one year, respectively, in the balance sheet.
(4) Assets leased out under finance leases
At the commencement of the lease term, 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
value 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.
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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 properties subsequently
measured using the cost model, long-term equity investment etc. but not include
financial assets and deferred tax assets. Non-current assets held for sale are stated at
the lower of carrying amount and net realisable value. Any excess of the carrying
amount over the net realisable value is recognised as impairment loss. At balance
sheet date, non-current assets held for sale are still presented under corresponding
asset classification as they were.
29. HEDGE ACCOUNTING
Hedge accounting is a method which recognises the offsetting effects on profit or loss
of changes in the fair values of the hedging instrument and the hedged item in the
same accounting period(s).
Hedged items are the items that expose the Group to risks of changes in fair value or
future cash flows and that are designated as being hedged. The Group’s hedged item
include a forecast transaction that is settled with a fixed amount of foreign currency
and expose the Group to foreign currency risk.
A hedging instrument is a designated derivative whose changes in fair value or cash
flows are expected to offset changes in the fair value or cash flows of the hedged item.
For a hedge of foreign currency risk, a non-derivative financial asset or
non-derivative financial liability may also be used as a hedging instrument.
The hedge is assessed by the Group for effectiveness on an ongoing basis and judged
whether it has been highly effective throughout the accounting periods for which the
hedging relationship was designated. A hedge is regarded as highly effective if both
of the following conditions are satisfied:
- at the inception and in subsequent periods, the hedge is expected to be highly
effective in achieving offsetting changes in fair value or cash flows
attributable to the hedged risk during the period for which the hedge is
designated;
- the actual results of offsetting are within a range of 80% to 125%.
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29. HEDGE ACCOUNTING (CONTINUED)
- Cash flow hedges
A cash flow hedge is a hedge of the exposure to variability in cash flows. The
portion of the gain or loss on the hedging instrument that is determined to be
an effective hedge is recognised directly in shareholders’ equity as a separate
component. That effective portion is adjusted to the lesser of the following
in absolute amounts:
- the cumulative gain or loss on the hedging instrument from inception of the
hedge
- The cumulative change in present value of the expected future cash flows on
the hedged item from inception of the hedge
The portion of the gain or loss on the hedging instrument that is determined to be an
ineffective hedge is recognised in profit or loss.
If a hedge of a forecast transaction subsequently results in the recognition of a
non-financial asset or non-financial liability, the associated gain or loss is removed
from shareholders’ equity and recognised in profit or loss in the same period during
which the financial asset or financial liability affects profit or loss. However, if the
Group expects that all or a portion of a net loss recognised directly in shareholders’
equity will not be recovered in future accounting periods, it reclassifies into profit or
loss the amount that is not expected to be recovered.
If a hedge of a forecast transaction subsequently results in the recognition of a
financial asset or a financial liability, the associated gain or loss is removed from
equity and recognised in profit or loss in the same period during which the financial
asset or financial liability affects profit or loss. However, if the Group expects that all
or a portion of a net loss recognised directly in shareholders’ equity will not be
recovered in future accounting periods, it reclassifies into profit or loss the amount
that is not expected to be recovered.
For cash flow hedges, other than those covered by the preceding two policy
statements, the associated gain or loss is removed from shareholders’ equity and
recognised in profit or loss in the same period or periods during which the hedged
forecast transaction affects profit or loss.
When a hedging instrument expires or is sold, terminated or exercised, or the hedge
no longer meets the criteria for hedge accounting, the Group will discontinue the
hedge accounting treatments prospectively. In this case, the gain or loss on the
hedging instrument that remains recognised directly in shareholders’ equity from the
period when the hedge was effective shall not be reclassified into profit or loss and is
recognised in accordance with the above policy when the forecast transaction occurs.
If the forecast transaction is no longer expected to occur, the gain or loss on the
hedging instrument that remains recognised directly in shareholders’ equity from the
period when the hedge was effective shall be reclassified into profit or loss
immediately.
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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 and close family
members of such individuals; and
(k) close family members of key management personnel of the Company’s parent;
and
(l) other enterprises that are controlled or jointly controlled by principal
individual investors, key management personnel of the Group, and close
family members of such individuals.
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31. RELATED PARTIES (CONTINUED)
Besides the related parties stated above determined in accordance with the
requirements of CAS, the following enterprises and individuals are considered as (but
not restricted to) related parties based on the disclosure requirements of
Administrative Procedures on the Information Disclosures of Listed Companies
issued by the CSRC:
(m) enterprises or persons that act in concert that hold 5% or more of the
Company’s shares;
(n) individuals and close family members of such individuals who directly or
indirectly hold 5% or more of the Company’s shares, supervisors for listed
companies and their close family members;
(o) enterprises that satisfy any of the aforesaid conditions in (a), (c) and (m)
during the past 12 months or will satisfy them within the next 12 months
pursuant to a relevant agreement;
(p) individuals who satisfy any of the aforesaid conditions in (i), (j) and (n) during
the past 12 months or will satisfy them within the next 12 months pursuant to
a relevant agreement; and
(q) enterprises, other than the Company and subsidiaries controlled by the
Company, which are controlled directly or indirectly by an individual defined
in (i), (j), (n) or (p), or in which such an individual assumes the position of a
director or senior executive.
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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 financial performance 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, financial performance and cash flows, etc.
Two or more operating segments may be aggregated into a single operating segment
if the segments have same or similar economic characteristics, and are similar in
respect of the following aspects:
- the nature of each product and service;
- the nature of production processes;
- the type or class of customers for the products and services;
- the methods used to distribute the products or provide the services;
- the legal and regulatory impact on manufacturing of products and rendering of
services.
Inter-segment revenues are measured on the basis of actual transaction price for such
transactions for segment reporting, and segment accounting policies are consistent
with those for the consolidated financial statements.
33 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements requires management to make estimates and
assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from
these estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
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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 recognised.
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
has been a change in the factors used to determine the provision for impairment which
indicates that the value of the receivables has recovered, the impairment loss
recognised in prior years is reversed.
(2) Provision for diminution in value of inventories
As described in Note II.11, the net realisable value of inventories is under
management‘s regular review, and as a result, provision for diminution in value of
inventories is recognised for the excess of inventories’ carrying amounts over their
net realisable value. When making estimates of net realisable value, the Group takes
into consideration the use of inventories held on hand and other information available
to form the underlying assumptions, including the inventories‘ market prices and the
Group‘s historical operating costs. The actual selling price, the costs of completion
and the costs necessary to make the sale and relevant taxes may vary based on the
changes in market conditions and product saleability, manufacturing technology and
the actual use of the inventories, resulting in the changes in provision for diminution
in value of inventories. The net profit or loss may then be affected in the period when
the provision for diminution in value of inventories is adjusted.
(3) Impairment of assets except inventories, financial assets and other long-term equity
investment
As described in Note II.20, assets such as fixed assets, intangible assets and
investment properties 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, an impairment loss is recognised.
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33 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
(CONTINUED)
(3) Impairment of assets except inventories, financial assets and other long-term equity
investment (continued)
The recoverable amount of an asset (asset group) is the greater of its fair value less
costs to sell 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.
(4) Depreciation and amortisation of assets such as fixed assets, intangible assets and
investment properties
As described in Note II.13, 14 and 17, investment properties, fixed assets and
intangible assets are depreciated and amortised over their useful lives after taking into
account residual value. The useful lives of the assets are regularly reviewed to
determine the depreciation and amortisation costs charged in each reporting period.
The useful lives of the assets are determined based on historical experiences of
similar assets and the estimated technical changes. If there have been significant
changes in the factors used to determine the depreciation or amortisation, the rate of
depreciation or amortisation is revised prospectively.
(5) Warranty provisions
As described in Note V.33, the Group makes provisions under the warranties it gives
on the sale of its products based mainly on the Group‘s recent claim experience.
Because it is possible that the recent claim experience may not be indicative of future
claims that the Group will receive in respect of past sales, a considerable level of
management‘s judgement is required and exercised to estimate the provision. Any
increase or decrease in the provision will affect profit or loss in future years.
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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.
101
Semi-Annual Report 2012 of CIMC
III. TAXATION
1. MAIN TAXES AND TAXES RATES
Types of tax Taxable base Tax rate
Value added tax The output VAT calculated based on taxable income from 17%
(VAT) 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 7%
Income tax Taxable income Note1
The Netherlands / Calculated based on revenue arising from sales of goods
Australia service tax and rendering of service, less deductible or refundable
rate taxes for purchase of goods 10 -19%
Note1: The income tax rates applicable to the Group for the year are as follows:
2012 2011
The Company 25% 24%
Domestic subsidiaries 12.5 - 25% 12.5 - 25%
Subsidiaries registered in Hong Kong 16.5% 16.5%
Subsidiaries registered in British Virgin Islands - -
Subsidiary registered in Suriname 36% 36%
Subsidiary registered in Cambodia 20% 20%
Subsidiary registered in US 15 - 35% 15 - 35%
Subsidiary registered in Germany 31.6% 31.6%
Subsidiary registered in Britain 28% 28%
Subsidiary registered in Australia 30% 30%
Subsidiary registered in the Netherlands 25.5% 25.5%
Subsidiary registered in Belgium 34% 34%
Subsidiary registered in Denmark 25% 25%
Subsidiary registered in Finland 26% 26%
Subsidiary registered in Poland 19% 19%
Subsidiary registered in Thailand 30% 30%
Subsidiary registered in Singapore 17% 17%
102
Semi-Annual Report 2012 of CIMC
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 25% 15% Recognised as high-tech
Airport Support Co., Ltd enterprises, in 2010 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 2012
is the fifth profit making year
3 Tianjin CIMC Special Vehicle Co., Ltd 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2012
is the fifth 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 2012
is the fifth profit making year
5 Shenzhen CIMC Intelligent Technology 25% 12.5% Recognised as high-tech
Co., Ltd. “enterprises, in 2011 entitled to
15% preferential rate
6 Ianermongolia Holonbuir CIMC Wood 25% 12.5% Entitled to tax holiday of
Co., Ltd “two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
7 Tianjin CIMC Containers Co., Ltd 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
8 Shanghai CIMC Yangshan Container 25% 12.5% Entitled to tax holiday of
Service Co.,Ltd “two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
9 Zhangjiagang CIMC Sanctum 25% 15% Recognised as high-tech
Cryogenic Equipment Co., Ltd Enterprises in 2010, entitled
to 15% preferential rate
10 Zhumadian CIMC Huajun Vehicle 25% 15% Recognised as high-tech
Co., Ltd. Enterprises in 2010, entitled
to 15% preferential rate
11 Yangzhou Tonglee Reefer Container 25% 12.5% Entitled to tax holidays of
Co., Ltd “two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
103
Semi-Annual Report 2012 of CIMC
III. TAXATION (CONTINUED)
2. TAX PREFERENCE (CONTINUED)
Local
Statutory Preferential
Name of enterprises tax rate rate Reasons
12 Yangzhou CIMC Tonghua 25% 12.5% Entitled to tax holidays of
Tank Equipment Co., Ltd “two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
13 Enric (Bengbu) Compressor Co., Ltd 25% 15% Recognised as high-tech
enterprises in 2011, entitled
to 15% preferential rate
14 Shanghai CIMC Reefer 25% 15% Recognised as high-tech
Containers Co., Ltd. enterprises in 2011, entitled
to 15% preferential rate
15 Nantong CIMC Special Transportation 25% 15% Recognised as high-tech
Equipment Manufacture Co., Ltd. enterprises in 2011, entitled
to 15% preferential rate
16 Xinhui CIMC Special Transportation 25% 15% Recognised as high-tech
Equipment Co., Ltd. enterprises in 2010, entitled
to 15% preferential rate
17 Dalian CIMC Logistics 25% 15% Recognised as high-tech
Equipment Co., Ltd. enterprises in 2011, entitled
to 15% preferential rate
18 Shenzhen CIMC Special 25% 15% Recognised as high-tech
Vehicle Co., Ltd. enterprises in 2011, entitled
to 15% preferential rate
19 CIMC Vehicle (Shandong) Co. Ltd 25% 15% Recognised as high-tech
enterprises in 2010, entitled
to 15% preferential rate
20 Qingdao CIMC Special 25% 12.5% Entitled to tax holidays of
Vehicle Co., Ltd. “two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
21 Luoyang CIMC Lingyu 25% 15% Recognised as high-tech
Automobile Co., Ltd. enterprises in 2010, entitled
to 15% preferential rate
22 Wuhu CIMC RuiJiang Automobile 25% 15% Recognised as high-tech
Co., Ltd enterprises in 2011, entitled
to 15% preferential rate
104
Semi-Annual Report 2012 of CIMC
III. TAXATION (CONTINUED)
2. TAX PREFERENCE (CONTINUED)
Local
Statutory Preferential
Name of enterprises tax rate rate Reasons
23 CIMC Vehicle (Liaoning) Co., Ltd. 25% 12.5% Entitled to tax holiday of
“two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
24 Chongqing CIMC Logistics Equipments 25% 12.5% Entitled to tax holiday of
Co., Ltd. “two-year exemption and
three-year reduction”, and 2012
is the fifth profit making year
25 Yangzhou CIMC Tong Hua Special 25% 15% Recognised as high-tech
Vehicles Co., Ltd enterprises in 2011, entitled
to 15% preferential rate
26 Shijiazhuang Enric Gas Equipment 25% 15% Recognised as high-tech
Co., Ltd. enterprises in 2011, entitled
to 15% preferential rate
27 Enric (Lang fang )Energy Equipment 25% 15% Recognised as high-tech
integration Co.,Ltd. enterprises in 2010, entitled
to 15% preferential rate
28 Jingmen Hongtu Special Aircraft 25% 15% Recognised as high-tech
Manufacturing Co., Ltd enterprises in 2011, entitled
to 15% preferential rate
29 Yantai CMIC Raffles 25% 15% Recognised as high-tech
offshore Ltd enterprises in 2009, entitled
to 15% preferential rate
30 Nantong CIMC Tank 25% 15% Recognised as high-tech
Equipment Co., Ltd enterprises in 2011, 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.
105
Semi-Annual Report 2012 of CIMC
III. TAXATION (CONTINUED)
2. TAX PREFERENCE (CONTINUED)
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 2012,
temporary difference caused by the Group’s subsidiaries’ undistributed profits
amounted to RMB 4,395,489,000 (2011: RMB 3,665,929,000). Accordingly, deferred
tax liabilities amounting to RMB 362,761,000 (2011: RMB 313,946,000) were
recognised by the Group at year end.
106
Semi-Annual Report 2012 of CIMC
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 287. Except for the subsidiaries listed as below, the number
of other subsidiaries held by the Group was 149, with paid-in capital amounting to
RMB 77,775,000. 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.
107
Semi-Annual Report 2012 of CIMC
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 50,000,000.00 Manufacture and sale of container USD 50,000,000.00 100.00% 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
108
Semi-Annual Report 2012 of CIMC
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
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 20,000,000.00 Manufacture, repair and sale of container USD 20,000,000.00 100.00% 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
109
Semi-Annual Report 2012 of CIMC
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 43,000,000.00 Design, production and sale of tank USD 43,000,000.00 100.00% 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
110
Semi-Annual Report 2012 of CIMC
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 20,000,000.00 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 24,600,000.00 82.00% 100.00% Yes
Vehicle Co., Ltd. China trailer, box car as well as relevant
(SHCIMCV) mechanical products
29 CIMC Financing and Corporation Guangdong, RMB 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
111
Semi-Annual Report 2012 of CIMC
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 8,500,000.00 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
112
Semi-Annual Report 2012 of CIMC
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 RMB 30,000,000.00 100.00% 100.00% Yes
Service Co., Ltd. China , sorting,examination and
(NBCIMCL) logistics advisory service
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 168,000,000.00 Development, production and USD 134,400,000.00 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 14,000,000.00 Design, manufacture, sale, maintenance USD 14,000,000.00 100.00% 100.00% Yes
Equipment Co., Ltd. China and relevant technical advisory
(DLL) for international trade, entrepot
trade, logistics equipment
and pressure vessel
113
Semi-Annual Report 2012 of CIMC
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 33,700,000.00 International trade, entrepot trade, USD 33,700,000.00 100.00% 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 90,000,000.00 Research and development, RMB 90,000,000.00 100.00% 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 28,000,000.00 Manufacturing and sale of bamboo RMB 28,000,000.00 100.00% 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 42,000,000.00 60.00% 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
114
Semi-Annual Report 2012 of CIMC
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 50,000,000.00 design of marketing activities scheme RMB 50,000,000.00 100.00% 100.00% Yes
Training(Shenzhen) China organization of academic and
Co., Ltd. commercial conference and
exhibition
54 Yangzhou Lijun Industry Corporation Jiangsu, RMB 70,000,000.00 Production and sales of mechanical RMB 70,000,000.00 100.00% 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 70,000,000.00 Design, manufacturing and maintenance RMB 70,000,000.00 100.00% 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 150,000,000.00 100.00% 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
115
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(i) Domestic subsidiaries (continued):
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 254,634,066.00 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 23,500,000.00 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 Holding”)
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
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(ii) Overseas Subsidiaries
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 Zhumadian CIMC Huajun Corporation Henan RMB 20,000,000.00 casting manufacturing for RMB 20,000,000.00 80.00% 100.00% Yes
Casting Co. Ltd.(HJCAST) China Vehicle and coal mining machinery
68 Ocean Engineering Corporation Shanghai RMB 50,000,000.00 Design and research of RMB 50,000,000.00 100.00% 100.00% Yes
Design & Research China marine operation platform
Institute of CIMC and other ocean engineering
(SHOE)
69 Shenzhen CIMC Corporation Shenzhen RMB 60,000,000.00 Equity investment RMB 60,000,000.00 100.00% 100.00% Yes
Investment China investment management
Co., Ltd (SZ Investment)] and related investment business
70 Shenzhen Sky Capital Corporation Shenzhen RMB 90,000,000.00 Equity investment RMB 90,000,000.00 100.00% 100.00% Yes
Co., Ltd(SESKYC) China investment management
and related investment business
71 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
72 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.
73 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
74 CIMC Vehicle Investment Hong Kong USD 50,000.00 Investment USD 40,000.00 80.00% 100.00% Yes
Holding Co., Ltd.
(CIMC Vehicle)
75 CIMC Europe BVBA Belgium EUR 18,550.00 Investment EUR 18,550.00 100.00% 100.00% Yes
( “BVBA” )
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(ii) Overseas Subsidiaries
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
Registration original original
Name place currency Business scope currency
76 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” )
77 CIMC Burg B.V. Holland EUR 60,000,000.00 Investment EUR 48,000,000.00 80.00% 80.00% Yes
( “BV” )
78 Tacoba Forestry Consultant Forestry N.V Suriname SF 3,000,000.00 Sale of wood SF 3,000,000.00 100.00% 100.00% Yes
( “Tacoba” )
79 Charm Wise Limited Hong Kong USD 1.00 Investment USD 1.00 100.00% 100.00% Yes
( “Charm Wise” )
80 Gold Terrain Assets Limited British Virgin USD 1.00 Investment USD 1.00 100.00% 100.00% Yes
( “GTA” ) Islands
81 Full Medal British Virgin USD 50,000.00 Investment USD 39,110.00 78.22% 100.00% Yes
Holdings Ltd. Islands
(“Full Medal”)
82 Charm Ray Holdings Limited Hong Kong HKD 1.00 Investment HKD 0.78 78.22% 100.00% Yes
( “Charm Ray” )
83 Charm Beat British Virgin USD 1.00 Investment USD 1.00 100.00% 100.00% Yes
Enterprises Limited Islands
( “Charm Beat” )
84 Sharp Vision Hong Kong HKD 1.00 Investment HKD 1.00 100.00% 100.00% Yes
Holdings Limited
( “Sharp Vision” )
85 Sound Winner British Virgin USD 10,000.00 Investment USD 7,822.00 78.22% 100.00% Yes
Holdings Limited Islands
( “Sound Winner” )
118
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(1) Subsidiaries obtained through establishment or business combination (continued)
(ii) Overseas Subsidiaries (continued)
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
Registration original original
Name place currency Business scope currency
86 Grow Rapid Limited Hong Kong HKD 1.00 Investment HKD 1.00 100.00% 100.00% Yes
( “Grow Rapid” )
87 Powerlead Holding Ltd. British Virgin USD 10.00 Investment USD 10.00 100.00% 100.00% Yes
( “Powerlead” ) Islands
88 Cooperatie Vela U.A. Holland EUR 18,000.00 Investment EUR 14,080.00 78.22% 100.00% Yes
89 Vela Holding B.V. Holland EUR 18,000.00 Investment EUR 14,080.00 78.22% 100.00% Yes
90 CIMC Financial Hong Kong HKD 500,000.00 Finance Lease HKD 500,000.00 100.00% 100.00% Yes
Leasing (HK) Ltd
(“Financial Leasing”)
91 CIMC Offshore Hong Kong HKD 342,860,173.00 Investment HKD 211,766,773.00 100% 100% Yes
Holdings Limited
( “CIMC Offshore” )
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(2) The Group does not have subsidiaries obtained through combination under common control.
