China Communications Services Corporation Limited Annual Report 2015
99
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the year ended 31 December 2015
Notes: (Continued)
(c)
Statutory surplus reserve
According to the People’s Republic of China (the “PRC”) Company Law and the Articles of Association of the Company and its PRC subsidiaries, these
companies are required to transfer 10% of their respective net profit as determined in accordance with the PRC Accounting Rules and Regulations to the
statutory surplus reserve until the reserve balance reaches 50% of the registered capital. The transfer to this reserve must be made before distribution of a
dividend to shareholders.
Statutory surplus reserve can be used to make good previous years’ losses, if any, or to expand the business, and may be converted into share capital by the
issuance of new shares to shareholders in proportion to their existing shareholdings or by increasing the par value of the shares currently held by them,
provided that the balance after such issue is not less than 25% of the registered capital.
The amount represents the statutory surplus reserve appropriated by the Company and the statutory surplus reserve appropriated by the Company’s
subsidiaries is not presented.
For the year ended 31 December 2015, the Company transferred RMB105 million (2014: RMB86 million) being 10% of the profit for the current year as
determined in accordance with the PRC Accounting Rules and Regulations to this reserve.
(d)
Specific reserve
Pursuant to the relevant PRC regulations, the Group appropriated and utilised the provision for production safety. The Group is required to make a transfer for
the provision for production safety from retained earnings to a specific reserve. The provision for production safety could be utilised when expenses or capital
expenditures on production safety measures are incurred. The amount of the provision for production safety utilised would be transferred from the specific
reserve back to retained earnings.
(e)
Fair value reserve
The fair value reserve represents the net change in the fair value of available-for-sale securities held at the end of the reporting period.
(f)
Exchange reserve
The exchange reserve represents all foreign exchange differences arising from the translation of the financial statements of subsidiaries located outside
Mainland China.
The notes on pages 102 to 170 form part of these consolidated financial statements.
