Inner Mongolia Yitai Coal Company Limited
900948 03948
Annual Report 2012
Inner Mongolia Yitai Coal Company Limited Annual Report 2012
I. Important Notice
I. Board of Directors, Supervisory Committee of Inner Mongolia Yitai Coal Company Limited (hereinafter referred to as the Company) and its directors, supervisors and senior executives hereby confirm that there are no any important omissions, fictitious statements or serious misleading information carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
II. All the Directors of the Company attended the Meeting of the Board.
III. Da Hua Certified Public Accountants Co., Ltd. issued the standard unqualified Auditors’ Report for the Company.
IV. Zhang Donghai, Principal of the Company; Lv Guiliang, Person in Charge of Accounting Work and Yang Yonggang, Principal of Accounting Department (Accounting Officer) hereby confirm that the Financial Report of 2012 Annual Report is authentic, accurate and complete.
V. Is there has controlling shareholder and its associated parties non-opeationally occupied funds of the Company? No
VI. Is there has outward guarantee supplied against decision-making procedures? No
1 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Contents
Section I. Paraphrase and Major Risk Warning…………………………………………..3 Section II. Company Profile………………………………………………………………4 Section III. Chairman's Statement………………………………………………………..8 Section IV. Accounting Data and Summary of Financial Index ……………………….10 Section V. Report of the Board of Directors……………………………………………12 Section VI. Report of Supervisory Committee………………………………………….42 Section VII. Important Events…………………………………………………………..46 Section VIII. Changes in Shares and Particular About Shareholders……………………58 Section IX. Particular About Directors, Supervisors, Senior Executives and Employees66 Section X. Corporate Governance ………………………………………………………82 Section XI. Internal Control …………………………………………………………….87 Section XII. Financial Report ………………………………………………………….. 89 Section XIII. Financial Data Summary………………………………………………. ..203 Section XIV. Documents Available for References …………………………………...204
2 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section I. Paraphrase and Major Risk Warning
I. Paraphrase In this Report the following words shall have the following meanings unless the context otherwise requires: Frequently-used words Company or the Company Refers to Inner Mongolia Yitai Coal Company Limited YITAI GROUP Refers to INNER MONGOLIA YITAI GROUP CO., LTD. Yitai H.K. Refers to Yitai (Group) H.K. Company Limited Yitai Chemicals Yitai Chemicals Refers to Inner Mongolia Yitai Chemicals Co., Ltd. CTO Company Refers to Inner Mongolia Yitai CTO Co., Ltd. Zhundong Railroad Co., Refers to Inner Mongolia Yitai Zhundong Railroad Co., Ltd. Huzhun Railway Co., Refers to Inner Mongolia Yitai Huzhun Railway Co., Ltd. Inner Mongolia Yitai Jingyue Suancigou Mine Co., Suancigou Mine Refers to Ltd. Yitai Tiedong Storage & Inner Mongolia Yitai Tiedong Storage and Refers to Transportation Co., Transportation Co., Ltd. Ili Energy Co., Refers to Yitai Ili Energy Co., Ltd. Yitai Xinjiang Refers to Yitai Xinjiang Energy Co., Ltd. Ili Mine Refers to Yitai Ili Mine Co., Ltd. Ordos Yizheng Extinguishment Engineering Co., Yizheng Extinguishment Refers to Ltd. Synfuels Refers to SYNFUELS CHINA Inner Mongolia Jingtai Electric Power Generation Jingtai Power Refers to Co., Ltd.
II. Major risk warning
Main risks of the Company existing are policy risk, market risk and operation risk. Content and countermeasures with relevant risks concerned please refer to ―II. Discussion and analysis on future development from the Board of Section V. Report of the Board of Directors‖ in this Report, which have been well explained.
3 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section II. Company Profile
I. Company information
Name of the Company (in Chinese) 内蒙古伊泰煤炭股份有限公司 Short form of the Company (in Chinese) 伊泰煤炭 Name of the Company (in English) INNER MONGOLIA YITAI COAL CO., LTD./ Short form of the Company (in English) IMYCC/Yitai Coal Legal representative Zhang Donghai
Executive Director
Zhang Donghai (Chairman) Liu Chunlin Ge Yaoyong Zhang Dongsheng Kang Zhi Member of the Board Zhang Xinrong Lv Guiliang
Independent Non-executive Director Xie Xianghua Lian Junhai Song Jianzhong Tan Guoming
Zhang Donghai (Chairman) Liu Chunlin Ge Yaoyong Zhang Dongsheng Kang Zhi Member of Strategy Committee Zhang Xinrong Lv Guiliang Song Jianzhong Xie Xianghua Lian Junhai Tan Guoming Lian Junhai(Chairman) Song Jianzhong Member of Audit Committee Xie Xianghua Tan Guoming
4 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Song Jianzhong(Chairman) Zhang Donghai Liu Chunlin
Member of Nomination Committee Ge Yaoyong Xie Xianghua Lian Junhai Tan Guoming Xie Xianghua (Chairman) Zhang Donghai Liu Chunlin Member of Remuneration and Assessment Ge Yaoyong Committee Song Jianzhong Lian Junhai Tan Guoming Zhang Donghai(Chairman) Ge Yaoyong Member of Production Committee Zhang Xinrong Lian Junhai Xie Xianghua Li Wenshan Zhang Guisheng Wang Sanmin Member of Supervisory Committee Ji Zhifu Han Zhanchun Wang Yongliang Wu Qu
Liu Chunlin Authorized representative Lian Tao Li Meiyi
II. Person/Way to contact
Secretary of the Board/ Co-Secretary of the Company Name Lian Tao Yitai Building, Tianjiao North Road, Dongsheng District, Contact address Erdos, Inner Mongolia, P.R.C. Telephone 0477-8565642 Fax 0477-8565415 E-mail [email protected]
II. Brief introduction
5 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Tianjiao North Road, Dongsheng District, Registered address Ordos, Inner Mongolia, P.R.C. Post code of registered address 017000 Yitai Building, Tianjiao North Road, Dongsheng Office address District, Ordos, Inner Mongolia, P.R.C. Post code of office address 017000 28/F, 3 Pacific Place, 1 Queen’s Road East, Hong Main operation place(Hong Kong) Kong Website of the Company http://www.yitaicoal.com E-mail of the Company [email protected]
IV. Information disclosure and preparation place
Shanghai Securities News, Hong Kong Commercial Newspaper appointed for information disclosure Daily Website for annual report of B-share appointed by Website for annual report publish appointed by CSRC: www.sse.com.cn CSRC Website for annual report of H-share appointed by HKEx: http://www.hkexnews.hk Securities Department of the Company and main Preparation place for annual report operation place in H.K.
V. Stock of the Company
Stock of the Company Short form of the Stock exchange for Short form of the Stock type Stock code stock before listing stock change Shanghai Stock B-share Yitai B 900948 Yimei B Exchange H-share HKEx YITAI COAL 03948
VI. Registration changes of the Company in reporting period
(I) Basic information
Registration date 7th January 2013 Administration of Industry and Commerce of Inner Registration place Mongolia Autonomous Region Registration serial of business license of enterprise 150000400001093 legal person Serial of tax registration 152702626402490 Serial of organization code 62640249-0
(II) Index of initial registration
More details of initial registration of the Company please found in basic information of the Company disclosed in Annual Report 2011 for B-share.
6 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(III) Changes of main business since B-share listed
Main business of the Company since 1997 B-share listed: manufacture, transport, washing, coking and sales of raw coal, farm cultivation and planting; catering, accommodation entertainment service; intrasystem supplying of coal mine equipment, accessories and materials; highway construction and operation as well as fuel charging service. 1. Main business scope of the Company changed in November 2006 as: withdrew from the business of ―Farm cultivation, accommodation entertainment service, intrasystem supplying of coal mine equipment, accessories and materials‖; business of ―mining supplies, guest room, tourism development, tourism business, bowling, Karaoke and natatorium‖ increased. 2. Main business scope of the Company changed in April 2008 as: withdrew from the business of ―bowling, Karaoke and natatorium‖; business of ―solar power‖ increased. 3. Main business scope of the Company changed in April 2011 as: business of ―coal imports and coal mine equipment and coal chemical equipment imports‖ increased.
(IV) All previous changes of controlling shareholder since B-share listed
Controlling shareholder has no changed since B-share listed.
VII. Other relevant information
Name Dahua CPA (LLP) 12/F, 7 Building, 16 Yard, Office address Xisihuan Rd. (M), Haidian Name of CPA engaged by the Company (in District, Beijing China) Gong Xinping Signing accountant Zhao Xi
Ernst & Young CPA Ernst & Name Young CPA CPA engaged by the Company (overseas) 22/F, Citic Tower, 1 Tim Mei Office address Ave., Central, Hong Kong
7 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section III Chairman’s statement
To each of the shareholders: In 2012, affected by the slowing growth of the macro economy which led to insufficient demand in downstream industries for coal, the supply and demand was relatively loose in the whole year. Besides, the great increase in import of coal further intensified such situation, resulting in great decline of coal price and great pressure of coal enterprises. Facing the unfavorable influences brought by depressed coal market, the Company made active response. In particular, it organized production, transportation and sales of coal on a reasonable basis with the preceding condition of safety guarantee; also, it further promoted project construction and expanded financing channels, consolidated the CTO demonstration results, realized overall development under stable order and implemented its development strategy step by step. I, on half of the Board, hereby present the operating results of the Company realized in the reporting period.
Satisfying completion of operating targets Due to the injection of coal mines into the Company from the Group, it recorded significant increase in coal production and sales in the reporting period, completing the operating targets as determined at the year beginning in general.
During the reporting period, the Company produced 49,760,000 tons coals and sold 73,200,000 ton accumulatively. Zhundong Railroad delivered 39 million tons and Huzhun railway delivered 25,690,000 tons accumulatively. As for CTO Company, 172,000 tons of coal chemicals were produced on an accumulative basis, reaching the designed capacity for the first time. During the reporting period, the Company realized operating income of 32.463 billion yuan, representing a year-on-year increase of 16.42%; net profit attributable to the parent was 6.622 billion yuan; the total assets amounted to 41.367 billion yuan.
New progress of project construction The consideration and approval procedures in respect of the material projects and project constructions were under stable promotion. Talahao coal mine and coal preparation plant project with annual capacity of 6,000,000 tons have been authorized by the NDRC, and official construction for the mine well and coal preparation plant have started. Nalinmiao disaster management project has received approval from the national energy administration for project establishment; progress of coal chemical project was successful; construction of Dalu coal chemical special railway was completed in general and Talahao coal mine special railway also obtained authorization from the local office of NDRC. Reform project of Kaida coal mine also obtained authorization from the local NDRC office of
8 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Inner Mongolia autonomous region. Successful promotion of projects construction laid foundation for its strategic development.
Satisfying performance in safety production The Company continued to focus on safety management without any negligence and arrogance. It improved management system on an overall basis and continued to make satisfying record in safety production. As at the end of the reporting period, the Company continued to keep the nil death record for production of million tons of raw coal. As for the safety production of Zhundong railway, there was no accident involving injury or death of human beings and material accident occurred due to driving responsibility for consecutive 4399 days. As for the safety production of Huzhun railway, there was no accident involving injury or death of human beings and material accident occurred due to driving responsibility for consecutive 2208 days.
Successful entrance into international capital market The Company issued H shares in 2012 as one of the significant IPO projects in Hong Kong Stock Exchange in this year. The successful issuance of H share was the new start of its business development. With further improved financing ability, the Company obtained capital guarantee for its material project construction by new financing channels, and injection of the relevant assets and businesses from the Group also assisted increase of its production and sales performances.
In 2013, due to the slowing growth of coal demand and rapid release of production capacity, coal market may still face great pressure. The Company would strengthen market analysis and arrange deliver plan scientifically to ensure completion of operating target. Driven by the National Energy 12th Five-year Plan in respect of promotion of further coal processing and requirement for high efficient, clean and safe application of coal, the Company took full advantage of the leading positions of Shanxi, Shanxi and Inner Mongolia in future coal industry to accelerate industrial upgrade, seize future development and constantly improve market competitiveness.
9 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section IV. Accounting data and summary of financial indexes
I. Main accounting data and financial indexes in latest three years at period-end (I) Main accounting data Unit: RMB Currency: CNY
Changes 2011 over 2010 Main same accounting 2012 period of data Post-adjustment Pre-adjustment last year Post-adjustment Pre-adjustment (%) Operating 32,463,324,694.04 27,884,242,042.39 17,413,904,871.28 16.42 23,255,916,709.08 14,292,702,713.61 income Net profit attributable to 6,621,880,767.60 7,720,489,100.77 5,495,898,660.64 -14.23 6,846,714,616.01 5,051,376,535.06 shareholders of the listed company Net profit attributable to shareholders of the listed company 4,780,346,699.49 5,462,382,787.29 5,462,382,787.29 -12.49 5,119,633,350.56 5,119,633,350.56 after deducting non-recurring gains and losses Net cash flow arising from 8,341,250,365.76 9,145,234,651.97 6,213,125,845.77 -8.79 8,005,721,152.45 5,451,050,766.82 operating activities Changes End of 2011 over end End of 2010 End of 2012 of last Post-adjustment Pre-adjustment year (%) Post-adjustment Pre-adjustment Net assets attributable to 19,699,409,181.19 19,401,320,930.63 16,853,594,759.51 1.54 15,473,102,105.25 13,547,662,909.73 shareholder of listed company
Total assets 41,367,143,576.90 33,445,108,495.43 29,901,158,544.64 23.69 29,031,591,388.10 25,669,825,326.56
10 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(II) Main financial data 2011 Increase/decrease in 2010 this report period Main financial data 2012 compared with that Post-adjustment Pre-adjustment Post-adjustment Pre-adjustment in the same period of last year (%) Basic EPS 4.3 5.27 3.75 -18.41 4.68 3.45 (RMB/Share) Diluted EPS Not applicable (RMB/Share) Basic EPS after deducting non-recurring gains 3.10 3.73 3.73 -16.89 3.50 3.50 and losses (RMB/Share) 10.76 Weighted average 31.08 41.84 37.05 percentage 52.20 44.53 return on equity (%) points down Weighted average return on equity 10.31 percentage after deducting 26.51 36.82 36.82 45.13 45.13 points down non-recurring gains and losses (%)
II. Amount and items of non-recurring gains and losses Unit: RMB Currency: CNY Non-recurring gains and losses 2012 2011 2010 Gains/losses from the disposal of 183,847,036.59 -3,550,290.42 -21,484,969.63 non-current assets Governmental subsidy reckoned into current gains/losses, not including the subsidy enjoyed in quota or ration 31,491,200.00 11,126,800.33 15,459,032.00 according to national standards, which are closely relevant to enterprise’s business Current net gains/losses of the subsidiaries from period-begin to consolidated date 1,680,928,960.19 2,485,999,558.18 1,967,818,548.17 occurred from enterprise merger under the common control Held transaction financial asset, gains/losses of changes of fair values from transaction financial liabilities, and investment gains from disposal of transaction financial asset, transaction 107,036.66 92,170.47 financial liabilities and financial asset available for sales, exclude the effective hedging business relevant with normal operations of the Company Influences on current gains/losses from one-time adjustment on current 38,678,790.06 gains/losses according to relevant taxation and accounting regulations and laws Other non-operating income and expense 294,292,096.61 118,897,450.05 -100,230,909.07 except the aforementioned items Amount of impact on minority -312,959,088.33 -335,004,287.52 -185,813,789.07 shareholders’ interests Amount of impact on income tax -36,066,136.95 -19,469,953.81 12,562,392.52 Total 1,841,534,068.11 2,258,106,313.47 1,727,081,265.45
11 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section V. Report of the Board of Directors
I. Discussion and analysis of the Board on operation of the Company during the reporting period In 2012, the macro economy in the PRC experienced slowing growth. Economy declined obviously in the first three quarters. Growth of each indicator of macro economy decreased year on year. In particular, downstream industries faced depressed increase. Growth of the production volumes of major coal-needed industries such as thermal power generation, steel and cement recorded great decline as compared to the same period of previous year. Especially thermal power generation industry whose coal consumption share accounted for 50%, its generation capacity even recorded negative growth. Meanwhile, coal price in international market continued to maintain low. Coal import increased significantly in the PRC, with an increase of 59% in 2012 as compared to previous year, which brought huge impact on domestic coal market. In general, supply and demand of coal in 2012 was relatively loose, with insufficient demand and falling price, resulting in great pressure for the whole industry.
During the reporting period, in front of the depressed macro economy and unfavorable situation in coal market, the Company managed to conquer difficulties and almost completed its operating targets, and implemented its development strategy steadily. In 2012, the Company produced 49.76 million tons of commercial coal, representing a decrease of 7.5% as compared to the same period of previous year, mainly due to that relocation of working face of mining well affected the current production. It sold 73.20 million tons of coal, representing an increase of 11.45%. For the whole year, it realized operating income of 32.463 billion yuan, and 6.622 billion yuan as for net profit attributable to owners of parent company.
During the reporting period, the Company continued to focus on safety management, improving operation of safety management system, enhancing safety management level, intensifying safety management control, strengthening construction of emergent assistance system, which resulted in continued satisfying record in safety production. The Company continued to maintain the national safety production honor, for 12 coal mines were rated as ―Coal Mines Satisfying National Safety Quality Standards‖, 8 coal mines were rated as ―Safe and Efficient Mines in the National Mine Industry ‖, among which, 7 were rated as special level and 1 was second level. One of the mines was rated as double-ten outstanding coal mine in the PRC coal industry. As at the end of the reporting period, the Company continued to maintain the nil death record with production of million ton of raw coal and nil death record with tunneling ten thousand meters.
12 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
During the reporting period, the Company continued to make innovation in production technology and managed to realize improvement in volume and efficiency. The Company obtained breakthrough progress in recovering core technology of Daxiang, taking the leading position in domestic craft. It recovered Daxiang coal pillar by use of fully mechanized technology, which was the first trial in Erdos. Meanwhile, it also realized ―one mine with two working faces‖ in Dadijing mine. The Roof Disaster Management Technology by Shallow Bury and Deep and Long Wall Working Face issued by the Company for rating for the first time was awarded the second science and technology progress prize by the national coal industry association.
In front of the weak demand of coal market in 2012, the sales strategy of the Company was to maintain quantity and strive for benefit. Through vast collection of market information, close attention paid to market tendency, adequate sales of commercial coal and strengthening of customer relation management, the Company managed to improve the product quality and customer service, so as to satisfy customers’ needs and expand coal market. At the same time, with consideration of objective factors such as railway transportation capacity and mine production, it adjusted coal structure and price reasonably, to ensure stable and orderly operation of the production, transportation, delivery and sales of coals. During the reporting period, in addition to managing to complete its operating targets, the Company has been always reminded of the environment ideas including prevention, combination of prevention and management, clean production and overall control. It further implemented the environment policy of ―Hundred years of Yitai, Green Energy‖, pursuant to which, environment management of its production and operation units were further standardized and green environment and carbon forest project were further promoted. In 2012, its production and operation units planted 687,800 trees in total, 7,955,600 shrubs and 2,666,700 square meters of lawn, performing their social responsibilities and obligations and improving the natural environment of Erdos.
During the reporting period, the construction in progress was promoted steadily, recording satisfying results. Talahao coal mine and coal preparation plant project have been authorized by the NDRC in September 2012. Currently, the overall construction has started. The special railway for Talahao coal mine has been authorized by the NDRC local office in Inner Mongolia in September 2012. And Kaida mine industrial upgrade project has been authorized by the NDRC local office in Inner Mongolia in 28 December 2012.
In July 2012, though facing slowing growth of macro economy, obvious decline of coal market and unprecedented depress in the industry, the Company successfully listed on Hong Kong Stock Exchange, which demonstrated the confidence in the Company from its investors. The capital proceeds raised through listing were used to acquire the relevant business and assets of the Group,
13 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
including five operating mines and certain mine-related assets and businesses. This acquisition remarked that the management of the Company was more standardized and improved, which effectively reduced internal competition and related transaction, and the increased resources reserve and production capacity would bring the Company into new step. The successful issuance of H share brought the Company into international capital market, which not only developed new financing channel, but also made the world know more about Yitai, so as to lay firm foundation for the rapid development and internationalization of Yitai.
(I) Main business analysis 1. Analytical statement of changes on relevant item of profit statement and cash flow statement Unit: RMB Currency: CNY Amount in same period Item Amount in this period Change ratio (%) of last year Operating revenue 32,463,324,694.04 27,884,242,042.39 16.42 Operating cost 20,237,988,738.19 14,817,232,933.14 36.58 Sales expenses 1,175,181,378.33 1,190,413,797.68 -1.28 Administrative expenses 1,650,399,911.82 1,122,072,646.22 47.08 Finacnial expenses 433,831,710.37 236,820,472.27 83.19 Net cash flow from operation activity 8,341,250,365.76 9,145,234,651.97 -8.79 Net cash flow from investment activity -5,541,684,442.45 -3,997,307,056.21 38.64 Net cash flow from financing activity Net -924,265,151.70 -5,546,433,189.95 -83.34 cash flows arising from financing activities R&D expenses 26,700,635.82 20,407,822.00 30.83
2. Revenue (1) Factor analysis of key drivers of changes in revenue January – December of 2012 January – December of 2011 Unit price Unit price Yitai Quantity (10 Quantity (10 thousand (RMB/Ton) (RMB/Ton) thousand tons) tons) (excluding tax) (excluding tax) Coal sales in local 2,655.69 263 2,833.61 295 Container station sales in local 707.48 340 717.80 337 Rail transit 383.18 506 336.91 480 Port sales 3,573.85 539 2,679.48 534 Total 7,320.19 418 6,567.81 409
(2) Analysis of influence factor on income of products of the Company major in physical sales Unit: 10 thousand tons
January – December of 2012 January – December of 2011 Yitai
14 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Quantity (10 thousand tons) Quantity (10 thousand tons)
Self-produce coal 4,951.75 5,336.53
Outsourcing coal 2,368.44 1,231.28
Unit: 10 thousand tons January – December of 2012 January – December of 2011 Own railway Volume supplied to the Volume supplied to the Total shipments Total shipments Company Company Zhundong 3,900.26 3,667.08 3,607.10 3,402.28 Railroad Huzhun Railway 2,569.16 1,809.40 2,345.07 1,196.24
(3) Order analysis
January – December of 2012 January – December of 2011 Unit price Unit price (RMB/Ton) Yitai Quantity (10 Quantity (10 thousand (RMB/Ton) (excluding tax) thousand tons) tons) (excluding tax) Long-term contract 2,738.06 485 2,663.67 454 Spot market 4,582.14 378 3,904.14 375 Total 7,320.19 418 6,567.81 409
(4) Impact analysis of new products and new service The Company has no new products and new service in reporting period (5) Main sales clients Unit: RMB Currency: CNY Total sales of top five clients Ratio in total sales (%) 4,218,526,558.70 13.01
Details of top five clients:
Unit: RMB Currency: CNY
Name Sales revenue Ratio in total sales (%) Zhejiang Zheneng Fuxing Fuel Co., Ltd. 1,255,888,046.50 3.87 Guangdong Zhutou Power Fuel Co., Ltd. 944,359,758.02 2.91 Shanghai Shenergy Fuel Co., Ltd. 739,411,173.71 2.28 Guangdong Power Industrial Fuel Co., Ltd. 664,461,038.35 2.05 Jiangsu Sulong Energy Co., Ltd. 614,406,542.12 1,90
By the end of 31st December 2012, revenue of the Company, obtained from the biggest external clients and top five big external clients takes a 3.87% and 13.01% in annual operation revenue respectively ended as 31st December 2012. 3. Cost (1) Analytical statement of cost
15 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: ten thousand yuan Currency: CNY Ratio Amount at same Ratio in total changes over Amount in this Ratio in period of last According to cost at same same period period current total cost year Amount at Explanation industry period of of last year amount (%) the same period last year (%) (%) current of last year amount Due to the sales Coal business 1,907,713.88 95.1 1,424,248.02 96.87 33.95 increased in period Due to the Transportation 8,525.44 0.43 2,525.27 0.17 237.61 increase of service shipment in period Due to the Coal chemical 87,221.49 4.35 41,108.85 2.8 112.17 increase of output in period Other 2,472.59 0.12 2,424.31 0.16 1.99 Total 2,005,933.40 100.00 1,470,306.45 100.00 36.43
(2) Main suppliers Unit: RMB Currency: CNY Name of suppliers Procurement value (tax excluded) DATONG COAL MINE GROUP 541,004,044.79 China Coal Energy Company Limited 328,357,311.76 SUEK AG 317,969,810.15 Dahua Zhongneng Co., Ltd. 301,623,720.68 Shanxi Jinshida International Trade Co., Ltd. 273,230,661.50
By end of 31st December 2012, total procurement value from top five suppliers of the Company amounting as 1,762,185,548.88 yuan. (3) Other Details of production cost listed by cost items Unit: ten thousand yuan Currency: CNY
Item January – December of 2012 January – December of 2011 Labor cost 57,186.31 58,216.53 Raw materials, fuel and power 45,722.27 41,180.74 Depreciation and amortization 30,707.03 34,161.51 Other production charges 337,318.67 399,638.52 Total production cost of coal 470,934.28 533,197.30 4. Expenses Ending balance Opening (RMB) balance(RMB) Changed Item Reasons of changed (or prior-period ratio (%) (or current amount) amount) Outsourcing coal increased and the Operation cost 20,237,988,738.19 14,817,232,933.14 36.58 outsourcing cost higher the cost of self-production
16 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Ending balance Opening (RMB) balance(RMB) Changed Item Reasons of changed (or prior-period ratio (%) (or current amount) amount) Coal Liquefaction and Phase II of Zhundong Railroad have completed Financial expenses 433,831,710.37 236,820,472.27 83.19 transfer into fixed assets, capitalization interest decreased Loss of assets impairment Due to switch-back of current bad debt -1,523,238.50 -56,037,931.70 -97.28 Devaluation losses provision of assets Non-profit donation expenditure and Non-operation 47,587,261.10 84,705,909.17 -43.82 losses from disposal of non-current expenditure assets in this period declined.
5. R&D expenditure Unit: RMB Currency: CNY
Current expenses R&D expenditure 24,599,011.90 Current capitalize R&D expenditure 2,101,623.92 Total R&D expenditure 26,700,635.82 Total R&D expenditure in net assets (%) 0.12 Total R&D expenditure in operation revenue (%) 0.08
6. Cash flow Balance of cash and cash equivalent dated 31st December 2012 was 6306.02 million yuan with 42.32% up, increased 1875.3 million yuan compared with 4430.72 million yuan at same period of last year. Main reasons are:
Current net cash in-flow from operation activity amounting to 8341.25 million yuan with 8.79% down, decreased 803.98 million yuan compared with 9145.23 million yuan at same period of last year. Mainly because buying & selling of coal in reporting period increased and low gross profit of outsourcing coal for trading.
Current net cash out-flow from investment activity amounting to 5541.68 million yuan with 38.64% up, increased 1544.37 million yuan compared with 3997.31 million yuan net out-flow at same period of last year. Mainly because investment of coal mine, railway and coal chemical increased in reporting period.
Net cash out-flow from financing activity amounting to 924.27 million yuan with 83.34% down approximately, decreased 4622.16 million yuan compared with 5546.43 million yuan at same period of last year. Mainly due to the global public share offering and issuance of MTN during reporting period.
17 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
7. Others (1) Well-explanation on material changes of profit structure or locality of profit No material changes of profit structure or locality of profit in reporting period.
(2) Analytical note of implementation scheduling of previous vary financing and material assets reorganization Refer to the explanation of application of raised proceeds, reduce horizontal competition and explanation of completion of Assets Transfer Agreement in this Section (3) Explanation of development strategy and progress of operation plans Found more details in Discussion and analysis on operation in this Section
(II) Operation analysis classify according to industry, products or region 1. Main business according to industry and products Unit: ten thousand yuan Currency: CNY Operation Operation Gross Gross revenue cost margin According to Operation revenue Operation cost margin increase/decre increase/decr increase/decrea industry (%) ase over last ease over last se over last year (%) year (%) year (%) 9.26 Coal business 3,060,375.77 1,907,713.88 37.66 14.05 33.95 percentage points down 0.68 Transportation 18,670.15 8,525.44 54.34 232.56 237.61 percentage service points down 0.65 Coal chemical 136,183.29 87,221.49 35.95 110.03 112.17 percentage points down 4.09 Other 7,664.98 2,472.59 67.74 -10.94 1.99 percentage points down 9.01 Total 3,222,894.20 2,005,933.40 37.76 16.67 36.43 percentage points down
2. Main business according to region Unit: RMB Currency: CNY
Region Operation revenue Operation revenue increase/decrease over last year (%) North China 16,728,778,314.99 4.44 East China 10,771,676,049.50 48.27 South China 4,352,871,176.34 14.53 Northeast 375,616,413.85 -30.49
(III) Assets and liabilities analysis 1. Analysis of assets and liabilities Unit: RMB Currency: CNY
18 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Ending balance or current Opening balance or Proportion Item Amount increased amount prior-period amount increased (%) Monetary fund 6,344,379,496.19 4,480,085,338.99 1,864,294,157.20 41.61 Note receivable 26,210,000.00 43,154,276.14 -16,944,276.14 -39.26 Account receivable 2,663,426,021.76 1,365,303,004.27 1,298,123,017.49 95.08 Other receivables 439,999,402.98 209,191,949.87 230,807,453.11 110.33 Projects under construction 7,963,101,458.80 4,883,464,819.22 3,079,636,639.58 63.06 Long-term deferred expenditures 760,405,595.13 208,251,953.49 552,153,641.64 265.14 Deferred income tax assets 917,591,106.71 112,224,831.58 805,366,275.13 717.64 Short-term loans 328,000,000.00 868,000,000.00 -540,000,000.00 -62.21 Wages payable 204,687,341.01 300,975,100.57 -96,287,759.56 -31.99 Taxes payable -8,741,814.97 190,308,454.39 -199,050,269.36 -104.59 Other payables 5,209,553,107.88 743,639,492.20 4,465,913,615.68 600.55 Other non-current liability 128,188,997.00 293,190,800.00 -165,001,803.00 -56.28 Capital reserve 1,511,013,242.53 2,160,567,734.17 -649,554,491.64 -42.99 Surplus reserve 1,105,415,215.52 2,022,835,760.36 -917,420,544.84 -45.35 Operation cost 20,237,988,738.19 14,817,232,933.14 5,420,755,805.05 36.58 Financial expenses 433,831,710.37 236,820,472.27 197,011,238.10 83.19 Devaluation losses of assets -1,523,238.50 -56,037,931.70 54,514,693.20 -97.28 Investment income 231,481,067.59 23,979,699.46 207,501,368.13 865.32 Non-operation revenue 381,723,619.20 213,887,109.20 167,836,510.00 78.47 Non-operation expenditure 47,587,261.10 84,705,909.17 -37,118,648.07 -43.82
Note: 1. Current monetary funds increased 41.61%, mainly because funds from H-share offering increased in this period. 2. Current note receivable decreased 39.26%, mainly because amount of goods settlement by notes decreased. 3. Current account receivable increased 95.08%, mainly because sales of coal for trading in this period increased. 4. Current other receivables increased 110.33%, mainly because investment for joint-stock companies increased in this period. 5. Current projects under construction increased 63.06%, mainly because the railway construction and Xinjiang project increased. 6. Current long-term deferred expenditures increased 265.14%, mainly because compensation for demolition and stripping charge of strip mining increased. 7. Current deferred income tax assets increased 717.64%, mainly because deductable temporary difference from assets acquisition increased. 8. Current short-term loans decreased 62.21%, mainly because due borrowings paid. 9. Current wages payable decreased 31.99%, mainly because last year’s performance bonus paid in
19 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 this period. 10. Current taxes payable decreased 104.59%, mainly because resources tax and VAT submitted in this period. 11. Current other payables increased 600.55%, mainly because assets acquisition payables increased. 12. Current other non-current liability decreased 56.28%, mainly because resources compensation was amortized in this period. 13. Current capital reserves decreased 42.99%, mainly because difference between fair value of assets acquisition under same control and book value were written-down. 14. Current surplus reserves decreased 45.35%, mainly because difference between fair value of assets acquisition under same control and book value were written-down. 15. Current operation cost increased 36.58%, mainly because resourcing coals increased, and resourcing cost higher than cost from self-production. 16. Current financial expenses increased 83.19%, mainly because Coal Liquefaction and Phase II of Zhundong Railroad have completed transfer into fixed assets, capitalization interest decreased. 17. Current loss of assets impairment increased 97.28%, mainly because no bad debt losses switch back in this period. 18. Current investment income increased 865.32%, mainly due to the equity disposal of Pharmaceutical Company in this period, the owned subsidiary of the Company.
(IV)Analysis on core competitiveness
As the largest local coal enterprise in Inner Mongolia, the Company has been improved obviously in terms of scale, development quality and benefits with years of development. With optimized industry structure and strengthened material basis, the overall competitiveness was improved substantially. The Company established stable, friendly, mutual benefit and strategic cooperation with many power and metallurgy users, wining great brand benefit. Meanwhile, the Company owns substantial coal reserve, superior mining condition, advanced mining technology and constant opportunity for internal and external resources integration, which provided strong support for constant improvement of coal resource reserve and production scale, thus to equip the Company with competition advantage in the industry. It was beneficial for the Company to seize the important opportunity in coal industry transition period and drive its rapid development.
First, the geological condition of its coal products was superior, featuring with mid-high calorific value, mid-low ash content, low sulphur content, low phosphor content and low water content, representing typical superior steam coal. These features were really attractive for business transaction and represented strong market competition advantages.
20 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Second, the mining condition of the Company was superior, locating at the area where the geological condition was beneficial for mining with low cost, earth surface was stable, geological structure was simple, coal was buried shallowly and angle of inclination was small, coal seam was relatively thick and gas concentration was low. All of these features brought down mining difficulty and safety risks greatly and reduced coal production costs.
Third, the Company owned advanced production efficiency and safety record. All of the coal mines of the Company realized mechanical mining, owned advanced mining technology, and all the equipments were advanced overseas and domestic comprehensive tunneling fully mechanized equipment, all of which improved the mining efficiency greatly. The Company adopted mechanized longwall mining method and fully mechanized top coal caving mining method to reach high yield and high recovery rate on a more safe and reliable basis. Besides, the Company has always been focusing on safety production. Particularly, it continued to increase investment in safety facilities, improve safety supervision and control in mines, strengthen construction of safety system and teams and ensure outstanding safety record.
Fourth, the Company owned advanced coal-to-liquids (CTL) technology across the world, and the PRC encouraged enterprises to develop CTL. The CTL business developed greatly by the Company was located in Erdos of Inner Mongolia and Xinjiang where coal resources were substantial, complying with the national industrial policies, which was beneficial for adjustment of industrial structure in the West area and acceleration of economic development there. At the same time, it also extended coal industry chain of the Company and increased added value of products, promoted business development in multiple ways, increased core competitiveness and consolidated industrial position. The indirect coal liquefaction project with annual capacity of 160,000 tons implemented by the Company reached annual capacity of 180,000 tons to 200,000 tons with technical reform, and realized safe and stable operation for long cycle. According to the current operating date, the project was advanced in the world, with few dosage, excellent activity and low cost of catalyst. In addition, through holding the opportunity of developing Xinjiang area, the Company is managing to obtain exploration right and preparation works in respect of the coal production and transformation project. Expansion of coal chemical business helped the Company to obtain new coal resources and ensure long term development.
Fifth, the Company had significant competitiveness advantage in terms of transportation and sales of products. It was equipped with matured railway and road transportation network, which was beneficial for control of transportation costs and further expansion of sales scope. Meanwhile, the Company
21 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
continued to strengthen construction of the infrastructure such as road, railways and container stations related to coal, creating such operating conditions of low cost and high efficiency for storage and delivery of its coal and ensuring effective connection between production, transportation and sales of products.
Sixth, the Company insisted on development on green and low carbon basis. It intensified greening in area surrounding mines, continued to improve the environment comprehensive governance there and made lots of works in aspects of improving ecological environment, promoting green mining and constructing ecological mines. Meanwhile, the Company actively performed social responsibility and helped the locals to manage environment, realizing harmony development between the enterprise and society. (V) Investment analysis 1. Analysis of general outward equity investment Equity of non-listed financial enterprise held
Equity owner Ending book value (RMB) Items Stock sources Industrial Investment Fund of Long-term equity 100,000,000.00 Fund contribution Mianyang Sci-Tech City investment Total 100,000,000.00 / / Being deliberated and approved by 18th meeting of 4th session of the Board in 2008, the Company subscribed 100 million yuan Industrial Investment Fund of Mianyang Sci-Tech City with initial contribution of 10 million yuan. To become shareholder as a limited partner, the Company takes a limited liability for Fund Company within invested capital. As end of reporting period, the Company actually has contributed 100 million yuan. Industrial Investment Fund of Mianyang Sci-Tech City is controlled by CITIC Securities Company Limited, it’s a fund sponsored and established by CITIC Private Equity Funds Management Co., Ltd.—the General Partner, with fund size as 9 billion yuan, 12-year duration and minimum expected rate of return as 10 percent every year.
2. Non-financial trust financing and derivative investment (1) Trust financing The Company has no trust financing in this year (2) Entrust loans Unit: RMB Currency: CNY Relate Exten Lawsu Capital Overd d d a its from Amount Loan Lending ue transa time involv fund-rai Borrower Association entrusted period rate (Yes/ ction limit ed sing No) (Yes/ (Yes/ (Yes/ (Yes/No No) No) No) ) Inner Mongolia One Wholly-owned 200,000,000 6.56% No No No No No Yitai Zhundong year subsidiaries
22 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Railroad Co., Ltd.
3. Application of raised proceeds (1) General application of raised proceeds Unit: RMB Currency: CNY Total Utilization Year for Fund-raisi Total raised funds purpose and accumulative Total un-utilized fund-rai ng Total fund-raising utilized in the orientation for raised funds raised funds sing method year un-utilized raised utilized funds H-share Amount of asset 2012 5,713,889,873.55 2,402,730,138.68 2,402,730,138.68 3,310,605,359.58 placement acquisition paid Offering 2012 1,000,000,000.00 1,000,000,000.00 1,000,000,000.00 MTN
Total / 6,713,889,873.55 3,402,730,138.68 3,402,730,138.68 3,310,605,359.58
Explanation on general application of raised proceeds: 2,200,664,865.06 yuan paid for amount of assets acquisition, 202,065,273.62 yuan paid for listing expenses and exchange gains/losses and 1,000,000,000.00 yuan used for turnover of production and operation.
(2) Committed project of raised proceeds Unit: 100 million yuan Currency: CNY Accord Accumu Accord to Project Raised lative to Projec Earnin anticip s Raised funds Anticipa fund raised planned t gs ated Committed project change invested in ted expect to funds schedule progre genera earnin d(Yes/ the year earnings invested actually (Yes/No ss ted gs No) invested ) (Yes/N o) Purchased Group’s coal mine and No 57.14 24.03 24.03 Yes 100% 22.00 21.00 Yes relevant assets and business
(3) Project of raised proceeds changed The Company has no changes on project of raised proceeds in reporting period
2. Main subsidiaries and stock-jointly companies analysis Unit: RMB Currency: CNY
Busines Main products or Company name Registered capital Assets size Net profit s nature service Railway Inner Mongolia Yitai transpor Zhundong Railroad t Railway transport 1,496,000,000 5,681,066,702.52 329,699,980.58 Co., Ltd. operatio n
23 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Construction Railway investment of Inner Mongolia transpor railway and Huzhun Railway t ancillary facilities, 1,360,000,000 3,885,134,754.36 124,099,742.39 Co., Ltd. operatio sale of engineering n material and chemical products The production and sale of coal Coal chemical products chemica Inner Mongolia Yitai (liquefied gas, l 1,500,000,000 3,796,698,779.69 -127,718,007.11 CTO Co., Ltd. gasoline, naphtha, product coal oil, diesel oil s and tar) and auxiliary products Inner Mongolia Yitai Coal Processing and sale Jingyue Suancigou operatio 1,080,000,000 3,711,003,101.38 929,573,450.81 of mineral products Mine Co., Ltd. n (1) Inner Mongolia Yitai Zhundong Railroad Co., Ltd. Inner Mongolia Yitai Zhundong Railroad Co., Ltd.(hereafter referred to as ―Zhundong Railroad Co.,‖) was mainly engaged in railway transportation business with registered capital of 1.496 billion yuan, and the Company held 100% equity interest of Zhundong Railway Company. Zhundong railway has already run 191.8 kilometers (including 59.4 kilometers ran by multiple track of Zhundong phase I). Zhundong railway, starting from Zhoujiawan station in Jungar coalfield extending west to Jungar in Dongsheng coalfield, provided transportation line between mines in Dongsheng coalfield and Dazhun railway and Huzhun railway, where it can be furthered connected to Daqin railway and Jingbao railway, thus finally reached at Tianjin port, Qinhuangdao port and Caofeidian port.
①General operation of Zhundong Railroad Co., During the reporting period, Zhundong Railroad Company implemented its working policies as ―ensure safety production, continue to explore potentials and increase efficiency, speed up project construction and practice detailed management‖. It strengthened safety supervision and management over the existing interval stations reform of Zhundong Railroad, construction of phase I multiple track and reform ending works of Zhoujiawan and Hushi stations to further improve railway standards. It formulated and issued Zhundong Railroad Rail Management Method and implemented the same. The prevailing management systems and working procedures were more systematic and standardized. In order to constantly improve transportation efficiency, the company increased cooperation and communication, optimized driving organization and reduced transportation affects. Till now, construction of phase I multiple track of Zhundong Railroad was progressed well. On 5 July, experimental train with transportation capacity of 10,000 tons successfully ran at Zhundong Railroad, which would greatly improve the transportation capacity of Zhundong Railroad and effectively take use of train efficiency, thus to lay foundation for satisfying coal transportation demands. As at the end of the reporting period, Zhundong Railroad Company has delivered 39,002,600 tons of coal
24 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 accumulatively, representing an increase of 8.13% as compared to the same period of previous year. The company realized operating income of 1,008,409,000 yuan, representing an increase of 50.1% as compared to the same period of previous year; The Company realized net profit of 329,700,000 yuan, representing an increase of 39.03% as compared to the same period of previous year. As at 31 December, as for the safety production of Zhundong Railroad, there was no accident involving injury or death of human beings, material accident occurred due to driving responsibility and fire accident for consecutive 4399 days.
②Project construction During the reporting period, additional construction for second line from Zhoujiawan to Hushi in Zhundong Railroad were under normal operation, and the accumulative investment has exceeded 90% of the budget. Additional construction project for second line from Hushi to Gedeergai in Zhundong Railroad has been reported to the local NDRC office of Erdos and Inner Mongolia respectively, pending for issuance of approval document from the NDRC office of Inner Mongolia. The local NDRC office of Inner Mongolia authorized the special railway project in Talahao mine on 3 September 2012 (including Shahaota container station). Currently, the preparation works have started under normal progress.
