2011 Interim Report
ZHEJIANG EXPRESSWAY CO., LTD.
2011 Interim Report
Leveraging Opportunities, Pursuing Growth
During the first half of 2011, the increase in both traffic volume and toll
income of the Group's two expressways dipped significantly as a result of
slackened growth in the economy. In the second half of 2011, the organic growth
of traffic volume on the Group's expressways is likely to improve as the
economic environment is improving. Meanwhile, the Group's securities business
will still be affected by the volatility in the A-share market and the intense
competition in the securities brokerage industry. The securities business will
enhance the competitiveness of its operating network by establishing more new
outlets in the Zhejiang market. It will also aggressively expand other
operations, striving to further promote a sound development of the business.
The Company will face unprecedented challenges, given the extremely complex
internal and external environments for economic development as well as the
uncertainties due to recent policy changes or adjustments for the toll road
industry. The Company's management will closely monitor the changes in policies
for the industry and the impact of road networks within the province on the
Group. The Company will adjust its business strategies on a timely basis to
strengthen the core expressway business, and strive to seek and cultivate new
businesses and new income bases so as to achieve a sustainable and healthy
development.
Contents
2011 Interim Results 2
Business Review 3
Financial Analysis 6
Outlook 9
Disclosure of Interests and Other Matters 10
Condensed Consolidated Statement of Comprehensive Income (Unaudited) 12
Condensed Consolidated Statement of Financial Position 13
Condensed Consolidated Statement of Changes in Equity (Unaudited) 15
Condensed Consolidated Cash Flow Statement (Unaudited) 16
Notes to Condensed Consolidated Financial Statements 17
Appendices
Corporate Information 26
Corporate Structure of the Group 28
Financial Highlights 29
Location Map of Expressways in Zhejiang Province 30
2011 Interim Results
The directors (the "Directors") of Zhejiang Expressway Co., Ltd. (the
"Company") announced the unaudited consolidated operating results of the
Company and its subsidiaries (collectively the "Group") for the six months
ended June 30, 2011 (the "Period"), with the basis of preparation as stated in
note 1 to the condensed consolidated financial statements set out below.
During the Period, revenue for the Group was Rmb3,339.37 million, representing
an increase of 6.7% over the same period in 2010. Profit attributable to owners
of the Company for the Period was Rmb900.32 million, representing an increase
of 5.2% year-on-year. Earnings per share for the Period was Rmb20.73 cents,
representing an increase of 5.2% over the same period in 2010.
The Directors have recommended to pay an interim dividend of Rmb6 cents per
share, subject to shareholders' approval at the extraordinary general meeting
of the Company expected to be held on October 13, 2011.
The interim report has not been audited or reviewed by the auditors but has
been reviewed by the audit committee of the Company.
Business Review
Although China's domestic economy continued to maintain a sound development
trend on the whole in the first half of 2011, its GDP growth had notably
decelerated, registering an increase of 9.6% over the same period last year due
to the impact from the macro-economic control initiatives of the PRC
Government. During the Period, the growth pace of Zhejiang Province's economy
also tended to slow in the second quarter of 2011, with the overall economic
structure undergoing the adjustment process of continuous improvement. The
province's GDP increased by 9.9% year-on-year during the Period.
Given the gradual slowdown of growth in the domestic economy and in automobile
sales in China, the organic growth of traffic volume on the Group's expressways
also showed a significant falling trend during the Period. As China's stock
market remained volatile and tumbled during the Period, revenue from the
securities business of the Group was generally on par with the same period last
year. Consequently, during the Period, income for the Group increased by 6.5%
year-on-year, amounting to Rmb3,436.13 million. Of such income, Rmb1,791.91
million was generated from the two major expressways owned and operated by the
Group, representing an increase of 3% year-on-year and accounting for 52.1% of
total income; and Rmb954.94 million was generated from the toll road-related
businesses, representing an increase of 19.5% year-on-year and accounting for
27.8% of total income. The securities business contributed an income of
Rmb689.28 million to the Group, representing an increase of 0.1% year-on-year
and accounting for 20.1% of total income.
A breakdown of the Group's income for the Period is set out below:
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000 Change%
--------------------------------------------------------------------------------
Toll income
Shanghai-Hangzhou-Ningbo 1,437,224 1,361,787 5.5%
Expressway
Shangsan Expressway 354,681 377,864 -6.1%
Other income
Service areas 911,890 758,195 20.3%
Advertising 43,053 41,166 4.6%
Others - 33 -100.0%
Securities business income
Commission 535,900 590,936 -9.3%
Bank interests 153,381 97,509 57.3%
--------------------------------------------------------------------------------
Subtotal 3,436,129 3,227,490 6.5%
Less: Revenue taxes (96,762) (96,588) 0.2%
--------------------------------------------------------------------------------
Revenue 3,339,367 3,130,902 6.7%
--------------------------------------------------------------------------------
TOLL ROAD OPERATIONS
The organic growth of traffic volume on the Group's expressways suffered
significantly due to the impact from a slowdown of growth in China's
macro-economy. Meanwhile, the Shangsan Expressway continued to be hit by
traffic diversions to the Zhuyong Expressway after the new expressway had been
opened to traffic in July 2010. As a result, growth of traffic volume on the
Group's two expressways was relatively slower than expected during the Period.
Coupled with the above-said challenges were frequent severe weather conditions
in Zhejiang Province during the first half of 2011. In addition to frequent
rains and snows between January and February, heavy rainfalls in June also
caused inconvenience to vehicle travels, thus bringing a significant negative
impact on traffic volume and toll income.
The PRC government's abolition of toll tariffs for local Class II highways in
early March 2010 resulted in diversions of some trucks travelling on the
Group's expressways to ordinary highways and recent changes in vehicle mix on
the Group's expressways. Meanwhile, the gradual increase in large trucks has
led to a decrease in small and medium-sized trucks, thereby weakening the
positive impact of the toll-by-weight policy on the Group's toll income on the
whole.
Average daily traffic volume in full-trip equivalents along the Group's
Shanghai-Hangzhou-Ningbo Expressway was 39,703 during the Period, representing
an increase of 4.7% year-on-year. In particular, average daily traffic volume
in full-trip equivalents along the Shanghai-Hangzhou Section of the
Shanghai-Hangzhou-Ningbo Expressway increased by 3.3% year-on-year, and that
along the Hangzhou-Ningbo Section increased by 5.7% year-on-year. Average daily
traffic volume in full-trip equivalents along the Shangsan Expressway was
17,089 during the Period, representing a decrease of 9.3% year-on-year.
