1st Sep 2011 10:36
ZHEJIANG EXPRESSWAY CO., LTD.
2011 Interim Report Leveraging Opportunities, Pursuing GrowthDuring the first half of 2011, the increase in both traffic volume and tollincome of the Group's two expressways dipped significantly as a result ofslackened growth in the economy. In the second half of 2011, the organic growthof traffic volume on the Group's expressways is likely to improve as theeconomic environment is improving. Meanwhile, the Group's securities businesswill still be affected by the volatility in the A-share market and the intensecompetition in the securities brokerage industry. The securities business willenhance the competitiveness of its operating network by establishing more newoutlets in the Zhejiang market. It will also aggressively expand otheroperations, striving to further promote a sound development of the business.The Company will face unprecedented challenges, given the extremely complexinternal and external environments for economic development as well as theuncertainties due to recent policy changes or adjustments for the toll roadindustry. The Company's management will closely monitor the changes in policiesfor the industry and the impact of road networks within the province on theGroup. The Company will adjust its business strategies on a timely basis tostrengthen the core expressway business, and strive to seek and cultivate newbusinesses and new income bases so as to achieve a sustainable and healthydevelopment. 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, representingan increase of 6.7% over the same period in 2010. Profit attributable to ownersof the Company for the Period was Rmb900.32 million, representing an increaseof 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 developmenttrend on the whole in the first half of 2011, its GDP growth had notablydecelerated, registering an increase of 9.6% over the same period last year dueto the impact from the macro-economic control initiatives of the PRCGovernment. During the Period, the growth pace of Zhejiang Province's economyalso tended to slow in the second quarter of 2011, with the overall economicstructure undergoing the adjustment process of continuous improvement. Theprovince's GDP increased by 9.9% year-on-year during the Period.Given the gradual slowdown of growth in the domestic economy and in automobilesales in China, the organic growth of traffic volume on the Group's expresswaysalso showed a significant falling trend during the Period. As China's stockmarket remained volatile and tumbled during the Period, revenue from thesecurities business of the Group was generally on par with the same period lastyear. Consequently, during the Period, income for the Group increased by 6.5%year-on-year, amounting to Rmb3,436.13 million. Of such income, Rmb1,791.91million was generated from the two major expressways owned and operated by theGroup, representing an increase of 3% year-on-year and accounting for 52.1% oftotal income; and Rmb954.94 million was generated from the toll road-relatedbusinesses, representing an increase of 19.5% year-on-year and accounting for27.8% of total income. The securities business contributed an income ofRmb689.28 million to the Group, representing an increase of 0.1% year-on-yearand accounting for 20.1% of total income.
A breakdown of the Group's income for the Period is set out below:
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For the six months ended June 30, -------------------------------------------------------------------------------- 2011 2010 Rmb'000 Rmb'000 Change%
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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%
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Subtotal 3,436,129 3,227,490 6.5% Less: Revenue taxes (96,762) (96,588) 0.2%
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Revenue 3,339,367 3,130,902
6.7%
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TOLL ROAD OPERATIONS
The organic growth of traffic volume on the Group's expressways sufferedsignificantly due to the impact from a slowdown of growth in China'smacro-economy. Meanwhile, the Shangsan Expressway continued to be hit bytraffic diversions to the Zhuyong Expressway after the new expressway had beenopened to traffic in July 2010. As a result, growth of traffic volume on theGroup's two expressways was relatively slower than expected during the Period.Coupled with the above-said challenges were frequent severe weather conditionsin Zhejiang Province during the first half of 2011. In addition to frequentrains and snows between January and February, heavy rainfalls in June alsocaused inconvenience to vehicle travels, thus bringing a significant negativeimpact on traffic volume and toll income.The PRC government's abolition of toll tariffs for local Class II highways inearly March 2010 resulted in diversions of some trucks travelling on theGroup's expressways to ordinary highways and recent changes in vehicle mix onthe Group's expressways. Meanwhile, the gradual increase in large trucks hasled to a decrease in small and medium-sized trucks, thereby weakening thepositive impact of the toll-by-weight policy on the Group's toll income on thewhole.Average daily traffic volume in full-trip equivalents along the Group'sShanghai-Hangzhou-Ningbo Expressway was 39,703 during the Period, representingan increase of 4.7% year-on-year. In particular, average daily traffic volumein full-trip equivalents along the Shanghai-Hangzhou Section of theShanghai-Hangzhou-Ningbo Expressway increased by 3.3% year-on-year, and thatalong the Hangzhou-Ningbo Section increased by 5.7% year-on-year. Average dailytraffic volume in full-trip equivalents along the Shangsan Expressway was17,089 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 stationbusiness) declined as a result of the slackened growth in traffic volume on theGroup's two expressways, frequent adverse weather conditions and reducedtravels of coach buses and passenger cars after the Shanghai-HangzhouHigh-Speed Railway and Hangzhou-Wenzhou Train increased their frequencyschedules. However, the surge in the selling prices of petroleum productsprompted a significant rise in the sales of petroleum products, generatingsatisfactory income on the whole. Consequently, income from the tollroad-related businesses of the Group amounted to Rmb954.94 million during thePeriod, representing an increase of 19.5% year-on-year.