(2)Inner Mongolia Yitai Huzhun Railway Co., Ltd. Inner Mongolia Yitai Huzhun Railway Co., Ltd. (hereinafter referred to as Huzhun Railway Company) is invested jointly by the Company, Inner Mongolia Mengtai Buliangou Coal Industry Co., Ltd. and Hohhot railway bureau, mainly engaging in railway commodity transportation with registered capital of 1.36 billion yuan, and the Company holds 76.46% of its equity interests. Huzhun railway has already run 124.18 kilometers. Huzhun railway starts from Zhoujiawan station in Jungar Banner extending north to Hohhot station of Jingbao railway. Huzhun railway means important for the Company as it carries coals produced by the Company to east China and north China markets.
①General operation of Huzhun Railway Company During the reporting period, Huzhun Railway Company continued to improve its management system. Particularly, it prepared Loading Times Card Control Management Rules and Steward ―Two Violation‖ Examination Management Rules. Through intensified management, it effectively improved working efficiency. In order to strengthen power safety, Huzhun railway completed preparation for project determination in respect of reform of the 110KV and 10KV lines, tamped big machines along the unhealthy section between Tuoketuo and Jialanying, completed sleeper intensification from Tuoketuo to Zhoujiawan in Huzhun railway, improved infrastructure effectively, enhanced equipment quality and ensured driving safety. On 16 August 2012, the special railway for Mengtai Buliangou
25 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 mine was successfully connected to Huzhun railway and put into normal operation, and Huzhun Railway Company was entrusted to conduct management and maintenance for the special railway.
During the reporting period, Huzhun Railway has delivered 25,691,600 tons of coal accumulatively, representing an increase of 9.56% as compared to the same period of previous year. The company realized operating income of 557,345,600 yuan, representing an increase of 11.48% as compared to the same period of previous year; The Company realized net profit of 124,099,700 yuan, representing an increase of 17.07% as compared to the same period of previous year. As for the safety production of Huzhun railway, there was no accident involving injury or death of human beings, material accident occurred due to driving responsibility and fire accident for consecutive 2208 days.
②Project construction Additional construction for second line from Tuoketuo to Zhoujiawan in Huzhun railway. The entire railway is 55.47 kilometers for which official construction started on 8 August 2010. Additional construction for second line from Jialanying to Tuoketuo in Huzhun railway was officially authorized by the local NDRC office of Inner Mongolia on 14 June 2012. The existing lines of Huzhun railway have obtained the relevant land approval from Ministry of Land and Resources, land resource bureau of Inner Mongolia, Hohhot and Erdos. At present, works are progressed as scheduled.
(3) Inner Mongolia Yitai CTO Co., Ltd. Inner Mongolia Yitai CTO Co., Ltd.(hereinafter referred to as CTO Company) was established on 17 March 2006, mainly engaging in production and sales of coal chemical products and the affiliated products. The company is invested jointly by the Company and Inner Mongolia Yitai Group Co., Ltd., with registered capital of 1.5 billion yuan. The Company holds 80% of its equity interests, and Inner Mongolia Yitai Group Co., Ltd holds 20%. Coal-based synthetic oil project with annual capacity of 480,000 tons is constructed by the company. For phase I project, the annual production scale is 160,000 tons. From May to June 2011, the annual production capacity of Yitai CTO Company amounted to 180,000 to 200,000 tons after technical reform. All the products characteristic index and energy consumption index reached the standards or exceeded the established one, and its major equipments realized full-load operation.
During the reporting period, under the major targets of ―safety stability, team training and talent cultivation‖, CTO Company continued to intensify the awareness of safety and cost of its employees; continued to improve crafts and technical innovation through overall promotion of standard works, which helped it to complete various working tasks of this year. In 2012, its equipments ran under safe operation for 348.83 days, among which, two times of planned maintenance took 10.43 days and
26 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 seven unplanned stops took 6.74 days accumulatively, representing decreases of 20 days and 1.5 days respectively; 171,987.55 tons of various oil and chemical products were accumulatively produced by the equipments, realizing the designed annual production capacity of 160,000 tons for the first time; 169,012.22 tons of various oil and chemical products were sold.
During the reporting period, CTO Company continued to improve production technology and effectively enhanced production efficiency. At the same time, according to market changes and customer requirements, the company adequately adjusted products structure and created good economic benefits. During the reporting period, construction of Dalu coal chemical special railway in Jungar Banner where CTO Company located was completed almost, which would provide stable coal supply for the current and future projects of CTO Company.
(4) Inner Mongolia Yitai Jingyue Suancigou Mine Co., Ltd. Inner Mongolia Yitai Jingyue Suancigou Mine Co., Ltd. (hereinafter referred to as Suancigou Mine) was established on 18 September 2007, invested jointly by the Company, Beijing Jingneng Thermal Co., Ltd., and Shanxi Yuedian Energy Co., Ltd. with registered capital of 1.08 billion yuan. The Company holds 52% of its equity interests. The designed production capacity of Suancigou Mine was 12,000,000 tons each year, supported with corresponding coal washery plant and special mine railway.
In 2012, Suancigou Mine conquered certain unfavorable conditions to reach the established production capacity. For a whole year, Suancigou Mine produced 13,198,000 tons of raw coal, and realized total operating income and net profit of 2,248,277,400 yuan and 929,573,500 yuan respectively.
During the reporting period, Suancigou Mine, based on the production of raw coal in its mines and market demands for commercial coal, formed several reliable raw coal washery and selection standby schemes and successfully solved a series of unfavorable factors such as small storage, strong continuity of production and transportation and difficulty in control coal quality of various commercial coals. Yield of commercial coal increased while coal quality also reached the planned index requirements. In terms of safety, Suancigou invested approximately 38 million yuan in safety across the year, completed construction of emergent risk prevention system, prepared and implemented Safety Regular Meeting System and Quality Standardization Review System, and further improved safety management. During the reporting period, Suancigou Mine was awarded the honors of national special safety high efficiency mine and national safety quality standardization mine.
(5) Yitai Ili Energy Co., Ltd.
27 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Yitai Ili Energy Co., Ltd. was established on 24 September 2009. In 2012, Yili Company received phase results for its preparation works as various supporting documents had been prepared and completed and external matching project preparation works were carried out orderly. Utility construction including offices and accommodations were progressed rapidly, and design for equipment area was promoted steadily, which laid firm foundation for construction of Ili CTL project in plant area in 2013.
(6) Inner Mongolia Yitai Tiedong Storage and Transportation Co., Ltd. Inner Mongolia Yitai Tiedong Storage and Transportation Co., Ltd. was established on 3 September 2008 with registered capital of 169 million yuan, and the Company holds 51% of its equity interests, and Erdos Dongchen Coal Co., Ltd. Holds 30% and Erdos Dinghua Resources Development Co., Ltd. Holds 19%. Operation scope of Yitai Tiedong Storage and Transportation Co., Ltd. Is storage and transportation and sales of coal and station platform leasing. In 2012, Yitai Tiedong Storage and Transportation Co., Ltd. Completed construction of equipments related to dust suppression and anti-freezing solution spraying, and construction of revetment and station drainage for special railway; completed capacity expansion and reform tasks of Tanggongta container station; the special railway was examined and accepted by Zhunneng Dazhun Railway Company.
(7) Share-participated subsidiary Inner Mongolia Jingtai Electric Power Generation Co., Ltd. as 29% held by the Company realized safety production for accumulative 1066 days. During the reporting period, the company generated power of 2.806 billion KWH and realized total profit of 41,323,700 yuan though the average utilization hours of Mengxi Grid was relatively low. The company obtained PRC Power Business License issued by regulatory bureau of north china in September 2012 and obtained resources comprehensive application qualification certificate in the beginning of December as one of the first batch of power enterprises to win such qualification in group pf 300MV machine sets.
Erdos Tiandi Huarun Coal Mine Equipment Co., Ltd. as 31.5% held by the Company actively expanded markets and established customer network during the reporting period. In 2012, the new contracts increased by 22.88% year on year, among which, contracts from shareholders market accounted for 58.8% and contracts from non-shareholders market accounted for 41.2%. The non-shareholders market businesses made great breakthrough. In 2012, it realized operating income of 34.74 million yuan, representing a decrease of 8.58% as compared to the same period of previous year.
Zhunshuo Railway Co., Ltd. as 18.96% jointly held by the Company and Yitai Zhundong Railroad Co.,
28 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Ltd. As at the end of the reporting period, constructions of Beitongpu four lines and direct line, road base of Zhunsuo line, bridge and culvert were all completed, and construction of tunnel, track-laying and power were progressed as scheduled. Till now, 98.55% of the plan has been finished. Besides, the company also finished reform of Yuanping station, additional two lines of Beitongpu direct line and initial review of related construction of Yuanping station. Yuanping station and additional two lines planned to operate in May.
During the reporting period, Xinbaoshen Railway Co., Ltd. As 15% held by the Company delivered 13 million tons of goods, and realized losses of 170 million yuan.
During the reporting period, the railway project from west of Inner Mongolia to central China as 10% held by the Company started part construction, and it is planned to start construction in full in the fourth quarter of 2013.
The project of Erdos south railway as 10% held by the Company has finished project examination and acceptance, and is qualified for running, pending for approval from the ministry of railway.
Mengji Railway Co., Ltd. As 9% held by the Company undertook Zhangji line project, Jibao second double-line project, Zhangtang line project and Huzhang special passenger project. As at the end of the reporting period, Baotou to Zhangjiakou section of Mengji railway has been fully operating, and Zhangjiakou to Caofeidian section is planned to put into operation in April 2015. 3. Project of non-raised fund Unit: RMB Currency: CNY
Increased in Project Name of project Project amount Opening balance Ending balance period progress Phase I of Zhundong 2,263,000,000.00 1,903,783,095.91 222,194,949.13 2,125,978,045.04 93.95% complex line
II. Discussion and analysis of future development from the Board (I) Industry competition layout and development trend 1. Industrial competition situation Since coal production capacity will be further released in future while growth of domestic economy may slow gradually and coal demand will experience slowing growth, it is difficult to change the loose supply and demand of coal starting from 2012. Besides, due to the low price of coal leading to approximate market price and contract price, the PRC canceled major coal contracts, resulting in further marketization of coals. Based on the above, coal industrial competition would be intensified gradually.
29 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
In 2012, due to the prevailing low price of coals leading to production stop of coal mines and increase of enterprises recording losses, cost control became the most important factor in determining competitiveness. Competition in coal industry represented cost competition firstly. However, based on the situation of the later half of 2012, large coal producers also strengthened cost control. Though the Company enjoyed the lowest production cost and the best management and cost control ability among the industry which made it take leading position in industrial competition, the Company will continue to strengthen cost control and keep such leading position.
In 2012, due to the loose supply and demand, great pressure for coal production capacity control and falling prices which led to operation difficulties for mid-and-small coal enterprises, the regulatory authorities and manufacturers of coal industry would promote integration of coal resources. According to the release of China Coal Industry Association in 2012, coal enterprises of large scale reduced 1,500, and the total yield of coal enterprises producing hundred million tons of raw coal across the nation accounted for 28% of the nation. As penetration of coal resources integration, market share taken by large coal enterprises would be further increased in future. Thus, competition in coal industry also means scale competition. Large scale companies are easier to take superior position in competitions. The Company, being the largest local enterprise in Inner Mongolia and a coal enterprise in Erdos with hundred million tons of yield, takes advantage in competition.
2. Industrial development trend According to ―National Energy 12th Five-year Plan‖ released, coal will still take a leading position in the energy structure of the PRC in future while the proportion will reduce relatively. Meanwhile, production capacity and consumption quantity of coal would be further controlled, thus yield of and demand for coal will keep slowing growth in future. As set out in the 12th Five-year Plan, large coal power bases would be constructed; in the central and west of China where coal resources are substantial, coal power integration is encouraged, several large pit-mouth power plants are constructed and low-heat coal resources are preferential for comprehensive application generation. Meanwhile, the above plan also actively carries forward large-scale demonstration projects with major topics of comprehensive application of coal liquidation, coal-to-gas, coal-to-olefin, coal-based co-production as well as coal oil gas, and develops coal further processing industry development pattern complying with the national situations including high levels of science and technology, high added value and long industry chain.
In the long run, coal exploration would become more safe and efficient in future and coal application would be more clean and efficient. More requirements would be addressed in respect of safety
30 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 management of coal exploration and energy consumption of coal further processing in future, thus the production capacity lagging behind would be eliminated gradually.
Erdos, where the Company locates at, is the area with the most substantial coal resources, also is the important area for coal industry development plan as set out in the energy 12th Five-year Plan. The Company owns advanced exploration technology and high safety management pattern, always keeping excellent safety production record and with outstanding environment management ability and leading coal liquidation technology. In front of the future development trend and development requirements in coal industry, the Company owns precious opportunity for development.
(II)Development strategy of the Company Based on the development direction and general trend of coal industry during the 12th Five-year period and the development target of the Company for future five years, we determine such development strategy as follows:
First, holding the opportunity of the national policy regarding to acceleration of coal resources integration and elimination of bagged behind production capacity, the Company integrates internal and external resources, enlarges production scale and marching system construction and improves its core competitiveness and market position. In terms of mine construction, it accelerates construction of Bulamao and Talahao mines, and acquires resources and constructs mine wells and improves production capacity by use of coal chemical project. In terms of resources integration, the Company will acquire Hongqinghe mine being constructed by the Group in future when it deems adequate, and integrate certain mines. Through the above measures, the resource reserve and production capacity of the Company would be greatly increased and its market position would be further improved.
Second, further expand and upgrade comprehensive transportation network to further improve its transportation ability. The Company will continue to maintain investment in railways, improve the existing railway projects, enhance delivery ability of container stations and create good internal transportation conditions meeting international standards, to make its annual comprehensive output of coal reach hundred million tons. Continue to take part in construction of national railway network, for horizontal: continue to invest Mengji railway, Zhunshuo railway and Erdos south railway; for vertical: continue to invest Xinbaoshen railway and Mengxi to Huazhong railway. Through its internal railway network construction and participation in national railway network, the Company will form complete railway external transportation network, which greatly improves external transportation ability across different provinces, reduces transportation costs, consolidates market position and improves its operation ability.
31 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Third, develop clean coal technology, improve added value of products and extend coal industry chain. The Company will increase preparation and washery of coals and enhance the relevant ability, thus to provide superior coal products for customers. Energy 12th Five-year Plan clearly emphasizes on stable promotion of large coal further processing upgrade demonstration. The Company now owns the domestic advanced CTL technology, and successfully operated the first demonstration project concerning coal indirect liquidation industrialization. Besides, other large projects are under preparation which would take advantage in coal chemicals industrial competition in future.
Coal further processing is the strategic industry in coal industry with strong competitiveness. The Company, by virtue of its technology innovation and under the target of improving the general transition efficiency of coals, realizes efficient, clean and comprehensive utilization of coals through coal preparation and washery and conversion upgrade demonstration project, aiming to become the leading enterprise in coal industry.
Forth, continue to improve safety production system and perform social responsibility. Safety has always been the working focus of the Company. In future, the Company will continued to implement the policy of safety priority, prevention and comprehensive governance, effectively prevent occurrence of accident, increase input and management for safety, strengthen construction of occupation health system and further improve safety production level in coal mines. The Company continues to maintain effective operation of ISO14001 environment management system and strengthen resources comprehensive utilization and biological environment protection in mine area, thus to cultivate the mines of the Company as such clean and efficient mines featuring with substance safety, energy saving, environment friendly, social harmony, high utilization rate of resources, guaranteed safety, good economic benefits and rare environment pollution.
(III)Operation plan In 2013, the major operation plans of the Company: coal mines of the Company or the holding ones produce commercial coals of 46.67 million tons and sell coals of 73 million tons. In 2013, coal market is expected to warm back stably, while the possibility of substantial recovery is not big. In order to complete operating targets, the Company will do the following works:
First, continue to emphasize on safety production, strengthen safety infrastructure and enhance safety management. Safety production management works for 2013 are mainly management of electromechanical devices to ensure continuity of coal production. Also, spot supervision will be further intensified and employees’ awareness of safety would be further consolidated, aiming to
32 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 cultivate the Company as an enterprise of ―substance safety type‖.
Second, organize scientific production and arrange reasonable sales plan based on market demands; manage to improve transportation capability of railways and ensure steady operation of its production, transportation and sales.
As for production, the Company would further optimize management and develop mine production potentials, improve resources recovery rate and realize production increase through technology innovation. As for sales, the Company will continue to develop new market and try to enlarge sales channels and market shares. Meanwhile, the Company continues to improve services level and increases communication with customers to strive for sales quantity. As for transportation, the Company will further strengthen traveling organization, arrange scientific and reasonable transportation, greatly compress turnover times of railways and improve transportation efficiency to ensure completion of transportation tasks.
Third, accelerate industrial upgrade. In terms of coal chemical products, the Company will continue to maintain safe and stable operation of equipments through crafts enhancement and solving equipment difficulty based on safety production; continue to promote equipments management standardization and make good preparation for equipment maintenance and continue to improve equipment management; strengthen staff team construction to ensure provision of eligible talents for coal chemical project promptly.
Forth, stable promotion of project construction. Promote construction of Talahao mine and aim for early operation. Accelerate construction of the approved open-pit mining project, strengthen development investment and improve coal yield. Promote construction of special railway for Talahao mine and double line of Huzhun railway. Promote consideration and approval of the CTL project with annual production capacity of 1 million tons in Xinjiang, arrange construction progress of coal chemical project reasonably and make adequate allocation of human, materials and finance resources, to ensure steady promotion of project construction.
Fifth, continue improve corporate management. Under its production operation and general construction plan, the Company strengthens cost control and management function, to guarantee steady operation of production operation and project construction.
(IV)capital requirements for maintaining the existing businesses and completing the investment project company under construction
33 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
The major investment of the Company for 2013 is construction of mines, railways and coal chemical project. Through allocating capital application, optimizing assets structure and controlling various expenses and expenditures, the Company aims to accelerate turnover of capital and arrange capital application plan reasonably to support healthy development of the Company. Capital requirements for maintenance of normal business operation will be financed by normal operation income and controlling shareholders. Besides, the Company satisfies its capital requirements through various channels.
(V)Potential risks 1. Policy risk By virtue of the leading position of coal in the resources and energy consumption structure, coal has always been the most important in energy plan of the PRC, thus receiving obvious affects from national policies. According to the released energy 12th Five-year Plan, the leading position of coal will be maintained in future. Besides, the PRC will promote development of coal further processing greatly, which means certain promotion of coal industry development. As the large leading coal enterprise integrating production, transportation, trading and further processing of coals, the Company enjoys certain development advantage under the guidance of the energy 12th Five-year Plan. However, based on the development experiences of coal industries in different countries, due to the environment problems along with further processing of coal power and coals and substitute of coals with other clean energies for a long term which would affect determination of coal industrial policies, industry development may face certain limit.
As for the above risks, the Company, based on the familiarity for coal industry adjustment policies of the state, will actively enhance its strengths and make Yitai more efficient, safe and environment friendly in future through enhancing enterprise management, accelerating industrial upgrade and strengthening research and innovation.
2. Market risks (1)macro economy fluctuation risks. The downstream industries of coal industry are mainly include power generation, steel and chemicals which, together with their downstream industries, are all fundamental industries of national economy with close connection with macro economy, thus coal industry is very easy to be influenced by macro economy. ―Golden Ten Years‖ for coal industry is also the ten years when the national macro economy records stable and rapid growth. The great decline of coal market for the first three quarters of 2012 is mainly due to the insufficient demand from downstream industries as macro economy records slowing growth. Though macro economy has showed steady recovery since the fourth quarter and economy continues to improve, our national
34 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 economy growth would become slowed gradually due to the slowing growth of global economy and conversion of growth pattern of our national economy, which may negatively affect the future growth of the Company.
As for the above risks, the Company has accumulated lots of experiences from the decline of coal industry in 2012. In future, the Company will pay close attention to market development and increase analysis ability in respect of coal market. For a long term, the Company will improve its diversity operation ability through enhancement of its business segments including coal production, railway and coal chemicals, so as to respond to fluctuation of macro economy.
(2)industry competition risks. Coal industry experiences relatively substantial reforms in 2012. Supply and demand relation has gradually changed from tight, balanced to loose. Besides, as industrial production capacity is going to further released in future and demands increase slowly, such relation is hard to receive great change. Currently, the state has canceled major electric coal contracts, leading to great increase of marketization, thus competition among coal producers would be intensified in future. In case that the Company can’t continue to improve its competitiveness and keep leading position in the industry, it may face hard growth of sales volume and rising cost risks which leads to decrease of its profitability.
For the increasing intensified industry competition, the Company will continue to improve its competitiveness by means of increasing cost management, expanding market through many channels, strengthening customer relation management, improving coal quality and customer services.
3. Operation risks (1)safety risk. Coal production belongs to underground exploration works. Though the current mechanization level and safety management level is relatively high, extension of service terms of mines and extension of exploration and tunnel set difficulty for safety management. In addition, as the Company expands its operation business from coal industry to coal chemicals industry, risk of safety production increases accordingly.
Therefore, the Company firmly insists on the policy of ―safety as priority‖, aiming to make its safety supervision and management reach or exceed domestically leading levels with more investments in safety and construction of professional teams; safety responsibility is definitely provided and implemented with adequate awards and punishment; continue to promote construction of safety quality standardization of coal mines and improve working and safety technology procedures of coal chemicals; strengthen safety technology training and construction of safety culture, improve business
35 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 quality and safety awareness of employees, strengthen safety supervision and ensure safety production.
(2) Cost rising risks. As the state continues to emphasize on saving energy and reducing emission, environment governance and safety production, together with risking material prices and staff salary and increase of resettlement and relocation compensation expenses, the external costs of the Company increases which will affect its operation. Therefore, the Company would take advantage of central management, increase budget management over controllable costs, implement established-amount examination system, develop potentials, reduce consumption, earn benefits from management and minimize the affect of fixed costs.
(VI) Contingent liability The Company offered guarantee 5,683,123,459.34 yuan to the bank for loans awarded to affiliated company and subsidiaries dated 31st December 2012. (VII) Pledge of assets The Company has no pledge of assets in reporting period
III. Explanation on “Qualified Opinion” from the CPA by the Board (I) Explanation on “Qualified Opinion” from the CPA by the Board and Supervisory Committee √ Not applicable (II) Analysis of reasons and influence on changes of accounting policy, accounting evaluation or calculation method from the Board √Not applicable (III) Analysis of reasons and influence on material previous error correction from the Board √Not applicable
IV. Preplan on profit distribution, capitalization of public reserves and suspends processing of share registrar (I) Formulation, execution and adjustment of cash dividend policy In 2012, under the accounting principle for enterprise, the net profit attributable to shareholders of the Company was 6.622 billion yuan and earnings per share were 4.30 yuan. As suggested by the board of directors, 10 shares would be dispatched to the entire shareholders for every 10 shares held by them based on the total share capital of 1,627,003,500 shares, and cash dividend of 12.5 yuan (tax included) would be dispatched for every 10 shares. Under relevant laws and regulations as well as the articles of association, its dividends shall be declared in RMB and paid in RMB for shareholders of domestic shares, USD for shareholders of domestic-listed foreign shares (B share) and HKD for shareholders of
36 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
overseas-listed foreign shares (H share). As for the foreign exchange rate between RMB and USD involved in dividend dispatch to shareholders of B shares in USD, it is calculated based on the middle price of the exchange rate released by People’s Bank of China on the first working date after the date of the general meeting (namely 2012 annual general meeting) when such dividend dispatch resolution is approved; As for the foreign exchange rate between RMB and HKD involved in dividend dispatch to shareholders of H shares in HKD, it is calculated based on the average value of the middle price of the exchange rate between RMB and HKD released by People’s Bank of China on the first working date after the date of the general meeting (namely 2012 annual general meeting) when such dividend dispatch resolution is approved.
Therefore, the cash dividend distribution of the Company complies with the requirements of Cash Dividend Guidance for Listed Company of Shanghai Stock Exchange, namely the proportion of the total distributable cash dividend during a year to the net profit attributable to shareholders of listed company shall not be less than 30%.
The Company will hold 2012 annual general meeting on 28 June 2013 (Friday) to consider relevant resolutions including the aforesaid resolution relating to 2012 final dividends.
(II) For the Company gains profit in reporting period and the retained profit of parent company is positive without plan of cash dividend proposed, the Company should well disclosed reasons as well as purpose and utilization plan for the retained profit √Not applicable
(III) Plan/preplan of profit distribution and capitalization of public reserves in latest three years (reporting period counts)
Proportion of net Share Net profit attributable Bonus Dividend profits capital to shareholders of stocks payout for Amount of cash attributable to Dividend increase for listed company in for every every 10 bonus (RMB) (tax shareholders of year every 10 consolidated statement 10 shares shares included) listed company shares of dividend year (Share) (Share) in consolidated (Share) (RMB) statement (%) 2012 10 12.5 0 2,033,754,375.00 6,621,880,767.60 30.71
2011 0 15 0 2,196,000,000.00 5,495,898,660.64 40.00
2010 0 15 0 2,196,000,000.00 5,051,376,535.07 43.47
(IV)Closure of shareholders registration
37 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
1. Registration day of B share and issues concerning dividends and distribution Since the Company is going to hold 2012 annual general meeting on 28 June 2013 (Friday), under the relevant domestic provision, the earliest registration day for shareholders of B shares of the Company shall be the trading day before seven working days prior to the 2012 annual general meeting, namely 19 June 2013.
Under the relevant domestic provision and relevant convention in B share market, issues concerning dividends distribution for shareholders of B shares of the Company will be released by separate dividend distribution implementation announcement after the 2012 annual general meeting, through which, registration day and ex-dividend day relating to distribution to shareholders of B shares are determined.
2. Closure of registration of H shares The Company is going to hold 2012 annual general meeting on 28 June 2013 (Friday). During the period from 29 May to 28 June 2013 (both days included), the Company will close registration of H shares. In order to be qualified for attending the annual general meeting and vote on the meeting, holders of its H shares should return all the transfer documents to the Company’s H share registrar namely Computershare Hong Kong Investor Services Limited at room 1712-1716, 17th floor, Hopewell Centre, No. 183 of Queen’s road east, Wan chai, Hong Kong no later than 4:30 p.m. on 28 May 2013. During the period from 16 July to 21 July 2013 /(both days inclusive), the Company will close registration of shares. In order to be qualified for receiving dividends, holders of the Company’s H shares should return all the transfer documents to the Company’s H share registrar namely Computershare Hong Kong Investor Services Limited at room 1712-1716, 17th floor, Hopewell Centre, No. 183 of Queen’s road east, Wan chai, Hong Kong no later than 4:30 p.m. on 15 July 2013.
3. There is no shareholder giving up or agreeing to give up dividends arrangement during the reporting period.
(V) Taxes 1. Under the Enterprise Income Tax Law of the PRC and its implementation rules effective from 1 January 2008, the Company is obligated to withdraw enterprise income tax at 10% when dispatching final dividends to any non-resident enterprise shareholder listed on the register of members of H shares. Any H share registered under the name of non-individual member (including Hong Kong Securities Clearing Company (Nominee) Limited, other agent or trustee, or other organization and group) shall be deemed as share held by non-resident enterprise shareholders. Thus, the attributable dividends should be levied with enterprise income tax. Upon receipt of dividends, non-resident
38 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 enterprise shareholder may, by itself or by proxy, apply to the tax authorities for tax agreement (arrangement) treatment and provide such information to prove its qualification as actual beneficial owner as provided by the tax agreement (arrangement) to complete tax rebates.
Investors shall read the above information carefully. In case of change of shareholder identity, please check relevant procedures with their proxy or trust agency. Te Company will withdraw enterprise income tax under the non-resident enterprise shareholders listed on the register of member of H shares as at 1 June 2013.
2. Under the notice on implementation of different individual income tax policy in respect of dividends of listed company jointly issued by the ministry of finance, the state administration of taxation and the CSRC (CS2012 No.85) (hereinafter referred to as Notice) effective from 1 January 2013, the Company withdraws individual income tax in respect of the dividends of individuals (hereinafter referred to as relevant individuals) who receive the dividends distributed by the Company for the stocks of the Company that them acquire from Shanghai Stock Exchange through public issuance and market transfer, under different individual income tax policies. When dispatching dividends to relevant individuals holding shares over one year as at registration day, the Company takes 25% of their attributable dividends as taxable income and withdraws individual income tax; as for those holding shares for a year or less and the relevant stocks have not been transferred yet as at the registration day, the Company takes 25% of the dividends as taxable income and withdraws individual income tax when dispatching dividends. If the relevant individuals transfer shares after the registration day and treated by Shanghai branch of China Securities Depository and Clearing Co., Ltd. under differentiation method based on their shareholding terms (namely the period from the date of acquiring shares to the date prior to transfer of shares). For shareholding term being less than one month (one month included)), their attributable dividends shall be recorded as taxable income in full; for shareholding term being one month to one year (one year included), 50% of their attributable dividends shall be recorded as taxable income; for shareholding term over one year, 25% of their attributable dividends shall be recorded as taxable income. As for the non-withdrawn part, it will be deducted from capital account of the relevant individuals by stock trust organs such as securities company and deposited to Shanghai branch of China Securities Depository and Clearing Co., Ltd. And then deposited to the Company for withdraw.
V. Active performance of social responsibility (I) Social responsibility See Attachment I
39 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(II) Explanation on environment protection for listed company and its subsidiaries, which belongs to heavy pollution industry regulated by State Environment Protection Department See Attachment I
VI. Other disclosure (I) Pre-emptive right No provision of pre-emptive right in relevant laws under the name of the People’s Republic of China.
(II) Reserves Dated 31st December 2012, the distributable reserves regulated according to relevant laws and regulations of P.R.C as 14,003,083,600.50 yuan.
(III) Auditor The auditor of the Company has not been replaced in past three years.
(IV) Free float Base on free queryable data of the Company and as the Board knows, as of the reporting period, the Company always abide by the requirement of free float of waiver application that approved by HKEx.
(V) Mining exploration, development and mining production 1. Coal reserves of the Company Unit: 10 thousand tons Coal mine of the Company Inland surplus maintain reserves in 2012 Inland recoverable reserves in 2012 Coal mine with shares 167,767 94,998 Suancigou 136,690 79,272
Nalin Temple Well II 14,251 8,094
Hongjing Tower Mine I 10,616 5,087
Nalin Temple Well I 2,905 1,207
Yangwangou 1,232 704 Fuhua 1,191 365 Kaida 882 269 Under construction 105,137 68,115 Talahao 87,656 58,907 Bulamao 17,481 9,208 Total reserves of coal mine with 277,394 163,113 shares Coal mine purchased Dadijing 9,832 6,343 Baoshan 5,173 3,639
40 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Dingjia Trench 4,839 2,816 Chengyi 2,055 1,005 Baijialiang 609 553 Total coal reserves purchased 22,509 13,868 Total reserves 295,413 177,469
2. Coal mine exploration in reporting period No supplement exploration in vary mines in reporting period
(VI)Decrease horizontal competition and completion of assets transfer agreement The Company signed prevention of horizontal competition agreement with its controlling shareholders on 29 May 2012. In order to realize its strategy of expansion of coal business and minimize the potential business competitions between Yitai Group and the Company, the Company entered into assets transfer agreement with Yitai Group on 29 May 2012, pursuant to which, the Company acquired the subject assets under such agreement owned by Yitai Group at a price of 8,446,544,400 yuan, including substantial production, sales and transportation of coal of Yitai Group.
The operating results of subject assets have been consolidated in the combined financial statements of the Company in the 3rd quarter financial report of 2012. On 19 October 2012, office of land and resources of Inner Mongolia municipality issued reply in respect of the transfer of mining rights which needed review and approval as set out in the assets transfer agreement. On 1 November 2012, the Company entered into supplementary agreement of assets transfer agreement with Yitai Group, pursuant to which, both parties agreed that the delivery date of subject assets other than the mining rights whose transfer needed review and approval shall be 30 September 2012, and the delivery date of the mining rights shall be the last day of the month when office of land and resources of Inner Mongolia municipality issues that reply (19 October 2012), namely 30 October 2012. Till now, the Company is acquiring the property change certificates regarding to the land and mining rights involved in such subject assets under assets transfer agreement. Till now, equity transfer involved in assets transfer agreement is as follows:(1)business and commercial registration in relation to transfer of 73% equity interest of Inner Mongolia Yitai Baoshan Coal Co., Ltd. has been completed on 25 January 2013; (2)business and commercial registration in relation to transfer of 73% equity interest of Inner Mongolia Yitai Tongda Coal Co., Ltd. has been completed on 26 January 2013.
41 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section VI. Report of Supervisory Committee
In 2012, in order to maintain the interests of the Company and minority shareholders, the supervisory committee observed laws and regulations such as Company Law, Securities Law and Listing Rules of Shanghai Stock Exchange and the Articles of Association. The committee also supervised the operation by law and duty performance of its directors and senior management, and maintained legal interests of the Company and shareholders. The detailed works for the year are set out below:
I. Works of the supervisory committee during the reporting period During the reporting period, the supervisory committee held four meetings with details as follows:
On 23 February 2012, the Company held the 5th meeting of the 5th supervisory committee, to consider the proposal on 2011 working report of the supervisory committee of Inner Mongolia Yitai Coal Co., Ltd., the proposal on 2011 internal control evaluation report of Inner Mongolia Yitai Coal Co., Ltd.; proposal on 2011 social responsibility report of Inner Mongolia Yitai Coal Co., Ltd.; proposal on the Company’s confirmation on the difference between actual occurrence and prediction of daily related transactions of 2011 and prediction on 2012 daily related transaction; proposal on withdraw long-term equity investment impairment reserve; proposal on 2011 annual report and its summary of Inner Mongolia Yitai Coal Co., Ltd. and proposal on entrusted loan by the Company for Inner Mongolia Yitai Zhundong Railroad Co., Ltd through bank.
On 27 April 2012, the Company held the 6th meeting of the 5th supervisory committee, to consider the proposal on 1st quarter report of 2012 of Inner Mongolia Yitai Coal Co., Ltd.
On 27 August 2012, the Company held the 7th meeting of the 5th supervisory committee, to consider the proposal on 2012 interim report and its summary of Inner Mongolia Yitai Coal Co., Ltd.; proposal on change of supervisors and proposal on providing loan guarantee by the Company for Inner Mongolia Yitai Huzhun Railway Co., Ltd.
On 26 October 2012, the Company held the 8th meeting of the 5th supervisory committee, to consider the proposal on 3rd quarter report of 2012 of Inner Mongolia Yitai Coal Co., Ltd.
During the reporting period, the supervisory committee believed that based on its supervision on duty performance of the directors and senior management: the board of directors can perform its duties in accordance with the Company Law, Securities Law and Listing Rules of Shanghai Stock Exchange and the Articles of Association. The material decisions are reasonable and procedures are legal and
42 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 effective; when performing corporate duties, senior management observed state laws and regulations, the Articles of Association and general meeting and resolutions of the board. There is no director and senior management of the Company breaking laws and regulations, the articles of association or doing harm to the interest of shareholders and the Company when exercising their corporate duties.
II. Independent opinions issued by the supervisory committee on relevant issues of the Company During the reporting period, general meeting, the board and senior management operate under strict decision-making authorities and procedure standards. Convening and holding procedures of general meeting are legal; the board exercises resolution of general meeting, each director performs his obligations earnestly and independent directors can issue independent opinions independently and completely for the entire shareholders; senior management observes commitment and representations, performs their duties and maintains interests of the Company and its entire shareholders. The Company further standardizes procedures of information disclosure, maintain confidentiality before information disclosure and prevents insider transactions, discloses all information on prompt and fair basis, enlarges informed right and participation right of shareholders and strengthens transparency and standardized operation of the Company. The Company implements active profit distribution plan based on honest operation, emphasizes on reasonable return to investors, increases communications with investors through many channels and creates healthy corporate image. The Company established sound internal control system and formed standardized management system. Relevant laws and regulations and various rules of the Company were observed for best development of the Company. The directors and senior management do no harm to the interests of the Company or investors when performing their duties focusing on the interests of the Company.
III. Independent opinions of the supervisory committee on review of finance During the reporting period, through listening the special report from the finance principal, the supervisory committee considered periodic reports, reviewed the audit report issued by auditor and made supervision and check on the finance operation of the Company. The supervisory committee believed that: the financial system of the Company complied with relevant provisions of accounting law and accounting principles of enterprises; the 2012 annual report reflected the financial position, operating results, cash flow and shareholders’ equity truthfully, accurately and completely. The audit opinions issued by auditor were objective and fair. The auditor issued audit report with standard unqualified opinions.
IV. Independent opinions of the supervisory committee on actual investment with the capital proceeds raised lately by the Company As at the end of 2012, the actual application of raised proceeds accorded with that as committed in the
43 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 prospectus of the Company and that changed or adjusted by resolutions of board and general meeting, and procedures of such change or adjustment was legal and regulated, no interest of shareholders and the Company was damaged. Firm foundation was laid for realization of sustainable development.
V.Independent opinions of the supervisory committee on acquisition and disposal of assets 1. Acquisition of equity interests Under the assets transfer agreement entered into between the Company and its controlling shareholder Inner Mongolia Yitai Group Co., Ltd. dated 29 May 2012, the Company acquired the subject assets and businesses under such agreement owned by its controlling shareholder Inner Mongolia Yitai Group Co., Ltd. at a price of 8,446,544,400 yuan. This acquisition was beneficial for expansion of its railway transportation capability, further technical upgrade of its mines and increase of its coal yield.
On 23 April 2012, the Company entered into equity transfer agreements respectively with railway bureau of Hohhot and Inner Mongolia Mengtai Coal Power Group Co., Ltd., pursuant to which, the Company transferred 40.5% and 10% equity interests of Dama railway respectively at an aggregate consideration of 397,334,000 yuan. Through this equity acquisition, the Company would hold 50.5% equity interests of Dama railway. Currently, the Company is busy with the preparation works. This acquisition is beneficial for integration of its transportation resources, effect of scale advantage and strengthens of its transportation ability.
2. Disposal of equity interests As approved at the 12th meeting of the 5th session of the board, the Company transferred 88% equity interests of Inner Mongolia Yitai Pharmaceuticals Co., Ltd. held by it to Zhejiang CONBA Pharmaceuticals Co., Ltd. at consideration of 200 million yuan. Upon the completion of transfer, the Company holds 12% equity interests of Pharmaceuticals Company. The supervisory committee believed that: this transaction consideration was determined based on market price which was fair and reasonable, benefiting for the general development of the Company.
During the reporting period, the transaction prices of acquiring and disposing assets were reasonable. No asset of the Company was lost.
VI. Independent opinions of the supervisory committee on related transaction During the reporting period, the related transactions involving the Company mainly included: establishment of Yitai Xinjiang Energy Co., Ltd. With joint investment of Yitai Group Co., Ltd.; establishment of Yitai Ili Mine Co., Ltd. with joint contribution from Inner Mongolia Yitai Group Co.,
44 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Ltd.; the Company entered into equity transfer agreement with Inner Mongolia Yitai Pharmaceuticals Co., Ltd., pursuant to which, the Company transferred 51% equity interests of Yitai Pharmatech Co., Ltd. held by Inner Mongolia Yitai Pharmaceuticals Co., Ltd. at consideration of 5.10 million yuan; the Company entered into equity transfer agreement with Inner Mongolia Yitai Pharmaceuticals Co., Ltd., pursuant to which, the Company transferred 100% equity interests of Beijing Yitai Biological Technology Co., Ltd. held by Inner Mongolia Yitai Pharmaceuticals Co., Ltd. at consideration of 10 million yuan. The aforesaid issues all constituted related transactions between the Company and controlling shareholders.
The supervisory committee made careful review and supervision over the related transactions across the whole year and believed that: during the reporting period, as for the guaranteed issues, the Company realized avoid of voting by related directors and shareholders when making a vote on an equal and fair basis. All the procedures were legal and regulated, and there was no behavior doing harm to interests of the Company and minority shareholders. Related transactions of the Company were disclosed under the Listing Rules of Shanghai Stock Exchange. The daily related transactions of the Company were exercised under the relevant terms of related transaction framework agreement and transaction price accorded with the pricing standards set out in the relevant agreement.
VII. Independent opinions of the supervisory committee on non-standard opinions issued by auditor Da Hua Certified Public Accountant and Ernst&Young Certified Public Accountant issued audit report with standard opinions for 2012 financial report of the Company. The audit report reflected its financial position truthfully, objectively and accurately.
VIII. Review and opinion on internal control self-evaluation report by the supervisory committee The supervisory committee reviewed 2012 internal control self-evaluation report of Inner Mongolia Yitai Coal Co., Ltd. which accorded with basic internal control standards of enterprise, internal control matching guidance of enterprise and relevant requirements, reflecting the actual internal control of the Company on an overall, objective and truthful basis. From 1 January to 31 December of this year, there was no material defect or important defect in design or implementation of internal control of the Company.
45 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section VII. Important Events
I. Material lawsuits, arbitration and media questioned The Company has no material lawsuits, arbitration and media questioned in the year. II. Fund occupation and progress of defaults clear up in reporting period √Not applicable III. Bankruptcy reorganization The Company has no relevant bankruptcy reorganization in the year. IV. Assets transaction and business combination (I) Sales of assets, assets acquisition and business combination that disclosed in temporary announcement without further implementation subsequently
Overview/type Inquiry index
In accordance with the Assets Transfer Agreement entered into between the Company and controlling shareholder Progress of the event found in temporary announcement INNER MONGOLIA YITAI GROUP CO., LTD. dated 29th published at website of Shanghai Stock Exchange and May 2012, the underlying assets and business under the Shanghai Securities News and Hong Kong Commercial Daily Agreement, owed by controlling shareholder INNER dated 12th November 2012 MONGOLIA YITAI GROUP CO., LTD. were purchased by the Company with price of 8446.5444 million yuan. Being deliberated and approved by 12th Meeting of 5th Session of the Board, 88% equity of Inner Mongolia Yitai Progress of the event found in temporary announcement Pharmaceutical Co., Ltd. owned by the Company was published at website of Shanghai Stock Exchange and transfer to Zhejiang Conba Pharmaceutical Co., Ltd. with Shanghai Securities News and Hong Kong Commercial Daily consideration of 200 million yuan. The Company holds 12% dated 8th August 2012 equity of the Pharmaceutical Company after transfer.
(I) Undisclosed in temporary announcement or events has further subsequent progress 1. Assets acquisition Unit: RMB Currency: CNY
Ownership Claims Relate with assets and debts transaction Counterparty or Assets concerned involved Acquired Purchasing (explained Pricing ultimate purchasing was have been assets date pricing principle controller price transfer transfer principle if totally totally it is Yes) (Yes/No) (Yes/No)
40.5% equity of Hohhot Agreement Erdos Dama 2012-4-23 318,654,000 No No No Railway Bureau price Railway Co., Ltd. 10% equity Inner Mongolia of Erdos Agreement Mengtai Coal 2012-4-23 78,680,000 No No No Dama price Power Co., Ltd. Railway
46 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Co., Ltd. Inner Mongolia 51% equity Yitai of Yitai Agreement 2012-7-24 5,100,000 No Yes Yes Pharmaceutical Pharmatech price Co., Ltd. Co., Ltd. 100% Inner Mongolia equity of Yitai Agreement Yitai 2012-7-20 10,000,000 No Yes Yes Pharmaceutical price Pharmatech Co., Ltd. Co., Ltd.
