ANNUAL REPORT FOR YEAR 2016
SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO., LTD.
ANNUAL REPORT FOR YEAR 2016
April 2017
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ANNUAL REPORT FOR YEAR 2016
PART Ⅰ Notice
The Board of Directors, the Board of Supervisors, directors, supervisors and senior management guarantee
that there are no omissions, misstatement or misleading information in this report. They are responsible,
individually and jointly, for the authenticity, accuracy and integrity of the information herein.
Mr. Tian Junyan, Chairman of the Board, Ms. Yu Zhongxia, Deputy General Manager &Financial Controller,
and Ms. Sun Yuhui, Financial Manager, guarantee the authenticity and integrity of the financial result in this
report.
Except the following directors, other directors attend the Board Meeting.
Absent Director Post of the Absent Director Reason Authorized Person
Zhuge Wenjing Vice Chairman Business Arrangement Chen Lei
He Liming Independent Director Business Arrangement Chen Weijie
This annual report contains prospective descriptions, which does not constitute substantial commitment to
investors. Investors are requested to be aware of the risks attached to their investment decisions.
Impossible risk has been well-described in this report. Please find details of risks and countermeasures of
future development described in Section IX, Part IV.
The Company will not distribute cash dividends or bonus shares, neither capitalizing of common reserves for
the report period.
This report is prepared both in Chinese and English languages, when ambiguity occurs in the two versions,
the Chinese version shall prevail.
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ANNUAL REPORT FOR YEAR 2016
Contents
PART Ⅰ Important Notice ....................................................................................... 2
PART II Corporate Information and Accounting Data........................................... 6
PART III Business Summary ................................................................................... 10
PART IV Business Discussion and Analysis ............................................................ 13
PART V Significant Events ....................................................................................... 28
PART VI Changes in Capital Stock and Shareholders .......................................... 41
PART VII Particulars about Preferred Share ........................................................ 47
PART VIII Directors, Supervisors, Senior Management and Staff ..................... 48
PART IX Corporate Governance............................................................................. 56
PART X Corporate Bonds ........................................................................................ 62
PART XI Financial Report (Attachment) ............................................................... 65
PART XII Documents Available for Verification.................................................... 65
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ANNUAL REPORT FOR YEAR 2016
Definition
Terms to be defined Refers to Definition
The Company, Chiwan Base Refers to Shenzhen Chiwan Petroleum Supply Base Co., Ltd.
Nanshan Group Refers to China Nanshan Development (Group) Incorporation
Blogis Holding Refers to Blogis Holding Co., Ltd.
Shanghai Baowan Refers to Shanghai Baowan International Logistic Co., Ltd.
Guangzhou Baowan Refers to Guangzhou Baowan Logistic Co., Ltd.
Kunshan Baowan Refers to Kunshan Baowan International Logistic Co., Ltd.
Tianjin Baowan Refers to Tianjin Baowan International Logistic Co., Ltd.
Langfang Baowan Refers to Langfang Baowan International Logistic Co., Ltd.
Xindu Baowan Refers to Chengdu Xindu Baowan International Logistic Co., Ltd.
Longquan Baowan Refers to Chengdu Longquan Baowan International Logistic Co., Ltd.
Nanjing Baowan Refers to Nanjing Baowan International Logistic Co., Ltd.
Tianjin Bingang Baowan Refers to Tianjin Bingang Baowan International Logistic Co., Ltd.
Nantong Baowan Refers to Nantong Baowan International Logistic Co., Ltd.
Wuhan Baowan Refers to Baowan Logistic（Wuhan）Co., Ltd.
Yangluo Baowan Refers to Baowan Logistic（Wuhan）Yangluo Co., Ltd.
Shenzhen Baowan Refers to Shenzhen Baowan International Logistic Co., Ltd.
Shanghai Mingjiang Refers to Mingjiang (Shanghai) International Logistic Co., Ltd.
Shenyang Baowan Refers to Shenyang Baowan International Logistic Co., Ltd.
Tianjin Qingwu Baowan Refers to Tianjin Qingwu Baowan International Logistic Co., Ltd.
Feidong Baowan Refers to Baowan Logistic Feidong Co., Ltd.
Xi’an Baowan Refers to Xi’an Baowan International Logistic Co., Ltd.
Xianyang Baowan Refers to Xianyang Baowan International Logistic Co., Ltd.
Blogis ( Hongkong ) Refers to Blogis ( Hongkong ) Limited
Huitong(H.K.) Refers to China Huitong (H.K.) Limited
Nanshan Hong Kong Refers to Nanshan Development (Hongkong) Limited
Wuxi Baowan Refers to Wuxi Blogis Co. Ltd
Zhenjiang Baowan Refers to Zhenjiang Shenjidi Warehouse Co.,Ltd.
Changzhou Baowan Refers to Changzhou Baowan Logistic Co., Ltd.
Jiangyin Baowan Refers to Jiangyin Baowan International Logistic Co., Ltd.
Qingdao Jiaozhou Baowan Refers to Qingdao Jiaozhou Baowan International Logistic Co., Ltd.
Jiaxing Baowan Refers to Jiaxing Baowan Logistic Co., Ltd.
Jiangsu Baowan Refers to Jiangsu Baowan International Logistic Co., Ltd.
Shaoxing Baowan Refers to Shaoxing Baowan Logistic Co., Ltd.
Chongqing Xipeng Baowan Refers to Chongqing Xipeng Baowan International Logistic Co., Ltd.
Ezhou Baowan Refers to Wuhan Baowan Logistic Ezhou Co., Ltd.
Nantong Xitong Baowan Refers to Nantong Xitong Baowan Logistic Co., Ltd.
Jiashan Baowan Refers to Jiashan Baowan Logistic Co., Ltd.
Chengdu Oil and Gas Base Refers to Chengdu Chiwan International Oil and Gas Base Co., Ltd.
Zhengzhou Baohai Refers to Zhengzhou Baohai International Logistic Co., Ltd.
Yuyao Baowan Refers to Yuyao Baowan International Logistic Co., Ltd
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ANNUAL REPORT FOR YEAR 2016
Jinmu Caoye Refers to Beijing Jinmu Caoye Co., Ltd.
Xiaogan Baowan Refers to Xiaogan Baowan Logistic Co., Ltd.
Xinjin Baowan Refers to Chengdu Xinjin Baowan International Co.,Ltd
Sanshui Baowan Refers to Foshan Sanshui Baowan Logistic Co., Ltd.
Nanhai Baowan Refers to Foshan Nanhai Baowan Logistic Co., Ltd.
Deqing Baowan Refers to Deqing Baowan International Co., Ltd.
Jiaxing Supply Chain/Jiabao Refers to Blogis Supply Chain Management (Jiaxing) Co., Ltd.
Luohuang Baowan Refers to Chongqing Luohuang Baowan International Logistic Co., Ltd.
Ningbo Baowan Refers to Ningbo Baowan International Logistic Co., Ltd.
Tianjin Haier/Jinnan Project Refers to Tianjin Haier Assets Management Ltd.
Dianzhong Baowan Refers to Yunnan Dianzhong Baowan Logistic Co., Ltd.
Hubei Baowan Refers to Hubei Baowan Investment Co., Ltd.
Yuhua Baowan Refers to Changsha Yuhua Baowan Logistic Co. Ltd.
Wangcheng Baowan Refers to Changsha Wangcheng Baowan Logistic Co., Ltd.
CSE/Sembawang Refers to Shenzhen Chiwan Sembawang Engineering Co., Ltd
CPEC Refers to Shenzhen Chiwan Offshore Petroleum Engineering Co., Ltd.
China Development Finance Refers to China Development Finance Company Limited
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ANNUAL REPORT FOR YEAR 2016
PART II Corporate Information and Accounting Data
I. Company Profile
Stock Abbreviation Chiwan Base B Stock Code 200053
Stock Exchange Shenzhen Stock Exchange
Company’s Name in Chinese 深圳赤湾石油基地股份有限公司
Company’s Short Name in Chinese 深基地 B
Company’s Name in English Shenzhen Chiwan Petroleum Supply Base Co., Ltd.
Company’s Short Name in English Chiwan Base
Legal Representative Tian Junyan
Registered Address Chiwan, Shenzhen
Post Code 518068
Office Address 14/F, Chiwan Petroleum Building, Shenzhen
Post Code 518068
Website www.chiwanbase.com
E-mail sa@chiwanbase.com
II. Contact Person and Method
Board Secretary Securities Representative
Name Yu Zhongxia Li Zizheng
Address 14/F, Chiwan Petroleum Building, Shenzhen, PRC 14/F, Chiwan Petroleum Building, Shenzhen, PRC
Telephone 0755-26694211 0755-26694211
Fax 0755-26694227 0755-26694227
Email sa@chiwanbase.com sa@chiwanbase.com
III. Information Disclosure
Designated Newspapers for Information Disclosure Securities Times, Hong Kong Commercial Daily
Website for Information Disclosure www.cninfo.com.cn
Place Of Regular Reports Prepared For Inquiry 14/F, Chiwan Petroleum Building, Shenzhen, PRC
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ANNUAL REPORT FOR YEAR 2016
IV. Changes in Registration
Uniform Social Credit Code 91440300618833899A
Change of Main Business since Listed N/A
Change of Controlling Shareholder N/A
V. Other Information
Appointed Certified Public Accountants
Name of the CPAs Deloitte Touche Tohmatsu Certified Public Accountants LLP
Office Address 30/F, Waitan Center, No. 222 Yan’an Road East, Shanghai
Names of the Certified Public
Li Weihua, Jiang Qishen
Accountants as the signatories
The sponsor performing persistent supervision duties engaged by the Company in the report period
□ Applicable √ Inapplicable
The financial advisor performing persistent supervision duties engaged by the Company in the report period
□ Applicable √ Inapplicable
VI. Major Accounting Data and Financial Indicators
Retroactive adjustment
□ Yes √ No
Unit: RMB
Y2016 Y2015 Change (%) Y2014
Operating Revenue (RMB) 677,791,331.11 650,279,516.34 4.23% 712,958,603.26
Net Profit Attributed to Shareholders of Listed
Company (RMB) 1,918,066.81 91,644,920.49 -97.91% 218,544,184.50
Net Profit Net of Non-recurring Gain and Loss
Attributed to Listed Company (RMB) -1,718,620.58 83,094,036.55 -102.07% 220,496,736.41
Net Cash Flows from Operating Activities (RMB) 371,474,731.89 332,656,351.44 11.67% 414,370,760.05
Basic Earnings per Share (RMB/Share) 0.01 0.4 -97.50% 0.95
Diluted Earnings per Share (RMB/Share) 0.01 0.4 -97.50% 0.95
Weighted Return on Equity（%） 0.11% 5.31% -5.20% 13.84%
December 31, 2016 December 31, 2015 Change (%) December 31, 2014
Total Assets (RMB) 7,549,041,526.12 5,643,956,639.17 33.75% 5,389,629,871.81
Owner’s Equity Attributed to Shareholders of
1,756,836,179.91 1,754,085,176.85 0.16% 1,690,486,032.37
Listed Company (RMB)
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ANNUAL REPORT FOR YEAR 2016
VII. Accounting Difference between Chinese General Accepted Accounting Principal
(GAAP) and International Financial Reporting Standard(IFRS)
1. Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in financial report of differences in net income and net assets.
□ Applicable √ Inapplicable
2. Differences of net profit and net assets disclosed in financial report prepared under overseas and Chinese
accounting standards.
□ Applicable √ Inapplicable
VIII. Main Financial Index by Quarters
Unit: RMB
First Quarter Second Quarter Third Quarter Fourth Quarter
Operating Revenue 164,424,597.76 166,623,690.89 169,557,114.04 177,185,928.42
Net Profit Attributed to
9,311,019.07 10,793,434.42 4,324,601.47 -22,510,988.15
Shareholders of Listed Company
Net Profit Net of Non-recurring
Gain and Loss Attributed to 8,553,393.49 10,608,950.09 3,993,410.84 -24,874,375.00
Listed Company
Net Cash Flows from Operating
74,546,903.86 76,563,195.94 96,853,274.98 123,511,357.11
Activities
Any material differences between the financial indicators above or their summations and those which have been
disclosed in quarterly or semi-annual reports?
□ Yes √ No
IX. Items of Non-recurring Gains & Losses
√ Applicable □ Inapplicable
Unit: RMB
Item Amount in 2016 Amount in 2015 Amount in 2014 Note
Disposal of non-current assets, including the part offset with
-1,761,326.85 -303,073.93 189,620.61
the provision for impairment of assets
Government grants recognized in current year’s profit or loss
(except for the fixed or quantitative government grants
5,238,023.20 12,491,552.18 9,686,859.21
closely related to the enterprise businesses according to the
national unified standard)
Net profit or loss of subsidiaries from the beginning of the
period up to the business combination date recognized as a
-12,902,949.53
result of business combination of enterprises under common
control
Other non-operating revenue and expenditure excluding the
2,868,136.38 -70,881.71 2,002,874.30
above-mentioned items
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ANNUAL REPORT FOR YEAR 2016
Less: Influence on income tax 1,594,903.68 2,906,602.66 2,969,838.53
Amount affected by minority equity (after tax) 1,113,241.66 660,109.94 -2,040,882.03
Total 3,636,687.39 8,550,883.94 -1,952,551.91 --
For the Company‘s non-recurring gain/loss items as defined in the Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering their Securities to the Public – Non-recurring Gains and Losses and its non-
recurring gain/loss items as illustrated in the Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering their Securities to the Public – Non-recurring Gains and Losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable √ Inapplicable
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ANNUAL REPORT FOR YEAR 2016
PART III Business Summary
I. Main Business of the Company
Whether the company needs to comply with the disclosure requirements of particular industry
No
1. Main Business
(1) The Company provides oil logistics support services for oil exploration, development and production in
the eastern South China Sea.
(2) The Company provides logistics park services for warehousing, distribution, supply chain management,
logistics finance, equipment leasing and e-commerce by controlling subsidiaries.
(3) The Company provides offshore engineering services for structure design, fabrication and maintenance by
associated companies.
2. Characteristics of Industry Development
(1) Offshore Oil Logistics Business
After the fully operation of CNOOC Huizhou Base, it has occupied the majority share of offshore oil logistics
market operated by CNOOC. Influenced by continued downturn of oil price and fall of oil developing and
production, Chiwan Base faces great operation pressure. But meanwhile ， with the acceleration of the
construction of the National Free Trade Zones, driven by the national strategy of "The Belt and Road" strategy，
and the concept of “Mass entrepreneurship and innovation ”continuous deepening, Chiwan Base is rising to a
new opportunity for development. New industrial park of “Technological and Cultural Innovation” in Chiwan
Park is in layout and planning adjustment.
Chengdu Oil Base is still facing challenging by downturn of oil price and marketing. However, it is also facing
new development opportunity benefited by state policies of new energy industry and environmental protection.
(2) Warehousing Logistics Services
In the past over ten years, warehousing logistics services developed from nothing rapidly with the overall
domestic economic growth and upgrade of consumption level, as well as the rapid development and promotion
of e-commerce. However, overall the supply of modern logistics facilities is still lagging behind the growing
demand. At present, although warehousing logistics industry still stabilized for the better development,
competition is also intensifying. Warehousing logistics industry has become the hot spot investment field for
real estate industry, E-commerce industry and other logistic industry. The representatives as Prologis,
Goodman, Alibaba and Vanke have accelerated their layout. Till now, Blogis takes the leading position in
domestic market.
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II. Major Changes for Main Assets
1. Major Changes for Main Assets
Major assets Explanation on Significant Changes
Equity Assets -
Fixed Assets -
Increase of 55% from the open date to end date, mainly due to acquisition of land
Intangible Assets
certificates by part of subsidiaries at preparatory period
Increase of 63% from the open date to end date, mainly due to project payment by
Construction in Progress
Wuxi, Zhenjiang, Jiaozhou and Jiaxin Baowan
Increase of 235% from the open date to end date, mainly due to increase of land
Other Intangible Assets
prepayment
2. Major Overseas Assets
□ Applicable √ Inapplicable
III. Analysis of Core Competitiveness
1. Petroleum logistics and industrial park business
Chiwan Base has more than 30 years of experience in petroleum logistics services, possesses with good wharfs,
warehouses and other infrastructures. In 2015, Chiwan Base park was included in Qianhai Shekou district of
Guangdong Free Trade Experimental Zone. With the acceleration of construction of the free trade zone, the
promotion of the national "One Belt One Road" strategy, and the continuous deepening of the national "mass
innovation and multitude entrepreneurship", operation of new industrial park ushered in a new development
opportunity. Chiwan Base has started cooperation of scientific and technological innovation, cultural creativity,
new media, intelligent manufacturing and other fields. At present, new industrial layout is shaping initially, the
new-type industrial park would become the Company's new operations patterns and profit points.
2. BLOGIS business
As a domestic well-known developer and operator of logistics parks, the logistics park scale of BLOGIS ranks
among the best at home. The operation scale in the next 3-5 years will continue to achieve the rapid growth
according to the company's strategic layout, and the network advantages in the national economic hot spot
regions will continue to increase. The Company has accumulated rich experience in the site selection,
development and construction, operation and management of logistics parks etc. BLOGIS takes the lead in
logistics storage markets from place to place from the project development, price benchmarks, customer
resources, service standards, brand reputation, profitability and other aspects.
For the business model, in addition to the investment in the development and construction of standard and
professional warehousing facilities to provide warehousing services for customers, the Company also provided
the integrated comprehensive value-added logistics services including the warehousing loading and unloading,
equipment leasing, circulation processing, e-commerce warehousing and distribution management, and
supplier inventory management for settled enterprises, strived to build an advanced supply chain integrated
management platform, and attracted a large number of domestic and overseas well-known manufacturers,
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ANNUAL REPORT FOR YEAR 2016
retailers, logistics providers, third-party logistics and e-commerce enterprises by efficient, qualified and safe
services.
For the management model, as a domestic well-known developer and operator of logistics parks, BLOGIS has
professional teams and talent teams for the development and management of modern logistics parks, and has
basically formed scientific standardized procedures in the project site selection, risk assessment, planning and
design, engineering construction, and property management and supply chain business services in operation.
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ANNUAL REPORT FOR YEAR 2016
PART IV Business Discussion and Analysis
I. General
1. Business Discussion
The Company achieved operating revenue of RMB 678 million, increasing by 4.23% and net profit attributed
to the listed shareholders was RMB 1.918 million, decreasing by 97.88% compared with last year respectively.
The main reasons are as follows:
Decrease of investment income: mainly because impacted by downturn oil industry, operating profit of
associated CSE and CPEC decreased greatly, which led to the Company's investment income decline.
Increase of developing and constructing costs for newly-built and constructing projects: mainly due to
increase of projects under construction and preparation resulting in increase of early start-up costs, land
taxes and fees, depreciation and amortization and construction costs.
Increase of financial expenses: mainly because with intensifying development of construction of newly
Blogis projects, capital demand and liabilities rose sharply, resulting in interest expenses increased
dramatically.
Adjustment for deferred income tax due to accounting confirmation affecting profit.
Offshore Oil Logistics Business
International crude oil prices still fluctuated at low price in 2016. Impacted by severe challenge for offshore
oil industry and operation of CNOOC Huizhou Base, the Company still faced great pressure in the operation
of traditional oil industry. Meanwhile, Transformation of the new industrial park business for Chiwan Park is
still in the incubation period.
Operating revenue of offshore oil logistics business was RMB 141.52 million, decreasing by 14.96% and net
profit was RMB 27.40 million, decreasing by 6.45% compared with last year respectively.
Blogis Business
Operating revenue of Blogis was RMB 518.62 million, increasing by 10.99% and net profit was RMB 84.51
million, increasing by 0.56% compared with last year respectively. Occupancy rate for overall Blogis was 94%，
increased by 2.8% . Companies for overall Blogis operated in good condition generally.
Main Operating Index of Blogis
Unit: RMB’0000
Parks Revenue Net Profit Occupancy Rate Revenue Growth Net Profit Growth
（%） （%） （%）
Shanghai Baowan 9,621 4,760 100.0 3.14 1.08
Shanghai Mingjiang 5,686 2,621 100.0 2.22 4.98
Kunshan Baowan 5,805 2,534 98.2 0.63 -9.85
Langfang Baowan 2,889 947 96.0 11.46 39.81
Tianjin Baowan 5,064 1,941 87.3 -12.37 -13.92
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ANNUAL REPORT FOR YEAR 2016
Xindu Baowan 2,730 1,136 99.6 18.28 56.85
Longquan Baowan 6,324 1,911 98.1 4.10 -0.61
Guangzhou Baowan 5,393 1,983 100.0 13.09 29.01
Shenzhen Baowan 2,306 202 83.1 35.72 49.70
Nanjing Baowan 3,385 1,276 99.8 44.87 108.90
Nantong Baowan 1,381 304 80.9 17.04 74.97
Wuhan Baowan 3,190 865 89.0 213.34 2882.40
Wuxi Baowan 90 -558 14.7 N/A N/A
Zhenjiang Baowan 15 -182 15.0 N/A N/A
Jinnan Baowan 260 111 90.8 N/A N/A
Note:
The net profit of above-mentioned subsidiaries excludes interest expenses influence.
Occupancy rate refers to cumulative average rate annually.
Wuxi Baowan has put into operation since October, 2016 and Zhenjiang since December, 2016. Jinnan
Baowan has been combined into consolidated financial statements on Oct 31, 2016.
Shenzhen Baowan is not combined into consolidated financial statements for Blogis.
Note to the year-on-year change of the relevant data
(1) Growth of revenue and net profit of Wuhan Baowan was mainly due to uprising warehouse occupancy
rate as Year 2016 was the first fully operation year .
(2) Growth of revenue and net profit of Nanjing Baowan was mainly because warehouses have been put into
operation in succession with expanding area from 100,000 m2 to 106,000 m2; on the other hand, the
administrative expenses fell by 20% due to the innovation of regional management system.
(3) Growth of Nantong Baowan revenue and net profit was because warehouse has been put into operation in
succession with expanding area from 45,000 square meters to 57,000 square meters; on the other hand, the
administrative expenses fell by 24% due to the innovation of regional management system.
(4) Growth of revenue and net profit of Xindu Baowan was mainly due to rental price increasing and
management fees fell by 21% for strengthening management.
(5) Growth of revenue and net profit of Shenzhen Baowan was mainly due to increasing warehouse rental
income, handling business and agency business revenue resulting from improved business operation; on
the other hand the management fees fell by 14% for strengthening management.
(6) Growth of revenue and net profit of Langfang Baowan was mainly due to increasing warehouse occupancy
rate and revenue for overflowed warehousing market from Beijing; on the other hand, the management
fees fell by 42% for strengthening management.
(7) Growth of revenue and net profit of Guangzhou Baowan was mainly due to uprising rental price and
management fees fell by 29% for strengthening management.
(8) Decrease of net profit of Tianjin Baowan was mainly because with intensified competition and soaring
regional investment, warehouse occupancy rate decreased resulting in reduced revenue.
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ANNUAL REPORT FOR YEAR 2016
Project Development for Blogis in 2016
In reporting period, the Company has successfully signed investment agreement with local governments for
Chongqin Luohuang, Chongqin Beibei, etc., covering land area of 4,600 Mu and transfer contracts of state
owned lands for Chongqing Luohuang, Xi’an, etc., covering land area of 3,600 Mu.
Market Competition Pattern for Blogis in 2017
For the warehousing industry environment, with overall economic growth and enhanced consumption level,
overall storage industry environment would be better in 2017. Although storage demand is strong, competition
is becoming more severely. With the representatives as Prologis, Goodman, Alibaba and Cainiao accelerated
their layout of logistics parks, high occupancy rate of high-end storage accompany sustainable rising rental
price is coming back to stability in recently years. It is expected to face pressure of rental price stagflation and
rental rates decline for high-end storage in some areas. But market competition would become more intensive
partly because of supply surge such as Tianjin, Chengdu Area. Meanwhile, Wuxi Baowan and Zhenjiang
Baowan, newly- operating parks in the end of 2016 for Blogis, would face challenges in marketing work in
2017.
Offshore Engineering and others
CSE: The Company holds 32% stake. CSE contributed an investment income of RMB 25.91 million to the
Company, decreased by 52.73% compared with the same period of last year.
CPEC: The Company holds 20% stake. The investment income from CPEC has declined to RMB -2.43 million
in reporting period.
China Development Finance Limited: The Company holds 20% stake. It contributed investment income of
RMB 9.02 million to the Company, with an increase of 39.84% compared with same period of last year.
Project Construction Development
(1) Tianjin Bingang Baowan: Construction of two warehouses for Phase I, expected to be completed in the
second half of 2017.
(2) Wuxi Baowan: Construction of five warehouses and one multiple-used building and its auxiliary facilities,
completed and was changed over to fixed assets, put into use in Oct, 2016.
(3) Zhenjiang Baowan: It plans to construct nine warehouses and one multiple-used building, which has partly
been changed over to fixed assets and put into use in Dec, 2016
(4) Jiaxing Baowan: Construction of one warehouses and one multiple-used building for Phase I, expected to
be completed in the first half of 2017. Construction of four warehouses for Phase II, expected to be completed
in the first half of 2018.
(5) Qingdao Jiaozhou Baowan: The construction of eight warehouses and one multiple-used building, expected
to be completed in the first year of 2017.
(6) Chengdu Oil and Gas Base: The construction of one workshop and storage yard for Phase I, expected to be
completed in the first half of 2017. The construction of three workshops, one building and one dormitory
building for Phase II, expected to be completed in the second half of 2017.
(7) E’zhou Gedian Baowan: Construction of six warehouses, expected to be completed at the end of 2017.
(8) Xi’an Xianyang Baowan: Construction of seven warehouses and one multiple-used building, expected to
be completed in the second half of 2018.
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ANNUAL REPORT FOR YEAR 2016
(9) Beijing Shunyi: Remoulding of four warehouses, expected to be completed in the first half of 2017.
(10) Shaoxing Baowan: Construction of six warehouses and one multiple-used building, expected to be
completed in the first half of 2018.
(11) Jiangyin Baowan: Construction of five warehouses and one multiple-used building, expected to be
completed in the first half of 2018.
(12) Xitong Baowan: Construction of six warehouses and one multiple-used building, expected to be completed
in the first half of 2018.
II. Main Business Analysis
1. General
Refer to relevant contents of “1.General” in “Business Discussion and Analysis”.
2. Revenue and Cost
(1) Operating Revenue
Unit: RMB
Y 2016 Y2015
Change (%)
Amount Ratio (%) Amount Ratio (%)
Total Operation Revenue 677,791,331.11 100% 650,279,516.34 100% 4.23%
By Industries
Warehouse and Storage 550,059,948.71 81.15% 520,194,029.77 80.00% 5.74%
Loading and Unloading
29,073,126.97 4.29% 36,833,559.77 5.66% -21.07%
Services
Harbor Management 16,887,119.45 2.49% 16,648,654.99 2.56% 1.43%
Office Leasing and Other
56,928,282.31 8.40% 53,394,344.77 8.21% 6.62%
Main Business
Transportation 23,942,527.61 3.53% 21,942,401.95 3.37% 9.12%
Other 900,326.06 0.13% 1,266,525.09 0.19% -28.91%
By Region
South China 218,948,614.60 32.30% 230,792,194.04 35.49% -5.13%
East China 254,436,388.03 37.54% 241,763,609.53 37.18% 5.24%
North China 82,140,373.01 12.12% 83,714,820.72 12.87% -1.88%
Southwest China 90,367,776.47 13.33% 83,828,291.06 12.89% 7.80%
Central China 31,898,179.00 4.71% 10,180,600.99 1.57% 213.32%
(2) Situation of Industry, Project and District Occupying the Company’s Business Income and Operation Profit
over 10%
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ANNUAL REPORT FOR YEAR 2016
Unit: RMB
Operating Operating Gross Profit Operating Operating Cost Gross Profit Rate
Revenue Cost Rate (%) Revenue Change Change over the Change over the
over the Same Same Period of Same Period of
Period of Last Last Year（%） Last Year（%）
Year（%）
By Industries
Warehouse and
550,059,948.71 209,112,081.97 61.98% 5.74% 3.66% 0.76%
Storage
By Regions
South China 218,948,614.60 130,400,385.89 40.44% -5.13% -8.19% 1.98%
East China 254,436,388.03 77,579,167.20 69.51% 5.24% 6.60% -0.39%
North China 82,140,373.01 30,515,967.60 62.85% -1.88% 3.22% -1.83%
Southwest China 90,367,776.47 46,454,111.22 48.59% 7.80% 4.57% 1.58%
Under the circumstance that the statistic specifications for the Company‘s principal business data experienced
adjustment in the report period, the principal business data upon adjustment of the statistic specifications at the
end of the report period in the latest year.
□ Applicable √ Inapplicable
(3) Whether the Company’s physical sales income exceeded service income.
□ Applicable √ Inapplicable
(4) Implementation of Important Orders
□ Applicable √ Inapplicable
(5) Operating Costs
Unit: RMB
Y 2016 Y 2015
Industries Change (%)
Amount Ratio (%) Amount Ratio (%)
Warehouse and Storage 209,112,081.97 69.73% 201,719,829.80 67.92% 3.66%
Loading and Unloading Services 30,820,322.74 10.28% 33,060,506.50 11.13% -6.78%
Harbor Management 5,847,984.04 1.95% 13,189,448.38 4.44% -55.66%
Office Leasing and Other 30,154,434.63 10.05% 26,260,174.35 8.84% 14.83%
Transportation 22,781,537.54 7.60% 19,578,771.01 6.59% 16.36%
Other 1,191,895.26 0.40% 3,193,784.84 1.08% -62.68%
(6) Changes in Consolidated Scope
√ Yes □ No
14 new subjects are combined into consolidated financial statement as follows:
Blogis Supply Chain Management (Jiaxing) Co., Ltd, Yunnan Dianzhong Baowan Logistic Co., Ltd., Yuyao
Baowan International Logistic Co., Ltd., Chongqing Luohuang Baowan International Logistic Co., Ltd.,
Changsha Yuhua Baowan Logistic Co. Ltd., Xiaogan Baowan Logistic Co., Ltd., Chengdu Xinjin Baowan
International Co.,Ltd., Foshan Sanshui Baowan Logistic Co., Ltd., Foshan Nanhai Baowan Logistic Co.,
17
ANNUAL REPORT FOR YEAR 2016
Ltd., Deqing Baowan International Co. Ltd., Changsha Wangcheng Baowan Logistic Co., Ltd., Ningbo
Baowan International Logistic Co., Ltd., Beijing Jinmu Caoye Co., Ltd. and Tianjin Haier Assets
Management Ltd.
(7) Important Change or Adjustment of Products or Services
□ Applicable √ Inapplicable
(8) Main Clients and Suppliers
Main Clients
Total Sales Revenue of Top 5 Clients (RMB) 151,498,020.95
Ratio of Top 5 sales revenue in 2016（%） 22.35%
Information of Top 5 Clients
No. Client Name Sales Revenue Ratio of sales revenue in
(RMB) 2016（%）
1 Li & Fung Supply Chain Management (China) Co., Ltd. 42,751,264.78 6.31%
2 China Volkswagen 36,489,363.69 5.38%
3 SF Express 31,478,633.52 4.64%
4 Watson 23,542,483.37 3.47%
5 COOEC Subsea 17,236,275.59 2.54%
Total -- 151,498,020.95 22.35%
Information of other Clients
□ Applicable √ Inapplicable
3. Expenses
Unit: RMB
Y2016 Y2015 Change (%) Note
Sales Expenses 1,077,360.05 1,794,630.86 -39.97% Mainly due to the decrease of intermediate fee
Administration Mainly due to increase of labor cost and land
116,607,241.20 95,531,527.18 22.06%
Expenses amortization
Financial Expenses 181,754,411.70 165,115,346.59 10.08% Mainly due to increase of average loan balance
4. R&D
√ Applicable □ Inapplicable
Consideration of the logistics market demand and business development needs, the Company established the
stepwise development policy of "give priority to supporting the core business, promote the comprehensive
upgrading of functional management, and improve the intelligent decision-making construction" for the
information system research and development projects.
18
ANNUAL REPORT FOR YEAR 2016
The Company's information research and development is aimed as set up "three platforms" construction: the
"integrated management information platform" to support internal business operations and management
decision-making; the "integrated logistics service platform" to support the offline implementation of logistics
businesses, and the warehousing and distribution of online "sharing logistics"; and the "large data application
platform" based on the logistics industry.
At present, the company is focusing on the phase I construction of "integrated management information
platform", as well as the early platform business exploration; the future goal is to gradually improve and deepen
the "management information" and "business platform" construction; the long-term goal is to achieve service
intelligence" and "data value". Research and development on information system would provide strong
supports for the company to give play to the "hardware + software" comprehensive competitive advantages,
promoting the customer’s dependence to expand business profit model and boost sustained and healthy
development of overall businesses.
Y 2016 Y 2015 Change (%)
R&D Amount in Person 11 0 -
R & D Personnel accounted for Total Person 2.14% 0.00% -
Amount in Investment (RMB) 1,330,674.42 0.00 -
R & D Investment Accounted for the Proportion of
0.20% 0.00% -
Operating Income
R & D Investment Capitalization Amount (RMB) 1,330,674.42 0.00 -
R & D investment capitalization accounted for the
100.00% 0.00% -
Proportion of Investment
5. Cash Flow
Unit: RMB
Item Y2016 Y2015 Change (%)
Subtotal of Cash Inflows from Operating Activities 768,163,534.86 730,547,455.76 5.15%
Subtotal of Cash Outflows from Operating Activities 396,688,802.97 397,891,104.32 -0.30%
Net Cash Flows from Operating Activities 371,474,731.89 332,656,351.44 11.67%
Subtotal of Cash Inflows from Investing Activities 296,346,102.37 1,554,363,738.69 -80.93%
Subtotal of Cash Outflows from Investing Activities 2,099,119,060.57 1,867,812,310.11 12.38%
Net Cash Flows from Investing Activities -1,802,772,958.20 -313,448,571.42 475.14%
Subtotal of Cash Inflows from Financing Activities 3,773,105,100.00 516,134,281.57 631.03%
Subtotal of Cash Outflows from Financing Activities 2,138,513,746.58 589,244,785.09 262.92%
Net Cash Flows from Financing Activities 1,634,591,353.42 -73,110,503.52 -2,335.78%
Net Increase in Cash and Cash Equivalents 203,487,170.85 -54,206,934.45 -475.39%
Note to the year-on-year change of the relevant data
1. Cash inflows from investment decreased mainly due to the decrease of available purchasing financial
19
ANNUAL REPORT FOR YEAR 2016
products.
2. Cash inflows from financing increased mainly due to increasing registered capitals from CNDI and newly
loans.
3. Cash outflows from financing decreased mainly due to increase of repayment due loans.
Significant Difference between Cash Flows from Operating Activities and Net Profit in Reporting Period
□ Applicable √ Inapplicable
III. Non-core Business Analysis
√ Applicable □ Inapplicable
Unit: RMB
Amount Ration in Profit Explanation Sustainable
(yes or no)
Investment income from
Investment Income 33,786,630.43 46.69% associated companies and N/A
financing income
impairment of assets -98,698.65 -0.14% N/A
government grants, tax relief,
Non-operating income 9,294,068.84 12.84% disposal of fixed assets, N/A
liquidated damages and fines
disposal of fixed assets,
Non-operating
2,950,166.24 4.08% compensation, confiscation of N/A
expenditure
expenditure
IV. Analysis on Assets and Liabilities
1. Significant Changes in Assets
Unit: RMB
December 31, 2016 December 31, 2015
Amount Ratio in Amount Ratio in
Change
Total Total Assets Note
（%）
Assets （%）
（%）
Cash and Cash Equivalents Increasing Blogis
registered capitals
524,609,097.58 6.95% 321,121,926.73 5.69% 1.26%
from CNDI and
newly added loans
Accounts Receivable 43,862,804.61 0.58% 50,257,814.22 0.89% -0.31%
Inventories 961,855.72 0.01% 914,543.44 0.02% -0.01%
Investment Real Estate 1,606,049,338.07 21.27% 1,425,593,724.71 25.26% -3.99%
Long-term Investment on
602,194,915.06 7.98% 582,600,360.74 10.32% -2.34%
Stocks
Fixed Assets 877,096,096.64 11.62% 842,722,056.06 14.93% -3.31%
Construction-in-progress construction payment
for Bingang,
601,906,964.62 7.97% 368,965,477.50 6.54% 1.43%
Jiaozhou, Jiaxin and
Jinmu Caoye
Short-term Borrowings increased funds
850,000,000.00 11.26% 300,000,000.00 5.32% 5.94%
demand caused by
20
ANNUAL REPORT FOR YEAR 2016
increasing
development speed
of the logistics parks
Long-term Borrowings increased funds
demand caused by
increasing
development speed
1,186,288,100.45 15.71% 489,834,250.45 8.68% 7.03% of the logistics parks,
resulted in increasing
long-term borrowings
from bank and
Zhongkai Financial
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Inapplicable
3. Asset Rights Restrictions at the End of the Reporting Period
□ Applicable √ Inapplicable
V. Investment
1. General
√ Applicable □Inapplicable
Investment in 2016 (RMB) Investment in 2015 (RMB) Changes (%)
1,011,241,264.21 144,241,585.00 601.07%
21
ANNUAL REPORT FOR YEAR 2016
2. Significant Equity Investment in the Report Period
√ Applicable □ Inapplicable
Company Main Business Investment Amount Equity Fund Partner Term of Product Progress Estimated Profit in the Lawsuit Disclosure Disclosure
Mode (RMB) Ratio Resource Investment Profit Report Period Date Index
Jiaxin Modern
Logistics
Warehouse, Loading 230,000,000.0 Logistics Preparatory
Jiaxin Newly Set 90.00% Self-raised Investment Open-ended - -80,860.04 N/A 2016.10.15
& Unloading Services 0 Services Period
Development
Company
Dianzhong Warehouse, Loading 200,000,000.0 Logistics Preparatory
Newly Set 100.00% Self-raised N/A Open-ended - -75,213.75 N/A 2016.12.23
Baowan & Unloading Services 0 Services Period
Warehouse, Loading 100,000,000.0 Logistics Preparatory
Yuyao Newly Set 100.00% Self-raised N/A Open-ended - -934,325.94 N/A 2016.01.13.
& Unloading Services 0 Services Period
Warehouse, Loading Logistics Preparatory
Luohuang Newly Set 80,000,000.00 100.00% Self-raised N/A Open-ended - -29,033.39 N/A 2016.03.23
& Unloading Services Services Period
Warehouse, Loading Logistics Preparatory
Yuhua Newly Set 14,000,000.00 100.00% Self-raised N/A Open-ended - -5,115.74 N/A 2016.8.16
& Unloading Services Services Period
Securities
Warehouse, Loading Logistics Preparatory Times,
Xiaogan Newly Set 100.00% Self-raised N/A Open-ended - N/A 2015.12.18
& Unloading Services Services Period Hong Kong
Commercial
Warehouse, Loading Logistics Preparatory Daily and
Xinjin Newly Set 100.00% Self-raised N/A Open-ended - N/A 2016.01.13
& Unloading Services Services Period website of
Warehouse, Loading Logistics Preparatory http://www.
Sanshui Newly Set 100.00% Self-raised N/A Open-ended - N/A 2016.08.04 cninfo.com.
& Unloading Services Services Period
cn
Warehouse, Loading Logistics Preparatory
Nanhai Newly Set 100.00% Self-raised N/A Open-ended - N/A 2016.08.16
& Unloading Services Services Period
Warehouse, Loading Logistics Preparatory
Deqing Newly Set 100.00% Self-raised N/A Open-ended - N/A 2016.08.16
& Unloading Services Services Period
Warehouse, Loading Logistics Preparatory
Wangcheng Newly Set 100.00% Self-raised N/A Open-ended - N/A 2016.08.16
& Unloading Services Services Period
Warehouse, Loading Logistics Preparatory
Ningbo Newly Set 100.00% Self-raised N/A Open-ended - N/A 2016.08.16
& Unloading Services Services Period
Warehouse, Loading Logistics
Jinmu Caoye Acquisition 270,110,000.00 100.00% Self-raised N/A Open-ended Construction - -2,031,066.23 N/A 2015.12.18
& Unloading Services Services
Warehouse, Loading Logistics
Tianjin Haier Acquisition 117,124,048.28 100.00% Self-raised N/A Open-ended Operation - 250,029.96 N/A 2016.08.31
& Unloading Services Services
1,011,241,264.
Total -- -- -- -- -- -- -- -- 0.00 -2,905,585.13 -- -- --
21
Note: The Company holds above-mentioned companies through Blogis Holding.
22
ANNUAL REPORT FOR YEAR 2016
3. Significant Non-equity Investment in the Report Period
□ Applicable √ Inapplicable
4. Financial Assets Investment
(1) Securities Investment
□ Applicable √ Inapplicable
(2) Derivatives Investment
□ Applicable √ Inapplicable
5. Application of Raised Capital
□ Applicable √ Inapplicable
VI. Sales of Major Assets and Equity
1. Sales of Major Assets
□ Applicable √ Inapplicable
2. Sales of Major Equity
□ Applicable √ Inapplicable
VII. Analysis of Main Subsidiaries and Investment Companies
Unit: RMB
Company Type Main Product or Registered Total Asset Net Asset Operating Operating Net Profit
Name Service Capital Revenue Profit
Warehouse, loading
Shanghai
Subsidiary and unloading 160,000,000.00 266,146,597.47 205,654,962.97 96,211,868.18 63,465,387.60 47,598,079.31
Baowan
services
Guangzho Warehouse, loading
u Subsidiary and unloading 150,000,000.00 411,351,923.68 151,388,370.45 53,927,012.44 14,850,824.47 11,271,292.19
Baowan services
Warehouse, loading
Tianjin
Subsidiary and unloading 150,000,000.00 443,596,463.13 153,077,300.13 50,644,808.78 16,636,083.04 12,815,263.50
Baowan
services
Warehouse, loading
Kunshan
Subsidiary and unloading 120,000,000.00 221,659,083.22 131,371,836.27 58,052,168.04 30,472,814.01 23,457,262.09
Baowan
services
Warehouse, loading
Langfang
Subsidiary and unloading 90,000,000.00 198,720,816.06 91,450,605.97 28,893,780.25 7,471,302.47 5,732,884.10
Baowan
services
Warehouse, loading
Xindu
Subsidiary and unloading 60,000,000.00 129,503,996.84 60,647,250.99 27,300,435.15 10,544,057.70 8,438,995.18
Baowan
services
Warehouse, loading
Longquan
Subsidiary and unloading 100,000,000.00 329,432,519.75 102,630,686.92 63,237,549.03 14,002,519.73 11,734,257.13
Baowan
services
Nanjing Warehouse, loading
Subsidiary 130,000,000.00 243,311,152.71 130,158,419.29 33,853,031.51 11,685,026.34 9,157,775.68
Baowan and unloading
23
ANNUAL REPORT FOR YEAR 2016
services
Warehouse, loading
Shanghai
Subsidiary and unloading 120,000,000.00 302,547,242.44 126,921,008.58 56,859,963.01 28,144,996.28 21,310,968.91
Mingjiang
services
Warehouse, loading
Wuhan
Subsidiary and unloading 100,000,000.00 345,669,629.01 89,393,348.45 31,898,179.00 1,165,492.64 2,333,870.08
Baowan
services
Warehouse, loading
Nantong
Subsidiary and unloading 200,000,000.00 219,353,051.50 200,366,247.62 13,810,723.58 4,052,051.02 3,044,514.50
Baowan
services
Manufacturing steel
Investment products for
CSE 253,386,000.00 1,591,801,150.10 1,489,793,979.84 567,812,267.19 90,420,187.04 80,981,754.16
Company offshore
engineering, etc.
