温州银行英文顶格.indd

Transcription

温州银行英文顶格.indd

CONTENTS
Section Ⅰ Important Notice
1
Section Ⅱ Company Profile
2
Section Ⅲ Main Financial Data and Indicators
4
Section Ⅳ Banking Business Information and Data
7
Section Ⅴ Changes in Stock Capital and Shareholders
24
Section Ⅵ Directors, Supervisors, Senior Managerial Staff and Staff
29
Section Ⅶ Corporate Governance Structure
36
Section Ⅷ Shareholders' General Meeting
42
Section Ⅸ Report of Board of Directors
43
Section Ⅹ Report of the Supervisory Board
62
Section Ⅺ Significant Events
66
Section Ⅻ Financial Report
69
Section XIII Contents for References
70
Section XIV Appendices
71
2011 年度报告
ANNUAL REPORT
SECTION I
IMPORTANT NOTICE
The Board of Directors and the Directors of Bank of Wenzhou Co., Ltd. ( hereinafter referred to as “the Company”) undertake
that the information in the Report does not contain any misrepresentation, misleading statements or materials omissions and
jointly and individually accept full responsibility for the truthfulness, accuracy and completeness of the contents.
The main body and the summary of the Annual Report of 2011 were approved at the 10th session of the 4th Board of Directors.
The financial report 2011 has been audited by Shu Lun Pan Certified Public Accountants Co., Ltd. in line with the Chinese
Accounting Standards. Shu Lun Pan CPAs has prepared a standard auditors' report with unqualified opinion.
Board of Directors of Bank of Wenzhou Co., Ltd.
Chairman Xing Zengfu, President Wu Hua, Assistant President in charge of financing Li Weiming, and General Manager of
Planning & Financial Department Zhang Deming hereby confirm that the annual financial report is true and complete.
001
SECTION II
COMPANY PROFILE
I. Brief information of the Company
( I ) Legal Chinese name: 温州银行股份有限公司 ( Abbreviation: 温州银行, hereinafter called “the Company” )
Legal English name: BANK OF WENZHOU CO., LTD ( Abbreviation: BANK OF WENZHOU )
( II ) Legal representative: Xing Zengfu
( III ) Secretary of the Board: Huang Chenyuan
Contact address: Office to the Board of Directors of Bank of Wenzhou Co., Ltd.,
196 Chezhan Ave., Wenzhou
Tel.: 0577-88999906
Fax: 0577-88990092
E-mail:[email protected]
( ⅳ ) Registered address: No. 196 Chezhan Ave., Wenzhou
Office address: No. 196 Chezhan Ave., Wenzhou
Post code: 325088
Internet Website: www.wzbank.cn
E-mail: [email protected]
( ⅴ ) Newspaper for information disclosure: Financial Times
Website for information disclosure: www.wzbank.cn
Place for Saving the Annual Report: the Office to the Board of Director
( ⅵ ) Other relevant information:
Date of Initial Registration: 10 March 1999
Registered Address: Administration Bureau for Industry and Commerce of Zhejiang Province
Registered Number of Business License of the Corporate Legal Entity: 330000000008227
No. of financial business license: B0153H233030001
Registered Number for Taxation: 330300712559654
Organization Code: 71255965-4
Certified Public Accountants Engaged by the Company:
Name: Shulun Pan Certified Public Accountants Co., Ltd.
Office Address: 4/F, 61 Nanjing Road E., Shanghai
( ⅶ ) The Annual Report is written in both Chinese and English. In case of any discrepancy between the two versions, Chinese
version prevails.
002
2011 年度报告
ANNUAL REPORT
II. Organization Structure of the Company
Shareholders’ General Meeting
Risk Management Committee
Nomination Committee
Board of Directors
Supervisory Board
Related Party Transaction Control Committee
Audit Committee
Nomination and Compensation Committee
Office of Board of Directors
Office of Supervisory Board
Strategic Development Committee
Audit Committee
Information Technology Committee
Risk Control Committee
Defeat Lawsuit Responsibility Assessment Committee
Internal Control Committee
Credit and Loan Examination & Management Committee
Office of President
Assets and Liabilities Management Committee
Risk Loan Responsibility Assessment Committee
Financial Management Committee
Compliance Management Committee
Office of Capital Construction
Security Dept
R&D Dept
Hangzhou Branch
E-Banking Dept
Technology & Information Dept
International Business Dept
Capital Operation Dept
Shanghai Branch
Credit Card Dept
Personal Financial Dept
Business Dept
Compliance Dept
Wenzhou Regional Branch
Internal Audit Dept
Asset Preservation Dept
Retail Credit Dept
Credit Management Dept
Wenzhou Regional Sub-branch
Risk Management Dept
Wenzhou Regional Branch
Accounting & Settlement Dept
Planning &Finance Dept
Organizational Development Office
HR Management Dept
General Office
Banking Dept
Ningbo Branch
Two Sub-branch such
as Cixi Sub-branch
Quzhou Branch
Two Sub-branch such
as Jiangshan Sub-branch
003
SECTION III
MAIN FINANCIAL DATA AND INDICATORS
I. Major financial data and indicators as of reporting period
Items
Unit: RMB'000 Yuan
As at 31 Dec. 2011
Total profit 866,338
Net profit 644,687
Net profit after deducting extraordinary gains and losses 651,353
Profit from main operation 874,101
Operating profit 874,101
Investment income
Net non-operating income and expense ( 816 )
( 7,763 )
Net cash flow arising from operating activities
4,291,688
Net increase of cash and cash equivalents 4,109,446
Note:
( 1 ) Extraordinary gains and losses is recognized and calculated in accordance with Interpretative Notice No. 1 for Information Disclosures by
Companies that Offer Securities to the Public- Extraordinary gains and losses ( 2008 ) ;
( 2 ) Operating profit = total profit - net operating income and expense
II. Extraordinary gains and losses
Items Gains/( losses ) on disposal of non-current assets
Income from government grants Net non-operating income and expense other than the above items Effected amount of income tax
Total
004
Unit: RMB'000 Yuan
Amount
( 23 )
0
( 7,740 )
1,098
( 6,665 )
2011 年度报告
ANNUAL REPORT
III. Major accounting and financial highlights over the past three years as at the end of reporting period
Unit: RMB'000 Yuan
Items Income from main operation Net profit Total assets
Y2011
Y2010
Y2009
2,275,334
1,630,643
1,197,919
644,687
494,729
444,655
65,651,579
Shareholders' equity 4,444,241
51,370,858 41,016,923
3,976,466
2,611,453
Fully diluted earnings per share ( Yuan ) 0.43
0.41
0.43
Weighted average earnings per share ( Yuan ) 0.43
0.41
0.43
Earnings per share after extraordinary gains and losses ( Yuan ) 0.43
0.42
0.43
Net asset per share ( Yuan ) 2.95
3.28
2.55
Net asset per share after adjustment ( Yuan ) 2.95
3.28
2.55
Net cash flow per share arising from operating activities ( Yuan ) 2.844
1.790
1.246
Return on equity ( % ) 14.51
12.44
17.03
Average return on equity ( % ) 15.37
17.19
22.82
Fully diluted return on equity after extraordinary gains and losses ( % ) 14.66
12.76
16.87
Weighted average return on equity after extraordinary gains and losses ( % ) 15.53
17.62
22.61
Note:
The relevant indicators were calculated in accordance with the Guidelines for Contents and Formats for Information Disclosures by
Companies that Offer Securities to the Public ( No. 2 ) : Contents and Format of Annual Reports ( 2007 Revision ) and the Compilation Rules
for Information Disclosure by Companies that Offer Securities to the Public ( No. 9 ) : Calculation and Disclosure for Return on Equity and
Earnings per Share ( CSRC Notice [2010] No. 2 ) .
IV. Appendix of Income Statement
Items
Unit: RMB'000 Yuan
Profit as of Return on equity ( % ) Earnings per share
the reporting Fully Weighted
Fully Weighted
period
diluted
average
diluted
average
Profit from main operation 874,101
19.67
20.84
0.58
0.58
Operating profit 874,101
19.67
20.84
0.58
0.58
Net profit 644,687
14.51
15.37
0.43
0.43
Net profit after extraordinary gains and losses
651,353
14.66
15.53
0.43
0.43
005
V. Changes of Shareholders' Equity in the Reporting Period and Reason for the Change
Items Unit: RMB'000 Yuan
As at the end of the reporting period
Difference Decrease Increase As at the
in foreign in the year
in the year
beginning of the
exchange
reporting period
Paid-in stock 1,508,991
1,508,991
Capital reserve 1,024,570
1,020,404
4,166
Of which: investment revaluation reserve
Surplus reserve
963,941
Provision for general risk
366,520
Retained profit 580,219
Of which: Proposed dividend distribution 181,079
Total shareholders' equity 4,444,241
265,768
509,724
509,724
698,173
62,878
303,642
644,687
445,256
181,079
0
977,499
3,976,466
Note:
( 1 ) The change in “capital reserve” was caused by the change in fair value of available-for-sale financial assets of the Company in 2011;
( 2 ) The increase in “surplus reserve” was because the Company appropriated statutory surplus reserve and discretionary surplus reserve
based on net profit as of year 2011;
( 3 ) The change in “retained profit” was due to the increase of net profit for the reporting period, which increased retained profit amounting to
RMB 644,687,000 yuan. The Company appropriated surplus reserve of RMB 265,768,000 yuan, provision for general risk of RMB 62,878,000
yuan and dividends payable for 2011 amounting to RMB 181,079,000 yuan, which decreased retained profit amounting to RMB509,724,000
yuan. Therefore, the final retained profit increased by RMB 134,963,000 yuan.
VI. Capital Structure and Changes in Capital Structure
Items
Net capital Unit: RMB'000 Yuan
Y2011
Y2010
Y2009
4,902,468
4,490,677
3,209,370
Of which: net core capital
4,186,842
3,769,254
2,507,947
Total risk-weighted asset
42,309,916
35,351,095
27,670,684
11.59
12.70
11.60
9.90
10.66
9.06
Capital adequacy ratio ( % ) Core capital adequacy ratio ( % ) Note: The above-mentioned data which are submitted to China Banking Regulatory Commission ( CBRC ) .
006
2011 年度报告
ANNUAL REPORT
SECTION IV
BANKING BUSINESS INFORMATION AND DATA
I. Supplementary financial data in the past three as at the end of the reporting period
Unit: RMB'000 Yuan
Items
Y2011
Y2010
Y2009
Total liabilities 61,207,338
47,394,392
38,405,470
Deposits of customers
52,980,432
43,805,822
33,710,644
Of which: personal deposit
Corporate deposit
17,872,343
13,706,166
12,110,371
35,108,089
30,099,656
21,600,273
Loans to and payments on behalf of customers
36,452,725
30,173,031
24,593,003
Of which: personal loan and payments on behalf of individuals
13,864,752
14,855,867
12,304,999
Corporation loan and payments on behalf of corporations
22,218,009
15,207,495
11,959,491
369,964
109,669
328,513
Discount
Borrowings from other banks
Allowance for loss on loan
88,213
19,868
0
658,485
422,398
331,702
II. Supplementary financial indicators in the past three as at the end of the reporting period
Unit: %
Regulatory indicators
Standard value
Y2011
Capital adequacy ratio
≥8
Core capital adequacy ratio
≥4
Non-performing loan ratio
Deposit/loan ratio ( RMB and foreign currency ) Assets liquidity ratio ( RMB and foreign currency ) Percentage of inter-bank borrowing and lending
Borrowing in RMB Lending in RMB
Provisioning coverage ratio
Percentage of cash reserve in RMB Profit/capital ratio
Profit/asset ratio
Y2010
Y2009
11.59
12.70
11.60
9.90
10.66
9.06
≤5
0.98
0.87
0.89
≤75
67.88
68.42
72.05
≥25
47.39
56.05
37.41
≤8
0
0
0
≤8
5.15
0
0
≥150
183.42
161.02
151.00
≥5
6.70
9.09
6.69
≥11
15.31
15.02
20.16
≥0.6
1.10
1.07
1.18
Balance of allowance for loss on loans Provided in 658,48.54
422,39.79
33,170.24
( in RMB'0000 yuan )
full amount
Percentage of mid-to-long-term loans
≤120
39.39
59.10
85.17
Concentration of loans to single customers
≤10
2.86
3.10
4.67
Concentration of single group customers
≤15
3.47
3.79
6.23
Correlation of ingle group customers ≤10
2.56
0.64
0.31
All Correlation
≤50
7.52
6.38
7.47
007
Note:
( 1 ) Among the above-mentioned regulatory indicators, profit/capital ratio, profit/asset ratio and balance of allowance for loss on loans, in
accordance with the regulatory standard, were recalculated based on the audited data, the rest data which are submitted to China Banking
Regulatory Commission ( the People's Bank );
( 2 ) Deposit/loan ratio = ( total loans - re-loans ) /total deposits;
( 3 ) Percentage of non-performing loans = ( inferior loans + doubtful loans + loss loans ) /balance of loans in RMB and foreign currencies.
III. Loans Classified to Five Classes at the end of the reporting period
In accordance with the five- class loan classification standard stipulated in the Guideline for the Classification of Loan Risks
( CBRC Issue [2007] No. 54 ) promulgated by China Banking Regulatory Commission, five-class loan classification and
provision for loss on special-purpose loan withdrawn by the Company are as at the end of the report period as follows:
normal: 1.35%; caution: 2.55%; inferior: 35.15%; doubtful: 63.79% and loss: 100%.
Items
Unit: RMB'000 Yuan
Amount of loans to and payments
Percentage to the Amount of Percentage of
on behalf of customers
total amount ( % )
special reserve
special reserve ( % )
Normal 35,255,119
96.72
477,291
Caution 835,597
2.29
21,308
2.55
Inferior 260,412
0.71
91,482
35.13
Doubtful 1.35
91,679
0.25
58,484
63.79
Loss 9,919
0.03
9,919
100.00
Total 36,452,725
100.00
658,485
1.81
IV. Provision for Bad Loans
Items Amount
At the beginning of the reporting period 422,398
Provided in the reporting period
282,421
Increase in the reporting period
-
Written off in the reporting period
Written back in the reporting period
Of which: collecting the written-off loans previously and written back due to payment on other's behalf Conversion difference At the end of the reporting period 008
Unit: RMB'000 Yuan
( 44,532 )
( 1,802 )
( 10,669 )
658,485
2011 年度报告
ANNUAL REPORT
V. Non-performing Loans at the end of the reporting period and the actions the Company should take
During the reporting period, the Company made efforts on the implementation the recovery plan against non-performing loans,
resulting in the principal of the five-category non-performing loans amounting to RMB96,620,000 yuan ( including recovery,
offsetting and transfer of five-category non-performing loans amounting to RMB41,390,000 yuan, RMB23,270,000 yuan and
RMB31,960,000 yuan from previous years ) from previous years was taken back. As at the end of the reporting period, the
balance of non-performing loan was RMB 362,010,000 yuan, as well as the non-performing loan ratio of 0.99%.
During the reporting period, the Company adopted a series of effective measures suppressing the increase of non-performing
loan in order to take back the loans at maturity: the first was carrying out the Notice of Structural Withdrawal Plan and
Squeezing loan with risks as well as List of Withdrawal Customers and urging branches and subbranches to implementing the
structural withdrawal plan. The second was strengthening the pledged property right certificate management and preventing
the adverse effect caused by loan operating risks. We promoted the bank-wide investigation on risk of the collaterals, revise
the Administrative Measures for Pledged Property Right Certificate and implemented centralized management of collaterals.
The third was implementing risk investigation on the bank operations on the basis of all risks covered, strengthening the onsite and off-site check after loans and enhancing and deepening risk investigations on loans at the same time. The fourth was
strengthening the collection and analysis of industry information according to economic situation and published industry risks
warning in time, publishing credit and loan risk early warning suggestive announcement against external economic environment
and loan risk signal, demanding effective identification and prevention the credit risk and carrying out reminder before the loan
was due and strictly protecting asset quality. The fifth was actively resolving the difficult of turnover for enterprises, reasonably
use the emergent loan and reduction of the overdue risk of loans to contain the credit and loan crisis due to temporary capital
chain rupture. The sixth was specifying the responsibilities, enhancing collecting and disposing non-performing loans, improving
the collecting efficiency and do well in the collection of the additional overdue loan to effectively decrease the non-performing
loans.
VI. Information of Branches
As at the end of the reporting period, Company has 68 branches in aggregate. There are 60 business outlets in 6 counties
( cities ) , namely Wenzhou Lucheng District, Ouhai District, Longwan District, Yueqing, Ruian, Pingyang, Cangnan, Yongjia
and Wencheng, and 4 branches and 4 sub-branches in Shanghai, Hangzhou, Ningbo and Quzhou.
Number
1
Name Headquarters Business address
196 Chezhan Ave., Lucheng District, Wenzhou
Number of staff
341
2
Headquarters Banking Dept.
196 Chezhan Ave., Lucheng District, Wenzhou
3
Shanghai Branch
1-3/F, 333 Jiujiang Road, Huangpu District, Shanghai
134
46
4
Hangzhou Branch
Xianlin Building, 3 Xianlinqiao Zhijie, Xiacheng District, Hangzhou
134
5
Ningbo Branch
Building of Bank of Wenzhou, 555-1, Century Ave. N., Jiangdong District, Ningbo
108
6
Cixi Subbranch of Ningbo
208-216 Ciyong Road, Cixi, Ningbo
22
7
Yuyao subbranch of Ningbo
55-13 and 55-15 to 55-19 Yuli Road, Yuyao, Ningbo
16
8
Quzhou Branch
82 Shang Jie, Kecheng District, Quzhou
64
9
Jiangshan Subbranch of Quzhou
20 Zhongshan Road, Jiangshan
23
10
Longyou Subbranch of Quzhou
10 Taiping Road, Longyou County, Zhejiang
15
009
( Cont'd )
Number
Name Number of staff
11
Lucheng Sub-Branch
210 Ma An Chi West Road, Lucheng District, Wenzhou
38
12
Hongchang Sub-Branch
128, Building 11, Shui Xin Bei Hui Chang, Lucheng District, Wenzhou
14
13
Qinye Sub-Branch
No. 102-3, 4, 5, Guanghui Commercial Building, Qinfen Rd., Lucheng District, Wenzhou
13
14
Guoding Sub-Branch
326, Ma An Chi East Road, Lucheng District, Wenzhou
13
15
Xueyuanlu Sub-Branch
110 Yinhai Building, Xueyuan Rd. W., Lucheng District, Wenzhou
16
16
Yinxin Sub-Branch
1 Xiao Gao Qiao, Lucheng District, Wenzhou
14
17
Ouhai Branch
202 Xing Hua Rd., Lucheng District, Wenzhou
37
18
Jingshan Sub-Branch
No. 1, 3, 5, Zhen Ou Rd., Jiang Jun Bridge, Ouhai District, Wenzhou
12
19
Xinqiao Sub-Branch
1217, Liu Hong Qiao Rd., Ouhai District, Wenzhou
14
20
Wutian Sub-Branch
90, 92 Longxia Rd., Ouhai District, Wenzhou
13
21
Guoxi Sub-Branch
219 Fan Sheng Rd., Tang Xia Xin Jie, Guoxi Town, Ouhai District, Wenzhou
13
22
Quxi Sub-Branch
41 He Tou Rd. W., Quxi Town, Ouhai District, Wenzhou
14
23
Longwan Sub-Branch
163-167, Yong Qiang East Road, Longwan District, Wenzhou
38
24
Development Zone Sub-Branch
No. 101, Building 1, Shun Jing Yuan, Jiajing Garden, 257 Nan Xi Jiang Rd., 21
Longwan District, Wenzhou
25
101-109 Transportation Service Center Building, Zhuangyuan Town, Zhuangyuan Sub-Branch
15
Longwan District, Wenzhou
26
Yongxing Sub-Branch
3728 Yong Qiang Ave., Longwan District, Wenzhou
14
27
Binhai Sub-Branch
Rm. 104, Building 19, Wan Kang Jin Garden, Bin Hai 6th Road, 14
Binhai Park of Wenzhou Economic and Technology Development Zone
28
Haicheng Sub-Branch
Gong Mao Rd., Haicheng Industrial Town, Longwan District, Wenzhou
13
29
Jiefanglu Sub-Branch
1F and 2F of Building C, Xianqian Building, Jiefang Rd. N., Lucheng District, Wenzhou 29
30
Huihai Sub-Branch
71-73 Yinlong Building, Shi Shui Liao, Lucheng District, Wenzhou
21
31
Fuqian Sub-Branch
28 Chan St., Lucheng District, Wenzhou 20
32
Dengfeng Sub-Branch
106-107, Dongfang Building, Li Ming Rd. W., Lucheng District, Wenzhou
15
33
Danan Sub-Branch
No. 1, South of Donglian Building, Renmin Rd. E., Lucheng District, Wenzhou
16
34
Puxieshi Sub-Branch
510 Fei Xia Rd., S., Lucheng District, Wenzhou 15
35
Liming Sub-Branch
Building 10, Luo Wan Jin Garden, Jiang Bin Rd. E., Lucheng District, Wenzhou
33
36
Chengdong Sub-Branch
8 Xin Pu Rd., Xin Cheng, Lucheng District, Wenzhou
14
37
Xincheng Sub-Branch
238 Xin Cheng Ave., Lucheng District, Wenzhou 15
38
Shifulu Sub-Branch
Administrative Approval Service Center Building, East of Guangming Bridge, 13
Hui Min Rd., Lucheng District, Wenzhou
39
Shizhong Sub-Branch
236-238, Jinxiu Rd., Lucheng District, Wenzhou
15
40
Desheng Sub-Branch
56 Niu Shan Rd. N., Lucheng District, Wenzhou
39
41
Rail Station Sub-Branch
Rooms 101-103, Building EF, Zhannan Commodity Market, Rail Station,
15
42
010
Business address
Zhanqian Sub-Branch
Lucheng District, Wenzhou
Rooms 117-120, 1F of Integrity Commercial Building, Chezhan Ave., 13
43
Central Area Sub-Branch
North of 1F, Communication Bank Plaza, Shifu Rd., Lucheng District, Wenzhou
16
44
Shunjing Sub-Branch
Office Building, Liuhong Steel Market, Liu Hong Qiao Rd., Lucheng District, Wenzhou 14
2011 年度报告
ANNUAL REPORT
( Cont'd )
Number
Name Business address
Number of staff
45
Nanpu Sub-Branch
255 Wendi Rd., Lucheng District, Wenzhou
13
46
Chengxi Sub-Branch
322 Lucheng Rd., Lucheng District, Wenzhou
37
47
Huanglong Sub-Branch
Room 112-116, Building 1, Lin Feng, Huanglong Residential Area, Lucheng District, Wenzhou
16
48
Shuanglong Sub-Branch
1, Zone C, Zhenan Shoe Materials Market, Lucheng District, Wenzhou
15
49
Huajian Sub-Branch
118-121, Building 16B, Xicheng Rd., Lucheng District, Wenzhou
14
50
Qinfen Sub-Branch
86 Huatan Lane, Lucheng District, Wenzhou 12
51
Laowu Sub-Branch
No. 5, Building 7, Scrap Leather Market, Taili Rd., Lucheng Industrial Park,
13
52
Jiangbin Sub-Branch
No. 117-119, Building A, Huafeng Building, Jiang Bin Rd. W., Lucheng District, Wenzhou
46
53
Fulong Sub-Branch
110 Building A, Hua Dian Xin Du, Fei Xia Rd. N., Lucheng District, Wenzhou
22
54
Baili Sub-Branch
23 Baili Rd. E., Lucheng District, Wenzhou
13
55
Lizhong Sub-Branch
94 Li Ming Rd. Central, Lucheng District, Wenzhou
16
56
Jinying Sub-Branch
1F and 2F, West of Building A, Xinghe Building, 103 Li Ming Rd. W., Lucheng District, Wenzhou
15
57
Yueqing Sub-Branch
226-240, Qingyuan Rd., Yuecheng Town, Yueqing
48
58
Liushi Sub-Branch
20-23 Xiangjin Garden, Liushi Town, Yueqing
13
59
Hongqiao Sub-Branch
1/F, 77-85 and 2/F, 67-71 Feihong Rd. S., Hongqiao Town, Yueqing
13
60
Beibaixiang Sub-Branch
357-365, East Street of Beibaixiang Town, Yueqing
12
61
Rui'an Sub-Branch
1F-3F, Podium of Luoyang Building, Wan Song East Road, Rui An
35
62
Shencheng Sub-Branch
Village Administration Building, Xia Village, Zhenfu Rd., Shencheng Town, Rui An
20
63
Tangxia Sub-Branch
Jinyang Building, Tangxia Ave., Tangxia Town, Rui'an
21
64
Wencheng Sub-Branch
133, Jianshe Rd., Daxue Town, Wencheng County, Wenzhou
16
65
Pingyang Sub-Branch
238-246, Xin He Rd., Aojiang Town, Pingyang County, Wenzhou
22
66
Kunyang Sub-Branch
Yongtai Building, 428 Jie Fang St., Kunyang Town, Pingyang County, Wenzhou
19
67
Yongjia Sub-Branch
Zhongnan Plaza, Shuangta Rd., Oubei Town, Yongjia County, Wenzhou
22
68
Longgang Sub-Branch
East at 1-2/F Hexiehua Garden, Longgang Av., Cangnan County, Wenzhou
19
69
Cangnan Sub-Branch
478, 480, 482, 484 Jiangwan Rd., Lingxi Town, Cangnan County, Wenzhou
21
Total
2045
VII. Interests Receivable
Items
Unit: RMB'000 Yuan
At the end of the reporting period
At the beginning of the reporting period
Interest receivable on the balance sheet
218,134
147,483
Interest receivable off the balance sheet
194,200
176,831
VIII. Overdue Debts
During the reporting period, the Company did not have any overdue debts.
011
IX. Lending of Corporation Loans
( i ) Types of customers
Unit: RMB'000 Yuan
Items
Balance at the end Balance at the beginning
of the reporting period
of the reporting period
Amount Amount Percentage ( % ) Percentage ( % )
Corporations 22,587,974
61.97 15,317,164
50.76
Individuals 13,864,752
38.03 14,855,867
49.24
Total loan issued and payments on customers' behalf
36,452,725
100.00
100.00
30,173,031
Less: allowance for loss on loans 658,485
422,398
Corporations 135,990
99,873
Individuals 522,495
322,525
35,794,240
29,750,633
Total loan issued and payments on customers' behalf
( ii ) Regional distribution of loans and payments on customers' behalf
Region
Balance at the end of the reporting period
Amount Percentage ( % ) Balance at the beginning of the reporting period
Amount Percentage ( % )
Zhejiang
33,882,364
92.95
29,010,802
96.15
Shanghai 1,633,463
4.48
815,354
2.70
Jiangsu 312,740
0.86
156,916
0.52
Other 624,158
1.71
189,959
0.63
36,452,725
100.00
30,173,031
100.00
Total
012
Unit: RMB'000 Yuan
2011 年度报告
ANNUAL REPORT
( iii ) Loans issued to corporations and payments on corporations' behalf categorized according to business sectors:
Unit: RMB'000 Yuan
Business sectors
Balance at the beginning of
the reporting period
Amount Percentage ( % ) Amount Electricity, gas and water production and supply industry
1,83,500
0.81
180,745
1.18
Real estate 732,400
3.24
707,500
4.62
1,878,860
8.32
966,691
6.31
274,144
1.21
221,015
1.44
Education 77,640
0.34
229,790
1.50
Resident service and other service industry
25,611
0.11
89,790
0.59
Building industry Transportation, warehousing and post industry
Science research, technology service and geologic prospecting Percentage ( % )
46,230
0.20
38,370
0.25
121,273
0.54
129,630
0.85
5,906,434
26.15
3,074,287
20.07
244,700
1.08
517,100
3.38
Health, social security and social welfare industry
70,650
0.31
85,650
0.56
Culture, sports and entertainment industry
49,380
0.22
10,700
0.07
Agriculture, forestry, livestock farming, fishery industry
Wholesale and retail
Water conservation, environment and public facility management industry
Information transmission, computer service and software industry
Manufacturing business
Hospitality and catering industry
Lease and business service Mining industry
Public management and social organizations
169,420
0.75
88,210
0.58
11,335,085
50.18
7,657,545
49.99
248,727
1.10
278,502
1.82
1,062,520
4.70
1,033,140
6.74
43,899
0.19
8,500
0.06
117,500
Total loans issued to corporations and payments on corporations' behalf
22,587,974
Less: allowance for loss on loans
0.52
100.00
15,317,164
494,826
258,974
Of which: allowance for individual loans
135,990
99,873
Allowance for loan group
358,836
159,101
22,093,148
15,058,190
Book value of loan issued and payments on corporations' behalf
100.00
( iv ) Loans issued to corporations and payments on corporations' behalf categorized according to the nature of the loans and
payments
Categories Short-term loan
Mid-to-long-term loan
Unit: RMB'000 Yuan
Amount Percentage ( % ) Balance at the beginning of the reporting period
20,630,143
91.33
14,022,199
91.54
1,215,381
5.38
1,009,388
6.59
Overdue loan
314,502
1.39
154,924
1.01
Discount 369,964
1.64
109,669
0.72
57,984
0.26
20,984
0.14
22,587,974
100.00
15,317,164
100.00
Negotiation Total
013
( v ) Loans issued to individuals and payments on behalf of individuals categorized according to the types of the loans and
payments
Unit: RMB'000 Yuan
Items Balance at the end of Balance at the beginning of
Amount Percentage ( % ) Amount First-hand home mortgage
206,472
1.49
188,233
1.25
5,611
0.04
2,418
0.02
0
-
0
-
Second-hand home mortgage
Car loan New car loan
Other consumer product loan Business loan for the self-employed and private business Percentage ( % )
8,536
0.06
20,318
0.14
883,038
6.37
1,962,108
13.11
81.71
11,975,300
86.37
12,106,550
Renovation Loan
45,335
0.33
9,520
Deposit and loan card integrated card
25,340
0.18
20,411
0.14
149
0.00
267
0.00
State student loan
Credit card
714,971
5.16
546,042
3.63
13,864,752
100.00
14,855,867
100.00
163,660
163,424
Total loans issued to individuals and payments on behalf of individuals
163,660
163,424
Book value of loans issued to individuals and payments on behalf of individual 13,701,092
Allowance for loan groups
14,692,443
( vi ) Loans and payments on customers' behalf categorized according to guarantee modes
Unit: RMB'000 Yuan
Items Balance at the end of the reporting period
Amount Credit loan
Guaranteed loan
872,178
2.39
812,746
2.69
9,307,452
25.53
5,090,644
16.87
Loan on collateral securities 26,273,095
72.07
24,269,641
80.44
Of which: loan with mortgages
22,895,054
87.14
22,050,853
90.86
3,008,077
11.45
2,109,119
8.69
92,179
0.35
52,590
0.22
Loan with pledges
Discount of bank acceptance bills
Discount of commercial acceptance bills
Total
014
Percentage ( % ) Balance at the beginning of
277,785
1.06
57,080
0.23
36,452,725
100.00
30,173,031
100.00
2011 年度报告
ANNUAL REPORT
( vii ) Loans to top ten biggest single customers
Customers Unit: RMB'000 Yuan
Balance of loan
Percentage to total loans ( % )
No. 1
140,000
0.38
No. 2
132,800
0.36
No. 3
101,767
0.28
No. 4
100,000
0.27
No. 5
90,000
0.25
No. 6
88,000
0.24
No. 7
80,000
0.22
No. 8
75,000
0.21
No. 9
70,000
0.19
No. 10
67,390
0.18
944,957
2.58
Total
( viii ) Risk management over credit line for group customers
During the reporting period, the Company strictly performed the Management Measures for Credit Line for Group Customers,
conducted management in the principle of unified management, separate responsibility: the first was leveraging the new generation
credit and loan system to realize the overall cover on credit procedures and the nodes covering all links of group customer
management, and further improving credit management on group customers in a unified way. A branch ( sub-branch ) as leader
manager would manage the unified credit and co-managers cooperate to conduct management on group members; the second
was confirming credit line to group customers in a reasonable way to prevent from over-concentrations of risk and to ensure that
the credit line to single group customer does not exceed 15% of the net capital of the Company. The third was perfecting risk
pre-warning system, strictly checking the customer's condition after loans and learning the related information and analyzing the
operation situation of the group customer in depth through CBRC risk monitor system, new credit and loan system association
retrieval and various channels to prevent and eliminate the credit risk of group customers.