Erdos Dama Railway Co., Ltd. (hereinafter referred to as Dama Railway) was incorporated on 8 July 2010 with registered capital of 786.8 million yuan and the paid-in capital of 157.368 million yuan. Shareholders Hohhot railway bureau, Jungar Banner Zhengtong Railway Investment Co., Ltd., Inner Mongolia Mengtai Coal Power Co., Ltd. And Erdos Xintie Logistics Co., Ltd. Hold 45%, 30%, 15% and 10% equity interests of Dama Railway Company respectively. On 23 April 2012, the Company entered into equity transfer agreements with Hohhot railway bureau and Inner Mongolia Mengtai Coal Power Co., Ltd. respectively to transfer 40.5% and 10% equity interests of Dama Railway respectively at an aggregate consideration of 397,334,000 yuan. Through this equity acquisition, the Company would hold 50.5% equity interests of Dama Railway. Currently, the Company is busy with preparation works.
V. Stock option incentive and its influence √Not applicable VI. Material related transactions (I) Related transactions with daily operation concerned 1. Events not disclosed in temporary announcement Unit: ten thousand yuan Currency: CNY Content of Amount of Party of related Type of related Pricing Settlement Association related related transaction transaction principle modes transaction transaction Controlling Merchandise Catalyst Cash in Synfuels subsidiary of Market price 3,461.54 procurement procurement bank parent company Affiliated Merchandise Machinery Cash in Jinhua Machine Market price 174.32 company procurement procurement bank Maintenance Affiliated Labor service Cash in Tiandi Huarun of coal Market price 1,693.40 company received bank equipment Controlling Sujiahao Coal Merchandise Coal Cash in subsidiary of Market price 3,589.45 Mine procurement procurement bank parent company Controlling Merchandise Cash in YITAI GROUP Material Market price 26.52 shareholder for sale bank Controlling Sujiahao Coal Merchandise Cash in subsidiary of Material Market price 548.38 Mine for sale bank parent company Taifeng Coal Controlling Merchandise Material Market price 1,763.93 Cash in
47 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Mine subsidiary of for sale bank parent company Affiliated Merchandise Coal, Cash in Jingtai Power Market price 21,445.76 company for sale gangue bank Controlling Merchandise Coal sheet, Cash in Synfuels subsidiary of Market price 387.52 for sale liquefied gas bank parent company Controlling Yitai Real Merchandise Cash in subsidiary of Material Market price 94.49 Estate for sale bank parent company Controlling Guanglian Merchandise Cash in subsidiary of Material Market price 107.79 Coalification for sale bank parent company Mengtai Other related Labor service Cash in Freight Market price 1,698.15 Buliangou person provided bank Mengtai Other related Labor service Cash in Logistic Market price 995.62 Buliangou person provided bank Mengtai Other related Merchandise Cash in Material Market price 93.95 Buliangou person for sale bank Affiliated Merchandise Cash in Tiandi Huarun Material Market price 97.36 company for sale bank Total / 36,178.18 /
(II) Material related transaction of outward investment jointly
(I) Events that disclosed in temporary announcement without further implementation or changes subsequently
Overview Inquiry index The Company and controlling shareholder INNER MONGOLIA YITAI GROUP CO., LTD. jointly established Yitai Xinjiang Details of the event found in Notice of Related Energy Co., Ltd. with register capital of 100 million yuan. Transaction published at website of Shanghai Stock Among which, 90 million yuan contributed by the Company, a Exchange and Shanghai Securities News and Hong Kong 90% in register capital; 10 million yuan contributed by INNER Commercial Daily dated 28th February 2012 MONGOLIA YITAI GROUP CO., LTD. with 10% in register capital takes.
2. Events undisclosed in temporary announcement Unit: ten thousand yuan Currency: CNY Progress of material Main Register Total Net Net projects Invested business capital of assets of assets of profit of Associatio under Co-investors enterpris of invested invested invested invested n constructio e invested enterpris enterpris enterpris enterpris n of enterprise e e e e invested enterprise INNER Investmen MONGOLI Yitai Ili t Parent A YITAI Mine for coal 5,000 / / / / company GROUP Co., Ltd. mining CO., LTD. industry
48 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
On 13th March 2012, the Company and INNER MONGOLIA YITAI GROUP CO., LTD. jointly established Yitai Ili Mine Co., Ltd. with register capital of 50 million yuan. Among which, 45 million yuan contributed by the Company, a 90% in register capital; 5 million yuan contributed by INNER MONGOLIA YITAI GROUP CO., LTD. with 10% in register capital takes. The company registered at Yinan Industry Zone, Qapqal County with business scope of investment for coal mining industry
VII. Significant contract and its implementation
(I) Trusteeship, contract and lease √Not applicable (II) Guarantee Unit: RMB Currency: CNY
Outward guarantees of the Company (barring guarantees for subsidiaries)
The relati onshi Guar p Guar Guar Guar antee betwe Guar antee antee antee Counter- for en antee com Guar Guar date Start End over guarante relate Associati guara d Type plete antor antee (signi date date due e existing d on ntor amou d ng (Y/N (Y/N) party and nt (Y/N date) ) (Y/N the ) ) listed comp any Erdo s Inner Tian Mon di golia Joint Huar Share-pa Yitai Home respon un 3,360 2009- 2009- 2016- rticipated Coal Offic sibility N N N Y Coal ,000 2-27 2-27 2-26 subsidiar Com e guaran Mine y pany tee Equi Limi pmen ted t Co., Ltd. Erdo s Inner Tian Mon di golia Joint Huar Share-pa Yitai Home respon un 11,20 2009- 2009- 2019- rticipated Coal Offic sibility N N N Y Coal 0,000 11-30 11-30 11-30 subsidiar Com e guaran Mine y pany tee Equi Limi pmen ted t Co., Ltd. Inner Home Erdo 6,300 2012- 2012- 2015- Joint N N N Y Share-pa
49 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Mon Offic s ,000 8-29 8-31 8-30 respon rticipated golia e Tian sibility subsidiar Yitai di guaran y Coal Huar tee Com un pany Coal Limi Mine ted Equi pmen t Co., Ltd. Total amount of guarantee in the report period (not 6,300,000 including guarantee for subsidiary) Total ending balance of guarantee (A) (not including 20,860,000 guarantee for subsidiary) Guarantee for subsidiary Total amount of guarantee for subsidiary in the report 974,016,000.00 period Total ending balance of guarantee for subsidiary (B) 5,662,263,459.34
Total amount of guarantee (including guarantee for subsidiary)
Total amount of guarantee (A+B) 5,683,123,459.34 Proportion of total guarantee amount in net assets of the 28.85 Company (%) Including: Amount of guarantee for shareholders, actual controllers 0 and related parties (C) Amount of debt guarantee directly or indirectly provided for guaranteed parties whose assets-liability ratio excess 0 70% (D) Amount that the guarantee amount excess 50% of the net 0 assets (E) Total amount of the afore listed three guarantees (C+D+E) 0
(III) Other significant contract The Company has no other significant contract in the year.
VIII. Implementation of commitments
(I) Commitments from Listed Company, shareholders (with over 5% shares held), controlling shareholder and actual controller in or continued to reporting period
Explain Well-explai Perform further Commitm Committ Owes ned reasons Commitm ed on plan if the ent Commitm Commitm ed time performan for ent time commitme backgroun ent pattern ent content or ce term incompletio acceptor strictly nt d duration (Y/N) n of (Y/N) uncomplet commitment ed on time
Relevant Solve the Inner In 2012-7-1 Not Not N Y commitme horizontal Mongolia Prospectus 2 applicable applicable
50 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
nt with competitio Yitai Coal of H-share refinancin n Company offering, g Limited the concerned Company disclosed that the fund raised from H-share placement will purchase the five coal mines and relevant coal assets and coal business owned by INNER MONGOL IA YITAI GROUP CO., LTD., controlling shareholde r of the Company, with purpose of solve the horizontal competitio n and related transaction with Yitai Group Being disclosed in Prospectus of H-share offering, the Inner Company Mongolia will 2012-7-1 Not Not Dividend Yitai Coal distribute Y Y 2 applicable applicable Company not less Limited than 30% of the distributab le profits after fiscal year of 2012 and 2013
51 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
IX. Appointment and unemployment of CPA
Unit: ten thousand yuan Currency: CNY Re-appointed accounting firms (Y/N): N Current appointment Name of domestic accounting firm Dahua Certified Public Accountants (LLP) Remuneration for domestic accounting firm 150 Auditing years for domestic accounting firm 2 Name of overseas accounting firm Ernst & Young CPA Remuneration for overseas accounting firm 150 Auditing years for overseas accounting firm 2
Name Remuneration
Audit accounting firm for internal Dahua Certified Public Accountants (LLP) 75 control
X. Penalty and rectification for listed company as well as its directors, supervisors, senior executives, shareholders with over 5 percent shares-held, actual controller and purchaser In reporting period, the Company as well as its directors, supervisors, senior executives, shareholders with over 5 percent shares-held, actual controller and purchaser have no inspection, administrative penalty and criticism circulation from the CSRC and public censure from Security Exchange either
XI. Other significant issues and subsequent issues 1. On 23 February 2012, the proposal on investment on establishment of Yitai Xinjiang Energy Co., Ltd. (hereinafter referred to as Yitai Xinjiang Energy) was considered and approved at the 5th meeting of the 5th session of the board. In order to develop coals in Heishan mine of Xinjiang and construct CTL project in Ganquanbao Industry Park, accelerate cooperation, strengthen coal industry and create more economic benefits, the Company established Yitai Xinjiang Energy Co., Ltd. with joint investment from Yitai Group Company. The registered capital of the company was 100 million yuan, among which, 90 million yuan was contributed by the Company accounting for 90% of the registered capital and 10 million yuan was contributed by Yitai Group Company accounting for 10% of the registered capital. The major operation scope covered production and sales of coal chemical products, consultant services in respect of coal chemical technology and coal technology. As determined by the entire shareholders of Yitai Xinjiang Energy, principal of 50 million yuan was added to registered capital of Yitai Xinjiang Energy, among which, 45.2 million yuan and 4.8 million yuan were contributed by Inner Mongolia Yitai Coal Co., Ltd. and Inner Mongolia Yitai Group Co., Ltd. respectively. Upon completion of such capital increase, the registered capital increased to 150 million yuan, among which, 135.3 million yuan was contributed by Inner Mongolia Yitai Coal Co., Ltd. accounting for 90.2% of the registered capital and 14.7 million yuan was contributed by Yitai Group
52 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Co., Ltd. accounting for 9.8% of the registered capital. Currently, business and commercial registration is being processed in respect of the capital increase issue.
2. On 13 March 2012, the Company established Yitai Ili Mine Co., Ltd. (hereinafter referred to as Yitai Ili Mine) with joint contribution from Inner Mongolia Yitai Group Co., Ltd. The registered capital of the company was 50 million yuan, among which, 45 million yuan was contributed by the Company accounting for 90% of the registered capital and 5 million yuan was contributed by Inner Mongolia Yitai Group Company accounting for 10% of the registered capital. The registered office was Yinan Industry Park in Qapqal County and operation scope covered investment on coal exploration. As determined by the entire shareholders of Yitai Ili Mine, principal of 50 million yuan was added to registered capital of Yitai Ili Mine, among which, 45.2 million yuan and 4.8 million yuan were contributed by Inner Mongolia Yitai Coal Co., Ltd. and Inner Mongolia Yitai Group Co., Ltd. Respectively. Upon completion of such capital increase, the registered capital increased to 100 million yuan, among which, 90.2 million yuan was contributed by Inner Mongolia Yitai Coal Co., Ltd. accounting for 90.2% of the registered capital and 9.8 million yuan was contributed by Inner Mongolia Yitai Group Co., Ltd. accounting for 9.8% of the registered capital. Business and commercial registration in respect of the capital increase has been completed on 26 February 2013.
3. The controlling shareholder of the Company Inner Mongolia Yitai Group planned to increase holding of the Shares within six months since 11 June 2012 at a price not exceeding US$ 7 per share through the securities trading system of Shanghai Stock Exchange by Yitai Hong Kong based on market situations. In detail, the investment amount shall not exceed US$ 512.4 million and the accumulative increased shareholding proportion shall not exceed 5% of the total share capital of the Company. As at 10 December 2012, Yitai Group has increased 65,080,000 B shares of the Company through Yitai Hong Kong, with the increased holding proportion representing 4% of the total share capital of 1,627,003,500 shares upon the completion of issuance and listing of H shares and exercise of over-allotment option. As at the end of the reporting period, Yitai Hong Kong accumulatively held 144,810,000 B shares of the Company, representing 8.90% of the total share capital of 1,627,003,500 shares upon the completion of issuance and listing of H shares and exercise of over-allotment option.
4. Due to adjustment in operation policy and investment plan of the Company, the wholly owned subsidiary Yitai Hami Energy Co., Ltd. held general meeting on 8 June 2012 to consider and approve the settlement report of Yitai Hami Energy Co., Ltd.. As at the end of the reporting period, Yitai Hami Energy Co., Ltd. was deregistered and completed business and commercial deregistration.
5. Due to adjustment in operation policy and investment plan of the Company, the wholly owned
53 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 subsidiary Yitai Xinjiang Zhundong Energy Co., Ltd. held general meeting on 8 June 2012 to consider and approve the settlement report of Yitai Xinjiang Zhundong Energy Co., Ltd.. As at the end of the reporting period, Yitai Xinjiang Zhundong Energy Co., Ltd. was deregistered and completed business and commercial deregistration.
6. On 23 July 2012, the Company set wholly-owned subsidiary Yitai Energy (Shanghai) Co., Ltd. with registered capital of 50 million yuan. The operation scope covered technology development, technology transfer, technology consultation, technology service concerning energy technology area, wholesale operation of coals, transportation agency of domestic goods as well as import and export of goods and technologies.
7. On 12 July 2012, as authorized by Hong Kong Stock Exchange, 162,667,000 H shares issued by the Company were listed on the main board of Hong Kong Stock Exchange and started trading. The abbreviation of the H share was Yitai Coal with stock code of 03948. As at 3 August 2012, the Company over-allotted 336,500 H shares. Upon issuance and over-allotment of H shares, the public float of H shares accounted for 10.02% of the total issued share capital of the Company. As at the disclosure date of this report, the total share capital of the Company was 1,627,003,500 shares.
8. On 26 July 2012, the proposal on joint investment on establishment of Mengxi Huazhong Railway Co., Ltd. with other 15 enterprises was considered and approved at the 11th meeting of the 5th session of the board. The registered capital of the company was one billion yuan, among which, 100 million yuan was contributed by the Company, representing 10% of the total share capital of the company.
9. Yitai Pharmatech Co., Ltd. is the controlling subsidiary of Inner Mongolia Yitai Pharmaceuticals Co., Ltd. which is the wholly owned subsidiary of the Company. Inner Mongolia Yitai Pharmaceuticals Co., Ltd. holds 51% equity interests of Yitai Pharmatech Co., Ltd. On 24 July 2012, the Company entered into equity transfer agreement with Inner Mongolia Yitai Pharmaceuticals Co., Ltd., pursuant to which, the Company transferred 51% equity interests of Yitai Pharmatech Co., Ltd. held by Inner Mongolia Yitai Pharmaceuticals Co., Ltd. at consideration of 5.10 million yuan. As at 31 July 2012, such equity transfer completed business and commercial registration. On 11 September 2012, Yitai Pharmatech Co., Ltd. held general meeting to agree increase of registered capital from 10 million yuan to 24.75 million yuan. Pursuant to the resolution, the additional registered capital of 14.75 million yuan shall be contributed by the Company in monetary way. After the capital increase, the Company holds 80.2% equity interests of Yitai Pharmatech Co., Ltd.
10. Beijing Yitai Biological Technology Co., Ltd. is the controlling subsidiary of Inner Mongolia Yitai
54 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Pharmaceuticals Co., Ltd. which is the wholly owned subsidiary of the Company. Inner Mongolia Yitai Pharmaceuticals Co., Ltd. holds 100% equity interests of Beijing Yitai Biological Technology Co., Ltd. On 20 July 2012, the Company entered into equity transfer agreement with Inner Mongolia Yitai Pharmaceuticals Co., Ltd., pursuant to which, the Company transferred 100% equity interests of Beijing Yitai Biological Technology Co., Ltd. held by Inner Mongolia Yitai Pharmaceuticals Co., Ltd. at consideration of 10 million yuan. As at 2 August 2012, such equity transfer completed business and commercial registration.
11. On 8 August 2012, the proposal on transfer of certain equity interests of Inner Mongolia Yitai Pharmaceuticals Co., Ltd. was considered and approved at the 12th meeting of the 5th session of the board. The Company signed equity transfer agreement in respect of Inner Mongolia Yitai Pharmaceuticals Co., Ltd. between Inner Mongolia Yitai Coal Co., Ltd. and Zhejiang CONBA Pharmaceuticals Co., Ltd. On 8 August, to transfer 88% equity interests of Inner Mongolia Yitai Pharmaceuticals Co., Ltd. held by the Company to Zhejiang CONBA Pharmaceuticals Co., Ltd at a consideration of 200 million yuan. Upon completion of equity transfer, the Company holds 12% equity interests of Inner Mongolia Yitai Pharmaceuticals Co., Ltd. Meanwhile, according to its shareholders’ decision, Inner Mongolia Yitai Pharmaceuticals Co., Ltd. decided to change its name as Inner Mongolia CONBA Pharmaceuticals Co., Ltd. Such changes of equity and company name have finished registration on 5 September 2012.
12. In order to promote construction of Shendong large coal base, so as to improve supply capability of Shendong coal base, adjust coal industrial structure and promote local economic development, Talahao coal mine and coal preparation plant in Wanli mining area of Inner Mongolia invested by the Company were authorized by the NDRC on 26 September 2012 by issuance of the document regarding to approval on Talahao coal mine and coal preparation plant in Wanli mining area of Inner Mongolia by NDRC (FGNY2012 No.3049), pursuant to which, the authorized construction scale was 6,000,000 tons per year, which was the same for the scale of the matching coal preparation plant. The total investment amount was 2.127 billion yuan (excluding that for mining rights). Talahao coal mine special railway invested by the Company was authorized by the NDRC office of Inner Mongolia on 3 September 2012 by issuance of the document regarding to approval on Talahao coal mine special railway(NFGTLZ2012 No.1994). The official line of such railway is 29.6 kilometers with construction of matching container station. The total investment amount was 1.393 billion yuan.
13. Fine chemicals demonstration project with capacity of 1,200,000 tones per year invested by the wholly owned subsidiary of the Company Inner Mongolia Yitai Chemicals Co., Ltd. received from the NDRC office of Inner Mongolia the reply letter on filing for fine chemicals demonstration project
55 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 with capacity of 1,200,000 tones per year of Inner Mongolia Yitai Chemicals Co., Ltd. on 30 October 2012 (NFGCYZ2012 No.2431), to agree such filing. The project was located at Duguitala industry park, Hangjin of Erdos. Construction scale was 1,200,000 tons of fine chemicals per year, and the investment amount was 19,187,260,000 yuan.
14. On 15 October 2012, the proposal on issuance of medium term note (MTN) was considered and approved at the 1st extraordinary shareholders’ general meeting of 2012, to agree the Company to publicly issue such MTN with amount not exceeding RMB3.5 billion in inter-bank bonds market. On 11 December 2012, China Inter-bank Market Transaction Association released Notification of Registration Acceptance (ZSXZ2012 No.MTN403) to accept MTN registration of the Company with registration amount of 3.5 billion yuan. The term of first batch of MTN in 2012 was 5 years with coupon rate of 5.53% and total issuance amount of one billion yuan. As at 4 January 2013, the Company completed issuance of the first batch of MTN in 2012, and the raised capital proceeds of one billion yuan has been accounted in full on 25 December 2012.
15. Kaida mine industrial upgrade project of the Company received from the NDRC office of Inner Mongolia the reply letter regarding to authorization of Kaida mine industrial upgrade project of Inner Mongolia Yitai Coal Co., Ltd. (NFGNYZ2012 No.2923) on 28 December 2012, to approve construction of Kaida mine industrial upgrade project which was located at Yangshita town, Jungar Banner, Erdos, Inner Mongolia. The production capability of the upgraded mine reaches at 1,500,000 tons per year. The total investment amount of the project amounted to 447.3 million yuan, and the project capital accounted for 30% of the total investment.
16. The Company established wholly owned subsidiary Yitai Yanxi (Beijing) International Trade Co., Ltd. On 4 January 2013, with registered capital of 50 million yuan. The operation scope covered sales of machinery equipments, import & export of goods, technology and agency; scientific development, consultation, transfer and service of technology.
17. Erdos Lianke Clean Energy Technology Coo., Ltd. (hereinafter referred to as Lianke Clean Energy Company) is a stake-holding subsidiary of the Company’s controlling subsidiary Inner Mongolia Yitai CTO Co., Ltd., with registered capital of 150 million yuan. Yitai CTO Co., Ltd. Holds 20% equity interests of the company; SYNFUELS CHINA holds 30% and other three shareholder enterprises hold 50%. On 20 August 2012, Lianke Clean Energy Company held general meeting and approved the resolution of equity transfer. Pursuant to such resolution, 20% and 50% equity interests of Lianke Clean Energy Company held respectively by Yitai CTO Co., Ltd. and other three shareholder enterprises were transferred to SYNFUELS CHINA at transfer price of 1 yuan per share. During the
56 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 reporting period, such equity transfer completed business and commercial registration.
18. Yitai Ili Energy Co., Ltd. (hereinafter referred to as Yitai Ili Energy) is controlling subsidiary of Inner Mongolia Yitai Coal Co., Ltd., with registered capital of 100 million yuan, and Inner Mongolia Yitai Coal Co., Ltd. holds 100% shares of the company. As determined by shareholders of Yitai Ili Energy, additional registered capital of 50 million yuan is made for Yitai Ili Energy, among which, 45.2 million yuan is contributed by Inner Mongolia Yitai Coal Co., Ltd. and 4.8 million yuan is contributed by Inner Mongolia Yitai Group Co., Ltd. Upon completion of capital increase, the registered capital of Yitai Ili Energy is 150 million yuan, among which, 135.3 million yuan is contributed by Inner Mongolia Yitai Coal Co., Ltd, representing 90.2% of the total share capital of the company; 14.7 million yuan is contributed by Inner Mongolia Yitai Group Co., Ltd., representing 9.8% of the total share capital of the company. Business and commercial registration in respect of this issue was completed on 26 February 2013.
19. The controlling shareholder of the Company Inner Mongolia Yitai Group Co., Ltd. received from the NDRC the reply letter on authorization of Hongqinghe coal mine project in Xinjie mining area of Inner Mongolia on 18 February 2013, to approve Inner Mongolia Yitai Guanglian Coalification Co., Ltd. to construct Hongqinghe coal mine and matching coal washery plant. The mine scale is 15,000,000 tons per year, total investment amount is 6.051 billion yuan, among which, capital 1.816 billion yuan accounts for 30% of the total investment.
57 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section VIII. Changes in Shares and Particular About Shareholders
I. Changes in shares (I) Statement of changes in shares 1. Statement of changes in shares Unit: Share
Increase/decrease of this Before this change After this change change(+,-)
Proportion Proporti Amount New issued Subtotal Amount (%) on (%) I. Shares with restricted sale condition 1. State-owned shares 2. State-owned corporate shares 3. Other domestic 800,000,000 54.64 800,000,000 49.17 shares Including: Domestic non-state-owned corporate shares Domestic nature person 4. Foreign shares Including: Foreign corporate shares Oversea nature person shares II. Tradable shares without restricted sale condition 1. RMB ordinary shares 2. Domestically listed foreign 664,000,000 45.36 664,000,000 40.81 shares 3. Overseas listed 0 0 163,003,500 163,003,500 163,003,500 10.02 foreign shares 4. Other
III. Total shares 1,464,000,000 100.00 1,627,003,500 100.00
2. Explanation on changes of shares The Company offered 162,667,000 shares H-share dated 12th July 2012, and additional 336,500 shares H-share were issued on 8th August 2012 according to the overallotment option. The above offering has 163,003,500 H-share in total; up to the disclosure date of the Report, total shares of the Company
58 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
amounting to 1,627,003,500 shares. 3. Impact on financial index of latest years’ and latest period’s EPS and Net Assets Per Share from changes of shares EPS of the Company for year of 2011 was 3.75 yuan and net assets per share attributable to shareholders of listed company at end of 2011 were 11.51 yuan. Total share capital of the Company has 163,003,500 shares increased after additional shares issued in 2012, restatement EPS for year of 2011 was 5.27 yuan based on the weighted calculation of 1,540,787,716.44 after total shares changed, the restatement net assets per share attributable to shareholders of listed company at end of 2011 was 11.59 yuan. (II) Changes of restricted shares Restricted shares of the Company has no change in reporting period (III) Any listed shares of the Company been purchased, sold or redemption Any listed shares of the Company have not been purchased, sold or redemption by the Group and associated undertaking during period ended as reporting period since listed. II. Security issuance and listing (I) Previous security issuance in latest three years ended as reporting period Unit: Share Currency: HKD Category of Issuance Quantity Transacti stock and its price (or Issuance authorized for on Issuance date Listing date derivative interest volume listing and terminati securities rate) trading on date
H share 2012-7-12 43 16,266,700 2012-7-12 16,266,700
H share (exercise of over-allotme 2012-8-3 43 336,500 2012-8-8 336,500 nt option in part)
On 12 July 2012, as authorized by Hong Kong Stock Exchange, 162,667,000 H shares issued by the Company were listed on the main board of Hong Kong Stock Exchange and started trading. The issuance price for each H share was HK$ 43.00. The abbreviation of the H share was ―伊泰煤炭‖ (in Chinese) and ―Yitai Coal‖ (in English) with stock code of 03948. On 3 August 2012, the Company exercised over-allotment option, to issue additional 336,500 H shares. For this over-allotment, each H share was allotted at price of HK$ 43.00 (excluding 1% brokerage commissions, 0.003% SFC trading charges and 0.005% Hong Kong Stock Exchange trading fee ). The over-allotted shares were traded on main board of Hong Kong Stock Exchange since 09:00 a.m. on 8 August 2012.
(II)Change of total shares and shareholder structure and change of assets and liabilities structure
59 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Upon issuance of H shares, the total share capital of the Company is 1,627,003,500 shares which comprises of 80,000,000 non-tradable shares (representing 49.17% of the share capital of the Company), 664,000,000 domestic listed foreign shares (B share) (representing 40.81% of the total share capital of the Company), and 163,003,500 overseas listed foreign shares (H share) (representing 10.02% of the total share capital of the Company).
On 31 December 2011, the debt asset ratio was 36.11%. As a 31 December 2012, the debt asset ratio was 46.97% since the H shares of the Company were issued and listed on 12 July 2012, representing an increase of 10.86 percentage points as compared to previous year.
(III) Existing internal staff shares The Company has no existing internal staff shares at period-end III. Shareholders and actual controller (I) Number of shareholders and share-holding In Share Total shareholders ended as the 5th trading day Total shareholders ended as reporting period 83,973 84,057 before annual report disclosed Share-holding of top ten shareholders Proportio Number of Amount of Nature of n of Total +,- in share Name of shareholders restrict shareholder shares shares held period pledged or shares held held (%) frozen INNER MONGOLIA Domestic 800,000,00 YITAI GROUP CO., non-state-owne 49.17 0 N/A 0 LTD. d corporate HKSCC NOMINEES Foreign 162,958,50 162,958,50 Unknow 10.016 LIMITED corporate 0 0 n
Yitai (Group) H.K. Foreign 144,810,00 8.90 65,080,000 N/A Company Limited corporate 0 FTIF TEMPLETON Foreign Unknow ASIAN GROWTH FUND 2.28 37,030,724 568,799 corporate n 5496 SCBHK A/C BBH S/A VANGUARD EMERGING Foreign Unknow 0.70 11,418,466 1,508,011 MARKETS STOCK corporate n
INDEX FUND GUOTAI JUNAN Foreign Unknow SECURITIES(HONGKON 0.56 9,063,571 -11,192,815 corporate n G) LIMITED ABU DHABI Foreign Unknow INVESTMENT 0.43 7,034,357 1,821,154 corporate n AUTHORITY SCBHK A/C GOVERNMENT OF Foreign Unknow SINGAPORE 0.34 5,462,143 -930,179 corporate n INVESTMENT CORPORATION - A/C "C" SCBHK A/C IBT S/A Foreign Unknow 0.31 5,011,052 1,803,820 ISHARES MSCI corporate n
60 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
EMERGING MARKETS INDEX FUND China Merchants Securities Foreign Unknow 0.31 4,990,151 -7,242,463 H.K. Co., Ltd. corporate n
Particular about top ten shareholders with un-restrict shares held Amount of un-restricted Name of shareholders Type and amount of shares held shares held Overseas HKSCC NOMINEES LIMITED 162,958,500 listed foreign 162,958,500 share
Domestic Yitai (Group) H.K. Company Limited 144,810,000 listed foreign 144,810,000 shares
Domestic FTIF TEMPLETON ASIAN GROWTH FUND 5496 37,030,724 listed foreign 37,030,724 shares
Domestic SCBHK A/C BBH S/A VANGUARD EMERGING 11,418,466 listed foreign 11,418,466 MARKETS STOCK INDEX FUND shares
Domestic GUOTAI JUNAN SECURITIES(HONGKONG) 9,063,571 listed foreign 9,063,571 LIMITED shares
Domestic ABU DHABI INVESTMENT AUTHORITY 7,034,357 listed foreign 7,034,357 shares
Domestic SCBHK A/C GOVERNMENT OF SINGAPORE 5,462,143 listed foreign 5,462,143 INVESTMENT CORPORATION - A/C "C" shares
Domestic SCBHK A/C IBT S/A ISHARES MSCI 5,011,052 listed foreign 5,011,052 EMERGING MARKETS INDEX FUND shares
Domestic China Merchants Securities H.K. Co., Ltd. 4,990,151 listed foreign 4,990,151 shares
Domestic BLACKROCK INSTITUTIONAL TRUST 4,762,778 listed foreign 4,762,778 COMPANY, N.A. shares
Among the top ten shareholders, Yitai (Group) H.K. Company Limited is the wholly-owned subsidiary of domestic Explanation on associated relations and corporation shareholder INNER MONGOLIA YITAI GROUP concerted actions of the above shareholders CO., LTD. It is unknown to the Company whether the other holders of foreign capital shares have associative relations or not and whether they are concerted actors or not. IV. Controlling shareholder and actual controller (I) Controlling shareholder
1. Corporation Unit: RMB Currency: CNY Name INNER MONGOLIA YITAI GROUP CO., LTD. Legal rep. or person in charge of unit Zhang Shuangwang Date established 1999-10-27 Organization code 11693188-6 Register capital 1,250,000,000.00 Raw coal production; processing, transportation and sales of raw coals; railroading and railway transportation; import Main business business of mining equipment, spare parts and technology; highway construction and operation; sales of coal chemical
61 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
products and coalification products; crop farming and cultivation industry.
(II) Actual controller
1. Corporation Unit: RMB Currency: CNY Name Inner Mongolia Yitai Investment Co., Ltd. Legal rep. or person in charge of unit Zhang Shuangwang Date established 2005-12-2 Organization code 78705310-5 Register capital 720,495,144.00 Main business Investment in energy industry and railway construction 2. Property right and controlling relationship between the actual controller and the Company
31 Individuals 100%
Other Four Shareholders Yitai Investment 0.456% 99.554%
B Shares Yitai Group Shareholders of H Shares 40.81% 49.17% 10.02%
Other Public Holders of B Yitai HK Shares 31.91% 8.9%
Yitai Coal
Note: shareholder of INNER MONGOLIA YITAI GROUP CO., LTD.—controlling shareholder of the Company, with 0.08% shares held was changed name from former ―Inner Mongolia Man Shi Coal Transport Co., Ltd.‖ to ―Inner Mongolia Man Shi Group Co., Ltd.‖
(III)other particulars about controlling shareholder and actual controller Inner Mongolia Yitai Group Co., Ltd. holds 800,000,000 shares of the Company, representing 49.17% of the total share capital of the Company. On 26 December 2011, Inner Mongolia Yitai Group Co., Ltd. changed its registered capital from the original 545.7 million yuan to 1,250 million yuan, with the increased 704.3 million yuan all contributed by Inner Mongolia Yitai Investment Co., Ltd. Upon change of registered capital, the shareholding proportion of Inner Mongolia Yitai Group Co., Ltd. was as follows: Inner Mongolia Yitai Investment Co., Ltd. holding shares on behalf of Group employees contributed 1,244.3 million yuan, accounting for 99.544%; Inner Mongolia Peak Enterprise Group Co.,
62 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Ltd contributed 2 million yuan, accounting for 0.16%; Inner Mongolia Ximeng Kegongmao Group Co., Ltd contributed 1.2 million yuan, accounting for 0.096%; Inner Mongolia Manshi Coal Group Co., Ltd contributed one million yuan, accounting for 0.08%; Erdos Tongjiu Materials Co., Ltd contributed 1.5 million yuan, accounting for 0.12%. The company assumed limited liability. Its operation scope covers: raw coal production; processing, transportation and sales of raw coal; railway construction and transportation of goods through railway; import business of mine equipments, components and technology; road construction and operation; sales of coal chemicals; planting as well as breeding. The legal representative: Zhang Shuangwang. Registered office: Liuzhongnan, Jiefang area, No.14 of Yimei road south, Dongsheng district, Erdos. Shares held by the company are not pledged or frozen.
V. Other corporate shareholders with over ten percent shares-held Up to end of reporting period, the Company has no other corporate shareholders with over ten percent shares-held except HKSCC Nominees Limited. HKSCC Nominees is a private company with main business of holding shares on behalf of other companies or person.
VI. Interests of shares and relevant stocks owned by main shareholders On 31st December 2012, as know as Directors and Supervisors of the Company or chief executive, interest or short position of the shares of the Company or relevant stocks held by the followed person or corporation (except Director and Supervisor of the Company or chief executive), which were discloseable in Register of Interest under Rule 336 of Securities and Futures Ordinance or should be notified the Company: Long Ratio of Ratio in Stock position/ shares total shares Name of shareholders Interest type Number of shares category short issued issued position (%)3,4 (%)3,4 Atlantis Capital Holdings H-Share Controlled Long Limited incorporation 9,016,800 5.54 0.55 position equity
China Datang H- Share Controlled Long Corporation incorporation 18,031,100 11.08 1.10 position equity
Credit Suisse AG H- Share Controlled Long incorporation 24,400,000 15.00 1.49 position equity Short 24,400,000 15.00 1.49 position
Credit Suisse (Hong H- Share Equity held Long Kong) Limited with other 24,400,000 15.00 1.49 position person Short 24,400,000 15.00 1.49 position
63 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Datang International H- Share Beneficial Long 18,031,100 11.08 1.10 (H.K.) Co., Ltd. owner position
Datang International H- Share Controlled Long Power Generation Co., incorporation 18,031,100 11.08 1.10 position Ltd. equity
Great Huazhong Energy H- Share Beneficial Long Co. Ltd 13,584,000 8.35 0.83 owner position
INNER MONGOLIA Non overseas Beneficial YITAI GROUP CO., listed foreign owner / Long LTD. share Controlled 944,810,000 1 64.53 58.07 position incorporation equity
Inner Mongolia Yitai Non overseas Controlled Long Investment Co., Ltd. listed foreign incorporation 944,810,000 2 64.53 58.07 position share equity
Liu Yang H- Share Controlled Long incorporation 9,016,800 5.54 0.55 position equity
Poseidon Sports Limited H- Share Beneficial Long 10,000,000 6.15 0.61 owner position
Reignwood International H- Share Controlled Long Investment (Group) incorporation 9,015,500 5.54 0.55 position Company Limited equity
Yitai (Group) H.K. Non overseas Beneficial Long Company Limited listed foreign 144,810,000 9.89 8.90 owner position share
Inner Mongolia Man Shi H- Share Beneficial Long Investment Group Co., 14,160,500 8.70 0.87 owner position Ltd
Inner Mongolia Erdos H- Share Investment Holding Beneficial Long 13,561,300 8.33 0.83 Group Co., Ltd. owner position
Erdos Wanzheng H- Share Beneficial Long Construction 14,160,500 8.70 0.87 owner position Engineering Co., Ltd. Erdos Hongrui H- Share Beneficial Long Commerce & Trading 13,584,000 8.35 0.83 owner position Co., Ltd.
CITIC Mezzanine H- Share (Shanghai) Investment Beneficial Long 8,771,600 5.39 0.53 Center (LP) owner position
Notes: 1. Inner Mongolia Yitai Group Co., Ltd. holds the entire issued share capital of Yitai (Group) Hong
64 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Kong Co., Ltd., thus it is deemed to be interested in all the 144,810,000 shares held by Yitai (Group) Hong Kong Co., Ltd. Inner Mongolia Yitai Group Co., Ltd. directly holds 800,000,000 domestic shares. 2. Inner Mongolia Yitai Investment Co., Ltd. holds 99.54% of the registered capital of Inner Mongolia Yitai Group Co., Ltd., thus it is deemed to be interested in all the 944,810,000 shares held by Inner Mongolia Yitai Group Co., Ltd. directly or indirectly. 3. According to the Articles of association, the Company owned two types of shares, including(i)non-overseas listed shares(including domestic share and B share); and (ii)H share. 4. The shareholding percentage is rounded to maintain two decimal places. Other than those as disclosed above, as at 31 December 2012, there is no such person (other than directors and supervisors of the Company whose interests have been disclosed in the section headed interests and short positions owned by directors, supervisors and executive officers in shares and underlying shares) owning interests or short positions in the shares or underlying shares of the Company which should be recorded in the registrar as required to be maintained by the Company under Rule 336 of SFO.