Providing
Investment equipment
CPEC 22,845,500.00 17,860,577.68 3,434,111.55 17,214,499.80 -11,576,675.59 -12,129,230.21
Company maintenance
services
Investment
Zhongkai Financial business 500,000,000.00 5,692,457,664.41 603,310,665.92 87,423,548.09 58,350,938.62 45,075,188.07
Company
Acquisition and Disposal of Subsidiaries in the Report Period
√ Applicable □ Inapplicable
Name Method of Acquisition and Disposal of Impact on Operation
Subsidiaries
Jiaxin Supply Chain Newly Set In the preparatory period
Dianzhong Baowan Newly Set In the preparatory period
Yuyao Baowan Newly Set In the preparatory period
Luohuang Baowan Newly Set In the preparatory period
Yuhua Baowan Newly Set In the preparatory period
Xiaogan Baowan Newly Set In the preparatory period
Xinjin Baowan Newly Set In the preparatory period
Sanshui Baowan Newly Set In the preparatory period
Nanhai Baowan Newly Set In the preparatory period
Deqing Baowan Newly Set In the preparatory period
Wangcheng Baowan Newly Set In the preparatory period
Ningbo Baowan Newly Set In the preparatory period
Jinmu Caoye New Subsidiary by Assets Acquisition In the preparatory period
Business Combinations not under affected consolidated net profit of RMB
Tianjin Haier
Common Controller 622,817.61
Explanation of Main Subsidiaries and Joint-ventured Companies: Find the details in I. General of Part IV
Business Discussion and Analysis.
VIII. Structured Bodies Controlled by the Company
□ Applicable √ Inapplicable
IX. Future Prospect of the Company
1. Competition Pattern and Development Trend
(1) Offshore Oil Logistics Services
24
ANNUAL REPORT FOR YEAR 2016
The international oil price has kept falling, which would make offshore oil and oil service companies adjust
their oil exploitation plan and reduce production. Meanwhile, with the operation of CNOOC Huizhou
production base, it will bring great impact to operation of the oil logistics services. It is estimated that some
warehouses and storage yard of Chiwan Base will be idled and operation of loading and unloading services
will still shrink in 2017. Promoted by national policies, new business of Chiwan yard is gradually stepping into
the track, but the profitability needs to be improved.
(2)Blogis Business
In 2016, logistics industry grew steadily. It was more difficult for the company to take land and the intensified
competition resulted the loss of customers. The Company will create new business including e-commerce
distribution and enhance the cooperation intention between local government and the Company.
2. Development Strategy
The Company is committed to be logistic enterprise with outstanding scale logistics parks throughout major
cities as well as various logistics services and be industrial leader in domestic petroleum logistics services and
integrated logistics services with continuous value creation for customers, shareholders, employees and society.
(1) Offshore Oil Logistics Business
The Company will seize the opportunity of “Qianhai Shekou FTA” to accelerate the transformation and
upgrading of offshore oil logistics business; continuously optimize marketing work and create new business
mode. In 2017, the Company will focus the following work: exploring upgrading program for offshore oil
logistics business and creating new business mode; making research of other outstanding park service provider.
Chengdu oil and gas base will strive to build as an international energy innovation and cooperation park.
(2) Blogis Business
Next three to five years the Company would accelerate the layout of logistics park network, covering main
cities all over the country with comprehensive and integrated logistics services system to develop into industrial
leading company with core competitiveness of large-scale logistics park network, high-level integrated
logistics services.
3. Operation Plan
2017 will be the critical period of China's economic restructuring and upgrading, the new normal such as
economic growth decline and structural adjustment will also further form greater impacts on the development
of various industries. In such a large environmental background, the company's two core businesses are facing
both promising development opportunities and challenges at the same time. To achieve the planned objectives,
the company will focus on the development theme of "sustainable innovation, increase income and reduce
expenditure", and complete following work in the management:
Offshore Oil Logistics businesses: to speed up the transformation and upgrading and development of new
businesses and realize the steady growth of traditional businesses simultaneously, take the park operations as
the development positioning, focus on promoting new projects planning, new clients investment and new
projects landing;
BLOGIS logistics business: to speed up and optimize development and engineering construction of new
projects, strengthen the business development and large customer management, and maintain the sustained and
healthy development of BLOGIS logistics business.
25
ANNUAL REPORT FOR YEAR 2016
4. Capital Requirement, Sources of Funds and the Usage Plan
On the premise of normal daily operations, the Company's demanded capital will be applied to land purchase,
development and construction of Baowan logistics parks as well as other projects through mergers, acquisition
or joint-venture, to ensure the steady development of the Company's main business. The capital demands are
planned to be resolved by way of equity fund, bank financing and returned funds from scrolling project
investments.
5. The Risk and Measures for Future Development
Under the circumstance of China's economic long-lasting healthy performance, two core businesses of the
Company would be expected to be more prosperous in future as well as the challenges and external risks ahead.
Speeding up land acquisition is main foundation to the Company's long-term development. However, under
the background of joining of other developing agents and expanding domestic demand for lands, competition
for lands will be intensified.
The expansion of business scale along with larger capital requirement could lead to higher asset-liability ratio
and debt costs. The coexistence of slowdown in China's economic growth and inflation pressures, combined
with the rising cost of elements such as domestic land, labor, construction materials, and fuel would greatly
effect on the company profitability.
There is a need for highly-quality talent and competitive salaries and welfares system to realize the strategic
targets on the path of company’s rapid growing. Combined with the development of internet and financial
industry and logistics, the transform of development cooperation of cross-border joint, competition and
business mode may likely change the profit mode of logistics industry.
The Company plans to carry out the following measures to achieve future development:
To strengthen immediate study of macro economy, policy trend and industrial development; continue to
strengthen centralized management of funds, improve efficiency of funds and reduce financial cost; At the
same time actively study and explore diverse financing way; to strengthen the research of extended business,
management and incentive mechanism construction; continue to improve leading service management
standardization system of the industry; on the basis of guarantee of project quality, to strongly promote progress
plan, optimize engineering management cost and explore new mode of project management; to further
strengthen the construction and cultivation of talents, establish a training system of capacity improvement.
X. Reception, Research and Interview in the Report Period
Time Method Type of Visitors Disclosure Index
2016.01.21 Field Research Individual www.cninfo.com.cn (Investor Relations Record No. 2016-01)
2016.05.16 Field Research Institute www.cninfo.com.cn (Investor Relations Record No. 2016-02)
www.cninfo.com.cn (Investor Relations Record No. 2016-01)
2016.07.13 Field Research Institute www.cninfo.com.cn (Investor Relations Record No. 2016-03)
2016.07.29 Field Research Institute www.cninfo.com.cn (Investor Relations Record No. 2016-04)
2016.11.18 Field Research Institute www.cninfo.com.cn (Investor Relations Record No. 2016-05)
2016.11.23 Field Research Institute www.cninfo.com.cn (Investor Relations Record No. 2016-06)
Reception Times 6
Reception Institution Time 5
Reception Individual Time 1
26
ANNUAL REPORT FOR YEAR 2016
Other 0
Whether disclosing undisclosed
N/A
information
27
ANNUAL REPORT FOR YEAR 2016
PART V Significant Events
I. Dividends Distribution
Implementation and Adjustment of Dividend and Cash Distribution Policy
√ Applicable □ Inapplicable
According to the requirements of the Shenzhen Securities Regulatory Commission and actual situation, 11th
Telecommunication Meeting of 6th Board and the Second Extraordinary Shareholders’ Meeting in 2012 has
reviewed and approved the proposal on Revision of Articles of Association, which clearly defined allocation
principle and forms of profit distribution, proportion and condition of cash dividends, decision procedures and
so on.
During the course of demonstration and revision, independent directors have published independent opinions
on argumentation report for returns planning for shareholders. The Company also offered many method such
as telephone, email for small shareholders’ opinions, which ensured the legitimate rights and interests of small
or middle shareholders.
The dividends distribution policy has no changed in report period.
Special Statement About the Cash Dividend Policy
In compliance with the Company’s Articles of Association and the resolution of general meeting Yes
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors fulfilled their responsibilities and played their due role Yes
Minority shareholders have the chance to fully express their opinion and desire, and their legal rights
Yes
and interests were fully protected
In adjustment or alteration of the cash dividend policy, the conditions and procedures were in
Inapplicable
compliance with regulations and transparent.
Dividend distribution scheme for last 3 years
1. Dividends Distribution Plan for 2016: The Company has no plan to distribute cash dividend to the whole
shareholders.
2. Dividends Distribution Plan for 2015: The Company has no plan to distribute cash dividend to the whole
shareholders.
3. Dividends Distribution Plan for 2014: Based on the total shareholders of 230,600,000 dated on December
31, 2014, the Company distributed cash dividend to all shareholders at RMB 1.29 (including tax) for every 10
shares amounted to RMB 29,747,400.00 in total.
Cash dividend distributions for the last three years
Unit: RMB
Net Profit Attributed Ratio of Cash Dividend
to Common to Net Profit Ratio of Cash
Cash Dividends Shareholders of the Attributable to Common Cash Dividend in
Year Dividend in Other
Tax Included Company in Shareholders of the Other Forms
Forms
Consolidated Company in
Statement for the Consolidated Statement
28
ANNUAL REPORT FOR YEAR 2016
Year (%)
Y 2016 0.00 1,918,066.81 0.00% 0.00 0.00%
Y2015 0.00 91,644,920.49 0.00% 0.00 0.00%
Y2014 29,747,400.00 218,544,184.50 13.61% 0.00 0.00%
In the report period, the Company’s profit and profit available for distribution of parent company are both
positive, but the Company does not distribute cash dividend.
□ Applicable √ Inapplicable
II. Pre-plan for Dividend Distribution and Turning Capital Reserve to Share Capital in
the Report Period.
□ Applicable √ Inapplicable
The Company has no plan to distribute cash dividend to the whole shareholders, nor turn capital reserve to
share capital.
III. Implementation of commitments
1. The commitments of the Company, its shareholders, actual controller, directors, supervisors, senior
management and other related parties fulfilled in the report period or ongoing at period-end.
√ Applicable □ Inapplicable
Commit
Promisee Type Content Beginning Time Limit Status
ments
Nanshan Other
to land use 1997-7-18 25 Years On duty
Group Commitment
Nanshan Other to resolve payment difficulties
2014-1-06 3 Yeas Fulfilled
Group Commitment in opening the Finance Limited
Other to provide regular monthly
Other The Long term
Commitment financial reports to the 2007-10-25 On duty
Commit Company effective
controlling shareholder
ments
Commitment for About the issue of "medium-
The
Raised Funds term notes for 2012" 2012-3-7 5 Years Fulfilled
Company
Commitment
The Other About the issue of "12 base
2013-01-09 7 Years On duty
Company Commitment debt" commitment
Fulfilling
commit
Yes
ments
timely
2. Whether there had been an earnings forecast for an asset or project and the report
period was still within the forecast period, explain why the forecast has been reached for
the report period.
□ Applicable √ Inapplicable
IV. Non-operation Oriented Fund Occupancy by the Controlling Shareholder and/or
Related Parties
□ Applicable √ Inapplicable
V. Notes of the Board of Directors, the Board of Supervisors and Independent Directors
on the Unqualified Auditor’s Report Issued by CPAs.
29
ANNUAL REPORT FOR YEAR 2016
□ Applicable √ Inapplicable
VI. Changes in Accounting Policy, Accounting Estimation and Way of Accounting in
Comparison with the Latest Annual Report
□ Applicable √ Inapplicable
VII. Retrospective Restatement Necessary for Correction of Significant Accounting
Errors during the Report Period
□ Applicable √ Inapplicable
VIII. Changes in Range of the Consolidated Statements in Comparison with the Financial
Report of the Previous Year.
√ Applicable □ Inapplicable
14 new subjects are combined into consolidated financial statement as follows:
Blogis Supply Chain Management (Jiaxing) Co., Ltd, Yunnan Dianzhong Baowan Logistic Co., Ltd., Yuyao
Baowan International Logistic Co., Ltd., Chongqing Luohuang Baowan International Logistic Co., Ltd.,
Changsha Yuhua Baowan Logistic Co. Ltd., Xiaogan Baowan Logistic Co., Ltd., Chengdu Xinjin Baowan
International Co.,Ltd., Foshan Sanshui Baowan Logistic Co., Ltd., Foshan Nanhai Baowan Logistic Co.,
Ltd., Deqing Baowan International Co. Ltd., Changsha Wangcheng Baowan Logistic Co., Ltd., Ningbo
Baowan International Logistic Co., Ltd., Beijing Jinmu Caoye Co., Ltd. Tianjin Haier Assets Management
Ltd.
IX. Engagement/ Disengagement of Certified Public Accountants
Certified Public Accountants Currently Engaged
Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Remuneration (RMB Million) 1.23
Successive Years Offering Auditing Services 5
Names of the Certified Public Accountants Li Weihua, Jiang Qishen
Has the CPAs been changed in the report period
□Yes √ No
Description of the CPAs, financial adviser or sponsor engaged for internal control auditing.
√ Applicable □ Inapplicable
In the report period, the Company appointed Deloitte Touche Tohmatsu CPA as internal control auditor for
2016 with audit expense of RMB 460,000.
X. The Suspension or Termination of Listing
□ Applicable √ Inapplicable
XI. Bankruptcy and Recombination
□ Applicable √ Inapplicable
XII. Significant Lawsuits and Arbitration Affairs
30
ANNUAL REPORT FOR YEAR 2016
□ Applicable √ Inapplicable
In the report period, there are no significant lawsuit or arbitration affairs.
Other lawsuit
Whether
Involved
forming Result and Arbitration Disclosure
asic Information Amount Progress
estimated influence Execution Date
(‘0000)
liabilities
Ming Jiang Baowan’s construction
contract disputation appealed by China 4,349.66 N/A First Trial - - -
Building and Technology Group LTD.
Construction disputation of Chixiao
Engineering construction Ltd.,and the
143.98 N/A First Trial - - -
Compay appealed by Shenzhen Lingnan
Building and Engineering Ltd
XIII. Punishment and Rectification
□ Applicable √ Inapplicable
XIV. Honesty Condition of the Company and the Controlling Shareholders and Actual
Controller
□ Applicable √ Inapplicable
XV. Execution of the Equity Incentive Plan, Employee Stock Ownership Plan or Other
Incentive Measures for Employees of the Company.
□ Applicable √ Inapplicable
XVI. Significant Related Transactions
1. Related transactions Involving Daily Operation
Approved Whether
Ratio of Market
Type of Price Amount Transactio Exceeded
Transac Pricing Same Price Disclos
Relationshi Related (Unit: (Unit: n Amount the Disclosure
tion p
Contents Principl Type of Settlement (Unit: ure
Transactio RMB RMB (Unit: Approved Date
Party e Transactio RMB Index
n Million) Million) RMB Amount
n (%) Million)
Million)
Renting Securiti
Nansha Parent Providing Office and Market Bank es
10.19 10.19 32.88% 8.73 Yes 10.19 2016.04.26
n Group Company Services Maintenance Price Settlement Times,
Services Hong
Kong
Renting
Comme
Land and
rcial
Nansha Parent Receiving Building, Market Bank
5.21 5.21 16.% 5.27 Yes 5.21 2016.04.26 Daily,
n Group Company Services Receiving Price Settlement
www.cn
Power
info.co
Supply
m.cn
Total -- -- 15.40 -- 14.00 -- -- -- --
Large Amount Return of Goods N/A
Where the Company classifies and The Fifth Session of the Seventh Board of Directors approved the amount of RMB 14 million
estimates the total amount of routine of routine related transactions with Nanshan Group for Year 2016. The actual amount of
related transactions for the report routine related transactions for Year 2016 is RMB 15.40 million, in which the amount of
period, explain the actual providing services is RMB10.19 million and receiving services is RMB 5.21 million.
implementation during the report
period.
Explain why the transaction price is Inapplicable
greatly different from the market price
31
ANNUAL REPORT FOR YEAR 2016
2. Related Transactions of Assets Acquisition and Sales
□ Applicable √ Inapplicable
3. Important Related Transactions of Joint Investment
√ Applicable □ Inapplicable
Associated Pricing Investee Main Business of Registered Total Net Net
Investor Party
Principle
Relationship Name Investee Capital ’0000 Assets ’0000 Assets ’0000 Profit ’0000
Increase Investment in
registered logistics industry,
Controlled capital of Blogis trade industry
CNDI 250,000 583,507 376,642 13,098
Shareholder Blogis Holding and related
Holding by investment
shareholding consulting,
Progress of Projects Under
Construction
4. Connected Claims and Liabilities
√ Applicable □ Inapplicable
Did there exist any non-operational related rights of credit and liabilities
□ Yes √ No
5. Other Important Related Transaction
(1) Related Transaction of Borrowing from Nanshan Group
The 3rd Tele-communication Meeting of 8th Board of Directors has approved the Company and Blogis Holding
borrowing loans from from Nanshan Group under the limit of RMB 600 million respectively with benchmark
lending rate of financial institutions and borrowing term under 1 year. The estimated interest expense is RMB
26.10 million.
The 8th Tele-communication Meeting of 8th Board of Directors has approved the Company, Blogis Holding
and its subsidiaries borrowing loans under the limit of RMB 1.2 billion from Nanshan Group respectively with
time limit of 3 years. Borrowing rate is not higher than the same period of the benchmark lending rate of
financial institutions announced by People's Bank of China. The estimated interest expense is RMB 101.70
million.
(2)Related Transaction of Renewal of Financial Services Agreement with Zhongkai Financial Company
The 10th Tele-communication Meeting of 8th Board of Directors has approved to renew Financial Services
Agreement with Zhongkai Financial Company with term of 3 years. It needs to be approved by Shareholders’
Meeting.
The Company has set Deposit Risk Disposal Plan and disclosed Risk Assessment Report by Zhongkai. At the
end of Dec 31, 2016, the Company has deposit 177.27 million and loans of 724.35 million at Zhongkai.
Disclosure of Important Connected Transaction
Announcement Disclosure Date Disclosure Website
Related Transactions of Joint Investment on Increasing Registered
2016.01.13 www.cninfo.com.cn
Capitals of Blogis
Related Transaction of Borrowing RMB 600 million from Nanshan
2016.08.16 www.cninfo.com.cn
Group
Related Transaction of Borrowing RMB 1.2 billion from Nanshan
2016.10.31 www.cninfo.com.cn
Group
32
ANNUAL REPORT FOR YEAR 2016
Related Transaction of Renewal Financial Services Agreement with
2016.12.23 www.cninfo.com.cn
Zhongkai Financial Company
XVII. Important Contracts and Implementation
1. Custodian, Contracting and Lease
(1) Custodian
√ Applicable □ Inapplicable
Entrusted Operation of Hefei Logistics Park
Approved by the sixteenth tele-communication of 6th Board of Directors, Baowan holding was entrusted to
operate Hefei logistics park until December 31, 2014. The entrusted management term will automatically
extend for 1 year if both parties agree. Until now, Hefei Logistics Park has paid management fees for Y2014
and Y2015 and it needs to pay management fee amounted to RMB 0.46 million for 2016.
(2) Contracting
□ Applicable √ Inapplicable
(3) Lease
□ Applicable √ Inapplicable
2. Significant Guarantee
√ Applicable □ Inapplicable
（1）Guarantee
Unit: RMB’0000
Outward guarantees (excluding guarantee to the subsidiaries)
Date of Guarantee
Actual Implem
Names of Guarantee Occurrence (date to Related
Disclosure Date Amount of Type Period entation
Guarantees Amount of agreement Party?
Guarantee Status
execution) (Y/N)
Guarantees to the Subsidiaries
Actual Guarantee
Date of Occurrence Implem
Names of Guarantee Amount to Related
Disclosure Date (date of agreement Type Period entation
Guarantees Amount of Party?
execution) Status
Guarantee (Y/N)
Guangzhou 2013.07.05
2016.01.13
8,565.4 2014.04.18 8,456.95 Irrevocable 15Years N/A N
Baowan
2013.07.05
Nanjing Baowan 2016.01.13 6,499.6 2014.05.28 6,359.84 Irrevocable 15Years N/A N
Wuhan Baowan 2014.04.24 19,340 2014.11.03 5,509.42 Irrevocable 15 Years N/A N
Blogis Holdings 2016.01.13 60,000 2016.03.29 20,000 Irrevocable 2 Years N/A N
Total guarantee quota to the Total amount of guarantee
subsidiaries approved in the to the subsidiaries actually
60,000 20,000
reporting period incurred in the reporting
（B1） period （B2）
Total balance of actual
Total guarantee quota to the
guarantee to the
subsidiaries approved at the end of
94,405 subsidiaries at the end of 40,326.21
the reporting period
the reporting period
（B3）
（B4）
Guarantees Between Subsidiaries
Names of Disclosure Date Guarantee Date of Occurrence Actual Type Period Implem Guarantee
33
ANNUAL REPORT FOR YEAR 2016
Guarantees Amount (date of agreement Amount entation to Related
execution) of Status Party?
Guarantee (Y/N)
Tianjin General
2016.08.29 20,000 2016.11.03 5,860 3 Months Yes N
Baowan guarantee
Total guarantee quota to the Total amount of guarantee
subsidiaries approved in the to the subsidiaries actually
20,000 5,860
reporting period incurred in the reporting
（C1） period （C2）
Total balance of actual
Total guarantee quota to the
guarantee to the
subsidiaries approved at the end of
20,000 subsidiaries at the end of 5,860
the reporting period
the reporting period
（C3）
（C4）
The Company‘s total guarantee
Total amount of
Total guarantee quota approved in guarantee actually
the reporting period 80,000 incurred in the reporting 25,860
（A1+B1+C1） period
（A2+B2+C2）
Total balance of the
Total guarantee quota already
actual guarantee at the
approved at the end of the reporting
114,405 end of the reporting 46,186.21
period
period
（A3+B3+C3）
（A4+B4+C4）
Actual total guarantee (A4+ B4)/ Net Assets of the Company 26.29%
In which:
Guarantee quota for shareholders, actual controller and related parties
0
(D)
Guarantee quota directly and indirectly for companies with asset-
0
liability ratio over 70% (E)
Guarantee quota exceeding 50% of net assets (F) 0
Total amount of D+E+F 0
Notes to Guarantee in Complex Method: Inapplicable
(2) Illegal Guarantee
□ Applicable √ Inapplicable
3. Entrusted Others for Cash Management
(1)Entrusted Financing
√ Applicable □ Inapplicable
Unit: RMB’0000
Actual Provisi Profit and
Determi
Connected Beginning Ending Revenue in on for Expected Actual loss in the
Trust Party Amount nation of
Transaction Date Date This Report impair revenue Revenue reporting
Reward
Period ment period
China Merchants N
2,500 2015.07.23 2016.01.20 cash 2,500 58.27 6.12 Recovered
Bank
China Merchants
N 3,000 2015.08.13 2016.02.05 cash 3,000 62.2 12.72 Recovered
Bank
China Merchants
N 5,000 2015.12.30 2016.01.06 cash 5,000 2.51 2.51 Recovered
Bank
China Merchants
N 4,000 2015.12.30 2016.01.13 cash 4,000 4.35 4.35 Recovered
Bank
China Merchants N 9,000 2015.12.30 2016.03.23 cash 9,000 71.2 71.2 Recovered
34
ANNUAL REPORT FOR YEAR 2016
Bank
China Merchants
N 2,000 2016.02.17 2016.03.23 cash 2,000 5.85 5.85 Recovered
Bank
China Merchants
N 2,500 2016.02.17 2016.08.10 cash 2,500 25.58 25.58 Recovered
Bank
合计 28,000 -- -- -- 28,000 229.96 128.33 --
Capital Resource Short term idle fund
Unrecovered Principal and
0
Revenue
Lawsuit situation N
Board Resolution
2014.04.24、2015.04.30
Disclosure Date
Whether or not there is a
N
trust plan in the future
Note: Types of financial products are break –even financing products.
(2) Entrusted Loans
□ Applicable √ Inapplicable
4. Other Significant Contracts
□ Applicable √ Inapplicable
XIII. Social Responsibility
□ Applicable √ Inapplicable
XIX. Other Significant Events
√ Applicable □ Inapplicable
1. to invest in Ningbo Yuyao Baowan logistics park (phase I)
Approved by 20th Telecommunication meeting of 7th of the Board, Blogis intends to invest and construct
logistics park in Donggang District Terminal in Ningbo Yuyao, covering an area of 300.5 Mu with the initial
investment of RMB 312 million. To operate and manage the project, Blogis has registered a new company
with the name of Ningbo Yuyao Baowan Logistics Co., Ltd and registration capital of RMB100 million.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on January 13, 2016, January 16, 2016, and May 25, 2016.
2. to invest in Chengdu Xinjin Baowan logistics park
Approved by 20th Telecommunication meeting of 7th of the Board, Blogis intends to invest and construct
logistics park in Chengdu Xinjin, covering an area of 208 Mu with the initial investment of RMB 489 million.
To operate and manage the project, Blogis has registered a new company with the name of Chengdu Xinjin
Baowan Logistics Co., Ltd and registration capital of RMB 80 million.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on January 13, 2016, January 16, 2016, and August 23, 2016.
3. to invest in Chongqing Jiangjin Baowan logistics park
Approved by 21th Telecommunication meeting of 7th of the Board, Blogis intends to invest and construct
logistics park in Chongqing Jiangjin, covering an area of 301 Mu with the initial investment of RMB 337
million. To operate and manage the project, Blogis intends to register a new company with the name of
Chongqing Jiangjin Baowan Logistics Co., Ltd and registration capital of RMB100 million.
35
ANNUAL REPORT FOR YEAR 2016
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on March 23, 2016, and November 11, 2016.
4. to establish Hubei Baowan Logistics Holding Co., Ltd.
Approved by 24th Telecommunication meeting of 7th of the Board, Blogis intends to register Hubei Baowan
Holdings Ltd in Qingshan District in Hunan City with registration capital of RMB100 million. The business
license has been obtained.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on June 7, 2016, and February 21, 2017.
5. to invest in Wuhan Baowan Qingshan E-commerce logistics park
Approved by 24th Telecommunication meeting of 7th of the Board, Blogis intends to invest and construct
logistics park in Wuhan Qingshan, covering an area of 441 Mu with the initial investment of RMB 1,070
million. To operate and manage the project, Blogis intends to register a new company with the name of Wuhan
Qingshan Baowan Logistics Co., Ltd and registration capital of RMB 200 million.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on June 7, 2016.
6. Significant Assets Reorganization
1st Session of 8th Board of Directors and 3rd Extraordinary Shareholders’ Meeting in 2016 have approved the
proposal on Shenzhen New Nanshan Holdings (Group) issuing A share to absorb and merge Chiwan Base
with raising funds. Legal person of Chiwan Base would be terminated and cancelled and meanwhile
inherited and carried by New Nanshan Holding if such transaction successful approved. The above
mentioned transaction has gained approved by Shenzhen Stock Exchange, State-owned Assets Supervision
and Administration Commission and Commerce Ministry.
As the relevant policies involved in this transaction are not yet clear, Nanshan Holding and Chiwan Base need
to implement the relevant matters. In view of the above situation, the Board has made prudent studies and has
applied for the suspension of examining and verifying this administrative license project to CSRC, after the
implementation of relevant matters, the Board will apply for examining and verifying this administrative
license project timely.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on July 2, July 16, July 19, July 30, August 2, August 5, August 9, August 12,
August 26 , October 10, 2016.
7. Holding subsidiary participates in the auction of underlying assets of Guangdong One Hundred Copper Co.,
Ltd.
The 1st Telecommunication meeting of 8th of Board approved BLOGIS to participate in the auction of
underlying assets of Guangdong One Hundred Copper Co., Ltd. BLOGIS successfully won the land use rights
(a total area of 353,381.10 ㎡), buildings (a total area of 156,812.27 ㎡) and related facilities belonging to
Guangdong One Hundred Copper Co., Ltd. which locate at No. 10, Zone C, Central Science and Technology
Industrial Park, Leping Town, Sanshui District, Foshan City, Guangdong Province, with transaction price of
RMB 263,120,000.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on July 28, 2016 and August 4, 2016.
8. Registration of Foshan Sanshui Baowan International Logistics Co., Ltd.
36
ANNUAL REPORT FOR YEAR 2016
The 2nd Telecommunication meeting of 8th of Board deliberated and approved to establish Foshan Sanshui
BLOGIS International Logistics Co., Ltd. (tentatively named, the specific name is subject to the business
registration) in Sanshui District, Foshan City. Foshan Sanshui BLOGIS International Logistics Co., Ltd. has
completed the registration, with registered capital of RMB 100 million.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 4, 2016 and August 30, 2016.
9. To invest in Deqing Baowan logistics park
Approved by 3rd Telecommunication meeting of 8th of the Board, Blogis intends to invest and construct
logistics park in Deqing Town, Zhejiang Province, covering an area of 200 Mu with the initial investment of
RMB 224 million. To operate and manage the project, Blogis has registered a new company with the name of
Deqing Baowan Logistics Co., Ltd and registration capital of RMB 50 million. BLOGIS invests with self-
raised funds, accounting for 100% stake.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 16, 2016 and October 15, 2016.
10. to invest in Ningbo Fenghua Baowan logistics park project
Approved by 3rd Telecommunication meeting of 8th of the Board, Blogis intends to invest and construct
logistics park in Fenghua City, Ningbo, covering an area of 156 Mu with the initial investment of RMB 421
million. To operate and manage the project, Blogis has registered a new company with the name of Ningbo
Baowan Logistics Co., Ltd and registration capital of RMB 78 million. BLOGIS invests with self-raised funds,
accounting for 100% stake.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 16, 2016 and November 11, 2016.
11. to invest in Changsha (Hexi) Baowan logistics park (phase I) project (Wangcheng BAOWAN)
Approved by 3rd Telecommunication meeting of 8th of the Board, Blogis intends to invest and construct
logistics park in Wangcheng Economic and Technological Development Zone, Changsha City, covering an
area of 337 Mu with the initial investment of RMB 514 million. To operate and manage the project, Blogis has
registered a new company with the name of Wangcheng Baowan Logistics Co., Ltd and registration capital of
RMB 100 million. BLOGIS invests with self-raised funds, accounting for 100% stake.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 16, 2016.
12. to invest in Changsha (Yuhua) Baowan logistics park
Approved by 3rd Telecommunication meeting of 8th of the Board, Blogis intends to invest and construct
logistics park in Yuhuan District, Changsha City, covering an area of 137 Mu with the initial investment of
RMB 366 million. To operate and manage the project, Blogis has registered a new company with the name of
Yuhua Baowan Logistics Co., Ltd and registration capital of RMB 100 million. BLOGIS invests with self-
raised funds, accounting for 100% stake.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 16, 2016.
13. Holding subsidiary participates in the auction of underlying assets of Guangdong Silver One Hundred
Innovative Aluminum Co., Ltd. and invest
37
ANNUAL REPORT FOR YEAR 2016
The 3rd Telecommunication meeting of 8th of the Board approved the holding subsidiary BLOGIS to participate
in the auction of underlying assets of Guangdong Silver One Hundred Innovative Aluminum Co., Ltd. BLOGIS
successfully won the underlying assets belonging to Guangdong Silver One Hundred Innovative Aluminum
Co., Ltd. which locate at Hongling Road, North District, Science and Technology Industrial Park of Shishan
Town, Nanhai District, Foshan City, Guangdong Province, with transaction price of 304,360,000 Yuan, and
registered and established Foshan Nanhai Baowan Logistics Co., Ltd., with registered capital of RMB 100
million. BLOGIS is the only investment subject of Foshan Nanhai BLOGIS Logistics Co., Ltd.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 16, 2016 and September 20, 2016.
14. newly added guarantees
Approved by 4th Telecommunication meeting of 8th of the Board and the fourth Extraordinary General Meeting
of Shareholders in 2016, the Company intends to offer guarantee to Blogis under the amount of RMB 600
million and to Tianjin Baowan with amount of RMB 200 million offered by Blogis respectively.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016 and September 24, 2016.
15. to authorize management to finance within the credit limit of RMB 4.8 billion (or equivalent foreign
currency)
The 4th Telecommunication meeting of 8th of the Board and the fourth Extraordinary General Meeting of
Shareholders in 2016 deliberated and agreed to adjust the company’s credit financing amount to no more than
RMB 4.8 billion or equivalent foreign currency, and authorize the management to make financing
arrangements within authorization according to the Company’s operations.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016 and September 24, 2016.
16. to purchase 100% stake of Tianjin Haier Asset Management Co., Ltd.
The 4th Telecommunication meeting of 8th of the Board approved Tianjin Baowan to purchase 100% stake of
Tianjin Haier Asset Management Co., Ltd. and continue to operate without further remolding.
Tianjin Haier Asset Management Co., Ltd. has completed the procedures for industrial and commercial
registration of changes, Tianjin Baowan has already held 100% stake of Tianjin Haier Asset Management Co.,
Ltd.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016 and November 15, 2016.
17. to purchase 100% stake of Shanghai Xuanpeng Logistics Co., Ltd. and proceed with the follow-up
investment
The 4th Telecommunication meeting of 8th of the Board approved Tianjin Baowan to purchase 100% stake of
Shanghai Xuanpeng Logistics Co., Ltd. and proceed with the follow-up investment in the construction of
Tianjin Wuqing Baowan logistics park project. The initial investment of the project is estimated to be RMB
243 million (including the initial price of 47,083,900 Yuan for purchasing 100% stake of Shanghai Xuanpeng).
After completion of this stake purchase, Tianjin Baowan shall obtain 100% stake of Shanghai Xuanpeng’s
wholly-owned subsidiary Tianjin Xuanhong Warehousing Co., Ltd. (hereinafter referred to as "Tianjin
Xuanhong"). Tianjin Xuanhong shall invest in the construction of Tianjin Wuqing Baowan logistics park with
self-raised funds, and take charge of the follow-up operations and management of the project.
38
ANNUAL REPORT FOR YEAR 2016
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016.
18. to invest in Chongqing Beibei Baowan logistics park
Approved by 4th Telecommunication meeting of 8th of the Board, Blogis intends to invest and construct
logistics park in Beibei District, Chongqing City, covering an area of 349 Mu with the initial investment of
RMB 457 million. To operate and manage the project, Blogis intends to register a new company with the name
of Beibei Baowan Logistics Co., Ltd and registration capital of RMB 100 million. BLOGIS invests with self-
raised funds, accounting for 100% stake.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016.
19. to increase investment for Beijing Shunyi logistics park
The 4th Telecommunication meeting of 8th of the Board deliberated and approved to increase investment of
RMB 21.12 million for Beijing Shunyi logistics park, and total reconstruction cost amounts to RMB 35.11
million after adjustment.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016.
20. to jointly set up Shenzhen Baowan Wangcang Supply Chain Management Co., Ltd.
The 4th Telecommunication meeting of 8th of the Board deliberated and approved BLOGIS Holdings Limited
to jointly invest and establish Shenzhen BLOGIS Net Warehouse Supply Chain Management Co., Ltd. with
Zhejiang Net Warehouse Technology Co., Ltd. and Shenzhen Huishen Equity Investment Partnership (limited
partnership).
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016.
21. Invest in Jiabao logistics park project
The 7th Telecommunication meeting of 8th of the Board deliberated and approved BLOGIS Holdings Limited
and its wholly-owned subsidiary China Huitong (Hong Kong) Co., Ltd. (hereinafter referred to as "Huitong
Hong Kong") to jointly invest in the development and construction of Jiabao logistics park project in Jiaxing
City. This project plans to use 618 mu of lands, and the initial total investment is estimate to be RMB 933
million, of which BLOGIS Holdings Limited invests RMB 559.8 million, accounting for 60% stake; Huitong
Hong Kong invests RMB 279.9 million, accounting for 30% stake; Jiaxing Logistics Park invests RMB 93.30
million, accounting for 10% stake.
Jiaxing Supply Chain Management has registered capital of RMB 230 million (including offshore RMB of 69
million Yuan), of which BLOGIS Holdings Limited invests RMB 138 million by self-raised cash, accounting
for 60% stake; Huitong Hong Kong invests offshore RMB 69 million by self-raised cash, accounting for 30%
stake; Jiaxing Logistics Park invests RMB 23 million in cash, accounting for 10% stake. This company will
take charge of the operations and management of Jiabao logistics park.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on October 15, 2016 and November 4, 2016.
22. Invest in Kunming Baowan logistics park project
39
ANNUAL REPORT FOR YEAR 2016
Approved by 10th Telecommunication meeting of 8th of the Board, Blogis intends to invest and construct
logistics park in Dianzhong New Area, Kunming City, covering an area of 214 Mu with the initial investment
of RMB 481 million. To operate and manage the project, Blogis has registered a new company with the name
of Dianzhong Baowan Logistics Co., Ltd and registration capital of RMB 200 million. BLOGIS Holdings
Limited invests with self-raised funds, accounting for 100% stake.
See details in the company’s announcement published on Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn on August 31, 2016 and December 29, 2016.
XX. Significant Events of Subsidiaries
√ Applicable □ Inapplicable
Please find the details in XIX. Other Significant Events.
40
ANNUAL REPORT FOR YEAR 2016
PART VI Changes in Capital Stock and Shareholders
I. Changes in Capital Stock
1. Changes in Capital Stock
Unit: Share
Before Changes Changes in Shares（＋，－） After Changes
New Conversion
Bonus of Reserves
Shares Ratio Shares Others Subtotal Shares Ratio
Shares
Issued to Shares
1.Non-tradable
119,420,000 51.79% 119,420,000 51.79%
Shares
a. Promoters’
119,420,000 51.79% 119,420,000 51.79%
Shares
Ownership by
Domestic Legal 119,420,000 51.79% 119,420,000 51.79%
Entities
2.Tradable
111,180,000 48.21% 111,180,000 48.21%
shares
B shares 111,180,000 48.21% 111,180,000 48.21%
3.Total 230,600,000 100% 230,600,000 100%
Reason of Changes in Capital Stock
□ Applicable √ Inapplicable
Approval of Changes in Capital Stock
□ Applicable √ Inapplicable
Transfer of Change in Capital Stock
□ Applicable √ Inapplicable
Change in capital stock’s impacts on basic EPS and diluted EPS in recent year and recent issue, and net assets
per share attributed to equity shareholder and financial index etc.
□ Applicable √ Inapplicable
Other contents were necessary to the Company or the securities regulators required to be disclosed.
□ Applicable √ Inapplicable
2. Changes of Non-tradable Shares
√ Applicable □ Inapplicable
Unit: Share
Non-tradable Non-tradable
Releasing Non-tradable Increasing Non-tradable Date of
Name of Shares at the Shares at the
Shares in the Report Shares in the Report Restricted Reason Releasing Non-
Shareholder Beginning of End of
Period Period tradable Shares
Y2016 Y2016
Fan Zhaoping 8,700 18,750 0 0 Senior management locking shares 2016/7/11
Yu Zhongxia 48,887 0 0 48,887 Senior management locking shares -
41
ANNUAL REPORT FOR YEAR 2016
Zhang Xiang 48,530 0 0 48,530 Senior management locking shares -
Total 106,117 18,750 0 97,417 -- --
II. Issuing and Listing
1. Issuance of Securities during the Report Period
□ Applicable √Inapplicable
2. Changes of Total Shares, Shareholders’ Structure, Asset and Liability Structure
□ Applicable √Inapplicable
3. Shares Holding by Employees
□ Applicable √Inapplicable
III. Shareholders and Actual Controller
1. Particulars about Shareholders and Shares Holding
Unit: Share
Total Number of Total Number of Total Number of
Shareholders Preference Preference Shareholders
Total
One Month Shareholders with with Resumed Voting
Shareholders in 5,676 5,610 0 0
before Annual Resumed Voting Rights at Previous Month-
Reporting period
Report Rights at Period-end end of this Report’s
Disclosure (if any) Disclosure (if any)
Top Ten Common Shareholders
Shares Tradable Impawned or
Ratio Total Shares Non-tradable
Name Nature Held Shares Frozen Shares
（％） Held Shares Held
Change Held Status Shares
CHINA NANSHAN
Domestic
DEVELOPMENT (GROUP) 51.79% 119,420,000 0 119,420,000 0 0
Legal Person
INCORPORATION
China Logistics Holding(12) Foreign Legal 45,890,00
19.90% 45,890,000 0 - Unknown
PTE.LTD. Person 0
GUOTAI JUNAN
Foreign Legal
SECURITIES(HONGKONG) 1.77% 4,079,809 1,537,768 4,079,809 - Unknown
Person
LIMITED
CHINA MECHANTS
State-owned
SECURITIES (HONGKONG) 1.66% 3,836,054 221,830 3,836,054 - Unknown
Legal Person
LTD
Shenwan Hongyuan Securities Foreign Legal
1.20% 2,777,639 2,550,378 2,777,639 - Unknown
(H.K.) Limited Person
Domestic
HUANG YINGBIN 1.00% 2,304,198 2,304,198 2,304,198 - Unknown
Natural Person
Domestic
YU ZHIXIANG 0.60% 1,373,939 1,026,839 1,373,939 - Unknown
Natural Person
Haitong International Securities Foreign Legal
0.53% 1,230,366 1,230,366 1,230,366 - Unknown
Company Limited-Account Client Person
GREENWOODS CHINA ALPHA Foreign Legal
0.43% 984,693 0 984,693 - Unknown
MASTER FUND Person
Domestic
LI WEI 0.27% 617,705 17,705 617,705 - Unknown
Natural Person
Strategic Investors of General Legal Person N/A
42
ANNUAL REPORT FOR YEAR 2016
Become Top Ten Shareholders Due To Share
Issued s (if any)
Among the top ten shareholders, the domestic legal entity shareholder, China
Nanshan Development (Group) Incorporation has no affiliated relations with
Explanation for the Affiliated Relations or United other shareholders and does not fall into the scope of united action person
Action of the Top Ten Shareholders stipulated by “Regulation of Information Disclosure of the Change of
Shareholding of listed company”. It is unknown that whether other tradable-
share shareholders fall into the scope of united action person.