Toll income from the Shanghai-Hangzhou-Ningbo Expressway amounted to
Rmb1,437.23 million during the Period, representing an increase of 5.5%
year-on-year; while toll income from the Shangsan Expressway amounted to
Rmb354.68 million during the Period, representing a decrease of 6.1%
year-on-year.
TOLL ROAD-RELATED BUSINESS OPERATIONS
The Company also operates certain toll road-related businesses along its
expressways through its subsidiaries and associated companies, including gas
stations, restaurants and shops in service areas, as well as roadside
advertising and vehicle service businesses.
During the Period, income from the service areas (except for the gas station
business) declined as a result of the slackened growth in traffic volume on the
Group's two expressways, frequent adverse weather conditions and reduced
travels of coach buses and passenger cars after the Shanghai-Hangzhou
High-Speed Railway and Hangzhou-Wenzhou Train increased their frequency
schedules. However, the surge in the selling prices of petroleum products
prompted a significant rise in the sales of petroleum products, generating
satisfactory income on the whole. Consequently, income from the toll
road-related businesses of the Group amounted to Rmb954.94 million during the
Period, representing an increase of 19.5% year-on-year.
SECURITIES BUSINESS
During the Period, competition in the securities business intensified further
due to the volatility and adjustments of the domestic stock market, compounded
with increasing sales outlets set up by various securities firms since 2010.
The positive effect from the increased market share of Zheshang Securities was
offset by a decline in commission rates, thereby impacting the performance of
the securities business.
Faced with an intensely competitive environment, Zheshang Securities endeavored
to expand various businesses, and consequently, the market share of its
securities brokerage business and the total number of customers continued to
increase in the Period, while the investment banking and asset management
businesses maintained steady growth. During the Period, the securities business
realized an operating income of Rmb689.28 million, representing an increase of
0.1% year-on-year. Of such income, brokerage commissions income amounted to
Rmb535.90 million, representing a decrease of 9.3% year-on-year; bank interests
income amounted to Rmb153.38 million, representing an increase of 57.3%
year-on-year; and the proprietary securities trading business recorded a profit
of Rmb27.89 million as accounted for in the income statement (Same period in
2010: Rmb51.61 million).
LONG-TERM INVESTMENTS
Zhejiang Expressway Petroleum Development Co., Ltd. (a 50% owned associate
company of the Company) ("Petroleum Co") realized an income of Rmb2,393.40
million, representing an increase of 49.6% year-on-year due to a rise in the
prices of petroleum products and a growth in sales of petroleum products during
the Period. In the Period, Petroleum Co achieved a net profit of Rmb17.52
million.
Zhejiang Jinhua Yongjin Expressway Co., Ltd. (a 23.45% owned associate company
of the Company) operates the 69.7 kilometre Jinhua Section of the Ningbo-Jinhua
Expressway. During the Period, the Company achieved a satisfactory growth in
toll income benefitting from an increase in traffic volume driven by the
opening of nearby road networks. The Jinhua Section of the Ningbo-Jinhua
Expressway recorded an average daily traffic volume in full-trip equivalents of
10,604 during the Period, representing an increase of 17.2% year-on-year; while
toll income amounted to Rmb105.78 million, representing an increase of 19.7%
year-on-year. Due to its heavy financial burden, the associate company still
incurred a loss of Rmb30.13 million during the Period but the Directors believe
that the loss is gradually decreasing.
JoinHands Technology Co., Ltd. (a 27.582% owned associate company of the
Company) did not show any improvement to its operations during the Period and
realized a loss of Rmb1.20 million during the Period.
HUMAN RESOURCES
There were no significant changes to the Company's overall number of employees,
remuneration policies, bonus schemes and training schemes from what have been
disclosed in the Company's latest annual report.
Financial Analysis
The Group adopts a prudent financial policy with an aim to provide shareholders
with sound returns over the long-term.
During the Period, profit attributable to owners of the Company for the year
was approximately Rmb900.32 million, representing an increase of 5.2%
year-on-year; return on shareholders' equity was 6.2%, representing an increase
of 1.0% year-on-year; while earnings per share for the Company was Rmb20.73
cents.
LIQUIDITY AND FINANCIAL RESOURCES
As at June 30, 2011, current assets of the Group amounted to Rmb16,629.86
million in aggregate (December 31, 2010: Rmb19,673.10 million), of which bank
balances and cash accounted for 30.6% (December 31, 2010: 30.5%), bank balances
held on behalf of customers accounted for 52.0% (December 31, 2010: 59.4%), and
held-for-trading investments accounted for 7.9% (December 31, 2010: 4.1%).
Current ratio (current assets over current liabilities) as at June 30, 2011 was
1.5 (December 31, 2010: 1.3). Excluding the effect of customer deposits arising
from the securities business, the resultant current ratio of the Group (current
assets less bank balances held on behalf of customers over current liabilities
less balance of accounts payable to customers arising from the securities
dealing business) was 3.1 (December 31, 2010: 2.6).
--------------------------------------------------------------------------------
As at As at
June 30, December 31,
2011 2010
--------------------------------------------------------------------------------
Rmb'000 Rmb'000
--------------------------------------------------------------------------------
Cash and cash equivalent
Rmb 4,313,471 5,674,173
US$ in Rmb equivalent 3,194 2,616
HK$ in Rmb equivalent 5,286 5,264
Time deposit
Rmb 735,066 301,286
US$ in Rmb equivalent 24,497 24,259
Held-for-trading investments-Rmb 1,309,511 803,772
Available-for-sale investments-Rmb 61,359 71,928
Financial assets held under resale 51,063 80,163
agreement-Rmb
Total 6,503,447 6,963,461
Rmb 6,470,470 6,931,322
US$ in Rmb equivalent 27,691 26,875
HK$ in Rmb equivalent 5,286 5,264
--------------------------------------------------------------------------------
The amount for held-for-trading investments of the Group as at June 30, 2011
amounted to Rmb1,309.51 million (December 31, 2010: Rmb803.77 million), of
which 81.6% was invested in corporate bonds, 18.0% was invested in the stock
market, and the rest was invested in open-end equity funds.
During the Period, net cash inflow generated from the Group's operating
activities amounted to Rmb666.12 million.
The Directors do not expect the Company to experience any problem with
liquidity and financial resources in the foreseeable future.