65 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section IX. Particulars about Directors, Supervisors and Senior Executives and Employees I. Changes of shares held by directors, supervisors and senior executives as well as their remuneration, who leave the office or currently in office In Share Total payable Total payable remuneration remuneration Start dated received from the received from End date of Title Sex Age of office Company in shareholders’ unit Name office term term reporting period in reporting period (in 10 thousand (in 10 thousand yuan) (Pre-tax) yuan) Zhang Chairman M 42 2011-2-18 2014-2-17 246.64 1.8 Donghai Executive Ge Yaoyong M 42 2011-2-18 2014-2-17 121.75 1.8 Director, GM Executive Liu Chunlin M 46 2011-2-18 2014-2-17 169.12 1.8 Director Zhang Executive M 42 2011-2-18 2014-2-17 109.76 1.8 Dongsheng Director Executive Director, Kang Zhi M 54 2011-2-18 2014-2-17 105.81 0 Deputy Manager Executive Zhang Director, M 48 2011-2-18 2014-2-17 118.77 0 Xinrong Deputy Manager Executive Lv Guiliang Director, M 47 2011-2-18 2014-2-17 79.02 0 CFO Xie Independent M 50 2011-2-18 2013-6-11 7.67 0 Xianghua Director Independent Lian Junhai M 45 2011-2-18 2013-11-22 7.67 0 Director Song Independent F 59 2011-2-18 2014-2-17 7.67 0 Jianzhong Director Tan Independent M 50 2011-2-18 2014-2-17 15.33 0 Guoming Director Chairman of the Li Wenshan M 50 2011-2-18 2014-2-17 102.72 0.96 Supervisory Committee Zhang Supervisor M 50 2012-10-15 2014-2-17 12.32 64.47 Guisheng Han Supervisor M 49 2011-2-18 2014-2-17 26.42 0 Zhanchun Wang Supervisor M 39 2011-2-18 2014-2-17 33.86 0 Sanmin Ji Zhifu Supervisor M 29 2011-2-18 2014-2-17 31.32 0 Wang Independent M 50 2011-2-18 2014-2-17 4 0 Yongliang Director Independent Wu Qu M 48 2011-2-18 2014-2-17 4 0 Director Ji Yongqiang Deputy GM M 54 2011-2-18 2014-2-17 84 0
66 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Liu Jian Deputy GM M 46 2012-12-21 2014-2-17 3.6 0 Zhang Chief M 44 2012-10-15 2014-2-17 64.72 0 Mingliang Engineer GM, Lian Tao Secretary of M 36 2012-9-24 2014-2-17 30 12.04 the Board Total / / / / / 1,386.17 84.67
Zhang Donghai: appointed as executive director of the Company since March 2001 and Chairman of the board since April 2003. Mr. Zhang is mainly responsible for determining the overall corporate strategy, planning and business development, and plays an important role in supervising operation and management of the Company. He owns 20 years experiences in corporate management in mining industry, during which, he accumulates substantial knowledge concerning mining industry. Mr. Zhang takes the role as director of Yitai Group since December 2001 till now, and holds the post of general manager of Yitai Group since June 2004 till now. Mr. Zhang joined Yike Zhaomeng Coal Corporation (predecessor of Yitai Coal Group) in April 1990 and joined the Company in July 1999. From March 2001 to November 2008, he worked as general manager of the Company; from April 2003 to June 2004, he took role as deputy general manager of Yitai Group; July 1999 to February 2001, as deputy general manager of the Company; May 1994 to June 1999, as deputy director, director, vice secretary of operation department and deputy manager of operation branch of the Beijing office of Inner Mongolia Yike Zhaomeng Coal Group (predecessor of Yitai Coal Group). Mr. Zhang graduated Fordham University in May 2005 for his MBA degree. In December 2003, he was appraised as senior economist by the personnel department of Inner Mongolia autonomous region. In May 2005, he was granted by Inner Mongolia Municipality and the State Council as model worker of Inner Mongolia autonomous region and national model worker respectively. Mr. Zhang is the son of Mr. Zhang Shuangwang. Mr. Zhang has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Ge Yaoyong: works as the executive director of the board and general manager of the Company since December 2008 and November 2008 respectively. Mr. Ge is mainly responsible for the daily management and operation of the Group and mine construction of the Company. He also works as director of Yitai Group since November 2008, and chairman of the board of Yitai Pharmaceuticals from January 2009 to June 2011. He joined Yitai Coal Group in April 1994 and the Company in March 2001. During the period, Mr. Ge accumulated lots of industrial knowledge and substantial management experiences in large coal enterprises. From August 2005 to November 2008 and from July 2000 to March 2001, he took the position of deputy general engineer of Yitai Group. From February 2006 to November 2008, he also worked as general manager of Yitai Guanglian. From
67 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
March 2001 to August 2005, Mr. Ge was deputy general manager of the Company. He worked as deputy head and head of coking plant in Eqian County from November 1996 to March 2001. Majoring in mining engineering, Mr. Ge graduated Shanxi Mining Institute in July 1991 with bachelor’s degree in engineering; he graduated from Tsinghua University in January 2010 with senior executive MBA degree. He was rated as senior engineer by personnel department of Inner Mongolia in September 2004. Mr. Ge has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Liu Chunlin: works as executive director of the board since May 2004 and director and general accountant of Yitai Group since June 2004. Mr. Liu owns lots of accounting and capital management experiences. He joined Yike Zhaomeng Coal Corporation (predecessor of Yitai Coal Group) in June 1989 and the Company in August 1997. He has ever worked as chairman of the board of Inner Mongolia Yitai Real Estate Co., Ltd from April 2006 to March 2010, deputy general manager of the Company from May 2004 to October 2004, deputy general accountant from October 2002 to May 2004, and CFO of the Company from July 1999 to October 2002. Mr. Liu took the position of secretary to finance department of the Company from August 1997 to July 1999 and director of finance office of Yitai Group from February 1993 to August 1997. By virtue of working for coal industry and finance department for so many years, he accumulated abundant knowledge in coal industry and professional experiences in enterprise finance. Mr. Liu graduated Inner Mongolia University in July 2003 with bachelor’s degree (correspondence student ) and graduated from Tsinghua University in 2010 with senior executive MBA degree. He was rated as senior accountant by personnel department of Inner Mongolia in July 2001. Mr. Liu has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Zhang Dongsheng: works as executive director of the board since May 2009. He is mainly responsible for construction and operation of the various railways of the Group. Being director of Yitai Group, Mr. Zhang takes position of chairman of the board of Yitai Zhundong since November 2008, and general manager and chairman of the board of Yitai Huzhun respectively since November 2007 and July 2009. He joined Yike Zhaomeng Coal Corporation (predecessor of Yitai Coal Group) in October 1989 and the Company in January 2002, during which, he has obtained lots of experiences in transportation and sales of coals and railway construction and management. From August 2005 to November 2008, he has ever worked as deputy general manager and general manager of Yitai Zhundong respectively; from January 2002 to July 2005, he was secretary to operation department of the Company. Mr. Zhang also took other management positions in Yitai Coal Group and Yitai Group. He graduated from Beijing Jiaotong University in June 2008 with MBA degree. And he was rated as business logistic
68 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 economist by the ministry of personnel and senior economist by human resources department of Inner Mongolia respectively in June 1995 and September 2004. Furthermore, Labor and Social Security Bureau of Inner Mongolia autonomous region and China Coal Industry Association granted Mr. Zhang qualifications of operation manager and China coal professional manager respectively in March 2006 and September 2007. Mr. Zhang is the nephew of Mr. Zhang Shuangwang. Mr. Zhang has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Kang Zhi: appointed as executive director of the Company in February 2011 and deputy general manager of the Company in March 2002. Mr. Kang is chairman of the board of Yitai Transportation and also manager of delivery business segment of the Company. Mr. Kang joined Yitai Coal Group in February 1992 and the Company in January 2001, during which, he was responsible for coal sales business of the Company which helped him to obtain substantial sales and marketing experiences. From November 2006 to February 2009, Mr. Kang worked as manager of coal marketing segment of the Company; from March 2001 to March 2002, deputy manager of operation segment of the Company; from August 2000 to February 2001, manager of Shanghai sales branch of operation branch of the Company; from 1997 to 2000, director of Shanghai representative office, assistant to manager of operation branch and deputy director of operation department of the Company. Mr. Kang graduated from Beijing Meteorological Institute in December 1988 obtaining associate degree (correspondence student ) and Beijing Technology and Business University in January 2007 majoring in accounting obtaining bachelor’s degree (correspondence student ). In May 1993 and June 1995, he was rated as intermediate engineer and intermediate economist by personnel department of Inner Mongolia respectively. Mr. Kang has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Zhang Xinrong: appointed as executive director of the Company in February 2011, deputy general manager in October 2004 and manager of coal production segment in November 2006. Mr. Zhang has been in charge of coal production management of the Company, during which, Mr. Zhang obtained lots of experiences in production operation management of coal enterprise. He joined Yike Zhaomeng Coal Corporation (predecessor of Yitai Coal Group) in February 1991 and the Company in March 1998. He now works as director of Yitai Baoshan and Yitai Tongda. From October 2002 to October 2004, he took position as assistant to general manager and standing deputy general manager of Inner Mongolia Yitai Biological High-tech Co., Ltd; from July 1999 to October 2002, he took roles of director of the quality inspection department, quality management department and enterprise management department respectively of the Company. Mr. Zhang graduated from China University of Geosciences in July 1986 with bachelor’s degree of science; graduated from China Coal Research
69 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Institute in July 2012 with doctor’s degree of science. He was rated as senior engineer by personnel department of Inner Mongolia in July 2001. Mr. Zhang has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Lv Guiliang: appointed as executive director of the Company in February 2011 and CFO of the Company in April 2008 responsible for finance management. Mr. Lv is also supervisor of Yitai Baoshan and Yitai Tongda. He jointed Yitai Coal Group in 1994 and the Company in August 1997, during which, he acquired lots of experiences in enterprise finance management. From March 2004 to February 2009, he worked as director of finance department of the Company; from November 2002 to March 2004, deputy director of finance office of Yitai Group; July 1999 to November 2002, deputy director of finance department of the Company. Mr. Lv graduated from China Party School Correspondence School in December 2008 with bachelor’s degree (correspondence student) and Huazhong University of Science and Technology in June 2011 with senior management MBA degree. He was rated as intermediate accountant by personnel department of Inner Mongolia in November 1993. Mr. Lv has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Xie Xianghua: appointed as independent non-executive director of the board since June 2007. Mr. Xie worked as a teacher in School of Continuing Education of Inner Mongolia University of Finance and Economics since 1984, and was recognize as professor in economy management by personnel bureau of Inner Mongolia in July 2005. Now he is the dean of Further-Education Institute of Inner Mongolia University of Finance. Mr. Xie is a senior enterprise consultant of China Enterprise Association, and a director of Inner Mongolia Enterprise Association and Inner Mongolia Entrepreneur Association. During his works, he accumulates lots of professional knowledge in finance and accounting. He joined the Company in 2007. In 1984, Mr. Xie graduated from Inner Mongolia University majoring in planning statistics with bachelor’s degree of economics. In December 2007, he obtained master’s degree in project management engineer from Inner Mongolia University of Technology.
Lian Junhai: appointed as independent non-executive director of the board since November 2007. He works as deputy general manager of Inner Mongolia Zhongtao Bailong Certified Public Accountants since February 2011. From 2006 to February 2011, Mr. Lian worked as vice principal of Inner Mongolia Zhengyu United Certified Public Accountants and deputy general manager of Inner Mongolia Zhengyu Construction Cost Consult Co., Ltd. He has ten years experiences in finance and accounting. From January 2002 to December 2005, he took position as project manager in Beijing Zhongtian Huazheng Certified Public Accountants; from November 1999 to December 2001, he worked in Inner Mongolia Guozheng Certified Public Accountants. He joined the Company in 2007.
70 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Mr. Lian graduated from Shanxi University of Finance and Economic in July 1993 with associate’s degree, and was qualified as certified public accountant by the ministry of finance in December 2003. Mr. Lian has not worked as director of other public listed company (other than the Company) during the three years prior to the latest practicable date.
Song Jianzhong: appointed as independent non-executive director of the board since August 2009. Mrs. Song now works for Inner Mongolia Jianzhong Law Firm and Renmin University of China, Tianjin University and Inner Mongolia University of Science and Technology as part-time professor in law. She established Inner Mongolia Jianzhong Law Firm in 1986. From 1980 to 1986, she held the posts of lawyer and vice director of Baotou Law Firm; from 1976 to 1980, she worked in People’s court of Kundulun district, Baotou. For consecutive 25 years, she assumes the office of law adviser for several large state-owned enterprises and listed companies. She joined the Company in 2009. In 1987, Mrs. Song graduated China University of Political Science and Law with associate’s degree (correspondence student) and Beijing University of Science and Technology in December 1993 with bachelor’s degree of laws. She acquired PRC lawyer qualification from Justice Department of Inner Mongolia in 2984 and studied Japanese civil and commercial law in Tokyo Lawyer Training Center in 1996. Mrs. Song was rated as senior lawyer by personnel department of Inner Mongolia in May 1990 and granted qualification of level one lawyer by such department in November 1998. She now is also independent non-executive director of Beijing Sanyuan Food Co., Ltd. (stock code:600429) and Tianjin Quanyechang (Group) Co., Ltd. (stock code:600821).
Tan Guoming: appointed as independent non-executive director of the board since February 2011, he is a permanent resident in Hong Kong. He has abundant experiences in audit for domestic B and H shares companies and Hong Kong listed companies. He was granted accounting certificate from Hong Kong Polytechnic University in 1993. Mr. Tan is a member of Hong Kong Institute of Certified Public Accountant which grants practicing certificate to him. Mr. Tan now is the partner of a Hong Kong accountant firm, and also he is independent non-executive director of Lijun International Group Holding Company (stock code: 8160) and China 3D Digital Entertainment Co., Ltd. (stock code: 8078).
Li Wenshan: appointed as chairman of the supervisory committee of the Company since December 2008. Also, he assumes the position of chairman of the supervisory committee of Yitai Group and Yitai CTO since November 2008. Mr. Li has substantial experiences in corporate management and corporate governance. Mr. Li joined Yike Zhaomeng Coal Corporation (predecessor of Yitai Coal Group) in September 1992 and the Company in August 1997. From July 1999 to December 2008, he worked as director of the Company; from August 2005 to November 2008 and from January 2002 to
71 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
March 2004, he worked as deputy general manager of the Company; from March 2004 to August 2005, deputy general manager and general manager of Yitai Zhundong; from August 1997 to January 2001, director of the securities department and enterprise management department of the Company. Mr. Li graduated from Inner Mongolia Institute of Finance and Economics in July 1987 with bachelor’s degree of economics, and was rated as intermediate economist by the personnel department of Inner Mongolia in November 2004. Mr. Li has not worked as director of other public listed company during the three years prior to the latest practicable date.
Zhang Guisheng: appointed as supervisor of the Company on 15 October 2012. He has substantial experiences in production operation management for coal enterprises. From February 1997 to April 1999, he worked as vice director of sales department of Industry Development Company; from April 1999 to September 1999, vice director of safety technology department of Industry Development Company; from September 1999 to February 2002, principal of Renchuanlong mine; from February 2002 to March 2006, principal of Nalinmiao mine; from March 2006 till now, principal of Dadijing mine. He graduated from Inner Mongolia University of Science and Technology with associate’s degree in machine and electricity integration in January 2009. In 1994, he was rated as intermediate engineer by Yimeng Title Reform Team. Mr. Zhang has not worked as director of other public listed company during the three years prior to the latest practicable date.
Han Zhanchun: appointed as supervisor of the Company since February 2011 and director of coal production segment since December 2010. Mr. Han has substantial experiences in finance and accounting. From March 2010 to December 2010, he worked as secretary of the finance department of the Company; April 2007 to March 2010, secretary of the finance department of Yitai Suancigou; August 2005 to April 2007, principal accountant of the finance department of Yitai Suancigou project; from November 1999 to August 2005, principal accountant of Qinhuangdao office of the Company; from January 1995 to November 1999, accountant of Fengzhen office, vide director, vice director and director of finance department of Yitai Coal Group. From May 1992 to January 1995, Mr. Han assumed accountant of Tanggongta mine of Yitai Coal Group. He graduated from Yimeng Finance and Economics School in June 1985 majoring in accounting, and graduated from the Open University of China in April 2006 majoring in accounting with associate’s degree. Mr. Han has not worked as director of other public listed company during the three years prior to the latest practicable date.
Wang Sanmin: appointed as supervisor of the Company since February 2011, and director of materials supply department of the Company since December 2010. Mr. Wang has substantial experiences in finance and management. He joined Yitai Coal Group in 1996 and the Company in April 2005. From April 2007 to November 2010, Mr. Wang worked as director of enterprise management department of
72 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 the Company; from October 2006 to March 2007, standing vide general manager of Yitai Pharmatech Co., Ltd. , April 2005 to September 2006, chairman of labor union and deputy general manager of Shenglong branch of Yitai Pharmaceuticals; from April 2004 to April 2005, director of accounting department of Yitai Group; from October 2001 to April 2004, finance principal of the licorice base of Yitai Pharmaceuticals, vice director of finance department of Yitai Pharmaceuticals and director of finance department and enterprise management department of Shenglong branch of Yitai Pharmaceuticals; from December 2000 to October 2001, financial director of coking plant of Eqian; from 1996 to 2000, director of marketing and finance departments of Taifeng Simengou Coke Powder Plant, Taifeng Diversity Operation Company, Taifeng Mine, Taifeng Hohhot Clean Coal branch and Taifeng head office of Yitai Coal Group. He graduated from Inner Mongolia Institute of Finance and Economics in July 2005 majoring in accounting with bachelor’s degree (correspondence student). Mr. Wang was granted the certificate of international accountant in July 2010, operation manager and licensed pharmacist in March 2006 and senior IT project manager in November 2008. Mr. Wang has not worked as director of other public listed company during the three years prior to the latest practicable date.
Ji Zhifu: appointed as supervisor of the Company since February 2011. He also works as director of operation management office of coal transportation and sales segment of the Company. Mr. Ji has lots of experiences in finance. He joined Yitai Zhundong in 2005 and the Company in 2006. From February 2009 to SEPTEMBER 2011, he worked as director of comprehensive business office of coal transportation and sales segment of the Company; from March 2008 to February 2009, vice director of finance department of the Company. From October 2006 to February 2009, he worked in finance department of the Company; from July 2005 to October 2006, he worked in Yitai Zhundong. Mr. Ji graduated from Inner Mongolia Institute of Finance and Economics in July 2004 majoring in management. Mr. Ji has not worked as director of other public listed company during the three years prior to the latest practicable date. Wang Yongliang: appointed as supervisor of the Company since February 2011. He also works as dean of Inner Mongolia Yimeng Law Firm since March 2001. He has substantial experiences in dealing with law issues. From April 1996 to March 2001, he worked as director of business department of Yimeng Law Firm; from March 1990 to April 1996, vice secretary of labor department of justice office of Yimeng; from December 1986 to March 1990, teacher of Yimeng cadre school of political science and law; from August 1985 to December 1986, member of Yimeng Labor Reform Team. Mr. Wang graduated from China University of Political Science and Law in May 2003 majoring in civil and commercial law with master’s degree. In October 2004, he was granted the title of level II lawyer by the personnel department of Inner Mongolia. Mr. Wang has not worked as director of other public listed company during the three years prior to the latest practicable date.
73 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Wu Qu: appointed as supervisor of the Company since February 2011. He works as director of audit department of Inner Mongolia Dongshen Certified Public Accountant since 2001. Mr. Wu has substantial experiences in audit and finance. From December 1998 to October 2000, he took position of finance manager of Erdos Rongze Food Company; from October 1994 to December 1998, finance director of Inner Mongolia Shengyi Plastic Products Company; from July 1986 to October 1994, director of finance department of Yike Zhaomeng Dongsheng Food Industry Company. Mr. Wu graduated from Inner Mongolia Yike Zhaomeng Finance and Economics School in July 1986, and correspondence school of the central party school in December 1998 majoring in economic management with bachelor’s degree. Mr. Wu has not worked as director of other public listed company during the three years prior to the latest practicable date.
Ji Yongqiang: appointed as deputy manager of the Company since February 2010. Mr. Ji joined Yike Zhaomeng Coal Corporation (predecessor of Yitai Coal Group) in 1990 and the Company in July 1997, during which, he accumulates lots of experiences in operation management of coal enterprises. Mr. Ji takes the position of general manager of Erdos Yizheng Mine Firefighting Engineer Co., Ltd since June 2010. From September 2007 to January 2010, he worked as general manager of Inner Mongolia Yitai Real Estate Co., Ltd.; from August 2005 to September 2007, general manager of Yitai Shengli Energy Co., Ltd., from July 1999 to August 2005, deputy general manager of the Company; from February 1993 to July 1999, and deputy general manager of Yitai Coal Group operation branch. He was rated as senior engineer by the senior professional title appraisal committee of Inner Mongolia oriented for ideology and politics personnel of enterprise in December 2007. Mr. Ji has not worked as director of other public listed company during the three years prior to the latest practicable date.
Liu Jian: appointed as deputy manager of the Company since December 2012. He graduated from University of Duisburg-Essen in July 2004 with doctor’s degree in cardiovascular medicine. From August 2004 to June 2005, he took position of manager of the PRC project department of German Dimugen Special Machines Corporation; from August 2005 to February 2007, standing vice general manager of Inner Mongolia Yitai Pharmaceuticals Co., Ltd.; from February 2007 to August 2012, general manager of Inner Mongolia Yitai Pharmaceuticals Co., Ltd.; from August 2012 to December 2012, worked for the Company. He graduated from University of Duisburg-Essen in July 2004 with doctor’s degree in cardiovascular medicine. In July 2006, he was rated as senior director pharmacist by the personnel department of Inner Mongolia autonomous region. Mr. Liu has not worked as director of other public listed company during the three years prior to the latest practicable date.
Zhang Mingliang: appointed as general engineer of the Company since October 2012. From April
74 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
2002 to October 2012, he worked as supervisor of the Company; from February 2012 to September 2012, vice general manager of production segment of the Company. He has lots of experiences in mine production, safety and management. Mr. Zhang jointed Yitai Coal Group in January 1994 and the Company in November 1997. From March 2011 to February 2012, he was director of allocation station of coal transportation segment of the Company in Jungar Banner; from June 2009 to March 2011, principal of Sujiahao mine of Yitai Group; from March 2006 to June 2009, vice principal of Hongjingta mine of the Company; from March 2002 to March 2006, vice director of operation department of the Company; from November 1997 to June 2009, vice principal of well No.1 of Nalinmiao mine, principal of well No.4 of Nalinmiao mine, vice president and president of Nalinmiao mine as well as vice president of well No.2 of Nalinmiao mine of the Company. Mr. Zhang graduated from Datong Coal Industry Institute in July 1991 majoring in underground mining, and was rated as intermediate engineer by the personnel department of Inner Mongolia in August 2007. Mr. Zhang has not worked as director of other public listed company during the three years prior to the latest practicable date.
Lian Tao: joined North China Power Group in August 1998 as an accountant. From December 2001 to November 2003, he took position of principal of legal affairs of Bioon Chip Co., Ltd. which was an enterprise under Tsinghua University enterprise group; from November 2003 to October 2006, general manager of legal affairs department of Shunchi (China) Holding Corporation; from July 2008 to October 2011, he joined Vtion Wireless Technology AG (Frankfurt, Germany) as general legal director and secretary to the company; from January 2012 to August 2012, deputy general accountant of Inner Mongolia Yitai Group Co., Ltd. Now, he works as deputy manager and secretary to the board (joint company secretary) of the Company. Mr. Lian has not worked as director of other public listed company during the three years prior to the latest practicable date.
II. Position of directors, supervisors and senior executives, who leave the office or currently in office (I) Post-holding in shareholder’s unit Name Name of other units Position Start dated of office term INNER MONGOLIA YITAI Zhang Donghai Director, GM 2004-6-15 GROUP CO., LTD. INNER MONGOLIA YITAI Ge Yaoyong Director 2008-11-14 GROUP CO., LTD. INNER MONGOLIA YITAI Liu Chunlin Director, Chief Accountant 2004-6-15 GROUP CO., LTD. INNER MONGOLIA YITAI Zhang Dongsheng Director 2008-11-14 GROUP CO., LTD. INNER MONGOLIA YITAI Chairman of Supervisory Li Wenshan 2008-11-14 GROUP CO., LTD. Committee
75 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(II) Post-holding in other unit Start dated of office Name Name of other units Position term School of Continuing Education of Xie Xianghua Inner Mongolia University of Finance Dean 2011-7-11 and Economics Lian Junhai Inner Mongolia Zhongdao Bailong CPA Deputy GM 2011-2-22
Song Jianzhong Inner Mongolia JianZhong Law Firm Chief 1986-7-15
Tan Guoming Yida CPA Partner 2011-7-1
Wang Yongliang Inner Mongolia Yimeng Law Firm Chief 2001-3-1 Inner Mongolia Dongshen CPA Co., Wu Qu Chief auditor 2001-7-1 Ltd.
III. Remuneration for directors, supervisors and senior executives
(I) Decision-making procedures and determination principle of remunerations for directors, supervisors and senior management Determination procedure in respect of remuneration of Considered and approved at general meeting directors, supervisors and senior management Remuneration management method of senior management The detailed calculation method: annual remuneration comprises of basic annual salary Determination bases in respect and results-related annual remuneration. Basic annual salary is formed by position level of remuneration of directors, coefficient * total assets scale coefficient * (1+net assets growth rate)*10000, and supervisors and senior results-related annual remuneration is formed by position level coefficient * net assets management return rate coefficient * (1+profit growth rate of the reporting period) * 10000. Basic annual salary is granted month by month in full, and results-related annual remuneration is firstly granted 50%, with the remaining granted at year end based on results examination. Remunerations are granted in full by the Company after withdraw of individual income Payables of remuneration of tax based on allowance of independent directors as determined by general meeting and directors, supervisors and remunerations of directors, supervisors and senior management as determined by its senior management remuneration management system. Total actual remuneration of entire directors, supervisors and 13,861,700 yuan senior management as at period end
(II)Examination system for senior management, and establishment and implementation of incentive mechanism during the reporting period The incentive mechanism of the Company is implemented by the annual remuneration plan of directors and senior management. The Company adopts annual remuneration system for its directors, supervisors and senior management and annual remuneration comprises of basic annual salary and results-relate remuneration. Results-related remuneration incentive mechanism is conducted through determination of production, operation and safety targets for a whole year. At year end, the Company makes comprehensive examination on the production operation results and completion of targets and determines results-related annual remuneration of senior management based on examination results. The Company will continue to improve the existing remuneration allocation and incentive mechanism,
76 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
aiming for long-term, constant and healthy development.
(III)Details about remuneration of directors, supervisors and senior management Remuneration of directors and supervisors is set out in the part one of the section headed ―shareholding changes and remunerations of the existing directors, supervisors and senior management and those resigned in the reporting period‖.
IV. Personnel alteration of directors, supervisors and senior executives
Name Position Alteration Reasons Xu Pinggui Chief Engineer Leave office Job turnover Liu Jiming Chief Engineer Leave office Job turnover Zhang Mingliang Supervisor Leave office Job turnover Zhang Guisheng Supervisor Appointment Job turnover Liu Jian Deputy GM Appointment Job turnover Deputy GM, co-secretary of the Lian Tao Appointment Job turnover Company, secretary of the Board Zhang Mingliang Chief Engineer Appointment Job turnover
V. Employees of parent company and main subsidiaries (I) Employees On-job employees of parent company 6,884 On-job employees of main subsidiaries 2,135 Total on-job employees 6,884 Retired employees with expenses bore by parent company and main 26 subsidiaries Professional composition Category of profession Number Production staff 2,658 Sales staff 2,329 Technician 558 Financial staff 306 Administration staff 1,033 Total 6,884 Education background Category of education background Number Graduate 177 University background 2,515 Junior college and technical secondary background 2,702 Technical secondary school below 1,490 Total 6,884 (II)Remuneration policies The Company insists on distribution based on labor works mainly together with considerations of certain factors under principles of efficiency priority and fairness. Salary allocation system under the principles of ―determine remuneration based on different positions‖ as a modern enterprise, position-related salary system mainly based on position value supplemented with executive position, as well as incentive and limitation mechanism of salary distribution are established and formed.
77 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
During the reporting period, the total staff salary amounted to RMB960 million. Others are detailed in attachment I.
(III) Pie chart of professional composition
25% Administrative Accounting&Financial Technical 55% 7% Marketing
13%
(IV) Pie chart of education background
3%
21% Others
37% College &Technical Secondary School Graduates Bachelors
Masters
39%
(V) Labor outsourcing
Total labor-hour of labor outsourcing 1,976,000 hours Total remuneration paid for labor outsourcing 26.7 million yuan
(VI)interests and short positions owned by directors, supervisors and executive officers in shares
78 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
and underlying shares On 31 December 2012, the interests and short positions owned by the directors, supervisors and executive officers of the Company in the shares of the Company and its associates which should be notified to the Company and Hong Kong Stock Exchange as required by section 7 and 8 of part XV of SFO (including interests and short positions which are deemed to own under SFO), or interests which should be recorded in the registrar maintained as described under rule 352 of SFO or which should be notified to the Company and Hong Kong Stock Exchange under Standard Rules for Conducting Securities Transactions by Directors of Listed Issuer (Standard Rules) are set out below:
Long position held in shares of affiliated company Ratio in share capital of Name of Ordinary shares Name of affiliated affiliated Director/Supervi Type of equity with equity company company that sor owned issued (%)
Director:
Mr. Zhang Inner Mongolia Yitai Beneficial owner 10,903,593 1.51 Donghai Investment Co., Ltd. Spouse equity 500,000 0.06
Equity owed on behalf of trustor 20,437,872 1 2.84
Mr. Liu Chunlin Inner Mongolia Yitai Beneficial owner 6,000,000 0.83 Investment Co., Ltd. Equity owed on behalf of trustor 20,428,000 1 2.84
Mr. Ge Yaoyong Inner Mongolia Yitai Beneficial owner 5,000,000 0.69 Investment Co., Ltd. Spouse equity 51,250 0.007
Equity owed on behalf of trustor 20,428,000 1 2.84
Mr. Zhang Inner Mongolia Yitai Beneficial owner 5,000,000 0.69 Dongsheng Investment Co., Ltd. Spouse equity 148,947 0.02
Equity owed on behalf of trustor 20,428,000 1 2.84
Mr. Kang Zhi Inner Mongolia Yitai Beneficial owner 2,606,644 0.36 Investment Co., Ltd. Equity owed on behalf of trustor 20,428,000 1 2.84
Mr. Zhang Inner Mongolia Yitai Beneficial owner 2,808,514 0.39 Xinrong Investment Co., Ltd. Spouse equity 114,871 0.01
Equity owed on behalf of trustor 20,428,000 1 2.84
Mr. Lv Guiliang Inner Mongolia Yitai Beneficial owner 2,200,000 0.30 Investment Co., Ltd.
79 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Supervisor:
Mr. Li Wenshan Inner Mongolia Yitai Beneficial owner 4,000,000 0.55 Investment Co., Ltd. Equity owed on behalf of trustor 20,428,000 1 2.84
Mr. Zhang Inner Mongolia Yitai Beneficial owner 2,200,000 0.30 Guisheng Investment Co., Ltd.
Mr. Wang Inner Mongolia Yitai Beneficial owner 500,000 0.06 Sanmin Investment Co., Ltd.
Mr. Ji Zhifu Inner Mongolia Yitai Beneficial owner 250,000 0.03 Investment Co., Ltd.
Mr. Han Inner Mongolia Yitai Beneficial owner 250,000 0.03 Zhanchun Investment Co., Ltd.
Note 1: according to an entrustment agreement entered into by 31 individuals and a group of employees of Inner Mongolia Yitai Group Co., Ltd., the directors and supervisors listed in the above table and other members of the 31 individuals held the entire issued capital of Inner Mongolia Yitai Investment Co., Ltd. on behalf of the employees group which was comprised of 2,300 individuals. As advised by the legal consultant of the PRC laws, the entrustment arrangement was effective and bound by PRC laws.
Save as disclosed above, on 31 December 2012, there was no director, supervisor or executive officer of the Company owning interests or short positions in shares, underlying shares or bonds of the Company or any of its associates (as defined in part XV under SFO) which should be notified to the Company and Hong Kong Stock Exchanges required by section 7 and 8 of part XV of SFO (including interests and short positions which are deemed to own under SFO), or interests or short positions which should be recorded in the registrar maintained as described under rule 352 of SFO or which should be notified to the Company and Hong Kong Stock Exchange under Standard Rules.
(VII)Briefs about other important issues concerning directors, supervisors and senior management The Company has signed service agreements with all of its directors and supervisors. Directors or supervisors haven’t entered into or planned to enter into such service agreement that can’t be terminated within one year without compensation payment from the Company (excluding legal compensation).
As at 31 December 2012, the Company has not granted any right to subscribe shares or bond
80 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 certificates of the Company or its associated corporation to its directors, supervisors or their spouses or children under age of 18.
Except for service agreement, directors and supervisors of the Company are not substantially interested, whether directly or indirectly, in the material contracts entered into by the Company or any of its subsidiaries in 2012 (still effective during the year or at the end of the year).
81 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section X. Corporate Governance
I. Corporate governance and insider registration management During the reporting period, under company law, securities law and relevant laws and regulations, the Company standardized operation, strengthened internal management and established healthy corporate governance system and corporate governance structure. Authorities and responsibilities are clearly defined for its authority organ, decision-making organ, and supervision organ and operation management.
The Company continued to strengthen information disclosure and investor relation. During the reporting period, the Company disclosed material information on prompt, accurate, truthful and complete basis, to ensure all shareholders informed on fair basis. The Company established non-financial enterprise debt financing instrument information disclosure management system, to guarantee the truthfulness, accuracy and completeness of information disclosure in area of debt financing instrument investment. From 10 to 12 November 2012, the Company organized large investors reverse roadshow which effectively increased communications with its investors and improved its reputation and influences in capital market.
The Company gradually improved insider registration management system. During the reporting period, the Company continued to improve files of insiders. It reminded relevant personnel during the sensitive information disclosure period through written documents, short messages, emails and its internal OA system, so as to prevent occurrence of illegal stock trading by relevant personnel.
The Company observed company law and relevant requirements of the CSRC in respect of corporate governance system and corporate governance structure. It improved the actual operation of legal person governance through improvement of ―three abilities‖ rules and internal limit system.
II. Brief introduction of Shareholders’ General Meeting
Query index for Disclosure Session of Convening Proposals Results resolution on appointed date for meeting date website resolutions Deliberated the followed proposals as: 1. Report from the Board for year of 2011; Annual 2. Report from Supervisory Shareholders’ Committee for year of 2011; All pass a General 2012-5-8 http://www.sse.com.cn/ 2012-5-9 3. Work Report of resolution Meeting for Independent Directors for year of 2011 year of 2011; 4. Confirmation of actual amount incurred and
82 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
estimated amount for Daily Related Transactions for year of 2011 as well as Estimating Daily Related Transactions for year of 2012; 5. Profit Distribution Plan of 2011; 6. Accumulated Profit Distribution Plan of the Company; 7. Annual Report of 2011; 8. Amendment of Article of Association; 9. Amendment of Outward Guarantee Management System of the Company; 10. Engagement of Domestic Audit Authority and Internal Control Audit Authority for year of 2012 Deliberated the followed proposals as: 1. Issuance of MTN of the Compay; 2. First Changes of the Register Extraordinary Capital of the Company; 3. Shareholders’ Amendment of Article of All pass a http://www.sse.com.cn/ 2012-10-15 2012-10-16 General Association; 4. Re-election resolution http://www.hkexnews.hk Meeting of of Supervisor; 5. Adjustment 2012 of Allowance for Independent Directors; 6. Adjustment of Allowance for Independent Supervisor III. Responsibility performance of Directors (I) The attending of directors to Board meetings and shareholders’ general meeting Attend the Shareholders’ Attend the Board Meeting General Meeting Absent Independent Times of Name of the director Board Times directors Times Meeting (Y/N) meeting Times of Times of Times present present for the supposed attending by entrusted of Shareholders’ in second to attend communication presence absence General person time in in the Meeting a row year (Y/N) Zhang N 12 3 9 0 0 N 1 Donghai Ge N 12 3 9 0 0 N 1 Yaoyong Liu N 12 3 9 0 0 N 1 Chunlin Zhang N 12 3 9 0 0 N 1 Dongsheng Kang Zhi N 12 3 9 0 0 N 1 Zhang N 12 3 9 0 0 N 1 Xinrong Lv N 12 3 9 0 0 N 1 Guiliang Xie Y 12 3 9 0 0 N 1 Xianghua Lian Y 12 3 9 0 0 N 1
83 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Junhai Song Y 12 3 9 0 0 N 1 Jianzhong Tan Y 12 3 9 0 0 N 1 Guoming
No Directors of the Compay absent the Board Meeting for the second time in a row in reporting period.
Board Meetings held in the year 12 Including: on-site Meetings 3 Meetings via communication 9 Meetings via on-site and communication both 0
(II)Objection on relevant issues by independent directors During the reporting period, independent directors of the Company has not raised any objection on the board resolutions and other non-board resolutions of this year.
IV. Important opinions and suggestions from the special committees under the board when performing their duties during the reporting period The board of the Company established the strategy committee, audit committee, nomination committee, remuneration and examination committee as well as production committee. During the reporting period, the strategy committee held 3 meetings in total. At this meeting, the strategy committee made important planning for subsequent development upon listing of H shares; besides, the committee made research on the issuance of MTN and provided relevant suggestions.
During the reporting period, the audit committee held 7 meetings in total, at which, the committee supervised the completeness of financial statements, quarterly reports, interim report and annual report and provided relevant opinions.
During the reporting period, the nomination committee held 4 meetings in total. The Company planned to change secretary to the board, general engineer and deputy manager. The nomination committee held meetings in respect of the election conditions, dismiss procedures and service terms of the secretary to the board, general engineer and deputy manager, and provided relevant opinions.
During the reporting period, the remuneration and examination committee held 1 meeting in total, at which, the committee provided opinions on adjustment of remunerations of directors and supervisors.
84 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
During the reporting period, the production committee held 1 meeting in total. Under weak global economy and depressed coal market, the production committee provided suggestions on coal yield and subsequent adjustment plan of the Company.
V. Explanation on risk existence of the Company by the supervisory committee The supervisory committee had no objection on the supervised issues during the reporting period.
VI. Explanation on the Company’s impossibility to maintain independent from its controlling shareholder in respect of business, staff, assets, organ and finance, and impossibility to maintain independent operation
Integrity (Y/N) Explanation The Company owes an independent system of coal production, In business Y transportation, sales business as well as self-production ability, bears responsibility and risk independently. The Company owes independent manpower management department In staff Y with a perfected H&R management system; and complete independent in aspect of labor service, human resources and salary management. The Company has a clear property relations with controlling In assets Y shareholders, and complete independence in aspect of assets management and operation. Based on self-characteristic of business and considered for long-term development, the Company established a completed organization In organ Y mechanism for independent operation without relation of subordination with controlling shareholders. The Company has an independent financial department, owes an In finance Y independent counting and financial management system and opens an account in the Bank independently as well as operated legally.
For the horizontal competition exist due to demutualization, industrial characteristics, state policies and merger & acquisition, relevant countermeasures, progress and subsequent working plans of the Company are:
Issues for which reforms were not completed in the year
Committed time Reform Reason for not completing Issues Current reform progress for completion of principal reforms reform Since the listing of H shares of the Company were The Company has signed prevention The Company the Company was issued on 12 July 2012, with the horizontal competition agreement with owns option and based on certain raised capital proceeds used for controlling shareholder. Under such preemptive right assets of its acquisition of coal-related assets agreement, the Company would be for the relevant controlling of its controlling shareholder granted such option and preemptive right assets of Inner shareholder Inner Inner Mongolia Yitai Group Co., to acquire any interest of the remaining Zhang Mongolia Yitai Mongolia Yitai Ltd., so as to solve horizontal business of controlling shareholder. Donghai Group Co., Ltd., Group Co., Ltd., competition. However, due to Meanwhile, as further provided by the which is exercised there existed that certain mines of group agreement, during the period from under prevention horizontal company is under initial listing date to the date when the horizontal competitions preparation before construction Company acquires the remaining competition between the or stop operation temporarily business, the Company would obtain agreement. Company and due to exhausted resources or exclusive sale agency in respect of all
85 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 controlling where there exist law the coals produced by Sujiahao mine. All shareholder in compliance issue, these mines the coal products explored from terms of are not taken into acquisition Hongqinghe mine would be provided production, sales scope for listing. exclusively to the Company for further and transportation sales. of coals VII. Examination system for senior management, and establishment and implementation of incentive mechanism during the reporting period The incentive mechanism of the Company is implemented under the annual remuneration plan of directors and senior management. The Company adopts annual remuneration system for its directors, supervisors and senior management and annual remuneration comprises of basic annual salary and results-related remuneration. Results-related remuneration incentive mechanism is conducted through determination of production, operation and safety targets for a whole year. At year end, the Company makes comprehensive examination on the production operation results and completion of targets and determines results-related annual remuneration of senior management based on examination results. The Company will continue to improve the existing remuneration allocation and incentive mechanism, aiming for long-term, constant and healthy development.
86 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section XI. Internal Control
I. Responsibility statement on internal control and construction of internal control system The board of directors and all the members guarantee that there is no false statement, misleading representation or material omission in the content of this report, and take several and joint responsibility as to the truthfulness, accuracy and completeness of the content.
To establish healthy internal control and effectively implement the same is the responsibility of the board. The supervisory committee supervises the establishment and implementation of internal control by the board; managers are in charge of normal operation of internal control.
The board of the Company sets up audit committee to be responsible for communication, inspection and supervision of intern and external audits; the internal audit department is in charge of detailed implementation of internal control evaluation and to evaluate the high-risk area and units consolidated into evaluation scope; internal control evaluation team is in charge of organization and evaluation of specific internal control works to be responsible for the board.
In order to further strengthen and standardize internal control, ensure standard and orderly operation of its various works, improve its operation management and risk-prevention ability, enhance sustainable development and implement basic internal control standards for enterprise and the relevant matching guidance, the Company made internal control system of Inner Mongolia Yitai Coal Co., Ltd., defined core internal control procedures in operation management area and prepared internal control manual of Inner Mongolia Yitai Coal Co., Ltd., thus to establish system guarantee for the implementation, supervision and evaluation of internal control.
The internal control team evaluated the reasonableness of design and effectiveness of operation of the internal controls of the various departments and subsidiaries within the evaluation scope under 2012 internal control evaluation scheme of Inner Mongolia Yitai Coal Co., Ltd., prepared working draft for the internal control evaluation, prepared internal control self-evaluation report and reported to the board. The internal control self-evaluation report would be disclosed after consideration by board meetings.
In 2012, the Company engaged Roland Berger Strategy Consultants to provide internal control consultancy services.
The internal control self-evaluation report is detailed as attached.
87 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
II. Particulars of internal control audit report The proposal that the Company engages Dahua Certified Public Accountant (LLP) to audit the effectiveness of its internal control in 2012 is considered and approved at the 6th meeting of the 5th board. As audited, Dahua Certified Public Accountant (LLP) issued audit report with standard unqualified opinions for the internal control evaluation report.
III. Responsibility accounting system for material mistake in annual report and explanation on relevant implementation Responsibility accounting system for material mistake in annual report information disclosure was approved at the 25th meeting of the 4th board. Under such system, for relevant persons whose default or incorrect performance of duties, obligations or due to other personnel reasons resulted in material economic loss or bad social influences to the Company during annual report information disclosure, reasons shall be investigated and the principal person shall be asked for relevant responsibilities.
During the reporting period, the Company had no material mistake in its annual report.
88 Section XII. Financial Report
The Annual Financial Report has been audited by CPA Gong Xinping and Zhao Xi under the name of Dahua Certified Public Accountant (LLP) with standard unqualified auditing report presented.
Audit Report Da Hua Shen Zi [2013] No.: 002857 To shareholders of Inner Mongolia Yitai Coal Company Limited
We have audited the Financial Report under the name of Inner Mongolia Yitai Coal Company Limited (hereafter referred as Yitai Company) enclosed, including the Consolidated Balance Sheet of the Company as well as of the Parent Company’s on 31st December 2012, the Consolidated Profit Statement and Parent Company’s Profit Statement, Consolidated Cash Flow Statement and Cash Flow Statement of the Parent Company, Consolidated Statement on Changes of Owners’ Equity and Statement on Changes of Owners’ Equity of Parent Company as well as the Notes to the Financial Statements for year of 2012
I. Management’s responsibility for the financial statements Management of the Company is responsible for prepare and present financial statement of the Company, which including: (1) Prepare financial statements with fair presentation in line with Accounting Standards for Business Enterprises; (2) Designing, executed and maintaining necessary internal control in order to prevent fundamental miscarrying in financial statement from fraudulent or errors.
II. Auditor's responsibility Our responsibility is to express an audit opinion on these financial statements based on our audit. We performed our audit in accordance with Chinese Certified Public Accountants' Auditing Standards. Those standards require us to comply with professional ethics, and to plan and perform our audit so as to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures of the financial statements. The selective audit procedures depend on auditor's judgment, including the evaluation of the risk of material misstatement of the consolidated financial statements due to frauds or errors. When evaluating risk, we consider internal control related to financial statements, in order to design auditing procedures, but not for the purpose of expressing an opinion on the internal control's
89
Inner Mongolia Yitai Coal Company Limited Annual Report 2012 effectiveness. An audit also includes assessing the appropriateness of the accounting policies adopted and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that we have obtained sufficient and appropriate audit evidences to provide a basis for our audit opinion.