(3) Subsidiaries acquired through combinations under non-common control:
(i) Domestics Subsidiaries
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
Registration original original
Name 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 100,000,000.00 Development, production and sales RMB 60,000,000.00 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 39,060,000.00 100.00% 100.00% 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 15,469,300.00 Manufacture and sale of container USD 15,469,300.00 100.00% 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
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(i) Domestics Subsidiaries (continued)
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, RMB 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 235,387,200.00 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 113,311,089.26 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
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(i) Domestics Subsidiaries (continued)
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 24,500,000.00 Manufacture and sale of reefer USD 24,500,000.00 100.00% 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 60,808,385.00 Manufacturing base of NG compressor HKD 47,564,318.74 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
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Semi-Annual Report 2012 of CIMC
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 Ningguo CIMC Wood Corporation Anhui USD 1,300,,000.00 Construction of offshore project USD 780,000.00 60.00% 60.00% Yes
Co., Ltd. China and supplime
( “NGCIMCW” )
23 Yantai CMIC Raffles Corporation Shandong RMB 1,042,690,000.00 Construction of dock; Designation, RMB 570,455,699.00 54.71% 54.71% 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 68,923,658.00 54.71% 54.71% 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 109,420,000.00 54.71% 54.71% 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 158,659,000.00 54.71% 54.71% Yes
offshore engineering China and suppliment
Co., Ltd (“LCRO”)
27 Shandong Master Special Corporation Shandong RMB 22,000,000.00 manufacture and sales of mixing truck, RMB 13,200,000.00 60.00% 60.00% Yes
Vehicle Manufacturing China special vehicle and components and parts
Co., Ltd (“SDMV”)
28 Nanjing Yangzi Petrochemical Corporation Jiangsu RMB 30,000,000.00 consultancy, planning, design, service, RMB 165,000,000.00 100% 100% Yes
Design & Engineering Co., Ltd. China procurement and contracting for petrochemical
(“YPDI”), projects; pressure vessels and pressure piping
design; computer software development and utilisation,
29 CIMC Rolling Stock Corporation Australia AUD 50,000.00 Sales of vehicles AUD 50,000.00 100.00% 100.00% -
Australia Pty Ltd.
(CIMC Aus)
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(ii) Overseas Subsidiaries
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
Registration original original
Name place currency Business scope currency
30 Enric Energy Equipment Cayman Islands HKD 120,000,000.00 Investment holding HKD 93,864,000.00 78.22% 100.00% Yes
Holdings Limited
(Enric)
31 Burg Industries B.V. Holland EUR 3,403,351.62 Investment EUR 2,722,681.30 80.00% 100.00% Yes
32 Holvrieka Holding B.V. Holland EUR 12,000,000.00 Investment EUR 9,386,400.00 78.22% 100.00% Yes
33 Holvrieka Ido B.V. Holland EUR 136,200.00 Sales of tank equipment EUR 106,535.64 78.22% 100.00% Yes
34 Holvrieka Nirota B.V. Holland EUR 680,670.32 Production, assembly and EUR 532,420.32 78.22% 100.00% Yes
sale of tank equipment
35 Noordkoel B.V. Holland EUR 500,000.00 Sales of tank equipment EUR 391,100.00 78.22% 100.00% Yes
36 Beheermaatschappij Holland EUR 453,780.22 Investment EUR 453,780.22 80.00% 100.00% Yes
Burg B.V.
37 Burg Carrosserie B.V. Holland EUR 90,756.04 Production of road transport vehicle EUR 72,604.83 80.00% 100.00% Yes
38 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
39 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
40 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
41 LAG Trailers N.V. Belgium BEF 30,000,000.00 Manufacturing trailer BEF 24,000,000.00 80.00% 100.00% Yes
42 Holvrieka N.V. Belgium BEF 40,000,000.00 Manufacturing tank equipment BEF 31,288,000.00 78.22% 100.00% Yes
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(ii) Overseas Subsidiaries (continued)
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
Registration original original
Name place currency Business scope currency
43 Immoburg N.V. Belgium BEF 10,000,000.00 Manufacturing road transport vehicle BEF 8,000,000.00 80.00% 100.00% Yes
44 Holvrieka Danmark A/S Denmark DKr 1,000,000.00 Manufacturing tank equipment DKr 782,200.00 78.22% 100.00% Yes
45 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
46 CIMC TGE Gas investment Luxemburg EUR 50,000.00 Investment holding EUR 30,000.00 60.00% 60.00% Yes
SA (“TGE SA”)
47 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
(“TGE Gas”) Construction Supervision) or other
technical project services in LNG,LPG
and storage and disposal of other
48 CIMC Raffles Offshore Singapore SGD 624,541,970.96 Production of various ship for offshore SGD 341,686,912.31 54.71% 54.71% Yes
(Singapore) Limited oil and gas, including jack-up drilling
(“Raffles”) platforms, semi-submersible drilling
Platforms, FPSOs,FSOs
49 CIMC Raffles Investments Hongkong HKD 2.00 Investment HKD 1.09 54.71% 54.71% Yes
Limited China
50 CIMC Raffles Leasing Pte Ltd. Singapore SGD 2.00 Leasing of marine ship SGD 1.09 54.71% 54.71% Yes
51 Caspian Driller Pte. Ltd. Singapore USD 30,000,000.00 Leasing of marine ship USD 16,413,000.00 54.71% 54.71% Yes
52 Technodyne International Limited Singapore GBP 1.00 Research and development of GBP 0.60 60% 60% Yes
(“Technodyne”) Energy equipment
53 Gadidae AB. Sweden SEK 1000.00 Investment holding SEK 547.10 54.71% 54.71% Yes
54 Perfect Victor Hongkong USD 1.00 Investment holding USD 1.00 100.00% 100.00% Yes
Investments Limited China
(“Perfect Victor”)
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. COMPANY STATUS OF INVESTMENT IN SUBSIDIARIES (CONTINUED)
(3) Subsidiaries acquired through combinations under non-common control (continued):
(ii) Overseas Subsidiaries (continued)
Note 1 Enric and its subsidiaries’ minority interests amounted to RMB 743,446,000.
Note 2 CIMC Tianyu and its subsidiaries’ minority interests amounted to RMB 82,598,000.
Note 3 Burg and its subsidiaries’ minority interests amounted to RMB 102,212,000, against which RMB14,408,000 of loss attributed to minority shareholders was allocated.
Note 4 TGE and its subsidiaries’ minority interests amounted to RMB 70,931,000, against which RMB1,982,000 of loss attributed to minority shareholders was allocated.
Note 5 CIMC Offshore, Raffles and its subsidiaries’ minority interests amounted to RMB 753,070,000, against which RMB511,276,000 of loss attributed to minority shareholders was allocated.
Note 6 HI and its subsidiaries’ minority interests amounted to RMB 799,399,000.
(4) Subsidiaries whose shareholding held by the Company differs from their voting rights
(i) Enric Energy Equipment Holdings Limited (Enric)
On Dec 31, 2011, 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%.On May 7, 2012, the company’s subsidiary CIMC
Vehicle converted its preferential shares in Enric into ordinary Shares. After the conversion, the Company’s shareholding percentage in Enric
is 78.22% while the voting right is 62.63%.
(ii) Except for the subsidiary mentioned above in (i), the Company’s voting rights in its indirect-owned subsidiaries which are held by the
Company’s non-wholly owned subsidiaries were presented according to the voting rights of its subsidiaries.
2. There are no entities set up for special purpose or operating entities controlled through entrusted operation and lease.
3. Changes in the scope of consolidation for the consolidation financial statements
Newly purchased (see Note IV.6) and established subsidiaries in the year change the scope of the consolidation financial statements.
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
4. Subsidiaries newly included in the scope of consolidation and excluded
from the scope of consolidation for the current period
(1) Subsidiaries newly included in the scope of consolidation, special purpose entity,
business entities that having control through being entrusted to manage or leasing
Subsidiaries newly included in the scope of consolidation mainly comprised of
Nanjing Yangzi Petrochemical Design & Engineering Co., Ltd. (“YPDI”), XINFA
Airport Equipment Ltd. and Ningbo Siemag Trading Ltd.
(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 (2011: Nil).
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
6. The Group’s acquisition through combination not under common control
for the current period
On 1 January 2012, the company’s subsidiary CIMC Enric acquired 100% of the
issued shares in Nanjing Yangzi Petrochemical Design & Engineering Co., Ltd.
(“YPDI”), a company that is principally engaged in consultancy, planning, design,
service, procurement and contracting for petrochemical projects; pressure vessels and
pressure piping design; computer software development and utilization, for
consideration of RMB165,000,000. .
CIMC Enric, the Company’s subsidiary, acquired 100% of the equity interests of
YPDI, the fair value of the identifiable net assets of which at the acquisition date
amounted to RMB 80,649，000. The excess amount of acquisition cost over fair value
amounting to RMB 84,351,000 was recognized as goodwill.
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IV. BUSINESS COMBINATIONS AND THE CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
7. There is no loss of control of subsidiaries through significant sales of
interests of the Group for the current period
8. There is no reverse acquisition of the Group for the current year.
9. There is no consolidation by merger of the Group for the current period.
10. Exchange rate for foreign operating entities’ major financial statement
items
Item Average exchange rate Benchmark exchange rate
1 Jan to 30 Jun 2012 1 Jan to 30 Jun 2011 30 Jun 2012 31 Dec 2011
USD 6.3052 6.5242 6.3249 6.3009
EUR 8.1633 9.2896 7.8710 8.1625
HKD 0.8126 0.8384 0.8152 0.8107
JPY 0.0788 0.1252 0.0796 0.0811
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CASH AT BANK AND ON HAND
2012.06.30 2011.12.31
Original
Original Exchange Exchange
RMB'000 currency RMB'000
currency '000 rate rate
'000
Cash on hand
RMB 1,212 1.0000 1,212 1,187 1.0000 1,187
USD 30 6.3249 190 51 6.3009 321
HKD 7 0.8152 6 320 0.8107 259
JPY 203 0.0796 16 197 0.0811 16
AUD - - - 1 6.4093 6
EUR 19 7.8710 150 76 8.1625 620
Others - - 19 - - 6
Subtotal 1,593 2,415
Deposits with banks
RMB 2,385,376 1.0000 2,385,376 3,352,210 1.0000 3,352,210
USD 207,261 6.3249 1,310,905 393,243 6.3009 2,477,785
HKD 385,226 0.8152 314,036 295,813 0.8107 239,816
JPY 470,716 0.0796 37,469 141,873 0.0811 11,506
AUD 36,730 6.3474 233,140 21,299 6.4093 136,512
EUR 17,283 7.8710 136,034 44,062 8.1625 359,656
Others - - 74,674 - - 77,279
Subtotal 4,491,634 6,654,764
Other monetary funds
RMB 431,715 1.0000 431,715 1,118,610 1.0000 1,118,610
USD 1,006 6.3249 6,363 1,958 6.3009 12,337
Subtotal 438,078 1,130,947
Total 4,931,305 7,788,126
As at 30 June 2012, restricted cash at bank and on hand of the Group amounted to
RMB 1,026,868,000 (2011: RMB 1,224,873,000). Refer to Note V.22 for details.
As at 30 June 2012, Finance Company, the subsidiary of the Group, had deposit with
central bank and deposits with banks and non-bank financial institutions totalling of
RMB 1,160,654,000 (2011: RMB 3,340,071,000). Finance Company is a finance
institution authorised by the People’s Bank of China.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
2. FINANCIAL ASSETS HELD FOR TRADING
(1) Classification
RMB'000
Category
1.Equity securities investments Note 2012.6.30 2011.12.31
held for trading 369,892 143,692
2.Derivative financial assets
- forward contract (3) 8,463 32,691
3.Hedging instrument 85 9,751
Total 378,440 186,134
(2) There is no material restriction of the investment in financial assets held for trading.
(3) Details of derivative financial assets held for trading
As at 30 June 2012, 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 862 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 1,293 million, EUR 5.69 million, and AUD
6.45million 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 6 July 2012 to 27 June
2013.
As at 30 June 2012, the Group recognised the aforesaid forwards contracts in their
fair values of RMB 8,463,000 as held-for-trading financial assets and RMB
17,831,000 as held-for-trading financial liabilities. Transaction costs on realisation
have not been considered when calculating the fair values.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
3. BILLS RECEIVABLE
(1) Classification of bills receivable
RMB'000
Category 2012.6.30 2011.12.31
Bank acceptance bills 557,965 924,183
Commercial acceptance bills - 106,345
Total 557,965 1,030,528
All of the above bills receivables 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. (2011: Nil)
(3) At 30 June 2012, there were no amount transferred to accounts receivable from
acceptance bills due to non-performance of the issuers by the Group and no
outstanding amount endorsed by the Group.
At 30 June 2012, the outstanding bills receivables endorsed by the Company are:
RMB'000
Issuer Issuing Date Due date Amount Notes
CNPC Transportation Co., Ltd 29 May 2012 29 November 2012 11,852 Bank acceptance bills
Shanxi Hande Axle Co.,Ltd 19 March 2012 19 September 2012 10,000 Bank acceptance bills
Sichuan Zhongtian Chengjian Co., Ltd 25 May 2012 22 November 2012 10,000 Bank acceptance bills
CNPC Transportation Co., Ltd 29 March 2012 29 September 2012 9,369 Bank acceptance bills
CNPC Transportation Co., Ltd 29 May 2012 29 November 2012 7,715 Bank acceptance bills
Total 48,936
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Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. ACCOUNTS RECEIVABLE
(1) Accounts receivable disclosed by customer categories:
RMB’000
Category 2012.6.30 2011.12.31
Containers group 4,453,127 3,418,813
Trailers group 2,419,324 1,754,595
Tank equipments group 1,692,639 1,497,937
Offshore engineering group 1,182,917 1,152,280
Airport ground facilities group 173,681 246,873
Others 749,832 359,836
Subtotal 10,671,520 8,430,334
Less:provision for bad and
doubtful debts (322,144) (319,550)
Total 10,349,376 8,110,784
(2) An ageing analysis of accounts receivable is as follows:
RMB’000
Category 2012.6.30 2011.12.31
Within 1 year 10,043,825 7,732,052
1 to 2 years 472,696 433,462
2 to 3 years 104,437 169,828
More than 3 years 50,562 94,992
Subtotal 10,671,520 8,430,334
Less:provision for bad and
doubtful debts (322,144) (319,550)
Total 10,349,376 8,110,784
The ageing is counted starting from the date the accounts receivable is recognised.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(3) Accounts receivable disclosed by categories:
RMB’000
Note 2012.6.30 2011.12.31
Provision for bad and Provision for bad and
Category Gross carrying amount Gross carrying amount
doubtful debts doubtful debts
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
RMB'000 （%） RMB'000 （%） RMB'000 （%） RMB'000 （%）
Individually significant and impairment provided
individually (4) 1,169,037 10.95% 173,776 14.86% 1,107,112 13.13% 174,011 15.72%
Individually insignificant but assessed for
inpairment individually (5) 57,274 0.54% 21,611 37.73% 49,777 0.59% 20,547 41.28%
Assessed for impairment collectively*
Containers group (6) 4,450,410 41.70% 3,503 0.08% 3,405,170 40.40% 3,723 0.11%
Trailers group (6) 2,278,478 21.35% 54,358 2.39% 1,665,282 19.75% 58,587 3.52%
Tank equipments group (6) 1,610,292 15.09% 51,027 3.17% 1,395,742 16.56% 49,374 3.54%
Offshore engineering group 278,845 2.61% - - 247,266 2.93% - -
Airport ground facilities group (6) 161,562 1.51% 10,061 6.23% 234,755 2.78% 12,735 5.42%
Others (6) 665,622 6.24% 7,808 1.17% 325,230 3.86% 573 0.18%
Subtotal 9,445,209 88.51% 126,757 1.34% 7,273,445 86.28% 124,992 1.72%
Total 10,671,520 100.00% 322,144 3.02% 8,430,334 100.00% 319,550 3.79%
Note*: This category includes accounts receivable individually tested but not impaired.
There were no collaterals that the Group held for accounts receivable that were made impairment aforesaid.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(3) Accounts receivable disclosed by categories (continued):
Individually significant items represent accounts receivable with an individual
amount over RMB 10,000,000 (inclusive) or the book value of which account for 5%
(inclusive) of the total accounts receivable in individual financial statements included
in the consolidated financial statement.
The analysis of the Group’s accounts receivable by original currency is as follows:
2012.6.30 2011.12.31
Currency Original Exchange rate Amount Currency Original Exchange rate Amount
currency
RMB'000 currency
RMB'000
RMB 2,424,177 1.0000 2,424,177 RMB 2,588,052 1.0000 2,588,052
USD 1,143,335 6.3249 7,231,480 USD 797,360 6.3009 5,024,086
HKD 58,273 0.8152 47,504 HKD 2,099 0.8107 1,702
JPY 615,954 0.0796 49,030 JPY 155,654 0.0811 12,624
AUD 107,098 6.3474 679,794 AUD 41,157 6.4093 263,789
EUR 23,989 7.8710 188,817 EUR 54,309 8.1625 443,299
Others 9,968 - 50,718 Others - - 96,782
Total 10,671,520 Total 8,430,334
(4) An analysis of accounts receivable individually significant and impairment
provided individually is as follows:
RMB’000
Provision for bad Provision
Category Amount Reason
and doubtful debts rate
Trailers group 90,359 21,570 23.87%
Tank equipments group 82,347 14,682 17.83%
Offshore engineering group 900,002 107,523 11.95%
Note1
Airport ground facilities group 12,119 3,636 30.00%
Others 84,210 26,365 31.31%
Total 1,169,037 173,776 14.86%
Note 1: Provision was made based on the credit risk assessment of customers and
historical loss experiences.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(5) An analysis of accounts receivable individually insignificant but impairment
provided individually is as follows:
RMB’000
Provision for bad Provision
Category Amount Reason
and doubtful debts rate
Containers group 2,717 615 22.64% Provision is
made based on
Trailers group 50,487 18,871 37.38%
the estimated
Offshore engineering group 4,070 2,125 52.21% recoverable
Total 57,274 21,611 37.73% amount
(6) An ageing analysis of account receivable assessed for impairment collectively is as
follows:
RMB’000
2012.6.30 2011.12.31
Provision for Provision for
Ageing
Amount bad and Amount bad and
RMB'000 Percentage(%) doubtful debts RMB'000 Percentage(%) doubtful debts
Within 1 year 9,017,721 84.50% 34,913 6,649,283 78.87% 34,096
1 to 2 years 288,109 2.70% 14,457 247,577 2.94% 13,569
2 to 3 years 76,008 0.71% 16,765 69,382 0.82% 17,390
More than 3 years 63,371 0.59% 60,622 59,937 0.71% 59,937
Total 9,445,209 88.51% 126,757 7,026,179 83.34% 124,992
The ageing is counted starting from the date the account receivable is recognised.
(7) The recovery of provision within this period
There were no accounts receivable for which a full provision or a significant
provision was made in previous years while were recovered in full or in significant
amount during the year (2011: Nil).
(8) Actual written-off of accounts receivable within this period
There was no material actual written-off of accounts receivable during the year (2011:
Nil).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(9) Accounts receivable due from the five biggest debtors of the Group are as follows:
RMB’000
Relationship Percentage in total
Company Name with the Amount Ageing accounts
company receivable (%)
1.Soratu Drilling LLC None 534,724 Within 2 year 5.01%
2.Maersk Line None 412,184 Within 1 year 3.86%
3.Seaco Containers Ltd. None 380,789 Within 1 year 3.57%
4.Baerfield Drilling LLC None 365,309 Within 2 year 3.42%
5.Florens Containers Corporation S.A. Subsidiaries of
important 220,680 Within 1 year 2.07%
shareholders
Total 1,913,686 - 17.93%
The total amount of the Group’s top 5 accounts receivable at 31 December 2011 was
RMB 2,747,975,000, 32.60% 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 (2011:Nil).
(11) Accounts receivable due from related parties
The Group’s accounts receivable due from related parties amount to RMB
294,502,000 (2011: RMB 109,096,000), accounting for 2.76% of the total accounts
receivable (2011: 1.30%).
RMB’000
Percentage in
total accounts
Company Name Relationship with the company Amount receivable (%)
Florens Container Corporation S.A. Subsidiary of significant shareholders 220,680 2.07%
Xiamen CIMC Haitou Container Service Co., Ltd Associate Company 42 0.00%
Tianjin Zhenhua Logistic Group Co., Ltd Associate Company 214 0.00%
Xiamen Hongji Container Development Co.,Ltd Associate Company 15,607 0.15%
Tianjin Zhenhua Logistic Group Co., Ltd Associate Company 542 0.01%
Qingdao International Airline service Co., Ltd Monority shareholders of subsidiaries 1,857 0.02%
Shanxi Heavy Duty Automobile Co.,Ltd Monority shareholders of subsidiaries 46,231 0.43%
Sumitomo Corporation Group Monority shareholders of subsidiaries 327 0.00%
GXNFWL Associate Company 9,002 0.08%
Total 294,502 2.76%
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
4. ACCOUNTS RECEIVABLE (CONTINUED)
(12) Derecognition of accounts receivable due to transferring of financial assets
As at 30 June 2012, there is no derecognition of accounts receivable due to
transferring of financial assets in the Group (31 December 2011:RMB 166,790,000. )
(13) Amount of assets and liabilities recognised due to the continuing involvement of
securitised accounts receivable
There were no securitised accounts receivable during the year (2011: Nil).
As at 30 June 2012, restricted accounts receivable amounted to RMB 595,738,000
(2011: RMB471,026,000). Refer to Note V.22.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. OTHER RECEIVABLES
(1) Other receivables by categories:
RMB'000
Customer type 2012.6.30 2011.12.31
Amounts due from related parties 656,043 980,115
Loans 542,802 562,343
Drawback tax receivable 282,968 312,888
Prepayment for land and equipment 40,702 86,475
Deposit 189,751 105,533
Fixed term and secured principle investment 143,000 415,000
Others 562,482 367,742
Subtotal 2,417,748 2,830,096
Less: provision for bad and doubtful debts (119,245) (120,431)
Total 2,298,503 2,709,665
Raffles entered into loan agreement with Sea Biscuit International Inc (“Sea
Biscuit”), whereby the total amount borrowed by Sea Biscuit from Raffles is USD
66,126,000 (RMB 418,238,000) as at 30 June 2012. The repayment is expected to be
settled in cash. As a result, the amount due from Sea Biscuit was recorded as other
receivables by Raffles.
The Group has made provision of RMB 12,650,000 for the amount above as at 30
June 2012.
