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Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
Annual Report 2011 /
1
2
Significant accounting policies
(continued)
(y) Translation of foreign currencies
The functional and presentation currency of the Group’s is Renminbi (“RMB”). Foreign currency
transactions during the year are translated into RMB at the applicable rates of exchange quoted by the
People’s Bank of China (“PBOC”) prevailing on the transaction dates. Monetary assets and liabilities
denominated in foreign currencies are translated into RMB at the applicable rates ruling at the balance
sheet date. Foreign currency differences, other than those capitalised as construction in progress (see
note 2(h)), are recognised as income or expense in the consolidated income statement.
The results of foreign operations are translated into RMB at the exchange rates approximating the
foreign exchange rates ruling at the dates of the transactions. Balance sheet items are translated
into RMB at the foreign exchange rates ruling at the balance sheet date. The resulting exchange
differences are recognised in other comprehensive income and accumulated separately in equity in
the exchange reserve. On disposal of a foreign operation, the cumulative amount of the exchange
differences relating to that foreign operation is reclassify from equity to profit or loss when the profit or
loss on disposal is recognised.
(z) Borrowing costs
Borrowing costs that directly attributable to the acquisition, construction or production of an asset
which necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalised as part of the cost of that asset. Other borrowing costs are expensed in the period in which
they are incurred.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when
expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are
necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing
costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying
asset for its intended use or sale are interrupted or complete.
(aa) Segment reporting
Operating segments, and the amounts of each segment item reported in the financial statements,
are identified from the financial information provide regularly to the Group’s most senior executive
management for the purposes of allocating resources to, and assessing the performance of, the
Group’s various lines of business and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products
and services, the nature of production processes, the type or class of customers, the methods used
to distribute the products or provide the services, and the nature of the regulatory environment.
Operating segments which are not individually material may be aggregated if they share a majority of
these criteria.
The Group principally has one business segment and hence no segment information is provided (see
note 46).
(bb) Dividends or profit distributions
Dividends or profit distributions are recognised as a liability in the period in which they are declared.