III. Auditing opinion In our opinion, in all material aspects, Yitai Company’s financial statements have been prepared in accordance with the Enterprises Accounting Standards and Enterprises Accounting System, and they fairly present the financial status of the consolidated and parent company’s as of December 31, 2012, and its operation results and cash flows for the year ended. Dahua Certified Public Accountant (LLP) Chinese CPA: Gong Xinping
Chinese CPA: Zhao Xi Beijing · P.R.C 25th March 2013
90 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
II. Financial statement
Consolidated Balance Sheet 2012-12-31 Prepared by Inner Mongolia Yitai Coal Company Limited Unit: RMB Currency: CNY
Items Note Ending balance Opening balance Current assets: Monetary fund 6,344,379,496.19 4,480,085,338.99 Notes receivable 26,210,000.00 43,154,276.14 Accounts receivable 2,663,426,021.76 1,365,303,004.27 Accounts paid in advance 825,006,347.18 712,169,370.44 Other accounts receivable 439,999,402.98 209,191,949.87 Inventories 873,373,801.70 1,015,191,367.75
Total current assets 11,172,395,069.81 7,825,095,307.46
Non-current assets: Long-term equity investment 4,153,540,766.95 3,223,616,426.38
Investment real estate 31,381,900.83 33,724,909.11
Fixed assets 15,633,845,485.78 16,425,353,781.64
Projects under construction 7,963,101,458.80 4,883,464,819.22
Engineering material 6,106,638.12
Intangible assets 728,775,554.77 733,376,466.55
Long-term deferred expenditures 760,405,595.13 208,251,953.49
Deferred income tax assets 917,591,106.71 112,224,831.58
Total non-current asset 30,194,748,507.09 25,620,013,187.97 Total assets 41,367,143,576.90 33,445,108,495.43 Current liabilities: Short-term loans 328,000,000.00 868,000,000.00
Accounts payable 2,000,469,890.45 1,590,735,905.44
Accounts received in advance 384,029,540.54 529,515,065.46
Wage payable 204,687,341.01 300,975,100.57
Taxes payable -8,741,814.98 190,308,454.40
Interest payable 22,271,606.96 21,706,923.59 Dividend payable 1,000,000,000.00
91 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Other accounts payable 5,209,553,107.88 743,639,492.20 Non-current liabilities due within 1 1,254,419,004.48 1,338,189,817.81 year Total current liabilities 10,394,688,676.34 5,583,070,759.47 Non-current liabilities: Long-term loans 7,802,523,891.08 6,100,594,085.93 Bonds payable 1,001,295,546.67 Long-term account payable 58,000,000.00 58,000,000.00
Accrued liabilities 43,578,613.68 42,484,426.10 Other non-current liabilities 128,188,997.00 293,190,800.00 Total non-current liabilities 9,033,587,048.43 6,494,269,312.03 Total liabilities 19,428,275,724.77 12,077,340,071.50
Owners’ equity (Shareholders’
equity): Paid-in capital (Share capital) 1,627,003,500.00 1,464,000,000.00 Capital reserve 1,511,013,242.53 2,160,567,734.17
Reasonable reserve 3,836,018.35
Surplus reserve 1,105,415,215.52 2,022,835,760.36
Retained profit 15,456,266,897.69 13,750,081,417.75
Translation reserve -289,674.55
Total owner’s equity attributable to 19,699,409,181.19 19,401,320,930.63 parent company
Minority interests 2,239,458,670.94 1,966,447,493.30
Total owner’s equity 21,938,867,852.13 21,367,768,423.93
Total liabilities and owner’s equity 41,367,143,576.90 33,445,108,495.43 Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
92 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Balance Sheet of Parent Company 2012-12-31 Prepared by Inner Mongolia Yitai Coal Company Limited Unit: RMB Currency: CNY
Items Notes Ending balance Opening balance
Current assets:
Monetary fund 5,562,984,916.00 2,289,617,207.83 Notes receivable 16,210,000.00 32,000,000.00 Accounts receivable 2,304,658,490.07 637,444,674.49 Accounts paid in advance 520,213,137.84 337,588,937.06 Other accounts receivable 2,524,212,219.07 845,573,778.30 Inventories 678,832,671.05 541,597,733.10
Total current assets 11,607,111,434.03 4,683,822,330.78
Non-current assets: Long-term equity investment 9,427,596,056.69 8,040,075,952.61
Investment real estate 31,381,900.83 33,724,909.11
Fixed assets 3,625,851,737.83 3,339,477,891.55
Projects under construction 2,141,625,366.38 1,265,666,139.47
Intangible assets 363,532,766.19 146,828,321.35
Long-term deferred expenditures 681,776,288.45 98,492,484.61
Deferred income tax assets 824,265,753.87 3,425,936.50
Total non-current asset 17,096,029,870.24 12,927,691,635.20 Total assets 28,703,141,304.27 17,611,513,965.98 Current liabilities: Accounts payable 2,740,473,373.43 638,683,038.53
Accounts received in advance 209,165,190.79 328,904,402.75
Wage payable 113,471,325.83 157,846,242.36
Taxes payable -16,683,687.62 126,052,283.34
Interest payable 3,871,465.29 339,661.78
Other accounts payable 4,790,269,228.86 432,429,348.43
Non-current liabilities due within 44,000,000.00 80,000,000.00 1 year Total current liabilities 7,884,566,896.58 1,764,254,977.19
93 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Non-current liabilities:
Long-term loans 2,036,000,000.00 80,000,000.00 Bonds payable 1,001,295,546.67 Accrued liabilities 15,400,123.10 12,146,638.67
Deferred income tax liability Other non-current liabilities 6,050,000.00 6,830,000.00 Total non-current liabilities 3,058,745,669.77 98,976,638.67 Total liabilities 10,943,312,566.35 1,863,231,615.86
Owners’ equity (Shareholders’
equity): Paid-in capital (Share capital) 1,627,003,500.00 1,464,000,000.00
Capital reserve 1,024,326,421.90 276,786,940.17
Less: treasury stock
Reasonable reserve
Surplus reserve 1,105,415,215.52 2,022,835,760.36
Generic risk reserve
Retained profit 14,003,083,600.50 11,984,659,649.59 Total owners’ equity 17,759,828,737.92 15,748,282,350.12 (shareholders’ equity) Total liability and owners’ equity 28,703,141,304.27 17,611,513,965.98 (or shareholders’ equity) Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
94 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Consolidated Profit Statement January – December of 2012 Unit: RMB Currency: CNY Items Notes Current amount Prior-period amount I. Total operating income 32,463,324,694.04 27,884,242,042.39 Including: Operating income 32,463,324,694.04 27,884,242,042.39 II. Total operating cost 24,310,625,065.75 18,140,779,041.67 Including: Operating cost 20,237,988,738.19 14,817,232,933.14 Operating tax and extras 814,746,565.54 830,277,124.06 Sales expenses 1,175,181,378.33 1,190,413,797.68 Administration expenses 1,650,399,911.82 1,122,072,646.22 Financial expenses 433,831,710.37 236,820,472.27 Devaluation losses of assets -1,523,238.50 -56,037,931.70 Add: Changing income of fair value(Loss is 41,625.37 listed with ―-‖) Investment income (Loss is listed with ―-‖) 231,481,067.59 23,979,699.46 Including: Investment income on affiliated 34,114,293.30 21,324,531.35 company and joint venture III. Operating profit (Loss is listed with 8,384,180,695.88 9,767,484,325.55 ―-‖) Add: Non-operating income 381,723,619.20 213,887,109.20 Less: Non-operating expense 47,587,261.10 84,705,909.17 Including: Disposal loss of non-current asset 6,228,076.16 16,633,771.86 IV. Total Profit (Loss is listed with ―-‖) 8,718,317,053.98 9,896,665,525.58 Less: Income tax expense 1,399,436,071.14 1,629,467,225.58 V. Net profit (Net loss is listed with ―-‖) 7,318,880,982.84 8,267,198,300.00 Net profit attributable to owner’s of parent 6,621,880,767.60 7,720,489,100.77 company
Minority interests 697,000,215.24 546,709,199.23 VI. Earnings per share (I) Basic earnings per share 4.3 5.27 (II) Diluted earnings per share VII. Other comprehensive income -289,674.55 104,400.00 VIII. Total comprehensive income 7,318,591,308.29 8,083,037,645.00 Total comprehensive income attributable to 6,621,591,093.05 7,720,593,500.77 owners of parent company Total comprehensive income attributable to 697,000,215.24 546,709,199.23
95 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 minority shareholders For combination under same control in this period, net profit realized for merged party before combination was: 1,680,928,960.19 yuan.
Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
96 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Profit Statement of Parent Company January – December of 2012 Unit: RMB Currency: CNY
Items Notes Current amount Prior-period amount
I. Operating income 20,093,016,433.92 16,495,575,147.30 Less: Operating cost 13,322,388,276.19 8,917,650,761.33 Operating tax and extras 358,865,818.69 373,878,953.36 Sales expense 798,957,047.76 787,384,519.93 Administration expense 843,869,141.66 636,683,083.81 Financial expense 76,591,700.81 -27,905,251.61 Devaluation losses of assets -22,583,787.37 19,333,050.19 Add: Changing income of fair value(Loss is 41,625.37 listed with ―-‖) Investment income ( Loss is listed with 412,099,130.27 281,909,429.49 ―-‖) Including: Investment income on affiliated 30,994,885.59 26,534,261.38 enterprises and joint-ventured enterprises II. Operating profit (Loss is listed with ―-‖) 5,127,027,366.45 6,070,501,085.15 Add: Non-operating income 111,471,309.98 10,359,227.86 Less: Non-operating expense 42,158,630.29 66,297,717.65 Including: Disposal loss of non-current asset 6,204,014.87 8,942,966.17 III. Total Profit (Loss is listed with ―-‖) 5,196,340,046.14 6,014,562,595.36
Less: Income tax expense 704,524,489.79 878,696,474.57
IV. Net profit (Net loss is listed with ―-‖) 4,491,815,556.35 5,135,866,120.79
V. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
VI. Other comprehensive income 104,400.00
VII. Total comprehensive income 4,491,815,556.35 5,135,970,520.79
Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
97 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Consolidated Cash Flow Statement January – December of 2012 Unit: RMB Currency: CNY
Items Notes Current amount Prior-period amount
I. Cash flows arising from operating activities: Cash received from selling commodities and 36,518,708,802.08 33,821,601,051.92 providing labor services
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Insured savings and net increase of investment
Net increase of disposal of transaction financial asset
Cash received from interest, commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Net increase of returned business capital
Other cash received concerning operating 188,892,648.63 609,824,336.22 activities
Subtotal of cash inflow arising from operating 36,707,601,450.71 34,431,425,388.14 activities
Cash paid for purchasing commodities and 22,220,215,972.53 17,780,822,450.08 receiving labor service
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
98 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Cash paid for original insurance contract compensation
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 1,208,851,894.65 852,077,075.65
Taxes paid 4,561,633,018.81 6,377,787,190.20
Other cash paid concerning operating 375,650,198.96 275,504,020.24 activities
Subtotal of cash outflow arising from 28,366,351,084.95 25,286,190,736.17 operating activities
Net cash flows arising from operating 8,341,250,365.76 9,145,234,651.97 activities
II. Cash flows arising from investing activities: Cash received from recovering investment 200,000,000.00 9,938,652.13 Cash received from investment income 17,172,061.88 2,706,204.00
Net cash received from disposal of fixed, 8,240,876.66 3,642,482.47 intangible and other long-term assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities
Subtotal of cash inflow from investing 225,412,938.54 16,287,338.60 activities Cash paid for purchasing fixed, intangible and 4,856,567,380.99 3,194,070,394.81 other long-term assets Cash paid for investment 910,530,000.00 819,524,000.00 Net increase of mortgaged loans Subtotal of cash outflow from investing 5,767,097,380.99 4,013,594,394.81 activities Net cash flows arising from investing -5,541,684,442.45 -3,997,307,056.21 activities III. Cash flows arising from financing activities
99 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Cash received from absorbing investment 5,609,505,377.75 167,422,000.00 Including: Cash received from absorbing minority shareholders’ investment by 37,540,000.00 167,422,000.00 subsidiaries Cash received from loans 3,288,000,000.00 1,905,000,000.00 Cash received from issuing bonds 1,000,000,000.00
Other cash received concerning financing
activities
Subtotal of cash inflow from financing 9,897,505,377.75 2,072,422,000.00 activities
Cash paid for settling debts 2,209,867,008.81 1,525,909,759.38
Cash paid for dividend and profit distributing 2,962,811,585.48 3,363,968,618.35 or interest paying
Other cash paid concerning financing 5,649,091,935.16 2,728,976,812.22 activities
Subtotal of cash outflow from financing 10,821,770,529.45 7,618,855,189.95 activities
Net cash flows arising from financing -924,265,151.70 -5,546,433,189.95 activities
IV. Influence on cash and cash equivalents
due to fluctuation in exchange rate V. Net increase of cash and cash 1,875,300,771.61 -398,505,594.19 equivalents Add: Balance of cash and cash equivalents at 4,430,718,716.48 4,829,224,310.67 the period -begin
VI. Balance of cash and cash equivalents at 6,306,019,488.09 4,430,718,716.48 the period -end Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
100 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Cash Flow Statement of Parent Company January – December of 2012 Unit: RMB Currency: CNY
Items Notes Current amount Prior-period amount
I. Cash flows arising from operating activities: Cash received from selling commodities and 31,878,887,202.22 19,134,032,522.86 providing labor services Other cash received concerning operating 137,227,586.81 80,793,920.61 activities Subtotal of cash inflow arising from operating 32,016,114,789.03 19,214,826,443.47 activities Cash paid for purchasing commodities and 24,919,175,070.88 10,435,396,573.33 receiving labor service
Cash paid to/for staff and workers 616,196,867.51 414,020,685.86
Taxes paid 2,990,633,265.30 3,257,909,842.60 Other cash paid concerning operating activities 475,432,803.66 182,983,933.04 Subtotal of cash outflow arising from operating 29,001,438,007.35 14,290,311,034.83 activities Net cash flows arising from operating activities 3,014,676,781.68 4,924,515,408.64
II. Cash flows arising from investing activities: Cash received from recovering investment 212,000,000.00 9,938,652.13
Cash received from investment income 241,812,061.88 255,426,204.00
Net cash received from disposal of fixed, 8,209,376.66 3,421,034.47 intangible and other long-term assets Subtotal of cash inflow from investing 462,021,438.54 268,785,890.60 activities Cash paid for purchasing fixed, intangible and 1,235,779,082.10 1,277,074,557.42 other long-term assets Cash paid for investment 5,173,543,713.54 1,619,350,000.00 Subtotal of cash outflow from investing 6,409,322,795.64 2,896,424,557.42 activities Net cash flows arising from investing activities -5,947,301,357.10 -2,627,638,666.82 III. Cash flows arising from financing activities Cash received from absorbing investment 5,571,965,377.75
101 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Cash received from loans 2,000,000,000.00 40,000,000.00
Cash received from issuing bonds 1,000,000,000.00
Subtotal of cash inflow from financing 8,571,965,377.75 40,000,000.00 activities
Cash paid for settling debts 80,000,000.00 20,000,000.00
Cash paid for dividend and profit distributing or 2,257,379,338.95 2,207,553,040.44 interest paying
Other cash paid concerning financing activities 30,948,812.43 4,446,983.99
Subtotal of cash outflow from financing 2,368,328,151.38 2,232,000,024.43 activities
Net cash flows arising from financing activities 6,203,637,226.37 -2,192,000,024.43
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents 3,271,012,650.95 104,876,717.39
Add: Balance of cash and cash equivalents at 2,272,540,819.20 2,167,664,101.81 the period -begin
VI. Balance of cash and cash equivalents at 5,543,553,470.15 2,272,540,819.20 the period -end Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
102 Consolidated Statement on Changes of Owners’ Equity January – December of 2012 Unit: RMB Currency: CNY
current amount
Equity attributable to owners of parent company Item Paid-in capital (Share Minority interests Total owner’s equity Capital reserve Reasonable reserve Surplus reserve Retained profit Other capital)
I. Balance at end of last year 1,464,000,000.00 2,160,567,734.17 3,836,018.35 2,022,835,760.36 13,750,081,417.75 1,966,447,493.30 21,367,768,423.93
II. Balance at beginning of this year 1,464,000,000.00 2,160,567,734.17 3,836,018.35 2,022,835,760.36 13,750,081,417.75 1,966,447,493.30 21,367,768,423.93
III. Amount of increase/decrease of this 163,003,500.00 -649,554,491.64 -3,836,018.35 -917,420,544.84 1,706,185,479.94 -289,674.55 273,011,177.64 571,099,428.20 period (decrease was listed with ―-‖)
(I) Net profit 6,621,880,767.60 697,000,215.24 7,318,880,982.84
(II) Other comprehensive income -289,674.55 -289,674.55
Subtotal of the above (I) and (II) 6,621,880,767.60 -289,674.55 697,000,215.24 7,318,591,308.29
(III) Capital invested or decreased by 163,003,500.00 -649,554,491.64 -1,366,602,100.47 37,540,000.00 -1,815,613,092.11 owners
1. Owners’ devoted capital 163,003,500.00 5,382,723,016.02 37,540,000.00 5,583,266,516.02
3. Other -6,032,277,507.66 -1,366,602,100.47 -7,398,879,608.13
(IV) Profit distribution 449,181,555.63 -4,915,695,287.66 -477,360,000.00 -4,943,873,732.03
1.Withdrawal of surplus reserves 449,181,555.63 -449,181,555.63
3. Distribution over owners (or -2,196,000,000.00 -207,360,000.00 -2,403,360,000.00 shareholders)
4. Other -2,270,513,732.03 -270,000,000.00 -2,540,513,732.03
(V) Carrying forward internal owners’ 16,789,967.00 16,789,967.00 equity
4. Other 16,789,967.00 16,789,967.00
(VI) Reasonable reserve -3,836,018.35 -959,004.60 -4,795,022.95
103
Inner Mongolia Yitai Coal Company Limited Annual Report 2012
1. Withdrawal in the report period 835,013,635.34 117,316,102.25 952,329,737.59
2. Usage in the report period 838,849,653.69 118,275,106.85 957,124,760.54
IV. Balance of this period-end 1,627,003,500.00 1,511,013,242.53 1,105,415,215.52 15,456,266,897.69 -289,674.55 2,239,458,670.94 21,938,867,852.13
104 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: RMB Currency: CNY
Amount at the same period of last year
Item Equity attributable to owners of parent company Minority interests Total owner’s equity Paid-in capital Capital reserve Reasonable reserve Surplus reserve Retained profit (Share capital)
I. Balance at end of last year 1,464,000,000.00 759,702,968.66 1,509,249,148.28 9,814,710,792.79 1,544,670,965.44 15,092,333,875.17
Other 233,210,573.65 2,098,688.510 1,689,977,333.36 321,482,341.82 2,246,768,937.34
II. Balance at the beginning of this year 1,464,000,000.00 992,913,542.31 2,098,688.510 1,509,249,148.28 11,504,688,126.15 1,866,153,307.26 17,339,102,812.51
III. Amount of increase/decrease of this 1,167,654,191.86 1,737,329.840 513,586,612.08 2,245,393,291.60 100,294,186.04 4,028,665,611.42 period (decrease was listed with ―-‖)
(I) Net profit 7,720,489,100.77 546,709,199.23 8,267,198,300.00
(II) Other comprehensive income 104,400.00 104,400.00
Subtotal of the above (I) and (II) 104,400.00 7,720,489,100.77 546,709,199.23 8,267,302,700.00
(III) Capital invested or decreased by 1,167,549,791.86 164,682,209.46 1,332,232,001.32 owners
1. Owners’ devoted capital 167,422,000.00 167,422,000.00
3. Other 1,167,549,791.86 -2,739,790.54 1,164,810,001.32
(IV) Profit distribution 513,586,612.08 -5,475,095,809.17 -611,280,000.00 -5,572,789,197.09
1.Withdrawal of surplus reserves 513,586,612.08 -513,586,612.08
3. Distribution over owners (or -2,196,000,000.00 -233,280,000.00 -2,429,280,000.00 shareholders)
4. Other -2,765,509,197.09 -378,000,000.00 -3,143,509,197.09
(VI) Reasonable reserve 1,737,329.8400 182,777.35 1,920,107.19
1. Withdrawal in the report period 522,819,248.5800 73,650,845.65 596,470,094.23
2. Usage in the report period 521,081,918.7400 73,468,068.30 594,549,987.04
IV. Balance of this period-end 1,464,000,000.00 2,160,567,734.17 3,836,018.3500 2,022,835,760.36 13,750,081,417.75 1,966,447,493.30 21,367,768,423.93
105 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
Statement on Changes of Owners’ Equity of Parent Company January – December of 2012 Unit: RMB Currency: CNY
current amount
Item Paid-in capital (Share Capital reserve Reasonable reserve Surplus reserve Retained profit Total owner’s equity capital)
I. Balance at end of last year 1,464,000,000.00 276,786,940.17 2,022,835,760.36 11,984,659,649.59 15,748,282,350.12
II. Balance at beginning of this year 1,464,000,000.00 276,786,940.17 2,022,835,760.36 11,984,659,649.59 15,748,282,350.12
III. Amount of increase/decrease of
this period (decrease was listed with 163,003,500.00 747,539,481.73 -917,420,544.84 2,018,423,950.91 2,011,546,387.80
―-‖)
(I) Net profit 4,491,815,556.35 4,491,815,556.35
Subtotal of the above (I) and (II) 4,491,815,556.35 4,491,815,556.35
(III) Capital invested or decreased by 163,003,500.00 747,539,481.73 -1,366,602,100.47 171,789,950.19 -284,269,168.55 owners
1. Owners’ devoted capital 163,003,500.00 5,382,723,016.02 5,545,726,516.02
3. Other -4,635,183,534.29 -1,366,602,100.47 171,789,950.19 -5,829,995,684.57
(IV) Profit distribution 449,181,555.63 -2,645,181,555.63 -2,196,000,000.00
1.Withdrawal of surplus reserves 449,181,555.63 -449,181,555.63
3. Distribution over owners (or -2,196,000,000.00 -2,196,000,000.00 shareholders)
106 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
1. Withdrawal in the report period 572,906,708.76 572,906,708.76
2. Usage in the report period 572,906,708.76 572,906,708.76
IV. Balance of this period-end 1,627,003,500.00 1,024,326,421.90 1,105,415,215.52 14,003,083,600.50 17,759,828,737.92
Unit: RMB Currency: CNY
Amount at the same period of last year
Item Paid-in capital (Share Capital reserve Reasonable reserve Surplus reserve Retained profit Total owner’s equity capital)
I. Balance at end of last year 1,464,000,000.00 276,829,559.92 1,509,249,148.28 9,558,380,140.88 12,808,458,849.08
II. Balance at beginning of this year 1,464,000,000.00 276,829,559.92 1,509,249,148.28 9,558,380,140.88 12,808,458,849.08
III. Amount of increase/decrease of this period (decrease was listed with 0.00 -42,619.75 513,586,612.08 2,426,279,508.71 2,939,823,501.04
―-‖)
(I) Net profit 5,135,866,120.79 5,135,866,120.79
(II) Other comprehensive income 104,400.00 104,400.00
Subtotal of the above (I) and (II) 104,400.00 5,135,866,120.79 5,135,970,520.79
(III) Capital invested or decreased -147,019.75 -147,019.75 by owners
3. Other -147,019.75 -147,019.75
(IV) Profit distribution 513,586,612.08 -2,709,586,612.08 -2,196,000,000.00
1.Withdrawal of surplus reserves 513,586,612.08 -513,586,612.08
3. Distribution over owners (or -2,196,000,000.00 -2,196,000,000.00 shareholders)
1. Withdrawal in the report period 280,312,217.73 280,312,217.73
107 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
2. Usage in the report period 280,312,217.73 280,312,217.73
IV. Balance of this period-end 1,464,000,000.00 276,786,940.17 2,022,835,760.36 11,984,659,649.59 15,748,282,350.12 Legal person of the Company: Zhang Donghai Charger of accounting works: Lv Guiliang Person in charge of accounting organ: Yang Yonggang
108 III. Company profile
(I) History origin of the Company Inner Mongolia Yitai Coal Company Limited (hereinafter referred to as the Company) is a listed company with B and H shares both launched by Inner Mongolia Yitai Group Co., Ltd. (hereinafter referred to as Yitai Group). The Company was established in August 1997 and was listed in Shanghai Stock Exchange in the same year. The abbreviation stock name is Yitai B share (stock code:900948). The Company was listed in Hong Kong Stock Exchange in July 2012, with abbreviation stock name of Yitai Coal (stock code: 3948). Currently, the total share capital of the Company is 1,627,003,500 shares, including 800,000,000 corporate legal person shares held by Yitai Group (accounting for 49.17% of the total share capital), 664,000,000 circulating B shares (accounting for 40.81% of the total share capital) and 163,003,500 H shares (accounting for 10.02% of the total share capital).
Register address of the Company: Yitai Building, Tianjiao North Road, Dongsheng District, Ordos, Inner Mongolia, P.R.C. Registration serial of business license of enterprise legal person: 150000400001093
(II) Industry nature The Company belongs to coal mining industry
(III) Business scope Business scope: manufacture, transport, washing, coking and sales of raw coal, mining supplies, farm cultivation, catering, guest room; tourism development, tourism business, highway construction and operation, fuel charging service, solar power, coal imports and coal mine equipment and coal chemical equipment imports.
(IV) Main products and labors The Company mainly engaged in coal production and operation, railway transportation as auxiliary business and coal chemical as the industrial extension.
(V)Basic corporate structure The highest authority organ of the Company is general meeting, with general manager as the principal under the board of directors. Based on business requirements, it sets office of general manager, HR department, securities department, finance department, audit department, coal transportation and sales department, materials supply department, safety supervision department, enterprise management department, business development department, engineer management department, quality management 109
Inner Mongolia Yitai Coal Company Limited Annual Report 2012 department, information management department, power management department, production segment, and environment supervision department.
IV. Major accounting policy & estimation and previous error (I) Basis of preparation of financial statements: The preparation of the financial statements is based on the Company’s continual operation, in line with the actual transaction and events, and on the recognition and measurement pursuant to the Corporate Accounting Principle – Basic Ordinance and other accounting principles together with other relevant rules.
(II) Declaration of obedience to Corporate Accounting Principles The preparation of the Group’s financial statements is up to the Corporate Accounting Principles and is a true and complete reflection to the Company relevant information in the Period as the financial status, operation result, and cash flow.
(III) Accounting period The Company’s accounting period is from 1 January to 31 December in Gregorian calendar.
(IV) Bookkeeping standard currency The RMB is taken as the bookkeeping standard currency.
(V) Accounting method for consolidation of enterprises under same control or otherwise 1. Consolidation of enterprises under same control The assets and liabilities from the corporate consolidation are measured on their book value in the consolidated party on the consolidation day. The difference between the book value of the net assets from the consolidation and the book value of the consideration value paid in the consolidation is used for the adjustment of the reserve or of the retained earnings if not sufficient for deducting the reserve.
All expenses directly related to the consolidation, including the auditory expenses, appraisal ones, and legal service ones, paid for the corporate consolidation, are reckoned into the current loss/gain.
The actual service charge and brokerage of the equity stock offering in the corporate consolidation are used for deducting the premium income of the equity stock or for the retained earnings if not sufficient for the premium income.
As for the inconsistency in the accounting policies between the consolidated parties and the Company, is adjusted on the Company’s policies on the consolidation day, and recognized on the corporate accounting
110 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 principles accordingly.
2. Consolidation of enterprises not under same control The actual liabilities or ones assumed as payment of the corporate consolidation consideration value on the purchase day, is measured on the fair value, and the difference between the fair value and the book value, is reckoned into the current loss/gain.
The consolidation cost is distributed on the purchased day.
The difference of the consolidation cost higher than the fair value of the net recognizable assets from the purchase party in the consolidation is recognized as the good will; the difference of the consolidation cost lower than the fair value of the net recognizable assets from the purchase party in the consolidation, is reckoned into the current loss/gain.
As for all other assets (not only the previously recognized assets of the purchased party) besides the intangible assets, from the purchased party in the corporate consolidation, bringing forth the possible economic interest inflow to the Company and with the reliable fair value measurement, they are recognized individually and measured on the fair value. As for the intangible assets of a reliable fair value measurement, are recognized individually as the intangible assets and measured on the fair value. As for all other liabilities besides the contingent liabilities, from the purchased party, with the fulfillment of relevant obligations bringing forth the possible economic interest outflow from the Company and with the reliable fair value measurement, they are recognized individually and measured on the fair value. As for the contingent liabilities from the purchased party, of a reliable fair value measurement, are recognized individually as liabilities and measured on the fair value.
(VI) Preparation methods for consolidated financial statements The scope of the preparation of the consolidated financial statements, are determined on the basis of the control, with all subsidiaries within the scope.
All accounting policies and periods adopted by the subsidiaries within the consolidation scope are consistent with the Company’s and the necessary adjustment is made in line with the Company’s if inconsistent.
The consolidated financial statements are prepared on the basis of the Company’s and the subsidiaries’, in light of other relevant information and after the adjustment on the subsidiaries’ long-term stock investment according to the equity law.
111 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
All influences from the internal transactions between the Company and its subsidiaries or among subsidiaries upon the consolidated balance sheet, profit statement, cash flow statement, and owners’ equity statement, are balanced out in the consolidated financial statements.
The balance of the current loss shared above the period-beginning owners’ equity enjoyed in the subsidiaries, by the minority shareholders, are used for deducting the Company’s owners’ equity if not stipulated by the Company’s Prospectus or agreements to be shared by the minority shareholders, and for the minority shareholders’ equity if stipulated.
In the Period, due to the subsidiary’s increase from the consolidation of enterprises under the same control, the period-beginning sum of the consolidated balance sheet is adjusted; the income, expense, and profit, of the subsidiary from the consolidation period-beginning to the Period-end, are all reckoned into the consolidated profit statement; the cash flow in the above period are reckoned into the consolidated cash flow statement.
In the Period, due to the subsidiary’s increase from the consolidation of enterprises not under the same control, the period-beginning sum of the consolidated balance sheet is not adjusted; the income, expense, and profit, of the subsidiary from the consolidation period-beginning to the Period-end, are all reckoned into the consolidated profit statement; the cash flow in the above period are reckoned into the consolidated cash flow statement.
In the Period, due to the disposal of the subsidiary, the income, expense, and profit, of the subsidiary, from the period-beginning to the disposal day, are all reckoned into the consolidated profit statement; the cash flow in the above period are reckoned into the consolidated cash flow statement.
(VII) Determination principle on cash and cash equivalent The Company’s storage cash and deposits available for payment anytime, are recognized as cash. The investment up to all of the following four conditions as of 3-month-blow holding period, strong mobility, easy change into the cash of the known sum and slight risk of the value change, is recognized as the cash equivalents.
(VIII) Foreign currency business and conversion of financial statements in foreign currency 1. Foreign exchange business
As for the foreign currency transaction, it is converted in RMB on the current exchange rate on the actual transaction day and booked.
112 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
The balance of the monetary item in foreign currency is converted on the current rate on the balance sheet day, and the difference arising is reckoned into the current loss/gain except that the one related to the construction of assets up to the capitalization, is dealt with on the principle of the capitalization of the borrowing expense. As for the non-monetary item in foreign currency and on historic cost measurement, is still converted on the current exchange rate on the day of the actual transaction, without the change in its sum in RMB. As for the non-monetary item in foreign currency and on the fair value measurement, it is converted on the current rate on the day of fair value recognition, and the difference arising is reckoned into the current loss/gain or the reserve.
2. Conversion of financial statement in foreign currency
The assets/liabilities items in the balance sheet i are converted on the current exchange rate on the balance sheet day; owners’ equity items besides the ―undistributed profit‖ are converted on the current exchange rate on the actual business day. Income/expense items in the profit statement are converted on the current exchange rate on the actual transaction day. The differences arising from the above conversions of the financial statement in foreign currency are specifically listed in owners’ equity items in the balance sheet.
Upon the disposal of the foreign operation, the difference of the conversion related to the disposal of the foreign operation and listed in the owners’ equity items in the balance sheet, is transferred into the current disposal loss/gain; as for the partly disposal of the foreign operation, the difference of the conversion measured on the disposal proportion, is transferred into the current loss/gain.
(IX) Financial instrument The financial instruments consist of the financial assets, financial liabilities and the stock instrument. 1. Category of financial instrument According to the management purpose of holding the financial assets and assuming the financial liabilities, the financial instruments are divided as the financial assets/liabilities on the fair value measurement and with the change reckoned into the current loss/gain (including the tradable financial assets/liabilities, and ones designated to be on the fair value measurement and with the change reckoned into the current loss/gain); long-term investment; account receivable; and financial assets available for sale; and other financial liabilities.
2. Recognition basis of and measurement method for financial instrument (1) Financial assets (liabilities) on fair value measurement and with change reckoned into current loss/gain
113 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Upon being obtained, they are recognized on the fair value (deducting the cash dividend announced but un-distributed yet or the security interest due but not drawn) as the initial recognition sum, and the relevant transaction expenses reckoned into the current loss/gain.
The interest or cash dividend received in the holding period, is recognized as the investment return, and the change in the fair value is reckoned into the current loss/gain.
Upon the disposal, the difference between the fair value and the initial book value is recognized as the investment return, and meanwhile the loss/gain from the fair value change is adjusted.
(2) Investment held-to-maturity Upon being obtained, the sum of the fair value (deducting the security interest due but not drawn yet) and the relevant expense, are recognized as the initial sum.
In the holding period, the interest income is measured and recognized on the diluted cost and actual interest (if the difference between the actual rate and nominal rate is small, the latter one is measured on), and reckoned into the investment loss/gain. Upon being obtained, the actual rate is recognized and unchanged in the estimative duration period or the applicable shorter period.
Upon disposal, the difference between the price received and the book value of the investment, is reckoned into the investment return.
(3) Account receivable As for the account receivables, they are liability receivables from the external sale of goods or supply of labor service, and other liabilities of the liability instrument from the other corporations held by the Company and with no quotation in the active market; they include account receivable, bill receivable, prepayment, other account receivable, and long-term account receivable, with the contract or agreement price receivable from the purchaser recognized as the initial sum; as for the financing ones, they are recognized initially on the current values.
Upon the withdrawal or disposal, the difference between the price received and the account receivable, is reckoned into the current loss/gain.
(4) Financial assets available for sale Upon being obtained, the sum of the fair value (deducting cash dividend announced but not distributed yet or the security interest due but not drawn yet) and the relevant expense, are recognized as the initial sum.
114 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
The interest or cash dividend received in the holding period, are recognized as the investment return and on the fair valuation measurement and with the change in the fair value reckoned into the reserve (other reserves) at the Period-end.
Upon disposal, the difference between the price received and the book value of the financial assets, is reckoned into the investment return, and meanwhile the previous sum directly reckoned into the accumulative change in the fair value of the owners’ equity and correspondent to the disposal part, are transferred out and reckoned into the investment loss/gain.
(5) Other financial liabilities. The sum of the fair value and the relevant expense, are recognized as the initial sum and on the follow-up measurement of the diluted cost.
3. Recognition principle on and measurement method for the transfer of financial assets Upon the transfer of the financial assets, if all risks and compensations in the ownership of the financial assets are transferred into the transfer-in party, the recognition of the financial assets is terminated; if nearly all risks and compensations are maintained, the recognition is not terminated.
Upon the judgment of the financial assets transfer up to the above conditions of the recognition termination, the principle of the substance more important than the form is adopted. The transfer of the financial assets are divided as the whole transfer and the partly one. As for the whole transfer up to the conditions of the recognition termination, the following two items are reckoned into the current loss/gain: (1) The book value of the transferred financial assets; (2) The sum of the consideration value received from the transfer and the previous accumulative change in the fair value directly reckoned into the owners’ equity (the financial assets related in the transfer are ones available for sale). As for the financial assets up to the conditions of partly transfer, the whole book value of the transferred ones is diluted on the respective relative fair value between the part of recognition termination and the one of no termination, and the difference between the following two items are reckoned into the current loss/gain: (3) The book value of the part of the recognition termination; (4) The sum of the consideration value of the part of the recognition termination and the accumulative change in the fair value directly reckoned into the owners’ equity and correspondent to the part of recognition termination (the financial assets related in the transfer are ones available for sale).
115 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
As for the financial assets not up to the conditions of the recognition termination, they are in continual recognition, and the consideration value received is recognized as one item of the financial asset.
4. Condition of termination of recognition of financial assets As the current obligation of the financial liability is lifted wholly or partly, the recognition of the financial liability or part of it is terminated; if the Company signs with the debtor the agreement that the existing financial liability are replaced by the assumption of the new liability, and the contract terms between the new one and the existing one are different substantially, the recognition of the financial liability are terminated, and meanwhile the new one is recognized.
As the substantial modification is made on all or part of the contract agreements of the existing financial liability, the recognition of it or part of it is terminated, and meanwhile the one after the modification, is recognized as a new oneself.
Upon the termination of the recognition of the financial liability or part of it, the difference between the book value of the terminated one and the consideration value paid (including the non-monetary assets transferred out or new financial liability assumed), is reckoned into the current loss/gain.
As for the repurchase of the partly financial liability, the whole book value of the financial liability is diluted on the respective relative fair value between the part of the recognition termination and the part of continual recognition on the repurchase day. The difference between the book value of the part of recognition termination and the consideration value paid (including the non-monetary assets transferred out and new liability assumed), is reckoned into the current loss/gain.
5. Recognition method for recognition of fair value of financial assets and liabilities The Company’s all financial assets and liabilities on the fair value measurement, are all in direct reference to the Period-end quotation in the active market.
6. Accrual of provision of impairment of financial assets (account receivable excluded) (1) Provision of impairment of financial assets available for sale: If the decrease in the fair value of the financial assets available for sale is rather large, or the decrease trend is not temporary expectedly after the comprehensive consideration of all relevant factors, the impairment is recognized, and the previous accumulative loss from the fall-down of the fair value and directly reckoned into the owners’ equity, is recognized as the impairment loss.
(2) Provision for impairment of long-term investment
116 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
The measurement on the loss of the impairment is made in comparison to the measurement method for the loss of the account receivable. (X) Account receivable 1. Amount receivable with single substantive amount and withdrawal bad debt provision single
The sum of the top five account receivables or the sum of Recognition principle or amount standards for single accounts all accounting for 10% of the balance of the substantive account account receivables After separate impairment test, if there has objective Accrual method for single substantive amount and evidence to the actual impairment or account receivable, withdrawal bad debt provision single recognized as impairment losses and reckoned into current gains/losses
2. Accounts receivable that are individually insignificant but with bad debt provision provided on an individual basis
As for single insignificant account receivable, they are grouped Reason for bad debt provision provided on an individual into the account receivable portfolio of similar credit risk basis characters and then tested again As for the account receivable without impairment been found after test (including account receivable with single substantive amount and single insignificant account), they are grouped into the account receivable portfolio of similar credit risk characters Method of provision for bad debt and then tested again. As for receivable recognized as impairment on an individual basis, not test for impairment in account receivable portfolio of similar credit risk characters
(XI) Inventory 1. Category of inventory Category of inventory: matter in the way, raw material, turn-over material, inventory goods, product in process, goods delivered, material in commissioned processing, and consumable biological assets.
2. Pricing method for inventory delivered Weighted average method
3. Recognition principle on net recognizable value of inventory and accrual method for the provision of the price fall-down of inventory Upon the thorough check upon the inventory at the Period-end, the accrual or adjustment is taken on the
117 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 provision for the inventory price fall-down according to the lower one between the inventory cost and the net recognizable value.
As for the goods inventory in direct use for sale as manufactured products, inventory goods, and materials for sale, the net recognizable values are recognized in the regular production and operation on the sum of estimative sale price of the inventory deducting the estimative sale expense & relevant tax expense; as for the inventory materials needing processing, the net recognizable value is recognized in the regular production and operation on the estimative sale price of the manufactured products deducting the will-be-actual cost, estimative sale expense and the relevant tax after the completion of the project; as for the inventory for the implementation of the sale contract or labor service one, its net recognizable value is measured on the basis of the contract price, and net recognizable value of the surplus inventory is on the general sale price if the inventory held is more than the one ordered in the contract.
The provision for the price fall-down of the inventory is accrued at the Period-end on the single inventory item; however, as for the inventory of a variety and rather low unit price, the provision for the price fall-down is accrued on the category of the inventory; as for the inventories related to the product series produced and sold in the same district and of the same or similar use or purpose, and impossible to be measured separately from other items, the provision for the price fall-down is consolidated and accrued.
As for the one with the factors of the influence on deducting the inventory value, the sum deducted is recovered, and transferred back within the previous provision accrued for the price fall-down, and the transferred-back sum is reckoned into the current loss/gain.
4. Inventory system Permanent inventory system
5. Dilution method for consumable low-value goods and packaging materials (1)Consumable low-value goods One-time dilution method (2) Packaging materials One-time dilution method
(XII) Long-term equity investments: 1. Recognition of investment cost (1)Long-term equity investment formed from business combination
118 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Business combination under the same control: as for those combinations, the considerations of which are satisfied by the Company through cash payment, transferring non-cash assets or undertaking obligations and issuance of equity securities, initial investment cost of long-term equity investment is determined according to the share of carrying value of owners’ equity of the party combined as at the combination date. Balance between such initial investment cost and combination consideration payment is adjusted against capital reserve; when capital reserve is insufficient to offset, then it shall be adjusted against retained profit. Each direct related expense arising from combination, including the audit fee, appraisal fee and legal service fee, shall be recorded in current gains and losses upon occurrence.
Business combination not under the same control: combination cost refers to fair value of assets paid, liabilities occurred or assumed and equity securities issued by acquirer for acquisition of control over the acquired party as at purchase date, and the various directly-related expenses arising from the business combination, including agent charge paid for auditing, law service and assessment consultant, other relevant management expenses that reckoned into current gains/losses, exchange expenses of equity securities or debt security that offered with merger consideration as well as initial amount recognized for equity securities or debt security. As for such business combination realized through various exchange transactions in phases, the combination cost refers to the aggregate of each transaction cost. If future events which may affect combination cost are agreed with in a combination contract, then combination cost also covers the amount which may be affected to combination cost and which also can be reliably measured when the estimated future event is very likely to happen as at the purchase date.
(2)Long-term equity investments acquired in other ways Long-term equity investment acquired by cash payment: initial investment cost represents the actual payment for such purchase.
Long-term equity investment acquired by issuance of equity securities: initial investment cost represents the fair value of equity securities in issue.
Long-term equity investment injected by investors: initial investment cost represents the value agreed in investment contract or agreement (net of cash dividend or profit declared but not paid yet), with exclusion of those agreed values which are not fair.
Provided that exchange of non-monetary assets has commercial nature and fair values of assets exchanged for or with could be reliably measured, initial investment cost of long-term equity investment exchanged in with non-monetary assets is determined according to the fair value of assets exchanged with, unless there is evidence proving that fair value of assets exchanged in is more reliable. As for the exchange of
119 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 non-monetary assets not meeting the aforementioned conditions, their initial investment costs are determined according to the carrying value of assets exchanged with and relevant taxes payable.
For long-term equity investment acquired through debt reorganization, its initial investment cost is determined based on fair value.
2. Consequent measure and recognition method for gains and losses (1) Consequent measure Long-term equity investment by the Company in its subsidiaries is calculated at cost method and adjusted at equity method when preparing consolidated financial statements.
For long-term equity investment where an investment party has no common control or significant effect over the invested unit and which has no quotation in an active market and whose fair value can not be measured reliably, it shall be calculated at cost method.
For long-term equity investment where an investment party has common control or significant effect over the invested unit, it shall be calculated at equity method. In case of initial investment cost being higher than share of fair value of net recognizable value of the acquired party, then the initial investment cost of such long-term equity investment shall not be subject to adjustment; while if lower, then the balance between them shall be included in current gains and losses.
Accounting treatment for other change of owners’ equity (other than net gains and losses) of invested unit: as for such purposes, the Company adjusts carrying value of long-term equity investment while increasing or decreasing capital reserve (other capital reserve) based on the part shared or assumed by the Company according to shareholding percentage, provided than the shareholding percentage held constant.
(2) Recognition of gains and losses Under cost method, other than the actual payment paid by the Company for acquiring investment or cash dividend or profit declared but not paid yet (included in consideration), the Company recognizes its investment income by reference to the cash dividend or profit declared by such invested unit.
When recognizing share of losses of invested unit under equity method, the following order shall be followed: first of all, offset carrying value of long-term equity investment. Second, in case of carrying value of long-term equity investment being insufficient for offset, continue to recognize investment loss to the extent of carrying value of other long-term equities which substantially constitute net investments in that invested unit, to offset carrying values of long-term receivables. Last, after the above actions, if a party
120 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 still assume additional obligations according to investment contract or agreement, projected liability then shall be recognized according to the obligations it is expected to assume, and then included in current investment loss.
In the event that such invested unit begins to realize profit in following periods, the invest party shall, after deduction of unrecognized share of losses, proceed in an adverse order as set out above, reduce accounting of book balance of projected liabilities recognized, resume carrying value of long-term equities and long-term equity investments which substantially constitute net investments in that invested unit while recognizing investment income.