Raffles completed its acquisition of Gadidae AB (formerly known as Consafe MSV
AB) on 31 January 2011. Since December 2007, Gadidae AB had been making loans
to its associate, Marine Subsea & Consafe (“MSC”), which amounted to USD
35,625,000 (RMB 225,324,000) as at 31 December 2011. Raffles recognised interest
income according to loan agreement and recorded expenses paid on behalf of MSC
with total amount of USD 10,116,000 (RMB 63,983,000) from 2007 to 31 January
2011.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. OTHER RECEIVABLES
(2) The ageing analysis of other receivables is as follows:
RMB'000
Category 2012.6.30 2011.12.31
Within 1 year 1,199,524 1,584,992
1 to 2 years 385,248 484,326
2 to 3 years 523,832 513,136
More than 3 years 309,144 247,642
Subtotal 2,417,748 2,830,096
Less: provision for bad and doubtful debts (119,245) (120,431)
Total 2,298,503 2,709,665
The ageing is counted starting from the date the other receivable is recognised.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories:
RMB'000
2012.6.30 2011.12.31
Provision for bad and Provision for bad and
Category Note Percentage doubtful debts Percentage doubtful debts
Amount Amount
(%) Percentage (%) Percentage
Amount (%) Amount (%)
Individually significant other receivables (4) 1,369,590 56.65% 71,224 5.20% 1,953,906 69.04% 71,176 3.64%
Insignificant other receivables (5) 1,048,158 43.35% 48,021 4.58% 876,190 30.96% 49,255 5.62%
Total 2,417,748 100.00% 119,245 4.93% 2,830,096 100.00% 120,431 4.26%
There were no collaterals that the Group held for other receivables that were made impairment aforesaid.
Individually significant items represent other receivables with an individual amount over RMB 10,000,000 (inclusive) or the book value
of which account for 5% (inclusive) of the total other receivables in individual financial statements included in the consolidated financial
statement.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(4) An analysis of individually significant other receivables assessed for impairment
individually are as follows:
RMB'000
Provision for
bad and
Category Amount doubtful debts Provision rate Reasons
Individually significant:
Capital increment amount due from
Note1
subsidiaries 118,110 - -
Amounts due from associates 461,858 - - Note1
Receivables arising from transfer of
Note1
equity investment 70,650 - -
Receivables arising from purchase
Note1
of land use right 20,099 - -
Receivables arising from financing
Note1
to third parties 497,299 (12,650) 2.54%
Receivables arising from fixed term
Note1
and secured principle investment 143,000 - -
Others 58,574 (58,574) 100.00% Note2
Total 1,369,590 (71,224) 5.20%
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.
(5) An analysis of individually insignificant other receivables but assessed for
impairment recognised individually is as follows:
The Group assessed impairment of the insignificant other receivable and made
provision of impairment of RMB 48,021,000 as at 30 June 2012.
(6) Provision written back or recovered
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 (2011: Nil).
(7) The recovery of other receivables by restructuring within this period
There were no other receivables recovered during the period by means of
restructuring. (2011: Nil)
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(8) Actual written-off of other receivables within this period
There were no material actual written-off of other receivables during the period
(2011: Nil).
(9) Other receivables due from the five biggest debtors of the Group are as follows:
RMB'000
Relationship Percentage in
with the total other
Company Name company Amount Aging receivables (%)
1. Sea Biscuit International Inc. None 418,238 1 to 2 years 17.30%
1 to 3 year
2. Marine Subsea & Consafe Ltd Associate 289,307 and more than 11.97%
3 years
1 to 3 year
3.Shanghia Fengyang Real Estate
Associate 172,550 and more than 7.14%
Development Co.,Ltd
3 years
4.Financing products None 143,000 Within 1 year 5.91%
Minority
5. P.G.M. Holding B.V. (“PGM”) shareholders 118,110 1 to 2 years 4.89%
of subsidiaries
Total 1,141,205 47.20%
The Group’s top 5 other receivables as at 31 December 2011 amounted to
RMB1,478,275,000 accounting for 52.23% of the total other receivables.
(10) Other 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 other receivables.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
5. OTHER RECEIVABLES (CONTINUED)
(11) Other receivables due from related parties
RMB'000
Percentage in total
Relationship with
Company name Amount other receivables
the company
(%)
Minority
1. P.G.M. Holding B.V. (“PGM”) shareholders of 118,110 4.89%
subsidiaries
2.Shanghia Fengyang Real Estate
Associate 172,550 7.14%
Development Co.,Ltd
Subsidiary of
3.Shenzhen Merchant Property
signficant 70,650 2.92%
Development Co.,Ltd
shareholders
4. MSC Associate 289,307 11.97%
5.Others 5,426 0.22%
TOTAL 656,043 27.14%
The Group’s other receivables due from related parties as at 31 December 2011
amounted to RMB 980,115,000, accounting for 34.63% 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 (2011: 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 (2011: Nil).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. PREPAYMENTS
(1) Prepayments by category are as follows:
RMB'000
2012.6.30 2011.12.31
Raw material 1,653,657 1,433,583
Construction Cost 220,335 506,620
Other 258,047 87,033
Subtotal 2,132,039 2,027,236
Less: provision for bad and doubtful debts (96,764) (96,740)
Total 2,035,275 1,930,496
(2) The ageing analysis of prepayments is as follows:
RMB'000
2012.6.30 2011.12.31
Percentage Percentage
Amount Amount
(%) (%)
Within 1 year 1,677,338 78.68% 1,577,538 77.82%
1 to 2 years 147,938 6.94% 114,381 5.64%
2 to 3 years 50,817 2.38% 36,279 1.79%
More than 3 years 255,946 12.00% 299,038 14.75%
Subtotal 2,132,039 100.00% 2,027,236 100.00%
Less: provision for bad and
4.54%
doubtful debts (96,764) (96,740) 4.77%
Total 2,035,275 95.46% 1,930,496 95.23%
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 in 2008. The supplier has not delivered the steels within
due date for its own reasons. As at 30 June 2012 the Group had made full provision
of RMB 87,640,000 for unsettled balances.(2011 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.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
6. PREPAYMENTS (CONTINUED)
(3) The Group’s top 5 prepayments are as follows:
RMB'000
Relationship Percentage of
with the the total Time of
Company Name company Amount prepayments(%) recognition Reason for unsettlement
1.Friede & Goldman equipments not yet
Marketing BV None 253,305 11.88% 2011 to 2012 received within due date
2.THRUSTMASTER OF equipments not yet
TEXAS, INC None 205,209 9.63% 2010 to 2012 received within due date
projects not yet completed
3.EMER International Ltd None 124,310 5.83% 2011 to 2012 with due date
4.OJSC 'Krasnye Barrikady' services not yet completed
Shipyard None 96,489 4.53% 2011 to 2012 within due date
5.Tian jin Yinze sheet metal materials not yet received
Co.,Ltd None 87,640 4.10% 2008 within due date
Total 766,953 35.97%
(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 (2011: Nil).
146
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
7. INVENTORIES
(1) Inventories by categories
RMB'000
2012.6.30 2011.12.31
Provision for Provision for
diminution in Carrying diminution in Carrying
Category Cost amount value amount Cost amount value amount
Raw materials 5,433,714 (111,322) 5,322,392 4,816,337 (221,791) 4,594,546
Work in progress 1,391,580 (6,592) 1,384,988 1,698,356 (23,079) 1,675,277
Finished goods 3,172,900 (36,337) 3,136,563 3,156,015 (68,790) 3,087,225
Consignment stocks 377,499 - 377,499 320,254 (158) 320,096
Spare parts 59,140 - 59,140 57,526 - 57,526
Low-valued
consumables 112,835 - 112,835 37,097 - 37,097
Materials in transit 27,150 - 27,150 10,920 - 10,920
Completed properties
held for sale 100,962 - 100,962 38,072 - 38,072
Properties under
development 743,254 - 743,254 591,783 - 591,783
Ship under
construction 5,518,544 (109,387) 5,409,157 5,078,579 (102,237) 4,976,342
Offshore engineering
equipment 75,770 - 75,770 79,468 - 79,468
Total 17,013,348 (263,638) 16,749,710 15,884,407 (416,055) 15,468,352
The Group’s closing balances of inventories included capitalised borrowing cost
amounting to RMB 349,500,000 (2011: RMB 164,010,000). The interest rate per
annum at which the borrowing costs were capitalised was 5.76 % (2011: 5.73%).
As at 30 June 2012, the Group had inventories with restricted ownership amounting
to RMB 8,314,000 (2011: RMB 7,671,000).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
7. INVENTORIES
(2) Inventories movement for the year is as follows:
RMB'000
Opening balance Diminutions Effect of foreign Closing balance
at the beginning Additions for for the exchange rate at the end of the
Category of the year the period period changes period
Raw materials 4,816,337 21,531,013 (20,929,914) 16,278 5,433,714
Work in progress 1,698,356 16,214,623 (16,517,216) (4,183) 1,391,580
Finished goods 3,156,015 19,926,565 (19,896,927) (12,753) 3,172,900
Consignment stocks 320,254 1,396,511 (1,339,266) - 377,499
Ship under 5,078,579 2,069,534 (1,649,998) 20,429 5,518,544
Other 814,866 892,462 (588,683) 466 1,119,111
Subtotal 15,884,407 62,030,708 (60,922,004) 20,237 17,013,348
Less: provision for
diminution in value of
inventories (416,055) (13,879) 166,241 55 (263,638)
Total 15,468,352 62,016,829 (60,755,763) 20,292 16,749,710
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
7. INVENTORIES (CONTINUED)
(3) Provision for diminution in value of inventories
RMB'000
Opening
Effect of Closing
balance at the Provision Written back during the
foreign balance at the
beginning of for the peirod
exchange rate end of the
Category the year period Reversal Write-off changes period
Raw materials 221,791 3,796 (67,120) (47,143) (2) 111,322
Work in progress 23,079 2,900 (3,558) (15,818) (11) 6,592
Finished goods 68,790 - (6,261) (26,183) (9) 36,337
Consignment stocks 158 - (158) - - -
Ship under construction 102,237 7,183 - - (33) 109,387
Total 416,055 13,879 (77,097) (89,144) (55) 263,638
(a) The provision for diminution in value of the Group’s inventories during the
period was recognised mainly for the price drop of certain products and the
slow-moving or waste materials.
(b) Written back of provision for diminution in value of the Group’s inventories
during the period is as follows:
Percentage of provision
Basis of provision for written back over total
diminution in value of Reasons for written back of inventories balance at
Category inventories provision year end
Inventories were used or sold 1.24%
Net realisable value was
Raw materials and the net realisable value
lower than book value
ascended
Inventories were used or sold 0.26%
Net realisable value was
Work in progress and the net realisable value
lower than book value
ascended
Inventories were used or sold 0.20%
Net realisable value was
Finished goods and the net realisable value
lower than book value
ascended
Inventories were used or sold 0.04%
Net realisable value was
Consignment stocks and the net realisable value
lower than book value
ascended
149
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
8. NON-CURRENT ASSETS DUE WITHIN ONE YEAR
RMB'000
Item 2012.6.30 2011.12.31
Finance leases 2,997,122 2,488,562
Sales of goods by instalments 167,705 168,709
Others 2,478 2,478
Subtotal 3,167,305 2,659,749
Less: Provision for impairment (24,462) (24,462)
Total 3,142,843 2,635,287
9. OTHER CURRENT ASSETS
RMB'000
Item 2012.6.30 2011.12.31
Tax deductible/withheld 924,121 857,885
Others 24,142 7,748
Total 948,263 865,633
10. AVAILABLE-FOR-SALE FINANCIAL ASSETS
RMB'000
Item 2012.6.30 2011.12.31
Available-for-sale equity instruments 621,216 571,954
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 RMB125,864,000and RMB
487,370,000respectively. Besides, the Group and the Company held equity
investment of Otto Energy Limited of RMB 7,982,000.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
11. LONG-TERM RECEIVABLES
RMB'000
Item 2012.6.30 2011.12.31
Finance Leases 1,588,467 1,888,156
including: Unrealised finance income 477,209 431,044
Sales of goods by instalment 460,603 455,835
Others 9,240 9,240
Subtotal 2,058,310 2,353,231
Less: Provision for impairment (61,979) (41,996)
Total 1,996,331 2,311,235
The total future minimum lease receipts under finance leases after the balance sheet
date, which are based on contractual undiscounted cash flows (including interest
payments computed using contractual rates or, if floating, based on rates current at the
balance sheet date), are receivable as follows:
RMB'000
The minimum lease receipts under finance leases 2012.6.30 2011.12.31
Winthin 1 year 3,257,525 2,725,141
1 to 2 years 952,724 878,900
2 to 3 years 590,814 450,400
over 3 years 522,138 979,633
Subtotal 5,323,201 5,034,074
Less:Unearned finance income (737,612) (657,386)
Total 4,585,589 4,376,688
There is no derecognition of long term receivables due to transferring of financial
assets during the period(2011:derecognition of long term receivables due to
transferring of financial assets during the period amounts to RMB 1,461,931,000,
gain or loss due to derocognition amounts to RMB 164,468,000.
151
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS
(1) As at 30 June 2012, the Group’s long-term equity investments by categories are as
follows:
RMB'000
Item 2012.06.30 2011.12.31
Investments in joint ventures
38,565 33,282
Investments in associates 1,513,348 1,534,672
Other long-term equity investments 392,610 392,300
Subtotal 1,944,523 1,960,254
Less: Provision for impairment (3,067) (3,067)
Total 1,941,456 1,957,187
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows:
RMB'000
Whether voting Dividend
Initial Balance at the Additions Balance at The Company Provision Impairment
Shareholding right is defferent receivable/
Investee investment beginning of during the the end of subsidiaries for loss of the
percentage (%) from the received of
cost the year period the period voting right (%) impairment period
shareholding the period
Equity method—Joint ventures
RuiJi Logistic (Wuhu) Co., Ltd 9,884 10,811 (2,308) 8,503 50.00% 50.00% N/A - - -
South CIMC Logistic Co., Ltd. 15,000 19,869 2,191 22,060 50.00% 50.00% N/A - - -
Super Cool 9,000 2,602 5,400 8,002 50.00% 50.00% N/A - - -
Subtotal 33,884 33,282 5,283 38,565 - - -
Equity method —Associates - - -
KYH Steel Holding Ltd ("KYH") 27,625 121,770 1,087 122,857 31.83% 31.83% N/A - - -
Tianjin Port CIMC Zhenhua Logistic Co.,
21,403 43,045 36.00% 36.00% - - -
Ltd (TJCIMCZL) 545 43,590 N/A
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows (continued):
RMB'000
Whether voting Dividend
Initial Balance at the Additions Balance at The Company right is defferent Provision Impairment receivable/
Investee
investment beginning of during the the end of Shareholding subsidiaries from the for loss of the received of
cost the year period the period percentage (%) voting right (%) shareholding impairment period the period
Dalian Jinong Logistic Co., Ltd (DLJLL) 16,844 38,814 (301) 38,513 30.00% 30.00% N/A - - -
Xiamen CIMC Haitou Container Service
Co., Ltd (Xiamen Haitou) 11,479 16,812 1,418 18,230 45.00% 45.00% N/A - - -
Tianjin Zhenhua Logistic Group Co., Ltd
(TJZL) 302,144 479,597 (3,163) 476,434 38.22% 38.22% N/A - - -
Ningbo Beilun Donghua Container
Service Co., Ltd (NBBL) 3,579 3,496 - 3,496 21.00% 21.00% N/A - - -
New Atlantic Timber (HK) Limited
(XYW) 2,916 2,780 - 2,780 20.00% 20.00% N/A - - -
Shanghai Fengyang 12,000 134,411 4,296 138,707 40.00% 40.00% N/A - - -
TRS Transportkoeling 12,030 11,871 445 12,316 32.00% 32.00% N/A - - -
Eurotank Oy 6,946 7,912 (276) 7,636 40.00% 40.00% N/A - - -
Xiamen Haitou Logistics Co., Ltd
(XMHLC) 6,153 5,287 (2,020) 3,267 49.00% 49.00% N/A - - -
C&C TRUCKS Co.,LTD (C&C TRUCKS) 540,000 454,988 (38,704) 416,284 45.00% 45.00% N/A - - -
154
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows (continued):
RMB'000
Whether voting Dividend
Initial Balance at the Additions Balance at The Company right is defferent Provision Impairment receivable/
Investee
investment beginning of during the the end of Shareholding subsidiaries from the for loss of the received of
cost the year period the period percentage (%) voting right (%) shareholding impairment period the period
TSC Offshore Group Limited ("TSC") 167,591 167,161 1,014 168,175 14.60% 14.60% N/A - - -
Xiamen Hongji Container Development
Co., Ltd. (“XMHJ”) 4,900 6,875 1,240 8,115 49.00% 49.00% N/A - - -
Haiyang Blue Island Offshore Ltd 9,000 18,616 9,144 27,760 30.00% 30.00% N/A - - -
Vostok-Raffles Joint Stock
Company("Vostok") 16,474 15,752 - 15,752 25.00% 25.00% N/A - - -
Sengju (Jiangmen) Science &
Technology Materials Co., Ltd. (“SJKJ”) 6,072 5,483 947 6,430 30.00% 30.00% N/A - - -
Shanghai Shenyi Enterprise
Development Co.,Ltd (SHSY) 3,004 - 3,004 3,004 25.00% 25.00% - - -
MSC 2 2 - 2 40.00% 40.00% N/A 2 - -
Subtotal 1,170,162 1,534,672 (21,324) 1,513,348 2 - -
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) An analysis of long-term equity investments movement of the year is as follows (continued):
RMB'000
Whether voting Dividend
Initial Balance at the Additions Balance at The Company right is defferent Provision Impairment receivable/
Investee
investment beginning of during the the end of Shareholding subsidiaries from the for loss of the received of
cost the year period the period percentage (%) voting right (%) shareholding impairment period the period
Costing method - - -
BOCM Schroder Stolt Fund
Management 8,125 8,125 - 8,125 5.00% 5.00% N/A - - 5,000
Donghua Container 270 270 - 270 5.00% 5.00% N/A - - -
China Railway United Logistics 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 - -
Wuhai Vehicle Magazine Co., Ltd 310 - 310 310 14.00% 14.00% N/A - - -
Jinmen General Aviation Company
Limited 60 60 - 60 39.00% 39.00% N/A - - -
Subtotal 392,610 392,300 310 392,610 3,065 - 5,000
Total 1,596,656 1,960,254 (15,731) 1,944,523 3,067 - 5,000
156
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
12. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 30 June 2012, 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.
On January 2010, CIMC Hong Kong, a subsidiary of the Group, and Raffles entered
into an agreement to act in concert with Mr. Brian Chang, a shareholder and director of
TSC, in respect of the exercise of their voting rights in TSC Offshore Group Ltd
(“TSC”) with CIMC Hong Kong empowered as the ultimate decision maker.
Accordingly, the Group had significant influence over TSC with effect from 31
January 2010 and investment in TSC is accounted for using the equity method. The
concerted action agreement ceased after CIMC Hong Kong acquired the shares of TSC
from Raffles in May 2011. However, the Group remains significance influence over
TSC since Mr. Yu Yuquan, the Group’s secretary of the Board, was assigned as
non-executive director of TSC on 15 March 2011. Therefore the accounting method of
the investment in TSC remains for subsequent measurement.
(3) There is no restriction on the ability of the invested enterprises to transfer funds to
the Group.
157
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
13. INVESTMENT PROPERTIES
RMB'000
Item Buildings Land use rights Total
Cost
Balance at the beginning of the year 74,078 64,051 138,129
Additions during the period 22,696 510 23,206
Disposals during the period - - -
Balance at the end of the period 96,774 64,561 161,335
Accumulated depreciation or amortisation
Balance at the beginning of the year 1,665 9,481 11,146
Charge for the period 3,835 861 4,696
Written back during the period - - -
Balance at the end of the period 5,500 10,342 15,842
Carrying amounts
At the end ot the period 91,274 54,219 145,493
At the beginning ot the year 72,413 54,570 126,983
The depreciation and amortisation charged for investment properties from 1 January
2012 to 30 June 2012 were RMB 4,696,000. There was no provision for impairment
for investment properties in 30 June 2012.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14. FIXED ASSETS
(1) Fixed assets by categories
RMB'000
Offshore
office
engineering--
Machinery & &other Motor special Dock &
Item Plant & buildings equipment equipment vehicles equipment Port Total
Cost
Balance at the beginning
of the year 6,149,370 6,695,230 748,229 799,473 599,471 944,564 15,936,337
Additions during the
period 30,745 32,634 14,703 12,749 9 29 90,869
Additions due to business
combination - 1,245 - 1,057 - - 2,302
Transfer from construction
in progress 70,974 182,044 28,042 21,907 - 139 303,106
Disposal during the period (25,888) (72,103) (4,743) (6,422) - (1,123) (110,279)
Effect of the forergn
exchange rate changes 9,619 (37,870) (2,302) (1,110) 8,181 31 (23,451)
Balance at the end of the
period 6,234,820 6,801,180 783,929 827,654 607,661 943,640 16,198,884
Accumulated depreciation
Balance at the beginning
of the year 1,513,300 2,413,059 450,178 294,391 73,901 95,952 4,840,781
Charge for the period 105,115 221,382 36,907 22,323 15,017 11,128 411,872
Written off on disposal (5,112) (44,694) (1,729) (5,384) (411) - (57,330)
Effect of the forergn
exchange rate changes 2,906 (23,703) (1,093) (801) 57 5 (22,629)
Balance at the end of the
period 1,616,209 2,566,044 484,263 310,529 88,564 107,085 5,172,694
Provision for impairment
Balance at the beginning
of the year 145,459 64,124 526 12 - - 210,121
Charge for the period 3,127 9,385 - - - - 12,512
Written off on disposal (1,129) (4,547) - - - - (5,676)
Effect of the forergn
exchange rate changes 4,426 (448) - - - - 3,978
Balance at the end of the
period 151,883 68,514 526 12 - - 220,935
Carrying amounts
At the end of the period 4,466,728 4,166,622 299,140 517,113 519,097 836,555 10,805,255
At the beginning ot the
year 4,490,611 4,218,047 297,525 505,070 525,570 848,612 10,885,435
As at 30 June 2012, restricted fixed assets of the Group amounted to RMB 87,135,000.
Refer to Note V.22 for details.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
14. FIXED ASSETS (CONTINUED)
(1) Fixed assets by categories (continued)
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 168,461,000 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.
(2) As at 30 June 2012, the Group had no temporarily idle fixed assets.