SECURITIES BUSINESS
During the Period, competition in the securities business intensified furtherdue to the volatility and adjustments of the domestic stock market, compoundedwith increasing sales outlets set up by various securities firms since 2010.The positive effect from the increased market share of Zheshang Securities wasoffset by a decline in commission rates, thereby impacting the performance ofthe securities business.Faced with an intensely competitive environment, Zheshang Securities endeavoredto expand various businesses, and consequently, the market share of itssecurities brokerage business and the total number of customers continued toincrease in the Period, while the investment banking and asset managementbusinesses maintained steady growth. During the Period, the securities businessrealized an operating income of Rmb689.28 million, representing an increase of0.1% year-on-year. Of such income, brokerage commissions income amounted toRmb535.90 million, representing a decrease of 9.3% year-on-year; bank interestsincome amounted to Rmb153.38 million, representing an increase of 57.3%year-on-year; and the proprietary securities trading business recorded a profitof Rmb27.89 million as accounted for in the income statement (Same period in2010: Rmb51.61 million).LONG-TERM INVESTMENTSZhejiang Expressway Petroleum Development Co., Ltd. (a 50% owned associatecompany of the Company) ("Petroleum Co") realized an income of Rmb2,393.40million, representing an increase of 49.6% year-on-year due to a rise in theprices of petroleum products and a growth in sales of petroleum products duringthe Period. In the Period, Petroleum Co achieved a net profit of Rmb17.52million.Zhejiang Jinhua Yongjin Expressway Co., Ltd. (a 23.45% owned associate companyof the Company) operates the 69.7 kilometre Jinhua Section of the Ningbo-JinhuaExpressway. During the Period, the Company achieved a satisfactory growth intoll income benefitting from an increase in traffic volume driven by theopening of nearby road networks. The Jinhua Section of the Ningbo-JinhuaExpressway recorded an average daily traffic volume in full-trip equivalents of10,604 during the Period, representing an increase of 17.2% year-on-year; whiletoll income amounted to Rmb105.78 million, representing an increase of 19.7%year-on-year. Due to its heavy financial burden, the associate company stillincurred a loss of Rmb30.13 million during the Period but the Directors believethat 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 beendisclosed 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 yearwas approximately Rmb900.32 million, representing an increase of 5.2%year-on-year; return on shareholders' equity was 6.2%, representing an increaseof 1.0% year-on-year; while earnings per share for the Company was Rmb20.73cents.
LIQUIDITY AND FINANCIAL RESOURCES
As at June 30, 2011, current assets of the Group amounted to Rmb16,629.86million in aggregate (December 31, 2010: Rmb19,673.10 million), of which bankbalances and cash accounted for 30.6% (December 31, 2010: 30.5%), bank balancesheld on behalf of customers accounted for 52.0% (December 31, 2010: 59.4%), andheld-for-trading investments accounted for 7.9% (December 31, 2010: 4.1%).Current ratio (current assets over current liabilities) as at June 30, 2011 was1.5 (December 31, 2010: 1.3). Excluding the effect of customer deposits arisingfrom the securities business, the resultant current ratio of the Group (currentassets less bank balances held on behalf of customers over current liabilitiesless balance of accounts payable to customers arising from the securitiesdealing business) was 3.1 (December 31, 2010: 2.6).