3. References for recognition of common control and significant effect over invested unit For such controls jointly shared over certain economic activity according to an agreement, it only exists when other parties to such investment offer unanimous consent toward significant finance and operation decisions related to such economic activity. Then, a common control is deemed to effect with other parties over such invested company. In the event that a party is entitled to participate in decision making of an enterprise in respect of its finance and operation decisions, while that party is not able to conduct control or common control with other parties over such policies, then that party is considered to have significant effect upon such invested company.
4. Method for impairment test and provision for impairment reserve For long-term equity investment which has under-significant effect, no quotation in an active market and whose fair value can’t be measured reliably, its impairment loss is determined at the balance between its carrying value and present value of future cash flow discounted at the prevailing return rate of market of similar assets.
For other long-term equity investment, other than goodwill arising from business combination, where impairment indication exists, if the measure result of recoverable amount shows that the recoverable amount of such asset is lower than its carrying value, then the balance shall be recognized as impairment losses.
Goodwill arising from business combination is subject to impairment test no matter there is impairment indication or not.
Impairment loss of long-term equity investment shall not be reversed once recognized.
(XIII) Investment real estate:
121 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Investment real estate represents properties held fur purpose of earning rental or capital appreciation, or both. It includes, among other things, land use right leased, land use right held and ready to transfer upon appreciation and constructions leased.
The Company adopts cost model for measuring investment real estate. Assets for lease, being investment real estate measured under cost model, follow the same depreciation policies as to the fixed assets of the Company. Land use right for lease follows the same amortization policies as to intangible assets; for any impairment indication, recoverable amount shall be estimated.
In case of the recoverable amount being lower than the carrying value, the Company will accordingly recognize impairment losses.
Impairment loss of investment real estate shall not be reversed once recognized.
(XIV) Fixed assets: 1. Recognition, pricing and depreciation for fixed assets Fixed assets represent the tangible assets held for the purposes of producing goods, providing labor services, lease or operational management, with service life over one year and high unit value.
Fixed assets are accounted for at the effective coat upon acquisition, and depreciation for fixed assets is provided at straight line method (average term method) commencing from the next month since they reach the expected purposes.
2. Depreciation methods for various fixed assets:
Depreciation rate per annum Category Depreciation term (year) Rate of residual value (%) (%) Houses and buildings 8-40 years 3%-10% 12.13%-2.25% Motors 10 years 4% 9.6% Highway 20-25 years 5%-4% Transportation Working capacity method 3% vehicles Well construction Production capacity method Railways 8-45 years 3%-5% 2.16%-12% Agricultural 10-35 years 3% 9.70%-2.77% equipments Other equipments 5-20 years 3%-10% 19.8%-4.5%
122 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
3. Impairment test and provision of impairment reserve for fixed assets The Company makes judgment at each period-end on whether there is impairment indication in fixed assets.
In case of existence of impairment indication, then estimate its recoverable amount which is determined at fair value of such assets less the higher of net amount after deduction of disposal expense and present value of estimated future cash flow of such asset.
In case of recoverable amount of fixed asset being lower than its carrying value, the Company will reduce the carrying value to the extent of recoverable amount, with the reduced amount recognized as impairment loss of such fixed assets and included in current gains and losses. Meanwhile, relative impairment provision of such assets shall be provided.
Once fixed assets are recognized with impairment losses, their depreciation also will be adjusted accordingly in future periods, so as to make sure that adjusted carrying value (net of estimated residual value) of the asset is systematically amortized against the remaining service life of the asset.
Impairment loss of fixed assets will not be reversed in following accounting periods once recognized.
In case of indication showing that an asset is probably to experience impairment, the Company will estimate its recoverable amount based on individual fixed asset. If it is hard to estimate the recoverable amount of an individual fixed asset, then the recoverable amount is determined based on the assets group such fixed asset belongs to.
4. Other explanations Depreciation of fixed assets is provided by adoption of average term method and working capacity method, while well construction and transportation vehicles are provided with depreciation by production capacity method and working capacity method respectively. Depreciation rates are determined according to categories, expected service life and expected rate of residual value (not applicable to roads) of fixed assets. Provision is conducted based on different categories.
(XV) Construction-in-progress: 1. Category of construction-in-process Construction-in-progress is calculated based on classification of special projects.
2. Standard and timing for carrying forward construction-in-process into fixed assets
123 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Constructions in process are accounted as fixed assets at all expenses occurred for making such constructions reaching the expected purpose. As for those constructions in process which have reached expected purpose while completion settlement has not been conducted for yet, they shall be accounted against fixed assets at the estimated value based on project budget, construction cost or actual engineering cost. Meanwhile, depreciation is provided for such assets under the depreciation policy of the Company applicable to its fixed assets. Upon completion of completion settlement, the original temporarily-estimated value shall be adjusted against the actual cost, while the original depreciation provision is not subject to adjustment.
3. Impairment test method and provision method for construction-in-process The Company makes judgment at each period-end on whether there is impairment indication of construction-in-process.
In case of existence of such indication, the Company will estimates the recoverable amount of such asset. The recoverable amount is determined at the higher of fair value of construction-in-process less disposal expense and present value of estimated future cash flow of construction-in-process.
In case of recoverable amount being lower than carrying value of construction-in-process, the carrying value then shall be reduced to the extent of recoverable amount, with the reduced part recognized as impairment loss which is accounted in current gains and losses. Meanwhile, corresponding impairment provision shall be provided.
Impairment loss of construction-in-process is not subject to reversal in following accounting periods once recognized.
In case of indication showing that construction-in-process is probably to experience impairment, the Company will estimate its recoverable amount based on individual item. If it is hard to estimate the recoverable amount of an individual construction-in-process, then the recoverable amount is determined based on the assets group such construction-in-process belongs to.
(XVI) Borrowing costs: 1. Recognition of capitalization of borrowing costs Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction or production of qualifying assets, it shall be capitalized and recorded in the costs of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall be dealt with in the current gains and losses.
124 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Qualifying assets shall refer to the fixed assets, investment properties, inventories and other assets, of which the acquisition and construction or production may take a substantially long period of time to get ready for its intended use or for sale.
Borrowing costs are capitalized when the following three conditions are fully satisfied: (1)Expenditures for the assets are being incurred where expenditures for the assets include cash paid for acquisition, construction or production of qualifying assets and expenditures incurred due to transfer of non-cash assets or interest-bearing loans; (2) Borrowing costs are being incurred; (3) Acquisition, construction or production that is necessary to enable the asset to reach the condition for its intended use or for sale have commenced.
2. Capitalization period of borrowing costs Capitalization period represents the period between commencement time and termination time of capitalization of borrowing costs, with exclusion of the period when borrowing costs are temporarily suspended with capitalization.
Capitalization for borrowing cost shall be ceased when qualified asset acquired and constructed or produced reaches the condition for its intended use or for sale.
Capitalization for borrowing cost of part asset shall be ceased when part project in the qualified asset acquired and constructed or produced is completed and reaches the condition for independent use.
In case that though each part of asset acquired or produced has been completed respectively while it can not reach the condition for its intended use or for sale until the integrity of such asset is finished, for such case, capitalization for borrowing cost of that asset shall be ceased only when that integrity gets completed.
3. Capitalization suspension period of borrowing costs The capitalization of borrowing costs is suspended during the period in which the acquisition or construction of qualifying asset is abnormally interrupted, and the interruption period is more than 3 months; if such interrupt constitutes necessary procedure for enabling qualifying asset acquired or produced to reach the condition for its intended use or for sale, then borrowing costs continue to be capitalized. Borrowing costs incurred during the interrupt period shall be recognized as current gains and losses, and borrowing costs continues to be capitalized since acquisition and construction or production of such asset restarts.
125 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
4. Computation of capitalized amount of borrowing costs Interest expenses incurred from special borrowings (net of interest income and investment income by saving the unutilized borrowing capitals in bank or making temporary investment with such unutilized borrowings) and its supporting expenses shall be capitalized until the qualifying assets acquired or produced reach the condition for their intended use or for sale.
Interest arising from general borrowings which shall be capitalized is calculated based on the weighted average number of the exceeding part of accumulated assets expenses over that of special borrowings at the end of each month times capitalization ratio of occupied general borrowings. Such capitalization ratio is determined according to the weighted average interest rate of general borrowings.
In case of discount or premium existed in borrowings, the Company will determine the amortized discount or premium amount for each accounting period at effective interest method, then to adjust interest of each period.
(XVII) Intangible assets: Intangible assets including land use right, exploration right, mining right and software ect and measured by cost. 1. Land use right Amortized equally based on service life of land use certificate. 2. Exploration right and mining right Exploration right was listed by cost subtract the accumulative amortization and amortized by units-of-production method (UOP). Mining right was measured by cost, and amortized by UOP since commissioning date of coal mine after transfer to exploration right. 3. Software was listed by obtained cost subtract the accumulative amortization and amortized by straight-line method based on actual service life. 4. Regular re-check for the service life and amortization method Re-checking the amortization method and expected operation life of intangible assets with limit service life at every end of the year. 5. Impairment reserve of intangible assets In case of recoverable amount being lower than carrying value of intangible assets, the carrying value then shall be reduced to the extent of recoverable amount, the recoverable amount is determined at the higher of fair value of asset less disposal expense and present value of estimated future cash flow of asset.
(XVIII) Long-term deferred expenditures:
126 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Long-term deferred expenses are amortized averagely during the beneficial period, among which: 1. Rental paid in advance for leased-in fixed asset for purpose of operation is amortized averagely against the term stipulated by lease contract or other reasonable method.
2. Expenses arising from improvement to fixed assets leased by operation lease are amortized averagely against the shorter period between the remaining lease period and available service life of lease assets. 3. Compensation for demolition of strip mining and land stripping fee were amortized by units-of-output.
(XIX) Asset transfer attached with repurchases condition: When disposing products or transferring other assets, the Company enters into repurchase agreements regarding to the products sold or assets transferred with buyers. Pursuant to terms of such repurchase agreements, the Company can judge whether disposal of goods satisfies recognition of income. If after-sale repurchase belongs to financing transaction, the Company shall not recognize sale income when delivering products or assets. The balance between repurchase payments over sales payment shall be provided with interest against the repurchase period, with such interest being recorded in finance costs. (XX) Contingent liabilities: 1. Assets or services which are likely to be delivered or provided in future periods required for lawsuits, debt guarantee, loss contract and reorganization which the Company is involved shall be recognized as contingent liabilities, provided such assets or services could be measured reliably.
2. Rework, disposal and environment clearance obligations shall be determined by the management after taking into account the present relevant laws and rules, by reference to their previous experiences and the best estimate about future expenditure.
3. Criterion of recognition of contingent liabilities As long as obligations related to contingent liabilities satisfy all of following conditions, the Company will recognize them as contingent liabilities: Such obligation constitutes current obligation assumed by the Company; Performance of such obligation leads economic benefit flowing out of the Company in a great possibility; Amount of such liability can be measured reliably.
4. Measure of contingent liability ①Contingent liabilities are initially measured based on the best estimates of the expenditures required to be paid for performance of the present obligations.
The Company comprehensively takes into account of risks, uncertainties and currency time value related to
127 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 contingent events when confirming the best estimates. As for those which have significant effect upon currency time value, the Company confirms the best estimates through discount on relative future cash outflow.
The best estimates are determined as per the following situations, respectively:
If there is a sequent range for the necessary expenditures and if all the outcomes within this range are equally likely to occur, the best estimates shall be determined in accordance with the middle estimate within the range, i.e. the average of the highest and the lowest amounts.
If there is no sequent range for the necessary expenditures, or all the outcomes within this range are not equally likely to occur despite that there is a sequent range, the best estimates shall be determined in light of the most likely outcome if the contingencies concern a single item; while if the contingencies concern two or more items, the best estimate shall be calculated and determined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenditures necessary for the liquidation of contingent liabilities of the Company is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the compensation will be obtained. The amount recognized for the compensation should not exceed the carrying value of the contingent liabilities.
②Estimates on rework, disposal and environment clearance obligation: Rework, disposal and environment clearance obligations shall be determined by the management after taking into account the present relevant laws and rules, by reference to their previous experiences and the best estimate about future expenditure. Meanwhile, they will discount the expected expenditures to their present value. As the ongoing performance of the current coal exploration activities which result in obvious effect over future land and environment, estimates about relevant costs may be subject to adjustment from time to time.
(XXI) Income: 1. Detailed judgment references for recognition of income from goods sales
The Company recognizes income from goods sales when the following conditions get satisfied, among other things: the Company has transferred the major risks and returns in the ownership of commodities to the purchaser; the Company no longer exercises continuing management generally related to the ownership
128 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 and no longer has actual control over the commodities sold; amount of revenue can be reliably measured; it is very likely that an inflow of economic benefits to the Company will occur; costs related, incurred or to be incurred can be reliably measured. Recognition principle: in accordance with the contract, as for on-scene delivery term, income should be recognized while the coal were delivered to the client and quality and quantity have been confirmed by two parties; as for delivery term of vehicle sweeping, income should be recognized by the loading quantity at dispatching station or coal mine; as for delivery directly through railway, income should be recognized while delivered to the appointed location by clients; as for sales with FOB, recognized the income by quantity shipped. 2. References for recognition of income from Assignment of asset use rights
References: economic benefits in connection with the transaction are likely to flow into the Company; amount of revenue can be reliably measured. Revenue from assignment of asset use rights is recognized according to the following situations:
(1)Interest revenue is calculated based on the time taken by others for applying monetary capital of the Company and the effective interest rate. (2)Revenue from utilization charge is calculated based on the charging time and method specified in relevant contract or agreement.
3. References and methods for confirming contract completion progress when recognizing revenue from service provision and construction contract at percentage of completion method
Revenue from service provision is recognized at percentage of completion method where service transaction provided as at balance sheet date can be estimated reliably. Completion progress of such service transaction is confirmed according to measurement upon completed works.
Total revenue from service provision is generally determined according to contracted or agreed payment received or receivable, while those payments which are not fair valued are out of inclusion. Current revenue from service provision is determined based on the total revenue from service provision as at balance sheet date plus completed progress less those accumulated revenue recognized in prior accounting periods. At the same time, current service cost shall be carried forward based on the estimated service costs plus completed progress less accumulated service costs recognized in prior accounting periods.
If service transaction provided at balance sheet date can not be estimated reliably, then it shall process according to the following situations:
129 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(1)If incurred service costs are expected to be compensated, service provision revenue shall be recognized in accordance with such incurred service cost. Meanwhile, service costs shall be carried forward under the same amount.
(2) If incurred service costs are not expected to be compensated, then such costs shall be recorded in current gains and losses, without recognition of service revenue. (XXII) Government grant: 1. Types Government grant refers to monetary assets and non-monetary assets received by the Company from government in free, which includes assets-related and revenue-related government grants.
2. Accounting treatment Government grants related to acquisition and construction of fixed assets and intangible assets and other long-term assets shall be recognized as deferred income, and recorded in non-operating income against the service life of the assets acquired or constructed in phases;
Government grants, other than assets- related ones, shall be current gains and recorded in non-operating income.
(XXIII) Deferred income tax assets / liabilities: 1. References for recognition of deferred income tax assets
The Company recognizes deferred income tax assets arising from deductible provisional difference to the extent of assessable profit which is likely to realize by the Company for offsetting the deductible provisional difference.
2. References for recognition of deferred income tax liabilities
The Company recognizes the assessable provisional difference which shall be paid while not paid yet in current or prior periods as deferred income tax liabilities, other than those provision differences arising from the transactions resulted form goodwill and non-business combination. Besides, such transactions are neither expected to effect accounting profit nor assessable profit upon incurrence.
(XXIV)Operating lease and financing lease: 1. Accounting treatment for operating lease
130 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(1)Expenses paid by the Company for leasing assets are amortized at straight line method and recorded in current expenses against the whole lease term which includes free lease period. The initial direct expenses paid by the Company in respect of lease transaction shall be recorded in current expenses.
If asset leaser assumes lease-related expenses which should have been assumed by the Company, the Company deducts such expense from the total rental and the balance shall be amortized against the lease period and recorded in current expenses.
(2)Rental from asset lease collected by the Company is amortized at straight line method against the whole lease term which includes free lease period and shall be recognized as rental income. The initial direct expenses paid by the Company in respect of lease transaction shall be recorded in current expenses. If such amount being great, it shall be capitalized and recorded in current income against the whole lease period in phases based on the same basis for recognition of rental income.
If the Company assumes lease-related expenses which should have been assumed by the leasee, the Company deducts such expense from the total rental income and the balance shall be allocated against the lease period.
2. Accounting treatment for financing lease (1)Assets input from financing lease: the Company accounts the asset input at the lower of its fair value and present value of minimal lease payment as at the inception date of lease. The minimal lease payment shall be taken as accounting value for long-term payables, with the balance as unrecognized financing costs.
The Company adopts effective interest rate to amortize the unrecognized financing costs during the relevant lease period, and recorded in finance expenses.
(2) Assets output from financing lease: as at the inception date of lease, the Company recognizes the balance between the sum of financing lease payment receivable and non-pledged balance and its present value as unrecognized financing income which will be recognized as lease income during each lease period. The initial direct expenses incurred to the Company in respect of lease transaction shall be recorded in the initial measurement of financing lease payment receivable, and income recognized during lease period shall be reduced accordingly.
(XXV) Change of principal accounting policies and accounting estimation
131 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(1) Change of accounting policies Nil
(1) Change of accounting estimation Nil
(XXVI) Correction of accounting errors in prior periods (1)Retroactive restatement method Nil
(2)Prospective application method Nil
V. Taxes: 1. Main taxes and tax rates
Taxes Taxation bases Tax rate VAT Sales of goods 17％ Diesel oil: 0.8 yuan/L; Naphtha: 1 yua Consumption tax Taxable consumer goods n/L Business tax Assessable service 3％, 5%, 20％ Urban maintenance and construction Turnover tax payable 5%, 7% tax Enterprise income tax Assessable profit 15％, 25％ Educational Surtax Turnover tax payable 3% Local educational Surtax Turnover tax payable 2% Water conservancy fund Operating income 0.1% Resources tax Sales of coal mines 3.2 yuan/Ton Coal price adjustment fund Yield of raw coals 15 yuan/Ton 2. Tax deduction and approval documents Under the announcement released by the state administration of taxation on enterprise income tax in respect of implementation of western development strategy (GJSWZJGG2012 No.12), from 1 January 2011 to 31 December 2020, enterprises located in the west China and whose major businesses are those listed in Encourage Industry Catalog for Western Area and whose major operating income of that year accounts for 70% or above of its total income may pay enterprise income tax at 15% as it applies and reviewed and confirmed by the taxation authority. Before release of the Encourage Industry Catalog for Western Area, enterprises qualifying for Industrial Structure Adjustment Guidance Catalog (2011 version), Foreign Investment industry Guidance Catalog (2007 amendment) and Advantage Industry Catalog in
132 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Central and West China (2008 amendment), as confirmed by taxation authority, may pay enterprise income tax at 15%.
As at the end of the reporting period, Encourage Industry Catalog for Western Area has not been released officially. The Company, together with its controlling subsidiaries Inner Mongolia Yitai Jingyue Suancigou Mine Co., Ltd., Inner Mongolia Yitai Zhundong Railroad Co., Ltd., Inner Mongolia Yitai Baoshan Coal Co., Ltd., Inner Mongolia Yitai Tongda Coal Co., Ltd. qualified for Industrial Structure Adjustment Guidance Catalog (2011 version), thus they paid enterprise income tax at 15% in 2012.
VI. Enterprise merger and consolidated financial statement
1. Particular about subsidiaries
(1) Subsidiary obtained from establishment or investment In 10 thousand yuan Currency: CNY Proporti Actual Proporti Consolidat Full name invested on of Type of Business Register amount on of ed of Register place Business scope voting enterprise nature capital at share statement subsidiaries period-e right nd held (%) (Y/N) held (%) Inner Products of coal Mongolia Dalu chemistry and Yitai CTO Holding Coal 120,016. Town,Jungar 150,000 production and sale 80 80 Y Co., Ltd. subsidiary chemical 00 Banner of their affiliated (CTO for products short) Inner Mongolia Yitai Majiata Jingyue Holding Village, Coal Processing and sale 56,160.0 Suancigou 108,000 52 52 Y subsidiary Hadaigaole , exploration of mineral products 0 Mine Co., Jungar Banner Ltd. ( Suancigou for short) Inner Mongolia Yitai Tanggongta Tiedong Village, Storage and Holding Station Coal transport, Transportati Xuejiawan 16,900 8,619.00 51 51 Y subsidiary sale; station leasing on Co., Ltd. leasing Town, Jungar (Tiedong Storage and Banner Transport for short) Inner Synthetic, Beixini South Mongolia ammonia and other Wholly-own Road, 109 Production Yitai chemical products 10,000.0 ed National of chemical 10,000 100 100 Y Chemicals and 0 subsidiary Higtway, industry CO., LTD. production, Hangjinqi (Yitai storage, operation
133 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Chemicals and sale of for short) chemical products Huhhot Yitai Coal JialanyingVilla Sale Co., Wholly-own ge, Yuquan Wholesale Ltd. (Yital ed 5,000 Wholesale of coal 5,000.00 100 100 Y Sale subsidiary Districy, of coal Company Huhhot fro short) Middle Block, No business Beijing Yitai Building, Yitai No.54 against law and Bio-Tech Holding Xizhimen Pharmaceuti regulations; 1,000 1,000.00 100 100 Y Co., Ltd. subsidiary Beidajie, cal self-optioned the (Bio-Tech Haidian business project for short) District, and business Beijing activities Research, Yitai development of PharmaTec Economy and new-type medicinal h Co., Ltd. Holding Technology Technology small molecular 1,000 510.00 51 51 Y (Beijing subsidiary Development development compounds;technol PharmaTec Zone, Beijing ogy transfer, h for short) technology consultancy Jungar Banner Commodity Huzhun storage, handling, Yitai Hotel, Ruyi Good agent of railway Holding Xuejiawan Logistic storage and 100 transport;logistic 51.00 51 51 Y subsidiary Town, Jungar Co., Ltd. ( handling consultancy and Banner Ruyi railway expansion Logistic for service short) Inner MongoliaYi tai Refined Dalu New Oil Sale Holding Sales of District, 3,000 Sales of lubricant 3,000.00 100 100 Y Co., Ltd. subsidiary lubricant Jungar Banner (Refined Oil for short) Inner Mongolia Consultant and Yitai Nuanshui service of freight Zhundong Holding Consultant county, Jungar 1,280 station business, 652.80 51 51 Y Jintai subsidiary leasing Banner venue leasing of Storage and freight station Transportati on Co., Ltd. Weitai Road Consultant of coal Yitai (S), Economic chemical Xingjiang Holding & technology, Consultant 10,000 9,000.00 90 90 Y Energy Co., subsidiary Technological consultant and Ltd. Development service of coal Zone, Urumchi technology Yitai Ili Holding Yinan Industry Investment of coal Mine Co., Investment 5,000 4,500 90 90 Y subsidiary Zone, Qapqal mining industry Ltd.
134 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Energy technology development, technology transfer, Yitai Wholly-own technology Energy Lingshi Rd, ed Consultant 5,000.00 consultant and 5,000.00 100 100 Y (Shanghai) Shanghai subsidiary service, wholesale Co., Ltd. of coal and operation, or freight transport agency Room 3312, Yitai No.33, Shui Wholly-own Import and export (Holding) On Centre, 6-8 International 19,136,1 ed of coal, 4,500 100 100 Y Hong Kong Harbour Road, trade 00 subsidiary international trade Co., Ltd. Wan Chai, Hong Kong
2. Subsidiary obtained from mergered under same control In 10 thousand yuan Currency: CNY Proporti Full name Actual Proporti Consolidat Registe invested on of of Type of Registered Business amount on of ed r Business scope voting subsidiarie subsidiaries place nature at share statement capital period-en right s d held(%) (Y/N) held(%) Inner MongliaYi tai Auto Transport Jungar Company Wholly-own Banner, Auto Auto transport of Limited ed 500 608.60 100 100 Y Ordos, Inner transport goods (Inner subsidiary Monglia Monglia Auto Transport for short) Inner Mongolia constructionofZhund XuejiawanTo Yitai ong Railway, wn , Jungar Zhundong Wholly-own railway client Banner, Railway 149,60 156,988. Rail Road ed transport; railway 100 100 Y Erdos City, transport 0 69 Co., Ltd. subsidiary expanded service Inner (Zhundong transport, maintance Mongolia Rail Road of vehicle and line for short) Coal technology development, Yitai Ili Xinron Road consultant on coal Energy Wholly-own Developme (E), technology 10,000.0 Co., Ltd. ed nt of coal 10,000 100 100 Y Huocheng development, 0 (Ili Energy subsidiary technology County development of for short) mine and coal chemical investment Inner Mongolia Taohai Town, Yitai Holding Nalin, Ejin Coal 3,000.0 Production and sales 3,000.00 73 73 Y Baoshan subsidiary Horo Banner, mining 0 of coal Coal Co., Erdos City Ltd. Inner Taohai Town, Holding Coal 7,000.0 Production and sales Mongolia Nalin, Ejin 7,000.00 73 73 Y subsidiary mining 0 of coal Yitai Horo Banner,
135 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Tongda Erdos City Coal Co., Ltd. 3. Subsidiary obtained from mergered under different control In 10 thousand yuan Currency: CNY Actual Proportio Full name Proportio Consolidat Type of Registe invested n of of Register Busines Business n of ed enterpris r capital at voting subsidiari place s nature scope share statement e capital period-en right es held(%) (Y/N) d held(%) Railway and constructio Inner n Mongolia investment Yitai Yitai on its Building, Railwa Huzhun Holding affiliated Tianjiao y 136,00 118,372.7 Railway subsidiar facility, 76.46 76.46 Y Rd.(N), transpo 0 4 Co., Ltd. y and sale of Dongshen rt (Huzhun constructio g District Railway n materials for short) and chemical industry products.
(II) Subject newly in consolidation scope in this period and subject outside the consolidation scope
1. Subsidiaries, special purpose vehicle and operation entity with controlling rights held through entrusted management or leases that newly in consolidation scope in this period In 10 thousand yuan Currency: CNY Name Ending net assets Current net profit Yitai Xingjiang Energy Co., Ltd. 9,995.00 -5.00 Yitai Ili Mine Co., Ltd. 5,000.00 Yitai Energy (Shanghai) Co., Ltd. 5,461.53 461.53 Yitai (Holding) Hong Kong Co., Ltd. 1,995.82 111.17 Inner Mongolia Yitai Baoshan Coal Co., 32,796.71 40,120.54 Ltd. Inner Mongolia Yitai Tongda Coal Co., Ltd. 41,489.65 52,386.22
2. Subsidiaries, special purpose vehicle and operation entity with controlling rights held through entrusted management or leases that outside the consolidation scope in this period In 10 thousand yuan Currency: CNY Name Net assets on disposed date Net profit from period-begin to
136 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
disposed date Erdos Yitai Auto Transport Co.,, Ltd. 4,308.79 84.79 Yitai Kumul Energy Co., Ltd. 1,000.00 0.94 Yitai Xingjiang Zhundong Energy Co., Ltd. 10,000.00 13.85 Inner Mongolia Yitai Pharmaceutical Co., 17,780.21 137.95 Ltd.
3. Enterprise mergered under the same control in period
In 10 thousand yuan Currency: CNY
Consolidated Consolidated Consolidated cash income from Criterion of enterprise Actual net profit from flow of operation period-begin Combined party mergered under the same controller of period-begin to activity from to control same control consolidation period-begin to consolidation date consolidation date date The aforesaid equity and assets purchased were controlled by YITAI GROUP, the controlling Equity and assets YITAI shareholder of the 973,861.71 168,092.90 -22,405.96 acquisition GROUP Company, than the acquisition belongs to enterprise mergered under the same control
(III) Subsidiaries reduced by equity without control rights on sale in period
Subsidiary Date for sale Recognition method for gains/losses Inner Mongolia Yitai Pharmaceutical 2012-7-31 Re-measured by fair value Co., Ltd.
(IV) Merger by absorption in this period In 10 thousand yuan Currency: CNY Categories Main assets mergered Main liability mergered Under the same control Item Amount Item Amount Monetary fund 69,939.74 Account payable 16,448.45 Account receivable 118,713.65 Total current liability 138,727.52 Total current assets 212,044.39 Total non-current 544.8
137 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
liability Fixed assets 77,348.82 Total liability 139,272.32 Intangible assets 27,583.00 Total non-current 124,704.42 assets Total assets 336,748.81
(V) Discount rate of main statement items for operation entity overseas
Invested entity Currency Main statement item Discount rate Note Rate dated 31st Yitai (Holding) Hong Kong Co., Ltd. HKD Monetary fund 0.8108 December 2012 Yitai (Holding) Hong Kong Co., Ltd. Rate dated 31st HKD Other account payable 0.8108 December 2012 Yitai (Holding) Hong Kong Co., Ltd. HKD Operation revenue 0.8113 Average rate Yitai (Holding) Hong Kong Co., Ltd. HKD Operation cost 0.8113 Average rate
VII. Notes to items of consolidated financial statement
(I) Monetary fund
Unit: RMB Ending amount Opening amount Foreign Item Foreign currency Convers Convers RMB amount currency RMB amount amount ion rate ion rate amount Cash: / / / / RMB / / 1,857,932.50 / / 790,072.29 RMB 1,857,932.50 790,072.29 Bank / / / / deposit: RMB / / 6,315,937,941.59 / / 4,450,262,927.24 RMB 3,001,621,253.38 4,449,568,216.05 HKD 4,087,135,040.31 0.8108 3,313,849,090.68 USD 74,393.05 6.2855 467,597.53 110,255.87 6.3009 694,711.19 Other monetar / / / / y fund: RMB / / 26,583,622.10 / / 29,032,339.46 RMB 26,583,622.10 29,032,339.46
138 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Total / / 6,344,379,496.19 / / 4,480,085,338.99
Details of restricted monetary fund:
Item Ending balance Opening balance Venture deposit of coal 15,552,727.86 16,675,837.02 Deposit of environment protection 22,807,280.24 32,690,785.49 Total 38,360,008.10 49,366,622.51
(II) Note receivable: 1. Classification of note receivable Unit: RMB Currency: CNY Types Ending amount Opening amount Bank acceptance 26,210,000.00 43,154,276.14 Total 26,210,000.00 43,154,276.14
2. Notes transfer to account receivable due to failure performance from the drawer and notes
un-matured endorsed to the other party at period-end
Unit: RMB Currency: CNY
Issued unit Date of draft Maturity date Amount Note
Notes un-matured endorsed to the other party at period-end
Erdos Hongrui Commerce & Trading 2012-10-18 2013-4-17 74,000,000.00 Co., Ltd. Fujian Sand and Stone 2012-7-31 2013-1-31 13,000,000.00 Export Co., Ltd. State Power Huai’an 2012-8-9 2013-2-9 12,205,244.53 Thermo Co., Ltd. Shougang Jingtang Iron and Steel Union 2012-10-11 2013-4-9 10,000,000.00 Co., Ltd. Togtoh County Chengqing Commerce 2012-7-24 2013-1-17 10,000,000.00 & Trading Co., Ltd. Total / / 119,205,244.53 /
(III) Account receivable:
1. Account receivable disclosed according to categories:
139 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: RMB Currency: CNY
Ending amount Opening amount Bad debt Bad debt Book balance Book balance Categ provision provision ories Propor Proporti Amou Proporti Am Proport Amount tion Amount on (%) nt on (%) ount ion (%) (%)
Account receivable with bad debt provision accrual by group
2,663,426,021.76 100.00 1,365,303,004.27 100.00
Group subtot 2,663,426,021.76 100.00 1,365,303,004.27 100.00 al
Total 2,663,426,021.76 / / 1,365,303,004.27 / /
2. In this report period, particular about shareholders with over 5 %( including 5%) voting rights of the Company in account receivable No debts owed to shareholders with over 5% (including 5%) voting rights of the Company in account receivables in reporting period
3. Particular about top 5 amount of account receivable Unit: RMB Currency: CNY Proportion in total Relationship with the Name of the company Amount Term account receivable Company (%) Guangdong Power Industrial Fuel Co., Client 356,709,896.28 Within 1 year 13.39 Ltd. Zhejiang Zheneng Client 198,988,045.59 Within 1 year 7.47 Fuxing Fuel Co., Ltd. Guangdong Zhutou Client 177,137,651.26 Within 1 year 6.65 Power Fuel Co., Ltd. Guangzhou Zhujiang Electric Power Client 131,122,699.67 Within 1 year 4.92 Fuelling Co., Ltd. Inner Mongolia Client 114,251,561.54 Within 1 year 4.29 Datang Fuel Co., Ltd. Total / 978,209,854.34 / 36.72
4. Particular about account receivable from related parties
140 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: RMB Currency: CNY Relationship with the Proportion in total account Name of the company Amount Company receivable (%) Inner Mongolia Jingtai Electric Power Generation Joint-stock company 23,135,696.79 0.87 Co., Ltd. Total / 23,135,696.79 0.87 (IV) Other account receivable:
1. Other account receivable disclosed according to categories:
Unit: RMB Currency: CNY Ending amount Opening amount Book balance Bad debt provision Book balance Bad debt provision Propor Propor Categories Proporti Proporti Amount tion Amount Amount tion Amount on (%) on (%) (%) (%) Other account receivable with bad debt provision accrual by group Group 439,999,402.98 95.38 209,191,949.87 90.16 subtotal Other accounts receivable that are individually insignificant 21,316,338.20 4.62 21,316,338.20 100.00 22,839,576.70 9.84 22,839,576.70 100.00 but with bad debt provision provided on an individual basis Total 461,315,741.18 / 21,316,338.20 / 232,031,526.57 / 22,839,576.70 /
Other amount receivable with single substantive amount and withdrawal bad debt provision single Unit: RMB Currency: CNY Content of other Book balance Bad debt Accrual ratio (%) Reasons receivable Advance payment 10,000,000.00 10,000,000.00 100.00 Un-collectable Equity transfer money 5,430,284.50 5,430,284.50 100.00 Un-collectable Risk guarantee 3,000,000.00 3,000,000.00 100.00 Un-collectable Borrowings 1,472,669.99 1,472,669.99 100.00 Un-collectable Other 1,413,383.71 1,413,383.71 100.00 Un-collectable Total 21,316,338.20 21,316,338.20 / / 2. Switch back or collected in period
141 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: RMB Currency: CNY Accumulative bad Criteria of bad debt provision Bad debt Content of other Reasons of switch debt provision accrual before Amount collected provision switch receivable back or collected recognized switch back or back collected American Specific Collected 300,000.00 300,000.00 vocation identification Specific Zhang Jiyong Collected 6,678,523.00 1,248,238.50 identification Total / / 6,978,523.00 / / 3. In this report period, particular about shareholders with over 5 %( including 5%) voting rights of the Company in other account receivable No debts owed to shareholders with over 5% (including 5%) voting rights of the Company in other account receivables in reporting period
4. Particular about top 5 companies in other account receivable Unit: RMB Currency: CNY Proportion in total Relationship with the Name of the company Amount Term other account company receivable (%) Mengji Railway Co., Related party 36,925,528.20 Within 1 year 8.00 Ltd. SYNFUELS CHINA Related party 30,000,000.00 Within 1 year 6.50 Leading Office of Retrieving Compensation for Ecological Non-related party 29,905,283.50 Within 1 year 6.48 Environment of Mining Area in Yi Banner Coal management station of Nalin Non-related party 26,015,498.10 Within 1 year 5.64 Temple, Jungar Banner Office of Local Tax Concerning Foreign Non-related party 16,919,429.67 Within 1 year 3.67 Affairs of Erdos Total / 139,765,739.47 / 30.29
142 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
5. Account receivable from related parties Unit: RMB Currency: CNY Relationship Proportion in total other Name of the company with the Amount account receivable (%) company Joint-stock SYNFUELS CHINA 30,000,000.00 6.50 company Joint-stock Erdos Tiandi Huarun Coal Mine Equipment Co., Ltd. 8,135,489.77 1.76 company Inner Mongolia Mengtai Buliangou Coal Industry Joint-stock 1,059,719.92 0.23 Co., Ltd. company Inner Mongolia Yitai Guanglian Coalification Co., Joint-stock 128,646.80 0.03 Ltd. company Total / 39,323,856.49 8.52 (V) Account paid in advance:
1. Account paid in advance listed according to account age
Unit: RMB Currency: CNY Ending amount Opening amount Age Amount Proportion (%) Amount Proportion (%) Within 1 year 533,721,149.26 64.69 657,898,901.06 92.38 1-2 years 280,179,974.14 33.96 46,562,856.62 6.54 2-3 years 10,377,070.88 1.26 7,707,612.76 1.08 Over 3 years 728,152.90 0.09 Total 825,006,347.18 100.00 712,169,370.44 100.00
2. Particular about top 5 amount of account paid in advance Unit: RMB Currency: CNY Relationship with Name of the company Amount Term Unliquidated reasons the Company Erdos Water Conservancy Not in accounting Non-related party 132,000,000.00 1-2 years Bureau period Hanggin Banner Xinhe Not in accounting Guozi Investment Non-related party 88,000,000.00 1-2 years period Management Co., Ltd. Inner Mongolia Machinery Not in accounting Non-related party 51,351,055.35 Within 1 year Whole-set Co., Ltd. period Removal Office of Not in accounting Government of Jungar Non-related party 50,000,000.00 Within 1 year period Banner
143 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Inspection Authority of Capital Charges for Not in accounting Non-related party 50,000,000.00 1-2 years Off-budget of Hanggin period Banner Total / 371,351,055.35 / /
3. In this report period, particular about shareholders with over 5 %( including 5%) voting rights of the Company in account paid in advance There are no arrears from shareholders with over 5 %( including 5%) voting rights of the Company in account paid in advance.
(VI) Inventory: 1. Classification of inventory
Unit: RMB Currency: CNY Ending amount Opening amount Item Devaluation Devaluation Book balance Book value Book balance Book value provision provision Raw 495,759,942.49 495,759,942.49 434,952,022.15 434,952,022.15 materials Products in 3,167,239.11 3,167,239.11 process Commodities 366,440,945.60 366,440,945.60 538,245,644.59 2,951,099.69 535,294,544.90 in stock Turn-over 799,161.08 799,161.08 932,489.09 932,489.09 materials Materials in 733,790.00 733,790.00 35,430,883.20 35,430,883.20 transit Low-value Consumption 252,387.04 252,387.04 goods Other 9,387,575.49 9,387,575.49 5,414,189.30 5,414,189.30 Total 873,373,801.70 873,373,801.70 1,018,142,467.44 2,951,099.69 1,015,191,367.75
2. Inventory devaluation provision Unit: RMB Currency: CNY Opening book Accrual amount Decreased in this period Ending book Categories balance in this period Switch-back Write-off balance Commodities 2,951,099.69 2,951,099.69 in stock Total 2,951,099.69 2,951,099.69
144 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(VII) Investment to joint venture and affiliated enterprise: Unit: RMB Currency: CNY Propor Proportio Total tion of Total net n of Total assts at Total liability operating Net profit Invested company share assts at voting period-end at period-end income this this period held period-end right (%) period (%) I. Joint-venture II. Affiliated enterprise Erdos Tiandi Huarun Coal Mine Equipment 31.50 31.50 19,522.39 13,625.41 5,896.98 3,540.02 -1,788.55 Co., Ltd. Jinhua Machine Petrochemical Equipment (Inner 39.00 39.00 42,834.54 20,680.09 22,154.45 34,917.06 178.98 Mongolia) Company Limited Erdos Yizheng Fire 30.00 30.00 35,837.38 19,845.36 15,992.02 10,203.33 6,601.49 Engineering Co., Ltd. Inner Mongolia Jingtai Electric Power 29.00 29.00 266,366.93 200,453.03 65,913.90 69,943.33 4,092.54 Generation Co., Ltd. (VIII) Long-term equity investment: 1. Particular about long-term equity investment Calculated based on cost: Unit: RMB Currency: CNY Proporti Proporti on of on of Change of Impairm share voting Invested Investment Opening Ending increase/decre ent held in rights in company cost balance balance ase provision invested invested compan compan y (%) y (%) Zhunshuo 796,320,000.0 675,790,000.0 120,530,000.0 796,320,000.0 Railway Co., 18.96 18.96 0 0 0 0 Ltd. New Baoshen 532,800,000.0 382,800,000.0 150,000,000.0 532,800,000.0 Railway 16.55 16.55 0 0 0 0 Company
145 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Limited Erdos South Railway 200,000,000.0 200,000,000.0 200,000,000.0 12.51 12.51 Company 0 0 0 Limited Mengji Railway 1,980,000,000 1,440,000,000 540,000,000.0 1,980,000,000 8.93 8.93 Co., Ltd. .00 .00 0 .00 Tangshan Caofeidian Mine 72,000,000.00 72,000,000.00 72,000,000.00 4.00 4.00 Horbor Co., Ltd. Mianyang Science&Technol ogy Town 100,000,000.0 100,000,000.0 100,000,000.0 1.11 1.11 Industry 0 0 0 Investmetn Fund (LLC) Mengxi Central 100,000,000.0 100,000,000.0 100,000,000.0 China Railway 10.00 10.00 0 0 0 Co., Ltd. Inner Mongolia CONBA 27,272,727.27 27,272,727.27 27,272,727.27 12.00 12.00 Pharmaceutical Co., Ltd.
Calculated based on equity: Unit: RMB Currency: CNY Proport Proporti ion of on of share Change of voting Invested Opening Cash bonus held in Investment cost increase/decreas Ending balance rights in company balance in this period investe e invested d compan compa y (%) ny (%) Erdos Tiandi Huarun Coal 31,500,000.00 25,110,296.54 -5,563,489.46 19,546,807.08 31.50 31.50 Mine Equipment Co., Ltd. Inner Mongolia Jingtai Electric 165,300,000.00 183,585,825.05 7,298,730.73 190,884,555.78 4,492,680.00 29.00 29.00 Power
146 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Generation Co., Ltd. Erdos Yizheng Fire Engineering 15,000,000.00 30,945,418.78 17,266,964.32 48,212,383.10 7,500,000.00 30.00 30.00 Co., Ltd. Jinhua Machine Petrochemical Equipment (Inner 85,137,000.00 85,806,543.05 697,750.67 86,504,293.72 39.00 39.00 Mongolia) Company Limited Erdos Lianke Clean Energy 30,000,000.00 27,578,342.96 -27,578,342.96 Technology Co., Ltd.