(3) Fixed assets held under finance leases
RMB'000
2012.6.30 2011.12.31
Accumulated Carrying Accumulated Carrying
Item Cost depreciation amount Cost depreciation amount
Machinery & equipment 327,110 (43,054) 284,056 314,463 (34,139) 280,324
Motor vehicles 1,293 (1,217) 76 1,293 (1,077) 216
Offshore engineering special
equipment 213,915 (40,131) 173,784 214,737 (34,842) 179,895
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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 29,295
Machinery & equipment 82,255
Total 111,550
(5) Fixed assets held for sale at the year end
As at 30 June 2012, there were no fixed assets held for sale (2011: Nil).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
15. CONSTRUCTION IN PROGRESS
(1) Construction in progress
RMB'000
2012.6.30 2011.12.31
Item Carrying Carrying
Cost Impairment amount Cost Impairment amount
Nantong CIMC special Transportation
Equipment Thrid Workshop Project 7,273 - 7,273 5,874 - 5,874
DLZH Plant Project 14,358 - 14,358 13,962 - 13,962
XHCIMCS Production Line and Power
Facilities Reconstruction Project 2,140 - 2,140 7,129 - 7,129
Enric Heavy Pressure Vessel
Workshop - - - 22,452 - 22,452
Xinhui Wood Factory 5th and 6th
project 1,678 - 1,678 1,678 - 1,678
Enric 3rd phase project - - - 1,651 - 1,651
Eastern logistic 3rd Phase Project 293,121 - 293,121 291,621 - 291,621
Raffles harbor basin project 118,905 - 118,905 119,218 - 119,218
Raffles Dredging Offshore Project 38,588 - 38,588 38,588 - 38,588
Raffles No1 and No 2 slideway project 59,228 - 59,228 89,168 - 89,168
Raffles sea route project 34,460 - 34,460 30,920 - 30,920
Raffles Jack-up Drilling Platform 1,014,980 - 1,014,980 810,879 - 810,879
CIMC Raffles Employee Canteen 12,436 - 12,436 11,979 - 11,979
MEA 1st stage R&D Project 134,120 - 134,120 76,793 - 76,793
TAS New Plant Project 25,357 - 25,357 21,758 - 21,758
Shijiazhuang Enric 2nd Phase Project 82,817 - 82,817 68,327 - 68,327
Others 447,745 - 447,745 286,333 - 286,333
Total 2,287,206 - 2,287,206 1,898,330 - 1,898,330
The carrying amounts of construction in progress at the end of the year included
capitalised borrowing cost of RMB 60,321,000 (2011: RMB 41,780,000). The
interest rate adopted for determining capitalised at borrowing cost for the current
period was 4.88 % (2011: 5.36%).
As at 30 June 2012, there was no construction in progress of the Group with restrictions
in ownership (2011: Nil). Refer to Note V.22 for details.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15. CONSTRUCTION IN PROGRESS (CONTINUED)
(2) The Group’s major construction projects in progress were set out as follows:
RMB'000
Including:
Effect of the
Balance at
the Transfer Balance at Percentage of Accumulated current year foreign
Project Budge
beginning to fixed Other the end of current input capitalisted capitalised Capitalised Sources of exchange rate
of the year Additions assets deduction the period over budget(%) Progress borrowing cost borrowing cost rate(%) funds changes
Nantong CIMC special Transportation
35,519 5,874 1,399 - 7,273 70.11% 98.02% 0.00% self-funding
Equipment Thrid Workshop Project - - - -
DLZH Plant Project 143,392 13,962 2,104 (1,708) - 14,358 32.01% 32.01% - - 0.00% self-funding -
XHCIMCS Production Line and Power
19,802 7,129 4,781 - 2,140 142.96% 92.64% 0.00% self-funding
Facilities Reconstruction Project (9,770) - - -
Enric Heavy Pressure Vessel
25,570 22,452 11,888 (34,340) - - 134.29% 100.00% 0.00% self-funding
Workshop - - -
Xinhui Wood Factory 5th and 6th
32,831 1,678 - 1,678 48.92% 57.66% 0.00% self-funding
project - - - - -
Enric 3rd phase project 28,132 1,651 - (1,651) - - 64.71% 64.71% - - 0.00% self-funding -
Eastern logistic 3rd Phase Project 350,000 291,621 1,500 - - 293,121 90.59% 91.12% - - 0.00% self-funding -
Raffles harbor basin project 163,859 119,218 187 - (500) 118,905 73.86% 97.00% - - 0.00% self-funding -
Raffles Dredging Offshore Project 62,445 38,588 - - - 38,588 61.00% 95.00% - - 0.00% self-funding -
Raffles No1 and No 2 slideway project 119,822 59,168 60 - - 59,228 86.25% 99.00% - - 0.00% self-funding -
Raffles sea route project 73,737 30,920 3,540 - - 34,460 45.80% 99.00% - - 0.00% self-funding -
Raffles Jack-up Drilling Platform 1,214,370 810,879 200,352 - - 1,011,231 90.50% 88.26% 52,757 18,541 4.88% self-funding 3,749
CIMC Raffles Employee Canteen 15,190 11,979 457 - - 12,436 82.01% 99.00% - - 0.00% self-funding -
MEA 1st stage R&D Project 350,000 76,793 57,327 - - 134,120 37.38% 55.90% - - 0.00% self-funding -
TAS New Plant Project 30,000 21,758 3,599 - - 25,357 84.55% 84.55% - - 0.00% self-funding -
Shijiazhuang Enric 2nd Phase Project 75,000 68,327 14,490 - - 82,817 110.42% 95.46% - - 0.00% self-funding -
Total 2,739,669 1,581,997 301,684 (47,469) (500) 1,835,712 52,757 18,541 3,749
(3) Provision for impairment
As at 30 June 2012, there was no provision for impairment for work in progress (2011: Nil).
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
16. INTANGIBLE ASSETS
(1) Intangible assets by categories
RMB'000
Technical
Timber
Land use know-how Customer Customer Mairime
Item concession Total
rights and relationships contracts use rights
rights
trademarks
Cost
Balance at the beginning of
the year 2,978,886 877,511 226,641 103,970 136,574 80,084 4,403,666
Additions during the period 168,429 530 - 27,000 4,800 - 200,759
Additions due to business
combination - - - - - - -
Disposal during the period (22,696) - - - - - (22,696)
Effect of the forergn
exchange rate changes 8,564 37,401 1,257 (2,818) (1,886) 307 42,825
Balance at the end of the 3,133,183 915,442 227,898 128,152 139,488 80,391 4,624,554
Accumulated depreciation -
Balance at the beginning of
the year 327,979 501,418 94,535 64,637 81,814 8,845 1,079,228
Charge for the period 38,311 73,548 1,643 6,799 1,008 1,853 123,162
Written off on disposal (2,534) - - - - - (2,534)
Effect of the forergn
exchange rate changes 1,480 3,492 233 (1,693) (1,748) 39 1,803
Balance at the end of the 365,236 578,458 96,411 69,743 81,074 10,737 1,201,659
Provision for impairment
Balance at the beginning of
the year - - 99,952 - 52,264 - 152,216
Charge for the period - - - - - - -
Written off on disposal - - - - - - -
Effect of the forergn
exchange rate changes - - 554 - - - 554
Balance at the end of the - - 100,506 - 52,264 - 152,770
Carrying amounts
At the end of the period 2,767,947 336,984 30,981 58,409 6,150 69,654 3,270,125
At the beginning ot the year 2,650,907 376,093 32,154 39,333 2,496 71,239 3,172,222
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
16. INTANGIBLE ASSETS (CONTINUED)
(1) Intangible assets by categories (continued)
As at 30 June 2012, there were no intangible assets without certificates of ownership.
As at 30 June 2012, the Group had intangible assets with restriction in ownership
amounting to RMB 127,618,000 (2011: RMB127, 844,000).
The timber concession right amounting to RMB116,769,000, 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 timbe 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 RMB13,303,000
was made to this part of timber concession rights.
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 RMB110,022,000. 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
RMB86,649,000 was made on the carrying value of the above timber concession
rights.
Regarding the client contracts obtained in 2012 through the acquisition of Raffles, the
Group had preformed impairment test based on the execution of these contracts in
2011 and consequently made a full impairment loss of RMB 52,264,000.
As at 30 June 2012, there were no intangible assets with indefinite useful lives.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
17. GOODWILL
RMB'000
Balance at the Effect of the Balance at
Name of investee or Provision for
beginning of Additions Deduction foreign exchange the end of
goodwill items impairment
the year rate changes the period
Enric 607,004 - - 607,004 -
YPDI 84,351 - 84,351 -
TGE SA 175,964 - - 670 176,634 -
Technodyne International 27,430 - (980) 26,450 -
Gadidae AB - - - 12,254
Others 397,106 - (1,595) 395,511 11,114
Total 1,207,504 84,351 - (1,905) 1,289,950 23,368
RMB'000
Item 2012.6.30 2011.12.31
Container industry 127,524 127,524
Tailers 77,752 77,752
Tank equipments industry 952,911 868,869
percentage of goodwill 131,763 133,359
Total 1,289,950 1,207,504
On 1 January 2012, the company’s subsidiary CIMC Enric acquired 100% of the
issued shares in Nanjing Yangzi Petrochemical Design & Engineering Co., Ltd.
(“YPDI”), a company that is principally engaged in consultancy, planning, design,
service, procurement and contracting for petrochemical projects; pressure vessels and
pressure piping design; computer software development and utilisation, for
consideration of RMB165,000,000. .
CIMC Enric, the Company’s subsidiary, acquired 100% of the equity interests of
YPDI, the fair value of the identifiable net assets of which at the acquisition date
amounted to RMB 80,649，000. The excess amount of acquisition cost over fair value
amounting to RMB 84,351,000 was recognized as goodwill.
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(CONTINUED)
18. LONG-TERM DEFERRED EXPENSES
RMB'000
Balance at the Effect of the Balance at Reasons for
beginning of the Other foreign exchange the end of other
Item year Additions Amortisation deduction rate changes the period deduction
electricity capacity
enlargement
expenses 1,572 - (236) - - 1,336 None
Rental 6,811 1,053 (2,258) - - 5,606 None
Others 26,509 8,085 (7,118) - - 27,476 None
Subtotal 34,892 9,138 (9,612) - - 34,418 None
Less:provision for
impairment - - - - - - None
Total 34,892 9,138 (9,612) - - 34,418 None
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
19. DEFERRED TAX ASSETS AND LIABILITIES
(1) Deferred tax assets or liabilities after offsetting and corresponding deductible or
taxable timing differences
RMB'000
Deferred tax Deductible/(taxable) Deferred tax
Deductible/(taxable) temporary difference
Item assets/(liabilities) temporary difference assets/(liabilities)
2012.06.30
2012.6.30 2011.12.31 2011.12.31
Deferred tax assets:
Provisions for impairment 959,487 191,897 917,376 183,799
Provisions 521,137 101,228 498,649 97,469
Employee benefits payable 1,004,697 216,479 1,314,557 309,184
Accrued expenses 543,855 98,756 495,601 96,826
Tax losses carry-forward 765,389 143,911 651,188 123,537
Movement for fair value of financial
assets held for trading/hedge
instruments 113,175 27,510 96,958 24,156
Others 164,727 24,709 146,182 16,156
Subtotal 4,072,467 804,490 4,120,511 851,127
Offsetting amount (515,898) (126,395) (599,278) (147,029)
Net amount after offsetting 3,556,569 678,095 3,521,233 704,098
Deferred tax liabilities:
Movement for fair value of financial
assets held for trading/hedge
instruments (4,001) (639) (26,046) (5,763)
Available-for-sale financial assets (552,355) (134,044) (499,820) (120,437)
Movement for fair value of hedging
financial instrument (3,119) (468) (12,784) (3,196)
Revaluation gain through combination (521,564) (159,223) (537,605) (163,771)
Estimated dividend income earned for
non-resident foreign enterprises (4,395,489) (362,761) (3,665,929) (313,946)
Others (490,852) (122,713) (463,670) (121,416)
Subtotal (5,967,380) (779,848) (5,205,854) (728,529)
Offsetting amount 515,898 126,395 599,278 147,029
Net amount after offsetting (5,451,482) (653,453) (4,606,576) (581,500)
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
19. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
(2) Unrecognised deferred tax assets
RMB'000
Item 201.06.30 2011.12.31
Tax losses carry-forward 348,193 330,324
Impairment losses of timber
Concession rights 53,205 53,205
Others 35,572 35,572
Total 436,970 419,101
(3) Expiry dates of tax credit for unrecognised deferred tax assets are as follows:
RMB'000
Year 2012.06.30 2011.12.31 Note
2012 - 31,464
2013 159,714 210,243
2014 353,630 353,630
2015 423,272 423,272
More than 5 years 591,946 357,743 Note 1
Total 1,528,562 1,376,352
At 30 June 2012, the Group had no unrecognised deferred tax liabilities.
Note 1: By the end of 2010 and 2011, 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.
20. OTHER NON-CURRENT ASSETS
Item 2012.06.30 2011.12.31
Prepayment for land use right 765,381 764,849
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(CONTINUED)
21. PROVISIONS FOR IMPAIRMENT
RMB’000
Decrease during the period
Balance at the Effect of the Balance at
Charge for
beginning of the Reversal Write off foreign exchange the end of
Item Note the period
year rate changes the period
Receivables 319,550 20,848 (16,952) (1,698) 396 322,144
Other Receivables 120,431 5,796 (5,267) - (1,715) 119,245
Prepayments 96,740 22 - - 2 96,764
Inventories 416,055 13,879 (77,097) (89,144) (55) 263,638
Non-current assets due
within one year 24,462 - - - - 24,462
Long-term receivables 41,996 22,594 (1,321) (1,290) - 61,979
Long-term equity
Investments 3,067 - - - - 3,067
Fix assets 210,121 12,512 (5,676) 3,978 220,935
Intangible assets 152,216 - - - 554 152,770
Goodwill 23,832 - - - (464) 23,368
Total 1,408,470 75,651 (100,637) (97,808) 2,696 1,288,372
Please refer to the respective notes of the assets for reasons of the provisions.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
22. RESTRICTED ASSETS
As at 30 June 2012, assets with restrictions in their ownership are as follows:
RMB’000
Effect of the
Balance at the Decrease foreign
beginning of Additions for during the exchange rate Balance at the
Item Note the year the period period changes end of the period
Assets guaranteed
Cash at bank and on hand V.1 1,224,873 232,853 (432,173) 1,315 1,026,868
Accounts receivable V.4 471,026 122,535 - 2,177 595,738
Inventories V.7 7,671 1,034 (391) - 8,314
Fixed assets V.14 87,439 249 (688) 135 87,135
Intangible assets V.16 127,844 - (659) 433 127,618
Total 1,918,853 356,671 (433,911) 4,060 1,845,673
The above inventories, fixed assets and intangible assets were secured for bank loans.
Accounts receivable was pledged for borrowings. Refer to Note V.23, Note V.34 and
Note V.35 for short-term and long-term secured loans analysis.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
23. SHORT-TERM LOANS
(1) Short-term loans by categories:
RMB’000
Item Note 2012.6.30 2011.12.31
Guarantee loans （a）
- RMB 1,737,801 2,760,263
- USD 1,669,490 2,401,895
- JPY 1,701 1,733
- HKD 470,288 -
- EUR - -
- SGD - 376
Subtotal 3,879,280 5,164,267
Secured loans （b）
- USD 25,552 -
- EUR - -
- SGD - -
Subtotal 25,552 -
Pledge loans （c）
- USD 83,490 -
Subtotal 83,490 -
Loans on credit
- RMB 1,122,454 572,336
- USD 1,886,578 1,386,579
- EUR 193,090 203,957
- HKD - 682,994
- AUD - 20,779
Subtotal 3,202,122 2,866,645
Total 7,190,444 8,030,912
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V. NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (CONTINUED)
23. SHORT-TERM LOANS
(1) Short-term loans by categories: (continued)
(a) As at 30 June 2012, guarantee loans of the Group included bank loans
amounting to RMB1,734,698,000 guaranteed by the Company for its
subsidiaries, RMB236,420,000 guaranteed by HI for its subsidiaries,
RMB132,826,000 guaranteed by Enric for its subsidiaries and
RMB1,775,336,000 guaranteed by Raffles for its subsidiaries.
(b) As at 30 June 2012, borrowings of DLCIMCS, a subsidiary of the Group,
amounting to USD 4,040,000, equivalent to RMB 25,552,000, raised from.
China Merchant Bank was secured by DLCIMCS ‘s account receivable.
(c) As at 30 June 2012, the Group’s pledge loans from Bank of China and
Agriculture Bank of China amounting to USD13, 200,000, equivalent to RMB
83,490,000 were pledged by the accounts receivable of its subsidiaries, YZRYL.
(d) As at 30 June 2012, 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 2012, the Group had no past due and un-repaid short-term loans.
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(CONTINUED)
24. FINANCIAL LIABILITIES HELD FOR TRADING
RMB’000
Item Note 2012.6.30 2011.12.31
Current:
Derivative financial liabilities
-foreign future contracts v.2（3） 17,831 4,816
-swap contract for interest rate v.24（1） 280 8,138
-foregin exchange option - 18,153
Subtotal 18,111 31,107
Non-Current:
Derivative financial liabilities
-swap contract for interest rate v.24（1） 86,914 74,836
Subtotal 86,914 74,836
Total 105,025 105,943
(1) As at 30 June 2012, the Company and subsidiaries separately had 6 and 4 unsettled
interest rate swap contracts denominated in U.S. dollars. The nominal value of these
contracts amounted to USD283, 000,000. The maturity dates of these interest rate
swap contracts range from 23 November 2012 to 29 December 2018. As at 30 June
2012, the Group recognised on the foresaid contracts in their fair values of
RMB87,194,000 (including RMB84,518,000 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.
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(CONTINUED)
25. BILLS PAYABLE
RMB’000
Item 2012.6.30 2011.12.31
Bank acceptance bills 1,101,288 1,184,861
Commercial acceptance bills 269,450 2,110,365
Total 1,370,738 3,295,226
The above bills are due within one year.
26. ACCOUNTS PAYABLE
(1) The Group’s accounts payable is as follows:
RMB’000
Item 2012.6.30 2011.12.31
Raw materials suppliers 8,041,510 7,328,966
As at 30 June 2012, there was no individual major accounts payable aged over one
year.
Group’s accounts payable is analysed by currencies as follows:
2012.6.30 2011.12.31
Currency Qriginal currency Exchange rate RMB Qriginal currency Exchange rate RMB
’000 ’000 ’000 ’000
RMB 5,879,204 1.0000 5,879,204 5,870,263 1.0000 5,870,263
USD 272,930 6.3249 1,726,255 151,009 6.3009 951,496
HKD 28,793 0.8152 23,472 19,969 0.8107 16,189
JPY 45,070 0.0796 3,588 7,082 0.0811 574
EUR 11,547 7.8710 90,886 43,272 8.1625 353,209
AUD 49,714 6.3474 315,555 18,870 6.4093 120,946
Others - - 2,550 - - 16,289
Total 8,041,510 7,328,966
(2) No amount due to shareholders who hold 5% or more of the voting rights of the
Company or related parties is included in the balance of accounts payable.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
27. ADVANCES FROM CUSTOMERS
(1) The Group’s advances from customers is as follows:
RMB'000
Item 2012.6.30 2011.12.31
Advances for goods 2,041,276 1,310,878
Advances for construction 654,871 955,546
Advances for property 430,943 396,318
Total 3,127,090 2,662,742
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 2012, there were no significant advances aged over one year.
28. EMPLOYEE BENEFITS PAYABLE
RMB'000
Effect of the
Accrued Balance at the
Balance at the Paid during foreign
Item during the end of the
beginning of the period exchange
period period
the year rate changes
Salaries, bonuses, and
allowances 1,441,683 1,447,852 (1,535,325) (1,105) 1,353,105
Senior management bonus 372,004 - (10,163) - 361,841
Severance payment 3,946 259 (259) 3 3,949
Cash-settled share-based
- -
payments 492 2 494
Social insurances and
others 194,483 265,183 (266,120) 84 193,630
Total 2,012,608 1,713,294 (1,811,867) (1,016) 1,913,019
Please refer to Note VII for cash-settled shared-based payments.
As at 30 June 2012, there was no delayed payment of employee benefits.
As at 30 June 2012, aforesaid “social insurances and others” included labour union
fees and employee education fees amounting to RMB28,268,000 .
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 period.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
28. EMPLOYEE BENEFITS PAYABLE (CONTINUED)
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.
29. Taxes payable
RMB'000
Item 2012.6.30 2011.12.31
VAT payable 44,430 52,069
Business tax payable 8,174 17,697
Income tax payable 318,484 663,749
Withholding tax 200,647 68,833
Urban maintenance and construction tax payable 37,100 38,936
Education surcharges payable 25,738 27,740
Other 32,424 47,094
Total 666,997 916,118
30. INTEREST PAYABLE
RMB'000
Item 2012.6.30 2011.12.31
Interest payable for long-term loan 40,074 12,224
Interest payable for short-term loan 8,047 17,810
Interest payable for corporate bonds 17,433 122,033
Total 65,554 152,067
31. DIVIDENDS PAYABLE
RMB'000
Item 2012.6.30 2011.12.31
Public shareholders 198,800 -
Minority shareholders of subsidiaries 98,609 116,253
Total 297,409 116,253
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
32. OTHER PAYABLES
(1) The analysis of the Group’s other payables is as follows:
RMB’000
Item Note 2012.6.30 2011.12.31
Quality guarantees 190,806 305,596
Deposits and mortgage & advance received 907,879 899,441
Transportation expenses 134,894 280,289
Equipment and land use rights 129,041 160,047
Accruals 963,103 656,916
Housing maintenance fees 46,953 34,933
Current account with subsidiary's minority 45,330 46,698
Professional and training fee 24,137 19,221
Insurances 22,846 19,662
Advance received for shilp building V.32(4) 425,666 424,051
Royalties 23,349 1,614
Others 649,856 545,369
Total 3,563,860 3,393,837
The analysis of the Group’s other payables by currencies is as follows:
2012.06.30 2011.12.31
Original Exchange Original Exchange
RMB RMB
Currency currency rate currency rate
’000 ’000 ’000 ’000
RMB 1,243,482 1.0000 1,243,482 1,404,982 1.0000 1,404,982
USD 277,342 6.3251 1,754,216 252,612 6.3009 1,591,679
HKD 7,966 0.8152 6,494 330,546 0.8107 267,974
JPY 3,017 0.0796 240 126,276 0.0811 10,241
EUR 37,888 7.8740 298,330 10,770 8.1625 87,908
AUD 41,123 6.3492 261,098 4,602 6.4093 29,496
Others - - - - - 1,557
Total 3,563,860 3,393,837
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
32. OTHER PAYABLES (CONTINUED)
(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 2012.06.30 2011.12.31
1.Gasfin Investment S.A.( “Gasfin”) Minority shareholder of subsidiary 37,330 38,698
2.Wuhu Ruijiang Investment Ltd Minority shareholder of subsidiary 8,000 8,000
3.Haiyang Blue Island Offshore Ltd Minority shareholder of subsidiary 58,305 58,305
4.MSC Minority shareholder of subsidiary 425,666 424,051
Total 529,301 529,054
(3) Significant other payables aged over one year:
As at 30 June 2012, significant other payables aged over one year represented quality
guarantee, vehicle mortgage guarantee and various deposits.