BORROWINGS AND SOLVENCY
As at June 30, 2011, total liabilities of the Group amounted to Rmb12,429.60
million (December 31, 2010: Rmb15,956.94 million), of which 15.7% was
borrowings and 69.4% was accounts payable to customers arising from the
securities dealing business.
Total interest-bearing borrowings of the Group as at June 30, 2011 amounted to
Rmb1,952.61 million, representing an increase of 7.2% over December 31, 2010.
The borrowings comprised outstanding balances of loans from domestic foreign
banks, denominated in HK dollar, totalling approximately Rmb320.61 million
equivalent; outstanding balances of loans from domestic commercial banks
totalling Rmb632.00 million; and corporate bonds amounting to Rmb1 billion that
was issued by the Company in 2003 for a term of 10 years. Of the
interest-bearing borrowings, 51.2% were not repayable within one year. The
details of relevant outstanding amounts are as follows:
-----------------------------------------------------------------------------------
Maturity Profiles
-----------------------------------------------------------------------------------
Gross Within >1 year-5years Beyond
amount 1 year inclusive 5 years
Rmb'000 Rmb'000 Rmb'000 Rmb'000
-----------------------------------------------------------------------------------
Floating rates
World Bank loan 532,000 532,000 - -
Fixed rates
Domestic commercial bank 100,000 100,000 - -
loans
Domestic foreign bank loan 320,611 320,611 - -
Corporate bonds 1,000,000 - 1,000,000 -
-----------------------------------------------------------------------------------
Total as at June 30, 2011 1,952,611 952,611 1,000,000 -
-----------------------------------------------------------------------------------
Total as at December 31,2010 1,822,000 822,000 1,000,000 -
-----------------------------------------------------------------------------------
As at June 30, 2011, the Group's loans from domestic commercial banks are
one-year short-term loans, of which Rmb100.00 million was fixed-rate loans with
interest rates ranging from 5.31% to 6.06% per annum and Rmb532.00 million was
floating-rate loans with interest rates ranging from 5.68% to 6.31% per annum.
The annual coupon rate for corporate bonds was fixed at 4.29%, with interest
payable annually. The annual interest rate for accounts payable to customer
arising from the securities dealing business was fixed at 0.36%. The annual
interest rate for the Group's loan denominated in HK dollars was 4.95% per
annum.
Total interest expense for the Period amounted to Rmb41.85 million, while
profit before interest and tax amounted to Rmb1,435.77 million. The interest
cover ratio (profit before interest and tax over interest expenses) stood at
34.3 (June 30, 2010: 31.0).
The asset-liability ratio (total liabilities over total assets) was 41.0% as at
June 30, 2011 (December 31, 2010: 47.4%). Excluding the effect of customer
deposits arising from the securities business, the resultant asset-liability
ratio (total liabilities less balance of accounts payable to customers arising
from the securities dealing business over total assets less bank balances held
on behalf of customers) of the Group was 17.6% (December 31, 2010: 19.7%).
CAPITAL STRUCTURE
As at June 30, 2011, the Group had Rmb17,873.70 million total equity,
Rmb10,041.85 million fixed-rate liabilities, Rmb532.00 million floating-rate
liabilities and Rmb1,855.75 million interest-free liabilities, representing
59.0%, 33.1%, 1.8% and 6.1% of the Group's total capital, respectively. The
gearing ratio, which was computed by dividing the total liabilities less
accounts payable to customers arising from the securities dealing business by
total equity, was 21.3% as at June 30, 2011 (December 31, 2010: 24.4%).
CAPITAL EXPENDITURE COMMITMENTS AND UTILIZATION
During the Period, capital expenditures of the Group totaled Rmb117.53 million,
while capital expenditures of the Company totaled Rmb4.97 million. Amongst the
total capital expenditures of the Group, Rmb76.24 million was incurred for
acquisition and construction of properties and Rmb38.14 million for purchase of
equipment.
As at June 30, 2011, capital expenditures committed by the Group and the
Company totaled Rmb648.12 million and Rmb221.75 million, respectively. Amongst
the total capital expenditures committed by the Group, Rmb283.94 million was
used for acquisition and construction of properties, Rmb304.62 million for
acquisition of equipment, Rmb46.62 million for the widening project between the
Shaoxing-Zhuji hub and the Shaoxing-Jiaxing hub of the Shangsan Expressway, and
Rmb12.94 million for service area renovation and expansion.
The Group will finance its above-mentioned capital expenditure commitments
mainly with internally generated cash flow, with a preference for debt
financing to meet any shortfalls thereof.
CONTINGENT LIABILITIES AND PLEDGE OF ASSETS
As at June 30, 2011, the Group did not have any contingent liabilities nor any
pledge of assets or guarantees.
FOREIGN EXCHANGE EXPOSURE
Save for the repayment of a domestic foreign bank loan in HK dollar amounting
to an equivalent of approximately Rmb320.61 and dividend payments to the
holders of H shares in HK dollars, the Group's principal operations are
transacted and booked in Renminbi. Therefore, the Group's exposure to foreign
exchange fluctuations is limited.
With an aim to hedge against foreign exchange risks arising from borrowings
denominated in HK dollar, the Group has purchased Hong Kong dollar equivalent
forward contracts with one-year term at a rate lower than the spot exchange
rate on the borrowing date during the Period. Save for the above-mentioned, the
Group has not used financial instrument for hedging purposes during the Period.
Although the Directors do not foresee any material foreign exchange risks for
the Group, there is no assurance that foreign exchange risks will not affect
the operating results of the Group in the future.
Outlook
During the Period, China's economic growth slowed moderately as expected under
the State's policy of continuously strengthening and improving the
macro-economic control initiatives. The corresponding slowdown in growth in
domestic automobile sales and foreign trade exports had affected the organic
growth of traffic volume on expressways. It is anticipated that as inflationary
pressures begin to subside in the second half of 2011, the intensity of the
macro-economic control initiatives is likely to be eased such that economic
growth may demonstrate a trend of "first decelerating then accelerating".
Although the increase in both traffic volume and toll income of the Group's two
expressways dipped significantly during the Period as a result of slackened
growth in the province's economy as well as the impact of traffic diversions to
the Zhuyong Expressway, it is anticipated that the organic growth of traffic
volume on the Group's expressways is likely to improve in the second half of
2011 as the impact from traffic diversions to the Zhuyong Expressway is
stabilizing and the economic environment in Zhejiang Province is improving.