(IX) Investment real estate: 1. Investment real estate calculated based on cost Unit: RMB Currency: CNY Decrease in this Item Opening book balance Increase in this period Ending book balance period I. Total original book 51,020,569.00 51,020,569.00 value 1.House and buildings 51,020,569.00 51,020,569.00 2.Land-use right II. Total accumulated depreciation and 17,295,659.89 2,343,008.28 19,638,668.17 accumulated amortization 1.House and buildings 17,295,659.89 2,343,008.28 19,638,668.17 2.Land-use right III. Total net book value of investment 33,724,909.11 -2,343,008.28 31,381,900.83 real estate 1.House and buildings 33,724,909.11 -2,343,008.28 31,381,900.83 2.Land-use right IV. Total accumulated amount of impairment provision on investment real estate 1.House and buildings
147 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
2.Land-use right V. Total book value of 33,724,909.11 -2,343,008.28 31,381,900.83 investment real estate 1.House and buildings 33,724,909.11 -2,343,008.28 31,381,900.83 2.Land-use right The depreciation and amortization amount this period was 2,343,008.28 yuan. Impairment provision for investment real estate in this period was 0 yuan.
(X) Fixed assts: 1. Particular about fixed assts Unit: RMB Currency: CNY Opening book Decrease in this Ending book Item Increase in this period balance period balance I. Total original book 19,646,369,238.72 815,518,653.94 549,791,139.11 19,912,096,753.55 value: Including: House and 3,698,851,246.93 230,842,633.49 177,760,383.84 3,751,933,496.58 Buildings Machinery equipment
Means of transport
Locomotives 266,947,802.93 1,250,000.00 259,792.93 267,938,010.00
Mine construction 1,633,024,564.31 84,470,654.25 1,717,495,218.56
High way 616,891,238.08 1,858,118.32 618,749,356.40
Railway 5,545,926,763.70 21,410,507.10 119,794,946.66 5,447,542,324.14
Transportation 256,889,485.74 66,334,119.58 23,581,343.58 299,642,261.74 equipment
Equipment for 12,760,379.49 12,760,379.49 agriculture-used Other Equipment 7,615,077,757.54 409,352,621.20 215,634,292.61 7,808,796,086.13 Newly increased this Accrual in period period II. Total accumulated 3,200,224,079.27 1,161,306,481.24 83,307,304.38 4,278,223,256.13 depreciation Including: House and 391,892,380.05 156,746,132.16 11,270,267.87 537,368,244.34 Buildings Machinery equipment
148 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Means of transport
Locomotives 64,222,870.81 23,351,606.88 249,401.21 87,325,076.48
Mine construction 230,693,062.60 206,701,790.94 437,394,853.54
High way 161,118,900.12 30,417,040.63 191,535,940.75
Railway 527,098,875.58 171,096,035.14 9,062,918.16 689,131,992.56
Transportation 116,377,611.54 48,480,790.34 16,598,488.40 148,259,913.48 equipment
Equipment for 3,417,058.51 3,417,058.51 agriculture-used
Other Equipment 1,705,403,320.06 524,513,085.15 42,709,170.23 2,187,207,234.98 III. Total net book 16,446,145,159.45 / / 15,633,873,497.42 value of fixed assts Including: House and 3,306,958,866.88 / / 3,214,565,252.24 Buildings Machinery / / equipment
Means of transport / /
Locomotives 202,724,932.12 / / 180,612,933.52
Mine construction 1,402,331,501.71 / / 1,280,100,365.02
High way 455,772,337.96 / / 427,213,415.65
Railway 5,018,827,888.12 / / 4,758,410,331.58
Transportation 140,511,874.20 / / 151,382,348.26 equipment
Equipment for 9,343,320.98 / / agriculture-used
Other Equipment 5,909,674,437.48 / / 5,621,588,851.15 IV. Total impairment 20,791,377.81 / / 28,011.64 provision Including: House and 4,705,140.82 / / Buildings Machinery / / equipment
Means of transport / /
Locomotives / /
149 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Mine construction / /
High way / /
Railway / /
Transportation 35,228.09 / / equipment
Equipment for 9,021,416.09 / / agriculture-used
Other Equipment 7,029,592.81 / / 28,011.64 V.Total book value of 16,425,353,781.64 / / 15,633,845,485.78 fixed assets Including: House and 3,302,253,726.06 / / 3,214,565,252.24 Buildings Machinery / / equipment
Means of transport / /
Locomotives 202,724,932.12 / / 180,612,933.52
Mine construction 1,402,331,501.71 / / 1,280,100,365.02
High way 455,772,337.96 / / 427,213,415.65
Railway 5,018,827,888.12 / / 4,758,410,331.58
Transportation 140,476,646.11 / / 151,382,348.26 equipment
Equipment for 321,904.89 / / agriculture-used
Other Equipment 5,902,644,844.67 / / 5,621,560,839.51 Accumulated depreciation in this period was 1,161,306,481.24 yuan. Original value of projected under construction transferred to fixed assts was 175,420,732.63 yuan.
(XI) Projects under construction: 1. Particular about projects under construction Unit: RMB Currency: CNY Ending amount Opening amount Impair Impair Item ment ment Book balance Net book value Book balance Net book value provis provisi ion on Project 7,963,101,458.80 7,963,101,458.80 4,883,464,819.22 4,883,464,819.22 s under
150 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 constru ction
151 2. Change of the significant projects under progress Unit: RMB Currency: CNY Ratio of Including: Accumulated Capitalizatio investmen Project amount t of Capita Name of Opening Increase this Fixed assts Other amount of n rate of Budget t in schedul interest l Ending amount projects amount period brought –in decrease interest interest in budget e capitalizing source capitalizing period (%) (%) this period Tara 806,740,000.00 493,612,652.53 166,059,683.42 1,925,474.70 81.77 81.77 Other 657,746,861.25 trenches Coal Loans, liquefactio 219,461,397.13 30,842,987.54 61,598,780.50 8.71 100.00 71,956,058.73 5.94 188,705,604.17 other n project Yitai Chemicals 75,336,004.00 153,075,976.95 48,338,587.92 1,794,316.00 Other 199,620,248.87 project Phase I of Complex 2,263,000,000.0 1,903,783,095.9 112,679,145.8 109,420,540.2 Loans, 2,125,978,045.0 222,194,949.13 93.95 93.95 6.45 Line of 0 1 5 8 other 4 Zhundong 2nd line project of 1,840,000,000.0 Loans, 1,284,363,505.2 532,967,237.60 751,396,267.66 69.80 69.80 48,846,821.55 12,017,138.89 5.94 Huzhun 0 other 6 Railway Xinjiang Energy 263,304,038.34 Other 263,304,038.34 Project Ili Mine 358,029,487.65 Other 358,029,487.65 project
152
Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Jungarzha 451,150,000.00 75,917,483.41 446,209,157.41 30,326,028.50 Other 491,800,612.32 o project Huayuan Cole 315,858,470.54 244,074,757.64 63,726,098.03 97.45 97.45 Other 307,800,855.67 Kaida Coal Mine Other 51,817,106.0 Loans, 1,428,005,338.9 766,959,565.52 790,713,537.70 77,850,658.24 45,653,129.23 project 0 other 8 5,752,084,474.5 4,389,852,166.6 3,140,814,794.8 173,495,257.9 51,817,106.0 279,135,155.3 121,437,679.1 7,305,354,597.5 Total / / / / 4 9 0 4 0 6 7 5
Projects under construction of the Company has no signs of impairment, there are no provision for impairment at period-end for projects under
construction.
153 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
154 (XII) Engineering materials: Unit: RMB Currency: CNY Item Opening amount Increase this period Decrease this period Ending amount Special materials 6,106,638.12 6,106,638.12 Total 6,106,638.12 6,106,638.12
(XIII) Intangible assts: 1. Particular about intangible assts Unit: RMB Currency: CNY Increase this Decrease this Ending book Item Opening book balance period period balance I. Total original book value 889,173,252.16 72,182,485.70 17,323,471.66 944,032,266.20 (1) Land-use right 303,547,127.88 16,325,382.73 11,582,431.66 308,290,078.95 (2)Know-how 11,166,987.61 30,315,683.76 5,741,040.00 35,741,631.37 (3)Exploitation right 556,926,089.90 5,226,427.62 562,152,517.52 (4)Software 17,533,046.77 20,314,991.59 37,848,038.36 II. Total accumulated 155,796,785.61 63,435,983.18 3,976,057.36 215,256,711.43 amortization (1) Land-use right 38,712,027.25 11,548,054.42 1,690,000.00 48,570,081.67 (2)Know-how 5,233,654.65 10,170,487.19 2,286,057.36 13,118,084.48 (3)Exploitation right 106,604,925.73 37,802,256.95 144,407,182.68 (4)Software 5,246,177.98 3,915,184.62 9,161,362.60 III. Total net book value of 733,376,466.55 8,746,502.52 13,347,414.3 728,775,554.77 intangible assts (1)Land-use right 264,835,100.63 4,777,328.31 9,892,431.7 259,719,997.28 (2)Know-how 5,933,332.96 20,145,196.57 3,454,982.6 22,623,546.89 (3)Exploitation right 450,321,164.17 -32,575,829.33 0.0 417,745,334.84 (4)Software 12,286,868.79 16,399,806.97 0.0 28,686,675.76 IV. Total impairment provision (1)Land-use right (2)Know-how (3)Exploitation right (4)Software V. Total book value of intangible 733,376,466.55 8,746,502.52 13,347,414.3 728,775,554.77 assets (1)Land-use right 264,835,100.63 4,777,328.31 9,892,431.7 259,719,997.28 (2)Know-how 5,933,332.96 20,145,196.57 3,454,982.6 22,623,546.89 (3)Exploitation right 450,321,164.17 -32,575,829.33 0.0 417,745,334.84 (4)Software 12,286,868.79 16,399,806.97 0.0 28,686,675.76 The amortized amount in this period was 63,435,983.18 yuan.
155
Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(XIV) Long-term amortized expenses: Unit: RMB Currency: CNY Amortized Increase amount Other decrease Item Opening amount amount in this Ending amount this period amount period Compensation for demolition of strip mining 115,423,078.17 904,682,015.68 363,515,044.26 656,590,049.59 and stripping charge Leasing charge 75,231,666.67 3,592,944.40 71,638,722.27 of land Use charge of 13,940,692.00 875,855.04 13,064,836.96 water-right Other 3,656,516.65 19,769,567.71 4,314,098.05 19,111,986.31 Total 208,251,953.49 924,451,583.39 372,297,941.75 760,405,595.13
(XV) Deferred income tax assets/deferred income tax liabilities:
1. Deferred income tax assets and deferred income tax liabilities listed without off-setting (1) Recognized deferred income tax assets and deferred income tax liabilities Unit: RMB Currency: CNY Items Ending amount Opening amount Deferred income tax assets: provision for assets impairment 3,197,450.73 3,425,936.50 Deferred gains① 20,144,010.18 43,293,171.53 Trial operation profit② 44,001,332.39 30,682,851.53 Unrealized profit 29,180,010.27 34,822,872.02 Acquisition of business and 821,068,303.14 equity③ Subtotal 917,591,106.71 112,224,831.58
(2) Details of items of taxable difference and deductible difference Unit: RMB Currency: CNY Items Amount Item of deductible difference: Provision for assets impairment 21,316,338.20 Deferred gains 125,260,067.83 Trial operation profit 176,005,329.56 Unrealized profit 194,533,401.80 Acquisition of business and equity 5,473,788,687.60 Subtotal 5,990,903,824.99
156 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Note ①: during this period, the controlling subsidiary Suancigou received resources compensation, and controlling subsidiary CTL received assets construction related government grant and confirmed deferred income tax assets;
Note②:during this period, the controlling subsidiary CTL yielded profit in its trial operation and confirmed deferred income tax assets;
Note③: on 29 May 2012, the Company signed assets transfer agreement with Yitai Group, pursuant to which, Yitai Group transferred Dadi mine, Chengyi mine, Baijialiang mine and coal-related assets owned by it to the Company; also transferred the equity interests of Inner Mongolia Yitai Baoshan Coal Co., Ltd. and Inner Mongolia Yitai Tongda Coal Co., Ltd. held by it to the Company; the total transaction price was 8,446,544,400 yuan;
Note④: the aforesaid acquisitions were completed on 30 September 2012. As at 30 September 2012, the difference between the acquisition price of the coal business of Yitai Group and its net assets was 5,473,788,700 yuan, thus to confirm deferred income tax assets at enterprise income tax rate of 15%.
(XVI) Details of provision for impairment of assts: Unit: RMB Currency: CNY Opening book Increased in Decreased in this period Ending book Items balance this period Switch-back Write-off balance I. Bad debt provision 22,839,576.70 25,000.00 1,548,238.50 21,316,338.20 II.Provision for depreciation of 2,951,099.69 2,951,099.69 inventory III. Impairment provision of financial assets available for sale IV. Impairment provision of investment held-to-maturity IV. Impairment provision of long-term equity investment VI. Impairment provision of investment real estate VII. Impairment provision of 20,791,377.81 20,763,366.17 28,011.64 fixed assets VIII. Impairment provision of engineering materials IX. Impairment provision of
157 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 projects under construction X. Impairment provision of productive biological assets Including: impairment provision of mature productive biological assets XI. Impairment provision of oil-and-gas assets XII. Impairment provision of intangible assets XIII. Impairment provision of goodwill XIV. Other Total 46,582,054.20 25,000.00 1,548,238.50 23,714,465.86 21,344,349.84
(XVII) Short-term loans:
1. Classification of short-term loans Unit: RMB Currency: CNY Item Ending amount Opening amount Guarantee loan 328,000,000.00 218,000,000.00 Credit loan 650,000,000.00 Total 328,000,000.00 868,000,000.00
(XVIII) Account payable: 1. Particular about account payable Unit: RMB Currency: CNY Item Ending amount Opening amount Within 1 year 1,845,116,609.28 1,492,940,811.77 1-2 years 109,410,162.17 80,561,122.43 2-3 years 34,898,084.80 11,324,298.07 Over 3 years 11,045,034.20 5,909,673.17 Total 2,000,469,890.45 1,590,735,905.44
2. In this report period, particular about related parties and shareholders with over 5 %( including
5%) voting rights of the Company in account payable Unit: RMB Currency: CNY Name of the company Ending amount Opening amount AVIC Liming Jinhua Machine Petrochemical Equipment 5,018,831.52 (Inner Mongolia) Company Limited
158 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
SYNFUELS CHINA 5,956,604.75 Erdos Tiandi Huarun Coal Mine Equipment Co., Ltd. 429,621.10 Total 11,405,057.37
3. Explanation on major amount account payable with over 1 year account age
Note (indicate Reasons for not the payment Name of the unit Amount carry-forward after report statement date) Management department of build-out 2nd line project, Tuo-Zhou division 42,719,657.20 Incomplete of Huzhun Railway, China Railway 19th Bureau Group Not in payment Zhengzhou Coal Mining Machinery Group Co., Ltd. 10,220,656.44 period Project department of Huzhun complex line III-II of Hunan Tiebin 9,676,493.80 Incom plete Construction Group Co., Ltd. Not in payment Australia Wande Industry Co., Ltd. 7,135,169.95 period Project department of build-out 2nd line project, Tuo-Zhou division of 6,823,963.00 Incomplete Huzhun Railway, China Railway 12th Bureau Group Total 76,575,940.39
(XIX) Account received in advance:
1. Particular about account received in advance Unit: RMB Currency: CNY Item Ending amount Opening amount Within 1 year 379,894,259.07 525,884,829.42 1-2 years 4,135,281.47 2,238,407.49 2-3 years 43,500.00 Over 3 years 1,348,328.55 Total 384,029,540.54 529,515,065.46
2. In this report period, particular about related parties or shareholders with over 5 %( including
5%) voting rights of the Company in account received in advance Unit: RMB Currency: CNY Name of the company Ending amount Opening amount Inner Mongolia Mengtai Buliangou Coal Industry 2,117,733.85 Co., Ltd. Total 2,117,733.85
3. Explanation on major amount of account received in advance with over 1 year account age
159 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Note (indicate the payment Reasons for not Name of the unit Amount or carried forward amount carry-forward after report statement date) Account received in Jungar Banner Guangyu Coal Mine Co., Ltd. 1,000,000.00 advance, goods not deliver Final payment for settlement Erdos Jinyuan Coal Co., Ltd. 371,737.00 of coal extract Final payment for settlement Jungar Banner Wanlong Coal Marketing Co., Ltd. 307,320.00 of coal extract Final payment for settlement Erdos Xingshengyuan Coal Co., Ltd. 166,763.50 of coal extract Account received in Jiangsu Luyuan Petrifaction Co., Ltd. 74,132.00 advance, goods not deliver Total 1,919,952.50
(XX) Wages payable Unit: RMB Currency: CNY Opening book Ending book Item Increase this period Decrease this period balance balance I. Salary, bonus, 279,325,286.90 846,489,689.59 960,543,933.69 165,271,042.80 allowance and subsidy II. Employee Welfare 2,905,577.08 2,905,577.08 expenses
III. Social insurance 684,750.09 120,963,843.68 120,513,729.87 1,134,863.90
IV. Public reserve of 831,385.80 23,216,897.68 22,468,649.40 1,579,634.08 recommendation V. Dismiss welfare VI. Other (5) Labor union outlay and employee education 19,858,817.78 28,493,085.57 12,204,313.12 36,147,590.23 outlay (6) Enterprise annuity 274,860.00 16,686,231.00 16,406,881.00 554,210.00 Total 300,975,100.57 1,038,755,324.60 1,135,043,084.16 204,687,341.01 In wages payable, 0 yuan belongs to arrears. The labor union outlay and employee education outlay was 36,147,590.23 yuan.
(XXI) Taxes payable: Unit: RMB Currency: CNY
160 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Item Ending amount Opening amount VAT -134,500,146.83 -123,701,967.42 Consumer tax 5,773,260.27 9,531,768.02 Business tax 7,285,950.12 20,109,643.70 Enterprise income tax 36,491,925.07 225,822,766.34 Individual income tax 4,146,703.04 3,016,837.00 Urban maintenance and construction 14,445,983.51 11,060,421.46 tax Resource tax -39,595,965.91 13,220,586.74 Stamp tax 821,651.76 739,674.23 Educational surcharge 7,122,602.25 6,988,417.47 Local educational surcharge 4,354,525.08 4,025,653.11 Water conservancy construction fund 1,376,850.75 1,902,826.42 Withholding tax 11,348,675.69 37,216,664.96 Compensation of mine resources 17,180,178.71 18,402,635.75 Price adjustment fund 66,271,018.28 66,147,581.40 Charge of security and maintenance of -11,283,327.26 -29,054,074.61 simple reproduction Prepay taxes -75,120,980.17 Property tax -31,929.07 River way treatment charge 50,229.56 Total -8,741,814.98 190,308,454.40
(XXII) Interest payable: Unit: RMB Currency: CNY Item Ending amount Opening amount Interest payable of short-term loans 1,002,222.22 1,074,746.90 Interest payable of long-term loans 21,269,384.74 20,632,176.69 Total 22,271,606.96 21,706,923.59
(XXIII) Dividend payable
Unit: RMB Currency: CNY Reasons of unpaid over Name of the company Ending amount Opening amount one year Beijing Jielongda Investment Co., Ltd. 141,480,000.00 INNER MONGOLIA YITAI GROUP CO., 730,000,000.00 LTD. Erdos Huijiabao Investment Co., Ltd. 128,520,000.00 Total 1,000,000,000.00 /
161 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(XXIV) Other account payable:
1. Particular about other account payable Unit: RMB Currency: CNY Item Ending amount Opening amount Within 1 year 4,911,531,983.24 480,180,203.50 1-2 years 106,894,699.55 236,274,663.51 2-3 years 170,841,019.44 20,599,666.86 Over 3 years 20,285,405.65 6,584,958.33 Total 5,209,553,107.88 743,639,492.20
2. In this report period, particular about related parties or shareholders with over 5 %( including
5%) voting rights of the Company in other account payable Unit: RMB Currency: CNY Name of the company Ending amount Opening amount INNER MONGOLIA YITAI GROUP CO., LTD. 4,307,013,178.08 Synfuels Engineering Co., Ltd. 104,735,309.99 104,590,000.00 Erdos Tiandi Huarun Coal Mine Equipment Co., Ltd. 856,335.35 814,196.59 AVIC Liming Jinhua Machine Petrochemical Equipment 589,140.00 (Inner Mongolia) Company Limited Total 4,413,193,963.42 105,404,196.59
3. Explanation on major amount other account payable with over 1 year age
Note (indicate the Name of the company Amount Reasons for not carry-forward payment after report statement date) Preparation fee of feasibility, not Synfuels Engineering Co., Ltd. 104,350,000.00 paid yet Zhengzhou Coal Ming Machinery Group Co., 17,160,140.84 Warranty fee, before maturity Ltd. Engineering quality assurance fund, Yi Banner Changqing Coal Co., Ltd. 14,454,000.00 still in-warranty period Insurance compensation ready for Erdos Branch of PICC 11,481,255.52 treatment Shanghai Greenland Group Shilian Mine 8,000,000.00 Unmatured margin Total 155,445,396.36
(XXV) Accrued liabilities:
Unit: RMB Currency: CNY
162 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Item Opening amount Increase this period Decrease this period Ending amount Other 42,484,426.10 1,094,187.58 43,578,613.68 Total 42,484,426.10 1,094,187.58 43,578,613.68 Accrued liability was the reclamation charge withdrawal, and the accrued reclamation charge was accrual based on the reasonable estimation from the management
(XXVI) Non-current liabilities due within 1 year:
1. Particular about non-current liabilities due within 1 year
Unit: RMB Currency: CNY
Item Ending amount Opening amount Long-term loans due within 1 year 1,254,419,004.48 1,338,189,817.81 Total 1,254,419,004.48 1,338,189,817.81
2. Long-term loans due within 1 year
(1) Long-term loans due within 1 year
Unit: RMB Currency: CNY
Item Ending amount Opening amount Guarantee loan 710,419,004.48 1,258,189,817.81 Credit loan 544,000,000.00 80,000,000.00 Total 1,254,419,004.48 1,338,189,817.81
(2) Top 5 amount in long-term loans due within 1 year
Unit: RMB Currency: CNY Ending amount Opening amount Beginning Expire date of Loan company currency Rate(%) Amount in local Amount in local date of loan loan currency currency Shenzhen Branch of 2010-1-14 2013-1-14 RMB 5.99 200,000,000.00 China Everbright Bank Sub-branch of Shenzhen Hi-Tech 2010-1-11 2013-1-11 RMB 5.99 200,000,000.00 Park of China Everbright Bank Inner Mongolia Branch 2012-11-20 2013-5-20 RMB 6.55 140,000,000.00 140,000,000.00
163 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 of China Development Bank Erdos Branch of Bank 2011-6-28 2013-11-5 RMB 6.70 118,000,000.00 112,000,000.00 of China Sub-branch of Shenzhen Hi-Tech 2010-1-11 2013-1-11 RMB 5.99 100,000,000.00 Park of China Everbright Bank Total / / / / 758,000,000.00 252,000,000.00
(XXVII) Long-term loans:
1. Classification of long-term loans
Unit: RMB Currency: CNY Item Ending amount Opening amount Guarantee loan 5,766,523,891.08 5,520,594,085.93 Credit loan 2,036,000,000.00 580,000,000.00 Total 7,802,523,891.08 6,100,594,085.93
2. Top 5 amount in long-term loans Unit: RMB Currency: CNY Ending amount Opening amount Beginning Expire date of Loan company currency Rate(%) Amount in local Amount in local date of loan loan currency currency Erdos Branch of 2012-7-27 2015-7-26 RMB 6.15 1,500,000,000.00 Bank of China Inner Mongolia Branch of China 2007-7-23 2021-7-23 RMB 6.55 760,000,000.00 860,000,000.00 Development Bank Erdos Branch of 2010-7-16 2023-11-5 RMB 5.90 500,000,000.00 500,000,000.00 Bank of China Bank of Communications 2012-8-31 2015-4-25 RMB 5.84 496,000,000.00 International Trust Inner Mongolia Branch of China 2008-7-2 2018-7-1 RMB 6.55 450,000,000.00 520,000,000.00 Development Bank Total / / / / 3,706,000,000.00 1,880,000,000.00
(XXVIII) Bonds payable
164 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: RMB Currency: CNY Bon Issuing d Interest in Ending Bonds Face value Issuance amount Ending balance date peri period interest od 12 5 2012-1 YITAI 1,000,000,000.00 year 1,000,000,000.00 1,295,546.67 1,295,546.67 1,001,295,546.67 2-24 MTN1 s On 11 December 2012, China Inter-bank Market Transaction Association released Notification of Registration Acceptance (ZSXZ2012 No.MTN403) to accept MTN registration of the Company with registration amount of 3.5 billion yuan. Among which, one billion yuan was raised by issuance of the first batch of MTN and has been accounted in full on 25 December 2012. The date of value was 25th December 2012 with 5.53% coupon rate and 5-year terms.
(XXIX) Long-term account payable: (1) Particular about top 5 long-term accounts payable Unit: RMB Currency: CNY Companies Initial amount rate（%） Interest Ending balance Capital in central budget 50,000,000.00 50,000,000.00 Capital in Inner Mongolia 8,000,000.00 8,000,000.00 Finance Budge Total 58,000,000.00 58,000,000.00
(XXX) Other non-current liabilities:
Unit: RMB Currency: CNY Item Ending book balance Opening book balance Compensation for constructed over the 108,588,997.00 286,360,800.00 resources Specific capital for environment protection 6,050,000.00 6,830,000.00 Deferred gains 13,550,000.00 Total 128,188,997.00 293,190,800.00
(XXXI) Share capital:
Unit: RMB Currency: CNY Increase/Decrease of this time (+, -) Capitalizing of Opening amount New shares Bonus Ending amount common Other Subtotal issued share reserves Total 1,464,000,000.00 163,003,500.00 163,003,500.00 1,627,003,500.00
165 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
shares The Company was listed on the main board of Hong Kong Stock Exchange and started trading dated 12th July 2012 with 163,003,500 shares offered in total. The aforesaid capital contribution has been audited and examined by Dahua CPA with Verification Report ―Dahua Yan Zi [2012] No.: 253‖ issued.
(XXXII) Reasonable reserve:
Amount used in Item Opening balance Withdrawal in period Ending balance period Charge of security and maintenance of 3,836,018.35 835,013,635.34 838,849,653.69 simple reproduction Total 3,836,018.35 835,013,635.34 838,849,653.69
(XXXIII) Capital reserve:
Unit: RMB Currency: CNY Item Opening amount Increase this period Decrease this period Ending amount Capital premium(Share 2,011,126,418.46 5,382,723,016.02 6,845,977,443.81 547,871,990.67 premium) Other capital 149,441,315.71 821,068,303.14 7,368,366.99 963,141,251.86 reserve Total 2,160,567,734.17 6,203,791,319.16 6,853,345,810.80 1,511,013,242.53
(1) The capital premium increased this period was resulted by the premium from H-share offering.
(2) The capital premium decreased this period due to the difference offset between the fair value and book
value of assets acquisition under the same control
(XXXIV) Surplus reserve:
Unit: RMB Currency: CNY Item Opening amount Increase this period Decrease this period Ending amount Statutory surplus 2,022,835,760.36 449,181,555.63 1,366,602,100.47 1,105,415,215.52 reserve Total 2,022,835,760.36 449,181,555.63 1,366,602,100.47 1,105,415,215.52
(1) Statutory surplus reserve increased resulted by the accrual based on 10% of parent company’s net profit
4,491,815,556.35 yuan.
(2) The statutory surplus reserve decreased due to the difference offset between the fair value and book
166 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 value of assets acquisition under the same control
(XXXV) Retained profit: Unit: RMB Currency: CNY Proportion of withdrawal or Item Amount distribution(%) Retained profit in last year-end before 13,750,081,417.75 / adjustment Retained profit in year-begin after adjustment 13,750,081,417.75 / Add: net profit attributable to owner of the 6,621,880,767.60 / parent company in this period Less: Withdrawal statutory surplus reserve 449,181,555.63 10 Dividend of common share payable 2,196,000,000.00 Distribution to original shareholders with 2,270,513,732.03 acquisition concerned Retained profit at period-end 15,456,266,897.69 /
(XXXVI) Operating income and operating cost: 1. Operating income, operating cost Unit: RMB Currency: CNY Item Amount occurred in this period Amount occurred in last period Main business income 32,228,941,954.68 27,623,592,047.49 Other business income 234,382,739.36 260,649,994.90 Operating cost 20,237,988,738.19 14,817,232,933.14
(2) Main business(according to products) Unit: RMB Currency: CNY Name of Amount occurred in this period Amount occurred in last period products Operating income Operating cost Operating income Operating cost Coal 30,603,757,748.83 19,077,138,840.38 26,833,003,913.06 14,242,480,243.58 Accommodati on and 5,315,662.88 3,831,383.68 3,337,868.80 1,488,682.07 catering service Income from transport 186,701,480.25 85,254,403.45 56,139,968.01 25,252,666.32 charge Logistic 56,050,623.40 14,370,830.91 53,027,612.00 12,959,210.99 service Medicine 15,283,557.53 6,523,671.55 29,697,202.40 9,795,208.01 Refined oil 1,361,832,881.79 872,214,896.04 648,385,483.22 411,088,500.87
167 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Total 32,228,941,954.68 20,059,334,026.01 27,623,592,047.49 14,703,064,511.84
3. Particular about operating income in top 5 client of the Company Unit: RMB Currency: CNY Proportion in total operating income of Name of the client Operating income the Company(%) Zhejiang Zheneng Fuxing Fuel Co., 1,255,888,046.49 3.87 Ltd. Guangdong Zhutou Power Fuel Co., 944,359,758.02 2.91 Ltd. Shanghai Shenergy Fuel Co., Ltd. 739,411,173.71 2.28 Guangdong Power Industrial Fuel 664,461,038.35 2.05 Co., Ltd. Jiangsu Sulong Energy Co., Ltd. 614,406,542.12 1.89 Total 4,218,526,558.69 13.00
(XXXVII) Business tax and extras:
Unit: RMB Currency: CNY
Amount occurred in this Amount occurred in last Item Calculation standards period period Consumption tax 68,587,180.83 49,830,155.03 Taxable consumer goods Business tax 73,137,950.99 64,834,523.54 Taxable labor service Urban maintenance and 185,569,198.78 196,022,022.97 Payable turnover tax construction tax Educational surtax 97,412,037.65 107,971,939.56 3% Resource tax 169,332,741.18 183,930,172.30 3.20 yuan/Ton Local educational surcharge 64,835,095.06 62,223,168.13 2% Other 155,872,361.05 165,465,142.53 Total 814,746,565.54 830,277,124.06 /
(XXXVIII) Sales expenses
Unit: RMB Currency: CNY
Item Amount occurred in this period Amount occurred in last period Port charges 636,983,429.00 562,979,594.20
168 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Labor cost of transportation loading 191,868,505.51 247,438,086.66 Salary, social insurance and extra 158,635,002.47 184,016,259.31 Depreciation 50,859,572.72 48,438,984.87 Leasing property charge 35,657,024.31 30,755,873.26 Business travel expenses 19,888,598.36 26,452,204.30 Business charge 14,525,635.21 15,084,273.80 Utilities 14,303,057.22 15,385,317.70 AD and publicity expenses 2,668,507.29 4,240,685.97 Other 49,792,046.24 55,622,517.61 Total 1,175,181,378.33 1,190,413,797.68
(XXXIX) Administration expenses
Unit: RMB Currency: CNY Item Amount occurred in this period Amount occurred in last period Salary, social insurance and extra 475,633,819.88 473,819,842.39 Depreciation and amortization 183,734,625.15 155,976,523.99 Green property charge 102,477,630.82 112,877,966.65 Business travel expenses 100,460,439.58 82,382,601.89 Office charge 83,759,476.37 89,917,670.37 Taxes 78,118,810.22 69,016,628.45 Business charge 70,114,914.40 66,613,019.21 Labor service charge 57,541,955.97 53,219,596.60 Audit and consultant charge 15,192,052.09 15,836,373.10 Other 483,366,187.34 2,412,423.57 Total 1,650,399,911.82 1,122,072,646.22
(XL) Financial expenses
Unit: RMB Currency: CNY Item Amount occurred in this period Amount occurred in last period Interest expenditure 429,612,505.18 285,536,773.04 Interest income -35,014,248.10 -38,148,124.88 Procedure fee 6,773,692.23 7,172,224.93 Exchange gains/losses 32,459,761.06 -17,740,400.82 Total 433,831,710.37 236,820,472.27
(XLI) Investment income: 1. Details of investment income
169 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: RMB Currency: CNY Amount occurred in this Amount occurred in last
period period Income of long-term equity investment based on cost 5,179,381.88 2,633,792.71 Income of long-term equity investment based on equity 34,114,293.30 21,324,531.35 Investment income from disposal of long-term equity investment 192,187,392.41 -44,035.89 Investment income obtained in period of transactional financial assets 65,411.29 held Total 231,481,067.59 23,979,699.46
2. Income of long-term equity investment based on cost method
Unit: RMB Currency: CNY Amount Amount Reason of changes compared with last Invested company occurred in this occurred in last period period period Mianyang Science &Technology Industry More bonus distributed in period from 5,179,381.88 2,633,792.71 Investmetn Fund (LLC) invested company Total 5,179,381.88 2,633,792.71 /
3. Income of long-term equity investment based on equity method
Unit: RMB Currency: CNY Reason of changes Amount occurred in Amount occurred Invested company compared with last this period in last period period Erdos Tiandi Huarun Coal Mine Equipment Co., Ltd. -5,563,489.46 -4,067,348.67 Inner Mongolia Jingtai Electric Power Generation Co., 11,791,410.73 13,920,385.34 Ltd. Jinhua Machine Petrochemical Equipment (Inner 697,750.67 -2,788,072.99 Mongolia) Company Limited Erdos Yizheng Fire Engineering Co., Ltd. 24,766,964.32 17,150,524.63 Erdos Lianke Clean Energy Technology Co., Ltd. 2,421,657.04 -2,421,657.04 Inner Mongolia Xinnuo Ecology Heating Technology -469,299.92 Development Co., Ltd. Total 34,114,293.30 21,324,531.35 /
No material restriction on investment income repatriated
(XLII) Devaluation losses of assets:
170 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Unit: RMB Currency: CNY Item Amount occurred in this period Amount occurred in last period I. Bad debt losses -1,523,238.50 -56,037,931.70 II. Loss of inventory devaluation III. Devaluation losses of financial assets available for sale IV. Devaluation losses of investment held-to-maturity V. Devaluation losses of long-term equity
investment VI. Devaluation losses of investment real estate VII. Devaluation losses of fixed assts VIII. Devaluation losses of engineering
materials IX. Devaluation losses of construction in
process X. Devaluation losses of productive biological assts XI. Devaluation losses of fuel and gas assts XII. Devaluation losses of intangible assets XIII. Devaluation losses of goodwill XIV. Other Total -1,523,238.50 -56,037,931.70
(XLIII) Non-operating income: 1. Particular about non-operating income Unit: RMB Currency: CNY Amount reckoned into Amount occurred in this Amount occurred in last Item current non-recurring period period gains/losses Total gains on disposal of 7,336,648.35 12,064,606.54 7,336,648.35 non-current assets Including: gains from disposal of 7,336,648.35 12,064,606.54 7,336,648.35 fixed assets Government subsidy 31,491,200.00 11,726,800.33 31,881,800.00 Penalty income 2,708,043.88 682,686.15 2,708,043.88 Debt unable to paid 1,853,737.03 121,631.32 1,853,737.03 Income from waste materials 744,169.62 8,540.00 744,169.62 disposal Compensation for constructed over 205,491,803.00 205,491,803.00
171 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 the square-fields Other 132,098,017.32 189,282,844.86 131,707,417.32 Total 381,723,619.20 213,887,109.20 381,723,619.20
2. Details of government subsidy Unit: RMB Currency: CNY Amount occurred in this Amount occurred in last Item Note period period Rewards turned from Rewards for research 31,025,000.00 10,000,000.00 scientific-technical progress and development scientific research achievements Rewards for environment Rewards of specific capital for 375,000.00 protection environment protection Rewards for training and Other 91,200.00 1,726,800.33 infrastructure expenditure Total 31,491,200.00 11,726,800.33 /
(XLIV)Non-operating expense:
Unit: RMB Currency: CNY Amount reckoned into Amount occurred in this Amount occurred in last Item current non-recurring period period gains/losses Total loss on disposal of 6,228,076.16 16,633,771.86 6,228,076.16 non-current assets Including: loss from disposal 6,228,076.16 16,633,771.86 6,228,076.16 of fixed assets External donation 34,294,000.00 54,745,000.00 34,294,000.00 Penalty expense 256,742.46 1,286,828.00 256,742.46 Compensation 1,846,840.93 1,846,840.93 Other 4,961,601.55 12,040,309.31 4,961,601.55 Total 47,587,261.10 84,705,909.17 47,587,261.10
(XLV) Income tax expense:
Unit: RMB Currency: CNY Item Amount occurred in this period Amount occurred in last period Current income tax calculated based on Tax 1,415,138,099.15 1,700,592,587.38 Law and relevant regulation Adjustment of deferred income tax -15,702,028.01 -71,125,361.80
172 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Total 1,399,436,071.14 1,629,467,225.58
(XLVI) Calculation of basic earnings per share and diluted earnings per share: In accordance with requirement of Preparation Rules No.9 on Information Disclosure for Companies Offering Their Securities to the Public – Calculation and Disclosure of ROE and EPS (revised in 2010) (―CSRC Announcement [2010] No.: 2) and Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss (2008) (―CSRC Announcement [2008] No.: 43), the EPS of the Company as: 1. Computed result
Current period Last period Profit of reporting period Basic EPS Diluted EPS Basic EPS Diluted EPS Net profit attributable to ordinary shareholders of / 4.30 / 5.27 the Company(I) Net profit attributable to ordinary shareholders of / the Company after deducting extraordinary 3.10 / 3.73 profit/losses (II)
2. Calculation of EPS
Item Serial Current period Last period Net profit attributable to ordinary shareholders of the 1 6,621,880,767.60 7,720,489,100.77 Company Net profit attributable to ordinary shareholders of 2 1,841,534,068.11 2,073,841,258.47 parent Company after deducting income tax impact Net profit attributable to ordinary shareholders of the 3=1-2 4,780,346,699.49 5,646,647,842.30 Company after deducted extraordinary profit/losses Total number of shares at the beginning of the period 4 1,464,000,000.00 1,464,000,000.00 Share added due to conversion of public reserve to share capital or allocation of share dividends during 5 - the report period 6 162,667,000.00 - Shares increased from issue of new shares or 6 336,500.00 conversion of debt into equity in the reporting period 6 The number of months from the month immediately 7 5 - following the increase of shares from issue of new 7 4 shares or conversion of debt into equity to the 7 year-end of reporting period Shares reduced from repurchase during the reporting 8 - - period The number of months from the month immediately 9 - - following the decrease of shares to the year-end of
173 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Item Serial Current period Last period reporting period The number of reduced shares during the reporting 10 period Number of months in the reporting period 11 12.00 12.00 Weighted average number of outstanding ordinary 12=4+5+6×7÷11-8×9÷11-1 1,540,787,716.44 1,464,000,000.00 shares (II) 0 Weighted average number of outstanding ordinary shares adjusted due to enterprise consolidation under 13 the same control (I) Basic EPS (I) 14=1÷13 4.30 5.27 Basic EPS (II) 15=3÷12 3.10 3.73 Interest of dilutive potential ordinary shares, recognized as expenses, as well as other influence 16 factor Income tax rate 17 Switching charge 18 Shares increased due to exercise or switch of 19 convertible bonds, warrants, stock option ect. 20=[1+(16-18×(100%-17)] Diluted EP(I) / / ÷(13+19) 21=[3+(16-18)×(100%-17)] Diluted EP(II) / / ÷(12+19)
(1) Basic earnings per share Basic earnings per share=P0÷S S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
Among which, P0 represents net profit attributable to ordinary shareholders of the Company or net profits attributable to ordinary shareholders after deducting extraordinary profit/losses ; S represents the weighted average number of outstanding ordinary shares; S0 represents total number of shares at the beginning of the period; S1 represents shares increased from conversion of reserve fund into share capital or share dividend distribution in the reporting period; Si represents shares increased from issue of new shares or conversion of debt into equity in the reporting period; Sj represents the shares reduced from repurchase during the reporting period; Sk represents the number of reduced shares during the reporting period; M0 represents number of months in the reporting period; Mi represents the number of months from the month immediately following the increase of shares to the end of the reporting period; Mj represents the number of months from the month immediately following the decrease of shares to the end of the reporting period .
174 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(2) Diluted earnings per share
Diluted earnings per share =P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average number of ordinary shares increased due to warrants, stock option, convertible bonds ect.) Among which, P1 represents net profits attributable to ordinary shareholders of the Company or net profits attributable to ordinary shareholders of the Company after deducting extraordinary profit/losses, and has been adjusted in accordance with Accounting Standards for Business Enterprises and the relevant regulations after taking the effect of dilutive potential ordinary shares into consideration. When calculating the diluted earnings per share, the Company shall take into account all the effect of dilutive potential ordinary shares on net profits attributable to ordinary shareholders of the Company or net profits attributable to ordinary shareholders of the Company after deducting extraordinary profit/losses and the weighted average number of shares, and include in diluted earnings per share according to the magnitude of dilution in an ascending order until the dilutive earnings per share is reduced to the lowest level.