(4) As at 30 June 2012, the significant other payables is as follows:
Raffles and Gadidae AB entered into a shipbuilding contract, which was terminated
afterwards, for the construction and sale of a submersible drilling rig from Raffles to
Gadidae AB in 2007. Subsequently Gadidae AB and MSC entered into a contract
which Gadidae AB would sell this vessel to MSC. Gadidae AB received USD
67,300,000, equivalent to RMB 425,666,000, progress billing from MSC in 2007.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
33. PROVISIONS
RMB’000
Effect of
Balance at Charges Payments Reversal foreign Balance
the beginning for during during exchange at the end
Item Note of the year the period the period the period rate changes of the period
Current
Warranties for product quality (1) 663,834 104,842 (25,838) (35,236) (250) 707,352
Guarantees for third parties (2) 18,057 - - (8,281) - 9,776
Others 54,288 64,987 (2,816) (2,882) (28) 113,549
Total 736,179 169,829 (28,654) (46,399) (278) 830,677
(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 of products
sold out during the period and in the previous fiscal years.
(2) The amount represents the possible loss for a bank guarantee letter issued by
the Company’s subsidiary - TAS.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
34. 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
Item 2012.06.30 2011.12.31
Long-term loans due within one year
-Credit loans 1,745,577 1,094,352
-Pledge loans - 649,072
-Guarantee loans - 750,000
Subtotal 1,745,577 2,493,424
Long-term payable due within one year 81,581 66,894
Total 1,827,158 2,560,318
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
34. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR
(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:
2012.06.30 2011.12.31
Aunual Original Exchange RMB Original Exchange RMB
interest rate currency'000 rate ’000 currency'000 rate ’000
Bank loans
-RMB - - - - 895,000 1.0000 895,000
-USD LIBOR+55～185BP 275,976 6.3249 1,745,577 248,500 6.3009 1,565,774
-HKD - - - - - 0.8107 -
-EUR - - - - 4,000 8.1625 32,650
Total 1,745,577 2,493,424
As at 30 June 2012, there was no renewal of past due long-term included in the
balance of long-term loans due within one year.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
34. 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 2012, the top five long-term loans due within one year are as follows:
2012.06.30 2011.12.31
Initial date of the Maturity date
Lender Currency Interest rate（%） Original RMB Original RMB
loans of the loans
currency'000 ’000 currency'000 ’000
1.China Development Bank 12-Dec-07 21-Jun-13 USD 6-month LIBOR+90BP 110,000 695,739
2.China Development Bank 12-Dec-07 21-Dec-12 USD 6 month LIBOR+90BP 60,000 379,494 60,000 378,054
3.Bank of China 19-Oct-09 19-Oct-12 USD 3 month LIBOR+55BP 47,000 297,270 48,500 305,594
4.Algemene Bank Nederland 26-May-10 21-May-13 USD 6 month LIBOR+185BP 20,000 126,498
5.Algemene Bank Nederland 28-May-10 21-May-13 USD 6 month LIBOR+185BP 20,000 126,498
Total 1,625,499 683,648
(3) Long-term payables due within one year
As at 30 June 2012, long-term payables due within one year included net financial leasing payable of RMB 81,581,000, which is total
amount of RMB 85,678,000 minus unrecognised financing expenses of RMB4,097,000.
As at 31 December 2011, long-term payables due within one year included net financial leasing payable of RMB 66,894,000, which is
total amount of RMB 73,234,000minus unrecognised financing expenses of RMB 6,340,000,
The Group had no financial leasing guaranteed by independent third parties.
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
34. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR (CONTINUED)
(3) Long-term payables due within one year (continued)
As at 30 June 2012, long-term payable due within one year was as follows:
Interest rate
Lender Period Initial Interest Ending Requirement
（%）
cost payable balance
RMB'000 RMB'000
PBOC
1.China Merchant Finance Leasing Ltd. From 19 Sep 2010 to 19 Sep 2013 312,300 Benchmark 4,097 73,236 Nil
Rate-8.00%
2.Bank of America From 1 Mar 2012 to 1 Mar 2015 155,709 2.74% - 4,924 Nil
3.Bank of America From 1 Dec 2011 to 28 Dec 2018 147,475 3.29% - 2,150 Nil
4.Bank of America From 1 Apr 2012 to 1 Apr 2017 57,433 3.64% - 1,271 Nil
Total 672,917 81,581
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
35. LONG-TERM LOANS
(1) The analysis of the Group’s long-term loans is as follows:
RMB'000
Item 2012.6.30 2011.12.31
Bank loans
Credit loans 6,414,153 4,424,142
Guarantee loans (a) 164,500 344,500
Secured loans (c) 1,093,295 1,371,698
Pledge loans (b) 614,047 432,245
Total 8,285,995 6,572,585
Long-term loans in original currencies are as follows:
2012.06.30 2011.12.31
Original Exchange RMB Original Exchange RMB
currency'000 rate ’000 currency'000 rate ’000
Bank loans
PBOC
Benchmark
rate +10% ~
-RMB 3,738,846 1.0000 3,738,846 3,642,400 1.0000 3,642,400
PBOC
Benchmark
rate -5%
LIBOR+170BP
-USD 668,798 6.3249 4,230,080 383,206 6.3009 2,414,544
～3.5%
-HKD HIBOR+230BP 388,946 0.8152 317,069 634,451 0.8107 514,350
-AUD - - - - 201 6.4093 1,291
Total 8,285,995 6,572,585
185
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
35. LONG-TERM LOANS
(1) The analysis of the Group’s long-term loans is as follows:
(a) As at 30 June 2012, Raffles, the subsidiary of the Group borrowed
RMB130,000,000 secured with its marine space using right, and CIMC
Tianyu borrowed RMB34,500,000 secured with the land use right and
buildings owned by Huayu Hotel, a subsidiary of CIMC Tianyu.
(b) As at 30 June 2012, the Group’s pledge loan borrowed by Raffles amounted to
USD97,084,000, equivalent to RMB614,047,000, which was pledged by
equity interest of Caspin Driller Pte. Ltd., a subsidiary of Raffles.
(c) As at 30 June 2012, the Group’s long-term guarantee loans included bank
loans amounting to RMB1, 093,295,000, guaranteed by the Company for its
subsidiaries.
(d) 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.
186
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
35. LONG-TERM LOANS (CONTINUED)
(2) The analysis of the Group’s long-term loans is as follows: (continued)
(a) As at 30 June 2012, the top five long-term loans are as follows:
Initial date of Maturity date of Interest rate 2012.06.30 2011.12.31
Lender Currency
the loans the loans （%）
Original RMB Original RMB
currency'000 ’000 currency'000 ’000
1.Syndicated Loan 13-Mar-12 23-Mar-15 USD LIBOR+230BP 225,000 1,423,103 - -
2.The Export-Import Bank of
1-Feb-11 1-Feb-14 RMB 4.76% 500,000 500,000
China 500,000 500,000
3.Syndicated Loan 8-Feb-12 23-Mar-15 USD LIBOR+230BP 70,000 442,743 - -
4.China Development Bank 30-Nov-11 30-Nov-18 USD LIBOR + 3.5% 68,601 433,894 68,601 432,245
5. Bank of Nederland 15-Apr-11 15-Apr-14 USD LIBOR+170BP 65,000 411,119 65,000 409,559
Total 3,210,859 1,341,804
As at 30 June 2012, there was no renewal of past due long-term bank loans included in the above balance of long-term loans.
187
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
36. DEBENTURES PAYABLE
RMB'000
Decrease
Balance at the beginning Addition during Balance at the
Item during the
of the year the period end of the year
period
Mid-term notes 3,988,438 2,001,172 - 5,989,610
(1) The analysis of debentures payable is set out as follows:
RMB'000
Balance of Balance of
Balance at
Issuance Issuance interest payable Interest Interest interest payable
Debenture name Face value Period the end of
date amount at the beginning accrued paid at the end of the
the year
of the year year
Mid-term notes-11 CIMC MTN1 4,000,000 23-May-11 5 years 4,000,000 (11,562) 1,172 - (10,390) 3,989,610
Mid-term notes-12 CIMC MTN1 2,000,000 24-May-12 3 years 2,000,000 - - - - 2,000,000
The company issued medium-term notes (MTN) on 20 May 2011 with a ceiling of
RMB 6 billion to institutional investors in the national inter-bank bond market. The
first phase of MTN with a total amount of RMB 4 billion, a term of five years from
23 May 2011 to 22 May 2016, par value of RMB 100 per note and fixed interest rate
of 5.23% per annum was successfully issued publicly. Interest is to be paid on 23rd
May each year in the arrears until redemption and par value is to be paid on 23 May
2016.
The company issued the second phase medium-term notes (MTN) on 22 May 2012
with a total amount of RMB 2 billion, a term of three years from 24 May 2012to 24
May 2015, par value of RMB 100 per note and fixed interest rate of 4.43% per annum
was successfully issued publicly. Interest is to be paid on 24th May each year in the
arrears until redemption and par value is to be paid on 24 May 2015.
The notes are unsecured and targets institutional investors in the national inter-bank
market. China Merchants Bank Co., Ltd. is the lead underwriter. Book building and
centralised placing were adopted for this issue. The MTN recorded as debenture was
subsequently measured at amortized cost using the effective interest.
37. Long-term payable
RMB'000
Item 2012.06.30 2011.12.31
Financial Leasing payable 350,182 86,846
Total 350,182 86,846
188
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
37. Long-term payable (continued)
(1) As at 30 June 2012 the top four of long-term payables (including all long-term
payable) were as follows:
RMB'000
Interest Ending
Requirement
Lender Period Initial cost Interest rate（%） payable balance
From 1 Mar 2011 to 1 Mar
Bank of America 155,709 2.74% 143,000 Nil
2015
From 1 Dec 2011 to 28 Dec
Bank of America 147,475 3.29% 138,416 Nil
2018
From 1 Apr 2011 to 1 Apr
Bank of America 57,433 3.64% 54,822 Nil
2017
China Merchant Bank Financial From 19 Sep 2010 to 19 Sep PBOC Benchmark
312,300 267 13,944 Nil
Leasing Co., Ltd. 2013 rate-8%
Total 350,182
As at 30 June 2012, balance of the long-term payable of the Group included
balance amounting to RMB336,238,000 denominated in USD (2011: RMB
33,667,000).
(2) Breakdown of financial leasing payable
As at 30 June 2012, the total future minimum lease payments under finance
leases, which are based on contractual undiscounted cash flows (including
interest payments computed using contractual rates or, if floating, based on
rates current at the balance sheet date), were as follows:
RMB'000
Minimum lease payments under finance lease 2012.06.30 2011.12.31
Within 1 year (inclusive) 85,678 73,234
After 1 year but within 2 (inclusive) 22,631 54,925
After 2 year but within 3 (inclusive) 17,111 -
After 3 years 310,707 33,667
Subtotal 436,127 161,826
Less: unrecognised finance charges (4,364) (8,086)
Total 431,763 153,740
Please refer to note V.34 for net financial leasing payable due within one year minus
unrecognised financing expenses.
189
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
37. Long-term payable (continued)
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.
38. SPECIAL PAYABLES
RMB'000
Effect of
Balance at Additions Settlements foreign Balance at
the beginning during during exchange the end
Item of the year the period the period rate changes of the period
Project funds 8,940 10,730 (8,940) - 10,730
Total 8,940 10,730 (8,940) - 10,730
39. OTHER NON-CURRENT LIABILITIES
RMB'000
Item 2012.6.30 2011.12.31
Deferred income 200,379 198,564
40. SHARE CAPITAL
The Company’s share capital status at 30 June is as follows:
RMB'000
Changes of Changes of
Balance at the Additions shares subject to shares subject to
beginning of during the selling selling
the year period restrictions restrictions
Shares subject to selling restrictions
-Shares held by - - - -
overseas legal persons
-Shares held by domestic 373 - - 373
natural persons
Shares not subject to selling
restrictions
-RMB-denominated
ordinary shares 1,231,544 - - 1,231,544
-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.
190
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
41. CAPITAL RESERVE
RMB'000
Balance at Additions Settlements Balance at
the beginning during during the end of
Item of the period the period the period the period
Share premiums 201,222 - - 201,222
Other capital reserves
-Property revaluation reserve 43,754 - - 43,754
-Exchange reserve on foreign currency capital 692 - - 692
-Donated non-cash assets reserve 257 - - 257
- Net changes in fair value of available-for-
503,276 49,079 - 552,355
sale financial assets
-Effective portion of changes in fair value of
12,784 - (9,665) 3,119
cash flow hedges
-Deferred tax effect (122,756) - (10,820) (133,576)
-Equity settled share-based payment 196,954 59,306 - 256,260
-Capital reserves due to minority
79,024 - - 79,024
shareholders’ equity
-Capital reserves due to acquiring minority
247,114 - (33,003) 214,111
shareholders' equity
-Decreased capital reserve due to minority
(58,964) - - (58,964)
shareholders' contribution
Others (304,096) - - (304,096)
Total 799,261 108,385 (53,488) 854,158
191
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
42. SURPLUS RESERVE
RMB'000
Item Balance at the beginning Additions Settlements Balance at the end
of the period during the during the of the period
period period
Statutory surplus
reserve 1,163,068 - - 1,163,068
Discretionary
surplus reserve 1,790,092 - - 1,790,092
Total 2,953,160 - - 2,953,160
43. RETAINED EARNINGS
RMB’000
Item Note Amount Appropriation proportion
Retained earnings brought forward 12,785,092 -
Add: profit attributable to shareholders of
the Company 933,710 -
Less: Dividends of ordinary shares (1,224,702) -
Retained earnings carry forward
12,494,100 -
(1) Dividends of ordinary shares declared during the period
Pursuant to the shareholders’ approval at the Shareholders’ Meeting on 25 May 2012,
a cash dividend of RMB 0.46 per share (2011: RMB 0.35 per share) totaling RMB
1,224,702,000 (2011: RMB931, 839,000) was declared and paid to the Company’s
ordinary shareholders on 14 June 2012.
192
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
44 OPERATING INCOME AND OPERATING COST
(1)
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Operating income 26,487,354 35,878,407
Other operating income 877,092 599,691
Operating cost 23,013,597 29,499,900
There was no individual construction contract whose revenue amounted to more
than 10% of the total operating income.
(2) Operating income and operating cost (by industries and by products)
RMB'000
From 1 January to 30 June 2012 From 1 January to 30 June 2011
Industry Operating income Operating cost Operating income Operating cost
Containers 13,405,500 11,347,348 21,655,698 17,039,984
Trailers 6,520,928 5,735,906 9,286,027 8,215,605
Tank equipments 4,199,283 3,380,956 3,630,768 2,933,102
Marine engineering 1,243,014 1,099,649 229,950 415,742
Air ground facilities 62,974 45,264 131,266 91,754
Others 1,055,655 785,655 944,698 639,482
Total 26,487,354 22,394,778 35,878,407 29,335,669
3) Operating income and operating cost (by regions)
RMB'000
From 1 January to 30 June 2012 From 1 January to 30 June 2011
Regions Operating income Operating cost Operating income Operating cost
P.R China 23,602,225 20,524,003 33,756,565 27,634,416
America 1,145,678 845,598 764,090 595,464
Europe 738,130 649,638 1,047,038 934,476
Asia 57,601 8,887 59,969 8,616
Others 943,720 366,652 250,745 162,697
Total 26,487,354 22,394,778 35,878,407 29,335,669
The regional operating income and operating cost is determined on the location at
which the services were provided or the goods were delivered.
193
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
44. OPERATING INCOME AND OPERATING COST (CONTINUED)
(4) Operating income of top five customers in 2011 is as follows:
Operating income Percentage of total
Customer RMB'000 operating income(%)
MAERSK(CHINA)SHIPPING CO.LTD 2,218,519 8.11%
TAL International Container Corporation 1,618,052 5.91%
Triton Container International Ltd 1,606,829 5.87%
CRONOS CONTAINERS LTD 852,029 3.11%
Sea Containers Ltd 800,238 2.92%
Total 7,095,667 25.92%
The Group’s operating income of top five customers from January to June 2011
totaled RMB 8,719,392,000 accounting for 24.30% of total operating income.
45. BUSINESS TAXES AND SURCHARGES
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011 Taxation basis and rates
Business tax 49,165 29,092 3%-5% of operating income
Urban maintenance 7% of VAT and business tax paid
46,439 24,090
and construction tax
Education fee and 3%-5% of VAT and business tax paid
35,027 16,619
surcharges
Appreciation amount in transferring
Land appreciation tax 12,446 1,059
property and applicable tax rate
Others 19,274 2,294
Total 162,351 73,154
46. SELLING AND DISTRIBUTION EXPENSES
RMB'000
Category from 1 January to 30 June 2012 from 1 January to 30 June 2011
Transportation and
distribution charges 361,064 462,321
External sales commission 21,791 38,707
Employ Benefit 84,616 99,133
Warranty 84,221 59,117
Others 312,064 309,313
Total 863,756 968,591
194
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
47. GENERAL AND ADMINISTRATIVE EXPENSES
RMB'000
Category from 1 January to 30 June 2012 from 1 January to 30 June 2011
Low- value consumables and materials consumed 28,375 43,853
Rental 29,252 26,754
Depreciation 81,373 76,985
Employ Benefit 522,934 490,693
Taxes and surcharges 61,934 63,702
Agency fee 45,404 48,962
Technology development costs 95,105 44,054
Amortisation 96,842 85,459
Performance Bonus and president bonus 100,000 354,999
Office expenditure,entertainment fee and others 594,490 480,490
Total 1,655,709 1,715,951
48. FINANCIAL EXPENSES
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
Interest expenses from loans and payables 530,173 423,058
Less:Borrowing costs capitalised 204,032 28,943
Interest income from deposits and receivables (101,313) (111,002)
Net exchange (gains)/ losses (11,768) 88,472
Other financial expenses 23,379 28,377
Total 236,439 399,962
195
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
49. (LOSSES) / GAINS FROM CHANGES IN FAIR VALUE
RMB'000
Sources of gain/loss from changes in fair value from 1 January to 30 June 2012 from 1 January to 30 June 2011
Financial assets held for trading
- Changes in fair value during the period
1.Gains from changes in fair value of held for trading
3,353 (42,564)
investments
2.Gains / losses from changes in fair value of
(22,473) (57,903)
derivative financial instrument
- Income for derecognised financial assets held for
3,268 (16,062)
trading
Subtotal (15,852) (116,529)
Financial liabilities held for trading
- Changes in fair value during the period
1.(Losses)/gains from changes in fair value of
918 28,273
derivative financial instrument
Total (14,934) (88,256)
196
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
50. INVESTMENT INCOME
(1) The analysis of the Group’s investment income is as follows:
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Long-term equity investments in cost method 5,000 10,000
Long-term equity investments in equity method (10,095) 28,739
Loss on disposal of long-term equity
13,063
investments
Investment gains of available-for-sale financial
4,841 3,343
assets
Gains / (losses) on sale of held-for-trading
(3,268) 16,062
financial assets
Total (3,522) 71,207
(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
Reasons for variances
Investee From 1 January to 30 June 2012 From 1 January to 30 June 2011
between two periods
Cash dividend was
BOCM Schroder Stolt Fund
5,000 10,000 distributed during the
Management
period
Total 5,000 10,000
197
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
50. INVESTMENT INCOME (CONTINUED)
(3) Long-term investments in equity method with individual investment income over
5% of total investment income or less than 5% but ranked the top five investment
income from 1 January 2012 to 30 June 2012 are as follows:
RMB'000
Reasons for variances
Investee From 1 January to 30 June 2012 From 1 January to 30 June 2011
between two periods
Changes in profit and
7,217 16,803
TJCIMCZL loss of the investee
Changes in profit and
4,296 28,267
Shanghai Fengyang loss of the investee
Changes in profit and
3,534 6,453
KYH loss of the investee
Changes in profit and
2,191 (231)
South CIMC Logistic Co., Ltd. loss of the investee
Xiamen CIMC Haitou Changes in profit and
1,418 1,790
Container Service loss of the investee
Total 18,656 53,082
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.