Meanwhile, following the commencement of operation of eight toll stations and
20 electronic toll collection (ETC) lanes, seven toll stations and 18 ETC lanes
commenced operation upon completion on 1 August 2011 as planned in the first
half of 2011. The remaining 17 toll stations and 52 ETC lanes are expected to
be built and to commence operation next year. The Group will then be able to
offer more convenient and efficient services to traveling vehicles and to
further enhance the traffic capacity of its expressways.
As regards the policy announced in mid-June 2011 by five national ministries
and commissions of China for specifically rectifying highway tolling, relevant
implementation policies expected to be formulated by Zhejiang Province in the
second half of the year will perhaps affect the current toll standards, thereby
triggering uncertainties over the toll income to be generated on the Group's
expressways.
As China's stock market will experience quite a high level of uncertainties
once the stock indices are being consolidated at low levels, the Group's
securities business will be affected by the volatility in the A-share market
and the intense competition in the securities brokerage industry. Zheshang
Securities will enhance the competitiveness of its operating network by
establishing more new outlets in the Zhejiang market. It will aggressively
expand investment banking, fixed income, asset management and other operations,
while striving to create new businesses for further promoting a sound
development of the securities business.
The Company will face unprecedented challenges, given the extremely complex
internal and external environments for economic development as well as the
uncertainties due to recent policy changes or adjustments for the toll road
industry. We expect that during the second half of 2011, we will be facing
increasing uncertainties regarding the traffic volumes on the Group's
expressways, the service area operations and the performance of the capital
market. Under such a complex situation, the Company's management will closely
monitor the changes in policies for the industry and the impact of road
networks within the province on the Group. We will adjust business strategies
on a timely basis to strengthen the expressway core business, and strive to
seek and cultivate new businesses and new income bases so as to achieve a
sustainable and healthy development of the Company.
Disclosure of Interests and Other Matters
PURCHASE, SALE AND REDEMPTION OF THE COMPANY'S SHARES
Neither the Company nor any of its subsidiaries had purchased, sold, redeemed
or cancelled any of the Company's shares during the Period.
DISCLOSURE OF DIRECTORS', SUPERVISORS' AND CHIEF EXECUTIVE'S INTERESTS AND
SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES
As at June 30, 2011, none of the Directors, Supervisors and chief executives
had registered an interest or short position in the shares, underlying shares
or debentures of the Company or any of its associated corporations that was
required to be recorded pursuant to Section 352 of the SFO, or as otherwise
notified to the Company and the Stock Exchange pursuant to the Model Code for
Securities Transactions by Directors of Listed Issuers.
OTHER INTERESTS DISCLOSEABLE UNDER THE SFO
As at June 30, 2011, the following shareholders held 5% or more of the issued
share capital of the Company according to the register of interests in shares
required to be kept by the Company pursuant to Section 336 of the SFO:
--------------------------------------------------------------------------------
Total interests Percentage of
the
in number of issued share
capital
ordinary shares of the Company
Substantial Capacity of the Company (domestic
shareholders shares)
--------------------------------------------------------------------------------
Communications Beneficial owner 2,909,260,000 100%
Investment Group
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total interests Percentage of
the
in number of issued share
capital
ordinary shares of the Company
Substantial Capacity of the Company (H shares)
shareholders
--------------------------------------------------------------------------------
Blackrock, Inc. Interest of controlled 139,122,847 (L) 9.70%
corporations
4,221,904 (S) 0.29%
JP Morgan Chase & Co. Interest of controlled 126,968,109 (L) 8.86%
corporations
Investment manager and
custodian corporation/ 95,112,482 (P) 6.63%
approved lending agent
Invesco Hong Kong Investment Manager / 112,646,000 (L) 7.86%
Limited Advisor of
various accounts
Macquarie Group Interest of controlled 86,945,647 (L) 6.06%
Limited corporations
3,010 (S) 0.00%
--------------------------------------------------------------------------------
The letter "L" denotes a long position. The Letter "S" denotes a short
position. The Letter "P" denotes interest in a lending pool.
Save as disclosed above, as at June 30, 2011, no person had registered an
interest or short position in the shares or underlying shares of the Company
that was required to be recorded pursuant to Section 336 of the SFO.
COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE PRACTICES AND THE MODEL CODE
The Company was in compliance with the code provisions in the Code on Corporate
Governance Practices set out in Appendix 14 to the Rules Governing the Listing
of Securities on the Stock Exchange (the "Listing Rules") during the Period.
The Company has adopted a code of conduct regarding directors' securities
transactions on terms no less exacting than the required standard set out in
the Model Code for Securities Transactions by Directors of Listed Issuers (the
"Model Code") in Appendix 10 to the Listing Rules. The Directors have confirmedtheir full compliance with the required standard set out in the Model Code and
its code of conduct regarding directors' securities transactions during the
Period.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE INTERIM REPORT AND
ACCOUNTS
Each of the Directors of the Company, whose name and function is listed in the
section headed "Corporation Information" of this report, confirms that, to the
best of his/her knowledge:
- the condensed consolidated financial statements prepared in accordance with
Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of
Certified Public Accountants give a true and fair view of the assets,
liabilities, financial position and profit of the Group and the undertakings
included in the consolidation taken as a whole; and
- the management discussion and analysis included in the interim report
includes a fair review of the development and performance of the business and
the position of the Group and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that the Group faces.
By order of the Board
Zhejiang Expressway Co., Ltd.