Top Ten Tradable Shareholders
Share Type
Name Tradable Shares Held
Type Shares
China Logistics Holding(12) PTE.LTD. 45,890,000 B 45,890,000
GUOTAI JUNAN SECURITIES(HONGKONG)
4,079,809 B 4,079,809
LIMITED
CHINA MECHANTS SECURITIES
3,836,054 B 3,836,054
(HONGKONG) LTD
Shenwan Hongyuan Securities (H.K.) Limited 2,777,639 B 2,777,639
HUANG YINGBIN 2,304,198 B 2,304,198
YU ZHIXIANG 1,373,939 B 1,373,939
Haitong International Securities Company Limited-
1,230,366 B 1,230,366
Account Client
GREENWOODS CHINA ALPHA MASTER
984,693 B 984,693
FUND
LI WEI 617,705 B 617,705
SUN HUNG KAI INVESTMENT SERVICES LTD 592,412 B 592,412
Statement on Associated Relationship or Consistent It is unknown that whether other tradable-share shareholders fall into the
Action among the Above Shareholders scope of united action person.
Remarks on Top Ten Shareholders Involved in
N/A
Securities Margin Trading
Whether shareholders appointed repurchase transaction during reporting period
□ Yes √ No
2. Controlling Shareholder
Characteristic of Controlling Shareholder: Uncertain
Type of Controlling Shareholder: Legal Entity
Legal Establishin Uniform Social
Name
Representative g Date Credit Code Main Business
China Nanshan Land development, port service and
September 91440300618832 transportation, as well as related
Development (Group) Wang Zhixian
28, 1982 976D industry, commerce, real estate and
Incorporation
tourism and bonded warehouse.
Equity in other domestic
and foreign listed
companies held by the
32.52% equity in Chiwan Wharf (000022) and 75.78% equity in New Nanshan
controlling shareholder by
Holding (002314).
means of control and
mutual shareholding in the
reporting period
Change of Controlling Shareholder in the Report Period
□ Applicable √ Inapplicable
43
ANNUAL REPORT FOR YEAR 2016
3. Actual Controller
Characteristic of Actual Controller: Domestic Organization
Type of Actual Controller: Legal Entity
Legal Establishin Uniform Social
Name
Representative g Date Credit Code Main Business
China Nanshan Land development, port service and
September 691440300618
Development (Group) Wang Zhixian transportation, as well as related
28, 1982 832976D
Incorporation industry, commerce, real estate and
tourism and bonded warehouse.
Controlling other domestic
and foreign listed
companies held by actual 75.78% equity in New Nanshan Holding (002314).
shareholding in the
reporting period
Change of Actual Controller in the Report Period
□ Applicable √ Inapplicable
Chart of Actual Controller and the Company
44
ANNUAL REPORT FOR YEAR 2016
State-Owned Assets
Supervision and
Administration Commission
of the State Council
100％
China Merchants Group State-Owned State-Owned China National Offshore Oil
Assets Assets Corporation
54.78％ Supervision and Supervision 100％
Administration and
Commission of Administration
Shenzhen Commission of
Municipal Guangdong
China Merchants Port Government Province
Holdings Company Limited 100％ 100％
100％
China Silverflow Shenzhen Guangdong China China HK Clifford
Merchants Co., Ltd. Investment Petro-Trade National Ocean Wong
(Nanshan) Holdings Developmen Offshore Oilfields Investment
Holdings Co., Ltd. t Oil Services Co.,Ltd
Ltd Corporation Investment (Hong
Co.,Ltd Kong)
Limited
(COOS)
0.50% 7.83% 1.64%
36.52% 26.10% 3.92%
23.49%
China Nanshan Development (Group) Incorporation
51.79%
Shenzhen Chiwan Petroleum Supply Base Co. Ltd. Tradable
48.21% Shareholders
(B Shares)
Actual Controller controlled the Company by trust or other asset management method.
□ Applicable √ Inapplicable
45
ANNUAL REPORT FOR YEAR 2016
4. Other shareholders with more than 10% shares
Registered
Shareholder’s Name Legal Representative Establishing Date Main Business
Capital
CHINA LOGISTICS Industrial and
HOLDING(12) PTE. Mark Tan 2010.11.11 USD 100 Equity
LTD Investment
IV. The Restricted Underweight of the Shares of Controlling Shareholder, Actual
Controller, Restructuring Parties and the Other Committed Party
□ Applicable √ Inapplicable
46
ANNUAL REPORT FOR YEAR 2016
PART VII Particulars about Preferred Share
□ Applicable √ Inapplicable
47
ANNUAL REPORT FOR YEAR 2016
PART VIII Directors, Supervisors, Senior Management and Staff
I. Changes of Shares held by Directors, Supervisors and Senior Management
Shares
Shares
Held
Starting Date Expiry Date Incr Decrea Other Held on
Name Position Office Status Gender Age
of Tenure of Tenure on Jan ease se Change Dec 31,
1,
2016
2016
Tian Junyan Chairman In Office Male 55 2010.05.13 0 0 0 0 0
Zhuge Wenjing Vice Chairman In Office Female 39 2016.06.28 0 0 0 0 0
Wang Shiyun Director/ GM In Office Male 50 2015.06.30 0 0 0 0 0
Zhang Jianguo Director In Office Male 52 2016.06.28 0 0 0 0 0
Chen Lei Director In Office Male 40 2016.06.28 0 0 0 0 0
Chen Hong Director In Office Male 57 2016.06.28 0 0 0 0 0
Shu Qian Director In Office Male 40 2013.05.20 0 0 0 0 0
Independent
He Liming In Office Male 63 2013.05.20 0 0 0 0 0
Director
Independent
Chen Weijie In Office Male 66 2013.05.20 0 0 0 0 0
Director
Independent
Chen Shujun In Office Male 49 2013.05.20 0 0 0 0 0
Director
Independent
Yu Xiufeng In Office Male 52 2013.05.20 0 0 0 0 0
Director
Supervisor
Li Weihong In Office Male 49 2016.06.28 0 0 0 0 0
Convenor
Zeng Jun Supervisor In Office Male 48 2016.06.28 0 0 0 0 0
Shang
Supervisor In Office Male 53 2016.06.28 0 0 0 0 0
Yuexiang
Song Huibin Supervisor In Office Male 51 2016.06.28 0 0 0 0 0
Employee
Sun Yuhui In Office Female 42 2013.05.20 0 0 0 0 0
Supervisor
Employee
Cai Lirong In Office Female 42 2016.06.28 0 0 0 0 0
Supervisor
Wang Jianjiang Deputy GM In Office Male 59 2011.02.21 0 0 0 0 0
Deputy GM/
Financial
Yu Zhongxia In Office Female 53 2011.11.21 65,182 0 0 0 65,182
Controller/Boar
d Secretary
Zhang Xiang Deputy GM In Office Male 52 2014.04.22 64,706 0 0 0 64,706
Out of
Fan Zhaoping Director Office
Male 62 2010.05.13 2016.01.07 27,450 0 27,450 0 0
Out of
Mingzhi Mei Vice Chairman Office Male 44 2011.04.20 2016.06.28 0 0 0 0
Out of
Kent Yang Director Office
Male 48 2011.04.20 2016.06.28 0 0 0 0
Out of
Huang Ronghui Supervisor Office
Male 60 2013.05.20 2016.06.28 0 0 0 0
Appointm
Song Tao Board Secretary ent and Male 38 2012.03.26 2016.06.27 0 0
Removal
Total -- -- -- -- -- -- 157,338 0 27,450 0 129,888
48
ANNUAL REPORT FOR YEAR 2016
II．Changes of Directors, Supervisors and Senior Management
Name Post Type Date Reason
Fan Zhaoping Director Outgoing 2016.01.06 Resignation
Mingzhi Mei Vice Chairman Full term 2016.06.28 General Election
Kent Yang Director Full term 2016.06.28 General Election
Zhang Jianguo Supervisor Convenor Full term 2016.06.28 General Election
Chen Lei Supervisor Appointment and Removal 2016.06.28 General Election
Chen Hong Supervisor Appointment and Removal 2016.06.28 General Election
Huang Ronghui Supervisor Full term 2016.06.28 General Election
Song Tao Board Secretary Appointment and Removal 2016.06.27 Post Change
III. Posts
Main Work Experience for Directors, Supervisors and Senior Management in Current Office
Chairman: Mr. Tian Junyan, master degree in management of Huazhong University of Science and Technology.
He was once the associate professor of School of Management of Huazhong University of Science and
Technology. Since 1996, he had successively served the posts of manager of research &development
department and the Executive Senior Vice President of Nanshan Group. At present Mr. Tian is General
Manager of Nanshan Group. He has been the Company’s Director since 2010 May and Chairman of Board of
Directors since 2013 May.
Vice Chairman: Ms Zhuge Wenjing, bachelor of Renmin University of China and MBA of Northwestern
University and Hong Kong University Science & Technology, had successively worked in Morgan Stanley
Asset Management Co, Deloitte Touche and SDIC commercial real estate Co., Ltd. At present, she is co-
president of Global Logistic Properties and served as Vice Chairman of the Company since 2016 June.
Director/GM: Dr. Wang Shiyun, doctor degree in finance of University Cambridge. Mr. Wang has served the
posts as employee of ICBC, teacher and Ph. D supervisor in University of Manchester, University of Sheffield,
and University of Southampton. Since 2004 to May 2015, Mr. Wang has served the posts as CEE and Deputy
GM of Nanshan Group. At present, he is GM of the Company since April and Director of the Company since
June 2015.
Director: Mr. Zhang Jianguo, Bachelor of Shanxi University of Accounting. He served in Chiwan Wharf
Holdings Limited as Financial Manager, Chief Financial Officer and Vice President. At present, he is the
Deputy General Manager& CFO of Nanshan Group. He was served as the convener of the Board of Supervisors
of the Company dated from May 2013 to June 2016. At present, he is served as Director of the Company since
2016 June.
Director: Mr. Chen Lei, bachelor degree in international finance of Shanghai Jiao Tong University and MBA
of University of Southern California. He is CPA and CTA of China. He was the auditor of Ernst & Young in
1998 and finance manager of Shanghai New International Expo Center in 2001. At present, he is Chief
Investment Officer& Senior Vice President of Global Logistic Properties. He was served as supervisor of the
Company dated from April 2011 to June 2016. At present, he is served as Director of the Company since 2016
June.
Director: Mr. Chen Hong, senior engineer, graduated from East China Institute of Water Conservancy. Since
2001, he successively served as deputy general manager of Shenzhen Haiqin Engineering Co., Ltd., deputy
chief engineer of China Nanshan Development (Group) Co., Ltd. At present he is Chief Engineer of China
Nanshan Development (Group) Co., Ltd. He was served as supervisor of the Company dated from June 2012
to June 2016. At present, he is served as Director of the Company since 2016 June.
Director/Deputy GM: Mr. Shu Qian, graduated from Hunan Institute of Finance (merged Hunan University in
2000) majored in accounting, and obtained a master degree with maritime economics and logistics from
Rotterdam University in 2004. Since 2000, Mr. Shu has successively worked in financial department in
49
ANNUAL REPORT FOR YEAR 2016
Shenzhen Chiwan International Freight Forwarding Co., Ltd., operating department in Shenzhen Chiwan
Wharf Holdings Limited., as assistant general manager and general manager of Research and Development
Department of Nanshan Group. He has served as a director of the Company since May 2013 and deputy GM
of the Company since 2015 April.
Independent Director: Mr. He Liming, master's degree, senior economist. He successively served the post of
former Deputy Director of the Materials Department, the Personnel Division of the Ministry of Domestic Trade,
general manager of China Nonferrous Metal Materials Corporation, Vice President and Secretary General,
Executive Vice President of the China Federation of Logistics and Purchasing. At present, he is president of
the China Federation of Logistics and Purchasing/party secretary, president of China Society of Logistics, the
president of China International Trade Promotion logistics industry branch, the vice chairman of the Asia
Pacific Logistics Alliance. In May 2013, he has served as an independent director of the Company.
Independent Director: Mr. Chen Weijie, a professor-level senior economist. He successively served the post
of the manager of Finance Department of the Eastern Oil Company CNOOC Nanhai, Finance Department
Manager of CNOOC Shenzhen Branch, presiden of CACT Operators Group, Deputy General Manager and
Deputy Party Secretary of CNOOC Shenzhen Branch, General Manager of China National Offshore Oil
Corporation, the Ministry of Planning. Currently; deputy director of the Professional Committee of China's
economy Petroleum Institute; CNOOC/Shanghai Jiaotong University Engineering Research Center member
technical committee of new energy; Vice Chairman of Tianjin Intercity Railway Co. In May 2013, he has
served as an independent director of the Company.
Independent Director: Mr. Chen Shujun, Master Degree of Business Administration in Finance of Chinese
University of Hong Kong, Master Degree of Accounting of City University of Hong Kong International,
Bachelor of Laws degree from Tsinghua University (Adult Education). Senior Accountant, CPA China,
Chinese Certified Tax Agents, judicial experts, national legal professional qualifications; twelfth session of the
Conference of Guangdong Provincial People's Congress Standing Committee of the legislative consultants,
member of the eighth Accounting Association, etc. Former Guangzhou CPA auditor, manager; in 1998 served
as Managing Partner of Shenzhen Guangshen Certified Accountant, legal representative of Forensic
Accounting Guangdong Guangzhou-Shenzhen; also served in Funde Insurance Holding, Funde Property &
Casualty Insurance Co., Ltd. and Nuode Investment Co., Ltd.as independent director; served in Chongqing
Cybernaut Equity Investment Fund Management and Shenzhen Cybernaut Central European Fund Investment
Limited as director. In May 2013, he has served as an independent director of the Company.
Independent Director: Dr. Yu Xiufeng, senior partner of Beijing DeHeng (Shenzhen) Law Office, with doctor
degree of Jilin University Law School and Economics postdoctoral of Jilin University Business School, and
once studied in Faculty of Law of Waseda University. Mr. Yu is Shenzhen Fifth People's Congress legislative
consultant, the fourth, fifth and sixth deputies of Shenzhen city for NPC, the fourth, fifth and sixth members
of the NPC Law Committee, the decision-making advisory committee of Shenzhen, Shenzhen Municipal
People's Government (Legislative Affairs) legal Expert Advisory Committee, arbitrator for China International
Economic and Trade Arbitration Commission and Shenzhen Arbitration Commission, executive director for
Shenzhen City Law Sixth Council, and part-time tutor for Peking University Law School and Northeast
University of Finance etc. He is also the Independent Director for Shenzhen Jinjia Color Printing. In May 2013,
he has served as an independent director of the Company.
Supervisor Convernor: Dr. Li Hongwei, has doctor degree in system engineering of South China University of
Technology. He successively held the posts of manager, board secretary, director and deputy GM of Chengdu
Galaxy Power Co., Ltd. since 1989. He was the board secretary and deputy GM of Shenzhen Seg Dasheng Co.,
Ltd. since 2001. He was deputy GM and GM of Business Management Department of China Nanshan
Development (Group) Incorporation in 2006. Now he is COO of Nanshan Group. He has served as supervisor
of the Company since April 2011 and supervisor convenor since 2016 June.
Supervisor: Mr. Zeng Jun, Bachelor of Anhui University, Master of business law and business law in
University of London, holding qualification of Chinese lawyers, notaries, industrial and commercial
registration agents, state-owned enterprises, project bidding lawyers and securities lawyers, worked in Lei
Yanping Law Firm Junhe Law Firm and etc. During the period, he has worked in many firms in London and
Hongkong appointed by Chinese Ministry of Justice. He is General Counsel& Senior Vice Chairman of Global
Logistic Properties. At present, he served as supervisor of the Company since 2016 June.
Supervisor: Mr. Shang Yuexiang, University degree, successively worked in Jiangxi University of Science and
Technology, Jingdezhen Ceramic Institute, Assistant Manager of Enterprise Management in Nanshan Group,
50
ANNUAL REPORT FOR YEAR 2016
Operation Manager in Shenzhen Chiwan wharf Limited, Deputy General Manager of Shenzhen Chixiao
Combination House Co. Ltd., Deputy General Manager of Shenzhen Chiwan Port Container Co. Ltd., General
Manager of Southern China Building Materials (Shenzhen) Limited, Director& General Manager of Yahgee
Building (Group) Ltd., and General Manager of Hefei Baowan International Logistics Center Co. Ltd. At
present, he is manager of Enterprise Management Department of Nanshan Group and served as supervisor of
the Company since 2016 June.
Supervisor: Mr. Song Huibin, accounting degree of Xi'an Institute of Highway Transportation, Senior
Accountant and Certified Tax Accountant, successively worked in Xi'an Institute of Highway Transportation,
as Financial Manager of Shenzhen Asia Bicycle Factory Co., Ltd., Deputy Finance Controller of Nanshan
Cuihengcun Catering Services Limited, and Deputy Finance Manager of Nansh Group. At present, he is
Auditing Manager of Nanshan Group and served as supervisor of the Company since 2016 June.
Employee Supervisor: Ms Sun Yuhui, bachelor degree in Economics, Lanzhou University, accountants of
Chinese Certified Tax Agents. Since August 2003, she worked as supervisor of financial department in
Nanshan Group. Since July 2010, she has served in Shenzhen Nanshan Real Estate Development Co., Ltd as
deputy manager/manager of Finance Department. At present, she is the financial manager of the Company.
And she served as employee supervisor of the Company since 2013 May.
Employee Supervisor: Ms Cao Lirong, MBA of Hong Kong Baptist University, She joined the Company since
March 2002 and worked as senior officer of administration department and vice manager of administration and
HR for offshore oil sector. At present, she is the manager of administration and HR for offshore oil sector. And
she served as employee supervisor of the Company since 2016 June.
Deputy GM/Chief Engineer: Dr. Wang Jianjiang, has doctor degree of Hydraulic Structure Engineering of
Wuhan Water Resources and Electric University. He worked in Xinjiang Shihezi University (the original
Shihezi Agricultural College) from Mar 1985 to Aug 1992. He studied in Wuhan Water Resources and Electric
University from Sept 1992 to June 1995 and got doctor degree of Hydraulic Structure Engineering. Since 1996,
he worked in planning department, office of general engineer and department of planning and construction
management of China Nanshan Development (Group) Incorporation as engineer, assistant manager and
department manager successively. He is Deputy GM & Chief Engineer of the Company since February 2011.
Deputy GM & CFO& Board Secretary: Mdm. Yu Zhongxia, has bachelor of Shan’xi Finance and Economics
College with the qualification of Accountant and senior international financial manager. Mdm. Yu has taught
at Xi’an Road Management College. She joined the Company in 1992 and held the posts of Financial Manager
Assistant, Financial Manager of CSE, System/Audit Manager Assistant, Deputy Financial Manager, Financial
Manager, Assistant GM, Deputy CFO and CFO. She is Deputy GM & CFO of the Company. At present, she
also served as Board Secretary since April 2071.
Deputy GM: Mr. Zhang Xiang, master degree, graduated from Wuhan Marine Traffic Engineering College.
He successively served as the post of supervisor, assistant manager, deputy manager of operation department
of the Company. From October 2005 to May 2015, he served as deputy GM and GM of Guangzhou Baowan.
Since February 2011, he was GM of Offshore Oil Logistics Service Division of the Company and Shenzhen
Baowan. He was once the supervisor of the Board of Supervisors of the Company. Currently, he is Deputy
GM of the Company since April 2014.
Posts in Shareholder’s Company
√ Applicable □ Inapplicable
Whether receiving
Starting Expiration
Name Company Name Position Date remuneration from
Date shareholder
CHINA NANSHAN
Tian Junyan DEVELOPMENT (GROUP) General Manager 2011.01.04 Yes
INCORPORATION
CHINA NANSHAN
Zhang Jianguo DEVELOPMENT (GROUP) Financial Controller 2013.01.01 Yes
INCORPORATION
CHINA NANSHAN
Deputy General
Zhang Jianguo DEVELOPMENT (GROUP) 2015.02.13 Yes
INCORPORATION Manager
51
ANNUAL REPORT FOR YEAR 2016
CHINA NANSHAN
Chen Hong DEVELOPMENT (GROUP) Chief Engineer 2007.09.12 Yes
INCORPORATION
CHINA NANSHAN
Chief Operating
Li Hongwei DEVELOPMENT (GROUP) 2014.02.21 Yes
INCORPORATION Officer
Manager of
CHINA NANSHAN
Enterprise
Shang Yuexiang DEVELOPMENT (GROUP) 2014.07.18 Yes
INCORPORATION Management
Department
CHINA NANSHAN
Manager of Auditing
Song Huibin DEVELOPMENT (GROUP) 2012.03.27 Yes
INCORPORATION Department
CHINA NANSHAN
Employee
Song Huibin DEVELOPMENT (GROUP) 2015.06.19 Yes
INCORPORATION Supervisor
Other Posts
√ Applicable □ Inapplicable
Whether
Starting Expiry receiving
Name Company Name Position Date of Date of remuneration
Tenure Tenure from other
companies
Tian Junyan Shenzhen New Nanshan Holding (Group) Co., Ltd. Chairman 2011.4.21 No
Tian Junyan HOMWON Capital Management Co., Ltd Chairman 2013.7.5 No
Tian Junyan China Development Finance Company Limited Chairman 2013.7.24 No
Zhuge Wenjing Global Logistic Properties Co-president 2016.06.06 Yes
Wang Shiyun Blogis Holding Co., Ltd. Chairman 2015.6.30 No
Wang Shiyun China Development Finance Company Limited Director 2015.10.29 No
Zhang Jianguo Chiwan Wharf Holdings Co., Ltd. Director 2013.01.31 No
Zhang Jianguo Blogis Holding Co., Ltd. Vice Chairman 2013.08.08 No
Zhang Jianguo Shenzhen Chiwan Oriental Logistics Ltd Supervisor 2015.06.03 No
Zhang Jianguo China Development Finance Company Limited Vice Chairman 2015.08.03 No
Zhang Jianguo Shenzhen New Nanshan Holding (Group) Co., Ltd. Vice Chairman 2015.08.27 No
Shenzhen Chiwan Oriental Supply Chain Management Chairman
Zhang Jianguo 2016.05.30 No
Ltd
Zhang Jianguo Hefei Baowan International Logistics Centre Co., Ltd. Chairman 2017.01.10 No
Chief
Investment
Chen Lei Global Logistic Properties 2015.10.29 Yes
Officer& Senior
Vice President
General
Shu Qian Blogis Holding Co., Ltd. 2015.06.30 No
Manager
Shu Qian Shenzhen Chiwan Oriental Logistics Ltd Director 2015.06.03 No
President and
He Liming China Federation of Logistics and Purchasing 2010.11.02 2021.09.26 Yes
Party Secretary
He Liming China Society of Logistics President 2006.11.11 2020.11.12 No
He Liming China International Trade Promotion Logistics Industry President 2010.11.02 2020.11.03 No
He Liming Asia Pacific Logistics Alliance Vice Chairman 2015.01.01 2019.01.01 No
International Alliance Director of Purchasing and Supply
He Liming Director 2017.01.01 2020.01.01 No
Management
52
ANNUAL REPORT FOR YEAR 2016
Managing
Chen Shujun Shenzhen Guangshen Certified Accountant 1998.1.1 Yes
Partner
legal
Chen Shujun Forensic Accounting Guangdong Guangzhou-Shenzhen 2002.12.1 No
representative
Independent
Chen Shujun Funde Insurance Holding 2015.07.01 Yes
Director
Independent
Chen Shujun Funde Property & Casualty Insurance Co., Ltd. 2015.06.04 Yes
Director
Nuode Investment Co., Ltd. Independent
Chen Shujun 2017.04.06 Yes
Director
Chongqing Cybernaut Equity Investment Fund
Chen Shujun Director 2016.02.26 No
Management
Shenzhen Cybernaut Central European Fund Investment
Chen Shujun Director 2017.03.01 No
Limited
Yu Xiufeng Beijing DeHeng (Shenzhen) Law Office Senior Partner 2002.08.01 Yes
Independent
Yu Xiufeng Hybio Pharmaceutical 2010.06.17 2016.04.26 Yes
Director
Independent
Yu Xiufeng Shenzhen Jinjia Color Printing 2014.03.13 Yes
Director
Li Hongwei Chixiao Enterprise Co., Ltd. Director 2011.01.24 No
Li Hongwei Blogis Holding Co., Ltd. Director 2011.07.20 No
Li Hongwei China Development Finance Company Limited Supervisor 2012.12.12 No
Li Hongwei Shenzhen Chiwan Oriental Logistics Ltd Director 2013.05.13 No
Li Hongwei Hefei Baowan International Logistics Centre Co., Ltd. Vice Chairman 2015.08.06 2017.02.28 No
Li Hongwei Shenzhen New Nanshan Holding (Group) Co., Ltd. Director 2015.09.22 No
General
Counsel&
Zeng Jun Global Logistic Properties 2011.04.01 Yes
Senior Vice
Chairman
Shang Yuexiang Chixiao Enterprise Co., Ltd. Director 2015.12.09 No
Shang Yuexiang Shenzhen New Nanshan Holding (Group) Co., Ltd. Supervisor 2015.12.22 No
Song Huibin Blogis Holding Co., Ltd. Supervisor 2016.03.11 No
Song Huibin Chixiao Enterprise Co., Ltd. Supervisor 2015.12.09 No
Song Huibin China Development Finance Company Limited Supervisor 2012.12.12 No
Penalty of the Current Directors, Supervisors and Senior Management Left during the Report Period over the
Past 3 Years
√ Applicable □ Inapplicable
Name Position Reason Punishment Type Conclusion Disclosure Date Disclosure Index
Short-
Mr.Fan Informed Announcement
Director term Other 2015.12.29
Zhaoping Criticism No.2015-72
trading
Particulars about Alleged illegal Proceeds
Alleged Illegal Proceeds
Name Alleged illegal proceeds back time
Amount(RMB)
Former Director Mr. Fan Zhaoping 2015.12.31 40,655.38
IV. The Remuneration of Directors, Supervisors and Senior Management
Decision-making procedures, basis for determination and actual payment of the remuneration to directors,
53
ANNUAL REPORT FOR YEAR 2016
supervisors and senior management
1. Independent directors’ allowance is approved by General Shareholders’ Meeting. The remuneration of senior
management is approved by Board of Directors. Independent Directors’ allowance is RMB 100,000 per year
2. Senior management is appointed by the Board of Directors. Remuneration standard for senior management
is decided by their abilities, performance, etc.
3. Directors, Supervisors and Senior Management will be paid monthly and the rest bonus will be decided by
their abilities, performance, etc. (Mr. He Liming, Independent Director, has not received independent director
allowance.)
Remuneration to directors, supervisors and senior management in the report period
Unit: RMB ‘0000
Remuneration Whether Gained
Office from the Remuneration from
Name Position Gender Age Company before Related Party of the
Status
Tax Company
Tian Junyan Chairman Male 55 In Office 0 Yes
Zhuge Wenjing Vice Chairman Female 39 In Office 0 Yes
Wang Shiyun Director/ GM Male 50 In Office 147.51 No
Zhang Jianguo Director Male 52 In Office 0 Yes
Chen Lei Director Male 40 In Office 0 Yes
Chen Hong Director Male 57 In Office 0 Yes
Shu Qian Director Male 40 In Office 93.51 No
He Liming Independent Director Male 63 In Office 0 No
Chen Weijie Independent Director Male 66 In Office 10 No
Chen Shujun Independent Director Male 49 In Office 10 No
Yu Xiufeng Independent Director Male 52 In Office 10 No
Li Weihong Supervisor Convenor Male 49 In Office 0 Yes
Zeng Jun Supervisor Male 48 In Office 0 Yes
Shang
Supervisor Male 53 In Office 0 Yes
Yuexiang
Song Huibin Supervisor Male 51 In Office 0 Yes
Sun Yuhui Employee Supervisor Female 42 In Office 61.8 No
Cai Lirong Employee Supervisor Female 42 In Office 7.32 No
Wang Jianjiang Deputy GM Male 59 In Office 141.32 No
Deputy GM/ Financial
Yu Zhongxia Controller/Board Female 53 In Office 126.99 No
Secretary
Zhang Xiang Deputy GM Male 52 In Office 103.61 No
Fan Zhaoping Director Male 62 Out of Office 0 Yes
Mingzhi Mei Vice Chairman Male 44 Out of Office 0 Yes
Kent Yang Director Male 48 Out of Office 0 Yes
Huang Ronghui Supervisor Male 60 Out of Office 18.71 No
Appointment
Song Tao Board Secretary Male 38 37.82 No
and Removal
Total -- -- -- -- 768.59 --
54
ANNUAL REPORT FOR YEAR 2016
Incentive equity to directors, supervisors or/and senior management in the report period.
□ Applicable √ Inapplicable
V. About Staff
1. Number of Employees, Professional Structure and Education
Number of Employees of Parent Company 282
Number of Employees of Main Subsidiaries 232
Total Number of Employees 514
Number of Taking Remuneration from the Company 514
Number of Retiree to Whom the Company needed to
0
Pay Salary
Professional Structure
Professional Structure Number
Manufacturing Employee 208
Sales Employee 80
Technical Employee 46
Financial Employee 55
Administrative Employee 125
Total 514
Education
Education Number
Master or above 50
Bachelor 195
Junior College 95
Junior College below 174
Total 514
2. Remuneration Policy for Staff
In the report period, staff’s salary was paid monthly according to the Company’s related regulation. At the end
the year, bonus was paid by the Company’s profitability and staff’s performance.
3. Training Program
To open up E-learning for core team, promote studies concerned about business, and safety management
training course for new employees.
4. Labor Outsourcing
√ Applicable □ Inapplicable
Hours of Labor Outsourcing 879,300
Total Remuneration of Hours of Labor Outsourcing
29,017,166.00
(RMB)
55
ANNUAL REPORT FOR YEAR 2016
PART IX Corporate Governance
Ⅰ. Corporate Governance
1. General
During the report period, the Company had continuously observed Company Law, Securities Law, and
Guidelines of Corporate Governance for Listed Company and relevant regulations to improve and enhance its
corporate governance.
(1) Shareholders and shareholders’ general meeting: the Company ensures that all the shareholders, especially
minority shareholders, are equal and could enjoy their full rights. The Company called and held shareholders’
general meeting strictly in compliance with the Rules for Shareholders’ General Meeting.
(2) Relationship between the controlling shareholder and the Company: controlling shareholder of the
Company acted in line with rules during the reporting period, did not intervened the decisions, productions or
operations of the Company directly or indirectly in exceeding the authority of the shareholders’ general meeting,
and did not appropriate any funds of the Company.
(3) Directors and the Board of Directors: the Company elected directors in strict accordance with the Articles
of Association. Number and composition of members of the Board were in compliance with relevant laws and
regulations; all Directors attend Board meetings and shareholders’ general meeting in a serious and responsible
manner and participated enthusiastically relevant training so as to know better about laws and regulations as
well as the rights, obligations and liabilities of Directors.
(4) Supervisors and the Supervisory Committee: number and composition of the members of the Supervisory
Committee were in compliance with the requirements of laws and regulations. The supervisors diligently and
seriously performed their duties and obligations, took responsible attitudes to all shareholders and supervised
the financial affair as well as the performance by the Company’s Directors, managers and other senior
executives of their duties in compliance with the laws and regulations.
(5) Stakeholders: the Company fully respected and safeguarded the legal rights and interests of the banks and
other creditors, staff, consumers and other stakeholders so as to develop the Company in a consistent and
healthy way.
(6) Information disclosure and transparency: the Company authorized the Company Secretary to take charge
of information disclosure, and the Chairman as well as related Directors to meet with shareholders. The
Company disclosed relevant information in a true, accurate, complete and timely way in strict accordance with
the requirements of laws, regulations and the Articles of Association, formulated the Management Rules on
Information Disclosure, the Management System on Inside Information and Insiders and the Rules on the
Management of Investors Relations, and designated Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn as its newspaper and website for information disclosure, so as to ensure all
shareholders have equal opportunity to obtain the information.
(7) Non-normative Corporate Governance
According to the requirements of Ministry of Finance and Accounting Standards for Enterprises, the Company
provided financial reports monthly to its controlling shareholders, Nanshan Group, for compiling consolidated
financial statements. In accordance with requirements of the Supplementary Notice on Strengthened
Supervision of Non-Standard Behaviors in Corporate Governance Including Providing Undisclosed
Information to Controlling Shareholders and Effective Controller, the Board of Directors reviewed and
56
ANNUAL REPORT FOR YEAR 2016
approved the Resolution on Regular Submission of Financial Statements to the Controlling Shareholders on
the Second Tele-communication Meeting of the Fifth Board of Directors. Nanshan Group and the Company
signed the commitment letter respectively, and the Company provided the insiders’ list to CSRC Shenzhen
Bureau for record as well.
2 . Preparation and Implementation of the Registration Management System for Insiders
On October 28, 2009, the Seventh Session of the Fifth Board of Directors reviewed and approved the
registration system of undisclosed information insiders. (Please find the details on www.cninfo.com.cn on
October 30, 2009) In the report period, the Company implemented the registration system strictly and
registered the insiders timely.
In the report period, directors, supervisors and the senior management of the Company did not buy or sell
shares against regulations.
Does there exist any difference in compliance with the corporate governance, the PRC Company Law and the
relevant provisions of CSRC.
□ Yes √ No
There exist no difference in compliance with the corporate governance, the PRC Company Law and the
relevant provisions of CSRC.
II. Particulars about the Company’s separation from the controlling shareholder in respect
of business, personnel, assets, organization and financial affairs
The Company is absolutely independent in business, personnel, assets, finance and organization from its
controlling shareholder. Details are set out as follows.
Separation in business: The Company has its own assets, personnel, qualifications and ability to carry out
operating activities and is able to operate independently in the market.
Separation in personnel: The Company has basically separated its staff from its controlling shareholder. No
senior management staff of the Company holds positions at controlling shareholder of the Company.
Separation in assets: The Company possesses its own self-governed assets and domicile. Separation in
organization: The Company has established and improved the corporate governance structure according to law
and has an independent and complete organizational structure.
Separation in finance: The Company has set up its own financial department as well as normative accounting
system and the financial management system on its subsidiaries. The Company has its own bank accounts and
does not share the same bank account with its controlling shareholder. The Company has been paying tax in
accordance with the laws and regulations on its own behalf.
III. Horizontal Competition
□ Applicable √ Inapplicable
57
ANNUAL REPORT FOR YEAR 2016
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Report
Period
1. Particular about Shareholders’ Meeting in the Report Period
Proportion of Convening Disclosure Disclosure Index
Sessions Type Investors’ Date Date
Participation
Special
First Extraordinary Shareholders’ Announcement No.
Shareholders’ 71.72% 2016.01.29 2016.01.30
Meeting in 2016 2016-15
General Meeting
Special
Second Extraordinary Shareholders’ Announcement
Shareholders’ 45.21% 2016.06.03 2016.06.04
Meeting in 2016 No.2016-46
General Meeting
Annual
Annual General Meeting for Year Announcement
Shareholders’ 72.89% 2016.06.28 2016.06.29
2015 No.2016-59
General Meeting
Special
Third Extraordinary Shareholders’ Announcement
Shareholders’ 74.75% 2016.08.04 2016.08.05
Meeting in 2016 No.2016-84
General Meeting
Special
Fourth Extraordinary Shareholders’ Announcement
Shareholders’ 72.18% 2016.09.23 2016.09.24
Meeting in 2016 No.2016-118
General Meeting
Special
Fifth Extraordinary Shareholders’ Announcement
Shareholders’ 71.69% 2016.12.20 2016.12.21
Meeting in 2016 No.2016-137
General Meeting
2. Special Shareholders’ General Meeting Applied by the Preferred Stockholder with Restitution of
Voting Right
□ Applicable √ Inapplicable
V. Performance of Independent Directors
1. Attendance of Board Meeting and Shareholders’ Meeting
Attendance of Board Meeting
Non-attendance
Meetings
Attendance in Attendance by Attendance by in person for
Name required to be Absence rate
person facsimile proxy two consecutive
present
times
He Liming 18 1 16 1 0 N/A
Chen Weijie 18 2 16 0 0 N/A
Chen Shujun 18 2 16 0 0 N/A
Yu Xiufeng 18 1 16 1 0 N/A
Number of Shareholders’ Meeting
6
Attended
2. Objection of Independent Directors on Some Relevant Issues
Objection of independent directors on some relevant issues
□ Yes √ No
Independent directors proposed no objection against the relevant matters in the report period.
3. Other Note to the Performance of Independent Directors
During the report period, the independent directors of the Company was in strictly accordance with relevant
laws, regulations and the "Articles of Association", fully concerned the company operation and performs their
duties independently, which affected the company's systems to improve decision-making and other aspects of
58
ANNUAL REPORT FOR YEAR 2016
daily operations. They made many valuable professional advices on the matters requiring the independent
directors of the Company during the report period to comment on the issue of independence, impartiality advice
for improving corporate oversight mechanisms to safeguard the legitimate interests of the company and all its
shareholders to play its due role.
VI. Performance of Special Committees under the Board of Directors in the Report Period
1. Performance of Audit Committee
(1) Reviewing the financial report and presenting written opinion
According to relevant regulations, the Audit Committee reviewed the financial report and presented written
opinion. The Company strictly implemented Articles of Association and other regulations and ensured the
objectivity and authenticity of financial report.
After the auditor submitted the draft of audit report, the committee reviewed the finance report and presented
written opinion. The compiling basis, principles and method of financial report followed the relative
regulations and fairly reflected the financial status and operation results of the Company for Year 2015.
(2) Maintaining regular communication with auditors and following progress of auditing closely
In the audit period, the committee maintained regular communication with financial department, followed the
progress of auditing closely and held a meeting discussed with the auditors about auditing plan, scope, focus
points and the incurred problems and resolutions.
(3) Summarizing the auditor’s work
The committee summarized the work of auditor and thought that they completed the annual audit work in plan.
(4) Opinions on hiring an accounting firm
Recommend the Company to hire Deloitte Touche Tohmatsu Limited for 2016 annual audit and internal control
audit.
2. Performance of Nomination and Remuneration Committee
(1)During the report period, the committee reviewed Tian Junyan, Zhang Jianguo, Chen Hong, Wang Shiyun,
Shu Qian, Kent Yang, Chen Lei, Zhuge Wenjing’s resume on their education background, work experience
and physical condition and agreed to submit proposal on appointment of the above mentioned candidates as
Directors for shareholders’ meeting’s approval.
(2) During the report period, the committee reviewed salary of senior managers, and published the opinion on
senior manager compensation for year 2015.
3. Strategy and Development committee
During the period, the committee has deliberated and agreed to submit 3 years developing plan (2016-2018)
to the Board of Director for approval.
VII. Work of the Board of Supervisors
Did the Board of Supervisors find any risk existing in performing the supervision activities in the report
period?
□ Yes √No
The Board of Supervisors has no objection against any matters under supervision in the report period.
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ANNUAL REPORT FOR YEAR 2016
VIII. Examination and Incentive Mechanism for Senior Management
In the report period, the salaries of senior management were decided by their work performance, job description,
personal ability, the Company’s profit, etc.
IX. Internal Control
1. Particulars about Significant Defects Found in the Internal Control during Report
Period
□ Yes √ No
2. Internal Control Evaluation Report
Disclosure date of full internal control evaluation report 2017-04-20
Disclosure index of full internal control evaluation report www.cninfo.com.cn
The ratio of the total assets of units included in the scope of evaluation
accounting for the total assets on the company's consolidated financial 61.32%
statements
The ratio of the operating income of units included in the scope of evaluation
accounting for the operating income on the company's consolidated financial 97.88%
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Non-financial reporting deficiencies are
identified in accordance with the impact
on the effectiveness of business processes
and the possibility of occurrence.
If the possibility of deficiency occurrence
is small, it will reduce the work efficiency
Deficiencies with following or effects, or increase the uncertainty of
characteristics are identified as major effects, or make it deviate from the
deficiencies: senior management of the expected target and become a general
company makes fraud; internal deficiency; if the possibility of deficiency
supervisory body has not performed occurrence is rather high, it will
Qualitative criteria basic functions; financial reports have significantly reduce the work efficiency
serious misstatements or omissions; or effects, or significantly increase the
internal control environment related to uncertainty of effects, or make it
financial reports is invalid. significantly deviate from the expected
target and become a significant
deficiency; if the possibility of deficiency
occurrence is very high, it will seriously
reduce the work efficiency or effects, or
seriously increase the uncertainty of
effects, or make it seriously deviate from
the expected target and become a major
deficiency.
Affirm according to the amount Affirm according to the absolute amount
Quantitative standard potentially causing financial losses or of direct economic losses caused to the
accounting misstatements: (1) It is a company: (1) It is a general deficiency if
60
ANNUAL REPORT FOR YEAR 2016
general deficiency if the amount is less the amount is less than 0.8 million yuan
than 0.8 million yuan or less than 0.5% or less than 0.5% of annual operating
of annual operating profit; (2) It is a profit; (2) It is a significant deficiency if
significant deficiency if the amount is the amount is greater than 0.8 million
greater than 0.8 million yuan and less yuan and less than or equal to 1.5 million
than or equal to 1.5 million yuan or yuan or 0.5% - 1% of annual operating
0.5% - 1% of annual operating profit; profit; (3) It is a major deficiency if the
(3) It is a major deficiency if the amount amount is greater than 1.5 million yuan or
is greater than 1.5 million yuan or greater than 1% of annual operating
greater than 1% of annual operating profit;
profit.