51. IMPAIRMENT LOSSES
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Accounts receivables 3,896 6,754
Prepayments 22 (2,421)
Other receibvables 529 (3,536)
Inventories (63,218) (5,264)
Non-current assets due within one year - -
Long-term receivables 21,273 32,445
Long-term equity investments - -
Fixed assets 12,512 -
Intangible assets - 45,731
Goodwill - -
Total (24,986) 73,709
198
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
52. NON-OPERATING INCOME
(1) The analysis of the Group’s non-operating income is as follows:
RMB'000
Item Note From 1 January to 30 June 2012 From 1 January to 30 June 2011
Gains on disposal of fixed assets 11,056 704
Gains on disposal of intangible assets 15 610
Compensation income 21,608 6,899
Penalty income 835 2,658
Government grants (2) 36,027 83,625
Amounts no longer payable 45 3,624
Others 7,445 4,893
Total 77,031 103,013
(2) Government grants
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Financial grants 36,027 83,625
Total 36,027 83,625
199
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
53. NON-OPERATING EXPENSES
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Losses on disposal of fixed assets 3,134 8,344
Losses on disposal of intangible assets 3,232 11
Donation expenses 2,527 1,733
Penalty expenses 1,370 655
Compensation expenses 691 310
Others 12,150 4,223
Total 23,104 15,276
54. INCOME TAX
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Current tax expenses for the period 406,187 993,680
Deferred taxation 79,186 30,438
Total 485,373 1,024,118
200
Semi-Annual Report 2012 of CIMC
V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
54. INCOME TAX (CONTINUED)
(2) Reconciliation between income tax expenses and accounting profits is as follows:
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Profits before taxation 1,493,051 3,817,519
Expected income tax expenses at applicable tax
rates 476,135 898,681
Effect of tax incentive (94,800) (145,724)
Tax effect of non-deductible expenses 8,706 12,878
Tax effect of non-taxable income (30,611) (35,508)
Tax effect of utilisation of tax losses not recognised
in prior years (27,147) (42,265)
Tax effect of unrecognised tax losses 45,016 159,064
Deductible temporary differences of unrecognised
deferred tax assets 48,754 3,752
Effect of tax rate change on deferred tax 10,766 (1,277)
Tax refund for income tax annual filing (261) 151
Income tax accruals for profit of foreign holding
companies in current period 48,815 174,366
Income tax expenses 485,373 1,024,118
55. 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 2012 From 1 January to 30 June 2011
Consolidated profit attributable to ordinary equity
933,710 2,807,629
shareholders of the Company
Weighted average of ordinary shares in issue (’000) 2,662,396 2,662,396
Basic earnings per share 0.3507 1.0545
201
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
55. CALCULATION OF EARNINGS PER SHARE AND DILUTED
EARNINGS PER SHARE
(1) Basic earnings per share (continued)
RMB'000
Calculation of weighted average number of ordinary
shares
From 1 January to 30 June 2012 From 1 January to 30 June 2011
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 2012 From 1 January to 30 June 2011
Consolidated profit attributable to ordinary equity
933,710 2,807,629
shareholders of the Company (diluted)
Weighted average of ordinary shares in issue (diluted)
2,671,583 2,662,396
(’000)
Diluted earnings per share 0.3495 1.0545
Note: Share based payment of the company’s subsidiaries has no significant impact on the company’s diluted earnings per share.
(a) Calculation of Consolidated profit attributable to ordinary equity shareholders
of the Company (diluted):
RMB'000
From 1 January to 30 June 2012 From 1 January to 30 June 2011
Consolidated profit attributable to ordinary equity
shareholders of the Company 933,710 2,807,629
(b) Calculation of weighted average number of ordinary shares (diluted):
From 1 January to 30 June 2012 From 1 January to 30 June 2011
Issued ordinary shares at 1 January (’000) 2,662,396 2,662,396
Effect of share options ('000) 9,187 -
Weighted average number of ordinary shares at 30
June (diluted) (’000) 2,671,583 2,662,396
202
Semi-Annual Report 2012 of CIMC
V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
56. OTHER COMPREHENSIVE INCOME
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
1.Gains/(losses) on available-for -sale financial
assets 49,079 (15,815)
Less: Effect of income tax arising from available-
for-sale financial assets 12,270 (662)
Amount recognised in other comprehensive
income in prior period transferred to profit and
loss in current period -
Subtotal 36,809 (15,153)
2.Gains/(losses) on cash flow hedges financial
instrument (9,665) 9,735
Less:Effect of income tax arising from cash flow
hedges financial instrument (1,450) 2,542
Amount recognised in other comprehensive
income in prior period transferred to profit and
loss in current period -
Subtotal (8,215) 7,193
3.Effect of foreign exchange rate changes 6,685 52,664
4.Others 4,489
Total 35,279 49,193
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
57. NOTES TO CASH FLOW STATEMENT
(1) Other cash received from operating activities
From 1 January to 30 June 2012
Item RMB'000
Cash received from government grants related to assets 15,000
Cash received from government grants related to income 21,027
Cash received from penalty 835
Cash received from quality compensation 1,052
Others 114,814
Total 152,728
(2) Other cash paid for operating activities
From 1 January to 30 June 2012
Item RMB'000
Cash paid for transportation expenses 361,064
Cash paid for rental, insurance and other selling expenses 153,100
Cash paid for technical development fee 95,105
Cash paid for warranty 30,599
Cash for commission of external sales 117,330
Cash for entertainment 28,120
Cash paid for travelling, office expenses and other expenses
in ordinary operation 183,339
Total 968,657
(3) Other cash paid for financing activities
RMB'000
Item From 1 January to 30 June 2012
Cash paid for finance lease 14460
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
58. INFORMATION TO CASH FLOW STATEMENT
(1) Supplement to cash flow statement:
a. Reconciliation of net profit to cash flow from operating activities:
RMB'000
Supplement From 1 January to 30 June 2012 From 1 January to 30 June 2011
Net profit 1,007,678 2,793,401
Add:Impairment for assets (24,986) 73,709
Depreciation of fixed assets 411,871 377,755
Amortisation of intangible assets 123,162 118,322
Amortisation of investment property and long-term
14,308 11,367
deferred expenses
Losses / (gains) on disposal of fixed assets, intangible
(4,705) 7,041
assets and other long-term assets
Losses/(Gains) on changes in fair value 14,934 88,256
Financial expense 326,141 394,115
Losses/(Gains) arising from investments 3,522 (71,207)
Share-based payment expenses 59,306 58,006
Change in deferred tax assets and liabilities 79,186 30,438
Decrease/(increase) in gross inventories (1,281,358) (2,062,311)
Decrease /(increase)in operating receivables (2,299,297) (7,699,962)
Increase/(decrease) in operating payables (536,455) 1,720,494
Effect of foreign exchange rate changes (350) (868)
Net cash inflow / (outflow) from operating activities (2,107,043) (4,161,444)
b. Cash and cash equivalents held by the Group is as follows:
RMB'000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Closing balance of cash and cash equivalents 3,904,437 5,104,385
Less:Opening balance of cash and cash equivalents 6,563,253 3,797,415
Net increase/(decrease) of cash and cash equivalents (2,658,816) 1,306,970
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V. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
58. INFORMATION 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 2012 From 1 January to 30 June 2011
1.Cash at bank and on hand
Including: Cash 1,593 30,273
Bank deposits available on demand 3,768,828 4,828,305
Other monetary fund available on demand 134,016 245,807
2. Closing balance of cash and cash equivalents 3,904,437 5,104,385
Note: Aforesaid “Cash at bank and on hand” excluded restricted cash and short-term
investment.
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. The company does not have immediate holding company.
2. For the information on the subsidiaries of the company, refer to Note IV.1.
3. For the information about the associates and joint ventures of the Group,
refer to Note V.12(2).
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
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
Florens Maritime Limited Subsidiary of significant shareholder N/A
Shenzhen China Merchants Real
Estated Co., Ltd Subsidiary of significant shareholder 61884513-6
Shenzhen CIMC Skyspace
Real Estate Development Minority shareholder of subsidiary 71526714-7
Gasfin Minority shareholder of subsidiary N/A
WHRJI Minority shareholder of subsidiary 78858986-8
PGM Minority shareholder of subsidiary N/A
COSCO Countainer Industries Limited Significant shareholder N/A
China Merdant International Ltd. Significant shareholder N/A
Bright Touch Minority shareholder of subsidiary N/A
Yantai Shipyard Minority shareholder of subsidiary N/A
Xiamen Haitou Associates of the Group 66473091-1
XMHJ Associates of the Group 55624298-8
DLJLL Associates of the Group 71696834-0
GXNFWL Associates of the Group 56158545-9
HBIO Associates of the Group 66934186-X
Qingdao Global International Airline
Services Ltd. Minority shareholder of subsidiary 74722427-2
Leung Kee Minority shareholder of subsidiary N/A
C & C Trucks Associates of the Group 68685184-5
Shaanxi Heavy Duty Automobile Co., Ltd. Minority shareholder of subsidiary 74127207-0
MSC Associates of the Group N/A
Sumitomo Minority shareholder of subsidiary N/A
Note: Significant shareholders represent shareholders holding more than 5%
(inclusive) of the Company’s shares.
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES
The following 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 2012 From 1 January to 30 June 2011
Percentage on Percentage on
Related party Nature of transaction Transaction details Pricing Mechanism Amount similar deals(%) Amount similar deals(%)
Purchase of raw
Conducted under normal
Other related party Purchase material 10,804 0.05% - -
non-related party
Processing
transaction commercial
Other related party Provision of services services 2,914 0.32% - -
terms
Key management staff Remuneration 25,033 - 25,011 -
The Company
RMB'000
From 1 January to 30 June 2012 From 1 January to 30 June 2011
Percentage on Percentage on
Related party Nature of transaction Transaction details Pricing Mechanism Amount similar deals(%) Amount similar deals(%)
Key management staff Remuneration 25,033 - 25,011 -
(2) Sales of goods and provision of services
The Group
RMB'000
From 1 January to 30 June 2012 From 1 January to 30 June 2011
Percentage on Percentage on
Related party Nature of transaction Transaction details Pricing Mechanism Amount similar deals(%) Amount similar deals(%)
Conducted under normal
Other related party Sales Sales of containers non-related party 607,078 2.96% 1,455,776 6.72%
transaction commercial
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(3) Funding
The Group
RMB'000
Related party Funding amount Initial date Maturity date Note
Borrowings
Gasfin 37,330 19-Sep-2008 Not fixed repayment date Shareholder loans
Lending
Shanghai fengyang 172,550 25-Dec-2007 Not fixed repayment date Shareholder loans
XYW 3,974 20-Jun-2006 Not fixed repayment date Shareholder loans
Advance payment
for capital injection
PGM 118,110 14-Aug-2009 Not fixed repayment date to subsidiary
MSC 289,308 1-Dec-2007 Not fixed repayment date Shareholder loans
The Company
RMB'000
Related party Funding amount Initial date Maturity date Note
Lending
Shanghai fengyang 172,550 25-Dec-2007 Not fixed repayment date Shareholder loans
(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 2012, RMB 70,650,000 of the total
price had not been paid.
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(4) Other related party transaction s(continue)
(ii) Share options granted to key management personnel
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
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
5. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
(4) Other related party transactions (continued)
(iii) Share options granted to key management personnel (continued)
Some key management personnel were not only granted the above share
options of the Company but also were granted share options of Enric, the
subsidiary of the Company. Details are as follows:
Number of granted
Name Position share options (in’000)
Zhao Qingsheng Vice Chairman 1,450
Wu fapei Vice Chairman 500
General Manager of 1,100
Jin Jianliong Finance Department
Yu Yuquan Secretary of the Board 1,100
合计 4,150
For detailed information for fair value of the granted share options aforesaid,
please refer to Note VII.
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VI. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
(CONTINUED)
6. THE BALANCES WITH RELATED PARTIES AS AT 31 DECEMBER
ARE SET OUT AS FOLLOWS:
Receivables:
RMB’000
Caption Note 2012.06.30 2011.12.31
Accounts receivable V.4 294,502 109,096
Other receivables V.5 656,043 980,115
Payables:
RMB’000
Caption Note 2012.06.30 2011.12.31
Accounts payable 14,720 2,334
Other payables V.32 529,301 529,054
VII. SHARE-BASED PAYMENTS
1. INFORMTION ABOUT SHARE-BASED PAYMENTS
RMB’000
Total equity instruments granted during the period
Total equity instruments exercised during the
period
Total equity instruments forfeited during the
period
The exercise price of outstanding share options at 1. Equity-settled share options granted
the end of the year and residual life of the share by Enric in 2009 and 2011: HKD4 and
options contracts HKD2.48 per share respectively, the
residual life of contract is 7.33 and
9.32 years respectively;
2. Equity-settled share options granted
by Raffles in 2008: from USD 1.64 to
USD 4.39 per share, the residual life
of contract is 5.22 years respectively;
cash-settle share options granted by
Raffles in 2011: RMB 17.57 per share,
the residual life of contract is 3.23 and
8.25 years.
3. Equity-settled share options granted by
the Company in 2010 and 2011:
RMB12.04 and RMB 17.57 per share
respectively, the residual life of
contracts is both 8.24 years
The price of other outstanding equity instruments
at the end of the year and residual life of relevant -
contracts
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VII. SHARE-BASED PAYMENTS (CONTINUED)
1. INFORMTION ABOUT SHARE-BASED PAYMENTS (CONTINUED)
Expenses recognised for the period from 1 January 2012 to 30 June 2012 arising from
share-based payments are as follows:
RMB’000
Item From 1 January to 30 June 2012 From 1 January to 30 June 2011
Equity-settled share-based payment 59,306 58,006
2. INFORMATION ON EQUITY-SETTLED SHARE-BASED PAYMENT
(1) Information on equity-settled share-based payment of Enric
Enric, a subsidiary of the Company, carried out a share options plan (the “Plan I”),
which was approved by the shareholders’ meeting on 11 November 2009.
According to the Plan, the key management personnel and other employees in Enric
were granted share options of Enric at nil consideration to subscribe for shares of
Enric. 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 Enric. The total number of
share options granted was 43,750,000, with the exercise price of HKD 4 per share.
Enric carried out another share options plan (the “Plan II”), which was approved by
the shareholders’ meeting on 28 October 2011. According to Plan II, the board of
directors of the Company was authorised to grant share options to the key
management personnel and other employees of Enric at nil consideration to subscribe
for shares of Enric. The options are 40% exercisable after one year from the date of
grant and, 70% exercisable after 2 years from the date of grant, and then 100%
exercisable after 3 years from the date of grant. Each option gives the holder the right
to subscribe for one ordinary share in Enric. The total number of share options
granted was 38,200,000, with exercise price of HKD 2.48 per share.
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VII. SHARE-BASED PAYMENTS (CONTINUED)
2. INFORMATION ON EQUITY-SETTLED SHARE-BASED PAYMENT
(2) Information on equity-settled share-based payment of 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 the 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. The total number of share options granted was
60,000,000, 54,000,000 among which were for the initial grant with exercise price of
RMB 12.39 per share while the remaining 6,000,000 options were for reservation
with exercise price of HKD 4 per share.
The Company distributed a cash dividend of RMB 0.35 per share on 31 May 2011
and RMB 0.46 per share on 21 June 2012 to ordinary shareholders which was
approved by the Shareholders’ General Meeting. In accordance with the Scheme,
upon the implementation of the annual dividend distribution plan for 2010 and 2011,
the Board of Directors would adjust the exercise price of the aforementioned
54,000,000 share options granted on 29 September 2010. The adjusted exercise price
is RMB 11.58 per share.
According to the resolution approved by the Shareholders’ General Meeting on 22
September 2011, the aforementioned 6,000,000 share options for reservation in the
Scheme on 28 September 2010 were granted with exercise price of RMB 17.57 per
share. Upon the implementation of the annual dividend distribution plan for 2010 and
2011, the adjusted exercise price for the above mentioned share option is RMB 17.11
per share.
(3) Information on equity-settled share-based payment of Raffles
As mentioned in Note IV 6(1), before Raffles was acquired by the Company, Raffles
carried out a share option plan approved by the shareholders’ meeting on 21 June
2006. According to the share options plan, the board of directors was authorised to
grant share options to the key management personnel and other employees to
subscribe for shares of Raffles. Each eligible participant purchased the share options
at the cost of SGD 1. The numbers of options were 6,355,003 and 1,154,003 granted
in 2007 and 2008 respectively 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.
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VII. SHARE-BASED PAYMENTS (CONTINUED)
2. INFORMATION ON EQUITY-SETTLED SHARE-BASED PAYMENT
(4) Fair value of share options and data input in the valuation model is as follows:
Fair value of share option is estimated based on binomial lattice model. Contract term
of the share option is used as the input variable of this model. And the binomial lattice
model includes estimation of early execution of the option.
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VII. SHARE-BASED PAYMENTS (CONTINUED)
2. INFORMATION ON EQUITY-SETTLED SHARE-BASED PAYMENT
(5) Basis of the best estimate of the number of equity instruments expected to vest is as
follows:
At each balance sheet date during the vesting period, the Company 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.
There was no significant difference of estimation between current year and last year.
RMB’000
Accumulated amount in capital reserve
for equity-settled share-based
payments 256,260
Total expenses recognised for equity-
settled share-based payments
Including：
- attributable to the Company 53,518
- attributable to Enric 5,657
- attributable to Raffles 131
There is no share option exercised for the period. (2011: Nil).
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VII. SHARE-BASED PAYMENTS (CONTINUED)
3. INFORMATION ON CASH-SETTLED SHARE-BASED PAYMENT
According to the approved Share Appreciation Rights Scheme (draft) Revised
(“Scheme”) during the board meeting of Raffles held on 27 September 2011, a
subsidiary of the Group, Raffles adopted Share Appreciation Rights (“SARs”) which
is to grant the relevant incentive recipients the right to receive incentive amount in
cash from Raffles upon the satisfaction of relevant financial performance of Raffles.
Incentive amount is the excess of fair market price of A share of the Company on a
particular date over the exercise price.
The scope of incentive recipients of this scheme: the appointed senior management
who is non-Chinese nationality of Raffles and its subsidiaries or associates as well as
person(s) who made special contribution to the company in the discretion of the board.
Accordingly, the there are 4 incentive recipients in the scope with total 760,000 SARs
granted.
The Scheme is conditional, which sets stipulations for appraisal result of incentive
recipients’ performance, misconduct activity and financial performance standards of
the Group to fulfill.
The SARs are exercisable in 2 installments periods after 2 years from the rights grant
date upon the satisfaction of exercisable conditions.
(1) The SARs are up to 25% exercisable from the first transaction date after 24
months since grant date to the last transaction date after 48 months since grant date.
(2) The remaining SARs up to 75% are exercisable from the first transaction date
after 48 months since grant date to the last transaction date of the Scheme.
Raffles will write off the unexercised SARs after each exercise period expires if the
SARs being requested for exercise by the grantee satisfying exercise conditions is less
than the number of effective SARs during each period.
Raffles will write off unexercised SARs, which was granted but invalid due to
un-satisfaction of the exercise condition during the exercise period, after each period
expires.
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VIII. CONTINGENCIES
1. CONTINGENT LIABILITIES
Raffles and its subsidiaries entered into shipbuilding and leasing contract with buyers
for the construction, sale and lease of the vessel, of which the contract clauses involve
compensation for delivery postponement and termination terms and conditions.
While the actual amount of compensation for delivery postponement in future is
subject to the actual delivery date in the future, the maximum amount of the
compensation for delivery postponement from contracted delivery date to future
estimated actual delivery date that Raffles may need to bear is USD 22,540,000,
equivalent to RMB142, 563,000.
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 2012, the Group has the above outstanding guarantees totaling
RMB652, 072,000.
3. Bills issued but not recorded on books, outstanding letter of credit and
performance guarantee
The Group does not recognize bills payable or letter of credit issued as deposits.
Corresponding inventories, prepayment and bills receivable are recognized at the
earlier of delivery of the goods by the suppliers and the maturity of the bill issued.
As at 30 June 2012, the Group had bills issued to suppliers but not recorded on books
and outstanding letter of credit totaling RMB1, 277,750,000.
As at 30 June 2012, Raffles had outstanding balance of performance guarantees
issued by bank totaling to USD 449,014,000,equivalent to RMB2,839,969,000, which
was issued for ship buyer .
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VIII. CONTINGENCIES(CONTINUED)
3. Bills issued but not recorded on books, outstanding letter of credit and
performance guarantee (continued)
As at 30 June 2012, TAS had outstanding balance of performance guarantees issued
by bank totaling to RMB225,319,000. The balance included RMB46,664,000 of
performance guarantee, RMB12,863,000 of bid guarantee, RMB 17,883,000of
quality guarantee and RMB147,909,000 of guarantee issued to suppliers.
4. Significant outstanding litigation
Raffles and its subsidiaries entered into a contract to build semi-submersible oil drilling
rig named SS PANTANAL and SS AMAZONIA for SCHAHIM Group which
incorporated in Brazil, and delivered the rig on November 2010 and April 2011
respectively. Raffles and its subsidiaries also provide advance disbursement for Schahin
Holdings SA and its related party for the drilling rig building.
Raffles and its subsidiaries lodged a law suit and arbitration application against
SCHAHIN HOLDINGS SA and other six related parties in London and New York to
claim the overdue milestone of USD208 million, equivalent to RMB1300million as
SCHAHIN Group failed to pay the amount.
The company is optimistic on the litigation and arbitration result and will take positive
legal act in favor of shareholders' interests, however, the case has yet hold hearing or
come to any conclusion which would cause uncertainties to the profits of 2012 or
subsequent periods.
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IX. COMMITMENTS
1. SIGNIFICANT COMMITMENTS
(1) Capital commitments
RMB'000
Item 2012.06.30 2011.12.31
Construction contracts entered into but not exercised or not fully exercised 160,496 316,805
Investment contracts entered into but not exercised or not fully exercised 236,220 401,516
Significant contracts entered into for ship to be manufactured, for sales or lease 798,633 1,602,307
External investment approved by Board of Directors 546,888
Total 1,195,349 2,867,516
(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
Item 2012.06.30 2011.12.31
Within 1 year (inclusive) 56,529 73,225
After 1 year but within 2 years (inclusive) 46,761 35,470
After 2 years but within 3 years (inclusive) 44,832 27,849
After 3 years 91,786 121,050
Total 239,908 257,594
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X. NON-ADJUSTING POST BALANCE SHEET EVENTS
1. INFORMATION ABOUT PROFIT DISTRIBUTIONS AFTER
BALANCE SHAEET DATE
As at 15 August,2012, the company announced < Plan for Listing Location Change
and Listing & Trading on Main Board of The Stock Exchange Of Hong Kong Limited
by way of Introduction of Domestic listed foreign Investment Shares of China
International Marine Containers (Group) Co., Ltd.>.