( ix ) Credit line of the top ten loan customers
Customers Unit: RMB'000 Yuan
Balance of credit Percentage to net capital ( % )
No. 1
170,000
3.47
No. 2
140,000
2.86
No. 3
138,500
2.84
No. 4
132,800
2.71
No. 5
101,767
2.08
No. 6
100,000
2.04
No. 7
92,500
1.89
No. 8
91,800
1.87
No. 9
90,000
1.84
No. 10
88,000
1.80
1,145,367
23.40
Total
015
X. Assets for Offsetting Debts
Unit: RMB'000 Yuan
Categories Balance at the end of the reporting period
Original value Provision for falling price House and building
2,737
Other Total
Balance at the beginning of the reporting period
1,214
Original value
Provision for falling price
2,737
1,214
349
349
349
349
3,086
1,563
3,086
1,563
XI. Amount of Discount Loan and Major Composition
During the reporting period, the Company did not have any discount loans.
XII. Loan Restructuring
During the reporting period, the Company has completely eliminated the loan risk of Wenzhou Yutian Group Co., Ltd. and its
associated companies. At the beginning of the period, Wenzhou Yutian Group Co., Ltd. transferred the 51%1equity of Pingyang
Lida Tideland Reclamation Development Co., Ltd. to Xinhu Zhongbao Co., Ltd.. After several negotiation with the person in charge
of Xinhu Zhongbao Co., Ltd., the Company and Xinhu Zhongbao Co., Ltd. entered into prepayment agreement, in which Yutian
Group Co., Ltd. and its associated companies would accumulatively repay loan principal of RMB99,900,000 yuan, outstanding
interest RMB22,600,000 yuan and attorney fee of RMB280,000 yuan due to sue the provincial government As at the end of the
report period, the credit business of Yutian Group Co., Ltd. and its associated companies has been fully settled.
XIII. Structure of Main Deposits and Loans of the Company
( i ) Structure of main deposits
Categories
Corporate deposit at call
Unit: RMB'000 Yuan
Average balance
Average interest rate ( % )
9,837,213
0.63
18,407,129
2.70
Saving deposit at call
4,317,429 0.76
Fixed-term saving deposit
9,090,823 2.62
Corporate fixed-term deposit
( ii ) Structure of main loans
Categories
Short-term loan
Note: the above-mentioned data failed to include discount
016
Unit: RMB'000 Yuan
Average balance
Average interest rate ( % )
27,514,310
8.89
1,948,382
8.53
2011 年度报告
ANNUAL REPORT
XIV. Financial Bonds held by the Company
Unit: RMB'000 Yuan
Categories Amount
Tradable financial assets
152,562
Available-for-sale financial assets
1,761,713
Investment held to maturity 3,351,289
Of which, major financial bonds were as follows:
Categories Unit: RMB'000 Yuan
Face value
Maturity date Provision for
rate ( % ) Coupon impairment
2002 book-entry treasure bonds
100,000
2.70
March 2012
-
10,000
3.37
May 2012
-
330,000
3.9-4.35
October 2012-November 2014
-
110,000
3.69
April 2013-September 2013
-
200,000
2.01-2.33
January 2012-June 2013
-
200,000
2.80-3.44
March 2012- June 2016
XV. Major Off-balance-sheet Items of Contingent Risk
Items
Bank acceptance bills opened Letter of guarantee opened
Unit: RMB'000 Yuan
Balance at the end of Balance at the beginning of
9,755,495
9,330,413
753,294
588,147
L /Cs opened
4,097,169
242,426
Loan undertakings and others
1,562,284
1,025,163
Notes:
( 1 ) Bank acceptance bill is a credit loan business in which the payee or payer ( or cashing applicant ) issues a commercial acceptance bill and
the cashing applicant applies to the Bank and the Bank agrees to cash the commercial acceptance bill after examination.
( 2 ) L/G is a credit loan business in which the Bank is requested by the applicant or authorized person to issue a letter of guarantee promising
to the beneficiary that when the applicant fails to fulfill the liabilities and undertakings set in the contract, the Bank will cover the debt or bear the
liabilities as ruled in the letter of guarantee.
( 3 ) L/C is a credit loan in which the Bank is requested and instructed by the applicant to issue a written guarantee letter of certain amount to the
beneficiary which guarantees to pay the amount in a given period at a given place upon given documents.
( 4 ) Loan undertakings refer to that ager negotiation which the customer, the Bank issues a letter of undertaking to the customer undertaking to
issue a certain amount of loan to the customer in certain period.
017
XVI. Risk and Countermeasures of the Company
During the reporting period, the Company has steadily implemented overall risks management, including the credit risks,
liquidity risks, market risks, operation risks, information technology risks and reputation risks, and allocated experts in
information technology and fund, thus the overall risks management system got further improved. In according to the principle
of separation among business operation, risks management and supervision appraisal, the Company adopted three levels
risk management organization structure. The Company was also proactive in developing risks measurement model. Through
advanced instruments for risks measurement and management, the Company conducted overall risks management. Under
such condition that assets were maintained with good quality, the Company realized stable business growth.
( I ) Credit Risks Management
Credit risks represent the possibility that a company is likely to bring losses to banks when operating businesses like credit,
borrowing and investments due to defaults or credit quality decline of clients ( or trading party ) and the uncertainty of income
arising from such businesses ( if any ) .
The assets of the Company exposed to credit risks include balance sheet and off balance sheet businesses, such as various
loans, inter-bank borrowings, bonds investment, notes acceptance, letter of credit, and bank guarantee, among which, the
various loans and off balance sheet assets take a large proportion of that, namely balance sheet credit businesses and off
balance sheet credit businesses.
The primary control procedure for credit risks mainly consists of the following steps: establishment of credit policies; due
diligence report before granting credit; credit rating of clients; guarantee appraisal; examination and approval of loans; loans
grant and payment management; management after granting credit; management of non-performing loans; and obligation
assessment and responsibility asking for non-performing loans.
The Company has established its set of credit level rating system covering 12 levels for corporate legal person customers,
to implement internal credit level assessment for its customers. Taking into account of customers' market competitiveness,
operation management level, credit performance and development potentiality, the Company make comprehensive appraisal
and determine specific levels on the basis of the statistic index and appraisal criterion. Corporate credit level appraisal is realized
by means of scoring. Each index is determined with different scores according to their influences upon realization or potential
influences on corporate credit risks. As such, customer credit is divided into 12 levels, namely AAA, AA＋, AA, AA－, A+, A, A－,
BBB＋, BBB, BBB－, BB and B ( high to low ) .
The credit-grant related examination competence of the Company consists of five levels, namely branch and subbranch level,
headquarter risks management department, credit management department and retail credit department, president in charge
of risk management, credit examination management committee, and president. Each business commences investigation in
branch or subbranch, and is examined within their scope of competence; once passed from such level, such business shall be
submitted to higher level, subject to implementation of examination obligations and preparation of written examination report,
and finally submitted for approval to the specific person who is entitled to determining the final examination result. Business
approved by the credit examination management committee requires the eventual approval from president. Regardless of being
competent to approve business or not, each higher level shall have the right to deny the business submitted by lower level.
018
2011 年度报告
ANNUAL REPORT
The Company sets alarming mechanism for credit risks, so as to get to know the dynamic information of major customers
and effectively prevent and control loan risks. Accordingly, the respective functions departments of the Company are in
charge of prevent credit risks in manners of collection, selection and release. The Company obtains alarming information from
the following channels: loan risks alarming module of credit management system; operation risks supervision and control of
internal examination department; customers' financing dynamics and defaults information collected from audit system and PBC
system; various information from banking regulatory organizations, internal examination department and internal control system;
information obtained from media such as news, newspapers and internet; and problems found by post-loan management
center during their works. Alarming information mainly represents particulars related to customers' quality, change of their bank
accounts, change of their operation conditions, change of their management, change of loans performance and change of their
ability to honor obligations.
In order to refine management of credit assets quality and reflect credit assets quality on a more accurate and dynamic basis,
the Company classifies credit assets quality into 12 levels, aiming at strengthening orientation for post-loan management
and improving credit management. In consideration of customers assessment index and debt assessment index, loans are
divided into 4 normal levels, 3 attention levels, 2 secondary levels, 2 suspicious levels, and 1 loss level. This kind of classification
adopts two sets of classification models which are customer classification and debt adjustment. Particularly, risks arising from
customers' defaults and trading risks bound to debts are measured through combination of such scoring model and logic
judgments, pursuant to which, the specific classification results in respect of credit assets quality is determined under such 12levels classification. The 12-level classification is done on monthly basis, which means that each subbranch classifies all credit
assets on quarterly basis when promptly supervising and controlling change of credit assets risks, and makes adjustments to
classification of credit assets whose risks experience significant change on monthly basis, and finally submits the corresponding
classification results summary to headquarter.
During the reporting period, taking into account of the characteristics of macro economy and regional economy, the Company
proactively promotes development of risk management works, targeting at raising risk management level and focusing on
optimizing assets structure and improving assets quality, so as to ensure the Company is operating each business in manner
of balanced, orderly and healthily. Through increasing credit policy guidance and access control concerning credit grant, the
Company proactively adjusts objectives to which loans are offered and improves credit structure.. Furthermore, credit risks
are controlled and solved by the Company through increasing risks alarming measures, increasing post loan examinations and
increasing settlement for stock and new non-performing loans.
As at the end of the reporting period, indexes in respect of credit risks concentration are as follows:
Regulatory As at the end of As at the beginning of
requirement
Concentration of credit of single group customers
≤15%
3.47%
4.19%
Concentration of loans of single customers
≤10%
2.86%
3.10%
Credit concentration
≤50%
26.52%
25.75%
All the concentration indexes were controlled within the specified proportion. All the indexes were adjusted parameter in the
credit system and conducted rigid control over the upper limit.
019
( II ) Liquidity Risks Management
Liquidity risks represent the risks that a commercial bank is not able to obtain promptly or obtain sufficient capital on reasonable
costs so as to repay for due obligations or other obligations of payment and cater for the assets increase or other business
development. The Company's liquidity risks mainly arise from activities involving capital provision such as loans, trades and
investments, and management over liquidity assets as well.
During the reporting period, in order to control liquidity risk, the Company promptly adjusted loan growth, arranged credit supply
as scheduled and further strengthened fund procurement in accordance with central bank monetary credit policy and regulatory
requirements and its effective scale so as to ensure the normal operation of fund. The first was carrying out loan-deposit ratio
management, making ends meet under the regulatory requirement and enhancing control over the credit scale of branches and
sub-branches to basically control the growth of Renminbi loans within the regulatory requirements; the second was investing
in bills discounted and other products with low risk and sufficient liquidity, so as to discount and reduce loan scale when the
fund was tighten and the loan-deposit ratio was high for improving the liquidity of credit funds; the third was enhancing fund
procurement, promptly supervising capital operating trends, analyzing the expected changes in fund positions and allocating
funds and regulating supply and demand by monetary market and bills discount; the fourth was adjusting internal and external
interest rate in due time so as to effectively play the role the guideline of interest rate lever in fund management and optimize
assets structure. In general, the liquidity indexes performed better and liquidity was sufficient and appropriate.
As at the end of the reporting period, indexes in respect of various liquidity risks are analyzed as follows:
1. Liquidity ratio
The liquidity ratio of the Company is 47.39% which is in line with the regulatory requirement of not less than 25%.
2. Liquidity gap ratio
The liquidity gap ratio of the Company is 1.02% which is in line with the regulatory requirement of not less than -10%.
3. Dependence degree of core debts
The dependence degree of core debts of the Company is 56.84% which is less than the regulatory requirement of not less than
60%.
4. RMB excess reserve rate
RMB excess reserve rate of the Company is 6.70%.
5. Loan-deposit ratio
The loan-deposit ratio of the Company is 67.88% which is in line with the regulatory requirement of not higher than 75%.
020
2011 年度报告
ANNUAL REPORT
During the reporting period, the Company's assets are running in well liquidity, with relatively high liquidity ratio. Loan-deposit
ratio is under reasonable control and cash reserves are sufficient. Assets and obligations terms structure is matched on
reasonable basis. Liquidity gap within 90 days is positive, bringing immaterial pressure on liquidity management.
( III ) Market Risks Management
Market risks represent the risks that value change of financial instruments arising from market prices ( interest rates, exchange
rates, stock prices and commodities prices, etc ) fluctuation is likely to bring potential losses to future income or future cash flow.
During the reporting period, the major market risk exposures of the Company consists of interest risks and exchange rate risks.
During the reporting period, the Company further improved the market risk policy system. According to market risk conditions
and external market changes, it duly revised and improved market risk management policies and procedures, and raised advice
related to assets and liabilities restructuring. It built and improved accounts checking systems in front, middle and back of the
capital business, and realized checking of accounts one by one in the front, middle and back systems of the capital business
through introduction of valuation systems of financial products outside the system. Before the background check system, outside
the system. According to the Company's business nature, scale and complexity, it measured all the market risks assumed by the
Company by selecting the appropriate and generally accepted VAR measurements for the different types of market risks in bank
accounts and trading accounts. Basic procedures for pressure tests have been set up, which regularly simulated and estimated
the potential losses that may arise from the events of small probability occurring suddenly and assessed the capability of loss
bearing of the Company under extremely negative situations. It regularly submitted market risk management assessment reports
and held market risk control committee meetings, and the management was responsible for submitting market risk management
assessment reports to the risk management committee under the board of directors in a quarterly basis.
As at the end of the reporting period, indexes in respect of market risks are analyzed as follows:
1. Sensitivity to interest risks
The total assets, total liabilities, and net capital of the Company amount to RMB 656,515,790,000, RMB61,207,338,400
and RMB4,902,468,400 respectively. Increase of 200 basis points in interest rate will result RMB80,184,700 affect on the
Company's net value, representing sensitivity to interest risks is 1.636%.
2. Foreign exchange open position ratio
The accumulated foreign exchange open position balance of the Company is RMB 145,420,000 and the net capital is
RMB4,902,468,400, representing foreign exchange open position ratio of 2.965%.
3. Value of risks ( VAR )
On the basis of confidence level being 99% and holding period being 10 days, the Company estimates the aero VAR and
average VAR of bonds trading accounts is RMB1,643,200 and RMB1,763,800 respectively which fall within the risks scope
acceptable to the Company.
021
For the market risk indicators of the Company at the end of the reporting period, interest rate risk sensitivity index did not
exceed the alert level of 20% required in “Interest Rate Risk Management and Regulatory Principles” released by the Basel
Committee in 2004, indicating that the Company did not have a large interest rate risk. Meanwhile, the Company had good
control in the indicator of the cumulative foreign currency exposure position proportion, in line with the standard of CBRC of not
exceeding. In addition, the Company's value of accounting risks ( VAR ) indicated the Company's losses within 10 days ( 99%
probability, in addition to market extreme cases ) were within the Company's risk tolerance range.
( IV ) Operation risk management
Operation risk is the risk of losses arising from inadequate or failed internal processes, staff, information technology systems,
and external events. The Company gradually standardized operation risk management and enhanced operation risk prevention
through establishing operation risk management system, strengthening internal controls, implementing monitoring of key
operation risk indicators, carrying out investigation of operation risk, enhancing staff awareness and capacities in risk prevention
and implementing strict accountability measures. The risk management committee under the board of directors and the
operation risk control committee under the management of the Company considered the major issues of operation risk; the risk
management department coordinate in managing the operation risk of the Company; operation risk control committee under
the internal control compliance department is the leading department of management; each business line is responsible for the
operation risk management and control of the business field according to division of functions.
During the reporting period, the Company conscientiously implemented requirements of Guideline on Operation Risk
Management for Commercial Bank issued by CBRC, steadily pushed operation risk management, proactively launched bankwide “The Internal Control Implementation Year” activity to strengthen internal control prevention awareness, so as to further
reform relevant system and procedures and standardize the normal operation and management behavior, mainly carrying
out inspections to the counter and accounting settlement business, loans business, credit cards business, foreign exchange
business, and management of staff behaviors. Through the investigations, we have found the problems and deficiencies of
the Company in respect of system implementation and certain business fields and links, and have raised recommendation
and measures to improve management; regularly monitored 27 operational risk monitoring indicators, with the scope of the
risks monitored including credit, counter services, international business, security, computer information, laws and compliance,
and objectively assessed the operational risk management of each business line, took effective measures for improvement to
strengthen the control base of operation risk and improved operational risk management.
( V ) Information technology risk
Information technology (“IT”) risk represents risks arising from information technology due to defector of natural factor,
human factor, technical loophole and management in the course of application to banks.
During the reporting period, the Company perfected IT governance structure, set up target framework for IT risk management
and published IT risk management measures. The Company also established IT risk assessment mechanism, integrated IT risk
management life cycle and major IT procedures, identified trigger mechanism for IT risk assessment process at each level and
set IT risk management position, so that the Company established perfect IT risk management system, further start special
audit on IT to continuously improve IT risk management.
022
2011 年度报告
ANNUAL REPORT
During the reporting period, the Company conscientiously carried out the Guideline on Information Technology Risk
Management for Commercial Bank in accordance with requirements of regulator and the deployment made by information
technology committee under the board of directors. According to requirements of Standard for Information Technology
Regulatory of Financial Institutions of Incorporate Banking, the Company enhanced IT team building, identified responsibilities,
improved IT system and standardize IT project management and process. The Company further conducted IT internal selfexamination, perfected IT risk management system step by step and promote IT risk management level.
( VI ) Reputational risk
Reputational risk represents risks arising from stakeholder's negative evaluation on the Company due to operation, management
and other behaviors or external events.
During the reporting period, the Company established and revised reputational risk management system, focused on prewarning and immediate feedback. The Company optimized treatment of public opinions, strengthened communication with
internal opinions, periodically analyzed reasons and transmission way of reputational risk, feasibly enhanced reputational risk
management; proactively deliver the value concept of the Company to establish a active and good image.
XVII. Explanation on completeness, rationality and effectiveness of internal control systems of
the Company
During the reporting period, the Company continued to optimized and integrated process relating to internal control to realize
the goal that internal control system meet the internal control management requirements. At the end of the reporting period,
there are 537 internal systems, of which 53 are additional, 62 are revised and 2 are abolished; introduced Business System
Management Measures, conduct standardized management on business system, identified procedures and requirement of
draft ( revise ) , application, review, accreditation, issue, explanation, evaluation and settlement and other links.
The Company was in line with standards of ISO9000 quality management system, established internal control system
structuring the three level of quality manual, management regulations and operating process. Such system, covering all
the internal control over business and management at each level, was mainly classified ten categories, including corporate
governance, credit business, credit car business, international business, treasury business, financial and accounting settlement,
human resources, technology and information, internal audit and supervision and administration, which specified organizational
structure, responsibilities, limits of authority, division of labor and operating flow of business and management at each level. All
business system was formulated and issued by the head office and implemented by branches and sub-branches. Branches
and sub-branched formulated specific rules for implementation according to local economic environment and impelled the
headquarters' regulations materialized and suitable.
The Company established effective supervision and examination mechanism, identified the different supervision responsibilities
of business management departments and internal audit department on business, promoted internal control execution, and
solved problems and amended defect of system to strengthen internal control establishment.
023
SECTION V
CHANGES IN STOCK CAPITAL AND SHAREHOLDERS
I. Changes in Stock Capital
( i ) The changes in stock capital of the Company during the reporting period
Items State-owned shares
Unit: Share
Amount 106,967,732 Balance at the beginning of the reporting period
Percentage ( % ) 7.09 Amount 106,967,732 Percentage ( % )
7.09
State-owned corporate shares
372,672,767 24.70 372,672,767 24.70
Other corporate shares
768,695,325 50.94 768,695,325 50.94
Shares held by natural persons
Total shares 260,655,373 17.27 260,655,373 17.27
1,508,991,197 100.00 1,508,991,197 100.00
Note:
( 1 ) During the reporting period, the total number of shareholders of the Company was 1,908, including 1 state shareholder, 9 state-owned
corporate shareholders, 95 other corporate shareholders and 1804 natural-person shareholders.
( ii ) Shares issued over the past three years as at the end of the reporting period
In 2009, in order to further strengthen capital and cater for business development, based on total shares capital of 1,023,181,921
shares, the Company implemented allotment of shares at the rate of 3 for 10 with par value for every share is RMB 1.00 yuan,
as well as the price of RMB 3 yuan per share. The Company allotted 285,809,276 shares to original shareholders and granted
private placement of 200,000,000 shares to Wenzhou Municipal Finance Bureau, Wenzhou Municipal Financing Development
Corporation and Wenzhou Urban Construction Investment Co., Ltd. at the price of RMB 3 yuan per share with par value of RMB
1.00 yuan for every share. In accordance with the Reply of China Banking Regulatory Commission Zhejiang Regulatory Bureau
on Changing Registered Capital by Bank of Wenzhou Co., Ltd. with ZYJF [2010] No. 821, the Company's registered capital was
changed into RMB 1,508,991,197 yuan from RMB 1,023,181,921 yuan.
024
2011 年度报告
ANNUAL REPORT
II. Information of Shareholders
( i ) Change in shareholders' equity in the reporting period
Unit: share
Assigners Wenzhou Jiajing Real Estate Development Co., Ltd.
Assignees Number of shares
Zhejiang Zhonghuan Property Co., Ltd.
6,500,000
Note: The equity changes involved in the above table which were over 5,000,000 shares of the Company in the reporting period.
( ii ) Details of shares held by the top ten principal shareholders
No. Unit: share
Name of shareholders
Nature of shareholders
Number of shares
Percentage ( % )
1
China Huarong Asset Management Corporation ( CHAMC ) Shares held by state-owned corporation
106,997,732
7.09
2
Wenzhou Municipal Finance Bureau
Shares held by the State 106,967,732
7.09
3
Wenzhou Municipal Financing Development Corporation
Shares held by state-owned corporation
105,506,825
6.99
4
Changtai Holding Group Co., Ltd.
Shares held by private corporation
96,484,097
6.39
5
Zhe Jiang Dongri Company Limited Shares held by state-owned corporation
78,000,000
5.17
6
Wenzhou Jiahong Real Estate Development Co., Ltd.
78,000,000
5.17
7
Hong Qing Ting Group Co., Ltd.
68,412,130
4.53
8
Natural Real Estate Development Group Co., Ltd. Shares held by private corporation
65,000,000
4.31
9
Sanhu Concrete Group Co., Ltd.
65,000,000
4.31
10
Shude Group Co., Ltd.
Total 65,000,000
4.31
835,368,516
55.36
( iii ) Information of share pledged of the top ten principal shareholders
Unit: share
1. Sanhu Concrete Group Co., Ltd. pledged the 65,000,000 shares of the Company, the details are as follows:
Party accepting the pledge
Number of shares under pledge
Period of pledge
Shenzhen Development Bank Wenzhou Branch Xincheng Sub-branch
15,000,000
9 October 2011-9 October 2014
Shanghai Pudong Development Bank Wenzhou Shizhong Sub-Branch
17,330,000
15 Nov. 2011- 15 Nov. 2016
Shanghai Pudong Development Bank Wenzhou Branch Shizhong Sub-branch
32,670,000
15 Nov. 2011- 15 Nov. 2016
2. Shude Group Co., Ltd. pledged the 65,000,000 shares of the Company, the details are as follows:
Party accepting the pledge
Number of shares under pledge
Period of pledge
Shanghai Pudong Development Bank Wenzhou Branch
30,000,000
27 Jul. 2010-31 Dec. 2013
Shenzhen Development Bank Wenzhou Lucheng Subbranch
20,000,000
20 Sep. 2010-20 Sep. 2013
025
( iv ) Shareholders holding more than 5% ( including 5% ) of the shares of the Company
Unit: share
Name of shareholders
At the end of the reporting period
Number of Shareholding percentage ( % ) At the beginning of the reporting period
Number of
Shareholding percentage ( % )
shareholding
shareholding
China Huarong Asset Management Corporation ( CHAMC ) 106,997,732 7.09
106,997,732 7.09
106,967,732 7.09
106,967,732 7.09
105,506,825 6.99
17.23
105,506,825 6.99
3.15
47,578,974
3.15
Wenzhou Urban Construction Investment Co., Ltd.
47,578,974
96,484,097 6.39
96,484,097 6.39
Zhejiang Dongri Company Limited 78,000,000 5.17
78,000,000 5.17
78,000,000 5.17
78,000,000 5.17
Natural Real Estate Development Group Co., Ltd. 65,000,000 4.31
65,000,000 4.31
65,000,000 65,000,000 4.31
8.62
4.31
17.23
8.62
1. China Huarong Asset Management Corporation
Legal representative: Lai Xiaomin;
Date of incorporation: 1999;
Main business: acquiring and operating the non-performing assets split from ICBC; debt recovery, asset exchange, assignment
and sales; debt restructuring and corporation restructuring; creditor's right transferring to equity and phase shareholding, asset
securitization; IPO recommendation and bond, share underwriting within the asset management scope; direct investment;
bond issuance; commercial loans; borrowing from financial institutions and applying for re-borrowing from the People's Bank
of China; investment, financial and legal consultation and advice; asset and project evaluation; business audit and bankruptcy
liquidation; and other business approved by the financial regulatory authority.
Registered capital: RMB 10 billion yuan;
Equity structure: solely state owned.
2. Wenzhou Municipal Finance Bureau
Wenzhou Municipal Finance Bureau is the Department of Wenzhou Municipal Government, which is in charge of the financial
jobs. Wenzhou Municipal Finance Bureau is an Official Organ as Legal Person with organization code certificate of 00251857-5,
which was located in 59 Qinfen Road, Wenzhou, Zhejiang.
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2011 年度报告
ANNUAL REPORT
3. Wenzhou Municipal Financing Development Corporation
Wenzhou Municipal Financing Development Corporation is a public operating institution, which is founded in 1992 via
approval by Wenzhou Municipal People's Government, which is on attachment to the Wenzhou Municipal Finance Bureau for
management.
Legal representative: Zhang Yu
Business scope: Loan of non-budgetary current capital and investment business
Registered capital: RMB 10 million
Equity structure: fully invested by Wenzhou Municipal Finance Bureau
4. Wenzhou Urban Construction Investment Co., Ltd.
This company was founded in 2000.
Legal representative: Li Buming
Main business: investment and consultation in urban construction, infrastructural construction, public utility construction
( excluding financial business ) , approximate estimate, budget and settlement of final accounts and appraised price on
construction projects ( operating on license ) .
Equity structure: Exclusively State-owned Company
5. Changtai Holding Group Co., Ltd.
Legal representative: Chen Shengquan
Date of incorporation: 1995
Main business: power engineering and construction, electricity equipment maintenance, power development and operation,
electric energy test, power engineering design and technical consultation service, production and installation of power products
and auxiliary equipment, real estate development and operation, property management, information consultation service, sales
of metal materials, construction materials and chemical materials and products ( excluding hazardous chemicals ) , sales of coal,
lease service.
Registered capital: RMB 219.71 million yuan
Equity structure: Ji Lingwu invests RMB 6.3872 million yuan, accounting for 2.91%; Chen Shengquan invests RMB 33.0153
million yuan, accounting for 15.03%; Zhang Yiyun invests RMB 33.825 million yuan, accounting for 15.4%; Jiang Yong invests
RMB 40.482 million yuan, accounting for 18.42%; Chen Rongzhu invests RMB 15.0683 million yuan, accounting for 6.85%; Xu
Xiangdong invests RMB 9.7157 million yuan, accounting for 4.42%; Dai Xiaolong invests RMB 19.7237 million yuan, accounting
for 8.98%; and Zhou Hanrong invests RMB 61.4928 million yuan, accounting for 27.99%.
027
6. Zhe Jiang Dongri Company Limited
Legal representative: Zheng Nianhong
Main business: industrial investment; market lease and operation; development of computer networks, production and sales of
lamps and lamp parts, and property management.