(XLVII) Other comprehensive income
Unit: RMB Currency: CNY Item Current period Last period 1. gains (losses) arising from financial assets available for sale Less: affect of income tax arising from financial assets available for sale Net, written in other comprehensive income in previous period and carried forward to gains and losses in current period Subtotal 2. Share in other comprehensive income of invested units by equity method 104,400.00 Less: affect of income tax arising from Share in other comprehensive income of invested units by equity method Net, written in other comprehensive income in previous period and carried forward to gains and losses in current period Subtotal 104,400.00 3. gains (losses) arising from cash flow hedge instruments Less: affect of income tax arising from cash flow hedge instruments Net, written in other comprehensive income in previous period and carried forward to gains and losses in current period Adjustment, converted to initial recognization amount of projects in hedge Subtotal 4. Conversion difference arising from foreign currency financial statement -289,674.55 Less: net, carried forward to gains and losses in current period after disposing overseas operation Subtotal -289,674.55 5. Other
175 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Less: affect of income tax arising from others which are written in other comprehensive income Net, others written in other comprehensive income in previous period and carried forward to gains and losses in current period Subtotal Total -289,674.55 104,400.00
(XLVIII) Notes to items of cash flow statement: 1. Other received cash related to operating activities Unit: RMB Currency: CNY Item Amount Quality assurance fund and warranty charge ect. 106,251,300.91 Interest income from deposit 35,043,006.80 Government subsidy 31,881,800.00 Compensation for constructed over the resources 9,000,000.00 Limited funds of environmental deposit 2,448,717.36 Other 4,267,823.56 Total 188,892,648.63
2. Other paid cash related to operating activities Unit: RMB Currency: CNY Item Amount Quality assurance fund and warranty charge ect. 140,873,350.13 Business charge 84,644,800.76 Business travel expenses 96,142,358.40 Non-profit donation expense 34,294,000.00 Premium 17,388,089.06 Other 2,307,600.61 Total 375,650,198.96
3. Other paid cash related to financing activities Unit: RMB Currency: CNY Item Amount Commission charge of issuance of H-share 2,760,226.81 Dividend of B-share 30,948,812.43 Net cash flow from acquisition of assets and equity of the 3,546,664,865.06 Group Distribution to the Group 2,068,718,030.86 Total 5,649,091,935.16 (XLIX)Supplementary information of cash flow statement:
176 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
1. Supplementary information of cash flow statement Unit: RMB Currency: CNY Supplementary information Current period Last period 1. Reconciliation of net profit to cash flows from operating activities: Net profit 7,318,880,982.84 8,267,198,300.00 Add: Provision for impairment of assets -1,523,238.50 -56,037,931.70 Depreciation of fixed assets, oil assets and productive biological 1,163,649,489.52 888,530,788.39 assets Amortization of intangible assets 63,435,983.18 42,996,360.88 Amortization of long-term prepayments 372,297,941.75 128,864,851.27 Losses on disposal of fixed assets, intangible assets and other 1,767,626.20 4,569,165.32 long-term assets (income is listed with ―- ‖) Losses on scrapping of fixed assets(income is listed with ―- ‖) Losses on fair value change(income is listed with ―- ‖) -41,625.37 Financial expenses(income is listed with ―- ‖) 429,612,505.18 267,586,693.10 Investment losses(income is listed with ―- ‖) -231,481,067.59 -23,979,699.46 Decrease in deferred income tax assets (increase is listed with ―-‖) 15,702,028.01 -66,458,632.07 Increase in deferred income tax liabilities (decrease is listed with
―- ‖) Decrease in inventories(increase is listed with ―-‖) 141,817,566.05 -354,531,988.47 Decrease in operating receivables(increase is listed with ―-‖) -278,854,506.60 80,919,736.85 Increase in operating payables(decrease is listed with ―- ‖) -654,054,944.28 -34,381,366.78 Others Net cash flows from operating activities 8,341,250,365.76 9,145,234,651.97 2. Significant investing and financing activities that do not involve cash receipts and payments Conversion of debt into capital Convertible bonds to be expired within one year Fixed assets under finance lease 3. Net increase in cash and cash equivalents: Cash at the end of the year 6,306,019,488.09 4,430,718,716.48 Less: Cash at the beginning of the period 4,430,718,716.48 4,829,224,310.67 Add: Cash equivalents at the end of the period Less: Cash equivalents at the beginning of the period Net increase in cash and cash equivalents 1,875,300,771.61 -398,505,594.19
2. Constitution of cash and cash equivalent Unit: RMB Currency: CNY
177 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Item Ending amount Opening amount 1.cash 6,306,019,488.09 4,430,718,716.48 Including: cash in stock 1,857,932.50 790,072.29 Bank deposit available for payment any time 6,304,161,555.59 4,429,928,644.19 Other monetary capital available for payment any time Account available for payment that deposit in
central bank Account of interbank deposit Account of interbank lending II. cash equivalent Including: Bond investment due within 3 months III. Balance of cash and cash equivalent at period-end 6,306,019,488.09 4,430,718,716.48
VIII. Related parties and related transactions (I) Parent company of the Company In 10 thousand yuan Currency: CNY Ultimat Proport Proport Type e Name of ion of ion of of Register Legal Business Register controll Organizat the parent share voting enterpr place representative nature capital er of the ion code company held right ise Compan (%) (%) y Production of raw coal; processing , transport Liuzhong of raw nan, coal and Inner INNER Limite Jiefang railway Mongol MONGO d Distric, transport ia Yitai LIA liabilit No. 14 ZhuangShuang constructio 125,000 Investm 11693188 YITAI 49.17 49.17 y Yimei wang n; .00 etn -6 GROUP compa Nan Coal-chem Compan CO., ny Road, ical y LTD. Dongshen industry Limited g Distric and sales of products of coal-chemi cal (II) Particular about subsidiary of the Company In 10 thousand yuan Currency: CNY Proporti Proporti Type of Legal Full name of Business Register on of on of Organizati enterpri Register place representati subsidiaries nature capital share voting on code se ve held right (%)
178 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
(%) Inner Limited Mongolia Liabilit Yitai CTO Dalu Town, Coal 78304195- y Hao Xizhu 150,000 80 80 Co., Jungar Banner liquefaction 9 Compa Ltd.( CTO ny for short) Inner Mongolia Limited Majiata Yitai Jingyue Liabilit Village, Coal 66730426- Suancigou y Pang Junlin 108,000 52 52 Hadaigaole , exploration 4 Mine Co., Compa Jungar Banner Ltd.( Suancig ny ou for short) Inner Mongolia Yitai Tiedong Limited Tanggongta Storage and Liabilit Village, Station 68000013- Transportatio y Xuejiawan Kang Zhi 16,900 51 51 leasing 4 n Co., Ltd. Compa Town, Jungar (Tiedong ny Banner Storage and Transport for short) Inner Mongolia Limited Beixini South Yitai Liabilit Road, 109 Production Chemicals 69592228- y National Ji Yanlin of chemical 10,000 100 100 CO., LTD. 9 Compa Higtway, industry (Yitai ny Hangjinqi Chemicals for short) Huhhot Yitai Limited Coal Sale JialanyingVilla Liabilit Co., Ltd. ge, Yuquan Xi Wholesale 69288155- y 5,000 100 100 (Yital Sale Districy, Xiangjun of coal 7 Compa Company fro Huhhot ny short) Beijing Yitai Limited Middle Block, Pharmaceuti 76011845- Liu Jian 1,000 100 100 Bio-Tech Liabilit Yitai Building, cal 8
179 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Co., Ltd. y No.54 (Bio-Tech for Compa Xizhimen short) ny Beidajie, Haidian District, Beijing Yitai Limited PharmaTech Economy and Liabilit Co., Ltd. Technology Technology 79755169- y Liu Jian 1,000 51 51 (Beijing Development development 3 Compa PharmaTech Zone, Beijing ny for short) Jungar Banner Limited Yitai Hotel, Huzhun Ruyi Liabilit Good Xuejiawan Zhang 69008750- Logistic Co., y storage and 100 51 51 Town, Jungar Dongsheng 1 Ltd. ( Ruyi Compa handling Banner Logistic for ny short) Inner Limited MongoliaYit Liabilit ai Refined Dalu District, Sales of 69945695- y Hao Xizhu 3,000 100 100 Oil Sale Co., Jungar Banner lubricant 9 Compa Ltd. (Refined ny Oil for short) Inner Mongolia Limited Yitai Liabilit Nuanshui Zhundong Zhang Consultant 57325700- y county, Jungar 1,280 51 51 Jintai Storage Dongsheng leasing 6 Compa Banner and ny Transportatio n Co., Ltd. Weitai Road Limited Yitai (S), Economic Liabilit Xingjiang & 58932390- y Hao Xizhu Consultant 10,000 90 90 Energy Co., Technological 1 Compa Ltd. Develoment ny Zone, Urumchi Yitai Ili Mine Limited Yinan Industry Zhang 58934681- Investment 5,000 90 90 Co., Ltd. Liabilit Zone, Qapqal Taiping 2
180 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
y Compa ny Limited Yitai Energy Liabilit Lingshi Rd, 59978842- (Shanghai) y Yang Jialin Consultant 5,000.00 100 100 Shanghai X Co., Ltd. Compa ny Room 3312, Limited Yitai No.33, Shui Liabilit (Holding) On Centre, 6-8 International 19,136,1 y 100 100 Hong Kong Harbour Road, trade 00 Compa Co., Ltd. Wan Chai, ny Hong Kong Inner Mongolia Yitai Motor Limited Transport Liabilit Jungar Banner, Co., Ltd. Motor 79718766- y Ordos, Inner Kang Zhi 500 100 100 (Inner transport 8 Compa Mongolia Mongolia ny Motor Transport for short) Inner Mongolia Yitai Limited Zhundong Liabilit Xuejiawan Zhang Railway 70141876- Rail Road y Town, Jungar 149,600 100 100 Dongsheng transport 8 Co., Ltd. Compa Banner, Erdos (Zhundong ny Rail Road for short) Yitai Ili Limited Energy Co., Liabilit Xingrong Rd. Coal Zhang 69342190- Ltd. (Ili y (E), Huocheng technology 10,000 100 100 Donghai 7 Energy for Compa County development short) ny Inner Limited Yitai Building, Zhang Railway 74389476- Mongolia Liabilit Tianjiao Rd. 136,000 76.46 76.46 Dongsheng transport 2 Yitai Huzhun y (E),
181 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Railway Co., Compa Dongsheng Ltd. (Huzhun ny District Railway for short) Inner Limited Mongolia Taohai Town, Liabilit Production Yitai Nalin, Ejin 78706435- y Ma Ping and sales of 3,000.00 73 73 Baoshan Horo Banner, 7 Compa coal Coal Co., Erdos City ny Ltd. Inner Limited Taohai Town, Mongolia Liabilit Production Nalin, Ejin Zhao 78706434- Yitai Tongda y and sales of 7,000.00 73 73 Horo Banner, Dangniu 9 Coal Co., Compa coal Erdos City Ltd. ny
(III) Particular about joint-venture and affiliated enterprises of the Company In 10 thousand yuan Currency: CNY Proporti Proporti Name of Type of Legal on of Busines Register on of Organization invested enterpris Register place representa share s nature capital voting code company e tive held right (%) (%) II. Affiliated enterprise Manufa cture Erdos Tiandi and Limited Tara trenches Huarun Coal sales of Liability Town, Liu Mine spare 10,000.00 31.50 31.50 79717545-6 Compan Dongsheng Jianhua Equipment parts of y District Co., Ltd. mining equipme nt Inner Mongolia Limited Data Village, Jingtai Gangue Liability Xuejiawan Meng Electric power 57,000.00 29.00 29.00 66733610-0 Compan Town, Jungar Wentao Power plant y Banner Generation Co., Ltd.
182 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Fire Room 610, engineer Erdos Limited 6/F Petroleum ing of Yizheng Fire Liability Building, Bai coal 5,000.00 30.00 30.00 55812248-8 Engineering Compan Kangbashi Zhiming field Co., Ltd. y New District, (coal Erdos mine) Jinhua Manufa Machine cture Petrochemica Limited and l Equipment Liability Dalu Town, Tian mainten 21,830.00 39.00 39.00 79361634-9 (Inner Compan Jungar Banner Hongwei ance of Mongolia) y larger Company equipme Limited nt
(IV) Particular about other related parties of the Company
Relationship with the Organization Name of other related parties Company code Holding subsidiary of SYNFUELS CHINA (Synfuels for short) Parent company Jinhua Machine Petrochemical Equipment (Inner Mongolia) Company Other Limited (Jinhua Machine for short) Erdos Tiandi Huarun Coal Mine Equipment Co., Ltd. (Tiandi Huarun for Other short) Holding subsidiary of Shenmu Sujiahao Coal Mine (Sujiahao Coal Mine for short) Parent company Erdos Lianke Clean Energy Technology Co., Ltd. (Lianke Company for Other short) Taifeng Coal Mine of INNER MONGOLIA YITAI GROUP CO., LTD. Other (Taifeng Coal Mine for short) Inner Mongolia Jingtai Electric Power Generation Co., Ltd. (Jingtai Power Other for short) Holding subsidiary of Inner Mongolia Yitai Real Estate Co., Ltd. (Yitai Real Estate for short) Parent company Inner Mongolia Yitai Guanglian Coalification Co., Ltd. (Guanglian Holding subsidiary of
Coalification for short) Parent company Inner Mongolia Mengtai Buliangou Coal Industry Co., Ltd. (Mengtai Other Buliangou for short) (V) Particular about related transaction
183 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
1. Merchandise procurement/labor service received In 10 thousand yuan Currency: CNY Amount occurred in this period Amount occurred in last period Price setting Proportion in Proportion in Content of Related party and strategy similar similar transaction Amount Amount procedure transaction transaction amount (%) amount (%) Catalyst Synfuels Market price 3,461.54 0.17 1,592.14 0.11 procurement Equity of Synfuels Lianke Clean Market price 3,000.00 0.15 Energy sold Jinhua Machinery Market price 174.32 0.01 435.21 0.03 Machine procurement Maintenance Tiandi Huarun of coal Market price 1,693.40 0.08 1,639.97 0.11 equipment Sujiahao Coal Coal Market price 3,589.45 0.18 Mine procurement Lianke Heating fees Market price 3.63 0.00 Company
Merchandise for sale/labor service provided In 10 thousand yuan Currency: CNY Amount occurred in this period Amount occurred in last period Price setting Proportion in Proportion in Content of Related party and strategy similar similar transaction Amount Amount procedure transaction transaction amount (%) amount (%) YITAI GROUP Material Market price 26.52 Sujiahao Coal Material Market price 548.38 0.02 850.17 0.03 Mine Taifeng Coal Material Market price 1,763.93 0.05 2,125.65 0.08 Mine Jingtai Power Coal, gangue Market price 21,445.76 0.66 19,866.53 0.71 Coal sheet, Synfuels Market price 387.52 0.01 liquefied gas Yitai Real Material Market price 94.49 Estate
184 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Guanglian Material Market price 107.79 Coalification Mengtai Freight Market price 1,698.15 0.05 Buliangou Mengtai Logistic Market price 995.62 0.03 Buliangou Mengtai Material Market price 93.95 Buliangou Tiandi Huarun Material Market price 97.36
2. Particular about related guarantee (1)Guarantee for associated company ①Erdos Tiandi Huarun Equipment Co., Ltd. borrowed loan of 14 million yuan from Erdos branch of China Merchants Bank for a term from 27 February 2009 to 26 February 2014. The Company provided guarantee for 3.36 million yuan according to the shareholding proportion of 24%; borrowed loan of 20 million yuan from Erdos branch of China Merchants Bank for a term from 27 February 2009 to 26 February 2014. The Company provided guarantee for 6.3 million yuan;
②Erdos Tiandi Huarun Equipment Co., Ltd. borrowed loan of 48 million yuan from Inner Mongolia branch of China Development Bank for a term from 30 November 2009 to 29 November 2019. The Company provided guarantee for 11.2 million yuan;
(2) Guarantees provided for subsidiaries ①the Company provided guarantee for its wholly owned subsidiary Zhundong Railroad as for the short term borrowings of 28 million yuan, long term borrowings matured within one year of 290,283,400 yuan and long term borrowing of 2,179,600,500 yuan;
②The Company and Erdos State-owned Assets Investment Operation Corporation and Hohhot Railway Bureau (guarantee provided by Erong Group) provided guarantee for controlling subsidiary Huzhun Railway as for the long term borrowings of 526,923,400 yuan and long term borrowings matured within one year of 140,135,600 yuan, with the guarantee proportions of 75.67%, 21.33% and 3% respectively. The Company totally provided guarantee for 504,763,500 yuan. Since the subsidiary Huzhun Railway experienced change in shareholding structure at the end of previous period, guarantee change procedures for the above borrowings are being processed as at the end of the reporting period;
The Company and Inner Mongolia Mengtai Buliangou Coal Co., Ltd and Hohhot Railway Bureau (guarantee provided by Erong Group) provided guarantee for subsidiary Huzhun Railway as for the long
185 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
term borrowings of 960 million yuan borrowed from Erdos branch of China Bank, with the guarantee proportions of 76.46%, 21.46% and 1.98% respectively. The Company totally provided guarantee for 734,016,000 yuan;
③The Company and Shanxi Yuedian Energy Co., Ltd. and Beijing Jingneng Thermal Co., Ltd. provided guarantee for controlling subsidiary Jingyue Suancigou as for the long term borrowings of 640 million yuan and long term borrowings matured within one year of 140 million yuan, with the guarantee proportions of 52%, 24% and 24% respectively. The Company totally provided guarantee for 405.6 million yuan;
④The Company and Yitai Group Company provided guarantee for controlling subsidiary CTO as for the long term borrowings of 1,460 million yuan, long term borrowings matured within one year of 140 million yuan and short term borrowings of 300 million yuan borrowed from Inner Mongolia branch of China Development Bank and Jungar Banner branch of China Bank, with the guarantee proportions of 80% and 20% respectively. The Company totally provided guarantee for 1,520 million yuan.
(VI) Account payable/ receivable of related parties Account receivable from related parties by listed company: In 10 thousand yuan Currency: CNY Period-end Period-begin Item Related party Book balance Bad debt provision Book balance Bad debt provision Account receivable: Jingtai Power 2,313.57 Note receivable: Jingtai Power 1,000.00 Other account receivable: Tiandi Huarun 813.55 Mengtai 105.97 Buliangou Guanglian 12.86 Coalification Synfuels 3,000.00 Account paid in advance: Jinhua Machine 47.38 9.10
186 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Tiandi Huarun 248.00 Synfuels 24.28
Account payable to related parties from listed company: In 10 thousand yuan Currency: CNY Item Related party Ending book balance Opening book balance Account payable: Tiandi Huarun 42.96 Synfuels 595.66 Jinhua Machine 501.88 477.12 YITAI GROUP 1,864.70 Other account payable: YITAI GROUP 430,701.32 Synfuels 10,473.53 10,459.00 Jinhua Machine 58.91 Tiandi Huarun 85.63 81.42 Account received in advance: Mengtai Buliangou 211.77 YITAI GROUP 1,300.13
IX. Share payment: Nil
X. Contingent events: Nil
XI. Commitments: Nil
XII. Events subsequent to balance sheet date: (I) Explanation on other events subsequent to balance sheet date As the Company is a company listed in two places which is applicable for two accounting principles, according to the articles of association, the profit distribution shall be based on the lesser of after-tax net profit of parent company.
The after-tax net profit of parent was 4.349 billion yuan in 2012 (international accounting principles, the same for below, besides, 10% shall be withdrawn as statutory surplus reserve before profit distribution). The Company plans to dispatch 10 shares for every 10 shares (tax included) and cash dividend of 12.5
187 Inner Mongolia Yitai Coal Company Limited Annual Report 2012 yuan for every 10 shares (tax included) to its entire shareholders based on the total share capital of 1,627,003,500 shares. The above two dividends amounted to 3.661 billion yuan.
As at the period-end of 2012, the accumulated profit available for distribution to shareholders amounted to 14.147 billion yuan. After this profit distribution, the remaining 10.486 billion yuan would be carried forward for next distribution. Dividend of B shares was calculated in RMB and paid in USD. The exchange rate between USD and RMB was calculated based on the central price of USD and RMB released by People’s Bank of China as at the first working day after the date when profit distribution resolution was made in general meeting.
Dividend of H shares was calculated in RMB and paid in HKD. The exchange rate between HKD and RMB was calculated based on the central price of HKD and RMB released by People’s Bank of China as at the first working day after the date when profit distribution resolution was made in general meeting.
XIII. Other significant matters: 1. Application report in respect of the land use right of the land occupied by subsidiaries Huzhun Railway and Zhundong Railroad phase II has been reported to the ministry of land and resources and being processed.
2. The Company was listed on Hong Kong Stock Exchange in July 2012, raising total capital proceeds of HK$ 7,009,150,500.00. After deduction of certain listing expenses, the proceeds were deposited in the Company’s bank account opened in Bank of China (special receipt account for listing capitals) in two batches on 12 July 2012 with HK$ 6,783,822,564.47 and HK$ 51,267,447.49; on 8 August 2012, the capitals raised through over-allocation were deposited in the Company’s bank account opened in Bank of China with HK$ 14,468,342.44, thus the total proceeds amounted to HK$ 6,849,558,354.40. On 31 July 2012, the Company transferred HK$ 1,400,000,000.00 from Hong Kong branch of Bank of China to Wing Lung Bank Ltd.(special receipt account for listing capitals). On 10 September 2012, the Company transferred HK$ 700,000,000.00 from Hong Kong branch of Bank of China to Hong Kong branch of Bank of Communications (special receipt account for listing capitals). As authorized by Erdos central branch of State Administration of Foreign Exchange, the Company transferred HK$ 1,300,000,000.00 from Hong Kong branch of Bank of China to domestic Erdos branch of Bank of China and transferred HK$ 707,430,000.00 from Hong Kong branch of Bank of China to domestic Erdos branch of Bank of Communications on 28 August 2012; HK$ 700,000,000.00 from Wing Lung Bank Ltd to domestic Erdos branch of China Merchants Bank on 29 August 2012. The aforesaid capitals transferred to domestic accounts amounted to HK$ 2,707,430,000.00 in total, and relevant settlement and remittance were processed on 31 August 2012 (for Bank of China) and 28 September 2012 (for Bank of Communications
188 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
and China Merchants Bank) respectively. The amounts settled and remitted were 1,061,839,820.30 yuan, 572,735,149.89 yuan and 566,089,894.87 yuan, totaling to 2,200,664,865.06 yuan which were all used as consideration of assets acquisition from Inner Mongolia Yitai Group Co., Ltd.
3. The consideration payable for acquisition of coal business of parent company by the Company was 8,446,544,400 yuan. As at 31 December 2012, 4,307,013,200 yuan has been paid and the remaining 4,139,531,200 yuan were not paid yet, among which, 3,310,369,400 yuan was not paid due to foreign exchange controls.
XIV. Notes to major items in Financial Statement of Parent Company (I) Account receivable: 1. Accounts receivable disclosed according to categories: Unit: RMB Currency: CNY Ending amount Opening amount Bad debt Bad debt Categorie Book balance Book balance provision provision s Proporti Amo Proporti Proporti Amo Proportio Amount Amount on (%) unt on (%) on (%) unt n (%) Account receivable with bad debt provision accrual by group: 2,304,658,490.07 100.00 637,444,674.49 100.00 Total 2,304,658,490.07 / / 637,444,674.49 / / 2. In this report period, particular about shareholders with over 5 %( including 5%) voting rights of the Company in account receivable No debts owed to shareholders with over 5% (including 5%) voting rights of the Company in account
receivables in reporting period
3. Particular about top 5 amount of account receivable Unit: RMB Currency: CNY Relationship with Proportion in total Name of the company Amount Term the Company account receivable (%) Guangdong Power Client 356,709,896.28 Within 1 year 15.48 Industrial Fuel Co., Ltd. Zhejiang Zheneng Client 198,988,045.59 Within 1 year 8.63 Fuxing Fuel Co., Ltd. Guangdong Zhutou Client 177,137,651.26 Within 1 year 7.69 Power Fuel Co., Ltd. Guangzhou Zhujiang Client 131,122,699.67 Within 1 year 5.69 Electric Power Fuelling
189 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Co., Ltd. Baotao Tieyuan Logistic Client 111,087,448.00 Within 1 year 4.82 Comprehensive Co., Ltd Total / 975,045,740.80 / 42.31
(II) Other account receivable:
1. Other account receivable disclosed according to categories:
Unit: RMB Currency: CNY
Ending amount Opening amount Book balance Bad debt provision Book balance Bad debt provision Categorie Propor Propor Propor s Proporti Amount tion Amount Amount tion Amount tion on (%) (%) (%) (%)
Other account receivable with bad debt provision accrual by group:
2,524,212,219.07 99.16 845,573,778.30 95.06 Group 2,524,212,219.07 99.16 845,573,778.30 95.06 subtotal Other accounts receivable that are individual ly insignific ant but 21,316,338.20 0.84 21,316,338.20 100.00 43,900,125.57 4.94 43,900,125.57 100.00 with bad debt provision provided on an individual basis Total 2,545,528,557.27 / 21,316,338.20 / 889,473,903.87 / 43,900,125.57 /
Other amount receivable with single substantive amount and withdrawal bad debt provision single Unit: RMB Currency: CNY
190 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Content of other Book balance Bad debt Accrual ratio (%) Reasons receivable Advance payment 10,000,000.00 10,000,000.00 100.00 Un-collectable Equity transfer money 5,430,284.50 5,430,284.50 100.00 Un-collectable Risk guarantee 3,000,000.00 3,000,000.00 100.00 Un-collectable Borrowings 1,472,669.99 1,472,669.99 100.00 Un-collectable Other 1,413,383.71 1,413,383.71 100.00 Un-collectable Total 21,316,338.20 21,316,338.20 / / 2. In this report period, particular about shareholders with over 5 %( including 5%) voting rights of the Company in other account receivable No debts owed to shareholders with over 5% (including 5%) voting rights of the Company in other account receivables in reporting period 3. Particular about top 5 companies in other account receivable Unit: RMB Currency: CNY Proportion in Relationship total other Name of the company with the Amount Term account company receivable(%) Wholly-owne Within 1 Yitai Ili Energy Co., Ltd. 741,844,845.29 29.14 d subsidiary year Wholly-owne Within 1 Inner Mongolia Yitai Chemicals CO., LTD. 259,003,730.69 10.17 d subsidiary year Holding Within 1 Yitai Ili Mine Co., Ltd. 169,780,618.44 6.67 subsidiary year Wholly-owne Within 1 Yitai Energy (Shanghai) Co., Ltd. 159,895,098.41 6.28 d subsidiary year Inner Mongolia Yitai Jingyue Suancigou Mine Co., Holding Within 1 155,699,702.26 6.12 Ltd. subsidiary year Total / 1,486,223,995.09 / 58.38
4. Account receivable from related parties Unit: RMB Currency: CNY Proportion in Relationship with total other Name of the company Amount the company account receivable (%) Wholly-owned Yitai Ili Energy Co., Ltd. 741,844,845.29 29.14 subsidiary Wholly-owned Inner Mongolia Yitai Chemicals CO., LTD. 259,003,730.69 10.17 subsidiary
191 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Yitai Ili Mine Co., Ltd. Holding subsidiary 169,780,618.44 6.67 Wholly-owned Yitai Energy (Shanghai) Co., Ltd. 159,895,098.41 6.28 subsidiary Inner Mongolia Yitai Jingyue Suancigou Mine Co., Ltd. Holding subsidiary 155,699,702.26 6.12 Yitai Xingjiang Energy Co., Ltd. Holding subsidiary 140,394,487.69 5.52 Wholly-owned Yitai (Holding) Hong Kong Co., Ltd. 21,770,732.87 0.86 subsidiary Yitai (Beijing) Pharmatech Co., Ltd. Holding subsidiary 14,749,642.55 0.58 Inner Mongolia Yitai Tiedong Storage and Transportation Holding subsidiary 3,609,906.93 0.14 Co., Ltd. Wholly-owned Beijing Yitai Biotech Co., Ltd. 1,112,177.02 0.04 subsidiary Total / 1,667,860,942.15 65.52 (III) Long-term equity investment: Calculated based on cost Unit: RMB Currency: CNY Proport Proport ion of ion of Impairme voting share Change of Impairme nt rights Invested Investment Opening Ending held in increase/dec nt provision in company cost balance balance investe rease provision accrual in investe d period d compa compa ny (%) ny (%) Inner Mongolia 1,183,727,4 1,183,727,4 1,183,727,4 Huzhun 76.46 76.46 00.00 00.00 00.00 Railway Co., Ltd. Erdos Yitai 39,294,274. 39,294,274. -39,294,274 Auto Transport 0.00 0.00 07 07 .07 Co.,, Ltd. Inner Mongolia 1,569,886,9 1,569,886,9 1,569,886,9 100.00 100.00 Zhundong Rail 28.85 28.85 28.85 Road Co., Ltd. Inner 1,200,160,0 1,200,160,0 1,200,160,0 Mongolia Yitai 80.00 80.00 00.00 00.00 00.00 CTO Co., Ltd.
192 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Yitai Xingjiang 100,000,000 100,000,000 -100,000,00 Zhundong 0.00 0.00 .00 .00 0.00 Energy Co., Ltd. Inner Mongolia Yitai 100,000,000 100,000,000 100,000,000 100.00 100.00 Chemicals .00 .00 .00 CO., LTD. Inner Mongolia Yitai 6,085,989.1 6,085,989.1 6,085,989.1 Motor 100.00 100.00 7 7 7 Transport Co., Ltd. Inner Mongolia Yitai 561,600,000 561,600,000 561,600,000 Jingyue 52.00 52.00 .00 .00 .00 Suancigou Mine Co., Ltd. Inner Mongolia Yitai Tiedong 86,190,000. 62,730,000. 23,460,000. 86,190,000. 51.00 51.00 Storage and 00 00 00 00 Transportation Co., Ltd. Hohhot Yitai Coal 50,000,000. 50,000,000. 50,000,000. 100.00 100.00 Marketing Co., 00 00 00 Ltd. Yitai Ili 100,000,000 100,000,000 100,000,000 Energy Co., 100.00 100.00 .00 .00 .00 Ltd. Yitai Xingjiang 90,000,000. 90,000,000. 90,000,000. 90.00 90.00 Energy Co., 00 00 00 Ltd. Yitai Ili Mine 45,000,000. 45,000,000. 45,000,000. 90.00 90.00 Co., Ltd. 00 00 00 Yitai Energy 50,000,000. 50,000,000. 50,000,000. (Shanghai) 100.00 100.00 00 00 00 Co., Ltd.
193 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Yitai (Holding) 19,136,100. 19,136,100. 19,136,100. Hong Kong 100.00 100.00 00 00 00 Co., Ltd. Beijing Yitai 1,006,699.3 1,006,699.3 1,006,699.3 Biotech Co., 100.00 100.00 4 4 4 Ltd. Yitai (Beijing) 2,258,466.4 2,258,466.4 2,258,466.4 Pharmatech 51.00 51.00 7 7 7 Co., Ltd. Inner Mongolia Yitai 172,023,372 172,023,372 172,023,372 73.00 73.00 Baoshan Coal .75 .75 .75 Co., Ltd. Inner Mongolia Yitai 256,534,375 256,534,375 256,534,375 73.00 73.00 Tongda Coal .73 .73 .73 Co., Ltd. Zhunshuo 757,045,000 576,875,000 105,625,000 682,500,000 Railway Co., 17.62 17.62 .00 .00 .00 .00 Ltd. New Baoshen Railway 382,800,000 382,800,000 150,000,000 532,800,000 16.55 16.55 Company .00 .00 .00 .00 Limited Erdos South Railway 200,000,000 200,000,000 200,000,000 12.51 12.51 Company .00 .00 .00 Limited
Mengji 1,440,000,0 1,440,000,0 540,000,000 1,980,000,0 Railway Co., 8.93 8.93 00.00 00.00 .00 00.00 Ltd.
Tangshan Caofeidian 72,000,000. 72,000,000. 72,000,000. 4.00 4.00 Mine Horbor 00 00 00 Co., Ltd. Mianyang 100,000,000 100,000,000 100,000,000 Science&Tech 1.11 1.11 .00 .00 .00 nology Town
194 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Industy Investmetn Fund (LLC) Inner Mongolia 8,042,978.4 350,425,544 306,964,479 43,461,065. 35,418,08 38,225,17 CONBA 12.00 12.00 2 .34 .02 32 6.90 9.85 Pharmaceutica l Co., Ltd. Mengxi Central China 100,000,000 100,000,000 100,000,000 10.00 Railway Co., .00 .00 .00 Ltd. Calculated based on equity Unit: RMB Currency: CNY Proporti Proporti on of on of Change of share voting Opening Invested company Investment cost increase/decrea Ending balance held in rights in balance se invested invested compan compan y (%) y (%) Erdos Tiandi Huarun Coal Mine 31,500,000.00 25,110,296.54 -5,563,489.46 19,546,807.08 31.50 31.50 Equipment Co., Ltd. Inner Mongolia Jingtai Electric 165,300,000.00 183,585,825.05 7,298,730.73 190,884,555.78 29.00 29.00 Power Generation Co., Ltd. Erdos Yizheng Fire Engineering Co., 15,000,000.00 30,945,418.78 17,266,964.32 48,212,383.10 30.00 30.00 Ltd. (IV) Operating income and operating cost: 1. Operating income, operating cost
Unit: RMB Currency: CNY Item Amount occurred in this period Amount occurred in last period Main business income 19,458,876,283.41 15,810,964,950.93 Other business income 634,140,150.51 684,610,196.37 Operating cost 13,322,388,276.19 8,917,650,761.33
195 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
2. Main business (according to products) Unit: RMB Currency: CNY Name of Amount occurred in this period Amount occurred in last period products Operating income Operating cost Operating income Operating cost Coal 19,396,457,475.19 12,712,230,098.41 15,807,627,082.13 8,318,460,873.25 Service industry 62,418,808.22 3,831,383.68 3,337,868.80 1,488,682.07 Total 19,458,876,283.41 12,716,061,482.09 15,810,964,950.93 8,319,949,555.32
3. Particular about operating income in top 5 client of the Company Unit: RMB Currency: CNY Proportion in total operating income of Name of the client Total operating income the Company (%) Zhejiang Zheneng Fuxing Fuel Co., 1,255,888,046.49 6.25 Ltd. Guangdong Zhutou Power Fuel Co., 944,359,758.02 4.70 Ltd. Shanghai Shenergy Fuel Co., Ltd. 739,411,173.71 3.68 Guangdong Power Industrial Fuel Co., 664,461,038.35 3.31 Ltd. Jiangsu Sulong Energy Co., Ltd. 614,406,542.12 3.06 Total 4,218,526,558.69 21.00
(V) Investment income: 1. Details of investment income Unit: RMB Currency: CNY Amount occurred in Amount occurred in last
this period period Income of long-term equity investment based on cost 229,819,381.88 255,353,792.71 Income of long-term equity investment based on equity 30,994,885.59 26,534,261.38 Investment income from disposal of long-term equity investment 151,284,862.80 -44,035.89 Investment income obtained in period of transactional financial assets 65,411.29 held Total 412,099,130.27 281,909,429.49
(VI)Supplementary information of cash flow statement: Unit: RMB Currency: CNY Supplementary information Current period Last period 1. Reconciliation of net profit to cash flows from operating activities: Net profit 4,491,815,556.35 5,135,866,120.79
196 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Add: Provision for impairment of assets -22,583,787.37 19,333,050.19 Depreciation of fixed assets, oil assets and productive 440,084,011.81 309,156,896.06 biological assets Amortization of intangible assets 57,423,697.08 9,844,899.09 Amortization of long-term prepayments 200,353,286.37 110,989,402.78 Losses on disposal of fixed assets, intangible assets and 945,762.30 -2,193,444.84 other long-term assets (income is listed with ―- ‖) Losses on scrapping of fixed assets(income is listed with
―- ‖) Losses on fair value change(income is listed with ―- ‖) -41,625.37 Financial expenses(income is listed with ―- ‖) 61,379,338.95 267,012.75 Investment losses(income is listed with ―- ‖) -412,099,130.27 -281,909,429.49 Decrease in deferred income tax assets (increase is listed 228,485.77 5,999,145.59 with ―-‖) Increase in deferred income tax liabilities (decrease is listed with ―- ‖) Decrease in inventories(increase is listed with ―-‖) -137,234,937.95 -103,733,981.47 Decrease in operating receivables(increase is listed with -3,910,020,457.13 -299,928,062.52 ―-‖) Increase in operating payables(decrease is listed with ―- ‖) 2,244,384,955.77 20,865,425.08 Others Net cash flows from operating activities 3,014,676,781.68 4,924,515,408.64 2. Significant investing and financing activities that do not involve cash receipts and payments Conversion of debt into capital Convertible bonds to be expired within one year Fixed assets under finance lease 3. Net increase in cash and cash equivalents: Cash at the end of the year 5,543,553,470.15 2,272,540,819.20 Less: Cash at the beginning of the period 2,272,540,819.20 2,167,664,101.81 Add: Cash equivalents at the end of the period Less: Cash equivalents at the beginning of the period Net increase in cash and cash equivalents 3,271,012,650.95 104,876,717.39
(XV) Supplementary information 1. Details of current extraordinary profit and losses Unit: RMB Currency: CNY Items 2012 2011 2010 Gains and loss from disposal of non-current assets 183,847,036.59 -3,550,290.42 -21,484,969.63 Government subsidy recorded into current gains and 31,491,200.00 11,126,800.33 15,459,032.00 losses, except for the ones closely relevant to
197 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Company’s ordinary operation business and enjoyed in accordance with the general ration or quota of the state based on regulation of state policy Current net gains and losses occurred from period-begin to combination day by subsidiaries 1,680,928,960.19 2,485,999,558.18 1,967,818,548.17 resulting from business combination under common control Held transaction financial asset, gains/losses of changes of fair values from transaction financial liabilities, and investment gains from disposal of transaction financial asset, transaction financial 107,036.66 92,170.47 liabilities and financial asset available for sales, exclude the effective hedging business relevant with normal operations of the Company Affect on current gains and losses after an one-time adjustment according to requirements of laws and 38,678,790.06 regulations regarding to taxation and accounting Other non-operating income and expense except the 294,292,096.61 118,897,450.05 -100,230,909.07 above items Influence amount on equity of minority shareholders -312,959,088.33 -335,004,287.52 -185,813,789.07 Impact on income tax -36,066,136.95 -19,469,953.81 12,562,392.52 Total 1,841,534,068.11 2,258,106,313.47 1,727,081,265.45
(II) Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
Unit: RMB Currency: CNY In ten thousand yuan Net profit Item Current period Last period Chinese GAAP 662,188.08 772,048.91 Items and amount adjusted by IAS Depreciation of fixed assets purchased by charge of maintenance of simple reproduction -16,774.28 -3,731.41
IAS 645,413.80 768,317.50
Note: Financial report disclosed on the basis of IAS was audited by Ernst & Young CPA while the financial
198 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
report disclosed on the basis of Chinese GAAP was audited by Dahua CPA (LLP)
(III) Return on equity and earnings per share
Earnings per share Weighted average of Profit in the report period Diluted earnings per return on equity (%) Basic earnings per share share Net profit attributable to common 31.08 4.30 shareholders of the Company Net profit attributable to common shareholders of the Company after 26.51 3.10 deducting non-recurring gains and losses
(IV) Abnormal condition and reasons of main items in accounting statement
Ending balance Opening balance Item Ratio for changes (%) Reasons for changes (or current period) (or last period) Capital raised from H-share Monetary fund 6,344,379,496.19 4,480,085,338.99 41.61 placement in period increased The endorsable note increased at Note receivable 26,210,000.00 43,154,276.14 -39.26 year-end and the note receivable decreased subsequently Amount of sales of coal for trading in Account receivable 2,663,426,021.76 1,365,303,004.27 95.08 this period increased Other account Operational contact in period 439,999,402.98 209,191,949.87 110.33 receivable increased More investment in project of Projects under Complex Phase I of Zhundong, 2nd 7,963,101,458.80 4,883,464,819.22 63.06 construction Line of Huzhun Railway, Xinjiang Energy and Ili Mine ect. in period Engineering Construction materials increased for 6,106,638.12 - 100.00 materials project of Ili Energy Long-term Compensation for demolition of strip 760,405,595.13 208,251,953.49 265.14 amortized expenses mining and stripping charge increased Deferred income The deductable temporary difference 917,591,106.71 112,224,831.58 717.64 tax assets from assets acquisition increased Short-term loans 328,000,000.00 868,000,000.00 -62.21 Due loans been paid Performance bonus accrual in period Wages payable 204,687,341.01 300,975,100.57 -31.99 decreased Unpaid enterprise income tax at Taxes payable -8,741,814.98 190,308,454.40 -104.59 year-end has dramatically declined
199 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Ending balance Opening balance Item Ratio for changes (%) Reasons for changes (or current period) (or last period) Unpaid dividend payables from Dividend payable 1,000,000,000.00 - 100.00 Holding subsidiaries increased Other account Payable account for assets acquisition 5,209,553,107.88 743,639,492.20 600.55 payable increased Bonds payable 1,001,295,546.67 - 100.00 First one MTN placement Other non-current Resources compensation was 128,188,997.00 293,190,800.00 -56.28 liability amortized in period The difference offset between the fair Capital reserve 1,511,013,242.53 2,160,567,734.17 -30.06 value and book value of assets acquisition under the same control The difference offset between the fair Surplus reserve 1,105,415,215.52 2,022,835,760.36 -45.35 value and book value of assets acquisition under the same control Outsourcing coal increased and the Operating cost 20,237,988,738.19 14,817,232,933.14 36.58 outsourcing cost higher the cost of self-production Coal Liquefaction and Phase II of Zhundong Railway have completed Financial expenses 433,831,710.37 236,820,472.27 83.19 transfer into fixed assets, capitalization interest decreased Devaluation losses Due to switch-back of current bad -1,523,238.50 -56,037,931.70 -97.28 of assets debt provision Equity of Pharmaceutical Company Investment income 231,481,067.59 23,979,699.46 865.32 disposed in period, holding subsidiary of the Company Non-operating Compensation for constructed over 381,723,619.20 213,887,109.20 78.47 income the resources received in period Non-profit donation expenditure and Non-operating 47,587,261.10 84,705,909.17 -43.82 losses from disposal of non-current expense assets in this period declined.
200 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section XIII. Financial Data Summary in Latest Five Years
Up to 31st December
2008 2009 2010 2011 2012 (in 10 thousand (in 10 thousand (in 10 thousand (in 10 thousand (in 10 thousand yuan) yuan) yuan) yuan) yuan) Income & Profit Operating income 1,604,940.34 1,570,709.89 2,325,591.67 2,788,424.20 3,246,332.47 Total operating cost 1,039,419.98 1,055,059.25 1,431,845.17 1,814,077.90 2,431,062.51 Operating cost 816,912.09 826,789.48 1,165,025.42 1,481,723.29 2,023,798.87 Sales expenses 101,888.81 112,845.61 124,855.78 119,041.38 117,518.14 Administration expense 62,454.80 66,789.95 95,466.44 112,207.26 165,039.99 Finacnial expenses 29,142.58 21,594.51 13,091.77 23,682.05 43,383.17 Net other operating cost 29,021.71 27,039.71 33,405.77 77,423.92 81,322.33 Operating profit 558,232.53 515,855.68 894,174.13 976,748.43 838,418.07 Total profit 555,643.68 513,425.87 884,020.44 989,666.55 871,831.71 Income tax 112,496.58 86,012.22 151,965.19 162,946.72 139,943.61 Net profit 443,147.10 427,413.65 732,055.25 826,719.83 731,888.10 Profit attributable to 439,687.19 407,177.75 684,671.46 772,048.91 662,188.08 owners’ of parent company Basic EPS 3.00 2.78 4.68 5.27 4.30 Assets & Liability Current assets 673,505.19 605,645.01 721,229.02 782,509.53 1,117,239.51
Non-current assets 1,408,094.85 1,892,308.19 2,181,930.12 2,562,001.32 3,019,474.85
Current liability 677,806.62 523,171.79 457,393.28 558,307.08 1,039,468.87
Non-current liability 465,160.79 746,956.02 711,840.32 649,426.93 903,358.70
Owners’ equity 938,632.65 1,227,825.38 1,733,925.54 2,136,776.84 2,193,886.79
201 Inner Mongolia Yitai Coal Company Limited Annual Report 2012
Section XIV. Documents Available for Reference I. Financial report signed and sealed by the legal representative, principal in charge of accounting works and principal in charge of accounting organ.
II. Original Auditing Report sealed by the CPA Office and signed and sealed by the CPA’s.
III. The formal versions of all files and original copies of all the notices publicly disclosed on Shanghai Securities News and Hong Kong Commercial Daily in the report period. IV. Annual Report disclosed in HKEx. Chairman: Zhang Donghai Inner Mongolia Yitai Coal Company Limited 25th March 2013
202