By July 13, 2012, CIMC Group has issued 1,430,480,509 B shares. This Plan is drafted
to change the listing location of B shares issued, and to list and trade them on the main
market of SEHK through introduction. The original investors holding B shares may
exercise their cash option to request purchasing the shares from the third party
arranged by the Company, or continue to hold such shares. However, the listing
location is changed into SEHK, and the nature of shares is converted from domestic
listed foreign investment shares into overseas listed foreign investment shares.
This proposal will not come into effect if it does not obtain approval from the
company’s extraordinary shareholders’ meeting, China Securities Regulatory
Commission, SEHK and other governmental departments and agencies (if necessary).
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XI. OTHER SIGNIFICANT MATTERS
1. FINANCE LEASE
Please read Note V.11 and Note V.37 for reference of the Group’s Accounts
Receivables and Accounts Payables related to finance lease.
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 preparation basis of such information is 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 liabilities include payables, bank loans, provision,
special payables and other liabilities, while deferred tax liabilities are exclude.
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 does not allocate
non-operating income/expenses and income tax expenses to individual segment.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
2. SEGMENT REPORT (CONTINUED)
(1) Segmentprofits, loses, 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:
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 2012
External transaction* 13,648,461 6,735,820 4,370,317 1,244,783 68,923 1,296,142 - - 27,364,446
Inter segment transaction* 22,830 85,474 150,632 - - 138,723 (397,659) -
Investment income / (losses) in
10,062 (36,855) - 8,985 - 4,179 - 3,534 (10,095)
joint ventures and associates
Impairment loss for the period (75,072) 10,791 6,428 17,526 (6,143) 21,484 - - (24,986)
Depreciation and amortisation
179,715 137,698 116,620 88,697 3,229 23,382 - - 549,341
expenses
Interest income 38,175 3,882 9,034 205 493 48,776 - 748 101,313
Interest expenses 8,634 30,021 15,098 55,183 51 27,368 - 189,786 326,141
Segment operating profit / (losses) 1,089,766 112,640 343,752 (144,799) (30,727) 47,170 - 75,249 1,493,051
Income tax expenses 289,690 26,614 87,056 2,312 1,450 57,690 - 20,561 485,373
Net profit / (losses) 800,076 86,026 256,696 (147,111) (32,177) (10,520) - 54,688 1,007,678
Segment total assets 13,673,547 11,105,480 9,647,435 14,883,323 719,107 11,440,923 - 3,761,932 65,231,747
Segment total liabilities 4,528,372 4,684,291 3,724,885 11,189,659 467,921 9,255,590 - 10,639,112 44,489,830
Supplementary information:
- Segment expenditures other than
(35,796) 12,860 9,255 18,529 15,100 1,255 - 13,500 34,703
depreciation and amortization
- Long-term equity investment of
594,425 445,670 - 211,689 - 169,270 - 130,859 1,551,913
joint ventures and associates
- Segment expenditures raising from
450,187 121,817 222,124 285,064 6,760 74,412 - 1,248,847 2,409,211
additions of non-current assets
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
2. SEGMENT REPORT (CONTINUED)
(1) Segment profits, loses, 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 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 - - 343,277 (594,417) - -
Investment income / (losses) in joint
20,587 (23,131) - - - 24,710 - 6,573 28,739
ventures and associates
Impairment loss for the period 241 11,392 311 45,731 527 15,507 - - 73,709
Depreciation and amortisation
146,989 149,003 126,365 66,113 1,794 17,181 - - 507,445
expenses
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
31,789 4,534 (5,912) (35,539) (10,951) 38,608 - (25,361) (2,832)
depreciation and amortization
- Long-term equity investment of
580,800 511,773 - 31,749 - 134,334 - 301,754 1,560,410
joint ventures and associates
- Segment expenditures raising from
555,920.00 1,133,087.00 403,524.00 106,518.00 1,120.00 104,928.00 - 3,142.00 2,308,239.00
additions of non-current assets
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
2. SEGMENT REPORT (CONTINUED)
(2) Geographic information
The following table sets out information about the geographical information of the
Group’s revenue from external customers and the Group’s non-current assets
(excluding financial assets and deferred tax assets, same for the below). The
geographical locations of customers are based on the location at which the services
were provided or the goods were delivered. The geographical locations of the
specified non-current assets are based on the physical location of the assets (for fixed
assets), or the location of the business to which they are allocated (for intangible
assets and goodwill), or the location of operations of the associates and joint ventures.
Geographic information
RMB'000
Item Revenue from external customers Non-current assets
From 1 January From 1 January
2012.06.30 2011.12.31
to 30 June 2012 to 30 June 2011
P.R.China 12,525,779 11,117,327 19,125,242 18,496,639
Asia (exclusive of China) 2,414,136 3,754,424 35,828 36,863
America 5,432,811 10,134,478 315,721 325,886
Europe 5,909,950 10,677,870 1,011,651 1,143,609
Others 1,081,770 793,999 47,907 44,405
Total 27,364,446 36,478,098 20,536,349 20,047,402
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS
The Group has exposure to the following risks from its use of financial instruments in
the normal course of the Group’s operations, which mainly include:
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 and etc.
The Group aims to seek the appropriate balance between the risks and benefits from
its use of financial instruments and to mitigate the adverse effects that the risks of
financial instruments have on the Group‘s financial performance. Based on such
objectives, the Group’s risk management policies are established to identify and
analyses 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
Credit risk is the risk that one party to a financial instrument will cause a financial
loss for the other party by failing to discharge an obligation. The Group’s credit risk is
primarily attributable to cash at bank, receivables, debt investments and derivative
financial instruments entered into for hedging purposes and etc. Exposure to these
credit risks are monitored by management on an ongoing basis.
The cash at bank of the Group is mainly held with well-known financial institutions.
Management does not foresee any significant credit risks from these deposits and
does not expect that these financial institutions may default and cause losses to the
Group.
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 to determine the credit limit and terms applicable to the customers.
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.
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3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS
(1) Credit risk (continued)
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 2012.
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.
In addition, the debtors of the Group that are neither past due nor impaired mainly
due to a wide range of customers for whom there was no recent history of default.
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 14.39% (2011: 25.40%) of the total accounts receivable and other receivables
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.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(2) Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds in
meeting obligations associated with financial liabilities. 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.
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:
30-Jun-12
Contractual undiscounted cash flow
Within 1 year or on More than 1 year but More than 2 years but More than 5 Balance sheet
Item demand less than 2 years less than 5 years years Total carrying amount
Financial assets
Cash at bank and on hand 4,931,305 - - - 4,931,305 4,931,305
Accounts receivable and
other receivables 12,647,879 - - - 12,647,879 12,647,879
Long-term receivables 3,331,414 1,011,317 2,044,568 1,305,927 7,693,226 5,139,174
Subtotal 20,910,598 1,011,317 2,044,568 1,305,927 25,272,410 22,718,358
Financial liabilities
Short-term loans (7,190,444) - - - (7,190,444) (7,190,444)
Bonds payable (297,800) (297,800) (6,793,867) - (7,389,467) (5,989,610)
Accounts payable and
other payables (11,605,370) - - - (11,605,370) (11,605,370)
Long-term loans (1,850,311) (965,497) (7,390,893) (459,909) (10,666,610) (10,031,572)
Long-term payables (86,476) (23,989) (17,111) (310,708) (438,284) (431,763)
Subtotal (21,030,401) (1,287,286) (14,201,871) (770,617) (37,290,175) (35,248,759)
Net total (119,803) (275,969) (12,157,303) 535,310 (12,017,765) (12,530,401)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(2) Liquidity risk (continued)
31-Dec-11
Contractual undiscounted cash flow
More than 2
Within 1 year or on More than 1 year but years but less More than Balance sheet
Item demand less than 2 years than 5 years 5 years Total carrying amount
Financial assets
Cash at bank and on
hand 7,788,126 - - - 7,788,126 7,788,126
Accounts
receivable and other
receivables 10,820,449 - - - 10,820,449 10,820,449
Long-term
receivables 3,002,110 1,330,588 889,346 631,378 5,853,422 4,946,522
Subtotal 21,610,685 1,330,588 889,346 631,378 24,461,997 23,555,097
Financial liabilities
Short-term loans (8,030,912) - - - (8,030,912) (8,030,912)
Bonds payable (209,200) (209,200) (4,627,600) - (5,046,000) (3,988,438)
Accounts payable
and other payables (10,722,803) - - - (10,722,803) (10,722,803)
Long-term loans (2,556,258) (1,295,764) (5,147,355) (453,339) (9,452,716) (9,066,009)
Long-term payables (73,234) (54,925) - (33,667) (161,826) (153,740)
Subtotal (21,592,407) (1,559,889) (9,774,955) (487,006) (33,414,257) (31,961,902)
Net total 18,278 (229,301) (8,885,609) 144,372 (8,952,260) (8,406,805)
(3) Interest rate risk
The Group determines the appropriate weightings of the fixed and floating rate
interest-bearing instruments based on the current market conditions and performs
regular reviews and monitoring to achieve an appropriate mix of fixed and floating
rate exposure.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(3) Interest rate risk (continued)
(a) As at 30 June 2012, the Group held the following interest-bearing financial
instruments:
2012.06.30 2011.12.31
Annual interest Annual interest
Item rate Amount rate Amount
Fixed rates interest-
bearing financial
instruments
Financial assets
Long-term receivables 4.20% - 19.89% 1,996,331 4.20% - 19.89% 2,311,235
Long-term payable
due within one year 4.20% - 19.89% 3,142,843 4.20% - 19.89% 2,635,287
Financial liabilities
Short-term loans 3.28%~6% (1,886,578) 3.28%~7.2% (2,980,294)
Bonds payable 4.43%-5.23% (5,989,610) 5.23% (3,988,438)
Total (2,737,014) (2,022,210)
2012.06.30 2011.12.31
Annual interest Annual interest
Item rate Amount rate Amount
Variable rates
interest-bearing
financial instruments
Financial assets
Cash and cash on 0.35%-4.25% 4,931,305 0.5%-4.4% 7,788,126
hand
Financial liabilities
Long-term loans due
within one year Refer to Note V.34 (1,745,577) Refer to Note V.34 (2,493,424)
Long-term loans d Refer to Note V.35 (8,285,995) Refer to Note V.35 (6,572,585)
Short-term loans Libor+0.33% - Libor+0.33% -
PBOC Benchmark PBOC Benchmark
rate + 10% (5,303,866) rate + 10% (5,050,618)
Long-term payables Refer to Note V.37 (350,182) Refer to Note V.37 (86,846)
Long-term payables
due within one year Refer to Note V.34 (81,581) Refer to Note V.34 (66,894)
Total (10,835,896) (6,482,241)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(3) Interest rate risk (continued)
(b) Sensitivity analysis
As at 30 June 2012, it is estimated that a general increase / decrease of 75
basis points in interest rates, with all other variables held constant, would
increase/decrease the Group’s net profit by RMB 60,952,000 (2011: RMB),
and equity by RMB 60,952,000 (2011: RMB 36,463,000).
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 the previous year.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(4) Foreign currency risk
The major currency received by the Group is USD and the major currency paid out is
RMB. In order to avoid the risks resulting from the fluctuation of the exchange rate
of RMB, in respect of accounts receivable 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.24, the Group’s exposure as at
31 December to currency risk arising from recognised assets or liabilities
denominated in foreign currencies is follows. For presentation purposes, the
amounts of the exposure are shown in RMB, translated using the spot rate at
the balance sheet date. Differences resulting from the translation of the
financial statements denominated in foreign currency are excluded.
2012.06.30 2011.12.31
Item USD EUR HKD JPY USD EUR HKD JPY
Cash at bank and on
136,184
hand 1,610,086 314,042 37,485 2,490,443 360,276 240,075 11,522
Accounts receivable 7,231,480 188,817 47,504 49,030 5,024,086 443,299 1,702 12,624
Short-term loans (3,665,110) (193,090) (470,288) (1,701) (3,788,474) (203,957) (682,994) (1,733)
Long-term loans (4,230,080) - (317,069) - (2,414,544) - (514,350) -
Accounts payables (1,726,255) (90,886) (23,472) (3,588) (951,496) (353,209) (16,189) (574)
Provisions (89,143) (664) (1,090) - (446,176) (5,873) - -
Non-current liabilities
- - -
due within one year (1,753,924) (1,565,774) (32,650) - -
Gross balance sheet
exposure (2,622,946) 40,361 (450,373) 81,226 (1,651,935) 207,886 (971,756) 21,839
(b) The following are the exchange rates for Renminbi against foreign currencies
applied by the Group and the Company:
Item Average exchange rate Benchmark exchange rate
1 Jan to 30 Jun 2012 1 Jan to 30 Jun 2011 30 Jun 2012 31 Dec 2011
USD 6.3052 6.5242 6.3249 6.3009
EUR 8.1633 9.2896 7.8710 8.1625
HKD 0.8126 0.8384 0.8152 0.8107
JPY 0.0788 0.1252 0.0796 0.0811
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(4) Foreign currency risk (continued)
(c) Sensitivity analysis
Assuming all other risk variables remained constant, 2.33%, 2.00%, 2.40%
and 1.00% strengthening of the RMB against the USD, EUR, HK dollar and
Japanese Yen respectively at 30 June 2012 (2.33%, 2.00%, 2.40% and 1.00%
strengthening of the RMB against the USD, EUR, HK dollar, and Japanese
Yen respectively at 31 December 2011) 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:
Item Equity Net profit
30 June 2012
USD 45,836 45,836
ERU (605) (605)
HKD 8,107 8,107
JPY (609) (609)
Total 52,729 52,729
31 Dec 2011
USD 28,868 28,868
ERU (3,118) (3,118)
HKD 17,492 17,492
JPY (164) (164)
Total 43,078 43,078
2.33%, 2.00%, 2.40% and 1.00% weakening of the RMB against USD, EUR,
HK dollar and Japanese Yen respectively at 30 June 2012 (2.33%, 2.00%,
2.40% and 1.00% weakening of the RMB against the USD, EUR, HK dollar,
and Japanese Yen respectively at 31 December 2011) would have had the
equal but opposite effect on the amounts shown above, on the basis that all
other variables remain constant.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(4) Foreign currency risk (continued)
(c) Sensitivity analysis (continued)
The sensitivity analysis above assumes that the change in foreign exchange
rates had been applied to re-measure those financial instruments held by the
Group which expose the Group to foreign currency risk at the balance sheet
date, the analysis excludes differences that would result from the translation of
the financial statements denominated in foreign currency. The analysis is
performed on the same basis for the previous year.
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.24 about financial assets
and financial liabilities, but the change in exchange rate may have effect on
shareholders’ equity and net profit.
(5) Other price risks
Other price risks are stock price risk. As at 31 December 2011, the Group held
41,978,498 tradable shares of China Merchants Securities and 11,526,000 tradable
shares of China Merchants Bank.
As at 30 June 2012, it is estimated that a general increase/decrease of composite
index of Shanghai A-share 20 % (2011: 21.69%), or 445 point (2011: 609point), with
all other variables held constant, would increase/decrease the Group’s shareholders’
equity by RMB 95,287,000 (2011: RMB 93,043,000).
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.20 % 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 2011.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(6) Fair values
(a) Financial instruments carried at fair value
The following table presents the carrying value of financial instruments
measured at fair value as at 31 December 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 (i.e. as prices) or indirectly (i.e. derived from
prices);
Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
As at 30 June 2012
Assets Note Level 1 Level 2 Level 3 Total
Financial assets held for trading
Trading equity instrument investment V.2 369,892 - - 369,892
Derivative financial assets V.2 - 8,463 - 8,463
Hedging instrument V.2 - 85 - 85
Subtotal 369,892 8,548 - 378,440
Available-for-sale financial assets V.10 621,216 - - 621,216
Subtotal 621,216 - - 621,216
Total 991,108 8,548 - 999,656
Liabilities Note Level 1 Level 2 Level 3 Total
Financial liabilities held for trading
Derivative financial liabilities V.24 - (105,025) - (105,025)
Total - (105,025) - (105,025)
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
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FINANCIAL INSTRUMENTS (CONTINUED)
(6) Fair values
(a) Financial instruments carried at fair value (continued)
As at 31 December 2011
Assets Note Level 1 Level 2 Level 3 Total
Financial assets held for trading
Trading equity instrument investment V.2 143,692 - - 143,692
Derivative financial assets V.2 - 32,691 - 32,691
Hedging instrument V.2 - 9,751 - 9,751
Subtotal 143,692 42,442 - 186,134
Available-for-sale financial assets V.10 571,954 - - 571,954
Subtotal 571,954 - - 571,954
Total 715,646 42,442 - 758,088
Liabilities Note Level 1 Level 2 Level 3 Total
Financial liabilities held for trading
Derivative financial liabilities V.24 - (105,943) - (105,943)
Total - (105,943) - (105,943)
During the period from 1 January 2012 to 30 June 2012, there were no
significant transfers between instruments in Level 1 and Level 2.
During the period from 1 January 2012 to 30 June 2012,, there were no
changes in valuation technique of fair value.
(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 2012.
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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, debenture payable, long-term payables and other non-derivatives
financial liabilities
The fair value is estimated as the present value of future cash flows,
discounted at the market rate of interest at the balance sheet date.
(d) Derivatives
The fair value of forward exchange contracts is either based on their listed
market prices or by discounting the contractual forward price and deducting
the current spot rate. The fair value of interest rate swaps is based on broker
quotes. The quotes are tested for reasonableness by discounting estimated
future cash flows based on the terms and maturity of each contract and using
market interest rates for a similar interest rate instrument at the measurement
date.
(e) Financial guarantees
The fair value of financial guarantees issued is determined by reference to fees
charged in an arm’s length transaction for similar services, when such
information is obtainable, or is otherwise estimated by reference to interest
rate differentials, by comparing the actual rates charged by lenders when the
guarantee is made available with the estimated rates that the lenders would
have charged, had the guarantees not been available, where reliable estimates
of such information can be made.
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XI. OTHER SIGNIFICANT MATTERS (CONTINUED)
3. RISK ANALYSIS, SENSITIVITY ANALYSIS, AND FAIR VALUES OF
FINANCIAL INSTRUMENTS (CONTINUED)
(7) Estimation and assumption of fair values (continued)
(f) Interest rates used for determining fair value
The interest rates used to discount estimated cash flows are based on same
term loans’ rates announced by People’s Bank of China at the balance sheet
date plus an adequate credit spread and are as follows:
Item Interest rates used in 30 June 2012 Interest rates used in 31 Dec 2011
Loans 1.03%-6.00% 1.03%-6.10%
Receivables 6.00%-6.55% 6.10%-7.05%
4. ASSETS AND LIABILITIES MEASURED AT FAIR VALUE
RMB'000
Balance at the Change in fair Accumulated Provision of
Item beginning of the value of the change in fair impairment Balance at the
period period value in equity for the period end of the period
Financial assets
1 Financial assets at fair value
through profit or loss (excluding
derivative financial assets) 143,692 6,621 - - 369,892
2. Derivative financial
instrument 32,691 (22,473) - - 8,463
3. Hedging Instrument 9,751 - 3,119 - 85
4. Available-for-sale financial
assets 571,954 - 552,355 - 621,216
Subtotal 758,088 (15,852) 555,474 - 999,656
Financial liabilities (105,943) 918 - - (105,025)
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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
beginning of the fair value of change in fair for the 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 assets) 143,692 15,612 - - 173,899
2.Derivative financial instrument 32,691 (22,473) - - 8,463
3.Hedging Instrument 9,751 - 3,119 85
4.Loans and receivables 7,910,913 - - (20,998) 12,483,193
5.Available-for-sale financial
assets 7,799 - (687) 7,982
Subtotal 8,104,846 (6,861) 2,432 (20,998) 12,673,622
Financial liabilities (13,495,209) 918 - - (18,086,364)
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, long term payables, interest
rate swap contracts and stock option contracts.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
1. CASH AT BANK AND ON HAND
30-Jun-12 31-Dec-11
Original Exchange Original Exchange
Item RMB'000 Item RMB'000
currency rate currency rate
Cash at bank
RMB 844,900 1.0000 844,900 RMB 98,805 1.0000 98,805
USD 10,553 6.3249 66,747 USD 15,909 6.3009 100,239
HKD 77,747 0.8152 63,379 HKD 58 0.8107 47
JPY 455,804 0.0796 36,282 JPY 141,750 0.0811 11,496
EUR 35 7.8710 275 EUR 35 8.1625 288
Subtotal 1,011,583 210,875
Other momentary funds
RMB 12,567 1.0000 12,567 RMB 217,099 1.0000 217,099
USD 377 6.3249 2,384 USD 377 6.3009 2,376
Subtotal 14,951 219,475
Total 1,026,534 430,350
As at 30 June 2012, restricted cash at bank and on hand of the Company was RMB
2,689,000 (2011: RMB 2,476,000).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
2. Financial assets held for trading
(1) Financial assets held for trading by categories:
RMB'000
Category Jun-30-2012 Dec-31-2011
Equity securities investments held for trading 195,993 -
(2) There is no restriction in liquidity of financial assets held for trading for the current period.