Registered capital: RMB 318.60 million yuan
Equity structure: as approved, the total common shares of 289,100,000 were issued.
7. Wenzhou Jiahong Real Estate Development Co., Ltd.
Legal representative: Zhou Dingwen
Main business: development and operation of real estate; upholstery services
Equity structure: Shanghai Huahong Investment ( Group ) Co., Ltd.
8. Natural Real Estate Development Co., Ltd.
Legal representative: Shao Fenghua
Main business: development and sales of real estate
Registered capital: RMB 100 million yuan
Equity structure: Li Guiwang invests RMB 80 million yuan, accounting for 80%; and Li Yuping invests RMB 20 million yuan,
accounting for 20%.
9. Sanhu Concrete Group Co., Ltd.
Legal representative: Shao Fenghua
Main business: concrete and concreter products, production and sales of granite products; sales of construction materials.
Registered capital: RMB 110 million yuan
Equity structure: Li Yuping invests RMB 68.75 million yuan, accounting for 62.5%; and Shao Fenghua invests RMB 41.25 million
yuan, accounting for 37.5%.
028
2011 年度报告
ANNUAL REPORT
SECTION VI
DIRECTORS, SUPERVISORS, SENIOR MANAGERIAL
STAFF AND STAFF
I. Information of directors, supervisors and senior managerial staff
Name
Shareholding at the end Basic annual salary received
Position
of the reporting period from the Company in the reporting
( shares )
period ( Unit: 0000' Yuan )
Xing Zengfu
Chairman
Male 1,967,637
144.68
Wu Hua
Vice Chairman and President Male
Dec.1968
April 2011-April 2014
0
143.65
Male Apr. 1954 April 2011-April 2014
1,428,981
123.50
Apr. 1971 April 2011-April 2014
0
6.70
Huang Chenyuan Director, Vice President and Sex
Date of birth
Office term
Oct. 1963 April 2011-April 2014
concurrently Secretary of the Board
Yang Lin
Independent Director
Male Zhang Yili
Male Oct. 1966 April 2011-April 2014
0
6.70
Zhou Qun
Male Nov. 1965 April 2011-April 2014
0
6.70
Yao Xianguo
Male Feb. 1953 April 2011-April 2014
0
6.70
Liang Lifang
0
6.70
Lin Jiangfan
Director
0
0
Gu Chang
Director
Female Oct. 1970 April 2011-April 2014
0
3.35
Chen Shengquan Director
Male Aug. 1964 April 2011-April 2014
0
4.35
Zheng Nianhong
Director
Male May 1951 April 2011-April 2014
0
4.35
Zhou Dingwen
Director
Male Mar. 1963 April 2011-April 2014
0
4.35
Li Yuping
Director
Male Feb.1962
April 2011-April 2014
0
4.35
Shao Fenghua
Director
0
4.35
Ying Shude
Director
0
4.35
Fang Xuanping
Director
0
3.35
Chen Xiwen
Chief Supervisor Male Jan. 1958 April 2011-April 2014
504,999
123.50
Yang Jin'guan
External Supervisor
0
8.70
Zhao Yiyuan
External Supervisor
8.70
Ma Kun
Supervisor Male Oct. 1964 April 2011-April 2014
0
4.35
Lu Leisheng
Supervisor Male Feb. 1964 April 2011-April 2014
0
0
Zheng Xiangbo
Supervisor Male Mar. 1957 April 2011-April 2014
0
4.35
Zhou Shuang
Staff-representative Supervisor
Female Aug. 1969 April 2011-April 2014
897,502
63.95
Zhang Renhui
148,281
83.80
Zheng Jie
Male Jun. 1963 Nov. 2011-April 2014
798,281
65.25
Jin Jiankang
Vice President and concurrent Male
Aug. 1967 April 2011-April 2014
0
149.34
President of Hangzhou Branch
Li Weiming
Assistant President Male
Jun. 1964 April 2011-April 2014
446,324
113.69
029
Note:
( 1 ) Senior management staff refers to Assistant President of Headquarter and over.
( 2 ) Mr. Yang Lin, Mr. Zhang Yili, Mr. Zhouqun, Mr. Yao Xianguo and Mr. Liang Lifang took the post of Independent Director since April 2011;
Mr. Lin Jiangfan, Mr. Fang Xuanping and Ms. Gu Chang took the post of Director since April 2011, and Mr, Lin Jiangfan had not received
emoluments from the Company.
( 3 ) Mr. Zhao Yiyuan and Mr. Lu Leisheng held the post of External Supervisor and Supervisor respectively since April 2011, and Mr. Lu
Lengsheng had not received emoluments from the Company ;Ms. Zhou Shuang and Mr. Zhang Renhui held the post of Staff-representative
Supervisor since April 2011; Mr. Zheng Jie held the post of Staff-representative Supervisor since November 2011.
( 4 ) The Company adjusted emoluments in May 2011, the former Independent director Zhao Yiyuan, Zhao Xiaolei, Lin Qiliang, Shan
Huaiguang, Xu Mengzhou and the former director Sun Jianwei, Hu Ying, Qian Jinbo as well as former external supervisor Song Yongsheng and
supervisor Zhang Yaohui and Fei Lianyou received emoluments for four months, new directors and supervisors received emolument from May
to December and the reappointed directors's emoluments were calculated at month.
II. Work experiences and positions of current directors, supervisors and senior managerial staff
( i ) Directors
Mr. Xing Zengfu, born in October 1963, is Chairman of the Company, Ph.D. candidate and senior accountant. Mr. Xing used to
be Vice President of ICBC Linhai Sub-Branch; President of ICBC Jiaojiang Sub-Branch; Director of the Business Department
and Peony Card Department of ICBC Taizhou Branch, Chairman and General Manager of Sino-Foreign Joint Venture Zhejiang
Guangsha Property Company, Vice President of ICBC Wenzhou Branch, President and concurrent Vice Chairman of the Board
of Bank of Wenzhou.
Mr. Wu Hua, born in 1968, Bachelor degree, senior economist, is President and concurrent Vice Chairman of the Board of the
Company. Mr. Wu used to be Section Chief of accounts section in the People's Bank of China Yunhe County Subbranch, and
served as Section Chief of General Office Secretary Department and later as Deputy Director of Office in Communications
Bank of China Wenzhou Branch, and successfully took the posts of President of Communications Bank of China Wenzhou
Branch Liming Subbranch, of Vice President of Communications Bank of China Wenzhou Branch, and of Vice President of
Communications Bank of China Shaoxing Branch.
Mr. Huang Chenyuan, born in April 1954, junior college degree, senior economist, is Director, Vice Present and concurrently
Secretary of the Board of Bank of the Company. Mr. Huang used to be Chief of staff of the navy, Director of the Government
Bond Office of Wenzhou Municipal Finance Bureau, Deputy Director of the Construction Office of Wenzhou City Commercial
Bank and Assistant to President of Wenzhou City Commercial Bank.
Mr. Yang Lin, born in 1971, Ph.D. in Finance and financial risk manager, is the Independent Director of the Company. Mr.
Yang currently acts as managing director of BNP Paribas Asset Management SAS; He used to be analyst in Lehman Brothers,
Chairman of Wall Street Capital ( Asia ) Association, senior manager of US Coast Group, CEO of ESSIN Investments and
General Manager of FTSE Xinhua Index Ltd.
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2011 年度报告
ANNUAL REPORT
Mr. Zhang Yili, born in 1966, Ph.D. candidate and professor, is Independent Director of the Company. Currently, Mr. Zhang
serves as Vice-Dean of School of Commerce, Wenzhou University. He used to be head of Enterprise Management Teaching
and Research Davison, assistant to president and vice present of School of Economic, Vice-Dean and professor of School of
Commerce and vice dean of School of City of Wenzhou University.
Mr. Zhou Qun, born in October 1965, undergraduate degree, CPA and lawyer, is the Independent Director of the Company.
Currently, Mr. Zhou serves as Chairman in Wenzhou Huaming CPAs Firm.; he used to be deputy manager, manager, assistant
to general manager and vice general manager of Business Department of Wenzhou Huaming CPAs Firm.
Mr. Yao Xianguo, born in 1953, graduate degree and professor, is Independent Director of the Company. Currently, Mr. Yao
serves as the Dean of School of Public Administration, Zhejiang University; He used to be deputy head and head of Economics
Department, Executive Vice President of School of Business Administration, School of Foreign Economic and Trade and School
of Economics of Zhejiang University.
Mr. Liang Lifang, born in 1950, graduate degree and senior engineer, is Independent Director of the Company. Currently, Mr.
Liang serves as advisor of the Software Development Center of Industrial and Commercial Bank of China; he used to be Vice
Director and Director of Science and Technology Divison, Director of Information Technology Division of Guangzhou Branch of
ICBC and the General Manager of the Software Development Center of Industrial and Commercial Bank of China.
Mr. Lin Jiangfan, born in 1962, junior college degree and tax agent, is Director of the Company. Mr. Lin currently serves as
Chief Accountant of Wenzhou Municipal Finance Bureau; he used to be Vice Director of General Office of Wenzhou Municipal
Finance and Taxation Bureaus, Vice Director of Finance Bureau of Development Zone and Local Taxation Bureau Branch, Vice
researcher of Wenzhou Local Taxation Bureau and Director of Ouhai Taxation Bureau Branch and Lucheng Branch.
Ms. Gu Chang, born in 1970, master degree and senior economist, is Director of the Company. Ms. Gu currently serves as Vice
General Manager of China Huarong Asset Management Corporation Hangzhou Office; she used to be Senior Vice Manager of
Operating Management Department, Senior Manager of Credit Rating Business Department and Trust Business Department of
Hangzhou Office of China Huarong Asset Management Corporation.
Mr. Chen Shengquan, born in 1964, undergraduate degree and senior economist, is Director of the Company; Mr. Chen
currently serves as Chairman of the Board of Changtai Holding Group Co., Ltd; he used to be Director of Wenzhou Dongyu
Power Plan Electric Branch, Vice Manager of Wenzhou Electricity Industrial Corp. Electricity Inspection and Maintenance
Branch; General Manager of China-Foreign Joint Venture Wenzhou Hongneng Electricity Co., Ltd., and General Manager of
Zhejiang Transformer Co., Ltd..
Mr. Zheng Nianhong, born in 1951, junior college degree and senior accountant, is Director of the Company. Currently, Mr.
Zheng serves as Chairman of Zhejiang Dongri Co., Ltd., and General Manager of Zhejiang Orient Holdings Co., Ltd; he used
to be Financial Director of Wenzhou Ceramic Construction Material Industrial Corp., Vice General Manager of Zhejiang Orient
Holdings Co., Ltd. and General Manager of Zhejiang Dongri Co., Ltd..
031
Mr. Zhou Dingwen, born in 1963, junior college degree, is Director of the Company. Currently, Mr. Zhou serves as Chairman
of Wenzhou Jiahong Real Estate Development Co., Ltd and Shanghai Huahong Investment ( Group ) Co., Ltd.; he used to be
Deputy Head of the Urban Area of Yueqing City, Vice Director of Agriculture and Economic Commission of Yueqing, Director of
Yueqing Forestry Bureau, Executive President of Wenzhou New Century Group Co., Ltd., Chairman of Wenzhou New Century
Real Estate Company.
Mr. Li Yuping, born in 1962, master degree and senior economist, is Director of the Company. Currently, Mr. Li serves as Chairman
of Natural Real Estate Development Group Co., Ltd.; he used to be Manager of the Sales Department of Yongjia Foreign Trade
Company, Chairman of Sanhu Concrete Group Co., Ltd. and Chairman of Natural Real Estate Development Group Co., Ltd.
Mr. Shao Fenghua, born in 1972, junior college degree and senior economist, is Director of the Company. Currently, Mr. Shao
serves as Chairman of Sanhu Concrete Group Co., Ltd.; he used to be Vice Chairman, President and Vice Chairman of Sanhu
Concrete Group Co., Ltd.
Mr. Ying Shude, born in 1964, undergraduate degree, is Director of the Company. Currently, he serves as Chairman of Shude
Group; he used to be Chairman of Wenzhou Tianxiong Property Development Co., Ltd., Chairman of Zhejiang Education,
Technology and Cultural Development Co., Ltd., Chairman of Shanghai Shude Investment Co., Ltd., Chairman of Wenzhou
Overseas Study Service Center, and Chairman of Shanghai Caoyang High School.
Mr. Fang Xuanping, born in 1955, high school eduction background and accountant, is the Director of the Company. Currently,
Mr. Fang serves as Vice President of Zhejiang Hong Qing Ting Group Co., Ltd; he used to be Vice General Manager of Wenzhou
Founder Enterprise Group Co,, Ltd.
( ii ) Supervisors
Mr. Chen Xiwen, born in 1958, master degree and senior economist, is Chief Supervisor of the Supervisory Board of the
Company. Mr. Chen used to be Vice Director of the Planning Department of ABC Wenzhou Branch, Vice Director of the General
Planning Department of the People's Bank of China Wenzhou Branch, Director of Finance Administration Department of the
People's Bank of China Wenzhou Branch, Vice Executive Director and Vice Director of Wenzhou Urban Credit Cooperatives
Central Office, Deputy Director, Vice President and Director of the Construction Office of Wenzhou City Commercial Bank, of
Wenzhou City Commercial Bank.
Mr. Yang Jinguan, born in 1963, postgraduate, professor and Chinese CPA, is the External Supervisior of the Company. Now he
serves as Vice Director of Academic Affaires office in Central University of Finance and Economics, as Independent Director in
Huadian Power International Corp., as Independent Director in China North Optical-Electrical Technology Co., Ltd, as Independent
Director in Xinhua Department Store Co., Ltd.; he used to be Deputy Director of Accounting Department in Central University of
Finance and Economics and Assistant Dean of School of Accounting in Central University of Finance and Economics.
Mr. Zhao Yiyuan, born in 1964, postgraduate, senior accountant, CPA and lawyer, is the External Supervisior of the Company.
Currently, he serves as Vice President of Zhejiang Dewei CPAs Firm and concurrently Chief Partner of Zhejiang Dewei CPAs Firm
Wenzhou Branch; he used to be Vice President of Wenzhou CPA Firm, Chairman and Chief Accountant of Wenzhou Huaming
Capital Operation Consultation Co., Ltd., Director and General Manager of Wenzhou Jinruniu Frozen Food Co., Ltd.
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2011 年度报告
ANNUAL REPORT
Mr. Ma Kun, born in 1964, postgraduate, is the Supervisor of the Company. Now he serves as Director, Secretary to the Board
and Deputy General Manager in Harbin High-Tech ( Group ) Co., Ltd.; he used to be Chief Strategic Development Officer in
Beijing Huiyuan Juice and Beverage Group Co., Ltd., Director, Secretary to the Board and concurrent Deputy General Manager
in Beijing Guowu Sports Exchanges Co., Ltd., Deputy Manager of Investment Department in Zhejiang Xinhu Group Co., Ltd.
Mr. Zheng Xiangbo, the Supervisor of the Company, was born in 1957. He took college degree and economist. Mr. Zheng
serves as the Chairman of the Board of Taili Industrial Co., Ltd.. He used to be Director of Wenzhou Bank Co., Ltd..
Mr. Lu Leisheng, born in 1969, undergraduate degree and economist, is Staff-representative Supervisor of the Company.
Currently, Mr. Lu serves as Deputy Director of Zhejiang Wenzhou Tobacco Monopoly Bureau; he used to be Deputy Manager
and Manager of Dongtou Tobacco and Sugar Company, Deputy Director and Director of Dongtou Tobacco Monopoly Bureau
and Chief of Human Resource Division of Wenzhou Tobacco Monopoly Bureau.
Ms. Zhou Shuang, born in 1969, postgraduate, senior economist and senior CEP, is Staff-representative Supervisor of the
Company. Currently, Ms. Zhou serves as Director of the Female Staff Committee, Director of the Supervisory Board of the
Labor Union and Chairman of the Supervisory of Zhejiang Taishun Wenyin Village Bank; she used to be assistant to chief of
Audit Division, Deputy Chief of Business Development Division of Bank of Wenzhou Co., Ltd. as well as Deputy Chief of
Financing Division and General Manager ( in charge ) of Marketing Department of the Company.
Mr. Zhang Renhui, born in 1964, postgraduate and senior economist, is Staff-representative Supervisor of the Company.
Currently, Mr. Zhang serves as President of Bank of Wenzhou Co., Ltd. Jiefanglu Sub-branch; he used to be Manager of
Wenzhou Dengfeng Urban Credit Cooperative, President of Bank of Wenzhou Co., Ltd. Ouhai Sub-branch and General
Manager of Headquarters Banking Department of Bank of Wenzhou Co., Ltd.
Mr. Zheng Jie, born in 1963, postgraduate and senior economist, is Staff-representative Supervisor of the Company. Currently,
Mr. Zheng serves as Director of the General Office of Labor Union Committee and Head of Labor Union Office of the Company,
as well as Chairman of the Board of Zhejiang Taishun Wenyin Village Bank; he used to be the President of Bank of Wenzhou
Co., Ltd. Yinxin sub-branch and Director of Human Resources Administrative Department and Director of Organization in
headquarters.
( iii ) Senior Managerial Staff
Mr. Wu Hua served as President and concurrent Vice Chairman of the Board of the Company. Please refer to the experience of
Wu Hua in the foregoing “Directors”.
Mr. Huang Chenyuan served as Vice President, Director and concurrently Secretary of the Board in the Company. Please refer
to the experience of Huang Chenyuan in the foregoing “Directors”.
Mr. Jin Jiankang, born in 1967, undergraduate degree and senior economist, is Vice President of the Company and concurrent
President of Bank of Hangzhou Branch. Mr. Jin used to be a Director of the General Office of Bank of China Shaoxing SubBranch; Vice Director of the Corporate Business Department of Bank of China Shaoxing Branch; Vice President ( in charge )
and President of Bank of China Wenzhou Ouhai Sub-Branch; Director of the Retail Department and Director of the Personal
Banking Department of Bank of China Wenzhou Branch; Vice President of Bank of China Quzhou Branch.
033
Mr. Li Weiming, born in 1964, postgraduate, holding the title of Economists, is Assistant President of the Company. Mr. LI
successively served as beller, Chief of security section, Chief of Personnel Section and Director of General Office in ICBC
Wenzhou Branch Wuma Subbranch, as the Chairman of the Board in Wenzhou Puxie Municipal Credit Bank, as Chief of security
division in Wenzhou Commercial Bank, as President of Fulong Subbranch, as Vice Director of General Office ( in charge ) and
later as Director of General Office.
III. Positions of Directors and Supervisors at the Shareholding Entities
Name Name of entities or institution
Position
Lin Jiangfan
Chief Accountant
Gu Change
China Huarong Asset Management Corporation Hangzhou Office
Vice General Manager
Chen Shengquan
Changtai Holding Group Co., Ltd. Chairman
Zheng Nianhong
Zhejiang Dongri Co., Ltd.
Chairman
Zhou Dingwen
Wenzhou Jiahong Real Estate Development Co., Ltd. Chairman
Li Yuping
Natural Real Estate Development Co., Ltd.
Chairman of the Board
Shao Fenghua
Chairman
Ying Shude
Chairman
Fang Xuanping
Vice President
Ma Kun Harbin High-Tech ( Group ) Co., Ltd.
Director, Secretary to the
BOD, Deputy General Manager
Lu Leisheng
Wenzhou Tobacco Monopoly Bureau
Deputy Director
Zheng Xiangbo
Taili Industrial Co., Ltd.
Chairman
IV. Change in Directors, Supervisors and Senior Managerial Staff
On 29 April 2011, the Company reelected the Board of Directors at expiration of office terms at the Shareholders' General
Meeting 2010, at which Mr. Yang Lin, Mr. Zhou Qun, Mr. Yao Xianguo and Mr. Liang Lifang was elected as Independent
Directors of the 4th Board of Directors of the Company, meanwhile, Mr. Lin Jiangan, Mr. Fang Xuanping and Ms. Gu Chang
was elected as Director of the 4th Board of Directors of the Company and members of the former 3rd Board of Directors Mr.
Zhao Yiyuan, Mr. Zhao Xiaolei, Mr. Lin Qiliang, Mr. Shan Huaiguang, Mr. Xu Mengzhou, Mr. Sun Jianwei and Mr. Qian Jinbo as
well as Ms. Hu Yin ceased to be Director of the Company.
On 19 April 2011, the Company reelected the Supervisory Board at expiration of office terms at the Shareholders' General
Meeting 2010, at which Mr. Zhao Yiyuan was elected as the external supervisor of the 4th Supervisory Board of the Company
and Mr. Lu Leisheng was elected as the supervisor of 4th Supervisory Board of the Company; members of the former 3rd
Supervisory Board of the Company Mr. Song Yongsheng, Mr. Feilianyou ceased to be supervisor of the Company.
On 19 December 2011, Mr. Zhou Shuang and Mr. Zhang Renhui were nominated as the staff-representative supervisor
candidates of the Company at the 4th Employee Representative Meeting; Mr. Zhou and Mr. Zhang will execute their official
duties after the expiration of Supervisory Board in April 2011, and members of the 3rd Superviroy Board Wang Yameng, Lu
Limin and Ms. Lin Shaocong ceased to be supervisor of the Company.
034
2011 年度报告
ANNUAL REPORT
On 18 November 2011, Mr. Zheng Jie was elected as staff-representative supervisor of the 4th Supervisory Board of the
Company at the 1st Session of the 5th Employee Representative Meeting of the Company.
V. Working Years and Work Responsibilities of the Senior Managerial Staff
Name Years in the financial industry
Wu Hua
21 years
Work responsibilities
To be in charge of the overall work of the Bank, and separately control
General Office, HR Management Department, Internal Audit Department
and Organ Development General Office.
Huang Chenyuan
To assist the President supervising the Risk Management Department,
14 years
Credit Management Department, Retail Credit Department, Capital
Operation Department, Assets Protection Department and Technology
and Information Department.
Jin Jiankang
22 years
In charge of all the operating management work of Hangzhou Branch.
Li Weiming
27 years
To assist the President supervising Banking Department, Personal Banking
Department, Credit Card Department, Planning and Finance Department,
Accounting Settlement Department, Conformity Department, Security
Department, E-banking Department, International Department, Capital
Construction General Office and Development and Research Department.
VI. Staff
As of the end of the reporting period, the Company has 2045 employees on the payroll ( including employees leased ) .
( i ) Classify by posts
Posts
Number of employees
Proportion of total employees ( % )
Marketing
899
43.96
Teller
548
26.80
Managerial
269
13.15
Business Support
251
12.27
Technical expertise
Total
78
3.82
2045
100.00
( ii ) Classify by education background
Education background
Postgraduate or above
Number of employees
Proportion of total employees ( % )
141
6.89
Undergraduate
1229
60.10
Junior college
584
28.56
91
4.45
2045
100.00
Technical secondary school or below
Total
035
SECTION VII
CORPORATE GOVERNANCE STRUCTURE
I. Corporate Governance
The Company strictly observed the provisions of Company Law of the People's Republic of China and the Law of Commercial
Banks of the People's Republic of China, and carried out the requirements of the regulatory authorities on corporate governance.
Taking account of the actual condition of the Company, the Company promoted the corporate governance system construction
structured based on the Board, the Supervisory Board and the management, and optimized the corporate governance structure
of which decisions made by the Board, full operation made by operation management team and supervised by the Supervisory
Board. The regulatory level of corporate governance was improved effectively.
During the reporting period, the Company continuously strengthened the establishment of systems, amended the Articles
of Association and Rules of Procedure of the Shareholders' General Meeting, Measures for Assessment on Performance of
Directors and Administrative Measures for Information Disclosure to further perfect procedure of the Shareholders' General
Meeting, performing director's duties and information decision, providing safeguard for the normative operation of the corporate
governance of the Company.
( i ) Shareholders and shareholders' general meeting
As at the end of the reporting period, the Company has 1,908 shareholders in total, including 1 state shareholder, 9 stateowned corporate shareholders, 95 other corporate shareholders and 1,803 natural-person shareholders.
During the reporting period, the Company held the annual shareholders' general meeting 2010, at which 16 resolutions were
approved. Notice, convening and voting procedures of the meeting strictly in accordance with the requirements of the Articles
of Association and Rules of Procedure of the Shareholders' General Meeting, ensured that all shareholders were entitle to
know, participate and votes on significant events of the Company. Zhejiang Pingyu Law Firm was present at the meeting for
witness and produce legal opinion.
( ii ) Directors and the Board of Directors
As at the end of the reporting period, the Board of Directors consists of 17 members, including 1 chairman of the Board,
1 vice chairman of the Board, 1 secretary to the Board, 5 independent directors, 9 shareholder directors and 3 executive
directors. During the reporting period, the Board of Directors held 10 meetings in total, discussed 75 proposals and adopted 49
resolutions. All directors seriously performed their duties and effectively played out their decision-making function to maintain
overall interests of all shareholders and the Company.
036
2011 年度报告
ANNUAL REPORT
During the reporting period, the Board of Directors effectively played the role of nucleus in decision-making, strengthened
strategic management and revised and perfected the new Five-year Strategic Plan to improve the forward looking and
operability; launched publicity of the Five-year Plan and pushed forward implementation of development plans; enhanced
establishment of the Board of directors, perfected corporate governance, conducted reelection of the Board and adjusted
special committees under the board and launched annual training of directors to strengthen their duty performance
consciousness and improve duty performance level; promoted establishment of corporate governance system, revised Rules
of Procedure of the Shareholders' General Meeting, Administrative Measures for Information Disclosure and Measures for
Assessment on Performance of Directors to further perfect procedure of the Shareholders' General Meeting, performing
director's duties and information decision, providing safeguard for the normative operation of the corporate governance of
the Company; launched introduction of strategic investors, formulated Programming on Introduction of Strategic Investors
and submitted it to the superior regulators; strengthened overall risk management, perfected risk management structure and
promoted credit risk officer system to accelerate the risk management changing from Horizontal management to portrait
management and effectively improve risk management level and efficiency; focused on prevision of compliance risk, accelerate
establishment of compliance risk mechanism, formulated Compliance Policy for Bank of Wenzhou Co., Ltd. and established
sound compliance risk management framework; promote branch office reform and distribution of banking outlets, i.e.,
successively set up Longyou Subbranch of Quzhou Branch, Yuyao Subbranch of Ningbo Branch, the Zhejiang Taishun Wenyin
Village Bank sponsored by the Company opened in July 2011 and set up 7 branches in Wenzhou. Meanwhile, the Company
adjusted functions of each departments of head office, clarified responsibilities and business lines, accelerated construction of a
three-level risk management structure of “head office-branch-subbranch” to enhance intensive management and guild the
Company to realize transformation and upgrading step by step.
( iii ) Supervisors and Supervisory Board
As at the end of the reporting period, the Supervisory Board consists of 9 members, including 1 chief supervisor, 2 external
supervisors, 3 shareholder supervisors and 3 staff supervisors. During the reporting period, the Supervisory Board held 10 meetings
in total, discussed 32 proposals and adopted 12 resolutions. All the supervisors proactively conducted supervisory and express
opinion and advices on the supervisory, so as to protect the lawful rights of all shareholders, employees and the Company.
During the report period, the supervisory Board deepened supervision at each level and actively play a role of its own functions.
The first was strengthening supervision in the course of operation, The Company conducted supervision on operating,
procedures for decision-making, internal risk management and duty performance of directors and the senior management,
expressed opinion to the regulator on core supervision index and risk control four times; proposed advices of strengthening
management of branches in other place, prevention of moral risk of employees and optimized financial management for many
times; made evaluation on performance of the Board of Directors and senior management and reported to the regulator and
the shareholders' general meeting; completed accountability audit of a resigned Vice President in the office term. The second
was deepening the supervision of annual operating results. The Company executed audit planning, focused on internal control
and risks as well as five-category classification besides the normal audit items; implementing supervision in the course of audit,
proactively consulted the regulator, coordinated, communicated, fee backed and identified the supervision; carried out “ThreeParty Talks” and urged auditors to replenish and perfect the audit report and senior management to rectification of relevant
problems; faithfully disclosed the audit result of 2010, reported relevant information at the shareholders' general meeting and
disclosed in the Financial Times and the Annual Report 2010 of the Company. The third was standardizing routine work. The
Company successfully completed reelection of the Supervisory Board and adjustment on all special committees under the
Board, deepened inspection on branches in other places with the Board of Directors, actively attended thematic instruction and
expressed supervisory opinion and advice to promote ability and level of duty performance.
037
( iv ) Senior management team
As at the end of the reporting period, the Company's president room consisted of 4 members, including 1 president, 2 vice
presidents and 1 assistant president, who implement effective management and overall control to the Company's operation.
The Company organized to convene 1 annual working meeting of president and 3 quarterly meetings of branch president
to discuss and analyze economic and financial situation, review the work at different stages and analyze problems and
shortcoming existed at work, and set forth work objective for the period ahead and main measures. The senior management
team held 23 president administration meetings. The Company built system of regular banking affairs meeting. The president
room convenes persons in charge of departments at the corresponding level of Head Office to hold the regular banking affair
meeting at the beginning of every month to summarize the monthly completion of jobs and to arrange the major tasks in the
next month. In the reporting year, 12 banking affairs meetings were held. The management team fulfilled their duties and
obligations according to Company Law of the People's Republic of China and the Articles of Association, carried out various
resolutions of the Shareholders' General Meeting and the Board of Directors, built three-level management structure of head
office-branch-subbranch and successfully realized specialized line management on personal finance and cooperate lines to
stably push forward reform of internal audit system, remuneration regime. The Company got some achievements in various
aspects including development of financing business, outlet comprehensive service, marketing and expansion of projects and
foundation of internal compliance.
( v ) Information disclosure and transparency
According to relevant requirements of information disclosure, the Company improved the timeliness, accuracy and
completeness of information disclosure and ensured all shareholders accessing the information equally. During the reporting
period, the Company finished the preparation of the Annual Report 2010 on time in line with the Rules for Management of
Information Disclosure and published the Summary of the Annual Report 2010 in Financial Times. The Company also provided
the Report in the Office of the Board and branches for investors and stakeholder for reference. Meanwhile, the Company
handled mails, calls, visits and questions of shareholders, set up special column of relationship of investors and disclosed
announcement of the Company and contract number on the website, so as to help investors to inform significant events of the
Company and seriously to safeguard the legal rights and interests of vast shareholders in an effective way.