Chen Jisong
Chairman
Hangzhou, the PRC, August 23, 2011
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Notes Rmb'000 Rmb'000
--------------------------------------------------------------------------------
Revenue 3 3,339,367 3,130,902
Operating costs (1,986,690) (1,756,462)
--------------------------------------------------------------------------------
Gross profit 1,352,677 1,374,440
Securities investment gains 27,885 51,605
Other income 4 119,926 77,453
Administrative expenses (36,032) (30,843)
Other expenses (19,323) (7,010)
Share of loss of associates (9,367) (6,394)
Finance costs (41,852) (47,007)
--------------------------------------------------------------------------------
Profit before tax 5 1,393,914 1,412,244
Income tax expense 6 (352,347) (362,597)
--------------------------------------------------------------------------------
Profit for the Period 1,041,567 1,049,647
--------------------------------------------------------------------------------
Other comprehensive expenses
Available-for-sale financial assets:
- Fair values loss during the Period (8,662) (841)
- Reclassification adjustments for
cumulative gain included
in profit or loss upon disposal (4,072) (23,453)
Income tax relating to components of other 3,184 6,074
comprehensive income
--------------------------------------------------------------------------------
Other comprehensive expenses for the Period (9,550) (18,220)
(net)
--------------------------------------------------------------------------------
Total comprehensive income for the Period 1,032,017 1,031,427
--------------------------------------------------------------------------------
Profit for the Period attributable to:
Owners of the Company 900,316 855,609
Non-controlling interests 141,251 194,038
--------------------------------------------------------------------------------
1,041,567 1,049,647
--------------------------------------------------------------------------------
Total comprehensive income for the Period
attributable to:
Owners of the Company 895,336 846,157
Non-controlling interests 136,681 185,270
--------------------------------------------------------------------------------
1,032,017 1,031,427
--------------------------------------------------------------------------------
EARNINGS PER SHARE-BASIC 8 20.73 cents 19.70 cents
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
----------------------------------------------------------------------------------
As at As at
June 30, December 31,
----------------------------------------------------------------------------------
2011 2010
Notes Rmb'000 Rmb'000
Unaudited Audited
----------------------------------------------------------------------------------
NON-CURRENT ASSETS
Property, plant and equipment 9 1,174,377 1,120,626
Prepaid lease payments 70,010 71,035
Expressway operating rights 11,725,839 12,071,497
Goodwill 86,867 86,867
Other intangible assets 152,520 155,020
Interests in associates 462,826 472,910
Available-for-sale investments 1,000 1,000
----------------------------------------------------------------------------------
13,673,439 13,978,955
----------------------------------------------------------------------------------
CURRENT ASSETS
Inventories 21,807 17,715
Trade receivables 10 47,607 50,768
Other receivables 11 1,407,717 953,153
Prepaid lease payments 2,052 2,052
Available-for-sale investments 61,359 71,928
Held-for-trading investments 1,309,511 803,772
Financial assets held under resale 51,063 80,163
agreement
Bank balances held on behalf of customers 8,647,233 11,685,951
Bank balances and cash
- Time deposits with original maturity 759,563 325,545
over three months
- Cash and cash equivalents 4,321,951 5,682,053
----------------------------------------------------------------------------------
16,629,863 19,673,100
----------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable to customers arising
from securities
dealing business 8,621,235 11,631,030
Trade payables 12 432,387 548,695
Tax liabilities 203,745 450,708
Other taxes payable 49,719 51,002
Other payables and accruals 13 641,349 1,049,301
Financial assets sold for repurchase 40,000 -
Dividends payable 215,264 120,319
Interest-bearing bank and other loans 952,611 822,000
Provisions 14 21,238 21,238
----------------------------------------------------------------------------------
11,177,548 14,694,293
----------------------------------------------------------------------------------
NET CURRENT ASSETS 5,452,315 4,978,807
----------------------------------------------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 19,125,754 18,957,762
----------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------
As at As at
June 30, December 31,
2011 2010
Rmb'000 Rmb'000
Unaudited Audited
--------------------------------------------------------------------------------
NON-CURRENT LIABILITIES
Long-term bonds 1,000,000 1,000,000
Deferred tax liabilities 252,055 262,647
--------------------------------------------------------------------------------
1,252,055 1,262,647
--------------------------------------------------------------------------------
17,873,699 17,695,115
--------------------------------------------------------------------------------
CAPITAL AND RESERVES
Share capital 4,343,115 4,343,115
Reserves 10,191,749 10,380,137
--------------------------------------------------------------------------------
Equity attributable to owners of the 14,534,864 14,723,252
Company
Non-controlling interests 3,338,835 2,971,863
--------------------------------------------------------------------------------
17,873,699 17,695,115
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
-----------------------------------------------------------------------------------------------------------------------------
Attributable to owners of the Non-controlling
Company interests Total
-----------------------------------------------------------------------------------------------------------------------------
Investment
Share Share Statutory revaluation Dividend Retained
Capital premium reserve reserve reserve profits Total
Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000
-----------------------------------------------------------------------------------------------------------------------------
At January 1, 4,343,115 3,645,726 2,467,011 8,016 1,085,779 2,633,973 14,183,620 2,881,234
2010
17,064,854
Profit for the - - - - - 855,609 855,609 194,038
Period
1,049,647
Other
comprehensive
expenses
for the Period - - - (9,452) - - (9,452) (8,768)
(18,220)
-----------------------------------------------------------------------------------------------------------------------------
Total
comprehensive
(expenses)
income for the - - - (9,452) - 855,609 846,157 185,270
Period
1,031,427
Dividend paid to - - - - - - - (219,948) (219,948)
non-controlling
interests
Final dividend - - - - (1,085,779) - (1,085,779) -
(1,085,779)
Proposed interim - - - - 260,587 (260,587) - - dividend
-
-----------------------------------------------------------------------------------------------------------------------------
At June 30, 2010 4,343,115 3,645,726 2,467,011 (1,436) 260,587 3,228,995 13,943,998 2,846,556
16,790,554
-----------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------------
Attributable to owners of the Non-controlling
Company
interests Total
---------------------------------------------------------------------------------------------------------------------------------------
Investment
Share Share Statutory revaluation Dividend Special Retained
Capital premium reserve reserve reserve reserve profits Total
Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000 Rmb'000
Rmb'000 Rmb'000
---------------------------------------------------------------------------------------------------------------------------------------
January 1, 2011 4,343,115 3,645,726 2,727,900 3,849 1,085,779 18,666 2,898,217 14,723,252
2,971,863 17,695,115
Profit for the - - - - - - 900,316 900,316
Period
141,251 1,041,567
Other
comprehensive
expenses
for the Period - - - (4,980) - - - (4,980)
(4,570) (9,550)
---------------------------------------------------------------------------------------------------------------------------------------
Total
comprehensive
(expenses)
income for the - - - (4,980) - - 900,316 895,336
Period
136,681 1,032,017
Injection - - - - - 2,055 - 2,055
336,299 338,354
Dividend paid to
non-controlling
interests - - - - - - - -
(106,008) (106,008)
Final dividend - - - - (1,085,779) - - (1,085,779)
- (1,085,779)
Proposed interim - - - - 260,587 - (260,587) - dividend
- -
---------------------------------------------------------------------------------------------------------------------------------------
At June 30, 2011 4,343,115 3,645,726 2,727,900 (1,131) 260,587 20,721 3,537,946 14,534,864
3,338,835 17,873,699
---------------------------------------------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Net cash from operating activities 666,121 962,120
Net cash used in investing activities (1,062,242) (355,175)
Net cash used in financing activities (963,981) (1,006,326)
--------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (1,360,102) (399,381)
Cash and cash equivalents at beginning of 5,682,053 5,049,003
the Period
--------------------------------------------------------------------------------
Cash and cash equivalent at end of the 4,321,951 4,649,622
Period
--------------------------------------------------------------------------------
Notes to Condensed Consolidated Financial Statements
1. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in
accordance with the applicable disclosure requirements of Appendix 16 to the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the "Listing Rules") and with Hong Kong Accounting Standard 34 ("HKAS
34") "Interim Financial Reporting".
2. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the
historical cost basis except for certain financial instruments that are
measured at fair value, as appropriate.
The accounting policies used in the condensed consolidated financial statements
are consistent with those applied in the preparation of the Group's annual
financial statements for the year ended December 31, 2010 except as described
below.
During the Period, the Group has applied for the first time, the following new
and revised standards, amendments and interpretations ("new and revised
HKFRSs") issued by the Hong Kong Institute of Certified Public Accountants
("HKICPA").
HKFRSs (Amendments) Improvements to HKFRSs issued in 2010
HKAS 32 (Amendment) Classification of rights issues
HK(IFRIC)-Int 14 (Amendments) Prepayments of a minimum funding requirement
HK(IFRIC)-Int 19 Extinguishing financial liabilities with equity instruments
The application of the other new and revised HKFRSs had no material effect on
the condensed consolidated financial statements of the Group for the current or
prior accounting periods.
The Group has not early applied the new and revised standards that have been
issued but are not yet effective. The following are the new and revised
standard that have been issued after the date of the consolidated financial
statements for the year ended December 31, 2010 were authorized for issuance
and are not yet effective:
HKFRS 10 Consolidated financial statements(2)
HKFRS 11 Joint arrangements(2)
HKFRS 12 Disclosure of interests in other entities(2)
HKFRS 13 Fair value measurement(2)
HKAS 1 (Amendments) Presentation of financial statements(1)
HKAS 19 (Amendments) Employee benefits(2)
HKAS 27 (Amendments) Separate in financial statements(2)
HKAS 28 (Amendments) Investments in associates and joint ventures(2)
1 Effective for annual periods beginning on or after January 1, 2012.
2 Effective for annual periods beginning on or after January 1, 2013.
The Directors anticipate that the application of the other new and revised
standards, amendments or interpretations will have no material impact on the
results and the financial position of the Group.
3. SEGMENT INFORMATION
Comparing to the same period last year, there were no changes in the reportable
segments of the Group during the Period.
Segment revenue and results
The following is an analysis of the Group's revenue and results by reportable
segment:
--------------------------------------------------------------------------------
For the Period ended June 30, 2011
--------------------------------------------------------------------------------
Service area
Toll and Securities
advertising
operation business operation Total
Rmb'000 Rmb'000 Rmb'000 Rmb'000
--------------------------------------------------------------------------------
Segment revenue from 1,731,996 947,294 660,077 3,339,367
external customers
--------------------------------------------------------------------------------
Segment profit 846,359 21,273 173,935 1,041,567
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
For the period ended June 30, 2010
--------------------------------------------------------------------------------
Service area
Toll and Securities
advertising
operation business operation Total
Rmb'000 Rmb'000 Rmb'000 Rmb'000
--------------------------------------------------------------------------------
Segment revenue from 1,684,074 791,969 654,859 3,130,902
external customers
--------------------------------------------------------------------------------
Segment profit 768,384 35,418 245,845 1,049,647
--------------------------------------------------------------------------------
Segment profit represents the profit after tax of each reportable segment. This
is the measure reported to the chief operating decision maker and the Group's
Chief Executive Officer, for the purposes of resource allocation and
performance assessment.
Revenue from major services
An analysis of the Group's revenue, net of discounts and taxes, for the Period
is as follows:
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Unaudited
--------------------------------------------------------------------------------
Toll operation revenue 1,731,996 1,684,074
Service area business revenue 908,049 754,265
Advertising business revenue 39,245 37,671
Commission income from securities 506,696 557,350
operation
Interest income from securities 153,381 97,509
operation
Others - 33
--------------------------------------------------------------------------------
Total revenue 3,339,367 3,130,902
--------------------------------------------------------------------------------
4. OTHER INCOME
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Unaudited
--------------------------------------------------------------------------------
Interest income on bank balances and an 67,128 21,734
entrusted loan receivable
Rental income 32,754 30,729
Net exchange gain 2,252 3,135
Handling fee income 8,649 7,894
Towing income 5,805 7,090
Others * 3,338 6,871
--------------------------------------------------------------------------------
Total 119,926 77,453
--------------------------------------------------------------------------------
* During the Period, the Group has borrowed a loan from a domestic foreign
bank in HK dollar amounting to an equivalent of RMB320.61 million with
one-year term. With an aim to hedge against foreign exchange risks arising
from the loan, the Group has purchased HK dollar equivalent forward
contracts with one-year term at a rate lower than the spot exchange rate on
the borrowing date. During the Period, the floating loss of the HK dollar
forward contracts amounted to RMB2.72 million.
5. PROFIT BEFORE TAX
The Group's profit before tax has been arrived at after charging:
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Unaudited
--------------------------------------------------------------------------------
Depreciation of property, plant and 73,064 53,642
equipment
Amortisation of expressway operating 345,658 345,188
rights
Amortisation of prepaid lease payments 1,025 1,021
Amortisation of other intangible assets 7,969 5,069
Cost of inventories recognized as an 834,614 705,097
expense
--------------------------------------------------------------------------------
6. INCOME TAX EXPENSE
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Unaudited
--------------------------------------------------------------------------------
Current tax:
PRC enterprise income tax 359,756 372,826
Deferred tax (7,409) (10,229)
352,347 362,597
--------------------------------------------------------------------------------
Under the Law of the PRC on Enterprise Income Tax (the "EIT Law") and
Implementation Regulation of the EIT Law, the tax rate of the Group is 25% from
January 1, 2008 onwards.
No Hong Kong Profits Tax has been provided as the Group's income neither arises
in, nor is derived from Hong Kong during the year.