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As at As at June 30, December 31, 2011 2010
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Rmb'000
Rmb'000
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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 80,163agreement-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
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The amount for held-for-trading investments of the Group as at June 30, 2011amounted to Rmb1,309.51 million (December 31, 2010: Rmb803.77 million), ofwhich 81.6% was invested in corporate bonds, 18.0% was invested in the stockmarket, 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 toRmb1,952.61 million, representing an increase of 7.2% over December 31, 2010.The borrowings comprised outstanding balances of loans from domestic foreignbanks, denominated in HK dollar, totalling approximately Rmb320.61 millionequivalent; outstanding balances of loans from domestic commercial bankstotalling Rmb632.00 million; and corporate bonds amounting to Rmb1 billion thatwas issued by the Company in 2003 for a term of 10 years. Of theinterest-bearing borrowings, 51.2% were not repayable within one year. Thedetails of relevant outstanding amounts are as follows:
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Maturity Profiles
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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 -
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Total as at June 30, 2011 1,952,611 952,611 1,000,000
-
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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 areone-year short-term loans, of which Rmb100.00 million was fixed-rate loans withinterest rates ranging from 5.31% to 6.06% per annum and Rmb532.00 million wasfloating-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 interestpayable annually. The annual interest rate for accounts payable to customerarising from the securities dealing business was fixed at 0.36%. The annualinterest rate for the Group's loan denominated in HK dollars was 4.95% perannum.Total interest expense for the Period amounted to Rmb41.85 million, whileprofit before interest and tax amounted to Rmb1,435.77 million. The interestcover ratio (profit before interest and tax over interest expenses) stood at34.3 (June 30, 2010: 31.0).The asset-liability ratio (total liabilities over total assets) was 41.0% as atJune 30, 2011 (December 31, 2010: 47.4%). Excluding the effect of customerdeposits arising from the securities business, the resultant asset-liabilityratio (total liabilities less balance of accounts payable to customers arisingfrom the securities dealing business over total assets less bank balances heldon 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-rateliabilities and Rmb1,855.75 million interest-free liabilities, representing59.0%, 33.1%, 1.8% and 6.1% of the Group's total capital, respectively. Thegearing ratio, which was computed by dividing the total liabilities lessaccounts payable to customers arising from the securities dealing business bytotal 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 thetotal capital expenditures of the Group, Rmb76.24 million was incurred foracquisition and construction of properties and Rmb38.14 million for purchase ofequipment.As at June 30, 2011, capital expenditures committed by the Group and theCompany totaled Rmb648.12 million and Rmb221.75 million, respectively. Amongstthe total capital expenditures committed by the Group, Rmb283.94 million wasused for acquisition and construction of properties, Rmb304.62 million foracquisition of equipment, Rmb46.62 million for the widening project between theShaoxing-Zhuji hub and the Shaoxing-Jiaxing hub of the Shangsan Expressway, andRmb12.94 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 amountingto an equivalent of approximately Rmb320.61 and dividend payments to theholders of H shares in HK dollars, the Group's principal operations aretransacted and booked in Renminbi. Therefore, the Group's exposure to foreignexchange fluctuations is limited.With an aim to hedge against foreign exchange risks arising from borrowingsdenominated in HK dollar, the Group has purchased Hong Kong dollar equivalentforward contracts with one-year term at a rate lower than the spot exchangerate on the borrowing date during the Period. Save for the above-mentioned, theGroup has not used financial instrument for hedging purposes during the Period.Although the Directors do not foresee any material foreign exchange risks forthe Group, there is no assurance that foreign exchange risks will not affectthe operating results of the Group in the future.