II. Duty Performance of Independent Directors and External Supervisors
The Company has 5 independent directors in the Board and 2 external supervisors who take office of chairman on all special
committees. In the reporting period, the independent directors and external supervisors attended the meetings of the Board
and the Supervisors Board in a positive attitude, and seriously organized to call the meetings of all special committees under the
Board or the Supervisory Board. They expressed their independent opinions actively and effectively played roles as independent
directors and external supervisors.
038
2011 年度报告
ANNUAL REPORT
( i ) Information of the independent directors attending the meetings of the Board
Name of independent director
Unit: times
Times of attending Attended Attended by Absence
the meeting of the Board
in person
his representative
Yang Lin
7
7
0
0
Zhang Yili
7
6
1
0
Zhou Qun
7
7
0
0
Yao Xianguo
7
5
1
1
Liang Lifang
7
7
0
0
Zhao Yiyuan
3
3
0
0
Zhao Xiaolei
3
2
1
0
Lin Qiliang
3
3
0
0
Shan Huaiguang
3
3
0
0
Xu Mengzhou
3
3
0
0
Note: The Board of Directors of the Company was reelected on 29 April 2011. Mr. Yang Lin, Mr. Zhang Yili, Mr. Zhou Qun, Mr. Yao Xianguo and
Mr. Liang Lifang were elected as the independent directors of the 4th Board of Directors, and Mr. Zhao Yiyuan, Mr. Zhao Xiaolei, Mr. Lin Qiliang,
Mr. Shan Huaiguang and Mr. Xu Mengzhou, independent directors of the 3rd Board of Directors, ceased to hold their posts.
( ii ) Information of the external supervisors attending the meetings of the Supervisory Board
Name of external supervisors
Unit: times
Times of attending Attended Attended by the meeting of the Board
in person
his representative
Yang Jinguan
10
10
0
0
Zhao Yiyuan
7
6
1
0
Yang Jinguan
3
3
0
0
Absence
Note: The Supervisory Board of the Company was reelected on 29 April 2011. Mr. Yang Jinguan, External Supervisor of the 3rd Supervisory
Board, was reelected as the external supervisor of the 4th Supervisory Board; Mr. Zhao Yiyuan was elected as external supervisor of the 4th
Supervisory Board and Mr. Song Yongsheng, External Supervisor of the 3rd Supervisory Board, ceased to hold his post after the expiration.
( iii ) Objections to matters of the Company proposed by independent directors
During the reporting period, none of independent directors proposed any objection to the proposals of the Board non-board
proposals.
039
III. Independent Operation of the Company
The Company has no any controlling shareholder and actual controller. The Company keeps full independent in business,
personnel, assets, organization and finance under the supervision of the People's Bank of China and China Banking Regulatory
Commission. The Company is an independent corporation which runs business independently and is entitled or assumes sole
responsibility for its own profits and losses. The Company has independent and complete business and independent operation
ability.
The highest power body of the Company is the Shareholders' General Meeting, which carries out management and supervision
through the Board of Directors and the Supervisory Board. The President is appointed by the Board of Directors and takes full
charge of the daily business management of the Company. The Company adopts first-level corporate system. All branches are
non-independent accounting units. Their business activities are operated under the authorization of the headquarters and they
report to the headquarters.
IV. Assessment and Incentive Mechanism for Senior Managerial Staff
During the reporting period, the assessment indicators for the senior managerial staff included whether he fulfilled the decisions
of the Board and the fulfillment of the business goals given by the Board and whether he actively maintained the interests of
shareholders and retained and increased the value of the assets of the Company. With operating indicators at each level, i.e.,
business development, risk control, business performance and business operation conformity, the assessment result, rewarding
and penalty were closely related to the compensation. Meanwhile, the Company's senior management team accepted the
management of the Board and the supervision of the Supervisory Board and reported to the Board and the Supervisory Board
on the financial status and operation results of the Company to ensure directors and supervisors to be informed about the daily
business operation and management of the Company constantly.
The Company owned perfect and reasonable compensation management structure. The Board of Directors is in charge of
formulation of the Company's compensation management system and relevant policies in accordance with Chinese laws and
policies. And the Board of Directors has the ultimate responsibility for compensation management. The Board of Directors set
up relatively independent nomination and compensation committee, which is responsible for reviewing relevant compensation
system and policies. The Board of Directors discloses compensation management information fully, timely, objectively and
carefully in every year, which is disclosed as the important part of annual report. The disclosure of salary is reported to banking
supervision regulatory department for reference.
During the reporting period, the remuneration structure comprised fixed payment ( basic salary and fixed payment ) , variable
payment ( performance salary, performance risk funds and qualification payment ) and welfare payments. According to CBRC
Notice on Release of Guideline on Supervision of Stable Remuneration of Commercial Banks, The basic annual remuneration
shall not more than 35% of the total standard post remuneration, which was based on evaluation of post value and market
price. Basic salary based on labor input, service years, accountability and risks and in line with requirement of no more than
35% of the total standard post remuneration. Meanwhile, the Company withdrew portion of qualification payment as deferred
payment within one to three years, namely paid year by year at the proportion of 30%, 30% and 40%. If there were losses from
risk in the duty of management and employees, the Company would recover all the variable payment and suspend payment of
balance.
040
2011 年度报告
ANNUAL REPORT
The incentive and restraining mechanism of the Company was embodied in the assessment and compensation system of the
senior managerial staff. The fulfillment of the business goal of the management, the rewarding plan for over-fulfilling profit
and the management rules on the performance assessment of the top management were reported to and approved by the
Nomination and Remuneration Committee under the Board and finally determined by the Board.
041
SECTION VIII
SHAREHOLDERS' GENERAL MEETING
The Annual Shareholders' General Meeting 2010 was held at Wenzhou Shangri-La on 29 April 2011. Ninety-four shareholders
and authorized representatives of the shareholder were present at the meeting, representing 1,340,673,212 shares with
valid voting right, accounting for 88.85% of the total shares of the Company. The following 11 proposals were reviewed and
approved as ordinary resolutions at this meeting, i.e., Working Report of the Board, the Report on Business Plan Fulfillment in
2010 and Business Plan for 2011, Financial Plan Implementation Report for 2010 and Financial Budget Report for 2011, Final
Report on Profit Distribution for 2009, Report on Profit Distribution Preplan for 2010, Working Report of the Supervisory Board
Development Planning for of Bank of Wenzhou Co., Ltd. for Year 2011-2015, Capital Increase Planning of Wenzhou Co., Ltd.
for Year 2011-2015, the Proposal on Suspending Construction of Wenyin Building, the Proposal on Amendment of Rules of
Procedure of the Shareholders' General Meeting and the Proposal on Adjustment of Remuneration of Relevant Independent
Directors and External Supervisors. The following three proposals were reviewed and approved as special resolutions at
this meeting, i.e., the Proposal on Issuance of Subordinate Bonds and Issuance Scheme, the Proposal of Usage of Raised
Proceeds from Subordinate Bonds and Analysis on Feasibility and the Proposal on Special Grant to Issue Subordinate Bonds
within the Limit. At this meeting, the following proposals were also reviewed and approved: Elected Xing Zengfu, Wu Hua,
Huang Chenyuan, Yang Li, Zhang Yili, Zhou Qun, Yao Xianguo, Liang Lifang, Lin Jiangfan, Gu Chang, Chen Shengquan, Zheng
Nianhong, Zhou Dingwen, Li Yuping, Shao Fenghua, Ying Shude and Fang Pingxuan as Directors of the 4th BOD; Elected Chen
Xiwen, Ma Kun, Lu Leisheng, Zheng Xiangbo, Yang Jinguan and Zhao Yiyuan as Supervisors of the 4th Supervisory Board;
Heard special reports including the Opinion from Regulatory Department and the Report on Implementation for Rectification
on Relevant Issues through on-the-spot Inspection for Year 2010, the Report on Implementation for Management on Related
Transaction and Related Transaction for Year 2010 and Performing Duties of Directors, Supervisors and Senior Management
Staff for Year 2010.
042
2011 年度报告
ANNUAL REPORT
SECTION IX
REPORT OF BOARD OF DIRECTORS
I. Discussion and Analysis of Overall Business Status during Reporting Period
( i ) Operating income, operating profit, net profit and increase in cash and cash equivalents
Items
Operating income Operating profit Net profit Increase in cash and cash equivalents Unit: RMB'000
Period-end
Period-begin
Increase/decrease ( % )
2,275,334
1,630,643
39.54
874,101
653,563
33.74
644,687
494,729
30.31
4,109,446
1,390,555
195.53
Notes:
( 1 ) Operating income increased because loan interest income increased year-on-year due to increase of loan size and loan interest rates;
( 2 ) Operating profit increased because increase in operating income being more than increase in operating expenses;
( 3 ) Net profit increased because of increase of income from main business;
( 4 ) Decrease in cash and cash equivalents went down significantly due to considerable increase in cash and cash equivalents received from
operating, investing and financing activities.
( ⅱ ) Comparison between total assets and shareholders' equity at the period-end with those at the period-begin
Unit: RMB'000
Items Period-end
Period-begin
Total assets 65,651,579
51,370,858
27.80
4,444,241
3,976,466
11.76
Shareholders' equity Increase/decrease ( % )
Notes:
( 1 ) Total assets increased due to business growth in loans and investment;
( 2 ) Shareholders' equity increased because of increases in investment and capital, resulting in increase in withdrawal of new surplus reserves
and profit this year.
043
Ⅱ. Discussion and Analysis of the Management
( ⅰ ) Scope of main business
Approved by the China Banking Regulatory Commission, the Company is mainly engaged in: receiving public deposits; issuing
short-term, mid-term and long-term loans; handling domestic and overseas settlement; handling bill acceptance and discount;
issuing financial bonds; issuing, cashing and selling government bonds as an agent; buying and selling government bonds and
financial bonds; operating inter-bank borrowings and lending; operating bankcard business; providing L/C service and guarantee;
collecting and paying funds and selling insurances as an agent; purchasing and selling or acting as an agent to purchase and sell
foreign currencies; providing guarantee letters; and other businesses approved by the China Banking Regulatory Commission.
( ⅱ ) Overall business development
In 2011, the Company accelerated internal management system, actively expanded market and operating scale, strengthened
risk prevention and control, optimized assets and liabilities structure and effectively boosted sound development in all
businesses. As a result, the set annual business objectives were excellently achieved. Both the scale and quality of the
Company increased steadily. Relevant details are as follows:
1. The overall business scale grew steadily. Total assets as at the year-end stood at RMB65.652 billion, up by RMB14.281
billion from that at the year-begin, representing a growth of 27.8%, in which balance of various loans granted stood at
RMB36.453 billion ( including discounts ) , up by RMB6.280 billion from that at the year-begin, representing a growth of
20.81%. Total liabilities stood at RMB61.207 billion, up by RMB13.813 billion from that at the year-begin, representing a growth
of 29.15%, in which balance of various deposits stood at RMB52.980 billion, up by RMB 9.174 billion from that at the yearbegin, representing a growth of 20.94%. Income from intermediary business stood at RMB98,180,300, up by RMB22,201,700
as compared with that of last year, representing a increase of 29.22%.
2. Operating benefit increased rapidly. For the year 2011, the Company achieved an operating income of RMB2.275 billion, up by
RMB644 million, or 39.54%, as compared with that of last year; a total profit of RMB866 million, up by RMB225 million, or 35.05%,
as compared with that of last year; a net profit after tax of RMB645 million, up by RMB 150 million, or 30.31%, as compared with
that of last year; and owners' equity of RMB4.444 billion, up by RMB468 million, or 11.76%, as compared with last year.
3. Operating cost decreased correspondingly. At the period-end, the cost-revenue ratio stood at 41.24%, representing a yearon-year drop of 2.74%.
4. The capital sufficiency rate was down slightly. At the period-end, the capital sufficiency rate stood at 11.55%, down by 1.12%
from that at the year-begin; and the core capital sufficiency rate stood at 9.86%, down by 0.77% from that at the year-begin.
5. Non-performing loans was increased slightly. At the year-end, balance of five-category non-performing loans stood at
RMB362.01 million, up by RMB99.57 million from that at the year-begin, with the non-performing loan rate standing at 0.99%,
up by 0.12% as compared with that at the year-begin. The NPL provision coverage rate stood at 181.90%, up by 20.95% from
that at the year-begin. And the provision and loan ratio stood at 1.81%, up by 0.41% as compared with that at the year-begin.
044
2011 年度报告
ANNUAL REPORT
( ⅲ ) Operation of main businesses
1. The corporate banking business: As at the period-end, balance of ordinary corporate deposits stood at RMB35.108 billion,
accounting for 66.27% of the total deposits of customers, representing a growth of RMB5.008 billion, or 16.64%, as compared
with that at the period-begin. And balance of loans to corporations stood at RMB22.588 billion, accounting for 61.96% of total
loans to customers, representing a growth of RMB7.271 billion, or 47.47%, as compared with that at the period-begin.
2. The personal banking business: As at the period-end, balance of personal deposits stood at RMB17.872 billion, accounting
for 33.73% of total deposits of customers, representing a growth of RMB 4.166 billion, or 30.40%, as compared with that at the
year-begin. And balance of loans to individuals stood at RMB13.865 billion, accounting for 38.04% of total loans to customers,
representing a decrease of RMB991 million, or 6.67%, as compared with that at the period-begin.
3. The intermediary business: For the reporting period, the Company achieved an income of RMB98.1803 million from the
intermediary business, up by RMB22.2017 million, or 29.22%, from that in the previous year. A total of 968,300 Jinlu debit cards
were issued accumulatively, 123,300 more than those at the year-begin, which was mainly due to disposing a mass of inactive
bank card, and a total of 54,400 credit cards ( active cards ) were issued accumulatively, 1,3400 more than those at the yearbegin. As such, the bankcard business generated an income of RMB37.10 million ( excluding credit card interest income ) ,
representing a year-on-year decrease of RMB1.59 million, or 4.11%.
Ⅲ. Breakdown of Main Business Incomes in Reporting Period
Category of business Loan interest income Unit: RMB'000
Operating income
2,854,580
Interest income from deposits in central bank 136,906
Interest income from deposits in other banks 49,998
Interest income from financial assets purchased under agreement to resell 57,579
Interest income from bond investment 150,371
Service charge and commission income 98,180
Return on investment ( 816 )
Income from fair value changes 6,678
Other businesses 1,384
Total 3,354,860
045
Ⅳ. Analysis on Financial Status and Business Outcomes of the Company in Reporting Period
( ⅰ ) Changes in main financial indicators and reasons thereof
Unit: RMB'000
Items Period-end Increase/decrease ( % ) Main reasons for change
Total assets 65,651,579
27.80%
Growth in loans and investment
Total liabilities 61,207,338
29.14%
Growth in deposits
4,444,241
11.76%
Increase in withdrawal of new
Shareholders' equity surplus reserves and profit increase
Profit of main business 874,101
33.74%
Increase of loan interest income
Net profit 644,687
30.31%
Increase of main business income
4,109,446
195.53%
Increase in increment of cash and
Net increase in cash and cash equivalents cash equivalents this year
( ⅱ ) Items in financial statements of which the change was over 30%, as well as reasons thereof
Items
Unit: RMB'000
Period-end
Deposits due from other banks
3,625,903
Increase/ decrease ( % )
90.67%
Based on the situation of the capital market, the Company increased its
temporary deposits due from other banks
Funds for inter-bank lending
Based on the situation of the capital market, the Company increased its
2,692,364
－
temporary funds for inter-bank lending
Trading financial assets
Based on the situation of the capital market, the Company redirected its
152,562
-35.71%
capital input.
Financial Assets Purchased Under Agreements to Resell
The Company increased transactions on bonds purchased under agreement
4,249,860
45.37%
to repurchase with other banks at the year-end
Financial assets available for sale
In the reporting period, interest rates in the bond market rose steadily.
1,761,713
91.96%
Therefore, the Company increased the financial assets available for sale
held by it.
Long-term equity investment
36,844
178.07%
Deferred income tax
73,405
68.40%
500,000
150.00%
Borrowing from the central bank
Borrowed inter-bank funds
Assets sold under agreements to repurchase
The Company held equities in Taishun Wenyin Village Bank
In the reporting period, increased in specific reserve withdrawn
Increase of SME loan
88,213
343.99%
Mainly because the foreign currency funds need borrowed inter-bank funds
3,963,300
121.85%
At the year-end, the Company considerably increased transactions on bonds
sold under agreement to repurchase with other banks.
Payroll payable
Increase in labor cost
Surplus reserves
220,228
121.58%
963,941
38.07%
Discretionary surplus reserves were withdrawn in the reporting period
Operating income
2,275,334
39.54%
Increase in net interest income in the reporting period
Net interest income
2,187,448
39.47%
Increase in income from interest on loans and enlargement of interest rate
046
Main reasons for change
in the reporting period
Interest income
3,287,326
51.46%
Increase in loan interest income in the reporting period
Interest expense
1,099,878
82.68%
Increase in loan interest expense in the reporting period
2011 年度报告
ANNUAL REPORT
( Cont'd )
Items
Period-end
Net handling charges commission income
86,994
Increase/ Main reasons for change
decrease ( % )
32.77%
Increase in income from selling funds on commission and from bank
card intermediary business in the reporting period
Sales tax and extra charges
Increase in operating income in the reporting period
192,958
61.63%
Business and administrative expense
937,687
30.85%
Expansion of business and increase in labor cost
Loss on assets impairment
269,950
92.14%
Increase in impairment provision for non-performing loan in the reporting
period
Operating profit
Increase in net interest income and income from intermediary business in
874,101
33.74%
Total profit
866,338
35.05%
Income tax expense 221,651
51.04%
Increase in total income tax
Net profit
644,687
30.31%
Ⅴ. Investments Made by the Company
( ⅰ ) Outward Investments
Enterprises invested in
China Union Pay Co., Ltd. City Commercial Bank Clearance Bank Unit: RMB'000
Period-end
Period-begin
13,000
13,000
250
250
Taishun Wenyin Village Bank
23,594
0
Total 36,844
13,250
( ⅱ ) Use of Raised Funds in Reporting Period
During the reporting period, the Company did not use any raised funds.
( ⅲ ) Use of Non-raised Funds in Reporting Period
During the reporting period, the Company did not have any non-raised funds investment project.
047
Ⅵ. Changes in accounting policies and estimates or significant accounting errors
In the reporting period, in terms of the entrustment business where the client provided funds and the Company only provided
agent service for distribution, supervision, use and assistance in collection of those funds according to the borrower, use, term
and interest rate of funds determined by the client and where the client shouldered risks, gains and losses and responsibilities
of the entrustment transaction and the Company only received commission charges from the entrustment transaction, it was
measured off the balance sheet, which had been originally presented in the balance sheet. And the prospective application
method was adopted in the said change of the accounting policy.
In the reporting period, no change occurred in accounting estimates. Nor there existed any correction of significant accounting errors.
Ⅶ. Explanation on main accounting policies chosen and important accounting estimates
Based on the going-concern assumption and according to actual transactions and events, the Company recognized and
measured transactions and events in line with the Accounting Standard for Business Enterprise—Basic Principles and other
accounting principles. Financial statements prepared based on such recognition and measurement.
The financial statement prepared by the Company was in compliance with the requirements of Accounting Standard for
Business Enterprise, which factually and completely reflected the information related to the financial status, operating results
and cash flows the Company.
The Company adopted the accrual basis accounting system to recognize, measure and report transactions. Except for the fair
value, the net realizable and the capitalized value mentioned in the Notes, other items were recorded at their historical cost. And
measurement attributes of the reported items in the reporting period remained unchanged.
Measurement of transactions in foreign currencies: Transactions in different foreign currencies were recorded separately. The
principle of preparing financial statements in RMB was to prepare statements in different currencies at first, then convert the
currencies to USD and then convert USD to the amount in RMB so as to prepare the financial statements in RMB. On the
balance sheet date, foreign-currency monetary items were converted into the recording currency according to the exchange
rates on the balance sheet date, and the exchange difference caused thereupon was recorded into current gains and losses.
Non-monetary foreign-currency items measured at their historical cost were converted according to the exchange rates on
the transaction beginning date; Non-monetary foreign-currency items measured at their fair value were converted into RMB
according to the exchange rates on the fair value recognition date, and difference between the amount in RMB and the amount
in the original recording currency belonged to the foreign-currency non-monetary item of available-for-sale financial assets
and were recorded into capital reserve. And difference of other items was recorded into current gains and losses.
Ⅷ. Liabilities of the Company, Changes in Counseling and Cash Arrangement for Repaying
Convertible Bonds in Future
As at the period-end, balance of subordinated bonds issued by the Company stood at RMB 550 million, with a borrowing
of RMB 500 million from the central bank. And the Company is quite capable to repay the said subordinated bonds and the
principal and interest to the central bank.
048
2011 年度报告
ANNUAL REPORT
Ⅸ. Major Changes in Operation Environment and Macroeconomic Policies and Regulations, as
well as Their Influence
( ⅰ ) Macro-control
Due to downside of economy in developed countries and change of growth driving of domestic economy, growth of economy
of China presented the trend of slow in 2011. But the overall running was in good condition, characterized as rapid growth,
stable price of commodities, considerable profit and improved livehoold of the people. In order to effectively hedge part of
excess liquidity of the banking system, the central bank raised the RMB deposit reserve ratio of deposit-taking financial
institutions for six times in the first half year of 2011; to stabilize inflation expectations and curb rapid growth of monetary
credits, the central bank raised RMB deposits and loans benchmark interest rates of financial institutions thrice in 2011. While
proactively playing the role of control of interest rate leverage, the central bank strengthened window guidance for financial
institutions to continuously improve the credit policy guidance, encouraged and guided financial institutions to rationally adjust
the credit structure and pace of launches, optimized credit structure, and increased financial supports for economic restructuring
and transformation of the mode of economic development.
In the face of the stricter macro-control, the Company actively enhanced its management over assets and liabilities and
improved the asset structure. Firstly, it properly controlled loan issuance so as to maintain a steady and balanced loan growth.
Secondly, it further adjusted the asset structure, increased and restricted loan issuance properly with disparate treatment,
optimized the loan structure, expanded small enterprise loan business and successfully realized two tasks of “the two
standards”. Thirdly, it properly adjusted ratios of assets with high liquidity such as investment, financing and notes, actively
took part in operation in the note market, the money market and the bond market, and tried to increase profitability while
maintaining liquidity. Finally, the Company made efforts to secure intermediary agent business and wealth management
business to look for new profit generators. To sum up, the macro-control accelerated the Company's adjustment to its asset
structure and income structure, with no material negative influence on the Company.
( ⅱ ) Changes in exchange rates
In 2011, under the environment that European debt crisis was severer, US economy was struggling and the global economy
recovery was slow, the central bank continued to deepen the Renminbi exchange rate formation mechanism, enhanced Bidirectional flexible fluctuations of the exchange rate, maintained the basic stability at reasonable balance level. Pressure from
appreciation of Renminbi as the international world opinion was higher, but the central bank always insisted on the exchange
rate policy, namely the principles of initiative, controllability and graduality and integrating international capital flows and changes
in major currency movements, so that the appreciation was in proper order. In 2011, exchange rate from Renminbi to dollars
grew 5.09% and the day Bi-directional fluctuations was significantly, even declined the daily limit for 10 days in December
2011, which caused NDF forward market adjusted the trend of Renminbi in the future. Appreciation of Renmin will continue in
2012, however, the growth is expected to slow and the Bi-directional fluctuations will be more significantly.
To rise to risks caused by exchange rate changes, the Company enhanced its operation risk consciousness and its ability to handle risks.
Meanwhile, the Company enhanced its exchange rate risk prevention consciousness, improved management over exchange rate risk
exposure, enhanced its ability to identify, measure and monitor exchange rate risks and optimized the internal risk control mechanism. It
also adjusted its asset and liability structure in a timely and rational way according to exchange rate fluctuations.
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( ⅲ ) Changes in housing loan policy
In the reporting period, the Company responded positively to and carried out the state's tightening policies imposed on the
real estate industry, steadily implemented the spirit of the relevant documents of regulatory departments, duly adjusted
housing loan policies of the Company. In the aspect of individual housing loan business, the Company further classified and
refining housing loan policy, revised the “Rules of Implementation of Management of Housing Mortgage, adjusted mortgage
percentage of various real estate, enhanced investigation on qualification of real estate appraisal agency and periodic evaluation
as well as elimination mechanism and faithfully strengthened prevention of risk from real estate loan.
X. Problems and difficulties in operation, as well as relevant solutions
( I ) Problems and difficulties in operation
In the reporting period, the problems and difficulties that the Company encountered during operation were mainly reflected:
firstly, with the gloomy global outlook and severe foreign trade export situation, the possibility of pressure from sovereign
debt crisis to bank crisis is increasing; the reduction of export due to depending on external market demand in PRC, which
caused great pressure for the economic growth. Secondly, continuous adjustment on real estate industry will expose certain
risks to the economic growth, assets quality of commercial banks and local finance. Thirdly, the increasing overcapacity risk
affected pressure from enterprise production and destocking increased. Fourthly, debt of the local government platform is the
challenge to assets quality of banks. Fifthly, private financing promote the marketization process of interest rate, and financial
disintermediation made the deposit organization more difficult.
In order to solve problems mentioned above, the Company focused on the followings:
1. Innovate products, improve service and effectively promote business development level. Firstly was strengthening the
product innovation. According to the market trend and customer's demand, the Company actively innovated by means of
independent research and development and cooperation agents successively launched products such as Western Union,
forward settlement and sales of foreign exchange, mobile bank, third-party depository, fortune card, domestic L/C and Jinlu
small start-up loan, launched 8 phases of Golden Deer series wealth management products, which effectively made up lack
of innovation products. The second was promoting the network service level. The Company set up 7 outlets as service and
marketing benchmarking, including Hangzhou Branch, Ningbo Branch, Quzhou Branch and headquarters banking department
and Jingshan, Jiangbin and Qinye sub-branch, and 5 sub-branches with wealth management room in Lucheng, Rui'an,
Ouhai, Jiangbin and liming, and optimized the organization of counters in 60 branches in Wenzhou. The third was significant
results of key project expansion. The Company established strategic partnership with Wenzhou Industry Investment Group
Co., Ltd., Wenzhou Modern Service Investment Group Co., Ltd., Wenzhou Communication Investment Group Co., Ltd.,
Wenzhou Education Development Group Co., Ltd., Wenzhou Public Business Investment Group Co., Ltd. and Wenzhou Urban
Construction Investment Group Co., Ltd., and contracted as charging agent for social security card, government credit card and
pipeline gas fees. The fourth was accelerating information technology establishment. The Company has increased or optimized
functions of more than 200 programs in comprehensive business management and data center system during the year. The
Company successively completed the development and promotion of new credit system, new performance system, the
second generation payment system and off-site audit system and wealth management system.
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2. Be sound and prudent, strengthen examination and promote risk prevention level. The first was identifying business risk
point in time, successively conducted examination on stamp management, implementation of new rules “Three Measures
and One Guideline” for loan and credit business risks, launched investigation of risks in the existing real estate mortgage
loans, cooperation with financing guarantee companies and all collaterals. The Company also conducted supervision on credit
business, counter business and international settlement business. The third was strengthening audit. The Company conducted
internal audit on 116 items, including audit on economic responsibility of 81 senior officers or staff holding senior positions, internal
control and assessment on 12 branches and sub-branches, audit on 13 branches without prior notice, audit investigation on
3 branches and special audit on 7 items of recovery of payment for non-performing loans, the authenticity of collaterals and
execution of credit decisions.
3. Standardize management, accelerate reform and effectively promote internal control level. The first was further sorting
out management level. Based on the preliminary three-tier ( Head office-branch-subbranch ) management structure, The
Company continued to clarified responsibilities and authorization of head office, identified names and responsibilities of
departments in branch and sub-branch and confirmed positions and headcount. Leveraging on the pivotal role of branches,
the Company granted portion of management authority to branches to enhance the management and control over other
departments at the same level and sub-branches. The second was establishing information communication mechanism.
The Company established regular meeting system of banking affairs in head office, branches and sub-branches, reported
performance, target realization monthly and deployed tasks. The Company also established monthly report system on the
operation of deposits, credit business and E-bank monthly, convened symposium on development of deposits business,
conducted investigation on the development of private finance business and held small enterprise credit business promoting
meetings for the purpose of provision of reference for business expansion. The third was building different managers for private
finance and corporate customers in line with the management requirements of specialization of business lines. The Company
formulated new management rules for customer managers, strengthened targeted training of relevant department at each
level, so that customer managers changed to be a highly qualified team specialized in business expansion, service, marketing
and propaganda from single deposits marketing.
4. Strengthen education and supervision and effectively promote internal control compliance level. The first was
comprehensively promoting activity of the year for implementing internal control and combing about 500 rules and regulations.
The Company focused on unruly regulations or not suitable to the current business development and management so as
to increase new system or amended them, assigned the backbone of business conducted independent and cross surprise
check on the problems and successively executed examination on business lines covering 77 job duties of 13 categories.
Meanwhile, the Company innovated propaganda instruments, prepared and issued special issue online about the year for
implementing internal control and published examples of internal control and compliance briefing on in-house internet. The
second was developing the activity of “Comparison with study from each other” and targeting at “Establishment of
compliance environment by laws and Promotion of stable and sound development”. Branches and sub-branches formulated
detailed targets focusing on “development scale, comprehensive revenues, assets quality, compliant internal control, talent
cultivation and creation of culture”, took specific measures, while all departments of the head office improved the efficiency
of branches and sub-branches in business study, responsibility consciousness, service grassroots, efficiency, honest style of
work, administration innovation, operating target and assessment on internal control. The third was perfecting establishment
of internal supervisor. The Company set up audit departments in 4 branches in other place and 4 branches excluding Lucheng
District, and discipline inspection department in other branches and sub-branched, strengthened construction of honest
administration and case preventions compliance building in sub-branches; try to conduct vertical management on audit
department, took the leading in setting up audit department and dispatching staff to confirm that the administrative relationship
and target assessment of auditors is subordinate to the headquarters, so as to guarantee independence of internal audit.