The tax charge for the year can be reconciled to the profit per the
consolidated statement of comprehensive income as follows:
--------------------------------------------------------------------------------
For the six months ended June 30,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Unaudited
--------------------------------------------------------------------------------
Profit before tax 1,393,914 1,412,244
--------------------------------------------------------------------------------
Tax at the PRC enterprise income tax rate 348,479 353,061
of 25%
Tax effect of share of loss of a jointly 2,342 1,599
controlled entity
Tax effect of (income)/expense that is not
(taxable) and
deductible for tax purposes 1,526 7,937
--------------------------------------------------------------------------------
Tax charge for the Period 352,347 362,597
--------------------------------------------------------------------------------
7. DIVIDENDS
The Directors have recommended the payment of an interim dividend of Rmb6 cents
per share (2010: Rmb6 cents per share), subject to shareholders' approval at
the extraordinary general meeting of the Company expected to be held on October
13, 2011.
8. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on profit for the year
attributable to owners of the Company of Rmb900,316,000 (2010: Rmb855,609,000)
and the 4,343,114,500 (2010: 4,343,114,500) ordinary shares in issue during the
Period.
No diluted earnings per share has been presented as there were no potential
dilutive ordinary shares outstanding during both periods.
9. PROPERTY, PLANT AND EQUIPMENT
There were no significant changes to the Group's property, plant and equipment
during the Period.
10. TRADE RECEIVABLES
The Group has no credit period granted to its trade customers of toll
operation, service area businesses and securities operation. The following is
an aged analysis of trade receivables presented based on the invoice date at
the end of the reporting period.
--------------------------------------------------------------------------------
As at As at
June 30, December 31,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Audited
--------------------------------------------------------------------------------
Within 3 months 46,505 49,666
3 months to 1 year - -
1 to 2 years 271 271
Over 2 years 831 831
--------------------------------------------------------------------------------
Total 47,607 50,768
--------------------------------------------------------------------------------
11. OTHER RECEIVABLES
--------------------------------------------------------------------------------
As at As at
June 30, December 31,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Unaudited
--------------------------------------------------------------------------------
Consideration receivable (Note a) - 115,000
Entrusted loan receivable from a related party 500,000 500,000
(Note 16(1))
Entrusted loan receivable from a third party (Note 700,000 60,000
b)
Dividend receivable from a jointly controlled - 53,000
entity*
Prepayments 53,137 53,223
Others* 154,580 171,930
--------------------------------------------------------------------------------
Total 1,407,717 953,153
--------------------------------------------------------------------------------
* The amounts were unsecured, interest-free and repayable on demand.
11. OTHER RECEIVABLES (Continued)
Note:
a. The balance represented the receivable of the unsettled consideration of
disposal of Hangzhou Shida Highway Co., Ltd. in 2009.
b. Shangsan Co., a subsidiary of the Company, provided entrusted loans during
2010 to Taizhou State-Owned Asset Operations Co., Ltd. through Industrial
and Commercial Bank of China for an amount of Rmb60,000,000 at a fixed
interest rate of 5.56% per annum for a term of one year. The entrusted loan
was fully repaid during the Period.
Pursuant to the resolutions of the board of directors meeting on August 28,
2010, the Company provided an entrusted loan to Zhejiang Jiahe Industrial Co.,
Ltd. through Industrial and Commercial Bank of China for an amount of
Rmb500,000,000, with a maturity date on January 29, 2013 at a fixed interest
rate of 12% per annum. Greentown China Holdings Limited provided a joint
responsibility irrevocable guarantee to such entrusted loan, covering the full
amount with equities and properties as collateral.
Pursuant to the resolutions of the board of directors meeting on August 28,
2010, the Company provided an entrusted loan to Zhejiang Yunhe Concord Property
Investment Co., Ltd. through Industrial and Commercial Bank of China for an
amount of Rmb200,000,000, with a maturity date on November 4, 2011 at a fixed
interest rate of 12% per annum. Hangzhou Yunhe Group Investment Company Limited
and World Trade Centre Zhejiang Real Estate Development Co., Ltd. provided a
full-amount joint responsibility irrevocable guarantee to such entrusted loan.
12. TRADE PAYABLES
The following is an aged analysis of trade payables presented based on payment
due date at the end of the reporting period.
--------------------------------------------------------------------------------
As at As at
June 30, December 31,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Audited
--------------------------------------------------------------------------------
Within 3 months 116,494 166,438
3 months to 1 year 162,865 232,122
1 to 2 years 59,181 60,701
2 to 3 years 12,339 83,256
Over 3 years 81,508 6,178
--------------------------------------------------------------------------------
Total 432,387 548,695
--------------------------------------------------------------------------------
13. OTHER PAYABLES AND ACCRUALS
--------------------------------------------------------------------------------
As at As at
June 30, December 31,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
Unaudited Audited
--------------------------------------------------------------------------------
Other liabilities:
Accrued payroll and welfare 324,572 386,033
Advance from customers 62,079 67,102
Toll collected on behalf of other toll 39,737 33,630
roads
Prepayment from non-controlling
shareholder of
Zheshang Securities * - 338,354
Others 194,193 182,365
--------------------------------------------------------------------------------
620,581 1,007,484
Accruals 20,768 41,817
--------------------------------------------------------------------------------
Total 641,349 1,049,301
--------------------------------------------------------------------------------
* Amount represents prepayment for additional capital injection to Zheshang
Securities from a non-controlling shareholder of Zheshang Securities. Such
amount will be credited to non-controlling interest upon the approval of
the relevant government authorities.
14. PROVISIONS
Subsequent to the relevant disclosure made in the Company's 2010 annual report
(pages 114 - 115) relating to "Provisions", as at the date of this report,
there was no material change for the Period.
15. COMMITMENTS
--------------------------------------------------------------------------------
As at As at
June 30, December 31,
--------------------------------------------------------------------------------
2011 2010
Rmb'000 Rmb'000
--------------------------------------------------------------------------------
Authorised but not contracted for:
Investments in expressway upgrade services 46,620 46,620
Renovation of service areas 12,945 16,100
Purchase of equipment 304,619 342,757
Acquisition and construction of properties and 283,939 360,180
Its renovation work
--------------------------------------------------------------------------------
Total 648,123 765,657
--------------------------------------------------------------------------------
16. RELATED PARTY TRANSACTION
The following is a summary of the related party transactions arising from the
Group's daily operating activities:
1) Pursuant to the resolutions of the shareholders' meeting of Zhejiang
Expressway Investment Development Co., Ltd. ("Development Co") on June 21,
2010, Development Co provided entrusted loans during 2010 to Hangzhou
Concord Property Investment Co., Ltd. ("Hangzhou Concord Co"), a subsidiary
of an associate of Development Co, through Industrial and Commercial Bank
of China for an amount of Rmb270,000,000, with maturity dates between July
11, 2011 and September 20, 2011 at a fixed interest rate of 12.0% per
annum.