3. DIVIDENDS RECEIVABLE
Item Jun-30-2012 Dec-31-2011
SCIMC 722,741 722,920
SCIMCEL 401,832 551,157
XHCIMC 125,349 3,595
SHYSLE - 21,115
TJCIMC - 20,237
TJCIMCN - 44,762
QDCC 25,063 24,967
DLCIMC 55,361 55,361
NBCIMC - 37,168
SBWI - 49,826
TCCIMC - 21,202
ZZCIMC - 57,125
SCRC 36,165 54,186
QDCRC - 918
XHCIMCS 442,740 228,775
QDCSR - 27,461
HI 246,836 246,836
TJCIMCLE 16,539 16,540
DLL 104,674 104,674
SHENZHEN SOUTH CIMC
LOGISTICS CO., LTD (“SZSCIMCL”) 1,360 1,360
CIMC WA 24,752 -
CIMC Hong Kong 3,109,702 3,113,070
Total 5,313,114 5,403,255
No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of dividends receivable.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
4. OTHER RECEIVABLES
(1) Other receivables by customers’ categories:
Category Jun-30-2012 Dec-31-2011
Amounts due from related parties 7,393,894 6,776,661
Deposits 180 444
Others 28,632 26,550
Subtotal 7,422,706 6,803,655
Less:provision for bad and doubtful debts (4,876) (4,876)
Total 7,417,830 6,798,779
(2) The ageing analysis of other receivables is as follows:
Category Jun-30-2012 Dec-31-2011
Within 1 year 7,271,755 6,652,704
1 to 2 years 2,000
2 to 3 years 2,000
More than 3 years 148,951 148,951
Subtotal 7,422,706 6,803,655
Less:provision for bad and doubtful debts (4,876) (4,876)
Total 7,417,830 6,798,779
The aging is counted starting from the date the other receivable is recognised.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(3) Other receivables by categories:
Jun-30-2012 Dec-31-2011
Provision for bad and Provision for bad and
Gross carrying amount Gross carrying amount
Category Note doubtful debts doubtful debts
Percentage Percentage Percentage Percentage
RMB'000 （%） RMB'000 （%） RMB'000 （%） RMB'000 （%）
Individually significant other
receivables (4) 7,307,412 98.45% - - 6,776,307 99.60% - -
Other insignificant other receivables (5) 115,294 1.55% 4,876 4.23% 27,348 0.40% 4,876 17.83%
Total 7,422,706 100.00% 4,876 6,803,655 100.00% 4,876 0.07%
There are no collaterals the Group holds for accounts receivable that made impairment aforesaid.
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.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(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. (2011: 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. (2011: Nil).
(6) Written-back or recovery of accounts receivable during the period
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 period (2011: Nil).
(7) Write-off of other receivables during the period
There was no material write-off of other receivables during the period (2011: Nil).
(8) Other receivables due from the five largest debtors of the Group are as follows:
Prpportion
in total
Relationship with
Debtor RMB'000 Aging other
the Company
receivables
（%）
1.Total amounts due from
Subsidiary 7,220,606 Within 1 year 97.28%
subsidiaries
2.Shanghai Fengyang Real Estate
Associates 172,550 1 to more than 3 years 2.32%
Development Co., Ltd
3、Yantai National High-tech
Third Party 20,000 Within 1 year 0.27%
Industrial Park
4、Xietong Real Estate Company Third Party 2,000 2 to 3 years 0.03%
5、Pingan Third Party 839 Within 1 year 0.01%
Total 7,415,995 99.91%
The Group’s top 5 other receivables at the end of 2011 amounted to RMB
6,799,167,000, accounting for 99.92% of the total other receivables.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
4. OTHER RECEIVABLES (CONTINUED)
(9) Status of shareholders holding to 5% or above voting rights, in the Company’s
other receivables
No balance of other receivables due from shareholders who hold 5% or more of the
voting rights of the Group as at balance sheet date.
(10) Receivables due from related parties
Relationship Percentage in
Related party with the RMB'000 total other
Company receivables(%)
Associated 172,550 2.32%
Associates
Subsidiaries Subsidiaries 7,220,606 97.28%
Minority
shareholders
Others of associates 0.01%
738
and
subsidiaries
Total 7,393,894 99.61%
(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 (2011: 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 period (2011: Nil).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
5. AVAILABLE-FOR-SALE FINANCIAL ASSETS
RMB'000
Jun-30-2012 Dec-31-2011
Available-for-sale equity instruments 613,234 564,155
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 2012, the Company’s long-term equity investments are as follows:
RMB'000
Jun-30-2012 Dec-31-2011
Investments in subsidiaries 4,438,307 3,949,644
Investments in associates 8,002 2,602
Other long-term equity investments 391,970 391,970
Total 4,838,279 4,344,216
Less: Provision for impairment (3,065) (3,065)
Total 4,835,214 4,341,151
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) The Company’s investments on subsidiaries are as follows:
The company Notes to difference Dividend
Investee Initial Balance at Addition/ Balance at the Shareholding subsidiaries between Provision Impairment receivable/
investment the beginning (disposal) end of the Percentage voting shareholdings and for loss of received
cost of the year during period period (%) (%) voting rights impairment the period of the period
Costing method – Investment in subsidiaries (continued):
CIM CI 60,000 60,000 - 60,000 100.00% 100.00% - - - -
SZSKYC 90,000 90,000 - 90,000 100.00% 100.00% - - - -
Tianjin Kangde Logistics
100.00% 100.00% - - - -
Equipment Co., Ltd 3,630 5,912 (2,282) 3,630
Subtotal 4,438,307 3,949,644 488,663 4,438,307 - - - - - -
Equity method – Associates
SCSCRC 9,000 2,602 5,400 8,002 50.00% 50.00% - - - -
Subtotal 9,000 2,602 5,400 8,002 - - - - - -
Costing method – Other long-term equity investment
China Railway United
Logistics 380,780 380,780 - 380,780 10.00% 10.00% - - - -
Beihai Yinjian 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
Fund M anagement 8,125 8,125 - 8,125 5.00% 5.00% - - - 50,000
Subtotal 391,970 391,970 - 391,970 - - - 3,065 - 50,000
Total 4,839,277 4,344,216 494,063 4,838,279 - - - 3,065 - 50,000
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 30 June 2012, the Company’s investments on subsidiaries are as follows (continued):
The company Notes to difference Dividend
Initial Balance at Addition/ Balance at the Shareholding subsidiaries between Provision Impairment receivable/
Investee
investment the beginning (disposal) end of the Percentage voting shareholdings and for loss of received
cost of the year during period period (%) (%) voting rights impairment the period of the period
Costing method – Investment in subsidiaries (continued):
CIM C (USA) 171,397 171,397 - 171,397 100.00% 100.00% - - - -
CIM CSD 162,686 162,686 - 162,686 100.00% 100.00% - - - -
HI 496,863 496,863 - 496,863 80.00% 80.00% - - - -
CIM C TEI - - - - - - - - - -
CIM C Tech 13,726 13,726 - 13,726 100.00% 100.00% - - - -
TCCRC 311,792 59,792 252,000 311,792 100.00% 100.00% - - - -
CIM CWD 108,544 108,544 108,544 100.00% 100.00% - - - -
CIM C M anagement and
Training(Shenzhen) 48,102 48,102 - 48,102 100.00% 100.00% - - - -
DLZH 111,083 111,083 - 111,083 100.00% 100.00% - - - -
M EA 111,703 111,703 - 111,703 100.00% 100.00% - - - -
SZW 3,472 3,472 - 3,472 100.00% 100.00% - - - -
TLC 81,548 81,548 - 81,548 100.00% 100.00% - - - -
SZSCIM CL 21,717 21,717 - 21,717 100.00% 100.00% - - - -
SZ investment 72,401 72,401 - 72,401 100.00% 100.00% - - - -
Finance Company 482,590 482,590 - 482,590 100.00% 100.00% - - - -
CIM C Vehicle Finance
and Leasing Co., Ltd. 422,363 185,700 236,663 422,363 100.00% 100.00% - - - -
QDSV 26,912 26,912 - 26,912 80.00% 100.00% IV.1.(4)(ii) - - -
SHGYTY 100.00% 100.00% - - - -
40,000 40,000 - 40,000
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
6. LONG-TERM EQUITY INVESTMENTS (CONTINUED)
(2) As at 30 June 2012, the Company’s investments on subsidiaries are as follows (continued):
The company Notes to difference Dividend
Investee Initial Balance at Addition/ Balance at the Shareholding subsidiaries between Provision Impairment receivable/
investment the beginning (disposal) end of the Percentage voting shareholdings and for loss of received
cost of the year during period period (%) (%) voting rights impairment the period of the period
Costing method – Investment in subsidiaries (continued):
CIM CI 60,000 60,000 - 60,000 100.00% 100.00% - - - -
SZSKYC 90,000 90,000 - 90,000 100.00% 100.00% - - - -
Tianjin Kangde Logistics
100.00% 100.00% - - - -
Equipment Co., Ltd 3,630 5,912 (2,282) 3,630
Subtotal 4,438,307 3,949,644 488,663 4,438,306 - - - - - -
Equity method – Associates
SCSCRC 9,000 2,602 5,400 8,002 50.00% 50.00% - - - -
Subtotal 9,000 2,602 5,400 8,002 - - - - - -
Costing method – Other long-term equity investment
China Railway United
10.00% 10.00% - - - -
Logistics 380,780 380,780 - 380,780
Beihai Yinjian 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
5.00% 5.00% - - - 50,000
Fund M anagement 8,125 8,125 - 8,125
Subtotal 391,970 391,970 - 391,970 - - - 3,065 - 50,000
Total - - - 3,065 - 50,000
4,839,277 4,344,216 494,063 4,838,278
Information for the Company’s subsidiaries see note IV.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
7. SHORT-TERM LOANS
RMB'000
Item Jun-30-2012 Dec-31-2011
Credit loans
RMB 570,000 363,009
Subtotal 570,000 363,009
Total 570,000 363,009
8. FINANCIAL LIABILITIES HELD FOR TRADING
RMB'000
Item Jun-30-2012 Dec-31-2011
Current:
Derivative financial liabilities
-Swap contract for interest rate - 3,137
-Foreign exchange option contracts - 18,153
Subtotal - 21,290
Non-current:
-Swap contract for interest rate 84,518 74,836
Subtotal 84,518 74,836
Total 84,518 96,126
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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
Item of the year the period the period of the period
Salaries, bonuses, and allowances 300,000 151,472 (51,492) 399,980
Senior management bonus 372,004 - (10,163) 361,841
Social insurances and others (164) 10,202 (10,140) (102)
Total 671,840 161,674 (71,795) 761,719
10. TAXES PAYABLE
RMB'000
Item Jun-30-2012 Dec-31-2011
Income tax payable 97,922 1,867
Withholding individual tax 64,404 58,191
Others 2,465 3,594
Total 164,791 63,652
11. INTEREST PAYABLE
RMB'000
Item Jun-30-2012 Dec-31-2011
Staging of interest principal repayments
6,262 10,348
due to the long term loan interest
Short term loan interest payable 699 725
Debenture interest 17,433 122,033
Total 24,394 133,106
12. DIVIDENDS PAYABLE
RMB'000
Jun-30-2012 Dec-31-2011
Public shareholders 198,800 -
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING
COMPANY (CONTINUED)
13. 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:
RMB'000
Item Jun-30-2012 Dec-31-2011
Long-term loans due within one year
-Credit loans 1,688,748 1,094,352
Subtotal 1,688,748 1,094,352
Total 1,688,748 1,094,352
(2) The analysis of the Company’s non-current liabilities by currencies due within one
year is as follows:
Annual Jun-30-2012 Annual Dec-31-2011
Original Exchange
interest rate Original Exchange RMB'000 interest rate RMB'000
currency rate
currency rate
Bank loans
-USD LIBOR+55~185BP 267,000 6.3249 1,688,748 LIBOR+55~90BP 168,500 6.3009 1,061,702
-EUR - - - EURIBOR+65BP 4,000 8.1625 32,650
Total 1,688,748 1,094,352
As at 30 June 2012, there was no renewal of past due long-term bank loans which was
included in the above non-current liabilities due within one year (2011: Nil).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
13. NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR (CONTINUED)
(a) As at 30 June 2012, the top four long-term loans due within one year are as follows:
Jun-30-2012 Dec-31-2011
Maturity Interest Original Original
Lender Initial date Currency RMB'000 RMB'000
date rate(%) currency '000 currency '000
six-month
1、China Development Bank USD 110,000 695,739 110,000 693,099
12-Dec-07 21-Jun-13 LIBOR+90BP
six-month
2、China Development Bank USD 60,000 379,494 60,000 378,054
12-Dec-07 21-Dec-12 LIBOR+90BP
three-month
3、China Bank USD 47,000 297,270 48,500 305,594
19-Oct-09 19-Oct-12 LIBOR+55BP
six-month
4、ING Bank USD 20,000 126,498 20,000 126,018
26-May-10 21-May-13 LIBOR+185BP
six-month
5、ING Bank USD 20,000 126,498 20,000 126,018
28-May-10 21-May-13 LIBOR+185BP
Total 1,625,499 1,628,783
(b) As at 30 June 2012, there was no overdue loan of non-current liabilities due within one year (2011: Nil).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
14. LONG-TERM LOANS
(1) Long-term loans by categories:
RMB'000
Item Jun-30-2012 Dec-31-2011
Bank loans
-Credit loans 4,187,490 4,223,180
Total 4,187,490 4,223,180
(2) The analysis of the Company’s long-term loans by currencies as follows:
Annual Jun-30-2012 Annual Dec-31-2011
Original Exchange Original Exchange
interest rate RMB'000 interest rate RMB'000
currency '000 rate currency '000 rate
Bank loans
RMB 4.76%~5.985% 3,555,000 1.0000 3,555,000 3.51%~4.23% 2,963,000 1.0000 2,963,000
three-month
USD libor+315BP 100,000 6.3249 632,490 LIBOR+55~185BP 200,000 6.3009 1,260,180
Total 4,187,490 4,223,180
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 (2011: Nil).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY (CONTINUED)
14. LONG-TERM LOANS (CONTINUED)
(3) As at 30 June 2012, the top four long-term loans is as follows:
Jun-30-2012 Dec-31-2011
Maturity Interest Original Original
Leader Initial date Currency RMB'000 RMB'000
date rate(%) currency '000 currency '000
The Export-Import Bank of China 1-Feb-11 1-Feb-14 RMB 4.76% 500,000 500,000 500,000 500,000
The Export-Import Bank of China 20-Jan-11 7-Jan-14 RMB 4.76% 400,000 400,000 400,000 400,000
The Export-Import Bank of China 15-Jun-11 15-Jun-14 RMB 4.76% 400,000 400,000 400,000 400,000
The Hong Kong and Shang Hai Banking Three-month
USD 60,000 379,494
Corporation 18-Jun-12 18-Jun-14 libor+315BP
The Export-Import Bank of China 28-Jul-11 18-Jul-14 RMB 5.48% 400,000 400,000 400,000 400,000
Total 2,079,494 1,700,000
As at 30 June 2012, there was no renewal of past due long-term bank loans which was include in the above long-term loans (2011: Nil).
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
15. BOND PAYABLE
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 3,988,438 2,001,172 - 5,989,610
a) The analysis of the bond payable is as follows:
RMB'000
Interest Interest
Notional Interest payable Accrued paid payable at Balance at the
Final maturity principal at the beginning interest for the during the the end of the end of the
Item Face value Issue date date amount of the period period period period period
Medium Term Note -
11 CIMC MTN1 4,000,000 23 May 2011 23 May 2016 4,000,000 (11,562) 1,172 - (10,390) 3,989,610
Medium Term Note -
12 CIMC MTN1 2,000,000 24 May 2012 24 May 2015 2,000,000 - - - - 2,000,000
16. DEFERRED TAX ASSETS AND LIABILITIES
(1) Deferred tax assets and liabilities after offsetting
As at 30 June 2012, there were no unrecognised deferred tax liabilities for the Company.
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XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
17. CAPITAL RESERVE
Balance at the Additions Settlements Change in Balance at
beginning during during functional the end of
Item of the year the period the period currency the period
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Share premiums 212,656 - - - 212,656
Other capital reserves - - -
-Property revaluation reserve 43,754 - - - 43,754
-Exchange reserve on foreign currency capital 687 - - - 687
-Donated non-cash assets reserve 87 - - - 87
- Net changes in fair value of available-for-sale
financial assets 499,820 49,079 - - 548,899
-Deferred tax effect (120,437) (12,270) - - (132,707)
-Amount of share-based payments charged to
equity 131,247 53,518 - - 184,765
-Others (568,492) - - (568,492)
Total 199,322 90,327 - - 289,649
18. GAINS FROM CHANGES IN FAIR VALUE
RMB’000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
Financial assets held for trading:
-Changes in fair value during the period
1.Including:Gains/losses from changes in fair value of
(14,442) (22,884)
trading equity instrument
2.Including:Gains/losses from changes in fair value of
841 -
derivative financial instrument
-Transfer to investment losses for derecognition of
5,451 (11,275)
financial assets held for trading
Financial liabilities held for trading:
-Changes in fair value during the period 11,608 25,440
Including:Gains/losses from changes in fair value of
11,608 25,440
derivative financial instrument
Total 3,458 (8,719)
258
Semi-Annual Report 2012 of CIMC
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
19. INVESTMENT INCOME
(1) The analysis of the Company’s investment income is as follows:
(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 period are as follows:
Note 1: There was no significant restriction on the remittance of investment income
to the investor.
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Semi-Annual Report 2012 of CIMC
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
20. Non-operating income
(1) The analysis of the Company’s non-operating income is as follows:
RMB'000
Item Note from 1 January to 30 June 2012 from 1 January to 30 June 2011
Gains on disposal of fixed assets 1,319 15
Gains on disposal of intangible assets - 593
Government grants 629 578
Others 134 -
Total 2,082 1,186
(2)Government subsidy:
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
Financial subsidies 629 578
Total 629 578
21. INCOME TAX
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
Current tax expenses for the period - -
Deferred taxation (21,606) (37,687)
Total (21,606) (37,687)
Reconciliation between income tax expenses and accounting profits/ (loss) is as follows:
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
Profits before taxation (26,323) (33,873)
Expected income tax expenses at
(6,581) (8,130)
applicable tax rates
Tax effect of non-taxable income 91,257 685
Unrecognised deferred tax assets in tax
effect (106,282) (30,242)
Income tax expenses (21,606) (37,687)
260
Semi-Annual Report 2012 of CIMC
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING COMPANY
(CONTINUED)
22. Other comprehensive income / (losses)
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
1.Gain/(losses) on available-for-sale financial assets 49,079 (15,815)
Less:Effect of income tax arising from available-for-sale
12,270 (662)
financial assets
Subtotal 36,809 (15,153)
2.Others
Total 36,809 (15,153)
261
Semi-Annual Report 2012 of CIMC
XII. SUPPLEMENTARY INFORMATION TO THE HOLDING
COMPANY (CONTINUED)
23. INFORMATION TO CHAS FLOW STATEMENT
(1) Supplement to cash flow statement:
1.Reconciliation of net profit to cash flow from operatiing activities
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
Net profit (4,717) 3,814
Add : Depreciation of fixed assets 4,761 8,069
Amortisation of intangible assets 135 412
Amortisation of long-term deferred expenses 615 842
(Gains)/losses on disposal of fixed assets,
(1,319) (608)
intangible assets and other long-term assets
(Gains)/losses on changes in fair value (3,458) 8,719
Financial expense 234,141 87,070
(Gains)/losses arising from investments (364,578) (222,704)
Expenses recognized by share-based payments 53,518 50,639
(Increase)/decrease in defered tax assets (21,606) 38,350
(Increase)/Decrease in operating receivables (3,411,085) (2,259,173)
Increase/(decrease) in operating payables 2,537,447 96,757
Net cash outflows from operating activities (976,146) (2,187,813)
2.Net movement in cash and cash equivalents:
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
Closing balance of cash and cash equivalents 1,023,845 1,491,441
Less:Opening balance of cash and cash equivalents 427,874 417,461
Net increase of cash and cash equivalents 595,971 1,073,980
(2) Cash and cash equivalents held by the Group is as follows:
RMB'000
Item from 1 January to 30 June 2012 from 1 January to 30 June 2011
1.Cash at bank and on hand
including： Cash on hand
-Bank deposits available on demand 1,011,582 1,357,232
-Other monetary fund available on demand 12,263 134,209
2.Closing balance of cash and cash equivalents
1,023,845 1,491,441
available on demand
Note: Aforesaid “Cash at bank and on hand” excluded restricted cash and short-term
investment.
262
Semi-Annual Report 2012 of CIMC
SUPPLEMENTARY INFORMATION
1. EXTRAORDINARY GAIN AND LOSS FROM 1 JAN TO 30 JUNE 2012
Item RMB'000
Disposal of non-current assets 4,705
Government grants charge to profit and loss (excluded government grants
closely related to business and applied to all similar businesses according 36,027
to national unity or quantitative standards)
Gains on movement of fair value of financial assets held for trading and
financial liabilities; gains on disposal of financial assets held for trading,
(24,854)
financial liabilities and available-for-sale financial assets (excluding hedge
financial instruments related to ordinary business of the Group)
The Group’s interest in gains from the excess of the fair value of
identifiable net assets of the acquiree over the acquisition cost -
Other non-operating income / expenses 13,195
Capital occupied interests from non-financial enterprises charged into
4,878
current profit and loss
Effect of income tax (4,141)
Effect of minority shareholder equity (after tax) (2,570)
Total 27,240
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
RMB'000
Profit Equity
From 1 January to 30 June 2012 From 1 January to 30 June 2011 2012.06.30 2011.12.31
Amounts under PRC GAAP 933,710 2,807,629 18,415,496 18,633,154
Adjustments under IFRS GAAP:
Others 557 2,745 (4,771) (5,328)
Amounts under IFRS GAAP 934,267 2,810,374 18,410,725 18,627,826
Adjustments include current year depreciation and amortisation of fixed assets and
intangible assets revaluated from 1 January 2012 to 30 June 2012.
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Semi-Annual Report 2012 of CIMC
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 Earnings per share
Profit average return on Basic earnings per Diluted earnings
net assets (%) share per share
Profit attributable to ordinary equity shareholders 4.93% 0.3507 0.3495
Profit attributable to ordinary equity shareholders net of
extraordinary gain and loss 4.79% 0.3405 0.3393
IX. Documents for Reference
Documents for Reference
I. Semi-annual Report 2012 signed by the Chairman of the Board of Directors;
II. Financial statements signed and sealed by legal representative, principal of accounting work, and manager of finance department
(chief accountant);
III. In the reporting period, all originals of the Company’s documents and public notices have been publicly disclosed in the
designated medium of CSRC.
IV. The Articles of Association of the Company
Chairman of the Board of Directors: Li Jianhong
Date when this report was approved by the Board of Directors for issue: 23 August 2012
264