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5. Oriented with people, focusing on training and effectively promote team development. Firstly, formulated Training Plan
of Bank of Wenzhou Co., Ltd. for 2011, set “Online Learning ( Examination ) Platform” in our website, strengthened
Conscientiousness and initiative of learn of cadres and employees and trained on special business including e-bank
commissioner, individual foreign currency and corporate financial adviser. Meanwhile, the Company established talent pool of
senior management and further broadened promotion channel for cadres and employees; building internal trainer team and
strived to explore internal education training resources. Secondly, launched customized training of administrators at each level
and professional talent and dispatched senior managers to Southwestern University of Finance and Economics in batches and
learn about Basel III and case prevention and understanding of new regulatory rules, and organized some Secretary of CPC of
branches to take part in specific training of “Strengthen construction of honest administration and prevention of employees'
moral risk”. Thirdly, completed remuneration system reform, formulated new administrative measures for remuneration and
implementation rules, strived to promote diligent and competent staff on the basis of increase of the salary of all staff.
6. Verify forms, excel in performances as a mode and effectively promote civilization level. Firstly, the Company developed
annual thematic education activity with the theme of “Strengthen internal control, focus on implementation and build steady,
sound and effective bank” and launched five activities, namely system reform, compliance education, risk investigation,
execution promotion and appraisal of internal control. Secondly, focused on team building, convened art performance for the
90th anniversary of the founding of the Communist Party of China, sufficiently showed favorable comprehensive quality of
cadres and employees of the Company and new features of positivity and progressivity; organized and launched youth debate
competition of "debate of youth and discussion of development", leaded league members and youth to positively think and put
forward reform and development of the Company; organized and joined in the citywide sporting meeting, the New year jogging
and tree planting. Thirdly, enhanced propaganda work and carried out maintenance of the private lending and financing and
public opinion supervision. The Company has released several reports in China Business, Zhejiang Daily and Wenzhou Daily and
set up a good social image.
( II ) Outlook of future development and measures to be taken
In 2012, growth of macro-economy slowed down but maintained stable, Renminbi internationalization process further
accelerated and financial market and environment grew up, which brought opportunities for operation and development of
commercial banks. However, affected by slowdown of economy growth, reduction of property price and concentration period
of repayment of government financing platform, assets quality of commercial banks faced challenges and capital constraint will
exist for a long time.
1. Opportunities. Firstly, our economy remained rapid growth due to the lead of programming on construction project
investments for the next year, expectation of moderately easy monetary policy and improvement of widening consumption
policy system. In 2012, monetary credit line is expected to over RMB 8,000 billion and banking assets will keep increasing.
Secondly, settlement in Renminbi will increase and foreign exchange of Renminbi will be liberalized for a period in the further
due to acceleration of Renminbi internationalization process, which breeds market opportunity for commercial banks. Thirdly,
continual deepening in financial market and customer demand will bring market for commercial banks. Further development
of capital market and acceleration on marketization of interest rates will bring commercial chances for independent pricing
ability, promotion of products innovation and competitive differentiation ability and offer of various customized finance service
resolutions; with changes in social strata structure and consumption concept, demand for high-grade and specialized service of
financial preservation and appreciation as well as financial planning grew continually.
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2. Challenges. Firstly, risks mainly rose from real estate and local financing platform. Real estate investment and property price
will continue to slide in the future, exposed risks of loan for real estate development and individual mortgage loans. Extended
downturn of real estate caused land price dropping, and then affected financial income and solvency of local government;
moreover, it is the peak season for local financing platform to repay the loans in the next two years. Accordingly, there are risk
pools for local financing platform. Meanwhile, along with slowdown of the economy growth, risk from repayment of off-sheet
financing and privative loans will rise gradually, part bank capital may involve in and caused unstable financial running. Secondly,
deepening interest rate marketization reform brought several pressures to commercial banks in business transformation and
will affect commercial banks in several aspects, for example, deepening competition and resulting in interest necked; fluctuation
of interest rate will be more volatile and unexpected, resulting in difficulty in control of financing cost of commercial banks
and increase of uncertainty of income; for commercial banks reliable to interest income in medium and long term, profit from
business development may not offset income decrease due to shrink of traditional business mode in short time, so the bank
exposure risk in transformation. Thirdly, pressures from capital adequacy ratio and provision increased and capital constraint
is still severe. As the gradual implementation of new capital adequacy standards, commercial banks will comply with stricter
regulatory rules for capital adequacy, leverage ration, liquidity and loan reserves, pressure from capital adequacy and provision
will increase and credit constraints is still severe. CBRC adopted higher requirements for risk weighted calculation, as a result
capital adequacy further declined; economic downside risk will prompt commercial banks withdrawal more provisions, which
will further affect capital adequacy of commercial banks.
XI. Business Development Plan for Year 2012
( 1 ) Guidelines for business development in 2012
In 2012, the Company will take “Insisting on human-oriented, faithfully preventing risks, accelerating transformation and
upgrade, striving to be excellent” as guiding ideology, “Risk first and stable and sound development” as principal and
organizational restructure as main line, actively prevent various risks, optimize and adjust business structure, strengthen reform
and innovation to improve operating management and realize the sustainable development of all businesses.
( 2 ) Business goals for 2012
Various deposits increase by RMB12 billion, exceeding RMB65 billion at the end of year. Various loans increase by RMB 6.8
billion, exceeding RMB43 billion at the end of year. Total assets increase by RMB15 billion, exceeding RMB80 billion at the end
of year.
( 3 ) Main measures
1. Unify the cognition and accelerate transformation development. Firstly, promote outlet transformation to realize classification
of customer service and product marketing. Secondly, put forward business transformation and strengthen e-bank,
international business and credit card business through enhance reward, marketing promotion and perfection of outlet function.
Thirdly, continued to strengthen products innovation, took customer experience into account and discovered the defect of
products and market demand through trial implementation in inter bank and customer experience.
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2. Set up marketing consciousness and compete market share together. Firstly, continued to enhance key customers and
project expansion. Secondly, created marketing atmosphere and launched various marketing competition activities to enhance
the marketing consciousness. Thirdly, guided customer managers to focus on marketing of assets business, paid equal
attention to marketing of assets business and medium business gradually and tried to implement marketing mix mode.
3. Correctly analyze and adjudge situation and faithfully prevent operation risks. Firstly, we will pay attention to credit risk and
be aware of corporate operating status and working of funds. Secondly, we will focus on liquidity risk, closely cooperate with
interbank such as commercial banks and insurance trust and develop business of trading and repurchase of bills, development
and sales of financing products, inter-bank payment in advance trust ius fruenndi planning. Thirdly, we will focus on operating
risk, realize development of auxiliary function of risk prewarning, provision withdrawal, assets safeguard, credit inter-banks
suspend and resumption of trading management and systematic data modification platform and overall management and
control of credit risks through all process. Fourthly, we will focus on science and technology risk, strengthen information
technology managements and establish supervision, appraisal and control system for science and technology risk to enhance
management on key operating positions of in important information system and infrastructure and improve monitor ability of
information and technology risks.
4. Straighten management mechanism and promote competitiveness. Firstly, play a full role in assessment instruction and
carry out differentiation and classification assessment modes. Secondly, continue to perfect three-level management structure
and improve management efficiency of the Head Office. We will further clearly define function of departments in Head Office,
straighten centralized management of department and strengthen lines supervision and examination, so as to practically
enhance management and control of head office under branches and subbranches. Thirdly, strengthen management under
branches and head office. Besides the authorization granted by head office including interest rate approval, cash approval,
results recognize, inter staffing and assessment as well as distributions, all lines may also grant certain authorization to
branches, so as to realize overall management of subbranches. Meanwhile, based on positions of branches and subbranches,
further straighten department functions and reasonably allocate human resources according to business development. Thirdly is
perfecting authorization mode. We will try to carry out internal rating system, grant authorization of human resource, finance and
check and approval according to different rating levels.
5. Strengthen education and training as well as team building. Firstly, we will strengthen talent introduction and cultivation, try
to establish talent storage pool of middle management and specialized staff on the basis of successful establishment of senior
management storage pool and carry out compound talent training modes to accumulate various experience in international
business, IT and credit management. Secondly, we will enhance staff education and supervision, focus on education and
training and strengthen supervision on staff behaviors at the same time. Thirdly, we will enhance line team building.
6. Foster enterprise culture and set a good image of enterprise. Firstly, we will strengthen Party and league construction, choose
themes of education activities, innovate carrier of thematic education activities and brainstorm to arrange and design all kinds
of activities according to key emphasis in work of 2012. Secondly, promote image of outlet and propose decoration planning of
outlets for 2012 according to customer-focused and demands for transformation and make planning of overall appearance of
outlets. Thirdly, we will strengthen propaganda, establish bank historical museum, play a role in advance and emotional appeal
and pay attention to reputation risk monitor.
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2011 年度报告
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XII. Routine work of the Board of Directors
( i ) Meetings of the Board and Resolutions
During the reporting period, the Company held 10 sessions of the Board in total, including 4 regular sessions and 6 interim
sessions, and totally 75 proposals were discussed. Of which, 49 major resolution such as annual branches development, the
12th Five-year Development Plan, Capital Supplement Plan, Introduction of Strategic Investors and Application for Re-loan from
People's Bank of China were decided at the sessions, giving full play to its central role of decision-making.
1. On 21 Jan. 2011, the 57th session of the 3rd Board of Directors was held at Wenzhou Shangri-La, 17 directors should be
present at the meeting, and actually 10 of them attended the meeting. 13 main issues were examined and approved at this
meeting, i.e., the Proposal of Further Improvement of Employees' Income, the Proposal of Programming on Evaluation of
Senior Management's Accountability of Operating Target for 2011, the Proposal of Planning on Self-appraisal Result, Realization
Plan and its Implementation for 2011, the Proposal on Branches Development Plan for 2011, the Report on Fulfillment of
Business Plan in 2010 and Arrangement on Business Plan for 2011 ( Draft ) , the Report on Implementation on Plan of the
Financial Revenues and Expenditures for 2010 and Financial Budget for 2011 ( Draft ) , the Report on Profit Distribution Plan
for 2010 ( Draft ) , the Proposal of Issuance of Subordinate Bonds and Issuing Plan, the Proposal of Usage of Raised Proceeds
from Issuing Subordinate Bonds and Analysis on Feasibility, the Proposal of Issuance of Subordinate Bonds and Special Grant
within Limits, the Report on Related Transaction between the Bank and its Related Parties in 2010 ( Draft ) , the Programming
on Development of Bank of Wenzhou Co., Ltd. for Year 2011-2015 ( Draft ) , the Report on Carrying out Rectification and
Fulfillment of Regulatory Opinion for 2010 ( Draft ) . The meeting also deliberate on the Report on Risk Management Appraisal
for 2010, the Report on the Management's Business Goal Fulfillment in 2010, the Report on Case Prevention and Control and
Implementation Rectification, the Report on Fulfillment of Resolutions of the Board of Directors for 2010, the Thematic Report
on President Working Meeting for 2011 ( Exposure Draft ) . Performance of directors and senior management was appraised
and discussed at the meeting.
2. On 6 Apr. 2011, the 58th session of the 3rd Board of Directors was held by the Company by means of telecommunication,
17 directors should be present at the meeting, and actually all of them attended the meeting. 5 issues were examined and
approved at this meeting, i.e., the Working Report of the Board of Directors ( Draft ) , Work Plan of the Board of Directors for
2011 ( Draft ) , the Annual Report 2010, the Agenda of the Shareholders' General Meeting 2010 ( Draft ) and the Proposal of
Amending Rules of Procedures of Shareholders' General Meeting; the Circular of Fake Real Estate Mortgage Loan in Tangxia
Subbranch of Rui'an Branch was reviewed.
3. On 22 Apr. 2011, the 59th session of the 3rd Board of Directors was held at Wyndham Grand Plaza Royale, Hangzhou, 17
directors should be present at the meeting, and actually 15 of them attended the meeting. 5 issues were examined and
approved at this meeting, i.e., the Report on Final Profit Distribution 2009 ( Draft ) , the Proposal of Reelection of the Board
of Directors, the Proposal of Adjustment on Remuneration of Relevant Independent Directors and External Supervisors,
Programming of Capital Increase of Bank of Wenzhou Co., Ltd for Year 2011 to 2015 ( Draft ) and Programming of Information
Technology for Year 2011 to 2015. The followings were reviewed at the meeting, i.e., the Report on Business Operation in the
First Quarter of 2011, the Report on Fulfillment of Financial Plan of the First Quarter of 2011 and the Report on Appraisal of Risk
Management of the First Quarter of 2011.
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4. On 29 Apr. 2011, the 1st session of the 4th Board of Directors was held at Wenzhou Onehome Howard Hotel, 17 directors
should be present at the meeting, and actually 13 of them attended the meeting. 4 issues were examined and approved at
this meeting, i.e., the Proposal of Nomination of Chairman of Vice Chairman of the Board, the Proposal of Nomination of Vice
President and Assistant to President, the Proposal of Nomination of Secretary of the Board of Directors and the Proposal of
Nomination of Nomination of the President.
5. On 22 Jun. 2011, the 2nd session of the 4th Board of Directors was held by the Company by means of telecommunication,
17 directors should be present at the meeting, and actually all of them attended the meeting. 4 issues were examined and
approved at this meeting, i.e., the Proposal of Formulation of Rules of Direct Authorization, the Proposal of Amendment
of Administrative Measured for Information Disclosure, the Proposal of Transfer of Equity of Wenzhou Jiajing Real Estate
Development Co., Ltd. and the Proposal of Investment in Data Center, Cash Center and Relevant Projects and Adjustment of
Budgetary Estimate of Longwan Building. At the meeting, the Supervisory Opinion Letter of 2010 was reviewed and studied
the Spirit of the Regulatory Conference of Zhejiang Small and Medium Commercial Banks for 2011.
6. On 12 Jul. 2011, the 3rd session of the 4th Board of Directors was held by the Company by means of telecommunication, 17
directors should be present at the meeting, and actually all of them attended the meeting. The Report on Implementation Plan
of Rectification to Regulatory Opinion and Relevant Situations for 2010 were examined and approved at this meeting.
7. On 27 Jul. 2011, the 4th session of the 4th Board of Directors was held by the Company at Wenzhou Shangri-La, 17 directors
should be present at the meeting, and actually 15 of them attended the meeting. The Proposal of Offering Inter-bank Loan
of RMB400 Million for China Huarong Asset Management Corporation were examined and approved at this meeting, and the
followings were reviewed at the meeting, i.e., the Report on Plan of Open Selection and Election of Vice President Nationwide,
the Report on Implementation of Financial Revenue and Expenditure Plan for the First Quarter of 2011, the Report on Risk
Management Appraisal for the First Quarter of 2011, the Internal Control Appraisal Report 2011 and the Report on Business
Operation for the First Half of 2011.
8. On 29 Sep. 2011, the 5th session of the 4th Board of Directors was held at Wenzhou Onehome Howard Hotel, 17 directors
should be present at the meeting, and actually 12 of them attended the meeting. 5 issues were examined and approved at
this meeting, i.e., the Proposal of Introduction of Strategic Investors Scheme, the Proposal of Plan for Realization of Provision
and Loan Ratio, the Proposal of Recommended List of the Special Committees of the 4th Board of Directors, the Proposal of
Change in Purchase of Office for Subbranch in Development District and the Proposal of Amendment of Performance Appraisal
of Directors; heard the Report of Inspection and Investigation of Directors and Supervisors and learned Guiding Opinion on New
Regulatory Standard for Banking Industry in China.
9. On 25 Oct. 2011, the 6th session of the 4th Board of Directors was held at Wenzhou Onehome Howard Hotel, 17 directors
should be present at the meeting, and actually 14 of them attended the meeting. The Proposal of Engagement of External Audit
Firm of 2011 and the Proposal on Re-loan to People's Bank of China with the Bank's self-owned Fixed Assets as Mortgage
were examined and approved at this meeting. The followings were reviewed at the meeting, i.e., the Report on Implementation
of Business Operation for the Third Quarter of 2011, the Report on Implementation of Financial Revenue and Expenditure Plan
for the Third Quarter of 2011 and the Risk Management Appraisal Report for the Third Quarter of 2011.
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10. On 25 Dec. 2011, the 7th session of the 4th Board of Directors was held by the Company at Wenzhou Shangri-La, 17
directors should be present at the meeting, and actually 16 of them attended the meeting. 9 issues were examined and
approved at this meeting, i.e., the Proposal of Adjustment of Certain Business Indicators and Financial Revenue and Expenditure
Plan for 2011, the Proposal of Improvement of Performance Appraisal Mechanism in Shanghai Branch, the Report on Business
Operation Plan of 2012 ( Draft ) , the Report on Financial Revenue and Expenditure Plan for 2012 ( Draft ) , the Trial Measures for
Senior Management Remuneration Appraisal of Bank of Wenzhou Co., Ltd., the Proposal of Confirmation of the Total Wages for
2012, the Proposal of Nomination and Appointment of Mr. Li Weiming as Vice President, the Proposal of Senior Management
Accountability Appraisal Scheme for Business Target for 2012 and the Proposal of Operation Management Authorization
Suggestion of 2012; the Report the Removal of the expired Administrative Punishment on the Two Directors was reviewed;
duty performance of directors was appraised and discussed at the meeting.
( ii ) Implementation of resolutions of the Shareholders' General Meeting by the Board
1. In accordance with the Resolution to the Business Plan Fulfillment in 2010 and Business Plan for 2011 adopted at the annual
shareholders' general meeting 2010, the total assets as of year 2011 was RMB65.652 billion increasing RMB14.281 billion,
or 27.80%, than that at the beginning of the year; the total liabilities was RMB6.1207 billion, increasing RMB13.813 billion, or
29.15%, than that at the beginning of the year; as well as the total profit of RMB 866 million.
2. In accordance with the Resolution to the Financial Final Report for 2010 and Financial Budget Report for 2011 adopted at the
annual shareholders' general meeting 2010, the Company achieved net profit of RMB645 million in 2011, the profit/capital ratio
was 15.31%, as well as the asset profit ratio was 1.10%.
3. In accordance with the Resolution of the Final Accounting of Profit Distribution for 2009 adopted at the annual shareholders'
general meeting 2010, the Company recognized the profit pre-distribution for 2009 as final accounting of profit distribution for
2009. Net profit of RMB 444.65 million for 2009 has been distribution.
4. In accordance with the Resolution of the Profit Pre-distribution Plan for 2010 adopted at the annual shareholders' general
meeting 2010, the profit after tax available for distribution for 2010 is RMB494.73 million, including statutory surplus reserve of
RMB 49.47 million, general reserve of RMB 62.88 million, dividend for shareholders amounting to RMB 181.08 million, and the
rest RMB 201.30 million was used for withdrawing discretionary surplus reserve.
5. In accordance with the Resolution of the Working Report of the Board and the Working Report of the Supervisory Board
adopted at the annual shareholders' general meeting 2010, the Board of Directors and the Supervisory Board seriously fulfilled
their duties stipulated in the Articles of Association of the Company, and effectively played their role of function, which actively
led the steady development of the Company.
6. In accordance with the Resolution on Development Plan for 2011 to 2015 of Bank of Wenzhou Co., Ltd. adopted at the
annual shareholders' general meeting 2010, the Company comprehensively put forward “the 12th Five-year Plan” strategy.
As at the end of 2011, assets of the Company totaled RMB65.652 billion, balance of loans were RMB36.453 billion ( including
discount ) and balance of deposits were RMB52.761, with an increase of 27.80%, 20.81% and 20.44% compared with that of
the year-begin, respectively, and the profit totaled RMB866 million.
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7. In accordance with the Resolution on Development Plan for 2011 to 2015 of Bank of Wenzhou Co., Ltd. adopted at the annual
shareholders' general meeting 2010, the Company enhanced capital increase and introduction, formulated Implementation
Scheme of Strategic Investors Introduction and submitted to Wenzhou Municipal People's Government and CBRC Zhejiang
Bureau, subject to the approval.
8. In accordance with the Resolution on Bank of Wenzhou Co., Ltd. Offering Junior Bond and Special Authorization within Limit,
the Proposal on Bank of Wenzhou Co., Ltd. Intending to Offer Junior Bond and Offering Plan and the Proposal on Usage of
Fund Raised by Bank of Wenzhou Co., Ltd. by Offering Junior Bond and Feasibility Analysis adopted at the annual shareholders'
general meeting 2010, the issue had been suspended due to the limit of market access.
9. In accordance with the Resolution on Suspension of building Headquarters Building of Bank of Wenzhou Co., Ltd. adopted at
the annual shareholders' general meeting 2010, the Company suspended the construction.
10. In accordance with the Resolution on Amending Rules of Procedures of the Shareholder's General Meeting adopted at the
annual shareholders' general meeting 2010, the Company has been executed.
11. In accordance with the Resolution on Adjusting Remuneration of Relevant Independent Directors and External Supervisors
adopted at the annual shareholders' general meeting 2010, the annual remuneration of directors and supervisors of the
Company has been paid according to new standard from May 2011.
12. In accordance with the Resolution on Reelction of the Board of Directors adopted at the annual shareholders' general
meeting 2010, Xing Zengfu, Wu Hua, Huang Chenyuan, Yang Lin, Zhang Yili, Zhou Qun, Yao Xianguo, Liang Lifang, Lin Jiangfan,
Gu Chang, Chen Shengquan, Zheng Nianhong, Zhou Dingwen, Li Yuping, Shao Fenghua, Ying Shude and Fang Xuanping were
elected as directors of the 4th BOD.
13. In accordance with the Resolution on Relection of the Supervisory Board adopted at the annual shareholders' general
meeting 2010, Chen Xiwen, Zhao Yiyuan, Yang Jinguan, Ma Kun, Lu Leisheng and Zheng Xiangbo were elected as supervisors
of the 4th Supervisory Board.
( iii ) Duty performance of special committees under the Board
There are six special committees under the Board, namely Risk Management Committee, Related Transaction Control
Committee, Nomination and Remuneration Committee, Strategic Development Committee, Audit Committee and Information
Technology Committee. In Sep, 2011, the Board elected members of the special committees of the 4th Session of the Board
after its successful reelection and in accordance with the practice experience and the professional background of new directors.
During the reporting period, the special committees under the Board strictly complied with working rules of committees,
effectively implemented the routine meeting system, actively standardized the operation, faithfully performance their duties,
directed works in the respect of risk management, related transaction, compensation reforming, strategic development,
inspection and supervision and informatization level, submitted important matters to the Board for discussion and established
sound corporate governance transmission system to effectively improve work efficiency and decision-making ability.
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2011 年度报告
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1. Risk Management Committee
The Risk Management Committee of the Board was comprised of Yang Lin ( Chairman ) , Gu Chang, Huang Chenyuan and
Zheng Nianhong.
During the reporting period, the Risk Management Committee of the Board held 5 meetings in total and examined and
approved 7 proposals such as the Risk Management Appraisal Report of Bank of Wenzhou Co., Ltd for 2010, Suggestion on the
Work Plan of the Risk Management Committee of the Board for 2011, and Suggestion on Business Management Authorization
for 2012, among them, 5 proposals were submitted to the Board for examination and approval, which actively play its role of
risk management and control.
2. Related Transaction Control Committee
The Related Transaction Control Committee of the Board was comprised of Yang Lin ( Chairman ) , Zhang Yili, Lin Jiangfan and
Shao Fenghua.
During the reporting period, the Nomination and Remuneration Committee of the Board held 4 meetings in total and examined
and approved 9 proposals including the Report on Related Parties Transaction between the Bank and its Related Parties in 2010,
the Special Audit Report of Related Parties Transaction between Insider and Shareholders and the Proposal of Offering Interbank Loan of RMB400 Million for China Huarong Asset Management Corporation, two of which were submitted to the Board
for examination and approval. It regulated the day-to-day management for related transaction, and examined significant related
transaction to ensure the Company's related transaction equal, open and fair.
3. Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board was comprised of Yao Xianguo ( Chairman ) , Zhou Qun, Ying
Shude and Zheng Nianhong.
During the reporting period, the Nomination and Remuneration Committee of the Board held 6 meetings in total and examined
and approved 16 proposals including the Proposal of Senior Management Accountability Appraisal Scheme for Business Target
for 2011, the Proposal of Further Improvement of Employees' Income, the Report on Plan of Open Selection and Election
of Vice President Nationwide and the Proposal of Reelction of the Board of Directors, and 14 of them were submitted to the
Board for examination and approval, which effectively played a role of remuneration management and incentive and restrictive
management.
059
4. Strategic Development Committee
The Strategic Development Committee of the Board was comprised of Zhang Yili ( Chairman ) , Wu Hua, Li Yuping and Zhou
Dingwen.
During the reporting period, the Strategic Development Committee of the Board held 3 meetings in total and examined and
approved 6 proposals including the Proposal of Branch Development Plan of Bank of Wenzhou Co., Ltd. for 2011, Scheme on
Capital Supplement of Wenzhou Co., Ltd. for 2011 to 2015 and the Proposal of Introduction of Strategic Investors Scheme and
4 of them were submitted to the Board for examination and approval, which effectively played the role of a strategic leader.
5. Audit Committee
The Audit Committee of the Board was comprised of Zhou Qun ( Chairman ) , Lin Jiangfan, Zhou Dingwen and Fang Xuanping.
During the reporting period, the Audit Committee of the Board held 4 meetings in total and examined and approved 20
proposals including the Operating Risk Management Appraisal Report of Bank of Wenzhou Co., Ltd for 2010, the Report on
Special Audit of Market Risk, the Report on Implementation Plan of Rectification to Regulatory Opinion and the Internal Control
Appraisal of Bank of Wenzhou Co., Ltd for 2010 and 3 of them were submitted to the Board for examination and approval,
which tried to improve the internal control management capacity.
6. Information Technology Committee
The Information Technology Committee of the Board was comprised of Liang Lifang ( Chairman ) , Huang Chenyuan, Fang
Xuanping and Chen Shengquan.
During the reporting period, the Information Technology Committee of the Board held 4 meetings and examined and approved
17 proposals including the Report of Technology Operation and Development of Bank of Wenzhou Co., Ltd for 2010, Target
realization Chart of Information Technology Risk Management and the Implementation Plan for Target realization for 2011 and
the “12th Five-year” Information Technology Development Plan of Bank of Wen zhou Co., Ltd., 2 of them were submitted to
the Board for examination and approval, which effectively played out the important role of IT in all fields.
( iv ) Study and training of the Board
On 26 Oct. 2011, the Company held the training meeting 2011 for the Board of Directors and the Supervisory Board in
multifucntional hall of head office, invited Section Chief of CBRC Zhejiang Buearu to give a special lecture on topic about
strengthening corporate governance of multipal commercial banks, rose requirement on corporate governance and duty
performance of directors and supervisors in accordance with domestic and oversea economic situation and the regulatory policy
groundback, strengthened performance conscious and improve duty performance level.
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2011 年度报告
ANNUAL REPORT
XIII. Preliminary Plan for Profit Distribution
The Report on Preliminary Plan for Profit Distribution for Year 2011 was discussed and passed at the Annual Shareholders'
General Meeting 2011 on 27 Apr. 2012. The resolutions are as follows: the meeting resolved that in distributing profit of 2011,
appropriated 10% of the net profit as of year 2011 audited by Shulun Pan CPAs Firm as statutory surplus reserve, 12% of the
share capital as dividend to shareholders, 1% of the increased amount of risky assets as provision for general risk, the remaining
profit available for distribution was used to appropriate for discretionary surplus reserve.
According to the above-mentioned resolutions, the Company intends to distribute the net profit of RMB644.69 million as of
year 2011 audited by Shulun Pan CPAs Firm as below:
1. Appropriating 10% of the net profit as of year 2011, or RMB64.47 million, as statutory surplus reserve;
2. Measures of Administrative for the Withdrawal of Reserves for Non-performing Debts of Financial Enterprises ( CJ [2005]
No. 49 ) promulgated by the Ministry of Finance, appropriating 1% of the increased amount of risky assets, or RMB134.02
million, as provision for general risk;
3. Distributing dividend of RMB 1.2 yuan ( tax included ) in cash for every 10 shares based on 1,508,991,197 shares for year
2011, totaling cash dividend of RMB181.08 million;
4. Appropriating discretionary surplus reserve of RMB201.30 million.
061
SECTION X
REPORT OF THE SUPERVISORY BOARD
I. Meetings of the Supervisory Board
( i ) Meetings of the Supervisory Board and Contents
During the reporting period, the Supervisory Board of the Company held 10 meetings, including 4 regular meetings and 6
interim meetings, in which totally 32 proposals was examined. At the meeting, the Supervisory Board made 12 resolutions,
including annual working plan, opinion on quarterly regulatory reporting, reelction of the supervisors and so on, appraised annual
duty performance of supervisors, signed Due Diligence Commitment and reported voting of proposal at the Board Meeting,
which gave full play to its central role of supervision.
1. On 21 Jan. 2011, the 37th session of the 3rd Supervisory Board was held at Lucheng Hall of Wenzhou Shangri-La, 9
supervisors should be present at the meeting, and actually all of them attended the meeting. The meeting heard and deliberated
the following proposals, i.e., the Report on Fulfillment of Business Plan in 2010 and Arrangement on Business Plan for 2011 (
Draft ) , the Report on Implementation on Plan of the Financial Revenues and Expenditures for 2010 and Financial Budget for
2011 ( Draft ) , the Report on Profit Distribution Plan for 2010 ( Draft ) , the Report on Related Transaction between the Bank
and its Related Parties in 2010 ( Draft ) , the Report on Risk Management Appraisal for 2010, the Report on the Management's
Business Goal Fulfillment in 2010, the Report on Recovery of Loan from Xuzhou Zhanbang Industrial Investment Co., Ltd. of
2010 and Plan for 2011, the Report on Carrying out Rectification to Regulatory Opinion Letter, the Report on Case Prevention
and Control and Implementation of Rectification and the Report on Carrying out Rectification to “Management Suggestions”
Related to External Audit, Meanwhile, the Supervisory Board launched assessment campaign to the duty performance of the
supervisors in 2010.