Affirm according to the losses caused
by fraud to the company: (1) It is a
general deficiency if there is no loss; (2)
It is a significant deficiency if the loss is
less than or equal to 0.5 million yuan; 3)
It is a major deficiency if the amount is
greater than 0.5 million yuan.
Amount of significant defects
0
in financial reports
Amount of significant defects
0
in non-financial reports
Amount of important defects in
0
financial reports
Amount of important defects in
0
non-financial reports
X. Audit Report on Internal Control
√ Applicable □ Inapplicable
Audit opinion paragraphs in the Audit Report on Internal Control
Deloitte Touche Tohmatsu Certified Public Accountants LLP believed that Shenzhen Chiwan Petroleum Supply
Base Co., Ltd. has maintained effective internal control on financial report in all significant respects according to
the Basic Rules for Enterprise Internal Control and relevant regulations on 31 Dec. 2016.
Disclosure of Audit Report on Internal Control Disclosed
Disclosure date of the Audit Report on Internal Control April 20, 2017
Disclosure index of the Audit Report on Internal
www.cninfo.com.cn
Control
Type of Audit Report on Internal Control Standard Unqualified auditor's report
Whether there is significant defect in non-financial report No
Whether the CPAs firm issues an Audit Report on Internal Control with non-standard opinion or not?
□ Yes √ No
Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal
Report from the Board or not?
√ Yes □ No
61
ANNUAL REPORT FOR YEAR 2016
PART X Corporate Bonds
There was the public issued corporate bonds that listed on the stock exchange which neither to expire on the
approval quote date of the annual report nor to pay in full amount when expired.
Yes
1. Basic Information of the corporate bonds
Bond
Abbreviatio Interest Ways of Debt
Name Code Issue Date Due Date Balance
n Rate Service
(RMB 0000)
To pay interest
2012 corporate bonds of
once a year and
Shenzhen Chiwan 12 Chiwan
112140 2012.12.17 2019.12.17 57,000 5.78% to pay for the
Petroleum Supply Base Base Bonds
principal at one
Co., Ltd.
time
Exchange Place for the Listing or
Shenzhen Stock Exchange
Transfer of the Corporate Bonds
Eligibility Management of Investors Inapplicable
Situation of the Interest Payment of
On Dec 17, 2016, the Company has paid bonds interests in cash incurred from Dec 17, 2015
the Corporate Bonds during the
to Dec 16, 2016.
Report Period
Execution of relevant regulations if
the corporate bonds were affiliated
with the special regulations such as
Inapplicable
the options of the issuers or the
investors as well as exchangeable
regulations. (if applicable)
2. List of the Bonds Trustees and the Credit Rating Organization
Bonds Trustees：
Room 1608, China Life Insurance
Huarong Securities Co., Office Contact Yuan Contact
Name Building, Chaoyang District, 010-85556464
Ltd. Address Person Dong Number
Beijing
Credit Rating Organization Tracked and Rated the Corporate Bonds during the Report Period：
8F, An Ji Building, No. 760 South Xizang Road,
Name China Chengxin Securities Rating Co., Ltd. Office Address
Huangpu District, Shanghai
Explanation on
Change of Bonds
Trustees and the Inapplicable
Credit Rating
Organization
3. List of the Usage of the Raised Funds of the Corporate Bonds
Usage and Execution Process of the Bonds Raised
The Company used the raised funds strictly followed the regulation.
Funds of the Company
Closing Balance (RMB10,000’) 0
Operation of the Special Account of the Raised Funds The Company did not create special account for the bonds.
The usage of the raised funds whether met with the
committed usage, usage plans and other agreements on Yes
the specification.
4. List of the Rating of the Corporate Bonds Information
62
ANNUAL REPORT FOR YEAR 2016
CCXR maintained the credit rating of “12 Chiwan Base Bonds” of AA+ as well as the credit rating of the main
body of the Company of AA with the stable rating outlook at report period.
5. Credit Supplement Mechanism, Repayment Plans and Other Repayment Guarantee Measures of the
Corporate Bonds
At the report period, there were no changes of credit supplement mechanism, repayment plans or other
repayment guarantee measures of the Corporate Bonds.
The Company’s controlling shareholder, Nanshan Group, provided guarantee for the Corporate Bonds. By the
end of 2016, Nanshan Group’s net assets were RMB 8.99 billion; assets-liabilities ratio was 61.27%; return on
equity was 11.52%; current ratio was 138.20%; and quick ratio was 57.63%. The above-mentioned data was
unaudited. The amount of external guarantee of Nanshan Group was RMB 2.04 billion, accounted by 22.69%
of its net assets.
6. List of the Holder Conference of the Bonds during the Report Period
For being absorbed and merged by New Nanshan Holding, the Company has convened bonds’ holder
conference on Jul 21, 2016.
7. List of the Duties Performance of the Bonds Trustee during the Report Period
At the report period, bonds trustee performed their duties according to related regulation, including supervising
the usage of raised funds, continuously paying attention to the Company’s creditability, etc.
The Company has disclosed Entrusted Management Report of 2012 Corporate Bonds for Year 2015 published
on Jun 8, 2016, which is made and published by Huarong Securities Co., Ltd.
8. Major Accounting Data and Financial Index of the recent 2 years of the Company
Unit: RMB’0000
Item Y2016 Y2015 Changes (%)
EBITDA 42,642 45,803 -6.90%
Current Ratio 24.99% 42.00% -17.01%
Asset-liability Ratio 65.37% 63.30% 2.07%
Quick Ratio 24.95% 42.00% -17.05%
Total Debt Ratio of
8.64% 13.00% -4.36%
EBITDA
Times Interest Earned 1.35 1.79 -24.58%
Times Interest Earned of
4.64 3.59 29.25%
Cash
Times Interest Earned of
2.24 2.65 -15.47%
EBITDA
Loan Repayment Rate 100.00% 100.00% 0.00%
Interest Coverage 100.00% 100.00% 0.00%
Note to the year-on-year change of the relevant data
√ Applicable □ Inapplicable
Mainly due to liabilities increased by RMB 1.36 billion.
9. List of the Interest Payment of Other Bonds and Bonds Financing Instruments during the Report
Period
63
ANNUAL REPORT FOR YEAR 2016
The Company have paid interest of RMB 400 million’s medium-term notes at the reporting period. Since this
medium-term notes have been expired on March 7, 2017, the Company has paid principal and interests of the
medium-term notes timely.
10. List of the Acquired Bank Credit Lines, Usage and Repayment of the Bank Loans
During the report period, the Company has acquired newly added bank credit lines of RMB 1,500 million,
made use of credit limit of RMB 1,526 million and paid back loans of RMB 1,010 million.
11. List of the Execution of the Agreement or the Commitment Related to the Corporate Bonds Raising
Specification during the Report Period
The raised funds of RMB 570 million had used up in 2013.
12. Significant Events Occurred during the Report Period
The Company has disclosed particular about accumulated newly loans which is over 20% of the Company’s
net assets at the end of last year, according to regulators’ requirements. Please find details on www.cninfo.com
dated on Sep 7, 2016 and Jan 7, 2017.
13. Whether There Was Guarantor of the Corporate Bonds
√ Yes □No
Whether the Guarantor of the Corporate Bonds was Business Entity or Other Organizations
√ Yes □No
Whether Disclose Guarantor’s Financial Report.
√ Yes □No
64
PART XI Financial Report (Attachment)
Opinion Type of Audit Report Standard and Unqualified
Signature Date of Audit Report April 18, 2017
Name of Audit Organization Deloitte Touche Tohmatsu Certified Public Accountants LLP
No. of Audit Report De Shi Bao(Shen) Zi (17) No. P01971
Name of Certificated Accountants Li Weihua, Jiang Qishen
PART XII Documents Available for Verification
1. Financial Report carrying the signature of Chairman, and other relative persons in charge.
2. Original copy of Auditor’s Statements sealed by CPA and signed by registered accountants.
3. Original copies of all the documents disclosed on the newspapers specified by the China Securities Regulatory
Commission.
Board of Directors
Shenzhen Chiwan Petroleum Supply Base Co., Ltd.
April 20, 2017
65
SHENZHEN CHIWAN
PETROLEUM SUPPLY BASE CO., LTD.
Financial Statements and Auditor's Report
for the year ended 31 December 2016
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
Contents Pages
Auditor's report 1-2
The Company's and consolidated balance sheets 3-4
The Company and consolidated income statements 5-6
The Company and consolidated cash flow statements 7-8
The Company and consolidated statements of changes in shareholders' equity 9 - 10
Notes to the financial statements 11 - 101
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (17) No. P01971
TO THE SHAREHOLDERS OF SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO., LTD.
We have audited the accompanying financial statements of Shenzhen Chiwan Petroleum Supply Base
Co., Ltd. (the "Company"), which comprise the Company's and consolidated balance sheets as at 31
December 2016, and the Company's and consolidated income statements, the Company's and
consolidated statements of changes in shareholders' equity and the Company's and consolidated cash
flow statements for the year then ended, and the notes to the financial statements.
1. Management's responsibility for the financial statements
Management of the Company is responsible for the preparation and fair presentation of these financial
statements. This responsibility includes: (1) preparing the financial statements in accordance with
Accounting Standards for Business Enterprises to achieve fair presentation of the financial statements;
(2) designing, implementing and maintaining internal control which is necessary to enable that the
financial statements are free from material misstatement, whether due to fraud or error.
2. Auditor's responsibility
Our responsibility is to express an audit opinion on these financial statements based on our audit. We
conducted our audit in accordance with China Standards on Auditing. Those Standards on require that
we comply with the Code of Ethics for Chinese Certified Public Accountants and plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing audit procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error. In making those risk assessments, we consider the internal control relevant to the
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
1
3. Opinion
In our opinion, the financial statements of the Company present fairly, in all material respects, the
Company's and consolidated financial position as of 31 December 2016, and the Company's and
consolidated results of operations and cash flows for the year then ended in accordance with
Accounting Standards for Business Enterprises.
Deloitte Touche Tohmatsu Certified Chinese Certified Public Accountant
Public Accountants LLP
Shanghai, China Li, Weihua
Chinese Certified Public Accountant
Jiang Qishen
18 April 2017
The auditor's report and the accompanying financial statements are English translations of the Chinese auditor's report
and financial statements prepared in accordance with Accounting Standards for Business Enterprises. These financial
statements are not intended to present the financial position and results of operations and cash flows in accordance with
accounting principles and practices generally accepted in other countries and jurisdictions. Where the English version
does not conform to the Chinese version, the Chinese version prevails.
2
AT 31 DECEMBER 2016
Consolidated Balance Sheet
Unit: RMB
ITEM Notes Closing balance Opening balance ITEM Notes Closing balance Opening balance
Current Assets: Current Liabilities:
Cash and bank balances (V)1 524,609,097.58 321,121,926.73 Short-term borrowings (V)17 850,000,000.00 300,000,000.00
Accounts receivable (V)2 43,862,804.61 50,257,814.22 Notes payable (V)18 16,200,019.20 -
Prepayments (V)3 748,064.45 435,877.51 Accounts payable (V)19 11,500,505.03 13,502,745.52
Interest receivable (V)4 423,404.92 1,138,739.73 Receipts in advance (V)20 9,185,065.04 4,294,109.24
Employee benefits
Other receivables (V)5 63,863,606.97 58,666,231.60 (V)21 21,162,917.90 26,233,258.02
payable
Inventories (V)6 961,855.72 914,543.44 Taxes payable (V)22 30,107,734.45 20,937,276.95
Other current assets (V)7 14,424,379.64 235,000,000.00 Interest payable (V)23 23,856,299.00 28,404,479.52
Total Current Assets 648,893,213.89 667,535,133.23 Other payables (V)24 437,522,424.61 480,066,219.49
Non-current liabilities
Non-current Assets: (V)25 633,057,978.40 707,396,728.40
due within one year
Long-term equity
(V)8 602,194,915.06 582,600,360.74 Other current liabilities (V)26 564,000,000.00 6,000,000.00
investments
Total Current
Investment properties (V)9 1,606,049,338.07 1,425,593,724.71 2,596,592,943.63 1,586,834,817.14
Liabilities
Fixed assets (V)10 877,096,096.64 842,722,056.06 Non-current Liabilities:
Construction in progress (V)11 601,906,964.62 368,965,477.50 Long-term borrowings (V)27 1,186,288,100.45 489,834,250.45
Intangible assets (V)12 2,245,211,656.35 1,450,042,826.68 Bonds payable (V)28 568,641,500.00 967,159,500.00
Development expenditure (V)13 1,330,674.42 - Long-term payables (V)29 - 251,417,853.31
Goodwill (V)14 11,133,118.55 - Deferred income (V)30 49,599,079.39 51,251,151.07
Other non-current
Deferred tax assets (V)15 24,317,786.92 28,877,355.41 (V)31 511,018,207.18 226,367,558.34
liabilities
Other non-current assets (V)16 930,907,761.60 277,619,704.84 Deferred tax liabilities (V)15 22,812,085.88 -
Total Non-current
Total Non-current Assets 6,900,148,312.23 4,976,421,505.94 2,338,358,972.90 1,986,030,313.17
Liabilities
TOTAL LIABILITIES 4,934,951,916.53 3,572,865,130.31
SHAREHOLDERS'
EQUITY:
Share capital (V)32 230,600,000.00 230,600,000.00
Capital reserve (V)33 234,141,186.09 234,141,186.09
Other comprehensive
(V)34 652,079.14 652,079.14
income
Special reserve (V)35 6,774,707.73 5,941,771.48
Surplus reserve (V)36 318,603,562.42 317,245,288.81
Unappropriated profits (V)37 966,064,644.53 965,504,851.33
Total shareholders' equity
attributable to equity 1,756,836,179.91 1,754,085,176.85
holders of the Company
Minority interests 857,253,429.68 317,006,332.01
TOTAL
SHAREHOLDERS' 2,614,089,609.59 2,071,091,508.86
EQUITY
TOTAL LIABILITIES
AND
TOTAL ASSETS 7,549,041,526.12 5,643,956,639.17 7,549,041,526.12 5,643,956,639.17
SHAREHOLDERS'
EQUITY
The accompanying notes form an integral part of the financial statements.
The financial statements on pages 3 to 101 were signed by the following:
Tian Junyan Yu Zhongxia Sun Yuhui
Legal Representative Chief Financial Officer Head of Accounting Department
3
AT 31 DECEMBER 2016
Balance Sheet of the Company
Unit: RMB
ITEM Notes Closing balance Opening balance ITEM Notes Closing balance Opening balance
Current Assets: Current Liabilities:
Cash and bank balances (XIV)1 14,320,382.62 28,808,779.96 Short-term borrowings 800,000,000.00 300,000,000.00
Accounts receivable (XIV)2 22,179,847.58 22,290,192.64 Accounts payable 10,800,195.25 13,115,420.11
Employee benefits
Prepayments 199,347.18 174,357.15 8,499,705.90 17,261,742.30
payable
Interest receivable - 1,031,342.47 Taxes payable 1,325,799.55 2,508,111.41
Other receivables (XIV)3 458,310,323.30 1,519,389,018.64 Interest payable 22,814,519.98 28,118,306.33
Inventories 666,721.31 665,307.48 Other payables 85,907,775.53 67,373,561.98
Non-current liabilities due
Other current assets - 235,000,000.00 401,349,351.16 701,349,351.16
within one year
Total Current Assets 495,676,621.99 1,807,358,998.34 Other current liabilities (XIV)10(2) 220,000,000.00 -
Non-current Assets: Total Current Liabilities 1,550,697,347.37 1,129,726,493.29
Long-term equity
(XIV)4 3,235,207,239.36 1,486,226,120.45 Non-current Liabilities:
investments
Investment properties 115,535,029.89 121,605,608.97 Long-term borrowings (XIV)5 378,824,302.04 181,224,302.04
Fixed assets 53,000,328.21 62,672,792.29 Bonds payable (V)28 568,641,500.00 967,159,500.00
Construction in Other non-current
2,626,533.00 2,600,283.00 255,018,207.18 16,367,558.34
progress liabilities
Total Non-current
Intangible assets 276,936,159.10 292,794,849.40 1,202,484,009.22 1,164,751,360.38
Liabilities
Deferred tax assets - 9,635,782.89 TOTAL LIABILITIES 2,753,181,356.59 2,294,477,853.67
Other non-current SHAREHOLDERS'
3,100,849.21 255,366.60
assets EQUITY:
Total non-current assets 3,686,406,138.77 1,975,790,803.60 Share capital (V)32 230,600,000.00 230,600,000.00
Capital reserve 204,534,849.49 204,534,849.49
Special reserve 6,468,869.88 5,775,987.68
Surplus reserve (V)36 318,603,562.42 317,245,288.81
Unappropriated profits 668,694,122.38 730,515,822.29
TOTAL
SHAREHOLDERS' 1,428,901,404.17 1,488,671,948.27
EQUITY
TOTAL LIABILITIES
AND
TOTAL ASSETS 4,182,082,760.76 3,783,149,801.94 4,182,082,760.76 3,783,149,801.94
SHAREHOLDERS'
EQUITY
The accompanying notes form an integral part of the financial statements.
4
FOR THE YEAR ENDED 31 DECEMBER 2016
Consolidated Income Statement
Unit: RMB
Amount for the Amount for the
ITEM Notes current period prior period
I. Operating income (V)38 677,791,331.11 650,279,516.34
Less: Operating costs (V)38 299,908,256.18 297,002,514.88
Business taxes and levies (V)39 46,306,467.44 36,184,168.56
Selling expenses (V)40 1,077,360.05 1,794,630.86
General and administrative expenses (V)41 116,607,241.20 95,531,527.18
Financial expenses (V)42 181,754,411.70 165,115,346.59
Impairment losses of assets (V)43 (98,698.65) 975,282.77
Add: Investment income (V)44 33,786,630.43 75,110,506.18
Including: Income from investments in associates
32,503,352.87 58,968,248.53
and joint ventures
II. Operating profit 66,022,923.62 128,786,551.68
Add: Non-operating income (V)45 9,294,068.84 13,638,110.34
Including: Income from disposal of non-current assets 277,164.06 83,782.26
Less: Non-operating expenses (V)46 2,950,166.24 1,520,513.80
Including: Losses from disposal of non-current assets 2,038,490.91 386,856.19
III. Gross profit 72,366,826.22 140,904,148.22
Less: Income tax expenses (V)47 51,321,853.41 30,231,553.32
IV. Net profit 21,044,972.81 110,672,594.90
Net profit attributable to owners of the Company 1,918,066.81 91,644,920.49
Profit or loss attributable to minority shareholders 19,126,906.00 19,027,674.41
V. Post-tax net value of other comprehensive income (V)48 - -
Post-tax net value of other comprehensive income attributable
- -
to owners of the Company
(I) Other comprehensive income that will not be reclassified - -
subsequently to profit or loss
(II) Other comprehensive income that will be reclassified - -
subsequently to profit or loss
1.Translation differences arising on translation of financial
- -
statements denominated in foreign currencies
Post-tax net value of other comprehensive income attributable
- -
to minority shareholders
VI. Total comprehensive income: 21,044,972.81 110,672,594.90
Total comprehensive income attributable to owners of the
1,918,066.81 91,644,920.49
Company
Total comprehensive income attributable to minority
19,126,906.00 19,027,674.41
shareholders
VII. Earnings per share:
(I) Basic earnings per share (V)49 0.01 0.40
(II) Diluted earnings per share Not applicable Not applicable
The accompanying notes form an integral part of the financial statements.
5
FOR THE YEAR ENDED 31 DECEMBER 2016
Income Statement of the Company
Unit: RMB
Amount for the Amount for the
ITEM Notes current period prior period
I. Operating income (XIV)6 141,522,223.95 166,417,996.03
Less: Operating costs (XIV)6 91,527,752.30 110,684,405.54
Business taxes and levies 3,055,108.82 6,113,907.38
General and administrative expenses 31,404,714.28 42,630,233.63
Financial expenses 102,366,098.62 67,316,429.52
Impairment loss of assets (7,800.16) (121,978.29)
Add: Investment income (XIV)7 35,605,507.92 75,925,377.89
Including: Income from investments in associates and
32,503,352.87 58,968,248.53
joint ventures
II. Operating profit (51,218,141.99) 15,720,376.14
Add: Non-operating income 2,518,993.03 4,118,579.72
Including: Income from disposal of non-current assets 103,965.11 61,791.60
Less: Non-operating expenses 2,086,487.37 153,636.63
Including: Losses from disposal of non-current assets 1,964,398.48 129,101.96
III. Gross profit (50,785,636.33) 19,685,319.23
Less: Income tax expenses 9,677,789.97 (7,480,153.00)
IV. Net profit (60,463,426.30) 27,165,472.23
V. Other comprehensive income post tax - -
VI. Total comprehensive income (60,463,426.30) 27,165,472.23
The accompanying notes form an integral part of the financial statements.
6
FOR THE YEAR ENDED 31 DECEMBER 2016
Consolidated Cash Flow Statement
Unit: RMB
Amount for the Amount for the prior
ITEM Notes current period period
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services 732,949,763.60 685,146,794.96
Cash receipts from tax refunds 989,803.75 21,649.57
Other cash receipts relating to operating activities (V)50(1) 34,223,967.51 45,379,011.23
Sub-total of cash inflows from operating activities 768,163,534.86 730,547,455.76
Cash payments for goods purchased and services received 138,716,936.68 132,064,953.07
Cash payments to and on behalf of employees 91,597,818.86 88,779,428.87
Payments of various taxes 122,395,080.48 138,290,674.66
Other cash payments relating to operating activities (V)50(2) 43,978,966.95 38,756,047.72
Sub-total of cash outflows from operating activities 396,688,802.97 397,891,104.32
Net Cash Flows from Operating Activities (V)51(1) 371,474,731.89 332,656,351.44
II. Cash Flows from Investing Activities:
Cash receipts from investment income 12,908,798.55 14,329,928.96
Net cash receipts from disposal of fixed assets, intangible assets
and other long-term assets 1,122,683.82 116,708.22
Other cash receipts relating to investing activities (V)50(3) 282,314,620.00 1,539,917,101.51
Sub-total of cash inflows from investing activities 296,346,102.37 1,554,363,738.69
Cash payments to acquire or construct fixed assets, intangible assets
(V)51(2) 359,679,066.42 -
and other long-term assets
Cash payments to acquire investments 1,644,377,369.35 542,802,310.11
Other cash payments relating to investing activities (V)50(4) 95,062,624.80 1,325,010,000.00
Sub-total of cash outflows from investing activities 2,099,119,060.57 1,867,812,310.11
Net Cash Flows from Investing Activities (1,802,772,958.20) (313,448,571.42)
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 521,080,000.00 -
Including: cash receipts from capital contributions from minority of
subsidiaries 521,080,000.00 -
Cash receipts from borrowings 1,788,025,100.00 510,134,281.57
Other cash receipts relating to financing activities (V)50(5) 1,464,000,000.00 6,000,000.00
Sub-total of cash inflows from financing activities 3,773,105,100.00 516,134,281.57
Cash repayments of borrowings 525,910,000.00 104,902,000.00
Cash payments for distribution of dividends or profits or settlement
of interest expenses 113,956,681.09 119,072,437.79
Including: cash payments for distribution of dividends or profits or
settlement of interest expenses to minority shareholders - -
by subsidiaries
Other cash payments relating to financing activities (V)50(6) 1,498,647,065.49 365,270,347.30
Sub-total of cash outflows from financing activities 2,138,513,746.58 589,244,785.09
Net Cash Flows from Financing Activities 1,634,591,353.42 (73,110,503.52)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
Equivalents 194,043.74 (304,210.95)
V. Net Increase (Decrease) in Cash and Cash Equivalents 203,487,170.85 (54,206,934.45)
Add: Opening balance of Cash and Cash Equivalents (V)51(2) 321,121,926.73 375,328,861.18
VI. Closing Balance of Cash and Cash Equivalents (V)51(2) 524,609,097.58 321,121,926.73
The accompanying notes form part of the financial statements.
7
FOR THE YEAR ENDED 31 DECEMBER 2016
Cash Flow Statement of the Company
Unit: RMB
Amount for the Amount for the prior
ITEM Note current period period
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services 148,109,282.81 184,501,086.75
Receipts of tax refunds 985,094.24 -
Other cash receipts relating to operating activities 8,679,989.87 9,585,481.04
Sub-total of cash inflows from operating activities 157,774,366.92 194,086,567.79
Cash payments for goods purchased and services received 49,811,501.39 54,382,467.45
Cash payments to and on behalf of employees 47,685,381.61 50,215,506.96
Payments of various taxes 9,849,362.14 40,200,770.50
Other cash payments relating to operating activities 18,267,325.71 19,821,733.69
Sub-total of cash outflows from operating activities 125,613,570.85 164,620,478.60
Net Cash Flows from Operating Activities (XIV)8 32,160,796.07 29,466,089.19
II. Cash Flows from Investing Activities:
Cash receipts from investment income 12,908,798.55 14,329,928.96
Net cash receipts from disposal of fixed assets, intangible assets and
other long-term assets 879,118.33 32,530.00
Other cash receipts relating to investing activities 487,044,620.00 1,535,950,412.74
Sub-total of cash inflows from investing activities 500,832,536.88 1,550,312,871.70
Cash payments to acquire or construct fixed assets, intangible assets
and other long-term assets 4,947,096.30 10,683,480.40
Cash payments to acquire investments 307,676,564.58 31,820,000.00
Other cash payments relating to investing activities 139,006,625.77 1,448,542,578.23
Sub-total of cash outflows from investing activities 451,630,286.65 1,491,046,058.63
Net Cash Flows from Investing Activities 49,202,250.23 59,266,813.07
III. Cash Flows from Financing Activities:
Cash receipts from borrowings 1,210,000,000.00 400,000,000.00
Other cash receipts relating to financing activities 888,755,895.81 7,955,511.01
Sub-total of cash inflows from financing activities 2,098,755,895.81 407,955,511.01
Cash repayments of borrowings 512,400,000.00 101,300,000.00
Cash payments for distribution of dividends or profits or settlement
of interest expenses 88,578,646.86 103,713,804.74
Other cash payments relating to financing activities 1,593,720,721.28 372,410,740.60
Sub-total of cash outflows from financing activities 2,194,699,368.14 577,424,545.34
Net Cash Flows from Financing Activities (95,943,472.33) (169,469,034.33)
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash
92,028.69 (632,046.89)
Equivalents
V． Net Increase (Decrease) in Cash and Cash Equivalents (14,488,397.34) (81,368,178.96)
Add: Opening balance of Cash and Cash Equivalents (XIV)8 28,808,779.96 110,176,958.92
VI. Closing Balance of Cash and Cash Equivalents (XIV)8 14,320,382.62 28,808,779.96
The accompanying notes form part of the financial statements.
8
FOR THE YEAR ENDED 31 DECEMBER 2016
Consolidated Statement of Changes in Shareholders' Equity
Unit: RMB
Amount for the current period Amount for the same period of last year
Attributable to shareholders of the Company Attributable to shareholders of the Company
Total Total
Other comprehensive shareholders' Other comprehensive Unappropriated shareholders'
ITEM Share capital Capital reserve income Special reserve Surplus reserve Unappropriated profits Minority interests equity Share capital Capital reserve income Special reserve Surplus reserve profits Minority interests equity
I. Closing balance of the preceding year 230,600,000.00 234,141,186.09 652,079.14 5,941,771.48 317,245,288.81 965,504,851.33 317,006,332.01 2,071,091,508.86 230,600,000.00 234,141,186.09 652,079.14 4,240,147.49 307,084,630.25 913,767,989.40 297,936,230.92 1,988,422,263.29
Add: Changes in accounting policies - - - - - - - - - - - - - - - -
Corrections of prior period errors - - - - - - - - - - - - - - - -
Business combination involving entities under - - - - - - - - - - - - - - - -
common control
II. Opening balance of the current year 230,600,000.00 234,141,186.09 652,079.14 5,941,771.48 317,245,288.81 965,504,851.33 317,006,332.01 2,071,091,508.86 230,600,000.00 234,141,186.09 652,079.14 4,240,147.49 307,084,630.25 913,767,989.40 297,936,230.92 1,988,422,263.29
III. Changes for the year - - - 832,936.25 1,358,273.61 559,793.20 540,247,097.67 542,998,100.73 - - - 1,701,623.99 10,160,658.56 51,736,861.93 19,070,101.09 82,669,245.57
(I) Comprehensive income - - - - - 1,918,066.81 19,126,906.00 21,044,972.81 - - - - - 91,644,920.49 19,027,674.41 110,672,594.90
(II) Owners' contributions and reduction in
- - - - - - 521,080,000.00 521,080,000.00 - - - - - - - -
capital
1. Capital contribution from owners - - - - - - 521,080,000.00 521,080,000.00 - - - - - - - -
2. Capital contribute from other equity
- - - - - - - - - - - - - - - -
instrument holders
3. Share-based payment recognized in owners'
- - - - - - - - - - - - - - - -
equity
4. Effect of business combination involving - - - - - - - - - - - - - - - -
entities under common control
(III) Profit distribution - - - - 1,358,273.61 (1,358,273.61) - - - - - - 10,160,658.56 (39,908,058.56) - (29,747,400.00)
1. Transfer to surplus reserve - - - - 1,358,273.61 (1,358,273.61) - - - - - - 10,160,658.56 (10,160,658.56) - -
2. General Risk Provision - - - - - - - - - - - - - - - -
3. Distributions to shareholders - - - - - - - - - - - - - (29,747,400.00) - (29,747,400.00)
4. Others - - - - - - - - - - - - - - - -
(IV) Transfers within owners' equity - - - - - - - - - - - - - - - -
1. Capitalization of capital reserve - - - - - - - - - - - - - - - -
2. Capitalization of surplus reserve - - - - - - - - - - - - - - - -
3. Loss offset by surplus reserve - - - - - - - - - - - - - - - -
4. Others - - - - - - - - - - - - - - - -
(VI) Special reserve - - - 832,936.25 - - 40,191.67 873,127.92 - - - 1,701,623.99 - - 42,426.68 1,744,050.67
1. Transfer to special reserve in the period - - - 1,505,428.41 - - 49,598.61 1,555,027.02 - - - 2,539,292.54 - - 56,404.62 2,595,697.16
2. Amount utilized in the period - - - (672,492.16) - - (9,406.94) (681,899.10) - - - (837,668.55) - - (13,977.94) (851,646.49)
IV. Closing balance of the current year 230,600,000.00 234,141,186.09 652,079.14 6,774,707.73 318,603,562.42 966,064,644.53 857,253,429.68 2,614,089,609.59 230,600,000.00 234,141,186.09 652,079.14 5,941,771.48 317,245,288.81 965,504,851.33 317,006,332.01 2,071,091,508.86
The accompanying notes form an integral part of the financial statements.
9
FOR THE YEAR ENDED 31 DECEMBER 2016
Statement of Changes in Shareholders' Equity of the Company
Unit: RMB
Amount for the current period Amount for the same period of last year
Attributable to shareholders of the Company Total Attributable to shareholders of the Company
shareholders' Total shareholders'
Unappropriated Unappropriated
ITEM Share capital Capital reserve Special reserve Surplus reserve equity Share capital Capital reserve Special reserve Surplus reserve equity
profits profits
I. Closing balance of the preceding
230,600,000.00 204,534,849.49 5,775,987.68 317,245,288.81 730,515,822.29 1,488,671,948.27 230,600,000.00 204,534,849.49 4,103,762.23 307,084,630.25 743,258,408.62 1,489,581,650.59
year
Add: Changes in accounting policies - - - - - - - - - - - -
Corrections of prior period errors - - - - - - - - - - - -
Others - - - - - - - - - - - -
II. Opening balance of the current 230,600,000.00 204,534,849.49 5,775,987.68 317,245,288.81 730,515,822.29 1,488,671,948.27 230,600,000.00 204,534,849.49 4,103,762.23 307,084,630.25 743,258,408.62 1,489,581,650.59
year
III. Changes for the year - - 692,882.20 1,358,273.61 (61,821,699.91) (59,770,544.10) - - 1,672,225.45 10,160,658.56 (12,742,586.33) (909,702.32)
(I) Comprehensive income - - - - (60,463,426.30) (60,463,426.30) - - - - 27,165,472.23 27,165,472.23
(II) Owners' contributions and - - - - - - - - - - - -
reduction in capital
1. Capital contribution from owners - - - - - - - - - - - -
2. Capital contribute from other - - - - - - - - - - - -
equity instrument holders
3. Share-based payment recognized - - - - - - - - - - - -
in owners' equity
4. Others - - - - - - - - - - - -
(III) Profit distribution - - - 1,358,273.61 (1,358,273.61) - - - - 10,160,658.56 (39,908,058.56) (29,747,400.00)
1. Transfer to surplus reserve - - - 1,358,273.61 (1,358,273.61) - - - - 10,160,658.56 (10,160,658.56) -
2. General Risk Provision - - - - - - - - - - - -
3. Distributions to shareholders - - - - - - - - - - (29,747,400.00) (29,747,400.00)
4. Others - - - - - - - - - - - -
(IV) Transfers within owners' equity - - - - - - - - - - - -
1. Capitalization of capital reserve - - - - - - - - - - - -
2. Capitalization of surplus reserve - - - - - - - - - - - -
3. Loss offset by surplus reserve - - - - - - - - - - - -
4. Others - - - - - - - - - - - -
(V) Special reserve - - 692,882.20 - - 692,882.20 - - 1,672,225.45 - - 1,672,225.45
1. Transfer to special reserve in the - - 1,283,632.59 - - 1,283,632.59 - - 2,423,047.32 - - 2,423,047.32
period
2. Amount utilized in the period - - (590,750.39) - - (590,750.39) - - (750,821.87) - - (750,821.87)
IV. Closing balance of the current 230,600,000.00 204,534,849.49 6,468,869.88 318,603,562.42 668,694,122.38 1,428,901,404.17 230,600,000.00 204,534,849.49 5,775,987.68 317,245,288.81 730,515,822.29 1,488,671,948.27
year
The accompanying notes form an integral part of the financial statements.
10
(I) BASIC INFORMATION ABOUT THE COMPANY
Shenzhen Chiwan Petroleum Supply Base Co., Ltd. (the "Company") was registered and
established on 4 January 1984 in Shenzhen, Guangdong Province.
Pursuant to the approval of Shen Fu Ban Han (1995) No. 112 issued by the General Office of
Shenzhen Municipal People's Government and Shen Zheng Ban Fu (1995) No. 33 issued by
Shenzhen Securities Administration Office, the Company publicly issued domestic listed foreign
shares (B-Share) on 21 June 1995. Pursuant to the Listing Notice of Shen Zheng Shi Zi (1995)
No. 14, issued by Shenzhen Stock Exchange, the Company's shares were listed and traded on
Shenzhen Stock Exchange on 28 July 1995.
The Headquarter of the Company locates in Shenzhen, Guangdong Province. The main business
of the Company and its subsidiaries (the "Group") include: terminal and port operation services;
lease of stack area, storage and office building; provision of labor service, cargo handling and
transportation, equipment lease, supply of water, power and oil, and agency services for offshore
crude oil logistics; operating bonded warehouse and stack area, and commercial car park
operation.
The Company's financial statements and the Group's consolidated financial statements are
approved by the Board of directors on 18 April 2017.
The scope of consolidated financial statements in the current period involves 50 subsidiaries. See
Note (VII) "Equity in other entities" for details. Changes of scope are new subsidiaries set up in
the current period. See Note (VI) "Changes of consolidation scope" for details.
(II) BASIS OF PREPARATION OF FINACIAL STATEMENTS
Basis of preparation
The Group has adopted the Accounting Standards for Business Enterprises (the "ASBEs") issued
by the Ministry of Finance (the "MoF"), including standards newly issued and amended in 2014.
In addition, the Group has disclosed relevant financial information in accordance with
Information Disclosure and Presentation Rules for Companies Offering Securities to the Public
No. 15 - General Provisions on Financial Reporting (Revised in 2014).
Going concern
As at 31 December 2016, the Group had total current liabilities in excess of total current assets of
RMB1,947,699,729.74. As the Company's parent company China Nanshan Development (Group)
("Nanshan Group"), has agreed not to request repayment of outstanding balances owing to it and,
when other outstanding debts owed by the Group fall due in the foreseeable future, to provide all
necessary financial support to the Company in the foreseeable future so as to maintain the Group's
ability to continue as a going concern, the financial statements have been prepared on a going
concern basis.
11
(II) BASIS OF PREPARATION OF FINACIAL STATEMENTS - continued
Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for certain financial instruments
which are measured at fair value, the Group adopts the historical cost as the principle of
measurement in the financial statements. Where assets are impaired, provisions for asset
impairment are made in accordance with the relevant requirements.
Under the historical cost measurement, asset should be measured at the value of cash or cash
equivalents or fair value paid to acquire the asset, whereas liability should be measured at the
value of cash or assets received due to shoulder present obligation, or at the contract amount of
shouldering present obligation, or at the value of cash or cash equivalents expected to pay for the
liability in routine activities.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using valuation technique. Fair value measurement
and/or disclosure in the financial statements are determined according to the above basis.
Pursuant to the observation of input value and the significance of the input value on the whole,
measurements of fair value are divided into the below three levels:
Level 1 input value is the unadjusted price of equivalent assets or liability which can be acquired
in an active market on the measurement date.
Level 2 input value is assets or liability except for those in Level 1, which are observable for the
asset or liability, either directly or indirectly
Level 3 input value is assets or liability which cannot be observed.
(III) SIGNIFICANT ACCOUNTING POLICIES, and ACCOUNTING ESTIMATES
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with the ASBEs, and
present truly and completely, the Company's and consolidated financial position as of 31
December 2016, and the Company's and consolidated results of operations and cash flows for the
year then ended.
2. Accounting period
The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31
December.
12
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
3、Business Cycle
Buginese cycle is referred to the period from which an enterprise buys assets to manufacture to the date it achieves cash or cash
equivalents.
4. Functional currency
Renminbi ("RMB") is the currency of the primary economic environment in which the Company
and its subsidiaries in the People's Republic of China (the "PRC") operate. Therefore, the
Company and its subsidiaries choose RMB as their functional currency. The Group adopts RMB
to prepare its financial statements.
5. The accounting treatment of business combinations involving enterprises under common
control and business combinations not involving enterprises under common control
Business combinations are classified into business combinations involving enterprises under
common control and business combinations not involving enterprises under common control.
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded
by the combining entities at the date of the combination. The difference between the carrying
amount of the net assets obtained and the carrying amount of the consideration paid for the
combination is adjusted to the share premium in capital reserve. If the share premium is not
sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in
which they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the same
party or parties before and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for
control of the acquiree. The intermediary expenses incurred by the acquirer in respect of auditing,
legal services, valuation and consultancy services, etc. and other associated administrative
expenses attributable to the business combination are recognized in profit or loss when they are
incurred.
13
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
5. The accounting treatment of business combinations involving enterprises under common
control and business combinations not involving enterprises under common control - continued
5.2 Business combinations not involving enterprises under common control and goodwill - continued
The acquiree's identifiable assets, liabilities and contingent liabilities, acquired by the acquirer in
a business combination, that meet the recognition criteria shall be measured at fair value at the
acquisition date.
Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the difference is treated as an asset and recognized as goodwill, which is
measured at cost on initial recognition. Where the cost of combination is less than the acquirer's
interest in the fair value of the acquiree's identifiable net assets, the acquirer firstly reassesses the
measurement of the fair values of the acquiree's identifiable assets, liabilities and contingent
liabilities and measurement of the cost of combination. If after that reassessment, the cost of
combination is still less than the acquirer's interest in the fair value of the acquiree's identifiable
net assets, the acquirer recognizes the remaining difference immediately in profit or loss for the
current period.
Goodwill arising on a business combination is measured at cost less accumulated impairment
losses, and is presented separately in the consolidated financial statements.
6. Preparation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. Control is the power to govern the financial and operating policies of an enterprise so as
to obtain benefits from its operating activities.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiaries and
ceases when the Group loses control of the subsidiary.
For a subsidiary disposed of by the Group, the operating results and cash flows before the date of
disposal (the date when control is lost) are included in the consolidated income statement and
consolidated statement of cash flows, as appropriate.
For a subsidiary acquired through a business combination not involving enterprises under
common control, the operating results and cash flows from the acquisition date (the date when
control is obtained) are included in the consolidated income statement and consolidated statement
of cash flows, as appropriate, and no adjustment is made to the opening balances and comparative
figures in the consolidated financial statements.
No matter when the business combination occurs in the reporting period, subsidiaries acquired
through a business combination involving enterprises under common control are included in the
Group's scope of consolidation as if they had been included in the scope of consolidation from the
date when they first came under the common control of the ultimate controlling party. Their
operating results and cash flows from the beginning of the earliest reporting period are included in
the consolidated income statement and consolidated statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries are determined
based on the uniform accounting policies and accounting periods set out by the Company.
14
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
6. Preparation of consolidated financial statements - continued
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the Company is treated as minority
interests and presented as "minority interests" in the consolidated balance sheet within
shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributable
to minority interests is presented as "minority interests" in the consolidated income statement
below the "net profit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders' portion of the opening balance of owners' equity of the
subsidiary, the excess amount are still allocated against minority interests.
Acquisition of minority interests or disposal of interest in a subsidiary that does not result in the
loss of control over the subsidiary is accounted for as equity transactions. The carrying amounts
of the Company's interests and minority interests are adjusted to reflect the changes in their
relative interests in the subsidiary. The difference between the amount by which the minority
interests are adjusted and the fair value of the consideration paid or received is adjusted to capital
reserve under owners' equity. If the capital reserve is not sufficient to absorb the difference, the
excess are adjusted against retained earnings.
7. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents are the Group's short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
8. Translation of transactions and financial statements denominated in foreign currencies
8.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying [the spot exchange
rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into RMB using the spot
exchange rates at the balance sheet date. Exchange differences arising from the differences
between the spot exchange rates prevailing at the balance sheet date and those on initial
recognition or at the previous balance sheet date are recognized in profit or loss for the period,
except that (1) exchange differences related to a specific-purpose borrowing denominated in
foreign currency that qualify for capitalization are capitalized as part of the cost of the qualifying
asset during the capitalization period; (2) exchange differences related to hedging instruments for
the purpose of hedging against foreign currency risks are accounted for using hedge accounting;
(3) exchange differences arising from available-for-sale non-monetary items (such as shares)
denominated in foreign currencies and changes in the carrying amounts (other than the amortized
cost) of available-for-sale monetary items are recognized as other comprehensive income.