Outlook
During the Period, China's economic growth slowed moderately as expected underthe State's policy of continuously strengthening and improving themacro-economic control initiatives. The corresponding slowdown in growth indomestic automobile sales and foreign trade exports had affected the organicgrowth of traffic volume on expressways. It is anticipated that as inflationarypressures begin to subside in the second half of 2011, the intensity of themacro-economic control initiatives is likely to be eased such that economicgrowth may demonstrate a trend of "first decelerating then accelerating".Although the increase in both traffic volume and toll income of the Group's twoexpressways dipped significantly during the Period as a result of slackenedgrowth in the province's economy as well as the impact of traffic diversions tothe Zhuyong Expressway, it is anticipated that the organic growth of trafficvolume on the Group's expressways is likely to improve in the second half of2011 as the impact from traffic diversions to the Zhuyong Expressway isstabilizing and the economic environment in Zhejiang Province is improving.Meanwhile, following the commencement of operation of eight toll stations and20 electronic toll collection (ETC) lanes, seven toll stations and 18 ETC lanescommenced operation upon completion on 1 August 2011 as planned in the firsthalf of 2011. The remaining 17 toll stations and 52 ETC lanes are expected tobe built and to commence operation next year. The Group will then be able tooffer more convenient and efficient services to traveling vehicles and tofurther enhance the traffic capacity of its expressways.As regards the policy announced in mid-June 2011 by five national ministriesand commissions of China for specifically rectifying highway tolling, relevantimplementation policies expected to be formulated by Zhejiang Province in thesecond half of the year will perhaps affect the current toll standards, therebytriggering uncertainties over the toll income to be generated on the Group'sexpressways.As China's stock market will experience quite a high level of uncertaintiesonce the stock indices are being consolidated at low levels, the Group'ssecurities business will be affected by the volatility in the A-share marketand the intense competition in the securities brokerage industry. ZheshangSecurities will enhance the competitiveness of its operating network byestablishing more new outlets in the Zhejiang market. It will aggressivelyexpand investment banking, fixed income, asset management and other operations,while striving to create new businesses for further promoting a sounddevelopment of the securities business.The Company will face unprecedented challenges, given the extremely complexinternal and external environments for economic development as well as theuncertainties due to recent policy changes or adjustments for the toll roadindustry. We expect that during the second half of 2011, we will be facingincreasing uncertainties regarding the traffic volumes on the Group'sexpressways, the service area operations and the performance of the capitalmarket. Under such a complex situation, the Company's management will closelymonitor the changes in policies for the industry and the impact of roadnetworks within the province on the Group. We will adjust business strategieson a timely basis to strengthen the expressway core business, and strive toseek and cultivate new businesses and new income bases so as to achieve asustainable 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 executiveshad registered an interest or short position in the shares, underlying sharesor debentures of the Company or any of its associated corporations that wasrequired to be recorded pursuant to Section 352 of the SFO, or as otherwisenotified to the Company and the Stock Exchange pursuant to the Model Code forSecurities 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 issuedshare capital of the Company according to the register of interests in sharesrequired to be kept by the Company pursuant to Section 336 of the SFO:
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Total interests Percentage of the in number of issued share capital ordinary shares of the CompanySubstantial Capacity of the Company (domesticshareholders 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 CompanySubstantial 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%
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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 CorporateGovernance Practices set out in Appendix 14 to the Rules Governing the Listingof Securities on the Stock Exchange (the "Listing Rules") during the Period.The Company has adopted a code of conduct regarding directors' securitiestransactions on terms no less exacting than the required standard set out inthe 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 andits code of conduct regarding directors' securities transactions during thePeriod.