2. On 25 Feb. 2011, the 38th session of the 3rd Supervisory Board was held by the Company by means of telecommunication, 9
supervisors should be voted at the meeting, and actually all of them voted at the meeting, the Working Plan of the Supervisory
Board for 2011 ( Draft ) and the Opinion on “Supervision Reporting” for the 4th Quarter of 2010 ( Draft ) were passed at this
meeting.
3. On 23 Apr. 2011, the 39th session of the 3rd Supervisory Board was held at No. 2 Conference Room on 3/F of Wyndham
Grand Plaza Royale, Hangzhou. 9 supervisors should be present at the meeting, and actually all of them attended the meeting.
The meeting heard and deliberated the Report of External Audit of Shulun Pan Certified Public Accountants Co., Ltd. for 2010,
the Report on Final Profit Distribution for 2009 ( Draft ) , the Report on Risk Management Appraisal for the 1st Quarter of
2011. Meanwhile, the following proposals were examined and approved at the meeting, i.e., the Proposal of Reelction of the
Supervisory Board, the Working Report of the Supervisory Board ( Draft ) and the Report on Duties Performance of Directors,
Supervisors and Senior Management Staff. Meanwhile, Case of Tangxia Branch and Related Situation of the 59th Session of
the 3rd Board of Directors were circulated at the meeting.
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2011 年度报告
ANNUAL REPORT
4. On 29 Apr. 2011, the 1st Session of the 4th Supervisory Board was held at Conference Room No. 2 of Wenzhou Onehome
Howard Hotel, 8 supervisors should be present at the meeting, and actually all of them attended the meeting. The Proposal of
Nominating Chairman of the Supervisory Board was examined and approved at the meeting.
5. On 27 May 2011, the 2nd Session of the 4th Supervisory Board was held by the Company by means of telecommunication. 8
supervisors should be voted at the meeting, and actually all of them voted at the meeting, in which the Opinion on “Supervision
Reporting” for the 1st Quarter of 2011 was examined and approved.
6. On 27 Jul. 2011, the 3rd Session of the 4th Supervisory Board was held at Lucheng Hall of Wenzhou Shangri-La, 8 supervisors
should be present at the meeting, and actually all of them attended the meeting. The meeting heard and deliberated the
following proposals, i.e., the Report on Business Operation for the First Half Year 2011, the Report on Implementation of
Financial Revenue and Expenditure for the First Half Year 2011, the Working Report on Recovery of Loan from Xuzhou
Zhanbang Industrial Investment Co., Ltd, Risk Management Appraisal Report for the 2nd Quarter of 2011 and the Internal Control
Appraisal Report 2010. The Proposal of Suggested List of Members of All Special Committees under the Supervisory Board
was examined and approved. Meanwhile, Examination and Approval of Proposals at the 4th Session of the 4th Board of Directors
was circulated and Due Diligence Commitment was sined at the meeting.
7. On 16 Aug. 2011, the 4th Session of the 4th Supervisory Board was held by the Company by means of telecommunication.
8 supervisors should be voted at the meeting, and actually all of them voted at the meeting, in which approved the Opinion on
“Supervision Reporting” for first half of 2011 by voting.
8. On 21 Oct. 2011, the 5th Session of the 4th Supervisory Board was held by the Company by means of telecommunication. 8
supervisors should be voted at the meeting, and actually all of them voted at the meeting, in which approved the Proposal on
Recommending Shulun Pan Certificate Public Accountants as External Audit Firm for 2011.
9. On 26 Oct. 2011, the 6th Session of the 4th Supervisory Board was held at Conference Room No. 2 of Wenzhou Onehome
Howard Hotel, 8 supervisors should be present at the meeting, and actually all of them attended the meeting. The meeting
heard and deliberated the following proposals, i.e., Risk Management Appraisal Report for the 3rd Quarter of 2011, the Report
on Effect on the Company due from Current Usury Crisis and Events Relating to the Supervisory Board Conducting Regulatory
on Remuneration Management. The Proposal of Working Rules for the Audit Committee under the Supervisory Board of
Bank of Wenzhou Co., Ltd. was examined and approved. Meanwhile, the following circulated the following, i.e., investigation
and inspection result of directors and supervisors and the Scheme of Introduction of Strategic Investors were examined and
approved at the 5th and 6th Session of the 4th Board of Directors.
10. On 22 Nov. 2011, the 7th Session of the 4th Supervisory Board was held by the Company by means of telecommunication.
8 supervisors should be voted at the meeting, and actually all of them voted at the meeting, in which approved the Opinion on
“Supervision Reporting” for the 3rd Quarter of 2011 by voting.
063
( ii ) Duty performance of special committees under the Supervisory Board There are 2 special committed under the Supervisory
Board, namely the Nomination Committee and the Audit Committee. In Jul. 2011, the Supervisory Board elected members of the
special committees of the 4th Supervisory Board upon its successful reelection and in accordance with the practice experience
and the professional background of new supervisors.
During the reporting period, the special committees under the Supervisory Board formulated the annual working plan
respectively, effectively implemented the routine meeting system, ceaselessly perfected organizational structure of the
Supervisory Board and various tasks on annual external audit, submitted important matters to the Supervisory Board for
discussion and established effective corporate governance transmission system.
1. The Nomination Committee
The Nomination Committee of the Supervisory Board of the Company was comprised of Yang Jinguan ( Chairman ) , Lu
Leisheng and Zhang Renhui.
During the reporting period, the Nomination Committee of the Supervisory Board held 2 meetings in total and discussed 2
proposals. The Committee nominated the candidate for external supervisors and shareholder-representative supervisors of the
Supervisory Board, so as to ensure successful reelection of the Supervisory Board.
2. The Audit Committee
The Audit Committee of the Supervisory Board of the Company was comprised of Zhao Yiyuan ( Chairman ) , Ma Kun, Zheng
Xiangbo and Zhou Shuang.
During the reporting period, the Audit Committee of the Supervisory Board held 2 meetings in total and discussed 5 proposals,
carried out the annual external audit work, executed communication, feedback and identification relating to the audit and
made economic responsibility audit to one vice president during his office term, so as to fully play the role of advancement to
operational management and risk prevention and control.
II. Independent Opinion of the Supervisory Board on Related Matters
( i ) Operation according to laws
During the reporting period, the Company ran its operating activities in line with the Company Law of the People's Republic
of China, the Commercial Banking Law of the People's Republic of China and the Articles of Association of the Company. The
Supervisory Board failed to find any activities violation of laws, regulations and the Articles of Association of the Company or any
behaviors that may impair the interest of the Company and its shareholders when the directors or senior management team
implemented their duties.
( ii ) Authenticity of Financial Report
The annual financial report of the Company has been audited by Shulun Pan Certified Public Accountants Co., Ltd., which was
prepared under Accounting Standards for Business Enterprises, in all material respects, and reflected fairly the financial status of
the Company as of 31 December 2011, and of operation result and cash flows for the year then ended.
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2011 年度报告
ANNUAL REPORT
( iii ) Use of fund raised
During the reporting period, the Company did not use the fund raised.
( iv ) Acquisition and sales of Assets of the Company
During the reporting period, the Company has no any major acquisition or sales of assets.
( v ) Related Parties Transaction
During the reporting period, the related parties transaction of the Company mainly involved with various on-balance-sheet and
off-balance-sheet credit business. Procedures relating to significant related transactions were in line with requirements the
regulatory authority and rules of the Company, interest rate was priced according to market price of the same kind of object,
and all indicators were in lines with requirements of regulator. Common transaction with related parties was assets transfer
on individual consumption, which was operated pursuant to the rules of the regulatory authority and the credit rules of the
Company. No any behaviors had priority over other borrowers. The risk of transactions with related parties was controllable.
The transaction behavior was reasonable and fair, meeting the requirements on credit approving conditions and loan issuing
management.
( vi ) Internal Control
During the reporting period, the Company formulated internal control system covering all businesses, which is basically
complied with the requirements of the Commercial Bank. By effective implementation, the system played an important role
in reinforcing operation management, controlling operating risk and preventing fraud, which can ensure the Bank's properties
safe and integral, protect the rights and interests of all stakeholder related to the Bank, and improve the credit and market
competitive strength of the Company. Shulun Pan CPAs Co., Ltd made the assurance to the self-appraisal report on internal
control in accordance with the regulations of Standards on Other Assurance Engagements for CPAs of China No. 3101 Assurance Engagements other than Audits of Reviews of Historical Financial Information. Shulun Pan CPAs Co., Ltd believed
that the criteria set in the Basic Standard for Enterprise Internal Control released jointly by Ministry of Finance and other four
ministries and commissions stayed the same as effective internal control related to the financial statement in all material
aspects as of 31 Dec. 2011.
( vii ) Implementation of Resolution of Shareholders' General Meeting
The Supervisory Board of the Company carried out supervision to implementation of 16 resolutions adopted by the
Shareholders' General Meeting, of which, there were 13 resolutions have already been earnestly carried out. The following
three resolutions such as the Proposal on Bank of Wenzhou Co., Ltd. Offering Junior Bond and Special Authorization within
Limit, the Proposal on Bank of Wenzhou Co., Ltd. Intending to Offer Junior Bond and Offering Plan and the Proposal on Usage
of Fund Raised by Bank of Wenzhou Co., Ltd. by Offering Junior Bond and Feasibility Analysis had been suspended due to the
limitation of market access. The Supervisory Board had no objection against all reports and proposals submitted by the Board to
the Shareholders' General Meeting during the reporting period.
065
SECTION XI
SIGNIFICANT EVENTS
I. Subordinated Bond Issued by the Company on the Interbank Bond Market
In accordance with the Decisions about the Approval of Administrative License of People's Bank of China ( YSCZY Zi [2007] No.
24 ) and the Official Replay of Subordinated Bond Issuance of Wenzhou City Commercial Bank of China Banking Regulatory
Commission ( YJF [2007] No. 278 ) , the Company issued subordinated fixed bonds with annual compounding of interest in
September 2007, raising RMB 550 million yuan, with the term of 10 years ( at the end of the fifth year, the issuer has the call
option of the bonds ) . The issuing price is fixed annual interest rates of 5.5%.
II. Important lawsuits and arbitration
As at 31 Dec. 2011, the Company has 8 cases involving object of action being above RMB 10 million ( including RMB 10 million ) .
The total principal of the objects was RMB289,400,000. The details are as follows:
Unit: RMB'000 Yuan
Plaintiff Defendant Zhuangyuan Sub-Branch
Xuzhou Zhanbang Industrial Investment Co., Ltd.
Rui'an Sub-Branch
Hongray Group Co., Ltd.
Principal of Summary
the lawsuit
132,800
Financing loan contract dispute
21,600
Zhuangyuan Sub-Branch
Zhejiang Dajingwei Industry Co., Ltd.
50,000
Lizhong Sub-Branch
Wenzhou Starview Group Co., Ltd.
30,900
Longwan Sub-Branch
Pan Deming
13,000
Huang Long Sub-Branch
Wenzhou Xinwei Trade Co., Ltd.
20,100
Ningbo Branch
Ninghai Precision Machinery Co., Ltd.
10,000
Ningbo Branch
Ningbo Ninghui Package Co., Ltd.
11,000
III. Acquisition and Sale of Assets, Takeover and Merger
During the reporting period, the Company did not acquire or sell any asset or take over or merger with any company.
IV. Transaction with Related Parties
( i ) Major transaction with related parties
Major transaction with related parties disclosed by the Company refer to a single transaction with a related party of the
Company and the amount of the transaction is over 1% of the Company's equity, or after the Company finishes a transaction
with a related party, the balance of the transaction with the related party accounts for over 5% of the Company's equity.
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2011 年度报告
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As at the end of the reporting period, the equity of the Company was RMB4.902 billion. The Company did not have any other
major transactions with related parties, except with the two inner-bank loans with China Huarong Asset Management Co., Ltd.
of RMB125,610,000.
( ii ) Ordinary transactions with related parties
Ordinary transaction with related parties disclosed by the Company refer to a single transaction with a related party of the
Company and the amount of the transaction is below 1% of the Company's equity, or after the Company finishes a transaction
with a related party, the balance of the transaction with the related party accounts for below 5% of the Company's equity.
As at the end of the reporting period, the Company had ordinary transaction with 428 related parties ( all are insiders and their
close relatives ) with a loan balance of RMB242,532,600, in which, classifying by guarantee method, mortgaged loans amounted
to RMB360,000, accounting for 0.15% of the total transaction amounts, pledged loans amounted to RMB242,172,600,
accounting for 99.85% of the total transaction amounts and no guarantee loans. The mortgage procedures were complied with
laws and regulations, without any preferential behavior to that of other borrowers.
( iii ) All Related Level
As at the end of the reporting period, balance of credit line to the related parties were RMB368,142,600, accounting for 7.51%
of net capital as at the end of reporting period, or 1.13 percent than that of last year, complying with the requirements of the
regulatory authority. Related parties and amounts with related transaction increased in the period, which was mainly because
the ordinary related transactions increased due to the related parties should include the ordinary standards and their close
relatives pursuant to requirements of external auditor and regulator, the Company added“Related with employee of the
Bank”.
V. Major Contracts and Implementation of Major Contracts
( i ) Major trusteeship, contracting and lease
During the reporting period, the Company never had any major trusteeship, contracting and lease.
( ii ) Major guarantees
During the reporting period, the Company did not have any major guarantees that need to disclose except for the financial
guarantee business within the business scope approved by the China Banking Regulatory Commission.
( iii ) Implementation of other major contracts
During the reporting period, the implementation of the Company's contracts was in good order.
067
VI. Engaging and Dismissing Certified Public Accountants
During the reporting period, the Company continued to appoint Shulun Pan Certified Public Accountants Co., Ltd. as external
auditor for 2011.
VII. Penalties on the Company, Board of Directors and Directors
During the reporting period, due to behaviors in violation of rules, some branches or sub-branches of the Company were
imposed fines of RMB300,000 by China Banking Regulatory Commission Wenzhou Regulatory Sub-Bureau, fines of
RMB500,000 by Wenzhou Audit Bureau, fines of RMB25.8 by the People's Bank of China Wenzhou Zhongxin Sub-Branch,
fines of RMB10,000 by the People's Bank of China Wenzhou Zhongxin Sub-Branch Yueqing Sub-Branch and fines of
RMB200,000 by China Banking Regulatory Commission Quzhou Regulatory Sub-Bureau.
VIII. Writing off Bad Loans during the Reporting Period
During the reporting period, the Company actively wrote off non-performing loans amounting to RMB42,634,200, including
RMB23,270,000 from the previous years.
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2011 年度报告
ANNUAL REPORT
SECTION XII
FINANCIAL REPORT
The Company's financial report for 2011 has been audited by Shulun Pan Certified Public Accountants Co., Ltd. and signed by
CPAs Dong Bingwei and Qian Yan. Shulun Pan Certified Public Accountants Co., Ltd. produced a standard auditors' report with
unqualified opinion numbered XKSB Zi [2012] No. 130263.
I. Auditors' Report ( see the appendix )
II. Change in main accounting policies, accounting estimates and correction of accounting errors
of the Company and influence
( i ) Fiscal year: the fiscal year of the Company is from January 1 to December 31.
( ii ) Currency for accounting: the Company used Renminbi as the currency for accounting.
( iii ) In 2009, as for commission business, the authorizer provided funds, while the Company only acted for such matters as
issuing, monitoring, using and helping to collect the loan on behalf of the authorizer according to prospective borrower, purpose
of the loan, term of a loan and interest rate determined by the authorizer. All risk, gains and losses and responsibilities of
commission business were on the authorizer's side, while the Company only charged a service fee, which was reflected in onbalance-sheet originally, but now was calculated in off-balance-sheet. Such accounting policy was changed by employing
prospective approach.
No change in accounting estimates. No correction of major accounting errors and related influence.
III. Business Merger and Consolidated Financial Statements
During the reporting period, the scope of the consolidation of the financial statement of the Company remained unchanged.
069
SECTION XIII
CONTENTS OF REFERENCES
I. Accounting statements signed by and annexed the seals of the legal representative, the
vice president in charge of finance and the general manager of the Planning and Finance
Department.
II. The original of the Auditors' Report annexed the seals of Shulun Pan CPAs Co., Ltd. and signed
by and annexed the seals of the CPAs.
III. The text of the Annual Report signed by the Chairman of the Company.
IV. The Articles of Association of Bank of Wenzhou Co., Ltd..
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2011 年度报告
ANNUAL REPORT
SECTION XIV
APPENDICES
I. Auditors' Report 2011 of the Company
Report of Auditors
XKSB Zi ( 2012 ) No. 130263
To the shareholders of Bank of Wenzhou Co., Ltd.
We have audited the accompanying financial statements of Bank of Wenzhou Co., Ltd. ( “the Bank” ) , which the balance
sheet as at December 31 2011, the income statement, the cash flow statement and the statement of change in equity for the
year then ended and notes to these financial statements
I. Responsibilities of the management for the financial statements
The management of the Bank is responsible for the preparation and fair presentation of these financial statements. Such
responsibility includes:
( 1 ) Preparing these financial statements in accordance with Accounting Standards for Business Enterprised to fairly reflect the
financial position of the Company;
( 2 ) designing, implementing and maintaining necessary internal control, so that financial statements are free from material
misstatement, whether due to fraud or error.
II. Auditor's responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with the China Standards on Auditing. Those standards require that we comply with China Code of Ethics for
Certified Public Accountants and plan and perform the audit to obtain reasonable assurance whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the CPA considers internal control
relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal
071
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Opinion
In our opinion, the accompanying financial statements of Bank of Wenzhou Co., Ltd. present fairly, in all material respects, the
financial status of the Company as of 31 December 2011, and of their operation results and their cash flows for the year then
ended in accordance with the Accounting Standards for Business Enterprises
Shu Lun Pan Certified Public Accountants Co., Ltd. Shanghai, China
072
Tong Bingwei, China CPA
Qian Yan, China CPA
23 April 2012
2011 年度报告
ANNUAL REPORT
Balance Sheets
Prepared by Bank of Wenzhou Co., Ltd
Assets
Note IV
Cash and deposits in the central bank
Deposits in other banks
Interests receivable Loans issued and payments on others behalf
Held-to-maturity investment Investment in accounts receivable
Investment real estate
Long-term equity investment
Fixed assets Intangible assets
Deferred income tax assets
Other assets
Total assets
Liabilities and shareholders' equity
Borrowings from the central bank
Deposits of other banks and financial institutions Loans from other banks
Assets Sold Under Agreements to Repurchase
Deposits received Payroll payables
Taxes payable
Interests payable
Bonds payable
Deferred income tax liabilities Other liabilities Total liabilities Stock capital Capital reserve
Surplus reserve
Provision for general risk
Retained profit Total shareholders' equity Total liabilities and shareholders' equity
Legal representative：Xing Zengfu
Unit: RMB Yuan
31 December 2011
31 December 2010
(i)
12,147,403,320.47
( ii ) 3,625,903,205.90
( iii ) 2,692,364,043.16
( iv ) 152,561,550.00
(v)
4,249,860,000.00
( vi ) 218,134,452.16
( vii ) 35,794,239,696.81
( viii ) 1,761,712,560.00
( ix ) 3,351,289,512.38
(x)
575,253,230.67
( xii ) 12,273,472.99
( xii ) 36,843,767.21
( xiii ) 639,437,622.35
( xiv ) 88,307,165.64
( xv ) 73,404,762.67
( xvi ) 232,590,616.25
65,651,578,978.66
( xviii ) 500,000,000.00
( xix ) 2,650,112,560.78
( xx ) 88,212,600.00
( xxi ) 3,963,300,000.00
( xxii ) 52,176,124,935.60
( xxiii ) 220,228,125.15
( xxiv ) 268,131,583.06
( xxv ) 457,631,662.75
( xxvi ) 549,332,667.24
( xvi ) 1,552,425.00
( xxvii ) ) 332,711,810.36
61,207,338,369.94
( xxviii ) 1,508,991,197.00
( xxix ) 1,024,569,843.20
( xxx ) 963,940,913.79
( xxxi ) 366,520,183.53
( xxxii ) 580,218,471.20
4,444,240,608.72
65,651,578,978.66
10,103,297,079.28
1,901,700,515.68
237,316,150.00
2,923,500,000.00
147,483,209.12
29,750,633,172.25
917,773,537.82
4,333,435,451.35
193,955,573.44
12,684,692.17
13,250,000.00
590,892,251.69
80,871,950.23
43,588,278.41
120,475,838.77
51,370,857,700.21
200,000,000.00
2,060,700,376.79
19,868,100.00
1,786,500,000.00
41,910,019,382.88
99,391,401.13
139,331,530.80
224,107,465.31
548,665,333.68
President: Wu Hua
405,807,995.03
47,394,391,585.62
1,508,991,197.00
1,020,403,595.65
698,172,914.70
303,642,478.47
445,255,928.77
3,976,466,114.59
51,370,857,700.21
Person in Charge of Accounting: Li Weiming
Person in charge of the accounting department: Zhang Demin
073
Income Statement
Items Note VI
I. Operating income
( xxxiii ) 2,275,333,504.96
1,630,642,623.21
i
2,187,447,944.49
1,568,370,477.01
Interest income
3,287,326,310.76
2,170,435,830.64
Interest expense 1,099,878,366.27
602,065,353.63
Net interest income
Net service charge and commission income 2011
2010
ii
86,993,877.90
65,524,683.85
Service charge and commission income
98,180,275.68
75,978,592.17
service charge and commission expense
11,186,397.78
10,453,908.32
-815,922.53
91,899.20
Gains on investment ( “-”for loss ) iii
Income from the change in fair value ( “-”for loss ) iv
Exchange income ( “-”for loss ) Income from other business
v
II. Operating expense
( xxxiv ) 6,678,300.00
-440,983.29
-6,354,519.08
-4,084,335.99
1,383,824.18
1,180,882.43
1,401,232,081.97
977,079,798.19
Business tax and surcharges
i
192,957,835.79
119,384,126.82
ii
937,687,498.28
716,625,181.27
Loss on asset impairment iii
269,950,242.03
140,494,805.82
Cost of other business iv
636,505.87
575,684.28
874,101,422.99
653,562,825.02
5,968,426.28
6,041,442.31
III. Operating profit ( “-”for loss ) Add: Non-operating income
( xxxv ) Less: Non-operating expense ( xxxvi ) 13,731,622.14
18,129,009.10
IV. Total profit ( “-”for total loss ) 866,338,227.13
641,475,258.23
Less: Income tax expense
221,651,036.91
146,746,448.49
644,687,190.22
494,728,809.74
( xxxviii ) V. Net profit( “-”for net loss ) VI. Earnings per share
( xxxix ) ( i ) Basic earnings per share ( ii ) Diluted earnings per share
VII. Other comprehensive income( “-”for loss ) ( xl ) VIII. Total comprehensive income
President: Wu Hua
074
Unit: RMB Yuan
0.43
0.41
0.43
0.41
4,166,247.55
-3,852,286.40
648,853,437.77
490,876,523.34
2011 年度报告
ANNUAL REPORT
Cash Flow Statement
Items Unit: RMB Yuan
Note VI
2011
I. Cash flow from operating activities Net increase of deposits of customers and other banks
10,855,517,736.71
Net increase of borrowings from the central bank
300,000,000.00
Net increase of borrowings from other financial institutions 1,399,704,283.53
Net decrease of deposits in the central bank and other banks
Cash received from interest, service charges and commissions
3,168,115,739.16
Other cash received related to operating activities ( xli ) 31,231,438.33
Sub-total of cash inflows
15,754,569,197.73
Net increase of loans to customers and payments on behalf of customers
6,313,556,766.59
Net increase of deposits in the central bank and other banks
3,031,471,721.31
Net decrease of borrowing from the central bank
Net decrease of borrowing from other financial institutions
Cash paid for interest, service charge and commissions
846,623,233.06
Cash paid to or for employees
439,168,180.07
Taxes and surcharges paid
323,007,464.04
Other cash paid related to operating activities ( xli ) 509,053,673.45
Sub-total of cash outflows
11,462,881,038.52
Net cash flow from operating activities
4,291,688,159.21
II. Cash flow from investing activities Cash received from taking back investment
4,367,769,456.55
Cash received from return on investment 147,019,604.24
Cash received from disposal of fixed assets, intangible assets and other long-term assets
218,057.00
4,515,007,117.79
Cash paid for acquiring fixed assets, intangible assets and other long-term assets
117,403,915.20
Cash paid for investment 4,339,237,290.00
Sub-total of cash outflows
4,456,641,205.20
Net cash flow from investing activities
58,365,912.59
III. Cash flow from financing activities
Cash received from absorbing investment Cash received from issuing bonds
Cash paid for distributing dividend, profit and interest
213,226,663.92
Other cash paid related to financing activities Sub-total of cash outflows
213,226,663.92
Net cash flow from financing activities
-213,226,663.92
IV. Influence of changes in exchange rate on cash and cash equivalents -27,381,671.09
V. Net increase of cash and cash equivalents 4,109,445,736.79
Add: Opening balance of cash and cash equivalents ( xlii ) 8,404,100,043.04
VI. Closing balance of cash and cash equivalents ( xlii ) 12,513,545,779.83
President: Wu Hua
2010
10,810,651,913.59
2,084,060,401.21
19,399,602.33
12,914,111,917.13
5,628,327,240.10
2,371,247,173.34
100,000,000.00
1,092,111,900.00
534,526,045.10
396,097,552.02
213,046,361.43
412,237,421.60
10,747,593,693.59
2,166,518,223.54
8,138,958,209.94
149,532,765.61
5,163.00
8,288,496,138.55
125,714,841.31
8,795,988,304.95
8,921,703,146.26
-633,207,007.71
130,383,340.40
130,383,340.40
-130,383,340.40
-12,373,373.07
1,390,554,502.36
7,013,545,540.68
8,404,100,043.04
075
Statement on Changes in Owners' Equity
Prepared by Bank of Wenzhou Co., Ltd.
Items Share capital Capital reserve
2011
Surplus reserve
I. Balance at 31 December 2010
1,508,991,197.00 1,020,403,595.65
Unit: RMB Yuan
698,172,914.70
Provision for Retained profit Total shareholders'
general risk
303,642,478.47
445,255,928.77
equity
3,976,466,114.59
Add: Change in accounting policies
Correction of errors in prior period
II. Balance at 1 January 2011
698,172,914.70
303,642,478.47
445,255,928.77
3,976,466,114.59
265,767,999.09
62,877,705.06
134,962,542.43
467,774,494.13
( I ) Net profit
III. Increase/ decrease in 2010 ( “-”for loss ) 1,508,991,197.00 1,020,403,595.65
-
4,166,247.55
644,687,190.22
644,687,190.22
( II ) Other comprehensive income
-
4,166,247.55
-
-
-
4,166,247.55
Subtotal of ( I ) and ( II ) -
4,166,247.55
-
-
644,687,190.22
648,853,437.77
( III ) Contributions and decrease of capital
-
-
-
-
-
-
1. Capital invested by shareholders 2. Amount of share payment entering into shareholders' equity 3. Other ( IV ) Profit distribution -
-
1. Appropriating to surplus reserve 265,767,999.09
62,877,705.06 -509,724,647.79
265,767,999.09 -265,767,999.09
2. Appropriating to provision for general risk -181,078,943.64
-
62,877,705.06 -62,877,705.06
-
3. Distributing profit to shareholders -181,078,943.64
-181,078,943.64
4. other
( V ) Shareholders' equity transferred internally
1. Capital reserve transferred to stock capital 2. Surplus reserve transferred to stock capital
3. Surplus reserve offsetting losses
4. Other ( VI ) Special reserve
1. Appropriating in 2011 2. Using in 2011 IV. Balance as at 31 Dec. 2011 1,508,991,197.00 1,024,569,843.20
President: Wu Hua
076
963,940,913.79
366,520,183.53
580,218,471.20
4,444,240,608.72
2011 年度报告
ANNUAL REPORT
Statement on Changes in Owners' Equity （Cont'd）
Items Share capital Capital reserve
2010
Surplus reserve
I. Balance at 31 December 2009
1,183,506,114.00
373,285,716.05
Unit: RMB Yuan
431,949,974.92
Provision for Retained profit Total shareholders'
general risk
222,521,665.06
400,189,064.32
equity
2,611,452,534.35
Add: Change in accounting policies
Correction of errors in prior period
II. Balance at 1 January 2010
1,183,506,114.00
373,285,716.05
431,949,974.92
222,521,665.06
400,189,064.32
2,611,452,534.35
325,485,083.00
647,117,879.60
266,222,939.78
81,120,813.41
45,066,864.45
1,365,013,580.24
( I ) Net profit
III. Increase/ decrease in 2010 ( “-”for loss ) ( II ) Other comprehensive income
Subtotal of ( I ) and ( II ) 494,728,809.74
494,728,809.74
-3,852,286.40
-3,852,286.40
-3,852,286.40
494,728,809.74
490,876,523.34
( III ) Contributions and decrease of capital
325,485,083.00
650,970,166.00
976,455,249.00
1. Capital invested by shareholders 325,485,083.00
650,970,166.00
976,455,249.00
2. Amount of share payment entering into shareholders' equity 3. Other ( IV ) Profit distribution 266,222,939.78
81,120,813.41 -449,661,945.29
1. Appropriating to surplus reserve 266,222,939.78
-266,222,939.78
2. Appropriating to provision for general risk 81,120,813.41 -81,120,813.41
3. Distributing profit to shareholders -102,318,192.10
-102,318,192.10
-102,318,192.10
4. other
( V ) Shareholders' equity transferred internally
1. Capital reserve transferred to stock capital 2. Surplus reserve transferred to stock capital
3. Surplus reserve offsetting losses
4. Other ( VI ) Special reserve
1. Appropriating in 2010
2. Using in 2010
IV. Balance as at 31 Dec. 2010
1,508,991,197.00 1,020,403,595.65
President: Wu Hua
698,172,914.70
303,642,478.47
445,255,928.77
3,976,466,114.59
077
Bank of Wenzhou Co., Ltd.