15
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
8. Translation of transactions and financial statements denominated in foreign currencies -
continued
8.1 Transactions denominated in foreign currencies - continued
Foreign currency non-monetary items measured at historical cost are translated to the amounts in
functional currency at the spot exchange rates on the dates of the transactions and the amounts in
functional currency remain unchanged. Foreign currency non-monetary items measured at fair
value are re-translated at the spot exchange rate on the date the fair value is determined.
Difference between the re-translated functional currency amount and the original functional
currency amount is treated as changes in fair value (including changes of exchange rate) and is
recognized in profit and loss or as other comprehensive income.
8.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a
foreign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders' equity items except for retained earnings are translated at the
spot exchange rates at the dates on which such items arose; all items in the income statement as
well as items reflecting the distribution of profits are translated at the spot exchange rates on the
dates of the transactions; the opening balance of retained earnings is the translated closing balance
of the previous year's retained earnings; the closing balance of retained earnings is calculated and
presented on the basis of each translated income statement and profit distribution item. The
difference between the translated assets and the aggregate of liabilities and shareholders' equity
items is separately presented as the exchange differences arising on translation of financial
statements denominated in foreign currencies under the shareholders' equity in the balance sheet.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign
subsidiary are translated at an exchange rate which approximates the spot exchange rate on the
date of the cash flows. The effect of exchange rate changes on cash and cash equivalents is
regarded as a reconciling item and presented separately in the cash flow statement as "effect of
exchange rate changes on cash and cash equivalents".
The opening balances and the comparative figures of previous year are presented at the translated
amounts in the previous year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over a
foreign operation due to disposal of certain interest in it or other reasons, the Group transfers the
accumulated exchange differences arising on translation of financial statements of this foreign
operation attributable to the owners' equity of the Company and presented under shareholders'
equity, to profit or loss in the period in which the disposal occurs.
16
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
8. Translation of transactions and financial statements denominated in foreign currencies -
continued
8.2 Translation of financial statements denominated in foreign currencies - continued
In case of a disposal or other reason that does not result in the Group losing control over a foreign
operation, the proportionate share of accumulated exchange differences arising on translation of
financial statements are re-attributed to minority interests and are not recognized in profit and
loss. For partial disposals of equity interests in foreign operations which are associates or joint
ventures, the proportionate share of the accumulated exchange differences arising on translation
of financial statements of foreign operations is reclassified to profit or loss.
9. Financial instruments
Financial assets and financial liabilities are recognized when the Group becomes a party to the
contractual provisions of the instrument. Financial assets and financial liabilities are initially
measured at fair value. For financial assets and financial liabilities at fair value through profit or
loss, transaction costs are immediately recognized in profit or loss. For other financial assets and
financial liabilities, transaction costs are included in their initial recognized amounts.
9.1 Effective interest method
The effective interest method is a method of calculating the amortized cost of a financial asset or a
financial liability (or a group of financial assets or financial liabilities) and of allocating the
interest income or interest expense over the relevant period, using the effective interest rate. The
effective interest rate is the rate that exactly discounts estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to
the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group estimates future cash flows considering all
contractual terms of the financial asset or financial liability (without considering future credit
losses), and also considers all fees paid or received between the parties to the contract giving rise
to the financial asset and financial liability that are an integral part of the effective interest rate,
transaction costs, and premiums or discounts, etc.
9.2 Classification, recognition and measurement of financial assets
On initial recognition, the Group's financial assets are classified into one of the four categories,
including financial assets at fair value through profit or loss, held-to-maturity investments, loans
and receivables, and available-for-sale financial assets. All regular way purchases or sales of
financial assets are recognized and derecognized on a trade date basis.
17
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.2 Classification, recognition and measurement of financial assets - continued
9.2.1. Financial assets at fair value through profit or loss ("FVTPL")
Financial assets at FVTPL include financial assets held for trading and those designated as at fair
value through profit or loss.
A financial asset is classified as held for trading if one of the following conditions is satisfied: (i)
It has been acquired principally for the purpose of selling in the near term; or (ii) On initial
recognition it is part of a portfolio of identified financial instruments that the Group manages
together and there is objective evidence that the Group has a recent actual pattern of short-term
profit-taking; or (iii) It is a derivative that is not designated and effective as a hedging instrument,
or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of
an unquoted equity instrument (without a quoted price in an active market) whose fair value
cannot be reliably measured.
A financial asset may be designated as at FVTPL upon initial recognition only when one of the
following conditions is satisfied: (i) Such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise result from measuring assets or
recognizing the gains or losses on them on different bases; or (ii) The financial asset forms part of
a group of financial assets or a group of financial assets and financial liabilities, which is managed
and its performance is evaluated on a fair value basis, in accordance with the Group's documented
risk management or investment strategy, and information about the grouping is reported to key
management personnel on that basis; (iii) Hybrid instruments associated with embedded
derivatives and financial assets measured at fair value and of which changes are recorded into the
profits and losses as specified in Accounting Standard for Business Enterprises No.22 - Financial
Recognition and Measurement of Instruments.
Financial assets at FVTPL are subsequently measured at fair value. Any gains or losses arising
from changes in the fair value and any dividend or interest income earned on the financial assets
are recognized in profit or loss.
9.2.2 Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that the Group's management has the positive intention and
ability to hold to maturity.
Held-to-maturity investments are subsequently measured at amortized cost using the effective
interest method. Gain or loss arising from DE recognition, impairment or amortization is
recognized in profit or loss.
18
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.2 Classification, recognition and measurement of financial assets - continued
9.2.3. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Financial assets classified as loans and receivables by the
Group include accounts receivable, interest receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest
method. Gain or loss arising from DE recognition, impairment or amortization is recognized in
profit or loss.
9.2.4. Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial assets that are designated on
initial recognition as available for sale, and financial assets that are not classified as financial
assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.
Available-for-sale financial assets are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income, except that
impairment losses and exchange differences related to amortized cost of monetary financial assets
denominated in foreign currencies are recognized in profit or loss, until the financial assets are
derecognized, at which time the gains or losses are released and recognized in profit or loss.
Interests obtained and the dividends declared by the investee during the period in which the
available-for-sale financial assets are held, are recognized in investment gains.
Investments in equity instruments that do not have a quoted market price in an active market and
whose fair value cannot be reliably measured, and derivative financial assets which are linked to
and must be settled by delivery of such unquoted equity instruments, are measured at cost.
9.3 Impairment of financial assets
The Group assesses at each balance sheet date the carrying amounts of financial assets other than
those at fair value through profit or loss. If there is objective evidence that a financial asset is
impaired, the Group determines the amount of any impairment loss. Objective evidence that a
financial asset is impaired is evidence that, arising from one or more events that occurred after the
initial recognition of the asset, the estimated future cash flows of the financial asset, which can be
reliably measured, have been affected.
19
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.3 Impairment of financial assets - continued
Objective evidence that a financial asset is impaired includes the following observable events:
(1) Significant financial difficulty of the issuer or obligor;
(2) A breach of contract by the borrower, such as a default or delinquency in interest or principal payments;
(3) The Group, for economic or legal reasons relating to the borrower's financial difficulty,
granting a concession to the borrower;
(4) It becoming probable that the borrower will enter bankruptcy or other financial reorganizations;
(5) The disappearance of an active market for that financial asset because of financial difficulties of the issuer;
(6) Upon an overall assessment of a group of financial assets, observable data indicates that there
is a measurable decrease in the estimated future cash flows from the group of financial assets
since the initial recognition of those assets, although the decrease cannot yet be identified
with the individual financial assets in the group. Such observable data includes:
- Adverse changes in the payment status of borrower in the group of assets;
- Economic conditions in the country or region of the borrower which may lead to a
failure to pay the group of assets;
(7) Significant adverse changes in the technological, market, economic or legal environment in
which the issuer operates, indicating that the cost of the investment in the equity instrument
may not be recovered by the investor;
(8) A significant or prolonged decline in the fair value of an investment in an equity instrument
below its cost;
(9) Other objective evidence indicating there is an impairment of a financial asset.
- Impairment of financial assets measured at amortized cost
If financial assets carried at amortized cost are impaired, the carrying amounts of the financial
assets are reduced to the present value of estimated future cash flows (excluding future credit
losses that have not been incurred) discounted at the financial asset's original effective interest
rate. The amount of reduction is recognized as an impairment loss in profit or loss. If, subsequent
to the recognition of an impairment loss on financial assets carried at amortized cost, there is
objective evidence of a recovery in value of the financial assets which can be related objectively
to an event occurring after the impairment is recognized, the previously recognized impairment
loss is reversed. However, the reversal is made to the extent that the carrying amount of the
financial asset at the date the impairment is reversed does not exceed what the amortized cost
would have been had the impairment not been recognized.
For a financial asset that is individually significant, the Group assesses the asset individually for
impairment. For a financial asset that is not individually significant, the Group assesses the asset
individually for impairment or includes the asset in a group of financial assets with similar credit
risk characteristics and collectively assesses them for impairment. If the Group determines that no
objective evidence of impairment exists for an individually assessed financial asset (whether
significant or not), it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively reassesses them for impairment. Assets for which an impairment
loss is individually recognized are not included in a collective assessment of impairment.
20
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.3 Impairment of financial assets - continued
- Impairment of available-for-sale financial assets
When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in
fair value previously recognized directly in capital reserve is reclassified from the capital reserve
to profit or loss. The amount of the cumulative loss that is reclassified from capital reserve to
profit or loss is the difference between the acquisition cost (net of any principal repayment and
amortization) and the current fair value, less any impairment loss on that financial asset
previously recognized in profit or loss.
If, subsequent to the recognition of an impairment loss on available-for-sale financial assets, there
is objective evidence of a recovery in value of the financial assets which can be related
objectively to an event occurring after the impairment is recognized, the previously recognized
impairment loss is reversed. The amount of reversal of impairment loss on available-for-sale
equity instruments is recognized as other comprehensive income, while the amount of reversal of
impairment loss on available-for-sale debt instruments is recognized in profit or loss.
- Impairment of financial assets measured at cost
If an impairment loss has been incurred on an investment in unquoted equity instrument (without
a quoted price in an active market) whose fair value cannot be reliably measured, or on a
derivative financial asset that is linked to and must be settled by delivery of such an unquoted
equity instrument, the carrying amount of the financial asset is reduced to the present value of
estimated future cash flows discounted at the current market rate of return for a similar financial
asset. The amount of reduction is recognized as an impairment loss in profit or loss. The
impairment loss on such financial asset is not reversed once it is recognized.
9.4 Transfer of financial assets
The Group derecognizes a financial asset if one of the following conditions is satisfied: (1) the
contractual rights to the cash flows from the financial asset expire; or (2) the financial asset has
been transferred and substantially all the risks and rewards of ownership of the financial asset is
transferred to the transferee; or (3) although the financial asset has been transferred, the Group
neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a
financial asset, and it retains control of the financial asset, it recognizes the financial asset to the
extent of its continuing involvement in the transferred financial asset and recognizes an associated
liability. The extent of the Group's continuing involvement in the transferred asset is the extent to
which it is exposed to changes in the value of the transferred asset.
21
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.4 Transfer of financial assets - continued
For a transfer of a financial asset in its entirety that satisfies the DE recognition criteria, the
difference between (1) the carrying amounts of the financial asset transferred; and (2) the sum of
the consideration received from the transfer and any cumulative gain or loss that has been
recognized in other comprehensive income is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part that
is derecognized, based on the respective fair values of those parts. The difference between (1) the
carrying amount allocated to the part derecognized; and (2) the sum of the consideration received for the
part derecognized and any cumulative gain or loss allocated to the part derecognized which has been
previously recognized in other comprehensive income, is recognized in profit or loss.
9.5 Classification, recognition and measurement of financial liabilities
Debt and equity instruments issued by the Group are classified into financial liabilities or equity
on the basis of the substance of the contractual arrangements and definitions of financial liability
and equity instrument.
On initial recognition, financial liabilities are classified into financial liabilities at fair value
through profit or loss and other financial liabilities.
9.5.1 Financial liabilities at fair value through profit or loss
Financial liabilities at FVTPL consist of financial liabilities held for trading and those designated
as at FVTPL on initial recognition.
A financial liability is classified as held for trading if one of the following conditions is satisfied:
(1) It has been acquired principally for the purpose of repurchasing in the near term; or (2) On
initial recognition it is part of a portfolio of identified financial instruments that the Group
manages together and there is objective evidence that the Group has a recent actual pattern of
short-term profit-taking; or (3) It is a derivative, except for a derivative that is a designated and
effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and
must be settled by delivery of an unquoted equity instrument (without a quoted price in an active
market) whose fair value cannot be reliably measured.
22
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.5 Classification, recognition and measurement of financial liabilities - continued
9.5.1 Financial liabilities at fair value through profit or loss - continued
A financial liability may be designated as at FVTPL upon initial recognition only when one of the
following conditions is satisfied: (1) Such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise result from measuring liabilities
or recognizing the gains or losses on them on different bases; or (2) The financial liability forms
part of a group of financial liabilities or a group of financial assets and financial liabilities, which
is managed and its performance is evaluated on a fair value basis, in accordance with the Group's
documented risk management or investment strategy, and information about the grouping is
reported to key management personnel on that basis; (3) Hybrid instruments associated with
embedded derivatives and financial liabilities measured at fair value and of which changes are
recorded into the profits and losses as specified in Accounting Standard for Business Enterprises
No.22 - Recognition and Measurement of Financial Instruments.
Financial liabilities at FVTPL are subsequently measured at fair value. Any gains or losses arising
from changes in the fair value or any dividend or interest expenses related to the financial
liabilities are recognized in profit or loss.
9.5.2 Other financial liabilities
For a derivative liability that is linked to and must be settled by delivery of an unquoted equity
instrument (without a quoted price in an active market) whose fair value cannot be reliably
measured, it is subsequently measured at cost. Other financial liabilities (excluding liabilities with
financial guarantee contracts) are subsequently measured at amortized cost using the effective
interest method, with gains or losses arising from derecognition or amortization recognized in
profit or loss.
9.5.3. Financial guarantee contracts
A financial guarantee contract is a contract by which the guarantor and the lender agree that the
guarantor would settle the debts or bear obligations in accordance with terms of the contract in
case the borrower fails to settle the debts. Financial guarantee contracts that are not designated as
financial liabilities at fair value through profit or loss are initially measured at their fair values less
the directly attributable transaction costs. Subsequent to initial recognition, they are measured at
the higher of: (i) the amount determined in accordance with Accounting Standard for Business
Enterprises No. 13 - Contingencies; and (ii) the amount initially recognized less cumulative
amortization recognized in accordance with the principles set out in Accounting Standard for
Business Enterprises No. 14 - Revenue.
23
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.6 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) only when the underlying present
obligation (or part of it) is discharged. An agreement between the Group (an existing borrower)
and an existing lender to replace the original financial liability with a new financial liability with
substantially different terms is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference
between the carrying amount of the financial liability (or part of the financial liability)
derecognized and the consideration paid (including any non-cash assets transferred or new
financial liabilities assumed) in profit or loss.
9.7 Derivatives and embedded derivatives
Derivatives are initially measured at fair value at the date when the derivative contracts are
entered into and are subsequently re-measured at fair value. The resulting gain or loss is
recognized in profit or loss unless the derivative is designated and highly effective as a hedging
instrument, in which case the timing of the recognition in profit or loss depends on the nature of
the hedge relationship.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is
not designated as a financial asset or financial liability at fair value through profit or loss, and
treated as a standalone derivative if 1) the economic characteristics and risks of the embedded
derivative are not closely related to the economic characteristics and risks of the host contract; and
2) a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative. If the Group is unable to measure the embedded derivative separately
either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid
instrument as a financial asset or financial liability at fair value through profit or loss.
9.8 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognized financial
assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial
asset and settle the financial liability simultaneously, a financial asset and a financial liability shall
be offset and the net amount is presented in the balance sheet. Except for the above
circumstances, financial assets and financial liabilities shall be presented separately in the balance
sheet and shall not be offset.
24
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
9. Financial instruments - continued
9.9 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities. The consideration received from issuing equity instruments
and net of transaction costs, are added to shareholders' equity.
All types of distributions (excluding stock dividends) made by the Group to holders of equity
instruments, are deducted from shareholders' equity. The Group does not recognize any changes
in the fair value of equity instruments.
10. Receivables
10.1 Receivables for which bad debt provision is collectively assessed on a portfolio basis
Basis or monetary criteria for A receivable that exceeds RMB 1 million (including RMB 1
determining an individually million) is deemed as an individually significant receivable by the
significant receivable Group.
For receivables that are individually significant, the Group
assesses the receivables individually for impairment. For a
Method of determining provision financial asset that is not impaired individually, the Group
for receivables that are individually includes the asset in a group of financial assets with similar credit
significant and for which bad debt risk characteristics and collectively assesses them for impairment.
provision is individually assessed Receivables for which an impairment loss is individually
recognized are not included in a collective assessment of
impairment.
10.2 Receivables for which bad debt provision is collectively assessed on a portfolio basis:
Basis for determining a portfolio
Portfolio 1 Receivables from government, petty cash advanced to employees,
security deposit, and receivables from related parties of the
Company and its subsidiaries. Bad debt provision is not
recognized for such receivables since the possibility of incurring
bad debt losses is remote.
Portfolio 2 Portfolio 2 mainly includes receivables arising from operating
activities other than Portfolio 1.
Bad debt provision method for a portfolio
Portfolio 1 No bad debt provision
Portfolio 2 Based on percentage of accounts balances
25
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
10. Receivables - continued
10.2 Receivables for which bad debt provision is collectively assessed on a portfolio basis: -
continued
10.2.1 Portfolios where percentage of accounts receivable method is used for bad debt provision:
Provision as a proportion
of accounts receivable Provision as a proportion
Name of portfolio (%) of other receivables (%)
Portfolio 2 1.00 1.00
10.3 Receivables that are not individually significant but for which bad debt provision is
individually assessed:
Reasons for making individual bad debt provision Significant difference between the carrying amount of accounts
receivable and the present value of estimated future cash flows
Bad debt provision methods Standalone impairment test is carried out and impairment losses are
recognized based on the difference between the carrying amount and the
present value of estimated future cash flows.
11. Inventories
11.1 Categories of inventories
The Group's inventories mainly include raw materials and maintenance accessories etc.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase,
costs of conversion and other expenditures incurred in bringing the inventories to their present
location and condition.
11.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
11.3 Basis for determining net realizable value of inventories and provision methods for decline in
value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. If
the net realizable value is below the cost of inventories, a provision for decline in value of
inventories is made. Net realizable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion, the estimated costs necessary to make the sale
and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and
takes into consideration the purposes of holding inventories and effect of post balance sheet
events.
26
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
11. Inventories - continued
11.3 Basis for determining net realizable value of inventories and provision methods for decline in
value of inventories - continued
Provision for decline in value of inventories is made based on the excess of cost of inventory over
its net realizable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that
previously caused inventories to be written down below cost no longer exist so that the net
realizable value of inventories is higher than their cost, the original provision for decline in value
is reversed and the reversal is included in profit or loss for the period.
11.4 Inventory count system
The perpetual inventory system is maintained for stock system.
12. Long-term equity investments
12.1 Basis for determining joint control and significant influence over investee
Control is the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. Joint control is the contractually agreed sharing of control over an
economic activity, and exists only when the strategic financial and operating policy decisions
relating to the activity require the unanimous consent of the parties sharing control. Significant
influence is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies. When determining whether an investing
enterprise is able to exercise control or significant influence over an investee, the effect of
potential voting rights of the investee (for example, warrants and convertible debts) held by the
investing enterprises or other parties that are currently exercisable or convertible shall be
considered.
12.2 Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprises
under common control, the investment cost of the long-term equity investment is the attributable
share of the carrying amount of the shareholders' equity of the acquiree at the date of
combination. For a long-term equity investment acquired through business combination not
involving enterprises under common control, the investment cost of the long-term equity
investment is the cost of acquisition. For a long-term equity investment acquired through business
combination not involving enterprises under common control and achieved in stages, the
investment cost of the long-term equity investment is the aggregate of the carrying amount of the
equity interest held in the acquiree prior to the acquisition date and the cost of the additional
investment at the acquisition date. The long-term equity investment acquired otherwise than
through a business combination is initially measured at its cost.
27
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
12. Long-term equity investments - continued
12.2 Determination of investment cost - continued
Other long-term equity investments acquired through methods other than business combination,
shall be recorded at cost initially. According to CAS No.22 – Financial Instrument Recognition
and Measurement, if the investor can exert significant influence on the investee or implement co-
control but not solely-control, the cost of long-term investment shall be the fair value plus the
newly invested cost.
12.3 Subsequent measurement and recognition of profit or loss
12.3.1. Long-term equity investment accounted for using the cost method
For long-term equity investments over which the Group does not have joint control or significant
influence and without quoted prices in an active market and that fair values cannot be reliably
measured, the Group accounts for such long-term equity investments using the cost method.
Besides, long-term equity investments in subsidiaries are accounted for using the cost method in
the Company's separate financial statements. A subsidiary is an investee that is controlled by the
Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.
Except for cash dividends or profits already declared but not yet paid that are included in the price
or consideration actually paid upon acquisition of the long-term equity investment, investment
income is recognized in the period in accordance with the attributable share of cash dividends or
profit distributions declared by the investee.
12.3.2. Long-term equity investment accounted for using the equity method
The Group accounts for investment in associates and joint ventures using the equity method. An
associate is an entity over which the Group has significant influence and a joint venture is an
entity over which the Group exercises joint control along with other investors.
Under the equity method, where the initial investment cost of a long-term equity investment
exceeds the Group's share of the fair value of the investee's identifiable net assets at the time of
acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost
is less than the Group's share of the fair value of the investee's identifiable net assets at the time of
acquisition, the difference is recognized in profit or loss for the period, and the cost of the long-
term equity investment is adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss of the investee
for the period as investment income or loss for the period. The Group recognizes its share of the
investee's net profit or loss based on the fair value of the investee's individually identifiable assets,
etc. at the acquisition date after making appropriate adjustments to conform with the Group's
accounting policies and accounting period. Unrealized profits or losses resulting from the Group's
transactions with its associates and joint ventures are recognized as investment income or loss to
the extent that those attributable to the Group's equity interest are eliminated.
28
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
12. Long-term equity investments - continued
12.3 Subsequent measurement and recognition of profit or loss - continued
12.3.2. Long-term equity investment accounted for using the equity method - continued
However, unrealized losses resulting from the Group's transactions with its associates and joint
ventures which represent impairment losses on the transferred assets are not eliminated. Changes
in owners' equity of the investee other than net profit or loss are correspondingly adjusted to the
carrying amount of the long-term equity investment, and recognized as other comprehensive
income which is included in the capital reserve.
The Group discontinues recognizing its share of net losses of the investee after the carrying
amount of the long-term equity investment together with any long-term interests that in substance
form part of its net investment in the investee is reduced to zero. If the Group has incurred
obligations to assume additional losses of the investee, a provision is recognized according to the
expected obligation, and recorded as investment loss for the period. Where net profits are
subsequently made by the investee, the Group resumes recognizing its share of those profits only
after its share of the profits exceeds the share of losses previously not recognized.
12.4 Disposal of long-term equity investments
On disposal of a long term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognized in profit or loss for the period. For
a long-term equity investment accounted for using the equity method, the amount included in the
shareholders' equity attributable to the percentage interest disposed is transferred to profit or loss
for the period. For long-term equity investments accounted for using the equity method, if the
remaining interest after disposal is still accounted for using the equity method, other
comprehensive income previously recognised for using the equity method is accounted for on the
same basis as would have been required if the investee had directly disposed of related assets or
liabilities, and transferred to profit or loss for the period on a pro rata basis; owners' equity
recognised due to changes in other owners' equity of the investee (other than net profit or loss,
other comprehensive income and profit distribution) is transferred to profit or loss for the period
on a pro rata basis. For long-term equity investments accounted for using the cost method, if the
remaining interest after disposal is still accounted for using the cost method, other comprehensive
income previously recognised for using the equity method or in accordance with the standards for
the recognition and measurement of financial instruments before obtaining the control over the
investee, is accounted for on the same basis as would have been required if the investee had
directly disposed of related assets or liabilities, and transferred to profit or loss for the period on a
pro rata basis; changes in other owners' equity in the investee's net assets recognised under the
equity method (other than net profit or loss, other comprehensive income and profit distribution)
is transferred to profit or loss for the period on a pro rata basis.
29
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
13. Investment properties
Investment property is property held to earn rentals or for capital appreciation or both. It includes
a land use right that is leased out; a land use right held for transfer upon capital appreciation; and
a building that is leased out.
An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that
economic benefits associated with an investment property will flow to the Group and the
subsequent expenditures can be measured reliably. Other subsequent expenditures are recognized
in profit or loss in the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which is consistent with that for
buildings or land use rights.
When an investment property is sold, transferred, retired or damaged, the Group recognizes the
amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss
for the period.
14. Fixed assets
14.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes, and have useful lives of more than
one accounting year. A fixed asset is recognized only when it is probable that economic benefits
associated with the asset will flow to the Group and the cost of the asset can be measured reliably.
Fixed assets are initially measured at cost and the effect of any expected costs of abandoning the
asset at the end of its use is considered.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset and
if it is probable that economic benefits associated with the asset will flow to the Group and the
subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the
replaced part is derecognized. Other subsequent expenditures are recognized in profit or loss in
the period in which they are incurred.
14.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method since the month
subsequent to the one in which it is ready for intended use. The useful life, estimated net residual
value rate and annual depreciation rate of each category of fixed assets are as follows:
30
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
14. Fixed assets - continued
14.2 Depreciation of each category of fixed assets - continued
Annual
Depreciation Residual value depreciation
Category period (years) rate (%) rate (%)
Buildings 5 - 50 5, 10 1.8-19
Port facilities 50 5 1.9
Machinery and equipment 3 - 20 5, 10 4.5-31.7
Transportation vehicles 3 - 14 5, 10 6.4-31.7
Fixed asset decorations 2-5 - 20-50
Office and other equipment 3-5 5, 10 18-31.7
Estimated net residual value of a fixed asset is the estimated amount that the Group would
currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the
asset were already of the age and in the condition expected at the end of its useful life.
14.3 Other explanations
The Group reviews the useful life and estimated net residual value of a fixed asset and the
depreciation method applied at least once at each financial year-end, and accounts for any change
as a change in an accounting estimate.
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from
its use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired
or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and
related taxes is recognized in profit or loss for the period.
15. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalized before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for its intended use.
Once the impairment loss of construction in progress is recognized, it is not be reversed in any
subsequent period.
16. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalized when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced. Capitalization of borrowing costs
ceases when the qualifying asset being acquired, constructed or produced becomes ready for its
intended use or sale. If construction or production of assets qualifying capitalization is interrupted
abnormally for a continuous 3-month-or-above period, the capitalization of borrowing costs
should be ceased until the assets resume construction or production. Other borrowing costs are
recognized as an expense in the period in which they are incurred.
31
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
16. Borrowing costs - continued
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalized
is the actual interest expense incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used on the asset or any investment income on the
temporary investment of those funds. Where funds are borrowed under general-purpose borrowings, the
Group determines the amount of interest to be capitalized on such borrowings by applying a
capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the
amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest
rates applicable to the general-purpose borrowings.
During capitalization period, any exchange differences of special loans in foreign currency should
be capitalized, whereas exchange differences of general loans should be recorded in current
profits and losses.
17. Intangible assets
17.1Intangible assets
Intangible assets include land use rights, trademarks and software.
An intangible asset is measured initially at cost. When an intangible asset with a finite useful life
is available for use, its original cost less net residual value and any accumulated impairment
losses is amortized over its estimated useful life using the straight-line method. An intangible
asset with an indefinite useful life is not amortized. The amortization method, years of useful life
and net residual value are as follows:
Net residual value
Category Amortization method Useful life (year) (%)
Land use rights Straight-line method 50 -
Trademarks Straight-line method 10 -
Software Straight-line method 3-10 -
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization
method at the end of the period, and makes adjustments when necessary.
17.2Research and development expenditure
Expenditure during the research phase is recognized as an expense in the period in which it is
incurred.
Expenditure during the development phase that meets all of the following conditions at the same
time is recognised as intangible asset. Expenditure during development phase that does not meet
the following conditions is recognised in profit or loss for the period.
32
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
17. Intangible assets - continued
17.2Research and development expenditure - continued
(1) it is technically feasible to complete the intangible asset so that it will be available for use or
sale;
(2) the Group has the intention to complete the intangible asset and use or sell it;
(3) the Group can demonstrate the ways in which the intangible asset will generate economic
benefits, including the evidence of the existence of a market for the output of the intangible
asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset;
(4) the availability of adequate technical, financial and other resources to complete the
development and the ability to use or sell the intangible asset; and
(5) the expenditure attributable to the intangible asset during its development phase can be
reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase,
the Group recognises all of them in profit or loss for the period.
18. Long-term assets impairment
The Group assesses at each balance sheet date whether there is any indication that the long-term
equity investment, investment property measured at cost method, fixed assets, construction in
progress and intangible assets with a finite useful life may be impaired. If there is any indication
that such assets may be impaired, recoverable amounts are estimated for such assets. Intangible
assets with indefinite useful life and intangible assets not yet available for use are tested for
impairment annually, irrespective of whether there is any indication that the assets may be
impaired.
If it is not practical to estimate the recoverable amount of an individual asset, the recoverable
amount of the asset group to which the asset belongs will be estimated. The recoverable amount
of an asset is the higher of its fair value less costs of disposal and the present value of the future
cash flows expected to be derived from the asset.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit
is accounted for as an impairment loss and is recognized in profit or loss for the period.
Goodwill should be tested for impairment at least at the end of each year. For the purpose of
impairment testing, goodwill is considered together with the related assets group(s), i.e., goodwill
is reasonably allocated to the related assets group(s) or each of assets group(s) expected to benefit
from the synergies of the combination. An impairment loss is recognized if the recoverable
amount of the assets group or sets of assets groups (including goodwill) is less than its carrying
amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill
allocated to such assets group or sets of assets groups, and then to the other assets of the group
pro-rata on the basis of the carrying amount of each asset (other than goodwill) in the group.
Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent
period.
33
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
19. Employee benefits
19.1 Accounting method for short-term employee benefits
Actually occurred short-term employee benefits are recognized as liabilities, with a corresponding
charge to the profit or loss for the period or in the costs of relevant assets in the accounting period
in which employees provide services to the Group. Staff welfare expenses incurred by the
Group are recognized in profit or loss for the period or the costs of relevant assets based on the
actually occurred amounts when it actually occurred. Non-monetary staff welfare expenses are
measured at fair value.
Payment made by the Group of social security contributions for employees such as premiums or
contributions on medical insurance, work injury insurance and maternity insurance, etc. and
payments of housing funds, as well as union running costs and employee education costs provided
in accordance with relevant requirements, are calculated according to prescribed bases and
percentages in determining the amount of employee benefits and recognized as relevant liabilities,
with a corresponding charge to the profit or loss for the period or the costs of relevant assets in the
accounting period in which employees provide services.
19.2 Accounting method for post-employment benefits
Post-employment benefits are all defined contribution. The contribution payable to the defined
contribution plan is recognized as liabilities, with a corresponding charge to the profit or loss for
the period or in the costs of relevant assets in the accounting period in which employees provide
services to the Group.
19.3 Accounting method for termination benefits
When the Group provides termination benefits to employees, employee benefit liabilities are
recognized for termination benefits, with a corresponding charge to the profit or loss for the
period at the earlier of: (1) when the Group cannot unilaterally withdraw the offer of termination
benefits because of the termination plan or a curtailment proposal; and (2) when the Group
recognizes costs or expenses related to restructuring that involves the payment of termination
benefits.
20. Provisions
A provision shall be recognized when the Group has a present obligation relating to a contingency
and it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a realizable estimate can be made of the amount of the obligation.
At the balance sheet date, a provision is measured at the best estimate of the expenditure required
to settle the present obligation after taking into account the risks and uncertainties surrounding a
contingency and the time value of money. Where the effect of the time value of money is material,
the best estimate shall be the present value as discounted from the expenditures expected to be
required to settle the obligation.
34
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
20. Provisions - continued
If all or partial expenses needed for liquidation of a provisionon is expected to be compensated by
a third party and the compensation is sure to be received, the compensation should be recorded as
assets separately with amount not exceeding the net book value of provision.
21. Production safety fee
The Group calculates and includes the production safety fee in the current profit or loss and the
special reserve based on the Administrative Rules on Provision and Use of Enterprise Production
Safety Fee (Cai Qi [2012] No. 16) jointly issued by the MoF and State Administration of Work
Safety on 14 February 2012.
If the production safety fee set aside is used as expense, it should be written-off against special
reserve directly. If the production safety fee set aside is used for fixed assets for safety purpose, it
should be included in construction in progress and recognized as fixed assets once the
construction of fixed asset for safety purpose reaches the ready-to-use status; at the same time,
special reserve should be written-off against the cost of forming fixed assets with the same
amount of accumulated depreciation being recognized. Depreciation will not be calculated on
such fixed assets for safety purpose in the future period.
22. Revenue
22.1 Revenue from rendering of services
Revenue from rendering of services is recognized when (1) the amount of revenue can be
measured reliably; (2) it is probable that the associated economic benefits will flow to the
enterprise; (3) the stage of completion of the transaction can be determined reliably; and (4) the
associated costs incurred or to be incurred can be measured reliably. Revenue from rendering of
services is recognized using the percentage of completion method at the balance sheet date. The
stage of completion of a transaction for rendering for services is determined based on services
performed to date as a percentage of total services to be performed.
When the outcome of the transaction involving the rendering of services cannot be estimated
reliably, revenue is recognized only to the extent of the costs incurred that will be recoverable,
and the costs incurred are recognized as expenses for the period. When it is not probable that the
costs incurred will be recovered, revenue is not recognized.
22.2 Revenue from rendering of asset usage right
The revenue is recognized on accrual basis according to related contracts or agreements reached.
22.3 Interest income
The interest income shall be calculated based on the tenure of the Group's monetary funds used by
others and the actual interest rates used.
35
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
23. Government grants
Government grants are transfer of monetary assets and non-monetary assets from the government
to the Group at no consideration.
A government grant is recognized only when the Group can comply with the conditions attaching
to the grant and the Group will receive the grant. If a government grant is in the form of a transfer
of a monetary asset, it is measured at the amount received or receivable.
23.1 Basis of judgment and accounting methods for assets-related government grant
The Groups' government grant includes special grants for logistics park construction. As the grant
relates to the final formation of assets, this grant is classified as assets-related government grant.
A government grant related to an asset is recognized as deferred income, and evenly amortized to
profit or loss over the useful life of the related asset.
23.2 Basis of judgment and accounting methods for income-related government grant
The Group's government grant includes governmental supporting funds and subsidies for modern
logistics industry. The grant should is classified as income-related government grant.
For a government grant related to income, if the grant is a compensation for related expenses or
losses to be incurred in subsequent periods, it is recognized as deferred income, and recognized in
profit or loss over the periods in which the related costs are recognized. If the grant is a
compensation for related expenses or losses already incurred, it is recognized immediately in
profit or loss for the period.
24. Deferred tax assets and deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
24.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods
are measured at the amount expected to be paid (or recovered) according to the requirements of
tax laws.
24.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their
tax base, or between the nil carrying amount of those items that are not recognized as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognized using the balance sheet liability method.
36
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
24. Deferred tax assets and deferred tax liabilities - continued
24.2 Deferred tax assets and deferred tax liabilities - continued
Deferred tax is generally recognized for all temporary differences. Deferred tax assets for
deductible temporary differences are recognized to the extent that it is probable that taxable
profits will be available against which the deductible temporary differences can be utilized.
However, for temporary differences associated with the initial recognition of goodwill and the
initial recognition of an asset or liability arising from a transaction (not a business combination)
that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of
transaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against
which the deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the Group
is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only
recognized to the extent that it is probable that there will be taxable profits against which to utilize
the benefits of the temporary differences and they are expected to reverse in the foreseeable
future. At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates,
according to tax laws, that are expected to apply in the period in which the asset is realized or the
liability is settled.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except
when they arise from transactions or events that are directly recognized in other comprehensive
income or in shareholders' equity, in which case they are recognized in other comprehensive
income or in shareholders' equity; and when they arise from business combinations, in which case
they adjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it
is no longer probable that sufficient taxable profits will be available in the future to allow the
benefit of deferred tax assets to be utilized. Such reduction in amount is reversed when it becomes
probable that sufficient taxable profits will be available.
24.3 Offsetting income tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis
or to realize the assets and settle the liabilities simultaneously, current tax assets and current tax
liabilities are offset and presented on a net basis.
37
(III)SIGNIFICANT ACCOUNTING POLICIES, AND ACCOUNTING ESTIMATES - continued
24. Deferred tax assets and deferred tax liabilities - continued
24.3 Offsetting income tax - continued
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current tax assets and liabilities on a net basis or to realize the assets and liabilities
simultaneously, in each future period in which significant amounts of deferred tax assets or
liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and
presented on a net basis.
25. Operating leases and finance leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
25.1 Accounting treatment on operating leases
25.1.1 The Group as lessee under operating leases
Operating lease payments are recognized on a straight-line basis over the term of the relevant
lease, and are either included in the cost of related asset or charged to profit or loss for the period.
Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are
charged to profit or loss in the period in which they are actually incurred.
25.1.2 The Group as lessor under operating leases
Rental income from operating leases is recognized in profit or loss on a straight-line basis over the
term of the relevant lease. Initial direct costs with more than an insignificant amount are
capitalized when incurred, and are recognized in profit or loss on the same basis as rental income
over the lease term. Other initial direct costs with an insignificant amount are charged to profit or
loss in the period in which they are incurred. Contingent rents are charged to profit or loss in the
period in which they actually arise.
26. Changes in significant accounting policies and accounting estimates
No changes in accounting policies and accounting estimates occur this period.
38
(IV) TAXES
1. Major categories of taxes and tax rates
Category of tax Basis of tax computation Tax rate
Revenues from water and electricity supply
and maintenance service provided by 13%, 17%
general taxpayers
Revenues from taxable services provided by
Value-added tax ("VAT") 3%
small-scale taxpayers
Revenues from stack (storage), loading and
unloading, delivery and port management 6%, 11%
services provided by general taxpayers
Taxable revenue from rendering of services,
Business tax 3% or 5%(note)
disposal of intangible assets or properties
City maintenance and construction tax Actual payment for VAT and business taxes 5% or 7%
Education surcharge Actual payment for VAT and business taxes 3%
Enterprise income tax Taxable income 25%
Urban land use tax Actual occupation of land area RMB1.50 - 10.00/square meter
70% to 90% of the original cost of the 1.2% of properties' residual
Property tax
property or rental income value
Note: Pursuant to Annoucement on Further Promote Pilots of Business Tax Reformed to Valued-
added Tax [Cai Shui (No.36)] issued by MoF and State Taxation Bureau, from 1 May 2016, the
Group is applicable to VAT using 6% when providing VAT related service and using 11% when
selling intangible assets or properties.
Entities using different enterprise income tax rate:
Name of entity Enterprise income tax rate
Blogis (Hong Kong) Limited ("Baowan Hong Kong") 16.5%
China Huitong (H.K.) Limited ("China Huitong") 16.5%
2. Tax incentives
Pursuant to Urban Land Use Tax Policy on the Logistics Enterprises with Commodity
Warehousing Facilities (Cai Shui [2015] No. 98) issued by the MoF and State Administration of
Taxation ("SAT"), from 1 January 2015 to 31 December 2016, the Group as a logistics enterprise,
of which land being used for commodity warehousing facilities (including owner-occupied and
rental) should be levied on urban land use tax based on 50% of applicable tax rate of different
land grades.
Pursuant to Announcement on Implementing Preferential on Enterprise Income Tax of
Encouraged Industries in the Western Region (2015 No. 14 announcement of SAT), and approved
by Chengdu Longquan State Administration of Taxation (Long Guo Shui Fa [2015] No.30),
Chengdu Longquan International Logistics Co., Ltd. ("Longquan Baowan"), subsidiary of the
Company which locates in Chengdu, Sichuang Province, is allowed to enjoy enterprise income
tax preferential policies tailored to enterprises which fits criteria of China West Development
Program. From 2014 to 2020, Longquan Baowan enjoys enterprise income tax preferential rate of
15%.
39
(IV) TAXES - continued
2. Tax incentives - continued
Pursuant to the second article of Announcement on Implementing Taxation Policies and Issues of
Western Development Region (Cai Shui [2011]No.58), and approved by National Development
and Reform Commission ([2016] No.195), Chengdu Xindu International Logistics Co., Ltd.
("Xindu Baowan"), subsidiary of the Company which locates in Chengdu, Sichuang Province, is
allowed to enjoy enterprise income tax preferential policies tailored to enterprises which fits
criteria of China West Development Program. In 2016, Xindu Baowan enjoys enterprise income
tax preferential rate of 15%.
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
Unit: RMB
Closing balance Opening balance
Cash:
RMB 6,843.18 7,360.75
Singapore Dollar 4,590.72 5,933.93
Hong Kong Dollar 3,086.03 2,819.04
Euro 2,776.58 2,698.00
United States Dollar 395.41 1,135.75
Sub-total 17,691.92 19,947.47
Bank balances:
RMB 521,490,973.19 317,429,556.55
Hong Kong Dollar 2,679,089.64 3,242,298.15
United States Dollar 421,342.83 430,124.56
Sub-total 524,591,405.66 321,101,979.26
Total 524,609,097.58 321,121,926.73
Including: Money deposited overseas(note ) 14,257,152.25 3,272,564.62
Note: Bank balances deposited overseas are deposits of subsidiary China Huitong and Baowan
Hong Kong. The remittance of funds is not restricted.