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 thesection headed "Corporation Information" of this report, confirms that, to thebest 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)
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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)
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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)
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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
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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
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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 80,163agreement 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
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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
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11,177,548
14,694,293
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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 14,723,252Company 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)
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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 -
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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
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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. Thisis the measure reported to the chief operating decision maker and the Group'sChief Executive Officer, for the purposes of resource allocation andperformance 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 506,696 557,350operation Interest income from securities 153,381 97,509operation 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 21,734entrusted 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 53,642equipment Amortisation of expressway operating 345,658 345,188rights Amortisation of prepaid lease payments 1,025 1,021 Amortisation of other intangible assets 7,969 5,069 Cost of inventories recognized as an 834,614 705,097expense
--------------------------------------------------------------------------------
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 348,479 353,061of 25% Tax effect of share of loss of a jointly 2,342 1,599controlled 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 - 53,000entity* 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 byentities directly or indirectly owned or controlled by the PRC government("State-controlled entities"). In addition, the Group itself is part of alarger group of companies under Zhejiang Communications Investment Group Co.,Ltd. (the "Communications Investment Group") which is controlled by the PRCgovernment. Apart from the transactions with the Communications InvestmentGroup and parties under the common control of the Communications InvestmentGroup, the Group also conducts business with other State-controlled entities.The directors consider those State-controlled entities are independent thirdparties 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 andfinancial institutions which are State-controlled entities in their ordinarycourse of business. In view of the nature of those bank transactions, thedirectors are of the opinion that individual disclosures would not benecessary.In respect of the Group's toll road business, the directors are of the opinionthat it is impracticable to ascertain the identities of the counterparts of theabove-said transactions and accordingly the directors cannot be sure that thetransactions 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 InformationEXECUTIVE DIRECTORSCHEN Jisong (Chairman)ZHAN Xiaozhang (General Manager)JIANG WenyaoZHANG JingzhongDING HuikangNON-EXECUTIVE DIRECTORSZHANG LuyunINDEPENDENT NON-EXECUTIVEDIRECTORSTUNG Chee ChenZHANG JunshengZHANG LipingSUPERVISORSMA KehuaFANG ZhexingJIANG ShaozhongWU YongminLIU HaisengCOMPANY SECRETARYTony ZhengAUTHORIZEDREPRESENTATIVESCHEN JisongZHANG JingzhongSTATUTORY ADDRESS12/F, Block A, Dragon Century Plaza1 Hangda RoadHangzhou City, Zhejiang ProvincePRC 310007Tel: 86-571-8798 5588Fax: 86-571-8798 5599REPRESENTATIVE OFFICE INHONG KONGSuite 291029/F, Bank of America Tower12 Harcourt RoadHong KongTel: 852-2537 4295Fax: 852-2537 4293LEGAL ADVISERSAs to Hong Kong and US law:Herbert Smith23rd Floor, Gloucester Tower 15 Queen's Road Central Hong KongAs to English law:Herbert Smith LLPExchange HousePrimrose StreetLondon EC2A 2HSUnited KingdomAs to PRC law:T & C Law Firm11/F, Block A, Dragon CenturyPlaza 1 Hangda RoadHangzhou City, Zhejiang Province PRC 310007AUDITORSDeloitte Touche Tohmatsu35/F, One Pacific Place88 QueenswayHong KongINVESTOR RELATIONSCONSULTANTRikes Hill & Knowlton Limited36th Floor, PCCW Tower, Taikoo Place979 King's Road, Quarry BayHong KongTel: 852-2520 2201Fax: 852-2520 2241PRINCIPAL BANKERSIndustrial and Commercial Bank of China, Zhejiang BranchChina Construction Bank, Zhejiang BranchShanghai Pudong Development Bank, Hangzhou BranchH SHARE REGISTRAR ANDTRANSFER OFFICEHong Kong Registrars LimitedRoom 1712-1716, 17/F, Hopewell Centre183 Queen's Road EastHong KongH SHARES LISTINGINFORMATIONThe Stock Exchange of Hong Kong LimitedCode: 0576LONDON STOCK EXCHANGE PLCCode: ZHEHADRS INFORMATIONUS Exchange: OTCSymbol: ZHEXYCUSIP: 98951A100ADR: H Shares 1:10CORPORATE BOND LISTING INFORMATIONThe Shanghai Stock Exchange Symbol: 03 Code: 120308WEBSITEwww.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 -----------------------------------------------------------------
PINXRelated Shares:
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