Notes to the Financial Statements
For the Year Ended 31 December 2011
( Expressed in Renminbi yuan )
I. General Information
( i ) History
Bank of Wenzhou Co., Ltd. ( the “Bank” ) is a joint-stock commercial bank founded pursuant to the policy in the Notice of
Establishing City Cooperative Banks ( GF [1995] No. 25 ) published by the State Council and upon the Approval of the Opening
of Wenzhou City Commercial Bank ( YF [1998] No. 395 ) issued by the People's Bank of China. The Bank received Business
License for Enterprise as Legal Person number 3300001005495 issued by Zhejiang Provincial Administration for Industry
and Commerce on 10 March 1999. The former name of the Bank was Wenzhou City Commercial Bank Co., Ltd., which was
renamed Bank of Wenzhou Co., Ltd. in line with the Approval of Change of Name of Wenzhou City Commercial Bank ( YJF
[2007] No. 375 ) issued and approved by China Banking Regulatory Commission on 6 September 2007. The Bank received
Business License for Enterprise as Legal Person issued by Zhejiang Provincial Administration for Industry and Commerce on 25
September 2007 after the change of name.
The Bank had a registered capital of RMB 290,495,800 yuan upon incorporation. In February 2004, the Bank increased
registered capital for the first time, increasing RMB 180,300,000 yuan. The registered capital was changed to RMB 470,795,800
yuan. In June 2006, the Bank increased registered capital for the second time, in which RMB 50,233,900 yuan was transferred
from capital reserve and retained profit, and RMB 486,183,800 yuan was newly increased by 17 enterprise corporate
shareholders and 257 employee shareholders. The registered capital was changed to RMB 1,007,213,500 yuan. In December
2006, the Bank increased registered capital for the third time by increasing RMB 15,968,400 yuan transferred from retained
profit. The registered capital was changed to RMB 1,023,181,900 yuan. In December 2009, the Bank increased registered
capital for the fourth time, in which RMB 160,324,193.00 yuan was increased through rights offer and private placement of
share additional according to the Report on the Verification of Capital ( DW( K ) YZ ( 2009 ) No. 10110 ) . In November 2010, the
Bank completely achieved increase of capital and stock for the fourth time, which carried out private placement of additional
share amounting to RMB 485,809,276.00 in total, resulting in the registered capital changing into RMB 1,508,991,197.00 yuan.
As of 31 December 2011，the registration number of the Business License for Enterprise as Legal Person of the Bank was
330000000008227 and the registration number of the License for Financial Business Operation was B0153H233030001. The
legal representative of the Bank was Xing Zengfu，and registered address No. 196, Chezhan Avenue, Wenzhou.
( ii ) Setup of Business Offices
As at 31 December 2011，the Bank had a Headquarters and 68 branches. They are the Headquarters, Ningbo Branch, Quzhou
Branch, Hangzhou Branch, Shanghai Branch,Yueqing Sub-Branch, Rui'an Sub-Branch, Pingyang Sub-Branch, Yongjia SubBranch, Liushi Sub-Branch, Tangxia Sub-Branch, Hongqiao Sub-Branch, Lucheng Sub-Branch, Ouhai Sub-Branch, Longwan
Sub-Branch, Guoding Sub-Branch, Fuqian Sub-B ranch, Jinying Sub-Branch, Fulong Sub-Branch, Desheng Sub-Branch,
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2011 年度报告
ANNUAL REPORT
Huihai Sub-Branch, Puxieshi Sub-Branch, Danan Sub-Branch, Liming Sub-Branch, Huajian Sub-Branch, Laowu Sub-Branch,
Qinfen Sub-Branch, Wutian Sub-Branch, Quxi Sub-Branch, Zhuangyuan Sub-Branch, Shifulu Sub-Branch, Cangnan SubBranch, Hongchang Sub-Branch, Chengdong Sub-Branch, Shizhong Sub-Branch, Railway Station Sub-Branch, Dengfeng
Sub-Branch, Yinxin Sub-Branch, Yongxing Sub-Branch, Xincheng Sub-Branch, CBD Sub-Branch, Zhanqian Sub-Branch,
Xinqiao Sub-Branch, Shuanglong Sub-Branch, Chengnan Sub-Branch, Shunjing Sub-Branch, Qinye Sub-Branch, Nanpu SubBranch, Lizhong Sub-Branch, Chengxi Sub-Branch, Xueyuanlu Sub-Branch, Xincheng Sub-Branch, Jiefanglu Sub-Branch,
Jiangbin Sub-Branch, Baili Sub-Branch, Jingshan Sub-Branch, Development Zone Sub-Branch, Haicheng Sub-Branch, Binhai
Sub-Branch, Huanglong Sub-Branch, Guoxi Sub-Branch, Kunyang Sub-Branch, Wencheng Sub-Branch, Beibaixiang SubBranch and Quzhou Jiangshan Sub-Branch, Ningbo Cixi Sub-Branch, Ningbo Yuyao Sub-branch and Quzhou Longyou Subbranch.
( iii ) Main business and service provided
As of 31 December 2011, the main businesses of the Bank were approved by People's Bank of China and China Banking
Regulatory Commission, they are as follows: accepting public deposits; issuing short-term, mid-term and long-term loans;
handling domestic and foreign settlements; bill cashing and discounting; issuing financial bonds, entrusted to issue, cash and
underwrite governmental bond; buying and selling governmental bonds and financial bonds; inter-bank funds lending; operating
bank card business; providing L/C service and guarantee; authorized to collect and pay money or authorized to handle insurance
services; providing safe deposit box service; self-operated foreign exchange trade and trade on behalf of others; personal
foreign exchange trade business; letter of indemnity service; other business approved by the banking regulatory authority of the
State Council.
II. Main accounting policies, accounting estimates and prior period errors
( i ) Basis for preparation of financial statements
With going-concern assumption as the basis, the Bank prepares its financial statements in light of the actual occurred
transactions and matters, as well as recognition and measurement in line with the accounting standard for business enterprisebasic standard and other accounting standards.
( ii ) Statement on complying with the accounting standard for business enterprise
The financial statements prepared by the Company are in compliance with the requirements of the accounting standard for
business enterprise-basic standard, and have truly and completely reflected the Company's financial status, operating results
and cash flows of the Bank.
( iii ) Fiscal period
The fiscal year of the Bank is from 1 January to 31 December, on the Gregorian calendar.
( iv ) Currency for accounting
The Company adopts Renminbi as the currency for accounting.
079
( v ) Accounting for transaction in foreign currencies
Transactions in foreign currencies shall be accounted separately according to different currencies. At the end of the period,
prepare financial statement in RMB. The principle for preparing financial statement in RMB is: prepare financial statement
in each currency. Then convert the amounts in various currencies in USD. Then, convert USD to RMB and consolidate the
statements to a financial statement in RMB.
At the balance sheet date, currency items in foreign currency are converted to RMB at the exchange rate at the balance date.
The difference of foreign exchange caused is included into the gain or loss of the current period. Non-monetary items in foreign
currency, which are measured at historical cost, are converted at the exchange rate of the original transaction date. Nonmonetary items in foreign currency, which are measured at fair value, are converted to RMB at the exchange rate on the date
of confirming the fair value. As to the difference between the converted amount of RMB and the original amount of RMB, if it
belongs to non-monetary item in foreign currency of available-for-sale financial assets, the difference shall be recorded into
capital reserve account. Differences of other items shall be recorded into the gain or loss of the current period.
( vi ) Cash and cash equivalents
Cash refers to cash held by the Bank and deposits that can be paid at any time, including cash held by the Bank, non-restricted
deposits for payment that placed in the central bank, deposits on call placed in other banks. Cash equivalents are investment of
short-term, high liquidity, easy to convert to cash of know amount, and very low risk of value change, including deposits placed
in other banks, bond investment and buying securities under agreements to resell that will be mature in three months.
( vii ) Financial assets and financial liabilities
1. Category, recognition and measurement of financial assets
According to the purpose of acquiring financial assets, the Bank classifies financial assets held to the following four categories:
( a ) the financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses
of the current period, including transactional financial assets and directly designated as financial assets which are measured at
their fair values and the variation of which is included in the current profits and losses; the investments which will be held to
their maturity; loans and the account receivables; and financial assets available for sale. The initial amount of the financial assets
shall be recognized at the fair value. As for the financial assets which are not designated as financial assets measured at its
fair value and the variation thereof is recorded into the profits and losses of the current period, the transaction expense directly
attributable to the acquisition of the financial assets should be included into the initially recognized amount.
( 1 ) Financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of
the current period
Financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the
current period include financial assets held for trade or financial assets which are measured at their fair values and the variation
of which is included in the current profits and losses directly designated by the management at the initial recognition. The return
on investment during holding such financial assets and the variation in fair value recorded at the fair value at the end of the
080
2011 年度报告
ANNUAL REPORT
period shall be included into the profit and loss on investment of the current period. Upon the disposal, the balance between the
fair value and amount in initial account shall be recognized as investment income, at the same time, gain and loss from change
in fair value shall be adjusted.
( 2 ) Held-to-maturity investment
The“held-to-maturity investment”refers to a non-derivative financial asset with a fixed date of maturity, a fixed or
determinable recovery amount and which the Bank holds for a definite purpose or the Bank is able to hold until its maturity.
Held-to-maturity investment is measured at the amount of post-amortization cost calculated by adopting the actual interest
rate method deducting the provision for impairment. The profit or loss on the held-to-maturity investment caused by being
stopped recognition, devalued or amortization is recorded into the profit and loss of the current period.
In the current fiscal period or the previous two fiscal years, if the Bank sells or re-categorizes high-amount held-to-maturity
investment before the mature date ( high amount refers to the total amount related to the investment before sale or recategorization ) , then the Bank should not categorize any such financial assets to the category of held-to-maturity investment.
Sales or re-categorization meeting the following conditions are exceptional: the selling date or re-categorizing date is near
the mature date or redemption date ( e.g., three months before maturity ) of the investment so that the changes in the market
interest rate have no significant influence on the fair value of the investment. The sale or re-categorization happens after
recovering almost all initial principal of the investment according to the agreed repayment mode or early repayment mode; or
the sale or re-categorization falls into some independent event that the Bank is unable to control and predict reasonable and the
event will not happen again.
( 3 ) Loans and accounts receivable
The“loans and accounts receivable”refers to the non-derivative financial assets for which there is no quoted price in the
active market and of which the repo amount is fixed or determinable.
The loans and accounts receivable of the Bank mainly include loans issued, payments on other's behalf, deposits in the central
bank and other banks, purchase of financial assets under agreements to resell and other receivables. The loans issued and the
payments on other's behalf by the Bank include common loans, discount, payments on other's behalf ( including payments for
bank acceptance bill, payments for L/Cs, payments for guarantees ) , trade financing and overdraft of credit card.
Overdue loan: loan that cannot be paid back when it is due ( including renewed term ) because of the reasons of the borrower;
or passive payment on behalf of others because the acceptor of the bill is unable to pay on time and the account balance of the
discount applicant is insufficient; or passive payment on behalf of customers because the bill accepted by the Bank is mature
but the account balance of the acceptance applicant is insufficient; or overdue import and export negotiation or off-balancesheet payment on behalf of others such as L/C and guarantee, which is recognized as overdue loan from the day of paying the
amount on behalf of others.
The value of loans and accounts receivable is recorded at the amount of post-amortization cost calculated at actual interest rate
method deducting the provision for impairment of the investment. The gain or loss caused by stopping recognition, devaluation
or amortization of a loan or accounts receivable are recorded into the profit and loss of the current period.
081
( 4 ) Available-for-sale financial assets
Available-for-sale financial assets refer to non-derivative financial assets that are designated as available for sale or investment
not categorized to loans or receivables or held-to-maturity investment or financial assets which are measured at their fair
values and the variation of which is recorded into the profits and losses of the current period. During subsequent measurement,
such financial assets are measured at their fair value. The unrealized profit and loss caused by the changes in the fair value
of available-for-sale financial assets are recorded into capital reserve ( other capital reserve ) before the financial asset is
terminated recognition or impairment occurred. When the financial asset is terminated recognition or impairment occurred,
the accumulated changes in the fair value recorded into capital reserve previously should be carried over the profit and loss of
the current period. Interests related to available-for-sale financial assets shall be measured into profit and loss of the current
period.
2. Category, recognition and measurement of financial liabilities
According to the purpose of acquiring financial liabilities, the Bank classifies financial liabilities held to the following four
categories: the financial liabilities which are measured at their fair values and the variation of which is recorded into the profits
and losses of the current period and other financial liabilities.
( 1 ) Financial liabilities which are measured at their fair values and the variation of which is recorded into the profits and losses
of the current period
Financial liabilities which are measured at their fair values and the variation of which is recorded into the profits and losses of
the current period include financial liabilities held for trade or financial liabilities which are measured at their fair values and the
variation of which is included in the current profits and losses directly designated by the management at the initial recognition.
The initial amount of such financial liabilities is recognized at their fair value. The relevant expense is recorded into the profits
and losses of the current period. Cost paid during holding such financial liabilities and the variation in fair value measured at the
fair value at the end of the period shall be included into the profit and loss of the current period. Upon the disposal, the balance
between the fair value and amount in initial account shall be recognized as investment income, at the same time, gain and loss
from change in fair value shall be adjusted.
( 2 ) Other financial liabilities
Except for financial liabilities held for trade or financial liabilities which are measured at their fair values and the variation of which
is included in the current profits and losses directly designated by the management at the initial recognition, other financial
liabilities include Deposit from other banks or other financial institutions, deposits-taking, assets sold under agreements to
repurchase, bond payables and other payables, of which the initial amount is recognized at the sum of their fair value and related
expense. During subsequent measurement, other financial liabilities are recorded at their fair post-amortization cost.
3. Recognition of the fair value of financial assets and financial liabilities
The fair value of the financial assets and financial liabilities of the Bank which are measured at their fair value refers to the
quoted price in the active market.
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2011 年度报告
ANNUAL REPORT
4. Transfer and termination of recognition financial assets and financial liabilities
( 1 ) Financial assets
Where the contractual rights for collecting the future cash flow of the said financial asset are terminated; or the Bank has
transferred nearly all of the risks and rewards related to the ownership of the financial asset, or though the Bank doesn't transfer
or keep almost all risks and rewards related to the ownership of the financial asset, the Bank has given up the control of the
financial asset, then the Bank shall stop recognizing the financial asset.
Where a financial asset is transferred, if the Bank retained nearly all of the risks and rewards related to the ownership of the
financial asset, the Bank shall not stop recognizing the financial asset. Where the Bank doesn't transfer or remained almost all
of the risks and rewards and doesn't give up the control to the financial asset, then the Bank shall recognize the financial asset
according to the degree that the Bank involves in the transferred financial asset and recognize related liability.
( 2 ) Financial liabilities
When the prevailing obligations of the financial liabilities are fulfilled, expired or relieved in all or in part may the recognition of the
financial liabilities be terminated in all or partly.
( viii ) Long-term equity investment
1. Recognition of initial investment cost
As for long-term equity investment obtained by making payment in cash, its initial investment cost shall be the purchase cost
which is actually paid.
2. Recognition of subsequent measurement and profits and losses
( 1 ) Subsequent measurement
For the long-term equity investment on the subsidiary company, the Company shall accounted by employing the cost method,
and shall make an adjustment by employing the equity method when it works out consolidated financial statements .
Long-term equity investment of investment of the Company that does not do joint control or does not have significant
influences on the invested entity, and has no offer in the active market and its fair value cannot be reliably measured shall be
measured by employing the cost method.
Long-term equity investments with joint control or significant influence on the investee are accounted for using equity method.
Where the initial investment cost of the long-term equity investment is less than the share of the identifiable net assets' fair
value at the time of investment, the latter is accounted for as the investment cost. The difference between the long-term
equity investment cost and the initial investment cost is recognised in profit or loss.
083
Treatment of the changes in owners' equity other than the share of the investee's net profit and loss: As for the changes in
owners' equity other than the share of the investee's net profit and loss, the Company shall calculate its proportion, provided
that the Company's proportion of shareholding in the investee remains unchanged, adjust the book value of the long-term
equity investment and increase or decrease the capital reserve ( other capital reserve ) .
( 2 ) Recognition of profit or loss
Under the cost method, except for the actual consideration paid for the acquisition of investment or the declared but not yet
distributed cash dividends or profits which are included in the consideration, investment gains is recognised as the Company'
shares of the cash dividends or profits declared by the investee.
Under the equity method, on the basis of the carrying amount of net profits of the investees, the following will be considered:
Where the accounting policies and accounting periods of the investees are inconsistent with those adopted by the Company,
the financial statements of the investees shall be adjusted according to the Company's accounting policies and accounting
periods; the effects of the amount of depletion or amortization or the relevant assets impairment provision provided based on
the fair values of fixed assets or intangible assets of the investees when acquiring the investment; appropriate adjustments are
made to the matters, such as offsetting the unrealized inter-transactions occurred between the Company and associates and
jointly controlled entities, the Company's share of net profits or losses in the investees shall be recognised.
In recognising the Company's share of losses incurred by the investees, treatment shall be made in the following order: First, to
reduce the carrying amount of the long-term equity investment. Second, where the carrying amount of the long-term equity
investment is not sufficient to reduce, the investment loss shall continue to be recognised to the extent of the carrying amount
of other long-term equities that in substance constitute the net investment in the investees, and reduce the carrying amount of
long-term receivables and other items. Finally, after the above treatments, where the enterprise still bears additional obligations
as stipulated in the investment contract or agreement, the expected liabilities shall be recognized based on the obligations
expected to be undertaken, and charged to the profit or loss for the current period. Where the investees realize profits in
subsequent periods, after deducting its share of unrecognized losses, the Company shall treat in a reverse order with the above:
write down the carrying amount of expected liabilities expected, restore the carrying amount of other long-term equities that in
substance constitute the net investment in the investees and long-term equity investment, and recognize investment income
simultaneously.
3. Recognition basis of joint control and significant influence to invested entity
Joint control to invested entity refers to the control over an economic activity in accordance with the contracts and agreements,
which does not exist unless the investing parties of the economic activity with one an assent on sharing the control power
over the relevant important financial and operating decisions. The significant influence to invested entity refer to the power
to participate in making decisions on the financial and operating policies of the Company, but not to control or do joint control
together with other parties over the formulation of these policies.
( ix ) Subsequent measurement for investment real estate
Investment real estate refers to the real estates held for generating rent and/or capital appreciation, or for both purposes.
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The subsequent measurement for investment real estate of the Bank is measured by adopting cost model.
The investment real estate by acquisition or self-building is initially measured at its cost price. To an investment real estate from
a fixed asset, the initial amount of the investment real estate is recognized at its book value on the transferring date.
Depreciable life and annual depreciation rate of the investment real estate:
Category Period of depreciation ( Year ) Net residual value rate ( % ) Annual depreciation rate ( % )
40
3
2.43
Houses and buildings
( x ) Accounting for fixed assets
1. Recognition of fixed assets
The “fixed assets” refer to the tangible assets which are held for the purpose of providing labor service, renting or business
management; and their useful life exceeds one fiscal year. No fixed asset may be recognized unless it simultaneously satisfies
the following conditions:
a. The economic benefits relating to the fixed asset are likely to flow into the enterprise;
b. The cost of the fixed asset can be measured reliably.
2. Categories of fixed assets
Fixed assets are categorized to houses and buildings, special-purpose equipment, transportation equipment, general-purpose
equipment and other.
3. Initial measurement for fixed assets
Fixed asset is initially measured at its actual cost upon acquisition.
The cost of fixed assets from acquisition consists of the purchase price, the relevant taxes, freights, loading and unloading fees,
installation fees and professional service fees that bring the fixed asset to the expected conditions for use and that may be
relegated to the fixed asset.
If the payment for a fixed asset is delayed beyond the normal credit conditions and it is of financing nature in effect, the cost of
the fixed asset shall be ascertained based on the current value of the purchase price.
The cost of self-built fixed assets is formed by the necessary expense incurred for bringing the asset to the expected
conditions for use.
In debt restructuring, if a fixed asset is acquired from debtor's offsetting its debt, the fixed asset is recognized at the fair value
of such fixed asset. The difference between the book value of the restructured debt and the fair value of the fixed assets is
recorded into the gain or loss of the current period.
085
Under the preconditions when exchanges of non-monetary assets is commercial in nature and the fair value of the asset
received or surrendered can be measured reliably, the fair value of the asset surrendered is the basis for the determination
of the cost of the asset received, unless there is any exact evidence showing that the fair value of the asset received is more
reliable. Where any non-monetary assets exchange does not meet the preconditions as prescribed above, the book value and
relevant payable taxes of the asset surrendered is the cost of the asset received and no profit or loss is recognized.
4. Depreciation for fixed assets
Depreciation of the fixed assets shall be withdrawn by adopting the straight-line method. Depreciation rate shall be determined
on the basis of the categories, expected useful life and expected net salvage value rate of the fixed assets.
Depreciable life and annual depreciation rate of the fixed assets are as follows:
Type
Depreciable life ( Year ) Houses and buildings
Special-purpose equipment
Transportation equipment
General-purpose equipment Other
Salvage value rate ( % ) Annual depreciation rate ( % )
40
3
2.43
5/8
0
20.00/12.50
8/10
0
12.50/10.00
5/10/20
0
20.00/10.00/5.00
10
0
10.00
( xi ) Accounting for construction in progress
1. Categories of construction in progress
The construction in progress is accounted at its actual cost under each approved project.
2. Standards and time point of construction in progress being carried over to fixed assets
As for the construction in progress, the total disbursements incurred for bringing the asset to the expected conditions for use
shall be treated as the entry value of the fixed assets. If a constructed fixed asset has reached the expected conditions for
use but the final project accounts have not been completed final accounting procedures, from the date of the asset reaches
expected conditions for use, it should be transferred to fixed assets at an estimated value based on project budget, contracted
construction price or actual project costs. Depreciation should be provided in accordance with fixed assets appreciation policy
of the Company. After the final accounting procedures are finished, the estimated values should be adjusted according to the
actual cost. However, the depreciation provided is not adjusted.
( xii ) Accounting for intangible assets
1. Measurement for intangible assets
The intangible assets are initially measured according to their costs.
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The costs of outsourcing intangible assets include the purchase prices, relevant taxes and other necessary expenditures directly
attributable to the realization of the expected purposes of the intangible assets. Where the payment of purchase price for the
intangible assets is delayed beyond the normal credit conditions, which is of financing intention, the cost of intangible assets is
determined on the basis of the current value of the purchase price.
In the debt restructuring, where the intangible assets are acquired from the debtor for debt paying in the debt recombination,
the entry value of the intangible assets is determined on the basis of its fair value. And the difference between the book value
of the restructured debt and the fair value of the intangible assets used for debt paying is included in the current profits and
losses.
Under the preconditions when exchanges of non-monetary assets is commercial in nature and the fair value of the asset
received or surrendered can be measured reliably, the fair value of the asset surrendered is the basis for the determination
of the entry value of the intangible asset received, unless there is any exact evidence showing that the fair value of the asset
received is more reliable. Where any non-monetary assets exchange does not meet the preconditions as prescribed above,
the book value and relevant payable taxes of the asset surrendered is the cost of the asset received and no profit or loss is
recognized.
The cost of self-developed intangible assets shall include the cost of raw materials used, service costs, registration fee,
amortization of patent right and concessions used in the course of development, interests expenses satisfying capitalization
conditions and other necessary expenditures directly attributable to intangible assets for the expected purpose.
2. Service life and amortization of intangible assets
All intangible assets of the Bank are intangible assets with limited service life. Since the month of acquiring the intangible asset,
the intangible asset is amortized evenly under straight-line method within its expected service years. Software is amortized
averagely in ten years from the month of buying the software.
At the end of the each period, the service life and amortization method of the intangible assets with limited service life shall be
checked.
Upon the checking result, the service life and amortization method of the intangible assets are same as the previous estimates.
( xiii ) Accounting for long-term deferred expense
Long-term deferred expense refers to various expenses that have been paid but the beneficial period is over one year ( excluding
one year ) . Long-term deferred expense is recorded at its actual occurred amount and amortized evenly throughout the
beneficial period, in which,
Prepaid rent for fixed assets rented under operating lease is amortized evenly throughout the years set in the lease contract.
Expenditure on the improvement of fixed assets rented under operating lease is amortized evenly in the shorter period between
the remaining lease term and the remaining useful life of the fixed assets rented.
087
( xiv ) Accounting for assets for offsetting debts
Assets for offsetting debts are recorded at their fair value upon acquisition. Meanwhile, offset the book value of the asset being
offset, including the principal of the loan, the recognized on-balance-sheet interest, other receivables, provision for loss on
loan or provision for bad debt related to the loan or receivables. In disposing an asset for offsetting debt, if the income from
the disposal is higher than the book value of the asset for offsetting debt, then the difference is recorded into non-operating
income. If the income is lower than the book value, then the difference is recorded into non-operating expense.
( xv ) Authorized business
The authorized business undertaken by the Bank is mainly release of authorized loan and authorized wealth management. Release
of authorized loan refers to the loan that the authorizer provides fund and the Bank releases, monitors, uses and helps collecting
the loan on behalf of the authorizer according to the borrower. Purpose, loan term and interest rate decided by the authorizer. All
risks, gains and losses of the authorized business are on the authorizer's side. The Bank only charges a service fee. Authorized
wealth management refers to the product the Bank designs and issues of which the raised fund is invested in the related
financial market to buy related financial products according to the agreement of the contract. The return on investment and risk
are born by the customer or the customer and the Bank according to the agreed mode. The Bank indicates authorized business
in the balance sheet.
( xvi ) Accounting for purchase of assets under agreements to resell or sale of assets under agreements to repurchase
According to the contract or the agreement, the Bank purchases an asset ( including bonds or bills ) from the other party of
the transaction at a certain price. The Bank resells the same financial assets at the agreed price on the expiration date of the
contract or the agreement. Purchase of assets under agreements to resell are recorded at the actually paid amount for the
assets and indicated in Purchase of assets under agreements to resell in the balance sheet. To purchase of financial products
under agreements to resell, the purchase of a financial product is deemed as a mortgaged financing transaction. The financial
product purchased is the mortgage of the financing transaction.
According to the contract or the agreement, the Bank sells an asset ( including bonds or bills ) to the other party of the
transaction at a certain price. The Bank repurchases the same financial asset at the agreed price on the expiration date of the
contract or the agreement. Sales of assets under agreements to repurchase are recorded at the actually received amount from
the assets and indicated in sale of assets under agreements to repurchase in the balance sheet. To sale of a financial product
waiting for repurchase, the financial product will be indicated continuously in the balance sheet of the Bank and accounted in
line with related accounting policy.
The price difference of purchase of assets under agreements to resell or sale of assets under agreements to repurchase is
recognized as interest income or expense at actual interest rate during the reselling or repurchasing period.
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( xvii ) Devaluation of main assets
1. Financial assets
At every balance sheet date, the bank check the book value of the financial assets other than tradable financial assets in order
to judge if there is any evidence indicating the financial asset's devaluation caused by one or more events. If there is objective
evidence indicating the financial asset devalues, provide allowance for devaluation. The event causing devaluation refers to
that occurring after the asset is recognized initially, and the event will affect the estimated future cash flow and the Bank can
measure the influence reliably.
( 1 ) Recording financial assets at amortized cost
If objective evidence proves a financial asset ( including loan, receivable and held-to-maturity investment ) recorded at
amortized cost is devalued, then reduce the book value of the financial asset to the present value of the estimated future cash
flow ( not including the un-occurred future credit loss ) . The reduced amount is recognized as loss on the devaluation of the
asset and enters into the gain or loss account of the period. The present value of the estimated future cash flow should be
determined by discounting the original actual interest rate and take into account of the value of related collaterals ( deducting the
expense of acquiring and disposing the collateral ) . The original actual interest rate is the actual interest rate upon recognizing
the financial asset initially. Loans to businesses, receivable and held-to-maturity investments, if applied to flexible interest
rates, the actual interest rate set in the contract may be adopted as the discount rate in calculating the recoverable amount.
The Bang assesses big-amount financial assets individually in order to determine if there is any objective evidence of
devaluation. To financial assets of which the amount of an individual asset is minor, check the asset individually or combined
together to determine if these is any objective evidence of devaluation. To a financial asset that has been assessed individually
but no objective evidence of devaluation, whether the amount is high or low, the asset will be put into a group of other financial
assets with similar credit risks for devaluation assessment again. To a financial asset that has been assessed individually and
has recognized or kept recognizing devaluation, the asset will not be put into the asset combination group. If objective evidence
proves the asset is devalued after a separate assessment, then recognize loss on devaluation equaling to the difference
between the present value of its estimated future cash flow and its book value and provide for allowance for devaluation. To
financial asset combination being checked with combination assessment mode, the estimation of future cash flow shall refer to
the historical loss and current financial status of the financial asset with credit risk similar to such financial asset.
After recognizing allowance for devaluation of financial asset accounted with amortized cost, if there is objective evidence
indicating the value of the financial asset recovers and recovery is objectively related to the event ( e.g., the credit rate of debtor
is improved ) happens after recognition of the loss, the recognized loss on devaluation shall be transferred back and enter into
the gain or loss account of the period. However, the book value transferred back shall not exceed the amortized cost of the
financial asset on transfer day when the loss of devaluation is not provided.
089
( 2 ) Available-for-sale financial assets
At the end of the period, if the fair value of an available-for-sale financial asset decreases and the decreasing trend is estimated
not temporary by into various relative, then recognize on devaluation even if the financial asset is not stopped recognition. The
accumulated loss caused by the decrease of the fair value that entered into capital reserve previously should be transferred to
the gain or loss account of the period. The result of the difference between the initial cost( deducting the recovered principal
and the amortized amount ) of the asset and the present fair value deducting the loss on that on that entered into the gain or
loss account previously is recognized as the accumulated of the transfer.
When loss on devaluation of an equity tool investment that is categorized as an available-for-sale financial asset is recognized,
the loss should not be transferred back through gain or loss account. When the fair value of the loss on devaluation of the
liability tool of an available-for-sale financial asset increase in the afterwards accounting period and the value increase is
objectively related to the event happens after the recognition of the loss, the recognized loss on devaluation shall be transferred
back and enters into the gain or loss account of the period.