40
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Accounts receivable
(1) Disclosure of accounts receivable by categories
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Proportio Proportion Net book Proportion Proportion
Category Amount n (%) Amount (%) value Amount (%) Amount (%) Net book value
Accounts
receivable that are
individually
- - - - -
significant and
provided for bad
debt individually
Accounts receivable for which bad debt provision has been assessed by portfolios
Portfolio 1 292,868.33 0.66 - - 292,868.33 389,154.95 0.76 - - 389,154.95
Portfolio 2 44,010,036.65 99.34 440,100.37 1.00 43,569,936.28 50,372,383.10 98.92 503,723.83 1.00 49,868,659.27
Subtotal of
44,302,904.98 100.00 440,100.37 43,862,804.61 50,761,538.05 99.68 503,723.83 50,257,814.22
portfolios
Accounts
receivable that are
not individually
significant but for
- - - - - 164,138.40 0.32 164,138.40 100.00 -
which bad debt
provision has been
assessed
individually
Total 44,302,904.98 100.00 440,100.37 43,862,804.61 50,925,676.45 100.00 667,862.23 50,257,814.22
Accounts receivable portfolios for which bad debt provision has been assessed using the percentage
of accounts receivable method:
Unit: RMB
Closing balance
Proportion of provision
Name of portfolio Carrying amount Bad debt provision (%)
Portfolio 2 44,010,036.65 440,100.37 1.00
Basis for determining the above portfolio: See Note(III)10.2.
(2) Provision being recorded and reversed in the current period
Provision being recorded is RMB 126,513.67 and being reversed is RMB 190,137.16 in the current
period, and being written-off is RMB 164,138.37 in the current period.
(3) Provision being written-off in the current period
Unit: RMB
Name of entity Written-off
Amount due from Shenzhen Lanjing Offshore Technology Co., Ltd. 164,138.37
41
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Accounts receivable - continued
(4) Top five entities with the largest balances of accounts receivable
Unit: RMB
Proportion of the
amount to total
accounts receivable
Name of entity Amount (%) Bad debt Closing balance
Customer 1 7,227,001.39 16.31 72,270.01
Customer 2 3,542,155.24 8.00 35,421.55
Customer 3 1,790,032.38 4.04 17,900.32
Customer 4 1,599,554.55 3.61 15,995.55
Customer 5 1,344,983.87 3.04 13,449.84
Total 15,503,727.43 35.00 155,037.27
3. Prepayments
(1) Aging analysis of prepayments is as follows:
Unit: RMB
Closing balance Opening balance
Proportion
Aging Amount (%) Amount Proportion (%)
Within 1 year 716,387.12 95.77 360,732.37 82.76
1 - 2 years 3,323.66 0.44 40,838.81 9.37
2 - 3 years 5,849.17 0.78 - -
More than 3 years 22,504.50 3.01 34,306.33 7.87
Total 748,064.45 100.00 435,877.51 100.00
There is no significant amount of prepayment aging over one year which is not settled in time.
4. Interests receivable
(1) Interests receivable by categories
Unit: RMB
Item Closing balance Opening balance
Fixed deposits 423,404.92 107,397.26
Financing product - 1,031,342.47
Total 423,404.92 1,138,739.73
(2) There is no significant interest overdue for the Group.
42
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Other receivables
(1) Disclosure of other receivables by categories
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Net book
Proportio Proportion Net book value
value Proportion Proportion
Category Amount n (%) Amount (%) Amount (%) Amount (%)
Other receivables
that are
individually
- - - - - - - - - -
significant and
provided for bad
debt individually
Other receivables for which bad debt provision has been assessed by portfolios
Portfolio 1 60,311,350.30 94.38 - - 60,311,350.30 51,641,225.90 87.92 - - 51,641,225.90
Portfolio 2 3,588,138.06 5.62 35,881.39 1.00 3,552,256.67 7,095,962.25 12.08 70,956.55 1.00 7,025,005.70
Subtotal of
63,899,488.36 100.00 35,881.39 63,863,606.97 58,737,188.15 100.00 70,956.55 58,666,231.60
portfolios
Total 63,899,488.36 100.00 35,881.39 63,863,606.97 58,737,188.15 100.00 70,956.55 58,666,231.60
Other receivables portfolios for which bad debt provision has been assessed using the percentage
of accounts receivable method:
Unit: RMB
Closing balance
Proportion of provision
Name of portfolio Other receivables Bad debt provision (%)
Portfolio 2 3,588,138.06 35,881.39 1.00
Basis for determining the above portfolio: See Note(III)10.2.
(2) Provision being recorded and reversed in the current period
Provision being recorded is RMB 10,302.66, being reversed is RMB 45,377.82 in the current
period.
(3) Disclosure of other receivables by nature:
Unit: RMB
Nature Closing balance Opening balance
Deposits 30,899,167.86 18,887,803.08
Amount due from operating activities 16,231,215.52 38,346,342.40
Amount due from related parties 15,360,336.60 93,521.48
Petty cash 1,141,493.08 1,282,427.95
Others 267,275.30 127,093.24
Total 63,899,488.36 58,737,188.15
43
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Other receivables - continued
(4) Top five entities with the largest balances of other receivables
Unit: RMB
Proportion of
the amount to
the total
other Bad debt
receivables closing
Name of entity Nature Amount Aging (%) balance
Minority Amount due from -
15,333,000.00 Within 1 year 24.00
shareholders related party
Customer 1 Amount due from 12,045,000.00 More than 3 years 18.85 -
government
Amount due from -
Customer 2 government 4,505,000.00 1 to 2 year 7.05
agency
Amount due from -
Customer 3 government 3,549,852.00 1 to 2 year 5.56
agency
Amount due from -
Customer 4 government 2,041,600.00 1 to 3 year 3.20
agency
Total 37,474,452.00 58.66 -
6. Inventories
Unit: RMB
Closing balance Opening balance
Provision for Provision for
Gross carrying decline in value of Net carrying Gross carrying decline in value of Net carrying
amount inventories amount amount inventories amount
Raw materials 606,805.98 - 606,805.98 579,126.32 - 579,126.32
Maintenance accessories 355,049.74 - 355,049.74 335,417.12 - 335,417.12
Total 961,855.72 - 961,855.72 914,543.44 - 914,543.44
7. Other current assets
Unit: RMB
Item Closing balance Opening balance
Prepaid taxes and deductible VAT input taxes 14,424,379.64 -
Bank financing products (note) - 235,000,000.00
Total 14,424,379.64 235,000,000.00
Note: Other current assets are bank financing products purchased by the Group. The expected
annualized rates of return are between 3.05% and 4.70% and the maturities are between 78
and 161 days.
44
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Long-term equity investments
Unit: RMB
Changes in the current period
Adjustment on Announcing
Investment income other cash Closing
Increase in Decrease in recognized by comprehensive Other equity dividends or balance on
Investee Opening balance investment investment equity method income changes profits Provision Others Closing balance provision
1. Associates
Shenzhen Chiwan Sembawang
467,789,861.57 - - 25,914,161.33 - - 12,908,798.55 - - 480,795,224.35 -
Engineering Co. Ltd. ("CSE")
China Development Finance
111,647,095.57 - - 9,015,037.61 - - - - - 120,662,133.18 -
Co., Ltd. ("CDFC")
Shenzhen Chiwan Offshore
Petroleum Engineering Co., 3,163,403.60 - - (2,425,846.07) - - - - - 737,557.53 -
Ltd ("CPEC")
Total 582,600,360.74 - - 32,503,352.87 - - 12,908,798.55 - - 602,194,915.06 -
There is no restrictions to the ability of transferring funds to the Company from the investee entities which are held by the Company as long-term
equity investment as at 31 December 2016.
45
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Investment properties
(1) Investment properties measured at cost
Unit: RMB
Item Buildings
I. Total original carrying amount
1. Opening carrying amount 1,783,444,445.35
2. Increase in the current period 389,664,863.01
(1) Transfer from Construction in Progress 120,753,638.04
(2) Increase due to business combination (note 1) 137,861,738.85
(3) Adjustment due to completion settlement 3,237,660.50
(4) Others(note 2) 127,811,825.62
3. Decrease in the current period 131,236,481.65
(1) Disposal 3,424,656.03
(2) Transfer to construction in progress for renovation project 127,811,825.62
4. Closing carrying amount 2,041,872,826.71
II. Total accumulated provision for depreciation losses of investment properties
1. Opening carrying amount 357,850,720.64
2. Increase in the current period 81,947,382.06
(1) Amount accrued or amortized 56,749,984.41
(2) Increase due to business combination (note 1) 24,034,838.85
(3) Others(note 2) 1,162,558.80
3. Decrease in the current period 3,974,614.06
(1) Disposal 1,484,942.76
(2) Transfer to construction in progress for renovation project 2,489,671.30
3. Closing carrying amount 435,823,488.64
III. Total accumulated provision for impairment losses of investment properties
1. Opening carrying amount -
2. Increase in the current period -
3. Decrease in the current period -
4. Closing carrying amount -
IV. Total net book value of investment properties
1. Closing net book value 1,606,049,338.07
2. Opening net book value 1,425,593,724.71
Note 1: See note (VI) 1(3) for details.
Note 2: See note (VI) 2(2) for details.
(2) Investment properties that have not obtained certificates
Unit: RMB
Item Net book value Reasons for not obtained certificates
Buildings 432,970,850.45 Settlement procedures are still in progress
Buildings 125,336,794.44 Properties are built on leased land. See note (V) 12 for details
Total 558,307,644.89
46
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
10. Fixed assets
(1) Details of fixed assets are as follows:
Unit: RMB
Office and
Machinery and Transportation Fixed assets other
Item Buildings Port facilities equipment vehicles decorations equipment Total
I. Total original carrying amount
1. Opening carrying amount 852,293,678.23 46,462,519.33 172,058,947.61 22,576,425.61 13,767,664.19 92,563,788.78 1,199,723,023.75
2. Increase in the current period 82,071,531.56 - 5,347,554.48 521,756.26 - 9,902,795.65 97,843,637.95
(1) Purchase 625,278.62 - 53,641.03 521,756.26 - 1,407,050.62 2,607,726.53
(2) Transfer from Construction in
71,983,558.80 - 5,293,913.45 - - 1,525,435.05 78,802,907.30
Progress
(3) Increase due to business
9,462,694.14 - - - - 6,776,317.98 16,239,012.12
combination (note 1)
(4) Others (note 2) - - - - - 193,992.00 193,992.00
3. Decrease in the current period 11,600.00 - 7,943,813.03 1,496,967.98 - 633,882.21 10,086,263.22
(1) Disposal 11,600.00 - 7,943,813.03 1,496,967.98 - 633,882.21 10,086,263.22
4. Closing carrying amount 934,353,609.79 46,462,519.33 169,462,689.06 21,601,213.89 13,767,664.19 101,832,702.22 1,287,480,398.48
II .Total accumulated depreciation
1. Opening carrying amount 148,644,293.69 35,133,444.71 88,440,273.26 14,067,681.20 13,767,664.19 56,947,610.64 357,000,967.69
2. Increase in the current period 38,453,786.02 945,667.54 12,804,545.60 2,728,601.07 - 7,592,699.74 62,525,299.97
(1) Amount accrued 37,178,403.57 945,667.54 12,804,545.60 2,728,601.07 - 6,008,977.91 59,666,195.69
(2) Increase due to business
1,275,382.45 - - - - 1,555,729.67 2,831,112.12
combination (note 1)
(3) Others (note 2) - - - - - 27,992.16 27,992.16
3. Decrease in the current period 11,020.00 - 7,064,828.36 1,463,449.97 - 602,667.49 9,141,965.82
(1) Disposal 11,020.00 - 7,064,828.36 1,463,449.97 - 602,667.49 9,141,965.82
4. Closing carrying amount 187,087,059.71 36,079,112.25 94,179,990.50 15,332,832.30 13,767,664.19 63,937,642.89 410,384,301.84
III. Total accumulated provision for
impairment losses
1. Opening carrying amount - - - - - - -
2. Increase in the current period
3. Decrease in the current period
4. Closing carrying amount
IV. Total net book value of investment
properties
1. Closing net book value 747,266,550.08 10,383,407.08 75,282,698.56 6,268,381.59 - 37,895,059.33 877,096,096.64
2. Opening net book value 703,649,384.54 11,329,074.62 83,618,674.35 8,508,744.41 - 35,616,178.14 842,722,056.06
Note 1: See note (VI) 1(3) for details.
Note 2: See note (VI) 2(2) for details.
(2) Fixed assets that have not obtained certificates
Unit: RMB
Item Net book value Reasons for not obtained certificates
Buildings 21,653,973.41 Settlement procedures are still in progress
Buildings 7,462,350.74 Properties are built on leased land. See note (V) 12 for details
Total 29,116,324.15
47
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11.Construction in progress
(1) Details of construction in progress are as follows:
Unit: RMB
Closing balance Opening balance
Provision for Net carrying Provision for Net carrying
Item Carrying amount impairment losses amount Carrying amount impairment losses amount
Qingdao Jiaozhou Baowan
International Logistic Co., Ltd
172,495,930.90 - 172,495,930.90 15,489,739.01 - 15,489,739.01
("Jiaozhou Baowan) logistic park
construction
Zhenjiang Warehouse Logistics Co.,
Ltd ("Zhenjiang Warehouse ") logistic 151,999,058.12 - 151,999,058.12 172,404,355.90 - 172,404,355.90
park construction
Beijing Jinmucaoye Co.,Ltd
(("Beijing Jinmucaoye") logistic park 145,962,022.82 - 145,962,022.82 - - -
construction
Tianjin Bingang Baowan International
Logistics Co., Ltd. ("Bingang Baowan 59,149,313.16 - 59,149,313.16 31,398,962.29 - 31,398,962.29
") logistic park construction
Jiaxing Baowan Logistic Co., Ltd
("Jiaxing Baowan) logistic park 44,562,016.70 - 44,562,016.70 99,562.42 - 99,562.42
construction
Chengdu Chiwan International Oil-
Gas Base Co., Ltd.("Chengdu Oil-Gas 6,499,857.37 - 6,499,857.37 266,908.50 - 266,908.50
Base") construction
Xianyang Baowan International
Logistic Co., Ltd ("Xianyang 2,215,162.70 - 2,215,162.70 49,000.00 - 49,000.00
Baowan) logistic park construction
Xi'an Baowan International Logistic
Co., Ltd ("Xi'an Baowan) logistic 823,660.36 - 823,660.36 190,000.00 - 190,000.00
park construction
Shenyang Baowan International
Logistic Co., Ltd ("Shenyang 646,090.10 - 646,090.10 646,090.10 - 646,090.10
Baowan) logistic park construction
Wuhan Baowan Logistic Ezhou Co.,
Ltd ("Ezhou Baowan") logistic park 518,070.48 - 518,070.48 - - -
construction
Feidong Baowan Logistic Co., Ltd
("Feidong Baowan) logistic park 292,789.91 - 292,789.91 7,000.00 - 7,000.00
construction
Shaoxing Baowan Logistic Co., Ltd
("Shaoxing Baowan) logistic park 411,154.06 - 411,154.06 - - -
construction
Yangluo Baowan logistic park
173,223.62 - 173,223.62 109,011.20 - 109,011.20
construction
Wuxi Baowan Warehouse Logistics
Co., Ltd ("Nantong Baowan ") 157,642.00 - 157,642.00 129,840,610.77 - 129,840,610.77
logistic park construction
Qingwu Baowan logistic park
120,000.00 - 120,000.00 120,000.00 - 120,000.00
construction
Jiangyin Baowan logistic park
70,843.00 - 70,843.00 70,843.00 - 70,843.00
construction
Chongqing Xipeng Baowan
International Logistic Co., Ltd
21,962.67 - 21,962.67 - - -
("Xipeng Baowan) logistic park
construction
Nantong Xitong Baowan Logistic
Co., Ltd ("Xitong Baowan) logistic 10,000.00 - 10,000.00 - - -
park construction
Other miscellaneous constructions 15,778,166.65 - 15,778,166.65 18,273,394.31 - 18,273,394.31
Total 601,906,964.62 - 601,906,964.62 368,965,477.50 - 368,965,477.50
48
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11.Construction in progress - continued
(2) Changes in construction in progress
Unit: RMB
Amount injected Interest
Transferred to as a proportion Amount of Including: capitalization
Increase in the Transferred to investment of budget Construction accumulated capitalized interest rate for the
Item name Budget amount Opening balance current period fixed assets properties Closing balance amount (%) progress (%) capitalized interest for the period period (%) Source of funds
Jiaozhou Baowan logistic park
274,000,000.00 15,489,739.01 157,006,191.89 - - 172,495,930.90 62.95 62.95 398,008.24 398,008.24 3.97 Self-financing and borrowings
construction
Zhenjiang Warehouse logistic park
362,220,000.00 172,404,355.90 12,042,005.03 - 32,447,302.81 151,999,058.12 50.92 50.92 - - - Self-financing
construction
Beijing Jinmucaoye logistic park
35,110,000.00 - 145,962,022.82 - - 145,962,022.82 58.79 58.79 706,562.50 706,562.50 4.75 Self-financing and borrowings
construction (note)
Bingang Baowan logistic park
343,600,000.00 31,398,962.29 27,750,350.87 - - 59,149,313.16 17.21 17.21 5,651,786.59 5,037,575.44 5.16 Self-financing and borrowings
construction
Jiaxing Baowan logistic park
193,690,000.00 99,562.42 44,462,454.28 - - 44,562,016.70 23.01 23.01 - - - Self-financing
construction
Chengdu Oil-Gas Base construction 820,000,000.00 266,908.50 6,232,948.87 - - 6,499,857.37 0.79 0.79 - - - Self-financing
Xianyang Baowan logistic park
549,780,000.00 49,000.00 2,166,162.70 - - 2,215,162.70 0.40 0.40 - - - Self-financing
construction
Xi'an Baowan logistic park
448,120,000.00 190,000.00 633,660.36 - - 823,660.36 0.18 0.18 - - - Self-financing
construction
Shenyang Baowan logistic park
433,240,000.00 646,090.10 - - - 646,090.10 0.15 0.15 - - - Self-financing
construction
Ezhou Baowan logistic park
525,000,000.00 - 518,070.48 - - 518,070.48 0.10 0.10 - - - Self-financing
construction
Shaoxing Baowan logistic park
356,000,000.00 - 411,154.06 - - 411,154.06 0.12 0.12 - - - Self-financing
construction
Feidong Baowan logistic park
228,530,000.00 7,000.00 285,789.91 - - 292,789.91 0.13 0.13 - - - Self-financing
construction
Yangluo Baowan logistic park
163,980,000.00 109,011.20 64,212.42 - - 173,223.62 0.11 0.11 - - - Self-financing
construction
Wuxi Baowan logistic park
361,530,000.00 129,840,610.77 26,514,859.21 75,406,603.36 80,791,224.62 157,642.00 43.25 100.00 - - - Self-financing
construction
Qingwu Baowan logistic park
279,060,000.00 120,000.00 - - - 120,000.00 0.04 0.04 - - - Self-financing
construction
Jiangyin Baowan logistic park
267,280,000.00 70,843.00 - - - 70,843.00 0.03 0.03 - - - Self-financing
construction
Xipeng Baowan logistic park
375,000,000.00 - 21,962.67 - - 21,962.67 0.01 0.01 - - - Self-financing
construction
Xitong Baowan logistic park
213,000,000.00 - 10,000.00 - - 10,000.00 0.00 0.00 - - - Self-financing
construction
Other miscellaneous constructions Not applicable 18,273,394.31 8,416,186.89 3,396,303.94 7,515,110.61 15,778,166.65 Not applicable Not applicable - - - Self-financing
Total 368,965,477.50 432,498,032.46 78,802,907.30 120,753,638.04 601,906,964.62 6,756,357.33 6,142,146.18
Note：Amount increased in the current period included RMB 125,322,154.32 which transfer from investment properties.
49
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Intangible assets
(1) Details of intangible assets
Unit: RMB
Item Land use rights Trademarks Software Total
I. Total original carrying amount
1. Opening carrying amount 1,879,423,447.43 312,832.83 2,192,585.94 1,881,928,866.20
2. Increase in the current period 853,591,674.73 126,213.59 905,823.50 854,623,711.82
(1) Purchase 643,971,199.29 126,213.59 905,823.50 645,003,236.38
(2) Increase due to business combination (note 1) 70,615,463.21 - - 70,615,463.21
(3) Others (note 2) 139,005,012.23 - - 139,005,012.23
3. Decrease in the current period - - - -
(1) Disposal - - - -
4. Closing carrying amount 2,733,015,122.16 439,046.42 3,098,409.44 2,736,552,578.02
II. Total accumulated amortization
1. Opening carrying amount 430,202,824.61 215,716.29 1,467,498.62 431,886,039.52
2. Increase in the current period 59,194,740.56 29,193.80 230,947.79 59,454,882.15
(1) Amortization accrued 53,308,855.71 29,193.80 230,947.79 53,568,997.30
(2) Increase due to business combination (note 1) 4,350,263.21 - - 4,350,263.21
(3) Others (note2) 1,535,621.64 - - 1,535,621.64
3. Decrease in the current period - - - -
4. Closing carrying amount 489,397,565.17 244,910.09 1,698,446.41 491,340,921.67
III. Total Provision for impairment losses
1. Opening carrying amount - - - -
2. Increase in the current period - - - -
3. Decrease in the current period - - - -
4. Closing carrying amount - - - -
IV. Total net book value
1. Closing net book value 2,243,617,556.99 194,136.33 1,399,963.03 2,245,211,656.35
2. Opening net book value 1,449,220,622.82 97,116.54 725,087.32 1,450,042,826.68
Note 1: See note (VI) 1(3) for details.
Note 2: See note (VI) 2(2) for details.
(2) Intangible assets that have not obtained certificates
Unit: RMB
Reasons for not obtained
Item Net book value certificates
Land use rights 267,443,239.10 Note 1
Land use rights 8,064,653.04 Note 2
Total 275,507,892.14
50
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Intangible assets - continued
Note 1: Land use right and dock use right are assets leased from Nanshan Group, the controlling
shareholder of the Company. In 1984, Nanshan Group contributed the land use right and
dock use right for 25 years as the investment capital to the Company. The term of the use
rights expired on 15 July 2009. On 18 July 2006, the Company and Nanshan Group
entered into Agreement on Land Use, which specifies that the Company can continue to
lease the land and dock by means of operating lease after the expiration. The lease term is
25 years that starts from 15 July 2009 and ends on 14 July 2034. The Company has paid
off all the rentals in a lump sum. As at 31 December 2016, Nanshan Group has not
obtained the use right certificate of the above mentioned land and dock.
Note 2: Use right of the eastern land is an asset leased from Nanshan Group, the controlling
shareholder of the Company, by means of operating lease in 1997. The lease term is 25
years from 1 August 1997 to 31 July 2022. The Company has paid off all the rentals in a
lump sum. Given that Nanshan Group has not obtained the use right certificate of the
mentioned land, in addition to the guarantee of the Company's legal use right on the land,
Nanshan Group entered into an Agreement on Immunity from Liabilities Caused by the
Land Use with the Company on 18 July 1997, agreeing to compensate the Company for
any losses, expenditures and liabilities associated with the leased land. As at 31
December 2016, Nanshan Group has not obtained use right certificate of the above
mentioned land and dock.
13. Development expenditure
Unit: RMB
Increase in the current
period
Opening Research and
Item balance development expenditure Closing balance
Warehouse management system - 920,050.29 920,050.29
SAP module customization - 410,624.13 410,624.13
Total - 1,330,674.42 1,330,674.42
14. Goodwill
(1) Carrying amount of goodwill
Unit: RMB
Increase in the current
period
Opening Generated from business
Item balance combination Closing balance
Tianjin Haier Asset Management Co., Ltd.
- 11,133,118.55 11,133,118.55
("Tianjin Haier")
The Group has evaluate the recoverable amount of goodwill at the end of 2016, and asserted that
there was no sign of impairment on the carrying amount of goodwill.
51
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
15. Deferred tax assets/deferred tax liabilities
(1) Deferred tax assets that are not offset
Unit: RMB
Closing balance Opening balance
Deductible Deductible
temporary temporary
Item differences Deferred tax assets differences Deferred tax assets
Deductible losses 97,090,341.05 24,272,585.27 114,871,400.43 28,717,850.10
Provision for impairment losses of
233,708.00 45,201.65 644,599.76 152,002.98
assets
Intangible assets amortization - - 30,009.32 7,502.33
Total 126,506,026.89 24,317,786.92 115,546,009.51 28,877,355.41
According to the profit forecast, the Group believes it is probable that sufficient taxable profits
will be available in future periods to offset the deductible temporary differences and deductible
losses. Therefore, the related deferred tax assets are recognized.
(2) Deferred tax liabilities that are not offset
Unit: RMB
Closing balance Opening balance
Taxable temporary Taxable temporary
Item differences Deferred tax liabilities differences Deferred tax liabilities
Increase in assets valuation due to
business combinations not involving
91,248,343.52 22,812,085.88 - -
enterprises under common control
(3) Deferred tax assets or liabilities that are presented at the net amount after offset
Closing balance Opening balance
Net amount of Net amount of
deferred tax assets deferred tax assets
The amount of or liabilities after The amount of or liabilities after
Item offset offset offset offset
Deferred tax assets - 24,317,786.92 - 28,877,355.41
Deferred tax liabilities - 22,812,085.88 - -
(4) Details of unrecognized deferred tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible losses 217,901,282.72 41,579,367.77
Deductible temporary differences 290,161.32 94,219.02
Total 218,191,444.04 41,673,586.79
Deductible temporary differences and deductible losses for which deferred tax assets are not
recognised due to uncertainty whether sufficient taxable profits will be available in the future shall
be presented.
52
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
15. Deferred tax assets/deferred tax liabilities - continued
(5) Deductible losses, for which no deferred tax assets are recognised, will expire in the following
years
Unit: RMB
Year Closing balance Opening balance Remarks
Deductible losses with Due to accumulated losses from Baowan Hong
unlimited expire term
92,822,732.48 41,579,367.77 Kong and China Huitong
2019 831,022.59 - Due to the Company is in the process of
significant assets reorganization, the Company
2020 38,627,080.46 - cannot be assert whether sufficient taxable
income can be achieved to offset deductible
2021 85,620,447.19 - losses.
Total 217,901,282.72 41,579,367.77
16. Other non-current assets
Unit: RMB
Item Closing balance Opening balance
Prepayments for assets (note 1) 567,480,000.00 23,000,000.00
Prepayments for land use rights (note 2) 311,733,581.18 251,808,516.48
Refundable deposits for land use rights (note 3) 38,954,624.80 -
Prepayments for software installation (note 4) 6,690,456.61 -
Others 6,049,099.01 2,811,188.36
Total 930,907,761.60 277,619,704.84
Note 1: Closing balance represents assets prepayments by Baowan Logistics Holdings
Co., Ltd. ("Baowan Holdings"), subsidiary of the Company.
Note 2: Closing balance represents Prepayments for land use rights by Yangluo Baowan,
Xianyang Baowan, Xipeng Baowan, Changsha Yuhua Baowan Logistic Co., Ltd
("Yuhua Baowan"), Blogis Supply Chain Management (Jiaxing) Co., Ltd.
("Jiaxing Supply Chain"), Chongqing Luohuang Baowan International Logistic
Co., Ltd.("Luohuang Baowan"), subsidiaries of the Company.
Note 3: Closing balance represents refundable deposits for land use rights paid by Jiangyin
Baowan, Jiaxing Baowan, Jiaxing Supply Chain,Yuyao Baowan Logistics Co.,
Ltd. ("Yuyao Baowan"), Jiashan Baowan Logistic Co., Ltd ("Jiashan Baowan"),
subsidiaries of the Company.
Note 4: Closing balance represents prepayments for software installation by Kunshan
Baowan International Logistic Co., Ltd ("Kunshan Baowan") , subsidiary of the
Company.
53
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Unsecured and non-guaranteed loans(note 1) 800,000,000.00 300,000,000.00
Guaranteed loans(note 2) 50,000,000.00 -
Total 850,000,000.00 300,000,000.00
Note 1: The annual interest rates on the above borrowings are fixed rates, ranging from 4.1000%
to 4.1325%.
Note 2: The annual interest rates on the above borrowings is 4.1325%. See Note (X) 5(3) for
details.
18. Notes payable
Unit: RMB
Item Closing balance Opening balance
Commercial acceptance 16,200,019.20 -
At the end of the year, the Group has no overdue notes payable that are not paid.
19. Accounts payable
(1) Details of accounts payable are as follows:
Unit: RMB
Item Closing balance Opening balance
Rents payable 7,274,685.37 9,251,160.55
Repair charges 1,899,243.70 442,426.82
Service charges 727,374.70 248,775.96
Others 1,599,201.26 3,560,382.19
Total 11,500,505.03 13,502,745.52
(2) There is no significant accounts payable aging more than a year in the closing balance.
20. Receipts in advance
(1) Details of receipts in advance are as follows:
Unit: RMB
Item Closing balance Opening balance
Storage service fees collected in advance 8,998,939.24 4,129,236.00
Others 186,125.80 164,873.24
Total 9,185,065.04 4,294,109.24
(2) There are no significant receipts in advance aging more than a year in the closing balance.
54
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Employee benefits payable
(1) Details of employee benefits payable are as follows
Unit: RMB
Increase in the Decrease in the
Item Opening balance current period current period Closing balance
I. Short-term compensation 26,216,644.78 76,608,382.30 81,677,853.50 21,147,173.58
II. Post-employment benefits- defined
16,613.24 9,268,833.34 9,269,702.26 15,744.32
contribution plans
III. Termination benefits - 650,263.10 650,263.10 -
IV. Other welfare due within one year - - - -
Total 26,233,258.02 86,527,478.74 91,597,818.86 21,162,917.90
(2) Short-term Compensation
Unit: RMB
Increase in the Decrease in the
Item Opening balance current period current period Closing balance
I. Wages or salaries, bonuses, allowances and
24,311,964.44 65,032,547.46 68,716,344.31 20,628,167.59
subsidies
II. Staff welfare 24,066.00 3,783,559.44 3,807,625.44 -
III. Social security contributions 7,942.92 3,505,687.28 3,505,933.06 7,697.14
Including: Medical insurance 6,214.34 2,621,952.39 2,622,208.90 5,957.83
Work-related injury insurance 1,373.74 223,295.55 223,342.53 1,326.76
Birth insurance 392.26 235,985.82 235,965.53 412.55
Others (37.42) 424,453.52 424,416.10 -
IV. Housing funds 87.00 3,568,386.84 3,567,806.84 667.00
V. Expenditure for trade union and employee
1,872,584.42 504,167.79 1,866,110.36 510,641.85
training
VI. Others - 214,033.49 214,033.49 -
Total 26,216,644.78 76,608,382.30 81,677,853.50 21,147,173.58
(3) Post-employment benefits- defined contribution plans
Unit: RMB
Increase in the Decrease in the
Item Opening balance current period current period Closing balance
I. Basic endowment insurance 15,455.00 6,780,550.96 6,781,022.28 14,983.68
II. Unemployment insurance 1,158.24 197,928.73 198,326.33 760.64
III. Enterprise annuity payment - 2,290,353.65 2,290,353.65 -
Total 16,613.24 9,268,833.34 9,269,702.26 15,744.32
Note: The Group participates in the social security contributions and the unemployment insurance
plan established by government institutions as required. According to such plans, the
Company and its subsidiaries contributes amounts according to local supervision agency's
requirement respectively to such plans. The Group does not undertake further payment
obligations other than the above monthly contributions. Corresponding expenses are
charged to profit or loss for the period or costs of the related assets when incurred.
During the year, the Group shall contribute RMB 6,780,550.96 and RMB 197,928.73
respectively to the social security contributions and the unemployment insurance plan
(2015: RMB 6,410,998.02 and RMB 289,509.21). As at 31 December 2016, the Group still
have outstanding contributions of RMB 14,983.68 and RMB 760.64 (31 December 2015:
RMB 15,455.00 and RMB 1,158.24) to be paid to the social security contributions and the
unemployment insurance plan. The related outstanding contributions have been made after
the reporting period.
55
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Taxes payable
Unit: RMB
Item Closing balance Opening balance
Enterprise income tax 13,910,953.26 9,806,765.58
Property Tax 6,020,749.61 4,309,172.88
Urban land use tax 5,146,891.43 3,190,660.26
Value added tax 3,614,107.55 2,589,977.27
Stamp duty 634,147.22 -
City construction and maintenance tax 235,320.44 182,018.30
Individual income tax 226,153.20 196,762.89
Educational surcharges 172,408.79 137,261.93
Business tax 2,127.28 140,936.22
Others 144,875.67 383,721.62
Total 30,107,734.45 20,937,276.95
23. Interest payable
Unit: RMB
Item Closing balance Opening balance
Medium term note interest 19,594,520.54 19,594,520.52
Bank interest 1,612,582.78 839,075.67
Corporate bond interest 1,189,716.64 1,189,716.67
CDFC borrowings interest 888,845.72 22,958.33
Nanshan Group borrowings interest 570,633.32 6,758,208.33
Total 23,856,299.00 28,404,479.52
24. Other payables
(1) Details of other payables are as follows:
Unit: RMB
Item Closing balance Opening balance
Construction costs 322,429,515.38 370,546,685.54
Deposits 68,669,191.97 60,198,658.09
Others 46,423,717.26 49,320,875.86
Total 437,522,424.61 480,066,219.49
56
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Other payables - continued
(2) Significant other payables aged more than a year
Unit: RMB
Item Closing balance Reason for not repay or carry over
Supplier 1 14,888,974.65 Construction balance not reaching payment terms
Nanshan Development (H.K.) Co.,
11,921,567.32 Interests payable not reaching maturity
Ltd("Nanshan Hong Kong")
Supplier 2 10,133,058.12 Construction balance not reaching payment terms
Supplier 3 9,183,673.07 Construction balance not reaching payment terms
Shenzhen Chixiao Project Engineering
8,718,573.62 Construction balance not reaching payment terms
Co., Ltd. ("Chixiao Project Company")
Customer 6 6,354,280.00 Storage deposit not reaching payment terms
Supplier 4 4,197,354.91 Construction balance not reaching payment terms
Supplier 5 3,995,610.92 Construction balance not reaching payment terms
Supplier 6 3,945,579.02 Construction balance not reaching payment terms
Supplier 7 2,916,569.50 Construction balance not reaching payment terms
Customer 7 2,757,869.00 Storage deposit not reaching payment terms
Supplier 8 2,734,107.20 Construction balance not reaching payment terms
Customer 8 2,450,921.40 Storage deposit not reaching payment terms
Supplier 9 1,612,000.25 Construction balance not reaching payment terms
Supplier 10 1,553,168.56 Construction balance not reaching payment terms
Customer 9 1,335,491.60 Storage deposit not reaching payment terms
Customer 10 1,283,010.00 Storage deposit not reaching payment terms
Customer 2 1,101,168.00 Storage deposit not reaching payment terms
Total 91,082,977.14
25. Non-current liabilities due within one year
(1) Details of non-current liabilities due within one year are as follows:
Unit: RMB
Item Closing balance Opening balance
Other non-current liabilities due within one year (note 1) 211,349,351.16 701,349,351.16
Bonds payable due within one year (note 2) 400,000,000.00 -
Long-term borrowings due within one year 21,708,627.24 6,047,377.24
Total 633,057,978.40 707,396,728.40
Note 1: See note (V) 31 for details.
Note 2: See note (V) 28 for details.
57
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Non-current liabilities due within one year - continued
(1) Changes in the current period of bonds payable within one year
Unit: RMB
Maturity Issue in Accrued interest Premium or Repay for the
Item Par value Issue date term Issued amount Opening balance the for the period discount period Closing balance
current amortization
Medium term
400,000,000.00 07/03/2012 5 year 400,000,000.00 400,000,000.00 - 24,000,000.02 - 24,000,000.00 400,000,000.00
note(note)
Note: See note (V) 28 for details.
(2) Long-term borrowings due within one year
Unit: RMB
Item Closing balance Opening balance
Guaranteed loans 16,450,000.00 -
Unsecured and non-guaranteed loans 5,258,627.24 6,047,377.24
Total 21,708,627.24 6,047,377.24
26.Other current liabilities
Unit: RMB
Item Closing balance Opening balance
Loans borrowed from Nanshan Group 564,000,000.00 -
Loans borrowed from Nanshan Hong Kong - 6,000,000.00
Total 564,000,000.00 6,000,000.00
Closing balance is short-term loan borrowed from Nanshan Group. The annual interest rates on
the above borrowings are fixed rates, ranging from 4.1325% to 4.3500%.
27. Long-term borrowings
Categories of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Unsecured and non-guaranteed loans(note 1) 766,424,117.92 48,379,017.92
Guaranteed loans (note 2) 441,572,609.77 447,502,609.77
Sub-total 1,207,996,727.69 495,881,627.69
Less: long-term borrowings within one year 21,708,627.24 6,047,377.24
Total 1,186,288,100.45 489,834,250.45
The annual interest rates on the above borrowings range from 4.5125% to 4.9000% (31 December
2015: 4.5125% to 4.9000%).
Note 1: Closing balance included RMB 724,355,100.00 which were long-term borrowings of
Wuhan Baowan Logistics Co., Ltd ("Wuhan Baowan "), Tianjin Baowan International
Logistic Co., Ltd ("Tianjin Baowan "), Xindu Baowan, Longquan Baowan, Beijing
Jinmucaoye, Tianjin Haier and Kunshan Baowan, subsidiaries of the Company, borrowed
from CDFC. See note (X) 5(4) for details.
Note 2: See note (X) 5(3) for details.
58
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28. Bonds payable
(2) Details of bonds payable
Unit: RMB
Item Closing balance Opening balance
Medium term note (note 1) 400,000,000.00 400,000,000.00
Corporate bond (note 2) 568,641,500.00 567,159,500.00
Total 968,641,500.00 967,159,500.00
Less: bonds payable within one year 400,000,000.00 -
Bonds payable over one year 568,641,500.00 967,159,500.00
(3) Changes in the current period of bonds payable
Unit: RMB
Premium or
Issue in the Accrued interest discount
Item Par value Issue date Maturity term Issued amount Opening balance current period for the period amortization Closing balance
Corporate bond 570,000,000.00 17/12/2012 7 years 570,000,000.00 567,159,500.00 32,945,999.97 1,482,000.00 32,946,000.00 568,641,500.00
Note 1: The Company issued the five-year medium term note, which starts from 9 March 2012
and ends on 9 March 2017, at the par value of RMB400, 000,000.00 with fixed annual
interest rate of 6% on 7 March 2012. The interests are paid yearly, and the principal will
be repaid in a lump sum upon maturity. Nanshan Group has provided a full-amount
irrevocable guarantee with joint-liability for the medium term note.
Note 2: Pursuant to Approval for Publicly Issuing Corporate Bond of Shenzhen Chiwan
Petroleum Supply Base Co., Ltd. (Zheng Jian Xu Ke [2012] No. 1142) issued by China
Securities Regulatory Commission, the Company issued the seven-year corporate bond
at the par value of RMB570,000,000.00 on 17 December 2012. In the first five interest-
bearing years, the annual interest rate is fixed at 5.78%. The interests will be paid
yearly, and the principal will be repaid in a lump sum upon maturity. As specified in the
prospectus of the corporate bond, the Company has the right to decide whether to raise
the interest rate of the corporate bond for the remaining two years by 1 to 100 basis
points at the end of the fifth year. After the Company publicly announces the decision
on changing interest rate, the bond holders are entitled to sell all or partial of the bonds
held by them to the Company at par value. Nanshan Group has provided a full-amount
irrevocable guarantee with joint-liability for the corporate bond.
29. Long-term payable
Unit: RMB
Entity Closing balance Opening balance
Nanshan Group - 251,417,853.31
Long-term payable is the fund borrowed by the Group from the Company's parent company
Nanshan Group. Pursuant to the agreement of long-term borrowings with Nanshan Group, the
borrowings should be used for the construction and subsequent operation of the logistics parks of
the Company's subsidiaries. The interests will be charged on the actual amounts borrowed at the
interest rate based on market rates of the same period. At the end of 31 December 2016,
borrowings were repaid in full amount.
59
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30．Deferred income
Unit: RMB
Opening Increase in the Decrease in the Closing
Item balance current period current period balance Cause of formation
Received special subsidy only
Government
51,251,151.07 - 1,652,071.68 49,599,079.39 for purchasing or constructing
subsidy
fixed assets
Items concerning government subsidy:
Unit: RMB
Amount recognized
Increase in in non-operating Related to
Opening the current income in the Closing assets or
Liabilities items balance period current period balance revenue
Wuhan Baowan logistic
park construction Related to
49,826,151.07 - 1,577,071.68 48,249,079.39
assets
(note 1)
Guangzhou Baowan
Related to
lot A construction 1,425,000.00 - 75,000.00 1,350,000.00
assets
(note 2)
Total 51,251,151.07 - 1,652,071.68 49,599,079.39
Note 1 : Represents special subsidy received in the prior period by Wuhan Baowan, subsidiary of
the Company, pursuant to the Official Confirmation Letter issued by Ministry of
Transport of Wuhan (Jiao Gui Hua Han [2014] 1080), which was intended for
construction of warehouse and facilities.
Note 2 : Represents special fund for developing modern logistics industry received by
Guangzhou Baowan Logistics Co., Ltd ("Guangzhou Baowan") pursuant to Notice on
Developing Strategic Leading Industries of Guangzhou in 2014.
31. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Medium and long-term borrowings(note) 706,000,000.00 910,000,000.00
Rental received in advance 16,367,558.34 17,716,909.50
Total 722,367,558.34 927,716,909.50
Less: Non-current liabilities due within one year 211,349,351.16 701,349,351.16
Non-current liabilities due after one year 511,018,207.18 226,367,558.34
60
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Other non-current liabilities - continued
Note: Medium and long-term borrowings included: a) the Company and Baowan Holdings,
subsidiary of the Company, borrowed RMB 240,000,000.00 and RMB 250,000,000.00
from Nanshan Group respectively, of which borrowing terms dates from 11 November
2016 to 31 October 2019 and from 8 November 2016 to 8 November 2019 respectively,
using floating interest rate hooked to the corresponding terms of benchmark interest rate of
the People's Bank of China and adjusting the floating rate yearly; b) China Huitong,
subsidiary of the Company, borrowed RMB 110,000,000.00 and RMB 100,000,000.00
from Nanshan Hong Kong, , of which borrowing terms dates from 12 December 2014 to 12
December 2017 and from 18 December 2014 to 18 December 2017 respectively, using
floating interest rate hooked to the corresponding terms of benchmark interest rate of the
People's Bank of China and adjusting the floating rate quarterly; and c) China Huitong,
subsidiary of the Company, borrowed RMB 6,000,000.00 of one-year loan from Nanshan
Hong Kong, dating from 28 December 2015 to 28 December 2016. The due date of this
borrowing is extended to 28 December 2019, with 4.75% annual interests rate.