Pursuant to the resolutions of the shareholders' meeting on July 8, 2010 of
Zhejiang Expressway Advertising Co., Ltd. ("Advertising Co"), a subsidiary of
Development Co, Advertising Co provided an entrusted loan to Hangzhou Concord
Co, through Industrial and Commercial Bank of China for an amount of
Rmb30,000,000, with a maturity date on July 11, 2011 at a fixed interest rate
of 12.0% per annum.
Pursuant to the resolutions of the Company's board of directors meeting on
August 28, 2010, the Company provided an entrusted loan to Hangzhou Concord Co
through Industrial and Commercial Bank of China for an amount of
Rmb200,000,000, with a maturity date on September 30, 2011 at a fixed interest
rate of 12.0% per annum.
World Trade Centre Zhejiang Real Estate Development Co., Ltd. provided
full-amount guarantee to such entrusted loans. Interest income recognized for
the Period on the above transactions with Hangzhou Concord Co amounted to
Rmb28,312,000.
2) Pursuant to the operation management agreement entered into between
Development Co and Petroleum Co in respect of the petrol stations in the
service areas along the Shanghai-Hangzhou-Ningbo and Shangsan Expressways,
Petroleum Co will assist Development Co with their expertise in running the
latter's petrol stations along the Shanghai-Hangzhou-Ningbo Expressway and
Shangsan Expressway. Purchases of petroleum products from Petroleum Co
during the Period amounted to Rmb772,091,000.
Transactions and balances with other State-controlled entities in the PRC
The Group operates in an economic environment currently predominated by
entities directly or indirectly owned or controlled by the PRC government
("State-controlled entities"). In addition, the Group itself is part of a
larger group of companies under Zhejiang Communications Investment Group Co.,
Ltd. (the "Communications Investment Group") which is controlled by the PRC
government. Apart from the transactions with the Communications Investment
Group and parties under the common control of the Communications Investment
Group, the Group also conducts business with other State-controlled entities.
The directors consider those State-controlled entities are independent third
parties so far as the Group's business transactions with them are concerned.
The Group has entered into various transactions, including deposit placements,
borrowings and other general banking facilities, with certain banks and
financial institutions which are State-controlled entities in their ordinary
course of business. In view of the nature of those bank transactions, the
directors are of the opinion that individual disclosures would not be
necessary.
In respect of the Group's toll road business, the directors are of the opinion
that it is impracticable to ascertain the identities of the counterparts of the
above-said transactions and accordingly the directors cannot be sure that the
transactions are conducted with other State-controlled entities in the PRC.
17. CONTINGENT LIABILITIES AND PLEDGE OF ASSETS
The Group did not have any other contingent liabilities, pledge of assets or
guarantees as at June 30, 2011.
18. APPROVAL OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements were approved and authorized
for issue by the board of directors on August 23, 2011.
Corporate Information
EXECUTIVE DIRECTORS
CHEN Jisong (Chairman)
ZHAN Xiaozhang (General Manager)
JIANG Wenyao
ZHANG Jingzhong
DING Huikang
NON-EXECUTIVE DIRECTORS
ZHANG Luyun
INDEPENDENT NON-EXECUTIVE
DIRECTORS
TUNG Chee Chen
ZHANG Junsheng
ZHANG Liping
SUPERVISORS
MA Kehua
FANG Zhexing
JIANG Shaozhong
WU Yongmin
LIU Haiseng
COMPANY SECRETARY
Tony Zheng
AUTHORIZED
REPRESENTATIVES
CHEN Jisong
ZHANG Jingzhong
STATUTORY ADDRESS
12/F, Block A, Dragon Century Plaza
1 Hangda Road
Hangzhou City, Zhejiang Province
PRC 310007
Tel: 86-571-8798 5588
Fax: 86-571-8798 5599
REPRESENTATIVE OFFICE IN
HONG KONG
Suite 2910
29/F, Bank of America Tower
12 Harcourt Road
Hong Kong
Tel: 852-2537 4295
Fax: 852-2537 4293
LEGAL ADVISERS
As to Hong Kong and US law:
Herbert Smith
23rd Floor, Gloucester
Tower 15 Queen's Road
Central Hong Kong
As to English law:
Herbert Smith LLP
Exchange House
Primrose Street
London EC2A 2HS
United Kingdom
As to PRC law:
T & C Law Firm
11/F, Block A, Dragon Century
Plaza 1 Hangda Road
Hangzhou City, Zhejiang
Province PRC 310007
AUDITORS
Deloitte Touche Tohmatsu
35/F, One Pacific Place
88 Queensway
Hong Kong
INVESTOR RELATIONS
CONSULTANT
Rikes Hill & Knowlton Limited
36th Floor, PCCW Tower, Taikoo Place
979 King's Road, Quarry Bay
Hong Kong
Tel: 852-2520 2201
Fax: 852-2520 2241
PRINCIPAL BANKERS
Industrial and Commercial Bank of China,
Zhejiang Branch
China Construction Bank, Zhejiang Branch
Shanghai Pudong Development Bank,
Hangzhou Branch
H SHARE REGISTRAR AND
TRANSFER OFFICE
Hong Kong Registrars Limited
Room 1712-1716, 17/F, Hopewell Centre
183 Queen's Road East
Hong Kong
H SHARES LISTING
INFORMATION
The Stock Exchange of Hong Kong Limited
Code: 0576
LONDON STOCK EXCHANGE PLC
Code: ZHEH
ADRS INFORMATION
US Exchange: OTC
Symbol: ZHEXY
CUSIP: 98951A100
ADR: H Shares 1:10
CORPORATE BOND LISTING INFORMATION
The Shanghai Stock Exchange Symbol: 03
Code: 120308
WEBSITE
www.zjec.com.cn
For Corporate Structure of the Group, please visit:
http://www.prnasia.com/sa/attachment/2011/08/20110831578563.pdf
For Financial Highlights, please visit:
http://www.prnasia.com/sa/attachment/2011/08/20110831872361.pdf
-----------------------------------------------------------------
NOTE: To view the full set of the company's 2011 Interim Report,
please visit www.zjec.com.cn
-----------------------------------------------------------------
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