61
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
32. Share capital
Unit: RMB
Changes for the period
Capitalization
New issue of surplus
Item Opening balance of shares Bonus issue reserve Others Sub-total Closing balance
2016:
I. Restricted tradable
shares
1. State-owned shares - - - - - - -
2. State-owned legal
119,420,000.00 - - - - - 119,420,000.00
person shares
3. Other domestic-owned
- - - - - - -
shares
4. Other foreign-owned - - - - -
- -
shares
Total restricted tradable
119,420,000.00 - - - - - 119,420,000.00
shares
II. Tradable shares
1. Ordinary shares - - - - -
- -
denominated in RMB
2. Foreign-owned shares
111,180,000.00 - - - - - 111,180,000.00
listed domestically
3. Foreign-owned shares
- - - - - - -
listed overseas
4. Others - - - - - - -
Total tradable shares 111,180,000.00 - - - - - 111,180,000.00
III. Total shares 230,600,000.00 - - - - - 230,600,000.00
2015:
I. Restricted tradable
shares
1. State-owned shares - - - - - - -
2. State-owned legal - - - -
119,420,000.00 - 119,420,000.00
person shares
3. Other domestic-owned - - - - -
- -
shares
4. Other foreign-owned - - - - -
- -
shares
Total restricted tradable - - - -
119,420,000.00 - 119,420,000.00
shares
II. Tradable shares
1. Ordinary shares - - - -
- - -
denominated in RMB
2. Foreign-owned shares - - - -
111,180,000.00 - 111,180,000.00
listed domestically
3. Foreign-owned shares - - - - -
- -
listed overseas
4. Others - - - - - - -
Total tradable shares 111,180,000.00 - - - - - 111,180,000.00
III. Total shares 230,600,000.00 - - - - - 230,600,000.00
Note: The par value per share of the above shares is RMB1.00.
33. Capital reserve
Unit: RMB
Increase in the Decrease in the
Item Opening balance period period Closing balance
Capital premium 124,868,225.67 - - 124,868,225.67
Other capital reserve 109,272,960.42 - - 109,272,960.42
Total 234,141,186.09 - - 234,141,186.09
62
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
34．Other comprehensive income
Unit: RMB
Amount for the current period
Less：Net
amount
included in
other
comprehensive
income in the Post-tax net
prior periods amount Post-tax net
Before-tax that is belonging to amount
amount for transferred to parent belonging to
Opening the current profit or loss Less： company minority Closing
Item balance period for the period income tax owners shareholders balance
I. Net amount included in other
comprehensive income that
- - - - - - -
cannot be transferred to profit or
loss in the future
Including：Changes in net
liability and net asset arising - - - - - - -
from recalculation of defined
benefit plan
Share of other comprehensive
income of the investee that
cannot be transferred to profit - - - - - - -
or loss accounted for using the
equity method
II. Net amount included in other
comprehensive income that can
652,079.14 - - - - - 652,079.14
be transferred to profit or loss in
the future
Including：Share of other
comprehensive income of the
investee that can be transferred - - - - - - -
to profit or loss accounted for
using the equity method
Gains (losses) arising from
available-for-sale financial - - - - - - -
assets
held-to-maturity investment that
is reclassified as financial assets - - - - - - -
available for sale
Effective gains(losses) arising
from cash flow hedging - - - - - - -
instruments
Translation differences of
financial statements
652,079.14 - - - - - 652,079.14
denominated in foreign
currencies
Total 652,079.14 - - - - - 652,079.14
35. Special reserve
Unit: RMB
Increase in the Decrease in the
Item Opening balance period period Closing balance
Production safety fee 5,941,771.48 1,505,428.41 672,492.16 6,774,707.73
36. Surplus reserves
Unit: RMB
Increase in the Decrease in the
Item Opening balance period period Closing balance
Statutory surplus reserve 218,585,153.26 - - 218,585,153.26
Discretionary surplus reserve 98,660,135.55 1,358,273.61 - 100,018,409.16
Total 317,245,288.81 1,358,273.61 - 318,603,562.42
63
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Unappropriated profits
Unit: RMB
Item Closing balance Opening balance
Before adjustment: Unappropriated profits at the end of prior year 965,504,851.33 913,767,989.40
Adjustment: Total unappropriated profits at the beginning of the year - -
After adjustment: Unappropriated profits at the beginning of the year 965,504,851.33 913,767,989.40
Add: Net profit attributable to owners of the Company for the period 1,918,066.81 91,644,920.49
Less: Appropriation to statutory surplus reserve - 2,716,547.22
Appropriation to discretionary surplus reserve (note 1) 1,358,273.61 7,444,111.34
Declaration of dividends on ordinary shares - 29,747,400.00
Unappropriated profits at the end of the year 966,064,644.53 965,504,851.33
Note 1: According to the resolution of 2015 shareholders' meeting on 22 April 2016, the Company
appropriated the discretionary surplus reserve based on 5% of the Company's net profit in
2015, the total amount of which is RMB 1,358,273.61.
Note 2: As at 31 December 2016, the balance of the Group's unappropriated profits includes
appropriation to surplus reserve by subsidiaries amounting to RMB 127,694,536.35 (31
December 2015: RMB 99,378,754.84).
38. Operating income and operating costs
Unit: RMB
Amount recognized in the current period Amount recognized in the prior period
Item Operating income Operating cost Operating income Operating cost
Principal operating activities 676,891,005.05 298,716,360.92 649,012,991.25 293,808,730.04
Other operating activities 900,326.06 1,191,895.26 1,266,525.09 3,193,784.84
Total 677,791,331.11 299,908,256.18 650,279,516.34 297,002,514.88
39. Business taxes and levies
Unit: RMB
Amount incurred Amount incurred
Item in the current period in the prior period
Property tax 26,403,928.30 22,306,776.50
Urban land use tax 13,650,090.75 8,191,167.12
City construction and maintenance tax 2,096,633.44 2,100,050.43
Education surcharges 1,512,311.90 1,676,708.28
Stamp duty 1,006,470.25 -
Business tax 572,309.40 1,674,684.65
Vehicle and vessel usage tax 109,360.41 -
Others 955,362.99 234,781.58
Total 46,306,467.44 36,184,168.56
64
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Selling expenses
Unit: RMB
Amount incurred Amount incurred
Item in the current period in the prior period
Agency brokerage 1,077,360.05 1,794,630.86
41. Administrative expenses
Unit: RMB
Amount incurred Amount incurred
Item in the current period in the prior period
Payroll 61,135,597.73 51,258,086.99
Asset amortization 20,109,092.36 10,074,850.77
Asset depreciation 5,426,688.59 4,147,388.80
Travelling expense 4,173,394.61 3,361,419.34
Business entertainment 3,206,023.55 2,836,145.47
Taxes 3,049,944.37 7,064,503.93
Vehicle expense 2,412,269.71 2,288,519.31
Others 17,094,230.28 14,500,612.57
Total 116,607,241.20 95,531,527.18
42. Financial expenses
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
Interest expenses 190,214,200.33 172,521,259.62
Less: Capitalized interest expenses 6,142,146.18 4,799,074.19
Less: Interest income 5,052,488.85 5,895,451.65
Exchange differences (499,813.18) 401,204.04
Less: Capitalized exchange differences - -
Others 3,234,659.58 2,887,408.77
Total 181,754,411.70 165,115,346.59
43. Impairment losses on assets
Unit: RMB
Amount incurred in Amount incurred in
Item the current period the prior period
Bad debt losses (98,698.65) 975,282.77
44. Investment income
Details of investment income
Unit: RMB
Amount recognized in Amount recognized in
Item the current period the prior period
Income from long-term equity investments under equity(note) 32,503,352.87 58,968,248.53
method
Income from bank financing products 1,283,277.56 16,142,257.65
Total 33,786,630.43 75,110,506.18
65
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Investment income - continued
Note: See note (V) 8 for details.
There are no significant restrictions on remittance of investment income stated above.
45. Non-operating income
(1) Details of non-operating income are as follows:
Unit: RMB
Amount included
Amount Amount in non-recurring
recognized in the recognized in the profit or loss for
Item current period prior period the period
Government grants 5,238,023.20 12,491,552.18 5,238,023.20
Remission on urban land use tax (note) 1,985,662.50 - 1,985,662.50
Penalty gains 805,902.64 45,170.87 805,902.64
Total gains on disposal of non-current assets 277,164.06 83,782.26 277,164.06
Including: Gains on disposal of fixed assets 277,164.06 83,782.26 277,164.06
Accounts payable write-off - 880,397.20 -
Others 987,316.44 137,207.83 987,316.44
Total 9,294,068.84 13,638,110.34 9,294,068.84
Note: Represents remission on urban land use tax of 2016 1st and 2nd quarters which granted to
Jiaozhou Baowan, subsidiary of the Company, in accordance with Remission on Urban
Land Use Tax and Property Tax for Enterprises with Difficulties issued by Qingdao
Municipal Local Taxation Bureau.
(2) Details of government grants:
Unit: RMB
Amount recognized Amount
in the current recognized in the Related to
Item period prior period assets/income
Bank loan subsidies (note 1) 2,014,701.50 1,878,500.00 Related to income
Special construction funds for logistics park
1,652,071.68 648,848.93 Related to income
(Note 2)
Financial support fund 694,664.00 9,750,547.11 Related to income
Encouragement fund for service industry 718,500.00 - Related to income
Others 158,086.02 213,656.14 Related to income
Total 5,238,023.20 12,491,552.18
Note 1: Amount recognized in the current period mainly are bank loan subsidies for key logistics
enterprise granted to the Company, in accordance with Management Provisions on
Special Funds for Shenzhen Modern Logistics Development (Shen Cai Gui (2013) No.
12).
Note 2: See note (V) 30 for details
66
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Non-operating expenses
Unit: RMB
Amount included
in non-recurring
Amount incurred in Amount incurred in profit or loss for
Item the current period the prior period the period
Total losses on disposal of non-current assets 2,038,490.91 386,856.19 2,038,490.91
Including: Losses on disposal of fixed assets 1,437,828.91 386,856.19 1,437,828.91
Losses on disposal of Investment properties 600,662.00 - 600,662.00
Compensation losses 612,356.58 1,063,858.34 612,356.58
Penalty losses 55,124.99 35,112.73 55,124.99
Others 244,193.76 34,686.54 244,193.76
Total 2,950,166.24 1,520,513.80 2,950,166.24
47. Income tax expense
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Current tax expense 46,762,284.92 41,991,156.77
Deferred tax expense 4,559,568.49 (11,759,603.45)
Total 51,321,853.41 30,231,553.32
Reconciliation of income tax expenses to the accounting profit is as follows:
Unit: RMB
Amount for the current Amount for the prior
period period
Accounting profit 72,366,826.22 140,904,148.22
Income tax expenses calculated at 25% (prior year: 25%) 18,091,706.56 35,226,037.06
Effect of deductible temporary differences and deductible losses
44,129,464.31 7,039,660.21
from unrecognized deferred tax assets in the current period
Effect of expenses that are not deductible for tax purposes 275,512.05 710,675.69
Effect of adjusting income tax for previous years (115,544.87) 3,072,869.66
Effect of using previously unrecognised deductible losses (487,716.69 ) -
Effect of subsidiaries using different tax rates (2,445,729.72) (1,282,386.20)
Effect of non-taxable income (8,125,838.23) (14,742,062.13)
Others - 206,759.03
Income tax expense 51,321,853.41 30,231,553.32
48. Other comprehensive income
See Note (V) 34 for detail.
67
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Calculation process of basic earnings per share and diluted earnings per share
For the purpose of calculating basic earnings per share, net profit for the current period
attributable to ordinary shareholders is as follows:
Unit: RMB
Amount for the current Amount for the prior
period period
Net profit for the current period attributable to ordinary shareholders 1,918,066.81 91,644,920.49
Including: Net profit from continuing operations 1,918,066.81 91,644,920.49
Net profit from discontinued operations - -
For the purpose of calculating basic earnings per share, the denominator is the weighted average
number of outstanding ordinary shares, and its calculation process is as follows:
Unit: Share
Number for the current Number for the prior
period period
Number of ordinary shares outstanding at the beginning of year 230,600,000.00 230,600,000.00
Add: Weighted average number of ordinary shares issued during the period - -
Less: Weighted average number of ordinary shares repurchased during the
- -
period
Number of ordinary shares outstanding at the end of the year 230,600,000.00 230,600,000.00
Earnings per share
Unit: RMB
Amount for the current Amount for the prior
period period
Calculated based on net profit attributable to shareholders of the
Company:
Basic earnings per share 0.10 0.40
Diluted earnings per share Not applicable Not applicable
Calculated based on net profit from continuing operations
attributable to shareholders of the Company:
Basic earnings per share 0.10 0.40
Diluted earnings per share Not applicable Not applicable
50. Notes to items in the cash flow statement
(1) Other cash receipts relating to operating activities
Unit: RMB
Amount for the current Amount for the prior
Item period period
Receipts of storage service deposits 16,326,103.95 21,559,126.76
Government grants 3,585,951.52 11,842,703.25
Interest income 4,729,575.61 5,895,451.65
Receipts of employee housing allowance 3,102,385.57 -
Receipts of insurance compensation 2,094,176.52 -
Receipts of supplies purchasing and decoration fees 900,326.06 1,266,525.09
Others 3,485,448.28 4,815,204.48
Total 34,223,967.51 45,379,011.23
68
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Notes to items in the cash flow statement - continued
(2) Other cash payments relating to operating activities
Unit: RMB
Amount for the current Amount for the prior
Item period period
Payments for administrative expense and selling expense 27,963,278.20 20,468,978.58
Payments for storage service deposits 11,135,068.21 7,876,656.43
Payment for supplies procurement and decoration fees 1,191,895.26 3,193,784.84
Payment for bank commissions 1,897,591.57 1,732,156.04
Payment for accrued expenses 549,551.69 2,964,294.17
Others 1,241,582.02 2,520,177.66
Total 43,978,966.95 38,756,047.72
(3) Other cash receipts relating to investing activities
Unit: RMB
Amount for the current Amount for the prior
Item period period
Receipts of matured financing products 280,000,000.00 1,471,000,000.00
Investment income from bank financing products 2,314,620.00 18,517,101.51
Receipts of government subsidy related to assets - 50,400,000.00
Total 282,314,620.00 1,539,917,101.51
(4) Other cash payments relating to investing activities
Unit: RMB
Amount for the current Amount for the prior
Item period period
Purchase of financing products 45,000,000.00 1,316,000,000.00
Deposits for land rights 34,729,624.80 9,010,000.00
Others 15,333,000.00 -
Total 95,062,624.80 1,325,010,000.00
(5) Other cash receipts relating to financing activities
Unit: RMB
Amount for the current Amount for the prior
Item period period
Receipts of loans from Nanshan Group 1,464,000,000.00 -
Receipts of loans from Nanshan Development (Hong Kong)
- 6,000,000.00
Limited ("Nanshan Hong Kong"),
Total 1,464,000,000.00 6,000,000.00
69
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Notes to items in the cash flow statement - continued
(6) Other cash payments relating to financing activities
Unit: RMB
Amount for the Amount for the
Item current period prior period
Payments for loan principal to Nanshan Group 1,361,417,853.31 300,000,000.00
Payments for loan interests to Nanshan Group 71,436,996.07 64,067,500.00
Payments for loan principal and interests to Nanshan Hong Kong(note) 64,455,148.10 -
Payments for commission of medium term note 1,201,200.00 1,201,200.00
Payments for commission of corporate bond 134,220.71 -
Others 1,647.30 1,647.30
Total 1,498,647,065.49 365,270,347.30
Note: Tianjin Baowan, subsidiary of the Company has acquired Tianjin Haier during the year.
Pursuant to the share acquisition agreement, Tianjin Haier would repay Tianjin Haier's
borrowings from its former shareholder.
51. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
Supplementary information Current period Prior period
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 21,044,972.81 110,672,594.90
Add: Provision for impairment losses of assets (98,698.65) 975,282.77
Depreciation of fixed assets 59,666,195.69 56,704,470.29
Depreciation of investment properties 56,749,984.41 51,126,829.28
Amortization of intangible assets 53,568,997.30 41,573,931.82
Losses (gains) on disposal of fixed assets, intangible assets
1,761,326.85 303,073.93
and other long-term assets
Financial expenses 184,072,054.15 167,722,185.43
Losses (gains) arising from investments (33,786,630.43) (75,110,506.18)
Decrease (increase) in deferred tax assets 4,559,568.49 (11,759,603.45)
Increase (decrease) in deferred tax liabilities 22,812,085.88 -
Decrease (increase) in inventories (47,312.28) 139,502.98
Decrease (increase) in receivables from operating activities 7,802,662.84 (27,795,284.40)
Increase (decrease) in payables from operating activities (6,630,475.17) 18,103,874.07
Net cash flows from operating activities 371,474,731.89 332,656,351.44
2. Net changes in cash and cash equivalents:
Closing balance of cash 524,609,097.58 321,121,926.73
Less: Opening balance of cash 321,121,926.73 375,328,861.18
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase (decrease) in cash and cash equivalents 203,487,170.85 (54,206,934.45)
70
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
51. Supplementary information to the cash flow statement - continued
(2) Net cash outflow on acquisition of subsidiaries and business units
Unit: RMB
Item Current period Prior period
Cash and cash equivalents paid to acquire subsidiaries and business units
375,567,215.93 -
during the year
Including: Beijing Jinmucaoye(note 1) 270,117,215.93 -
Tianjin Haier(note 2) 105,450,000.00 -
Less: Cash and cash equivalents held by subsidiaries and business units
15,888,149.51 -
on acquisition date
Including: Beijing Jinmucaoye(note 1) 15,650,290.72 -
Tianjin Haier(note 2) 237,858.79 -
Net cash outflow on acquisition of subsidiaries and business units 359,679,066.42 -
Note 1: See Note (VI) 2 (2) for details.
Note 2: See Note (VI) 1 for details.
(3) Composition of cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 524,609,097.58 321,121,926.73
Including:Cash on hand 17,691.92 19,947.47
Bank deposits 524,591,405.66 321,101,979.26
II. Cash equivalents - -
Including:Investments in debt securities due within three months - -
III. Closing balance of cash and cash equivalents 524,609,097.58 321,121,926.73
52．Foreign currency monetary items
Unit: RMB
Closing balance Closing balance
in foreign translate in
Item currency Exchange rate RMB
Cash and bank balance 3,111,281.21
Including: Hong Kong Dollar 2,998,519.47 0.8945 2,682,175.67
United State Dollar 60,795.48 6.9370 421,738.24
Singapore Dollar 956.50 4.7995 4,590.72
Euro 380.00 7.3068 2,776.58
71
(VI) CHANGES OF CONSOLIDATION SCOPE
1. Business combination not involving enterprises under common control
(1) Business combination not involving enterprises under common control during the year
Unit: RMB
Revenue Net profits
between between
acquisition date acquisition date
Acquired and and
Costs of share Acquisition Basis of determining 31December 31December
Acquiree acquisition percentage method Acquisition date acquisition date 2016 2016
Control on the acquiree
Tianjin Haier 117,124,048.28 100% Share acquisition 31 October 2016 has been transferred to 2,601,783.98 622,817.61
acquirer(note)
Note: the acquirer has paid for the majority of acqusition price, and the acquirer
On 31 October 2016,
has the capability and plan to pay for the rest; the acquirer has controlled the acquiree's
financial and operating policies, enjoying gains and sharing risks from the acquiree.
(2) Costs of business combination
Unit: RMB
Costs of business combination Tianjin Haier
- Cash 117,124,048.28
Total 117,124,048.28
Less: share of fair value of identifiable net assets acquired 105,990,929.73
Goodwill 11,133,118.55
(3) Identifiable assets and liabilities of acquiree on acquisition date
Unit: RMB
Tianjin Haier
Fair value on Net book value on
acquisition date acquisition date
Assets:
Cash and bank balances 237,858.79 237,858.79
Accounts receivable 5,176,474.21 5,176,474.21
Investment properties 113,826,900.00 80,654,114.42
Fixed assets 13,407,900.00 9,500,410.71
Intangible assets 66,265,200.00 40,631,786.79
Long-term prepaid expenses - 3,195,418.46
Liabilities:
Accounts payable 3,055,394.93 3,055,394.93
Taxes payable 1,489,067.43 1,489,067.43
Other payables 65,405,024.43 65,405,024.43
Deferred income - 32,377,396.30
Deferred tax liabilities 22,973,916.48 -
Net assets 105,990,929.73 37,069,180.29
Less: Minority interests - -
Net assets acquired 105,990,929.73 37,069,180.29
72
(VI) CHANGES OF CONSOLIDATION SCOPE - continued
2. Other changes
(1) Newly set-up subsidiaries during the year
Unit: RMB
Name of subsidiaries Year-end net assets
Jiaxing Supply Chain 229,919,139.96
Yunnan Dianzhong Baowan Logistic Co., Ltd ("Dianzhong Baowan") 199,924,786.25
Yuyao Baowan 99,065,674.06
Luohuang Baowan 79,970,966.61
Yuhua Baowan 13,994,884.26
Xiaogan Baowan Logistic Co., Ltd ("Xiaogan Baowan") -
Chengdu Xinjin Baowan International Co.,Ltd ("Xinjin Baowan") -
Foshan Sanshui Baowan Logistic Co., Ltd ("Sanshui Baowan") -
Foshan Nanhai Baowan Logistic Co., Ltd ("Nanhai Baowan") -
Deqing Baowan International Co.,Ltd ("Deqing Baowan") -
Changsha Wangcheng Baowan Logistic Co., Ltd ("Wangcheng Baowan") -
Ningbo Baowan International Logistic Co.,Ltd ("Ningbo Baowan") -
The above subsidiaries are set up in the current period. As at 31 December 2016, these
subsidiaries are still under construction and not put into operation.
(2) Subsidiary newly included in consolidation scope through asset acquisition
Unit: RMB
Name of subsidiaries Year-end net assets
Beijing Jinmucaoye 92,316,900.71
Baowan Holdings, subsidiary of the Company, acquired 100% share of Beijing Jinmucaoye at the
price of RMB 270,117,215.93 during the year. This acquisition is asset acqusition, not business
combination.
73
(VII) EQUITY IN OTHER ENTITIES
1. Equity in subsidiaries
(1) Group Composition
Proportion of
holding equity (%)
Name of subsidiary Business premise Registered place Business nature Direct Indirect Acquired method
Baowan Holdings Guangdong Shenzhen Guangdong Shenzhen Investment 77.36 - Set-up
Shanghai Baowan International Logistic Co., Ltd. Shanghai Shanghai Logistic service - 100.00 Set-up
Guangzhou Baowan Guangdong Guangzhou Guangdong Guangzhou Logistic service - 100.00 Set-up
Kunshan Baowan Jiangsu Kunshan Jiangsu Kunshan Logistic service - 100.00 Set-up
Tianjin Baowan International Logistic Co., Ltd. Tianjin Tianjin Logistic service - 100.00 Set-up
Langfang Baowan International Logistic Co., Ltd. Logistic service Set-up
Hebei Langfang Hebei Langfang - 100.00
("Langfang Baowan")
Longquan Baowan Sichuang Chengdu Sichuang Chengdu Logistic service - 100.00 Set-up
Xindu Baowan Sichuang Chengdu Sichuang Chengdu Logistic service - 100.00 Set-up
Nanjing Baowan International Logistic Co., Ltd. Logistic service Set-up
Jiangsu Nanjing Jiangsu Nanjing - 100.00
("Nanjing Baowan")
Bingang Baowan Tianjin Tianjin Logistic service - 100.00 Set-up
Nantong Baowan International Logistic Co., Ltd. Jiangsu Nantong Jiangsu Nantong Logistic service - 100.00 Set-up
Wuhan Baowan Hubei Wuhan Hubei Wuhan Logistic service - 100.00 Set-up
Qingwu Baowan Tianjin Tianjin Logistic service - 100.00 Set-up
Shenyang Baowan. Liaoning Shenyang Liaoning Shenyang Logistic service - 100.00 Set-up
Yangluo Baowan Hubei Wuhan Hubei Wuhan Logistic service - 100.00 Set-up
Feidong Baowan Anhui Hefei Anhui Hefei Logistic service - 100.00 Set-up
Xi'an Baowan Shanxi Xi'an Shanxi Xi'an Logistic service - 100.00 Set-up
Xianyang Baowan Shanxi Xianyang Shanxi Xianyang Logistic service - 100.00 Set-up
Hong Kong Special Hong Kong Special Set-up
Baowan Hong Kong Investment - 100.00
Administrative Region Administrative Region
Jiaozhou Baowan. Shandong Qingdao Shandong Qingdao Logistic service - 100.00 Set-up
Changzhou Baowan Logistic Co., Ltd. Jiangsu Changzhou Jiangsu Changzhou Logistic service - 100.00 Set-up
Jiaxing Baowan Zhejiang Jiaxing Zhejiang Jiaxing Logistic service - 100.00 Set-up
Jiangyin Baowan Jiangsu Jiangyin Jiangsu Jiangyin Logistic service - 100.00 Set-up
Logistic service Business
combination
Shenzhen Baowan International Logistic Co., Ltd.
Guangdong Shenzhen Guangdong Shenzhen 100.00 - involving
("Shenzhen Baowan")
enterprises under
common control
Logistic service Business
combination
Mingjiang (Shanghai) International Logistic Co.,
Shanghai Shanghai - 100.00 involving
Ltd. ("Mingjiang International ")
enterprises under
common control
Business
combination
Hong Kong Special Hong Kong Special
China Huitong Investment - 100.00 involving
Administrative Region Administrative Region
enterprises under
common control
Logistic service Business
combination
Wuxi Baowan Jiangsu Wuxi Jiangsu Wuxi - 100.00 involving
enterprises under
common control
Logistic service Business
combination
Zhenjiang Warehouse Jiangsu Zhenjiang Jiangsu Zhenjiang - 100.00 involving
enterprises under
common control
Chengdu Oil-Gas Base Sichuan Chengdu Sichuan Chengdu Logistic service 100.00 - Set-up
Shaoxing Baowan Zhejiang Shaoxing Zhejiang Shaoxing Logistic service - 100.00 Set-up
Jiangsu Baowan Logistic Co., Ltd. Jiangsu Nanjing Jiangsu Nanjing Logistic service - 100.00 Set-up
Xipeng Baowan Chongqing Chongqing Logistic service - 100.00 Set-up
Zhengzhou Baowan Logistic Co., Ltd. Zhengzhou Henan Zhengzhou Henan Logistic service - 80.00 Set-up
Ezhou Baowan Ezhou Hubei Ezhou Hubei Logistic service - 100.00 Set-up
Xitong Baowan Jiangsu Nantong Jiangsu Nantong Logistic service - 100.00 Set-up
Jiashan Baowan Zhejiang Jiashan Zhejiang Jiashan Logistic service - 100.00 Set-up
Beijing Jinmucaoye Beijing Beijing Logistic service 100.00 Asset acquisition
Yuyao Baowan Zhejiang Yuyao Zhejiang Yuyao Logistic service 100.00 Set-up
Xiaogan Baowan Hubei Xiaogan Hubei Xiaogan Logistic service 100.00 Set-up
Xinjin Baowan Sichuan Chengdu Sichuan ChengDu Logistic service 100.00 Set-up
Sanshui Baowan Guangdong Foshan Guangdong Foshan Logistic service 100.00 Set-up
74
(VII) EQUITY IN OTHER ENTITIES - continued
1. Equity in subsidiaries - continued
(2) Group Composition - continued
Proportion of
holding equity (%)
Name of subsidiary Business premise Registered place Business nature Direct Indirect Acquired method
Nanhai Baowan Guangdong Foshan Guangdong Foshan Logistic service - 100.00 Set-up
Yuhua Baowan Hunan Changsha Hunan Changsha Logistic service - 100.00 Set-up
Deqing Baowan Zhejiang Deqing Zhejiang Deqing Logistic service - 100.00 Set-up
Wangcheng Baowan Hunan Changsha Hunan Changsha Logistic service - 100.00 Set-up
Luohuang Baowan Chongqing Chongqing Logistic service - 100.00 Set-up
Business
combination not
Tianjin Haier Tianjin Tianjin Logistic service - 100.00 involving
enterprises under
common control
Jiaxing Supply Chain Zhejiang Jiaxing Zhejiang Jiaxing Logistic service - 90.00 Set-up
Ningbo Baowan Zhejiang Ningbo Zhejiang Ningbo Logistic service - 100.00 Set-up
Dianzhong Baowan Yunnan Kunming Yunnan Kunming Logistic service - 100.00 Set-up
2. Equity in joint ventures or associates
(1) Significant associates
Proportion of
shareholding (%)
Accounting
Name Business premise Registered place Business nature Direct Indirect method
CSE Guangdong Shenzhen Guangdong Shenzhen Oceanic oil engineering 32.00 - Equity method
CDFC Guangdong Shenzhen Guangdong Shenzhen Capital management 20.00 - Equity method
Oil chemical equipment
CPEC Guangdong Shenzhen Guangdong Shenzhen 20.00 - Equity method
manufacturing
(2) Financial information of Significant associates
Unit: RMB
Closing balance/ Amount incurred in the current period Opening balance/ Amount incurred in the prior year
CSE CDFC CPEC CSE CDFC CPEC
Current asset 475,445,258.66 5,683,218,806.86 14,761,345.19 482,873,475.04 3,307,742,630.92 29,711,372.51
Non-current asset 1,116,355,891.44 9,238,857.55 3,099,232.49 1,112,312,706.71 920,635,240.41 8,154,950.23
Total asset 1,591,801,150.10 5,692,457,664.41 17,860,577.68 1,595,186,181.75 4,228,377,871.33 37,866,322.74
Current liability 102,007,170.26 5,089,049,191.91 14,426,466.13 186,373,956.07 3,670,142,393.48 22,302,980.98
Non-current liability - 97,806.58 - - - -
Total liability 102,007,170.26 5,089,146,998.49 14,426,466.13 186,373,956.07 3,670,142,393.48 22,302,980.98
Net assets share calculated
according to proportion of 480,795,224.35 120,662,133.18 737,557.53 467,789,861.57 111,647,095.57 3,163,403.60
shareholding
Net book value of the
equity investment in 480,795,224.35 120,662,133.18 737,557.53 467,789,861.57 111,647,095.57 3,163,403.60
associates
Income 567,812,267.19 87,570,708.82 17,214,499.80 568,666,851.49 53,276,669.73 65,789,872.06
Net profit 80,981,754.16 45,075,188.07 (12,129,230.21) 171,275,757.70 32,225,306.31 (11,425,276.06)
Other comprehensive
- - - - - -
income
Total comprehensive
80,981,754.16 45,075,188.07 (12,129,230.21) 171,275,757.70 32,225,306.31 (11,425,276.06)
income
Dividend received from
associates in the current 12,908,798.55 - - 14,329,928.96 - -
period
75
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
The Group's major financial instruments include bank deposits, accounts receivable, interests
receivable, other receivables, short-term borrowings, notes payable, accounts payable, non-current
liabilities due within one year, interests payable, other payables, other current liabilities, long-term
borrowings, bonds payable and other non-current liabilities. Details of these financial instruments
are disclosed in their correspondent notes. The risks associated with these financial instruments
and the policies on how to mitigate these risks are set out below. Management manages and
monitors these exposures to ensure the risks are monitored at a certain level.
The Group adopts sensitivity analysis technique to analyze possible effects from reasonableness
and possible change of risk variable to current profits and losses or shareholders' equity. Given
that any risk variable seldom changing in isolation, the correlation between variables will have a
significant effect on the final amount affected by the change of one risk variable. Thus the
following content is under the assumption that the change of each variable is conducted
independently.
1. Risk management objectives and policies
The Group's risk management objectives are to achieve a proper balance between risks and yield,
minimize the adverse impacts of risks on the Group's operation performance, and maximize the
benefits of the shareholders and other stakeholders. Based on these risk management objectives,
the Group's basic risk management strategy is to identify and analyze the Group's exposure to
various risks, establish an appropriate maximum tolerance to risk, and implement risk
management, and monitors regularly and effectively these exposures to ensure the risks are
monitored at a certain level.
1.1 Market risk
1.1.1 Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The
Group's exposure to the currency risk is primarily associated with RMB. As at 31 December 2016,
the balance of the Group's assets and liabilities are both denominated in RMB except that the
assets and liabilities set out below are denominated in foreign currencies.
Unit: RMB
Items Ending balance Opening balance
Cash and cash equivalents 3,111,281.21 3,685,009.43
The Group closely monitors the effects of changes in the foreign exchange rates on the Group's
currency risk exposures.
Foreign currency sensitive analysis
Given that the Company holds a relatively small amount of assets and liabilities in foreign
currency, the management considers that, where all other variables are held constant, the
reasonably possible changes in exchange rates will not have a material pre-tax effect on the profit
or loss for the period and shareholders' equity.
76
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.2 Interest rate risk - risk of changes in cash flows
The Group's cash flow interest rate risk of financial instruments relates primarily to variable-rate
borrowings (see Note (V) 25, Note (V) 27and Note (V) 31 for details). It is the Group's policy to
keep its borrowings at variable rate of interests so as to eliminate the fair value interest rate risk.
Analysis on interest rate risk
The sensitivity analysis on interest rate risk is based on the following assumptions:
Changes in the market interest rate may influence the interest income or expense of the
variable rate financial instruments;
For fixed rate financial instruments measured at fair value, changes in the market interest rate
only influence their interest income or expense;
For derivative financial instruments designated as hedging instruments, changes in the
market interest rate influence their fair values, and all the hedges of interest rate risk are
expected to be highly effective;
Changes in the fair value of derivative financial instruments and other financial assets and
liabilities are calculated at the market interest rate as at the balance sheet date, using the
method of discounted cash flow analysis.
On the basis of the above assumptions, where all other variables are held constant, the reasonably
possible changes in the interest rate may have the following pre-tax effect on the profit or loss for
the period and shareholders' equity:
Unit: RMB
Current year Prior year
Change in Effect on Effect on
Item interest rate Effect on profit shareholders' equity Effect on profit shareholders' equity
External borrowings 1% increase (19,079,967.28) (19,079,967.28) (16,512,521.04) (16,512,521.04)
External borrowings 1% decrease 19,079,967.28 19,079,967.28 16,512,521.04 16,512,521.04
1.2 Credit risk
As at 31 December 2016, the Group's maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties and
financial guarantees issued by the Group is arising from:
(1) The carrying amount of the respective recognized financial assets as stated in the
consolidated balance sheet. For financial instruments measured at fair value, the carrying
amount reflects the exposure to risks but not the maximum exposure to risks. The maximum
exposure to risks would vary according to the future changes in fair value
(2) The amount of financial guarantees contract disclosed in Note (XIV) 9 (3) "Guarantees with
related parties".
77
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.2 Credit risk - continued
In order to minimize the credit risk, the Group has delegated the finance department to be
responsible for determination of credit limits, credit approvals and other monitoring procedures to
ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the
recoverable amount of each individual trade debt at each balance sheet date to ensure that
adequate impairment losses are made for irrecoverable amounts. In this regard, the management
of the Group considers that the Group's credit risk is significantly reduced.
The credit risk on liquid funds is limited because they are deposited with banks with high credit
ratings.
1.3 Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and
cash equivalents deemed adequate by the management to finance the Group's operations and
mitigate the effects of fluctuations in cash flows. The management monitors the utilization of
bank borrowings and ensures compliance with loan covenants.
As at 31 December 2016, the Group's current liabilities exceeds current assets by RMB
1,947,699,729.74. The Group relies on bank borrowings as a significant source of liquidity. As at
31 December 2016, and the Group still possessed RMB 1,834,296,592.27 unused bank credit line
(As at 31 December 2015: RMB 1,708,721,692.27). The Group's management is confident that
short-term borrowings will be rolled over or replaced by a new financing channel when due. In
addition, Nanshan Group, has agreed when other outstanding debts owed by the Group fall due in
the foreseeable future to provide all necessary financial support to the Company in the foreseeable
future so as to maintain the Group's ability to continue as a going concern. Hence, the Group's
Management believes the Group does not exist significant liquidity risk.
78
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.3 Liquidity risk - continued
The following is the maturity analysis for financial assets and financial liabilities held by the
Group which is based on undiscounted remaining contractual obligations:
Unit: RMB
Item Within 1 year 1 year to 5 years Over 5 years
Non-derivative financial assets
Cash and bank balances 524,609,097.58 - -
Accounts receivable 43,862,804.61 - -
Interest receivable 423,404.92 - -
Other receivables 63,863,606.97 - -
Non-derivative financial liabilities
Short-term borrowings 872,953,967.36 - -
Notes payable 16,200,019.20 - -
Accounts payable 11,500,505.03 - -
Interests payable 23,856,299.00 - -
Other payables 437,522,424.61 - -
Other noncurrent liabilities due within
646,951,556.13 - -
one year
Other current liabilities 574,041,129.17 - -
Long-term borrowings 57,991,726.66 529,652,774.75 1,092,192,389.76
Bonds payable 32,946,000.00 635,068,350.00 -
Other non-current liabilities 21,221,000.00 535,421,508.33 -
(IX) DISCLOSURE ON FAIR VALUE
1. Financial assets and financial liabilities that are not measured at fair value
The management considers that the carrying amounts of financial assets and financial liabilities
measured at amortized cost the financial statements are approximate to their fair values.
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
Unit: RMB
Voting
Shareholding power
Registered Registered percentage percentage
Entity name location Business nature capital (RMB) (%) (%)
Port and shipping, offshore oil service, real
Nanshan Guangdong
estate development and new construction 900,000,000.00 51.79 51.79
Group Shenzhen
material
The ultimate control party of the Company is Nanshan Group.
79
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in note (VII) 1.
3. Associates and joint ventures of the Company
Details of the associates and joint ventures of the Company are set out in note (VII) 2.
4. Other related parties of the Company
Relationship between other
related parties and the
Name of other related parties Company
Shenzhen Nanshan Real Estate Development Co., Ltd. ("Nanshan Real Estate Company") Controlled by the same party
Chixiao Project Company Controlled by the same party
Chixiao Construction Company Controlled by the same party
Chixiao Business Co., Ltd. ("Chixiao Business Company") Controlled by the same party
Shenzhen New Nanshan Holdings (Group) Co., Ltd. Controlled by the same party
(Originally "Yahgee Modular House Co Ltd " "New Nanshan Holdings")
Shenzhen Chiwan Oriental Logistics Co., Ltd. ("Shenzhen Oriental Logistics Company") Controlled by the same party
Shenzhen Chiwan Real Estate Development Co., Ltd. ("Chiwan Real Estate Company") Controlled by the same party
Hefei Baowan International Logistics Center Co., Ltd.("Hefei Baowan") Controlled by the same party
Nanshan Hong Kong Controlled by the same party
Hubei Ezhou Nanshan Lingang New Tow Development Co.,Ltd("Ezhou Nanshan Company") Controlled by the same party
Shanghai Chiwan Oriental Logistics Co., Ltd. ("Shanghai Oriental Logistics Company") Controlled by the same party
Jiaxing Modern Logistic Park Investment Development Co.,Ltd ("Jiaxing Investment Minority interest of Jiaxing
Company”) Supply Chain
Directors, general manager, vice-general managers, etc. of the Company Key management personnel
5. Related party transactions
(1) Provision and receipt of services
Receipt of service
Unit: RMB
Pricing and decision-making
Details of related party procedures of related party
Related party transaction transactions Amount for the current period Amount for the prior period
Nanshan Group Power supply service By reference to market price 3,021,282.30 2,876,386.96
CDFC Letter of guarantee service By reference to market price 54,748.73 -
Chixiao Project
Construction service By reference to market price - 2,688,395.00
Company
Total 3,076,031.03 5,564,781.96
80
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Provision and receipt of services - continued
Provision of service
Unit: RMB
Pricing and decision-making
Details of related party procedures of related party
Related party transaction transactions Amount for the current period Amount for the prior period
Loading and unloading
CSE By reference to market price 4,197,178.22 1,781,531.46
service
CSE Stack (storage) service By reference to market price 3,704,755.60 2,724,336.00
Shenzhen
Oriental Logistics Stack (storage) service By reference to market price 466,981.16 -
Company
Trusteeship management
Hefei Baowan By reference to market price 440,383.68 397,690.39
service
CPEC Stack (storage) service By reference to market price 288,950.68 815,718.96
Oriental Logistics
Maintenance service By reference to market price 190,388.19 -
Company
Loading and unloading
CPEC By reference to market price 48,514.35 42,405.23
service
Nanshan Group Stack (storage) service By reference to market price 9,600.00 9,600.00
Nanshan Group Maintenance service By reference to market price 7,675.00 41,957.95
CDFC Maintenance service By reference to market price 1,285.00 5,750.00
Total 9,355,711.88 5,818,989.99
(2) Leases with related parties
Leases where the Group is the lessor:
Unit: RMB
Lease income recognized Lease income recognized
Name of lessee Type of leased assets in the current year in the prior year
Nanshan Group Office building 6,606,800.81 6,258,106.46
CDFC Office building 1,219,676.21 1,165,280.76
Chiwan Real Estate Company Office building 989,714.20 740,143.72
CSE Office building 785,836.56 785,836.56
Chixiao Enterprise Office building 463,171.17 39,042.15
CPEC Office building 392,206.50 455,129.28
Shanghai Oriental Logistics Company Office building 148,770.82 131,040.00
Nanshan Real Estate Company Office building 87,765.12 85,240.80
Total 10,693,941.39 9,659,819.73
Leases where the Group is the lessee:
Unit: RMB
Lease payment recognized Lease payment recognized
Name of lessor Type of leased assets in the current year in the prior year
Nanshan Group Site (note 1) 27,241,673.80 28,088,931.65
Nanshan Group Site (note 2) 2,186,505.60 2,053,780.27
New Nanshan Holdings Building - 4,920.00
Total 29,428,179.40 30,147,631.92
81
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
Note 1: The leased assets include two pieces of lands which the Company has leased from
Nanshan Group: one is to the east of Chiwan 1st Road, with the lease term from 1
September 2006 to 31 August 2026; the other is the Chiwan east coast venue (phase I),
with the lease term from 1 January 2012 to 14 July 2034.
Note 2: The leased land is located to the southeast of the intersection of Chiwan 2nd Road and
6th Road, which Shenzhen Baowan has leased from Nanshan Group, the Company's
parent company.
(3) Guarantees with related parties
The Group as the guaranteed party:
Unit: RMB
Whether execution
Guaranteed Inception date Expiration date of of guarantee has
Guarantor Guaranteed items party Guaranteed amount of guarantee guarantee been completed
Nanshan Group(note 1) Corporate bond The Company 570,000,000.00 17/12/2012 17/12/2019 No
Nanshan Group(note 1) Medium term note The Company 400,000,000.00 09/03/2012 09/03/2017 No
Long-term
Nanshan Group(note 2) The Company 200,000,000.00 31/03/2012 30/03/2029 No
borrowings
Long-term
Nanshan Group(note 3) The Company 120,000,000.00 29/11/2012 28/11/2029 No
borrowings
Long-term Wuhan No
Nanshan Group(note 4) 56,600,000.00 17/12/2014 16/12/2029
borrowings Baowan
Long-term No
Nanshan Group(note 5) The Company 45,280,000.00 28/06/2016 28/06/2017
borrowings
Long-term Guangzhou No
Nanshan Group(note 6)
borrowings Baowan
24,749,915.56 22/04/2014 21/04/2029
Long-term Nanjing No
Nanshan Group(note 7) 18,612,543.06 29/05/2014 28/05/2029
borrowings Baowan
Total 1,435,242,458.62
Note 1: Guarantee provided by Nanshan Group for corporate bond and medium term note. See
note (V) 28 for details.
Note 2: Pursuant to the long-term borrowings contract, the loan withdrawal is expired, and the
Company can no longer use the residual facility. Nanshan Group only provides guarantee
for the closing balance of the loan within the guaranteed term. As at 31 December 2016,
the closing balance of the aforesaid guaranteed loan is RMB126,019,651.68.
Note 3: Pursuant to the long-term borrowings contract, the loan withdrawal is expired, and the
Company can no longer use the residual facility. Nanshan Group only provides guarantee
for the closing balance of the loan within the guaranteed term. As at 31 December 2016,
the closing balance of the aforesaid guaranteed loan is RMB 52,804,650.36.
82
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Guarantees with related parties - continued
Note 4: Pursuant to the long-term borrowings contract, Wuhan Baowan can apply for loans within
the scope of guaranteed amount and guaranteed term. Nanshan Group and the Company
has provide guarantee for the borrowings by 22.64% and 77.36% of the amount
respectively. As at 31 December 2016, the closing balance of the aforesaid guaranteed
loan is RMB 71,218,013.48, which Nanshan Group and the Company guarantee RMB
16,123,758.25 and RMB 55,094,255.23 by 22.64% and 77.36% respectively.
Note 5: Pursuant to the short-term borrowings contract, the Company has provided a maximum of
RMB 200,000,000.00 irrevocable guarantee with joint-liability for Baowan Holdings,
whereas Nanshan Group has provided a counter-guarantee against the Company by
22.64% of RMB 200,000,000.00. As at 31 December 2016, the closing balance of the
aforesaid guaranteed loan is RMB 50,000,000.00. See Note (V)17 for details.
Note 6: Pursuant to the long-term borrowings contract, Guangzhou Baowan can apply for loans
within the scope of guaranteed amount and guaranteed term. Nanshan Group and the
Company has provide guarantee for the borrowings by 22.64% and 77.36% of the amount
respectively. As at 31 December 2016, the closing balance of the aforesaid guaranteed
loan is RMB 109,319,415.02, which Nanshan Group and the Company guarantee RMB
24,749,915.56 and RMB 84,569,499.46 by 22.64% and 77.36% respectively.
Note 7: Pursuant to the long-term borrowings contract, Nanjing Baowan can apply for loans
within the scope of guaranteed amount and guaranteed term. Nanshan Group and the
Company has provide guarantee for the borrowings by 22.64% and 77.36% of the amount
respectively. As at 31 December 2016, the closing balance of the aforesaid guaranteed
loan is RMB 82,210,879.23, which Nanshan Group and the Company guarantee RMB
18,612,543.06 and RMB 63,598,336.17 by 22.64% and 77.36% respectively.
Closing balances of the above note 2, note 3, note 4, note 6 and note 7 added up to RMB
441,572,609.77. See note (V) 27 for details.
83
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(4) Borrowings/loans with related parties
Unit: RMB
Amount for the
Related party current period Inception date Maturity date Remarks
Borrowed from：
Nanshan Group 294,000,000.00 25/01/2016 25/01/2017 Note 1
Nanshan Group 250,000,000.00 08/11/2016 08/11/2019 Note 2
Nanshan Group 240,000,000.00 11/11/2016 31/10/2019 Note 2
Nanshan Group 220,000,000.00 16/08/2016 16/08/2017 Note 1
Nanshan Group 210,000,000.00 28/12/2016 28/12/2017 Note 3
Nanshan Group 200,000,000.00 18/08/2016 18/08/2017 Note 1
CDFC 207,900,000.00 27/05/2016 27/05/2026 Note 4
CDFC 100,000,000.00 31/03/2016 30/03/2019 Note 5
CDFC 100,000,000.00 29/12/2016 29/12/2019 Note 5
CDFC 95,000,000.00 07/11/2016 07/11/2026 Note 4
CDFC 70,000,000.00 04/08/2016 04/08/2026 Note 4
CDFC 64,455,100.00 08/12/2016 08/12/2019 Note 5
CDFC 54,000,000.00 17/10/2016 17/10/2026 Note 4
Nanshan Group 50,000,000.00 15/08/2016 15/08/2017 Note 1
CDFC 35,000,000.00 01/08/2016 01/08/2019 Note 6
Total 2,190,355,100.00
Lent to：
CDFC (500,000.00) 04/08/2016 04/08/2026 Note 4
CDFC (500,000.00) 17/10/2016 17/10/2026 Note 4
CDFC (1,000,000.00) 27/05/2016 27/05/2026 Note 4
CDFC (100,000,000.00) 30/12/2015 29/12/2016 Note 7
Nanshan Group (200,000,000.00) 18/08/2016 18/08/2017 Note 1
Nanshan Group (210,000,000.00) 16/08/2016 16/08/2017 Note 1
Nanshan Group (251,417,853.31) Note 8 Note 8
Nanshan Group (700,000,000.00) 11/11/2011 11/11/2016 Note 9
Total (1,463,417,853.31)
Note 1: The loan is used for the business turnover of the Company. The annual interest rate is
4.3500%.
Note 2: The loan is used for the business turnover of the Group. The interest rate is floated
quarterly, which is 4.2750% during the year.
Note 3: The loan is used for the business turnover of the Group. The annual interest rate is
4.1325%.
Note 4: The loan is used for repaid other loans. The interest rate is floated quarterly, which is
4.9000% during the year.
Note 5: The loan is used for the business turnover of the Company. The interest rate is floated
quarterly, which is 4.7500% during the year.
84
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(4) Borrowings/loans with related parties - continued
Note 6: The loan is used for logistic park construction. The interest rate is floated quarterly,
which is 4.7500% during the year.
Note 7: The loan was used for the business turnover of the Company, of which annual interest
rate was 4.1325% and was fully repaid during the year.
Note 8: The loan was not fixed with repayment terms and interest rate was refer to market rate.
Note 9: The loan was used for the business turnover of the Company, of which annual interest
rate was 6.8150% and was fully repaid during the year.
(5) Interest incomes and expenses with related parties
Interest/investment income gained from deposits/purchase of bank financing products
Unit: RMB
Type of related party Pricing principle of related Amount for the current Amount for the prior
Related party transaction party transaction period period
Negotiated interest rate
CDFC (note) Interest income 1,775,494.79 104,145.68
(referred to market rate)
Note: Interest incomes from CDFC is due to current deposits placed in CDFC by the Group.
Interest expense for borrowings
Unit: RMB
Amount for Amount for
Type of related party Pricing principle of related
Related party transaction party transaction the current period the prior period
Negotiated interest rate
Nanshan Group Interest expense
(referred to market rate)
62,825,137.53 71,161,521.03
Negotiated interest rate
Nanshan Hong Kong Interest expense
(referred to market rate)
10,238,175.00 11,378,791.67
Negotiated interest rate
CDFC Interest expense
(referred to market rate)
17,556,739.68 22,958.33
Ezhou Nanshan Negotiated interest rate
Company (note)
Interest expense
(referred to market rate)
1,694,202.43 -
Total 92,314,254.64 82,563,271.03
Note: Represents interest expense generated from prepayment for land use right by Ezhou
Nanshan Company on behalf of Ezhou Baowan, subsidiary of the Company. Ezhou
Baowan has fully repaid Ezhou Nanshan Company during the year.
(6) Compensation for key management personnel
Unit: RMB
Amount incurred in the Amount incurred in the
Item current period prior period
Compensation for key management personnel 7,385,803.81 5,795,754.00
85
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from / to related parties
(1) Amounts due from related parties
Unit: RMB
Closing balance Opening balance
Bad debt Bad debt
Item Related party Carrying amount provision Carrying amount provision
Hefei Baowan 466,806.70 - 397,690.39 -
CPEC 318,036.50 3,180.37 314,290.30 3,142.90
CSE 268,743.22 2,687.43 1,179,367.56 11,793.68
Accounts receivable Oriental Logistics Company 246,973.65 - - -
Chiwan Real Estate Company 82,595.70 825.96 243,315.68 2,433.16
Nanshan Group 76,616.55 766.17 - -
Total 1,459,772.32 7,459.93 2,134,663.93 17,369.74
Jiaxing Investment Company 15,333,000.00 - - -
CSE 27,336.60 273.37 11,571.48 115.71
Other receivable Hefei Baowan - - 79,200.00 -
Nanshan Group 2,750.00 27.50 2,750.00 27.50
Total 15,363,086.60 300.87 93,521.48 143.21
(2) Amounts due to related parties
Unit: RMB
Item Related party Closing balance Opening balance
Short-term Borrowing CDFC - 100,000,000.00
Accounts payable Nanshan Group 7,286,492.59 4,340,013.89
Chixiao Project Company 93,258.66 -
CSE 16,554.40 16,554.40
Chixiao Construction Company 9,740.00 102,998.66
Total 7,406,045.65 4,459,566.95
Interest payable CDFC 888,845.72 22,958.33
Nanshan Group 570,633.32 6,758,208.33
Total 1,459,479.04 6,781,166.66
Other payables Nanshan Hong Kong 21,655,761.67 11,921,567.32
Nanshan Group 13,598,928.74 16,228,098.95
Chixiao Project Company 8,718,573.62 15,004,897.43
Chixiao Construction Company 4,840,413.70 2,156,683.47
CSE 255,726.00 255,726.00
CPEC 204,224.04 204,224.04
Oriental Logistics Company 179,375.00 26,165.00
Chiwan Real Estate Company 62,059.90 -
Chixiao Business Company 35,790.30 -
Total 49,550,852.97 45,797,362.21
Non-current liabilities due within one year Nanshan Hong Kong 210,000,000.00 -
CSE 785,836.56 785,836.56
Nanshan Group - 700,000,000.00
Total 210,785,836.56 700,785,836.56
Other current liabilities Nanshan Group 564,000,000.00 -
Nanshan Hong Kong - 6,000,000.00
Total 564,000,000.00 6,000,000.00
Long-term Borrowing CDFC 724,355,100.00 -
86
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from / to related parties - continued
(2) Amounts due to related parties - continued
Unit: RMB
Item Related party Closing balance Opening balance
Long-term payables Nanshan Group - 251,417,853.31
Other non-current liabilities Nanshan Group 490,000,000.00 -
Nanshan Hong Kong 6,000,000.00 210,000,000.00
CSE 3,879,199.02 4,665,035.58
Total 499,879,199.02 214,665,035.58
7. Amounts deposited in related parties
Cash and bank balances deposited in related parties
Unit: RMB
Item Related party Closing balance Opening balance
Cash and bank balances CDFC 177,270,206.74 5,685,248.40
(XI) COMMITMENTS AND CONTINGENCY
1. Significant commitments
(1) Capital commitments
Unit: RMB
Closing balance Opening balance
Capital commitments that have been entered into but have not
been recognized in the financial statements:
- Commitment for acquisition and construction of long-term 297,349,050.63 97,735,552.60
assets
(2) Operating lease commitments
At the balance sheet date, the Group had the following commitments in respect of non-cancellable
operating leases:
Unit: RMB
Closing balance Opening balance
Minimum lease payments under non-cancellable operating
leases:
1st year subsequent to the balance sheet date 33,118,298.13 32,009,734.28
2nd year subsequent to the balance sheet date 39,388,509.13 37,502,362.78
3rd year subsequent to the balance sheet date 38,814,361.08 38,491,811.94
Subsequent periods 449,937,149.06 478,357,846.90
Total 561,258,317.40 586,361,755.90
2. Contingency
There is no significant contingency needed to be disclosed for the Group.
87
(XII) EVENTS AFTER THE BALANCE SHEET DATE
1. Significant acquisition
On 23 January 2017, the Company's Board of Directors approved the Motion on Acquiring
100% share of Jiangsu Jinwanxin Business Co.,Ltd, which agreed to have Kunshan Baowan,
subsidiary of the Company, to acquire 100% share of Jiangsu Jinwanxin Business Co.,Ltd with
maximum consideration of RMB 119,360,000.00. This transaction was not significant assets
reorganization specified in Management Method of Listed Company Significant Assets
Reorganization, nor was transaction between related parties.
2. Set up new subsidiaries
(1) Baowan Holdings, subsidiary of the Company, set up a 100% share subsidiary in Wuhan,
Hubei province. The newly set-up subsidiary, Hubei Baowan Logistic Investment Co.,Ltd,
has obtained business license on 16 February 2017, and plans to invest in e-commerce
project in Qinshan District of Wuhan, with land coverage of 441 Mu and initial investment
of RMB 1,070,000,000.00.
(2) On 23 January 2017, the Company's Board of Directors approved to have Baowan Holdings,
subsidiary of the Company, to invest and build logistic park project in Zhangzhou, Fujian
Province, with land coverage of 196 Mu and initial investment of RMB 434,000,000.00.
(XIII) OTHER SIGNIFICANT EVENTS
1. Borrowing costs
Unit: RMB
Amount of borrowing
Item costs during the year Capitalization rate
Construction in progress 6,142,146.18 5.01%
Sub-total of borrowing costs capitalized during the year 6,142,146.18
Borrowing costs recognized in profit or loss during the year 184,072,054.15
Total 190,214,200.33
2. Segment reporting
(1) Determining basis of reporting segment and accounting policy
Based on the Group's internal organization structure, management requirements and internal
operating system, the operations of the Group are classified into four operating segments. The
reporting segments are determined based on the specific circumstances of the Group. On the basis
of operating segments, the Group identifies four reporting segments. The Group's management
periodically evaluates the operating results of these reporting segments to make decisions about
resources to be allocated to the segments and assess their performance. Major products and
services delivered or provided by each of the reporting segments are: stack (storage), loading and
unloading, port management, office leasing and others.
Segment information is disclosed in accordance with the accounting policies and measurement criteria
adopted by each segment when reporting to management. The measurement criteria are consistent
with the accounting and measurement criteria in the preparation of the financial statements.
88
(XIII) OTHER SIGNIFICANT EVENTS - continued
2. Segment reporting - continued
(2) Reporting segment information
Unit: RMB
Stack (storage) Loading and unloading Port management Office leasing and others Unallocated items Inter-segment eliminations Total
Current year Prior year Current year Prior year Current year Prior year Current year Prior year Current year Prior year Current year Prior year Current year Prior year
Operating income:
External revenue 550,059,948.71 520,194,029.77 29,073,126.97 36,833,559.77 16,887,119.45 16,648,654.99 81,771,135.98 76,603,271.81 - - 677,791,331.11 650,279,516.34
Inter-segment revenue - - - - - - - - - - - -
Total segment operating
550,059,948.71 520,194,029.77 29,073,126.97 36,833,559.77 16,887,119.45 16,648,654.99 81,771,135.98 76,603,271.81 - - 677,791,331.11 650,279,516.34
income
Reconciling items:
Total operating income in the financial statements 677,791,331.11 650,279,516.34
Operating costs 209,112,081.97 201,719,829.80 30,820,322.74 33,060,506.50 5,847,984.04 13,189,448.38 54,127,867.43 49,032,730.20 - - 299,908,256.18 297,002,514.88
Segment operating profit
340,947,866.74 318,474,199.97 (1,747,195.77) 3,773,053.27 11,039,135.41 3,459,206.61 27,643,268.55 27,570,541.61 - - 377,883,074.93 353,277,001.46
(loss)
Reconciling items:
Business taxes and levies 37,579,903.93 28,945,688.71 1,986,265.90 2,049,567.46 1,153,722.11 926,398.15 5,586,575.50 4,262,514.24 - - 46,306,467.44 36,184,168.56
Selling expenses 1,077,360.05 1,794,630.86 - - - - - - - - 1,077,360.05 1,794,630.86
General and administrative 72,813,127.12 58,032,564.09 3,848,499.23 4,109,131.97 2,235,399.94 1,857,314.93 10,824,296.76 8,545,819.50 26,885,918.15 22,986,696.69 - 116,607,241.20 95,531,527.18
expenses
Financial expenses - - - - - - - - 181,754,411.70 165,115,346.59 - 181,754,411.70 165,115,346.59
Impairment loss of assets - - - - - - - - (98,698.65) 975,282.77 - (98,698.65) 975,282.77
Investment income - - - - - - - - 33,786,630.43 75,110,506.18 - 33,786,630.43 75,110,506.18
Operating profit 229,477,475.64 229,701,316.31 (7,581,960.90) (2,385,646.16) 7,650,013.36 675,493.53 11,232,396.29 14,762,207.87 (174,755,000.77) (113,966,819.87) - 66,022,923.62 128,786,551.68
Non-operating income 9,294,068.84 13,638,110.34
Non-operating expenses 2,950,166.24 1,520,513.80
Total profit 229,477,475.64 229,701,316.31 (7,581,960.90) (2,385,646.16) 7,650,013.36 675,493.53 11,232,396.29 14,762,207.87 (174,755,000.77) (113,966,819.87) - 72,366,826.22 140,904,148.22
89
(XIII) OTHER SIGNIFICANT EVENTS - continued
2. Segment reporting - continued
(2) Reporting segment information - continued
Unit: RMB
Stack (storage) Loading and unloading Port management Office leasing and others Unallocated items Inter-segment eliminations Total
Current year Prior year Current year Prior year Current year Prior year Current year Prior year Current year Prior year Current year Prior year Current year Prior year
Total segment assets 8,417,395,609.73 6,112,058,474.17 444,896,982.40 432,778,652.28 258,418,315.05 195,614,611.07 1,251,318,156.53 900,055,844.21 7,582,487,347.46 4,309,057,943.37 (10,405,474,885.05) (6,305,608,885.93) 7,549,041,526.12 5,643,956,639.17
Reconciling items:
Total assets in the financial
8,417,395,609.73 6,112,058,474.17 444,896,982.40 432,778,652.28 258,418,315.05 195,614,611.07 1,251,318,156.53 900,055,844.21 7,582,487,347.46 4,309,057,943.37 (10,405,474,885.05) (6,305,608,885.93) 7,549,041,526.12 5,643,956,639.17
statements
Total segment liabilities 3,145,193,547.44 3,683,349,074.33 166,237,537.50 260,808,180.25 96,559,037.34 117,884,490.09 467,560,035.69 542,406,437.14 4,508,785,899.45 1,791,445,607.21 (3,449,384,140.89) (2,823,028,658.71) 4,934,951,916.53 3,572,865,130.31
Reconciling items:
Total liabilities in the
3,145,193,547.44 3,683,349,074.33 166,237,537.50 260,808,180.25 96,559,037.34 117,884,490.09 467,560,035.69 542,406,437.14 4,508,785,899.45 1,791,445,607.21 (3,449,384,140.89) (2,823,028,658.71) 4,934,951,916.53 3,572,865,130.31
financial statements
Supplementary information:
Depreciation 117,246,462.77 86,260,134.07 6,196,999.63 6,107,851.34 3,599,525.88 2,760,729.90 17,429,693.75 12,702,584.26 - - - - 144,472,682.03 107,831,299.57
Amortization 48,250,468.73 33,257,254.13 2,550,252.94 2,354,857.97 1,481,313.87 1,064,388.51 7,172,846.61 4,897,431.21 - - - - 59,454,882.15 41,573,931.82
Interest income - - - - - - - - 5,052,488.85 5,895,451.65 - - 5,052,488.85 5,895,451.65
Interest expense - - - - - - - - 184,072,054.15 167,722,185.43 - - 184,072,054.15 167,722,185.43
Impairment losses
recognized in the current - - - - - - - - (98,698.65) 975,282.77 - - (98,698.65) 975,282.77
period
Investment income from
long-term equity investment - - - - - - - - 32,503,352.87 58,968,248.53 - - 32,503,352.87 58,968,248.53
under equity method
Long-term equity
investments under equity - - - - - - - - 602,194,915.06 582,600,360.74 - - 602,194,915.06 582,600,360.74
method
Non-current assets other
than long-term equity - - - - - - - - 6,297,953,397.17 4,393,821,145.20 - - 6,297,953,397.17 4,393,821,145.20
investments
Capital expenditure - - - - - - - - 1,446,513,885.08 551,067,384.83 - - 1,446,513,885.08 551,067,384.83
Including.: Expenditure
arising from construction in - - - - - - - - 307,175,878.14 392,050,771.00 - - 307,175,878.14 392,050,771.00
progress
Expenditure arising from
- - - - - - - - 19,040,730.65 8,461,997.66 - - 19,040,730.65 8,461,997.66
purchase of fixed assets
Expenditure arising from
purchase of Investment 265,673,564.47 125,037.42 265,673,564.47 125,037.42
properties
Expenditure arising from
- - - - - - - - 854,623,711.82 150,429,578.75 - - 854,623,711.82 150,429,578.75
purchase of intangible assets
90
(XIII) OTHER SIGNIFICANT EVENTS - continued
2. Segment reporting - continued
(3) External revenue by geographical area of source and non-current assets by geographical location
All external revenues of the Group were derived from PRC and all non-current assets of the
Group were located in the PRC.
(4) Degree of reliance on major customers
There is no transaction from single customer accounting for over 10% of the total income of the
Group.
(XIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Cash and bank balances
Unit: RMB
Item Closing balance Opening balance
Cash:
RMB 1,430.33 2,067.93
Singapore Dollar 4,590.72 5,933.93
Hong Kong Dollar 3,086.03 2,819.04
Euro 2,776.58 2,698.00
United States Dollar 395.41 1,135.75
Sub-total 12,279.07 14,654.65
Bank balances:
RMB 12,667,131.04 27,237,604.20
Hong Kong Dollar 1,371,585.77 1,268,546.63
United States Dollar 269,386.74 287,974.48
Sub-total 14,308,103.55 28,794,125.31
Total 14,320,382.62 28,808,779.96
2. Accounts receivable
(1) Disclosure of accounts receivable by categories:
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Proportio Proportion Net book Proportion Proportion
Category Amount n (%) Amount (%) value Amount (%) Amount (%) Net book value
Accounts
receivable that are
individually
- - - - - - - - - -
significant and
provided for bad
debt individually
Accounts receivable for which bad debt provision has been assessed by portfolios
Portfolio 1 - - - - - - - - - -
Portfolio 2 22,403,886.44 100.00 224,038.86 1.00 22,179,847.58 22,515,346.10 99.28 225,153.46 1.00 22,290,192.64
Subtotal of
22,403,886.44 100.00 224,038.86 22,179,847.58 22,515,346.10 99.28 225,153.46 22,290,192.64
portfolios
Accounts
receivable that are
not individually
significant but for
- - - - - 164,138.40 0.72 164,138.40 100.00 -
which bad debt
provision has been
assessed
individually
Total 22,403,886.44 100.00 224,038.86 22,179,847.58 22,679,484.50 100.00 389,291.86 22,290,192.64
91
(XIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Accounts receivable - continued
(1) Disclosure of accounts receivable by categories - continued:
Accounts receivable portfolios for which bad debt provision has been assessed using the percentage
of accounts receivable method:
Unit: RMB
Closing balance
Proportion of provision
Name of portfolio Carrying amount Bad debt provision (%)
Portfolio 2 22,403,886.44 224,038.86 1.00
Basis for determining the above portfolio: See Note(III)10.2.
(2) Provision being recorded and reversed in the current period
Provision being recorded is zero and being reversed is RMB 1,114.63 in the current period. And
being written-off is RMB 164,138.37 in the current period
(3) Provision being written-off in the current period
Unit: RMB
Name of entity Written-off
Shenzhen Lanjing Offshore Technology Co., Ltd. 164,138.37
(4) Top five entities with the largest balances of accounts receivable
Unit: RMB
Proportion of the
amount to the total
accounts receivable Bad debt provision
Name of entity Amount (%) Closing Balance
Customer 1 7,227,001.39 32.26 72,270.01
Customer 5 1,344,983.87 6.00 13,449.84
Customer 11 1,324,067.02 5.91 13,240.67
Customer 12 1,171,896.02 5.23 11,718.96
Customer 13 1,136,957.94 5.07 11,369.58
Total 12,204,906.24 54.47 122,049.06
92
(XIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
3. Other receivables
(1) Disclosure of other receivables by categories
Unit: RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Proportion Proportion Proportion Proportion
Category Amount (%) Amount (%) Net book value Amount (%) Amount (%) Net book value
Other receivables
that are individually
significant and - - - - - - - - - -
provided for bad
debt individually
Other receivables for which bad debt provision has been assessed by portfolios
Portfolio 1 457,636,342.31 99.85 - - 457,636,342.31 1,518,053,170.11 99.91 - - 1,518,053,170.11
Portfolio 2 680,788.88 0.15 6,807.89 1.00 673,980.99 1,349,341.95 0.09 13,493.42 1.00 1,335,848.53
Subtotal of
458,317,131.19 100.00 6,807.89 458,310,323.30 1,519,402,512.06 100.00 13,493.42 1,519,389,018.64
portfolios
Other receivables
that are not
individually
significant but for
- - - - - - - - - -
which bad debt
provision has been
assessed
individually
Total 458,317,131.19 100.00 6,807.89 458,310,323.30 1,519,402,512.06 100.00 13,493.42 1,519,389,018.64
Other receivables portfolios for which bad debt provision has been assessed using the percentage
of accounts receivable method:
Unit: RMB
Closing balance
Proportion of provision
Name of portfolio Other receivables Bad debt provision (%)
Portfolio 2 680,788.88 6,807.89 1.00
Basis for determining the above portfolio: See Note(III)10.2.
(2) Provision being recorded and reversed in the current period
Provision being recorded is zero and being reversed is RMB 6,685.53 in the current period.
(3) Top five entities with the largest balances of other receivables
Unit: RMB
Proportion of the
amount to the Bad debt
Name of entity Nature Amount Aging
total other closing Balance
receivables (%)
Amount due from
Mingjiang international 130,843,804.90 Within 1 year 28.55 -
related parties
Amount due from
Tianjin Baowan 104,045,923.86 Within 1 year 22.70 -
related parties
Langfang Baowan Amount due from 91,453,113.76 Within 1 year 19.95 -
related parties
Amount due from
Guangzhou Baowan 73,806,105.00 Within 1 year 16.10 -
related parties
Longquan Baowan Amount due from 56,124,406.58 Within 1 year 12.25 -
related parties
Total 456,273,354.10 99.55 -
93
(XIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
4. Long-term equity investments
Unit: RMB
Changes in the current period
Adjustment on Announcing
Investment income other cash Closing
Increase in Decrease in recognized by comprehensive Other equity dividends or balance on
Investee Opening balance investment investment equity method income changes profits Provision Others Closing balance provision
1. Subsidiaries
Baowan Holdings 830,531,987.58 1,701,920,000.00 - - - - - - - 2,532,451,987.58 -
Shenzhen Baowan 41,273,772.13 - - - - - - - - 41,273,772.13 -
Chengdu oil gas base 31,820,000.00 27,466,564.59 - - - - - - - 59,286,564.59 -
Subtotal 903,625,759.71 1,729,386,564.59 - - - - - - - 2,633,012,324.30 -
2. Associates
CSE 467,789,861.57 - - 25,914,161.33 - - 12,908,798.55 - 480,795,224.35
CDFC 111,647,095.57 - - 9,015,037.61 - - - - 120,662,133.18
CPEC 3,163,403.60 - - (2,425,846.07) - - - - 737,557.53
Subtotal 582,600,360.74 - - 32,503,352.87 - - 12,908,798.55 - 602,194,915.06
Total 1,486,226,120.45 1,729,386,564.59 - 32,503,352.87 - - 12,908,798.55 - 3,235,207,239.36
There is no restrictions on the ability of transferring funds to the Company from the investee entities which are held by the Company as long-term
equity investment as at 31 December 2016.
94
(XIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
5. Long-term borrowings
Categories of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Credit loans(note 1) 200,000,000.00 -
Guaranteed loans (note 2) 178,824,302.04 181,224,302.04
Total 378,824,302.04 181,224,302.04
Note 1: Represents long-term loans borrowed from CDFC, with annual interest rate of 4.7500%.
See note (XIV) 9(4) for details.
Note 2: The annual interest rate of the guaranteed loans is 4.9000% (31 December 2015:
4.9000%). Nanshan Group has provided a full-amount irrevocable guarantee with joint-
liability for the said loans. See note (X) 5(3) for details.
6. Operating income and operating costs
Unit: RMB
Amount recognized in the current period Amount recognized in the prior period
Item Operating income Operating costs Operating income Operating costs
Principal operating activities 141,419,025.81 90,338,986.01 165,619,871.51 107,497,621.13
Other operating activities 103,198.14 1,188,766.29 798,124.52 3,186,784.41
Total 141,522,223.95 91,527,752.30 166,417,996.03 110,684,405.54
7. Investment income
Details of investment income
Unit: RMB
Amount recognized Amount recognized
Item in the current period in the prior period
Income from long-term equity investments under equity method 32,503,352.87 58,968,248.53
Income from bank financing products 1,283,277.56 15,739,426.42
Income from long-term equity investments under cost method 1,818,877.49 1,217,702.94
Total 35,605,507.92 75,925,377.89
95
(XIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
8. Supplementary information to the cash flow statement
Supplementary information to the cash flow statement
Unit: RMB
Supplementary information Current period Prior period
1. Reconciliation of net profit to cash flow from operating activities:
Net profit (60,463,426.30) 27,165,472.23
Add: Provision for impairment losses of assets (7,800.16) (121,978.29)
Depreciation of fixed assets 9,368,412.18 10,291,248.18
Amortization of intangible assets 16,890,727.39 16,786,846.12
Depreciation of investment properties 5,727,365.81 5,920,143.84
Losses (gains) on disposal of fixed assets, intangible assets 1,860,433.37 67,310.36
and other long-term assets
Financial expenses 99,957,815.39 64,085,023.82
Losses (gains) arising from investments (35,605,507.92) (75,925,377.89)
Decrease (increase) in deferred tax assets 9,635,782.89 (9,497,897.67)
Decrease (increase) in inventories (1,413.83) (47,250.88)
Decrease (increase) in receivables from operating activities (969,080.36) 12,697,490.83
Increase (decrease) in payables from operating activities (14,232,512.39) (21,954,941.46)
Net cash flow from operating activities 32,160,796.07 29,466,089.19
2. Net changes in cash and cash equivalents:
Closing balance of cash (note) 14,320,382.62 28,808,779.96
Less: Opening balance of cash 28,808,779.96 110,176,958.92
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase (decrease) in cash and cash equivalents (14,488,397.34) (81,368,178.96)
9. Related party transactions
(1) Provision and receipt of services
Receipt of service
Unit: RMB
Pricing and decision-making
Details of related party procedures of related party Amount for the Amount for the
Related party transaction transactions current period prior period
Nanshan Group Power supply service By reference to market price 2,686,320.90 2,558,805.26
Chixiao Project Company Construction service By reference to market price - 2,688,395.00
Total 2,686,320.90 5,247,200.26
96
(XIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
9. Related party transactions - continued
(1) Provision and receipt of services - continued
Provision of service
Unit: RMB
Pricing and decision-making
Details of related party procedures of related party Amount for the Amount for the
Related party transaction transactions current period prior period
CSE Loading and unloading service By reference to market price 4,197,178.22 1,781,531.46
CSE Stack (storage) By reference to market price 3,704,755.60 2,724,336.00
CPEC Stack (storage) By reference to market price 288,950.68 815,718.96
CPEC Loading and unloading service By reference to market price 48,514.35 42,405.23
Nanshan Group Stack (storage) By reference to market price 9,600.00 9,600.00
Nanshan Group Maintenance service By reference to market price 7,675.00 41,957.95
CDFC Maintenance service By reference to market price 1,285.00 5,750.00
Total 8,257,958.85 5,421,299.60
(2) Leases with related parties
Leases where the Company is the lessor:
Unit: RMB
Lease income Lease income
recognized in the recognized in the prior
Name of lessee Type of leased assets current year year
Nanshan Group Office building 6,606,800.81 6,258,106.46
CDFC Office building 1,219,676.21 1,165,280.76
Chiwan Real Estate Office building 989,714.20 740,143.72
CSE Office building 785,836.56 785,836.56
Chixiao Enterprise Office building 463,171.17 39,042.15
CPEC Office building 392,206.50 455,129.28
Nanshan Real Estate Company Office building 87,765.12 85,240.80
Total 10,545,170.57 9,528,779.73
Leases where the Company is the lessee:
Unit: RMB
Lease payment Lease payment
recognized in the recognized in the prior
Name of lessor Type of leased assets current year year
Nanshan Group Site 27,241,673.80 28,088,931.65
97
(XIIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
9. Related party transactions - continued
(3) Guarantees with related parties
The Company as the guarantor:
Unit: RMB
Inception date of Expiration date Whether execution of guarantee
Guaranteed party Guaranteed amount guarantee of guarantee has been completed
Baowan Holdings (note) 200,000,000.00 28/06/2016 28/06/2017 No
Wuhan Baowan (note) 193,400,000.00 17/12/2014 16/12/2029 No
Guangzhou Baowan (note) 85,654,000.00 22/04/2014 21/04/2029 No
Nanjing Baowan (note) 64,996,000.00 29/05/2014 28/05/2029 No
Total 544,050,000.00
Note: See Note X (5)3 for details of closing balances of guaranteed bank loans.
The Company as the guaranteed party:
Unit: RMB
Inception date of Expiration date Whether execution of guarantee
Guarantor Guaranteed amount guarantee of guarantee has been completed
Nanshan Group 570,000,000.00 17/12/2012 17/12/2019 No
Nanshan Group 400,000,000.00 09/03/2012 09/03/2017 No
Baowan Holdings 300,000,000.00 08/03/2016 07/03/2018 No
Nanshan Group 200,000,000.00 31/03/2012 30/03/2029 No
Nanshan Group 120,000,000.00 29/11/2012 28/11/2029 No
Nanshan Group 45,280,000.00 28/06/2016 28/06/2017 No
Total 1,635,280,000.00
(4) Borrowings/loans with related parties
Unit: RMB
Related party Amount for the current period Inception date Maturity date Remarks
Borrowed from:
Nanshan Group 240,000,000.00 11/11/2016 31/10/2019 Note 1
Nanshan Group 220,000,000.00 16/08/2016 16/08/2017 Note 2
Nanshan Group 210,000,000.00 28/12/2016 28/12/2017 Note 3
Nanshan Group 200,000,000.00 18/08/2016 18/08/2017 Note 2
CDFC 100,000,000.00 31/03/2016 30/03/2019 Note 4
CDFC 100,000,000.00 29/12/2016 29/12/2019 Note 4
Total 1,070,000,000.00 11/11/2016 31/10/2019
Lent to:
CDFC (100,000,000.00) 30/12/2015 29/12/2016 Note 5
Nanshan Group (200,000,000.00) 18/08/2016 18/08/2017 Note 2
Nanshan Group (210,000,000.00) 16/08/2016 16/08/2017 Note 2
Nanshan Group (700,000,000.00) 11/11/2011 11/11/2016 Note 6
Total (1,210,000,000.00)
98
(XIIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
9. Related party transactions - continued
(4) Borrowings/loans with related parties- continued
Note 1: The loan is intended for the business turnover of the Group. The annual interest rate is
4.2750% and floated annually.
Note 2: The loan is intended for the business turnover of the Company. The annual interest rate
is 4.3500%.
Note 3: The loan is intended for the business turnover of the Group. The annual interest rate is
4.1325%.
Note 4: The loan is intended for the business turnover of the Company. The annual interest rate
is 4.7500% and floated quarterly..
Note 5: The loan was intended for the business turnover of the Company. The annual interest
rate was 4.1325%. The loan was fully paid off.
Note 6: The loan was intended for the construction of the Company. The annual interest rate was
6.8150%. The loan was fully paid off.
(5) Interest incomes and expenses with related parties
Interest income gained from deposits
Unit: RMB
Type of related Pricing principle of related party Amount for the current Amount for the prior
Related party party transaction transaction period period
Negotiated interest rate
Subsidiaries Interest income 31,285,152.02 65,871,262.71
(by reference to market rate)
Negotiated interest rate
CDFC.(note) Interest income 173,521.59 103,787.60
(by reference to market rate)
Total 31,458,673.61 65,975,050.31
Note: The Company has placed current deposits of which generated interest income in the current
period.
Interest expense for borrowings
Unit: RMB
Type of related Pricing principle of related party Amount for the current
Related party party transaction transaction period Amount for the prior period
Negotiated interest rate
Nanshan Group Interest expense 41,780,531.89 55,725,833.34
(by reference to market rate)
Negotiated interest rate
CDFC Interest expense 7,836,708.36 22,958.33
(by reference to market rate)
Total 49,617,240.25 55,748,791.67
99
(XIIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
10. Amounts due from/to related parties
(1) Amounts due from related parties
Unit: RMB
Closing balance Opening balance
Bad debt Bad debt
Item Related party Carrying amount provision Carrying amount provision
Accounts receivable CPEC 318,036.50 3,180.37 314,290.30 3,142.90
CSE 268,743.22 2,687.43 1,179,367.56 11,793.68
Chiwan Real Estate Company 82,595.70 825.96 243,315.68 2,433.16
Nanshan Group 76,616.55 766.17 - -
Total 745,991.97 7,459.93 1,736,973.54 17,369.74
Other receivable Mingjiang international 130,843,804.90 - - -
Tianjin Baowan 104,045,923.86 - - -
Langfang Baowan 91,453,113.76 - - -
Guangzhou Baowan 73,806,105.00 - - -
Longquan Baowan 56,124,406.58 - - -
Chengdu oil gas 1,110,383.33 - 734,356.07 -
CSE 27,336.60 273.37 11,571.48 115.71
Baowan Holdings 116,098.68 - 1,516,264,841.65 -
Hefei Baowan - - 79,200.00 -
Total 457,527,172.71 273.37 1,517,089,969.20 115.71
100
(XIIV) NOTES TO KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
10. Amounts due from/to related parties - continued
(2) Amounts due to related parties
Unit: RMB
Item Related party Closing balance Opening balance
Short-term borrowing CDFC - 100,000,000.00
Accounts payable Nanshan Group 7,286,492.59 4,340,013.89
Chixiao Project 93,258.66 -
CSE 16,554.40 16,554.40
Chixiao Construction
9,740.00 102,998.66
Company
Total 7,406,045.65 4,459,566.95
Interest payable Nanshan Group 570,633.32 6,758,208.33
CDFC 184,722.24 22,958.33
Total 755,355.56 6,781,166.66
Other payables Shenzhen Baowan 42,854,649.84 41,621,271.53
Baowan Holdings 18,001,969.21 -
Chixiao Construction
4,393,677.66 502,000.00
Company
Nanshan Group 435,595.22 623,281.06
CSE 255,726.00 255,726.00
CPEC 204,224.04 204,224.04
Chiwan Real Estate
62,059.90 -
Company
Chixiao Business
35,790.30 -
Company
Chixiao Project - 5,793,423.81
Total 66,243,692.17 48,999,926.44
Non-current liabilities due within one year CSE 785,836.56 785,836.56
Nanshan Group - 700,000,000.00
Total 785,836.56 700,785,836.56
Other current liabilities Nanshan Group 220,000,000.00 -
Other non-current liabilities Nanshan Group 240,000,000.00 -
CSE 3,879,199.02 4,665,035.58
Total 243,879,199.02 4,665,035.58
11. Amounts deposited in related parties
Cash and bank balances deposited in related parties
Unit: RMB
Item Related party Closing balance Opening balance
Cash and bank balances CDFC 4,850,227.72 3,108,387.56
101
SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Breakdown of non-recurring profit or loss
Unit: RMB
Item Amount
Profit or loss on disposal of non-current assets (1,761,326.85)
Government grants recognized in profit or loss for the current period(other than grants which are
closely related to the Company's business and are either in fixed amounts or determined under 5,238,023.20
quantitative methods in accordance with the national standard)
Other non-operating income or expenses other than the above 2,868,136.38
Tax effects (1,594,903.68)
Effects attributable to minority interests (after tax) (1,113,241.66)
Total 3,636,687.39
Note: To improve the usage of spare cash, Shenzhen Chiwan Petroleum Supply Base Co., Ltd. (the
"Company") and its subsidiaries use spare cash to purchase bank financing products (see
Note(V)42) every year, and classify the investment income gained form bank financing products as
recurring profit and loss.
2. Return on equity (ROE) and earnings per share ("EPS")
The ROE and EPS have been prepared by the Company in accordance with Information Disclosure and
Presentation Rules for Companies Making Public Offering of Securities No. 9 - Calculation and
Disclosure of Return on Equity and Earnings per Share (Revised 2010) issued by China Securities
Regulatory Commission.
Unit: RMB
EPS
Weighted average return on
Profit for the reporting period net assets (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders of the
Company
0.11 0.01 No application
Net profit after deduction of non-recurring profits or
losses attributable to ordinary shareholders of the (0.10) (0.007) No application
Company
The supplementary information was signed by the following responsible persons on 18 April 2017:
Tian Junyan Yu Zhongxia Sun Yuhui
Legal Representative Person in Charge of Chief Accountant
the Accounting Body