( 3 ) Financial assets recorded at their cost
To an equity financial tool without market price and is not recorded at its fair value because it cannot be measured with its fair
value, if evidence shows that the equity financial tool is devalued, the amount of loss on devaluation should be recognized at
the difference between the book value of the financial and the present value of the future cash flow of similar financial assets
calculated according to the current market return rate. The amount of loss on devaluation enters into the gain or loss account of
the period. When the loss on devaluation is recognized, the loss shall not be transferred back.
To long-term investment accounted with method under Enterprise Accounting PrincipleNo.2-Long-Term Equity investment
and which does not have a quotation in the active market and its fair value cannot be measured reliably, the loss on devaluation
is accounted under the above principle.
2. Long-term non-financial assets such as fixed assets, construction in progress and intangible asset
Long-term non-financial assets such as fixed assets, construction in progress and intangible asset, the Bank judges if there is
any evidence of devaluation of the related asset at the end of the period.
If evidence shows an asset may be devalued, estimate the recoverable amount of the asset. The recoverable amount is
recognized as higher of the result of the fair value of the asset deducting the disposal expense or the present value of estimated
future cash flow of the asset.
If the recoverable amount of the asset is lower than its book value, reduce the book value of the asset to the recoverable
amount. The reduced amount is recognized as the loss of devaluation of the asset and enters into the gain or loss account of
the period. Meanwhile, provide related allowance for devaluation of the asset.
After the loss on devaluation of the asset is recognized, the depreciation or amortization expense of the devalued asset is
adjusted in future periods so that the book value ( deducting the estimated net residual value ) of the asset after the adjustment
can be amortized evenly in its remaining service life.
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Once the loss of devaluation of long-term non-financial assets is recognized, the loss shall not in the future accounting period.
When loss of devaluation of long-term non-financial assets occurs, the recoverable amount is estimated based on individual
asset.
3. Assets for offsetting debts
At the end of the period, the Bank checks it there is any objective evidence of loss on the devaluation of assets for offsetting
debts. The allowance for devaluation of assets for offsetting debts is recorded at lower of the book value at the end of the
period or the cash-realizable amount. Provide allowance for devaluation equaling to the difference between the book value and
the cash-realizable amount. If the influencing factors on reducing the value of the asset in the book disappear, then recover the
reduce amount and transfer it back from the allowance for devaluation of assets for offsetting debts that provided previously.
The amount transferred back enters into the gain or loss account of the period.
( xviii ) Staff compensation
The “employee compensation” refers to all kinds of payments and other relevant expenditures given by the Bank in exchange
of the services offered by the employees. During the accounting period of an employee' providing services to the Bank, the
Bank shall recognize the compensation payable as liabilities. The Bank participated in the social security system established by
the government in line with the regulations, including basic pension insurance, medical insurance, housing public fund and other
systems of social security, from which relevant expenditure was included into expense of the current period as it occurs.
As for employees who retire early before the legal retirement age ruled, as approved, the Bank paid various fees to these layoff
workers until they reach the legal retirement age. The said welfare are discounted for calculation based on expected future cash
flow on the date of implementation of internal retirement plan, and measured in the profit and loss of the current period. The
Bank will recheck the discount on the balance sheet date, the relevant change shall be counted into the profit and losses of the
current period.
( xix ) Estimated liabilities
The current obligation of the Bank generated by issuing L/C, letter of indemnity, bank acceptance bill or loan commitments,
which it is likely to cause any economic benefit to flow out of the Bank as a result of performance of the obligation, and the
amount of the obligation can be measured in a reliable way, is recognized as an estimated liabilities.
The estimated liabilities shall be initially measured in accordance with the best estimate of the necessary expenses for the
performance of the current obligation, and the Bank shall take into full consideration of the risks, uncertainty, time value of
money, and other factors pertinent to the Contingencies. If the time value of money is of great significance, the best estimate
shall be determined after discounting the relevant future outflow of cash. The change in the book value of the estimated
liabilities caused by the recovery of discount with time passing is recognized as the profit or loss of the current period.
On the balance sheet date, the Bank checked the book value of the estimated debts and made proper adjustment in order to
reflect the best estimated amount at present.
091
( xx ) Interest income and expense
As for financial instruments recorded at post-amortization cost and interest-bearing financial instruments in available-for-sale
financial assets, the interest income and expense are recognized in the income statement pursuant to the accrual basis with
actual interest rate.
Actual interest rate method is a method to calculate the post-amortization cost of certain financial asset or liabilities and distribute
the interest income and expense in the related period. Actual interest rate is the interest rate adopted to cash the future cash flow of
financial instrument into the net book value of a financial instrument with the predicted due date of or within a certain proper shorter
term. In estimating future cash flow, the Bank takes all contract terms of the financial instrument into account, but does not take into
account of future credit loss. In calculating the actual interest rate, the Bank takes into account of the transaction cost, discount or
premium, and all expense related to the actual interest rate paid or received by the parties to the contract.
If the impairment of financial asset occurred, the related interest income is determined at the discount rate of the loss of the
future cash flow.
( xxi ) Service charge and commission income
Service charge and commission income are generally recognized pursuant to the accrual basis in providing the related service.
( xxii ) Operating lease
The Bank regards lease of which the lessor keeps the main risks and rewards of the leased asset as operating lease. The
operating lease of the Bank includes business sites and equipment rented in. The amount paid is amortized in the light of
straight-line-method averagely within the leasing period and recorded into the operating expense.
( xxiii ) Accounting for income tax
Income tax includes current income tax and deferred income tax. Except that income tax related to shareholders' equity
transaction or matters is recorded into the shareholders' equity account, other income tax is recognized as the income tax
expense or income and recorded into the profit and loss of the current period.
The Bank withdraws tax payable and current income tax expense in the light of the applicable income tax rate, based on the
total profit recognized in the financial statement and by making adjustment on tax adjustment to tax-exempt income and
undetectable expense pursuant to the applicable tax laws and regulations as well as their interpretations.
To the temporary difference of assets and liabilities caused by the difference of accounting and taxation basis, adopt debt method
to recognize deferred income tax asset or liability based on the temporary difference. The temporary difference will generate
taxable income in the future. Temporary difference refers to the difference between the book value and the taxation basis of the
asset or liability. To accounts not being recognized as assets or liabilities, if its taxation basis can be recognized in the light of the
tax law, then the difference between the book value and the taxation basis is also recognized as temporary difference.
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2011 年度报告
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The Bank checks the book value of the deferred income tax at each balance sheet date and when it is unlikely to have enough
taxable income in the future to transfer back part or entire deferred income tax asset, deduct the amount of the deferred
income tax asset that cannot be transferred back.
( xxiv ) Segment report
Business segment refers to a special combination consisting of a group of assets and business activities with has different risks
and rewards from the assets and business activities of other business segment. The Bank sets business segment as the main
reporting form. The transferable price among different segment is determined by the fund source and using period with the
corresponding deposit and loan interest rate quoted by the People's Bank of China and the interest rate in the interbank market.
Expenses are distributed to different segment in the light of their benefiting situation. The businesses of the Bank mainly involve
in four segments: corporate banking business, personal banking business, capital business and other business.
( xxv ) Material accounting estimates and judgment in carrying out the accounting policies
The Bank continuously assesses material estimates and key assumptions adopted according to historical experience and other
factors, including reasonable expectations for future events. Material accounting estimates and key assumptions that may cause
the book value of the assets and liabilities of the next fiscal year to appear material risk of adjustment are listed as follows:
1. Loss on impairment of issuing loans and payments on other's behalf
Besides assessing the loss on impairment of identified corporate non-performing loans separately, the Bank also assesses the
loss on impairment of loans issued and payments on other's behalf. If there is any loss on impairment, the Bank will estimate
the amount of the loss. The amount of the loss on impairment is the difference between the sum of the book value of the loans
issued and payments on other's behalf and the present value of the estimated future cash flow. In estimating the amount loss
on impairment, it is needed to make material judgment if there is any evidence indicating the loans issued and payments on
other's behalf is devalued and make material estimate on the current value of the future cash flow.
2. Income tax
In daily business activities, the final tax accounting for many transactions is uncertain. In withdrawing for income tax, the Bank
needs to make many estimates. To estimable tax issue, the Bank recognizes corresponding liabilities based on if additional tax
needs to be paid. If the final result of these tax items is different from the estimated amount in the past, then the difference will
influence the recognition of the income tax and deferred income tax during the period recognizing the difference.
3. Classification and recognition of held-to-maturity investment
The Bank classifies non-derivative financial assets with fixed or certain recoverable amount and of which the mature date is
fixed. The classification involves material judgment. In making related judgment, the Bank will consider if it has the will or ability
to hold such investment till its maturity. If the Bank sells a big-amount held-to maturity investment before the mature date
of the investment, then the Bank must classify all held-to-maturity investment portfolio to available-for-sale investment and
record the investment at fair value instead of post-amortization cost.
093
( xxvi ) Change in main accounting policies, accounting estimates of the Company and influence
1. Main accounting policies remained unchanged in 2011.
2. Significant accounting estimates remained unchanged in 2011.
( xxvii ) Correction of prior period accounting errors
As at the end of reporting period, the Company did not find prior period accounting errors by adoption of retrospective
restatement.
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III. Taxes
The taxes and tax rates applied to the Bank are as follows:
( i ) Business tax
Business tax is 5% of the operation revenue. The business tax of the Sub-branches in the urban area of Wenzhou is summed
up and paid by the Headquarters. Branches and sub-branches in counties ( cities ) pay the tax to their local tax administration.
Business income includes loan interest income, income form intermediary services and income from other operation; however,
income from deals with financial institutions is not.
( ii ) City construction and maintenance tax
City construction and maintenance tax is 5% or 7% of business tax. Such tax of the sub-branches in the urban area of
Wenzhou is summed up and paid by the Headquarters. Branches and sub-branches in counties ( cities ) pay the tax to their
local administration. The tax rates are as follows：
Sub-branch and Business Office Tax rate
2011
2010
Business office of the Headquarters, Sub-branches in the urban area of Wenzhou
7%
7%
Yueqing Sub-Branch
7%
7%
5%
5%
Pingyang Sub-Branch
5%
5%
Longgang Sub-Branch
5%
5%
Liushi Sub-Branch
5%
5%
Cangnan Sub-Branch
5%
5%
Hongqiao Sub-Branch
5%
5%
Yongjia Sub-Branch
5%
5%
Tangxia Sub-Branch
5%
5%
Rui'an Sub-Branch
7%
7%
Kunyang Sub-Branch
5%
5%
Wencheng Sub-Branch
5%
5%
Quzhou Branch
7%
7%
Ningbo Branch
7%
7%
Hangzhou Branch
7%
7%
Shanghai Branch
7%
7%
095
( iii ) Educational surcharge
The educational surcharge of the sub-branches in the urban area of Wenzhou is summed up and paid by the Headquarters.
Branches and sub-branches in counties ( cities ) pay the tax to their local administration. The tax rates are as follows:
Sub-branch and Business Office Tax rate
2011
2010
Business office of the Headquarters, Sub-branches in the urban area of Wenzhou
5%
5%
Yueqing Sub-Branch
5%
5%
5%
5%
Pingyang Sub-Branch
5%
5%
Longgang Sub-Branch
5%
5%
Liushi Sub-Branch
5%
5%
Cangnan Sub-Branch
5%
5%
Hongqiao Sub-Branch
5%
5%
Yongjia Sub-Branch
5%
5%
Tangxia Sub-Branch
5%
5%
Rui'an Sub-Branch
5%
5%
Kunyang Sub-Branch
5%
5%
Wencheng Sub-Branch
5%
5%
Quzhou Branch
5%
5%
Ningbo Branch
5%
5%
Hangzhou Branch
5%
5%
Shanghai Branch
5%
5%
( iv ) Corporation income tax
The tax rate of corporation income tax is 25%. Corporation income tax is summed up and paid by the Headquarters, the
Headquarter, Lucheng Sub-Branch, Ningbo Branch, Quzhou Branch, Hangzhou Branch and Shanghai Branch paid such tax
respectively.
IV. Notes to the financial statements
( i ) Cash and deposits in central bank
Items
Closing balance
Opening balance
Cash in hand
260,495,785.97
274,010,396.43
Statutory reserve placed in central bank
8,585,289,273.23
6,140,616,551.92
Excess reserve placed in central bank
3,291,538,261.27
3,685,389,130.93
Fiscal deposit placed in central bank
Total 096
10,080,000.00
3,281,000.00
12,147,403,320.47
10,103,297,079.28
2011 年度报告
ANNUAL REPORT
1. For details of deposits in central bank in the category of cash as of 31 Dec. 2011, please see the Note IV ( xlii ) /2.
2. Deposit reserve in RMB, deposit reserve in foreign currencies and fiscal deposit placed in the People's Bank of China are not
allowed to use for daily business. The RMB deposit reserve ratio as at 31 Dec. 2011 and 31 Dec. 2010 was 19% and 16.5%;
the foreign currency deposit reserve ratio as at 31 Dec. 2011 and 31 Dec. 2010 was 5%. The scope of RMB deposit reserve
and foreign currency deposit reserve covers deposits of institutions, deposits other than fiscal revenue, deposits of individuals,
deposits of corporations, margin deposits, credit balance of liabilities of authorized business offsetting assets and other deposits.
( ii ) Deposit in other banks
Items Closing balance
Opening balance
Deposits in domestic banks
3,402,050,335.20
1,787,053,537.48
Deposits in overseas banks
223,852,870.70
114,646,978.20
Less: provision for bad debt of deposits in other banks
Book value of deposit in other banks
3,625,903,205.90
1,901,700,515.68
For details of deposit in other banks in the category of cash as of 31 Dec. 2011 and 31 Dec. 2010, please see the Note IV ( xlii )
/2.
( iii ) Funds for inter-bank lending
Call loan to banks
2,692,364,043.16
Opening balance
Less: provision for bad debt of call loan to banks
Book value of call loan to banks
2,692,364,043.16
For details of call loan to banks in the category of cash equivalents as of 31 Dec. 2011 and 31 Dec. 2010, please see the Note IV
( xlii ) /2.
097
( iv ) Tradable financial assets
Categories Closing balance
Opening balance
Central government bond
152,561,550.00
109,363,650.00
Financial bonds
127,952,500.00
Total 237,316,150.00
152,561,550.00
Categories
31 Dec. 2011
Bond cost
Change in fair value
Fair value
146,351,850.00
6,209,700.00
152,561,550.00
Financial bonds
Total 146,351,850.00
6,209,700.00
Categories
152,561,550.00
31 Dec. 2010
Bond cost
Change in fair value
Fair value
109,474,750.00
-111,100.00
109,363,650.00
Financial bonds
128,310,000.00
-357,500.00
127,952,500.00
Total 237,784,750.00
-468,600.00
237,316,150.00
For details of pledge and mortgage of tradable financial assets as of 31 Dec. 2011, please see the Note VI ( ii ) /3.
( v ) Financial Assets Purchased Under Agreements to Resell
1. Categorized according to the type of pledges:
Opening balance
951,000,000.00
1,129,300,000.00
Central bank bills
149,940,000.00
300,000,000.00
3,049,920,000.00
1,194,200,000.00
Credit assets
300,000,000.00
Policy bank bonds
Corporate bonds
Total
99,000,000.00
4,249,860,000.00
2,923,500,000.00
2. Categorized according to the other party of the transaction:
Other party of the transaction Closing balance
Opening balance
Banks
500,320,000.00
1,988,500,000.00
3,000,500,000.00
935,000,000.00
Rural Credit cooperative
Insurance companies
Fund companies
Total
599,100,000.00
149,940,000.00
4,249,860,000.00
2,923,500,000.00
3. For details of financial assets purchased under agreements to resell included in cash equivalent as of 31 Dec. 2011, please
see the Note IV ( xlii ) /2.
098
2011 年度报告
ANNUAL REPORT
( vi ) Interest receivables
1. Balance breakdown
Items Opening balance
Closing balance
114,559,071.00
76,357,098.33
Loan interest receivables
Interest receivables of deposit in other banks
2,149,448.03
Bond interest receivables 76,135,887.85
Funds for inter-bank lending receivables
25,290,045.28
Total
71,126,110.79
218,134,452.16
147,483,209.12
2. Overdue interest
Overdue
31 Dec. 2011
31 Dec. 2010
Corporate loans
Items
Within 3 months
8,495,074.33
2,477,726.40
Private loans
Within 3 months
4,669,601.12
557,002.77
13,164,675.45
3,034,729.17
Total
3. Analysis of aging
Aging Closing balance
Opening balance
Amount Percentage ( % ) Amount Percentage ( % )
Within 1 year
218,134,452.16
100.00
147,483,209.12
100.00
Total 218,134,452.16
100.00
147,483,209.12
100.00
4. As at 31 Dec. 2011, no debit interest receivable was due from shareholders that held 5% or above shares of the Bank
( vii ) Loan issued and payments on other's behalf
1. Composition of loan and payments on other's behalf
Amount
Percentage ( % ) Opening balance
Amount
Percentage ( % )
Corporations 22,587,973,552.89
61.97 15,317,163,657.33
50.76
Individuals 13,864,751,589.50
38.03 14,855,867,405.27
49.24
Total amount of loans issued and payments on others' behalf
36,452,725,142.39
100.00
100.00
30,173,031,062.60
Less: allowance for loss on loans 658,485,445.58
422,397,890.35
135,990,078.93
99,873,192.76
522,495,366.65
322,524,697.59
35,794,239,696.81
29,750,633,172.25
Book value of loans issued and payments on others' behalf
099
2. Loans and payments on others' behalf categorized according to regions
Closing balance
Amount( RMB 10,000 yuan ) Zhejiang Amount( RMB 10,000 yuan ) 92.95
Percentage ( % )
2,901,080.14
96.15
163,346.27
4.48
81,535.41
2.70
31,274.00
0.86
15,691.62
0.52
Jiangsu Other Total Percentage ( % ) 3,388,236.39
Shanghai Opening balance
62,415.85
1.71
18,995.94
0.63
3,645,272.51
100.00
3,017,303.11
100.00
3. Loans issued to corporations and payments on corporations' behalf categorized according to business sectors:
Business sectors
Opening balance
Amount Percentage Amount Percentage
( RMB 10,000 yuan )
(%)
( RMB 10,000 yuan )
(%)
Electricity, gas and water production and supply industry
18,350.00
0.81
18,074.50
1.18
Real estate industry 73,240.00
3.24
70,750.00
4.62
Construction industry 187,886.03
8.32
96,669.08
6.31
27,414.41
1.21
22,101.49
1.44
Transportation, warehousing and post industry
Education 7,764.00
0.34
22,979.00
1.50
Resident service and other service industry
2,561.11
0.11
8,979.00
0.59
Science research, technology service and geologic prospecting Agriculture, forestry, livestock farming, fishery industry
Wholesale and retail industry
4,623.00
0.20
3,837.00
0.25
12,127.28
0.54
12,963.00
0.85
590,643.44
26.15
307,428.66
20.07
24,470.00
1.08
51,710.00
3.38
Health, social security and social welfare industry
7,065.00
0.31
8,565.00
0.56
Culture, sports and entertainment industry
4,938.00
0.22
1,070.00
0.07
Information transmission, computer service and software industry
Manufacturing industry
Hospitality and catering industry
Lease and business service industry
Mining industry
Self-employed business Total loans issued to corporations and payments on corporations' behalf
16,942.00
0.75
8,821.00
0.58
1,133,508.50
50.18
765,754.45
49.99
24,872.74
1.10
27,850.19
1.82
106,252.00
4.70
103,314.00
6.74
0.19
850.00
0.06
4,389.85
11,750.00
100.00
1,531,716.37
49,482.59
25,897.39
13,599.01
9,987.32
35,883.58
15,910.07
2,209,314.77
1,505,818.98
Book value of loan issued and payments on corporations' behalf
2,258,797.36
0.52
Allowance for loan group
100
Closing balance
100.00
2011 年度报告
ANNUAL REPORT
4. Loans issued to corporations and payments on corporations' behalf categorized according to the nature of the loans and
payments:
Amount
Short-term loan
Opening balance
Percentage ( % ) Amount
Percentage ( % )
20,630,142,812.36
91.33
14,022,199,201.06
91.54
1,215,380,968.31
5.38
1,009,386,879.14
6.59
Overdue loan
314,501,914.90
1.39
154,924,414.64
1.01
Discount 369,963,920.25
1.64
109,669,280.79
0.72
Negotiation Total 57,983,937.07
0.26
20,983,881.70
0.14
22,587,973,552.89
100.00
15,317,163,657.33
100.00
5. Loans issued to individuals and payments on behalf of individuals categorized according to the types of the loans and
payments
Amount
First-hand home mortgage
Percentage ( % ) 206,472,027.09
1.49
Second-hand home mortgage
5,610,805.87
New car loan
8,535,853.10
Other consumer product loan Opening balance
Amount
Percentage
(%)
188,233,108.09
1.27
0.04
2,418,044.17
0.02
0.06
20,318,196.00
0.14
883,037,744.39
6.37
1,962,108,096.97
13.21
11,975,299,741.38
86.37
12,106,550,479.84
81.49
Renovation loan
45,335,000.00
0.33
9,520,000.00
0.06
Deposit and loan card integrated card
25,340,367.62
0.18
20,411,017.18
0.14
Business loan for the self-employed and private business State student loan
Credit card
Total loans issued to individuals and payments on behalf of individuals
148,981.60
0.00
266,551.34
0.00
714,971,068.45
5.16
546,041,911.68
3.68
13,864,751,589.50
100.00
14,855,867,405.27
100.00
163,659,516.15
163,424,011.37
Book value of loans issued to individuals and payments on behalf of individual
163,659,516.15
163,424,011.37
13,701,092,073.35
14,692,443,393.90
101
6. Loans and payments on others' behalf categorized according to guarantee modes
Amount Credit loan
Guaranteed loan
Opening balance
Percentage Amount ( % ) Percentage
(%)
872,177,869.71
2.39
812,745,642.59
2.69
9,307,452,311.11
25.53
5,090,644,115.17
16.87
Mortgaged loan
26,273,094,961.57
72.08
24,269,641,304.84
80.44
22,895,054,424.90
87.14
22,050,853,316.60
90.86
3,008,076,616.42
11.45
2,109,118,707.45
8.69
92,179,424.41
0.35
52,589,517.00
0.22
Loan with pledges
Discount of bank acceptance bills
Discount of commercial acceptance bills
Total
277,784,495.84
1.06
57,079,763.79
0.23
36,452,725,142.39
100.00
30,173,031,062.60
100.00
7. Overdue loans and payments on others' behalf
Items Overdue 1 day to Overdue 90 days to Overdue 360 days to Overdue over 90 days ( incl. )
360 days ( incl. )
3 years ( incl. )
3 years
Total
Credit loan
26,320,730.66
4,997,713.70
6,842,823.69
313,326.14
38,474,594.19
Guaranteed loan
77,521,330.76
22,126,059.06
484,450.75
5,000.00
100,136,840.57
Mortgaged loan
107,487,971.35
121,351,256.71
92,299,340.40
321,138,568.46
107,487,971.35
121,351,256.71
92,299,340.40
321,138,568.46
Total 211,330,032.77
148,475,029.47
99,626,614.84
318,326.14
459,750,003.22
Total
Items 102
Closing balance
Opening balance
Overdue 1 day to Overdue 90 days to
Overdue 360 days to Overdue over 90 days ( incl. ) 360 days ( incl. ) 3 years ( incl. )
3 years
Credit loan
19,149,165.47
7,771,536.02
312,355.97
35,708,664.43
3,184,450.75
8,475,606.97
5,000.00
4,189,450.75
37,835,096.35
1,608,976.25
182,608,137.76
37,835,096.35
1,608,976.25
182,608,137.76
45,606,632.37
1,926,332.22
222,506,252.94
Guaranteed loan
1,000,000.00
Mortgaged loan
32,424,224.85
110,739,840.31
32,424,224.85
110,739,840.31
Total 52,573,390.32
122,399,898.03
2011 年度报告
ANNUAL REPORT
8. Allowance for loss on loan
Items 2011
Individuals Groups
Total
Balance at the beginning of the year
99,873,192.76
322,524,697.59
422,397,890.35
Withdrawing in the year
49,164,553.46 233,257,210.3 282,421,763.76
Increase in the year
Written off in the year
7,028,982.12 37,503,030.78
44,532,012.90
Written back in the year
6,018,685.17 ( 4,216,489.54 ) 1,802,195.63
Of which: amount written back because of collecting ( 6,452,836.56 ) ( 4,216,489.54 ) ( 10,669,326.10 )
previously written off loans and payments on others' behalf
Difference from exchange
Balance at the end of the year
135,990,078.93 Items
522,495,366.65 658,485,445.58
2010
Individuals Groups
Total
Balance at the beginning of the year
43,369,366.29
288,333,024.06
331,702,390.35
Withdrawing in the year
89,973,052.09
62,695,624.36
152,668,676.45
Increase in the year
21,108,462.29
31,274,096.24
52,382,558.53
Written back in the year
12,360,763.33
-2,770,145.41
9,590,617.92
Of which: amount written back because of collecting -1,313,107.30
-2,770,145.41
-4,083,252.71
Written off in the year
previously written off loans and payments on others' behalf
Difference from exchange
Balance at the end of the year
99,873,192.76
322,524,697.59
422,397,890.35
103
9. In accordance with the five-class loan classification standard stipulated in the Guideline for the Classification of Loan
Risks ( CBRC Issue [2007] No. 54 ) promulgated by China Banking Regulatory Commission, five-class loan classification
and provision for loss on special-purpose loan withdrawn by the Company are as follows:
Five-class categories 31 Dec. 2011
Amount of loans Percentage to Percentage of Amount of
and payments on the total specialized specialized
allowance %
others' behalf
amount ( % )
Normal 35,255,118,721.83
96.72
Caution 835,596,848.99
Inferior 260,411,630.83
91,678,702.58
9,919,238.16
36,452,725,142.39
Doubtful Loss Subtotal Five-class categories allowance
1.35
477,291,385.87
2.29
2.55
21,308,456.31
0.71
35.13
91,482,288.98
0.25
63.79
58,484,076.26
0.03
100.00
9,919,238.16
100.00
1.81
658,485,445.58
31 Dec. 2010
Amount of loans Percentage to Percentage of Amount of
and payments on the total specialized specialized
allowance %
others' behalf
amount ( % )
Normal 29,063,367,579.45
96.32
Caution 847,221,767.91
Inferior 179,407,494.05
77,728,776.27
5,305,444.92
30,173,031,062.60
Doubtful Loss Subtotal allowance
1.00
290,633,675.79
2.81
2.00
16,944,435.35
0.59
34.38
61,681,873.52
0.26
61.54
47,832,460.77
0.02
100.00
5,305,444.92
100.00
1.40
422,397,890.35
10. The top ten customers with the biggest balance amount - loan issued to customers and payments on customers' behalf.
( 1 ) As of 31 Dec. 2011, the top ten customers with the biggest balance amount are as follows：
Customers
Industries
Percentage to total
amount of loan ( % )
Customer 1
Real estate industry
140,000,000.00
0.38
Customer 2
132,800,000.00
0.36
Customer 3
Manufacturing industry
101,766,824.27
0.28
Customer 4
Construction industry
100,000,000.00
0.27
Customer 5
90,000,000.00
0.25
Customer 6
88,000,000.00
0.24
Customer 7
80,000,000.00
0.22
Customer 8
75,000,000.00
0.21
Customer 9
70,000,000.00
0.19
Customer 10
67,390,000.00
0.18
944,956,824.27
2.58
Total
104
Balance of loans to customers and payments on customers' behalf
2011 年度报告
ANNUAL REPORT
( 2 ) As of 31 Dec. 2010, the top ten customers with the biggest balance amount are as follows：
Customers
Industries
Balance of loans to customers Percentage to total
and payments on customers' behalf
amount of loan ( % )
139,000,000.00 0.46
Customer 1
Customer 2
132,800,000.00 0.44
Customer 3
131,013,322.88 0.43
Customer 4
110,000,000.00 0.36
Customer 5
100,000,000.00 0.33
Customer 6
100,000,000.00 0.33
Customer 7
100,000,000.00 0.33
Customer 8
97,000,000.00 0.32
Customer 9
80,000,000.00 0.27
Customer 10
80,000,000.00 0.27
1,069,813,322.88
3.54
Total
11. Credit line of the top ten group customers
( 1 ) As of 31 Dec. 2011, the top ten group customers with the highest credit line
Unit: RMB 10,000 yuan
Customer Credit line
Customer 1
17,000.00
Customer 2
14,000.00
Customer 3
13,850.00
Customer 4
13,280.00
Customer 5
10,176.68
Customer 6
10,000.00
Customer 7
9,250.00
Customer 8
9,180.00
Customer 9
9,000.00
Customer 10
Total
8,800.00
114,536.68
105
( 2 ) As of 31 Dec. 2010, the top ten group customers with the highest credit line
Unit: RMB 10,000 yuan
Customer Customer 1
Customer 2
Customer 3
Customer 4
Customer 5
Customer 6
Customer 7
Customer 8
Customer 9
Customer 10
Total
Credit line
18,800.00
18,800.00
17,000.00
16,396.00
16,000.00
15,000.00
14,000.00
14,000.00
13,900.00
13,880.00
157,776.00
12. As of 21 Dec. 2011, no loan receivables were due from the shareholders holding 5% or above equity of the Company. For
details of loans for related parties, please see the Note V/( ii ) /3.
( viii ) Available-for-sale financial assets
Categories Closing balance Central government bond
99,979,500.00
Commercial bank bond
Commercial bank subordinated bond
Financial bonds
1,445,892,580.00
Corporation bonds
215,840,480.00
Total
1,761,712,560.00
Categories Bond cost
Central government bonds
99,883,813.63
Financial bonds
1,453,664,750.31
Corporation bonds
219,840,841.48
Total
1,773,389,405.42
Categories Bond cost
99,942,640.49 Commercial bank bonds
385,962,068.11
Commercial bank subordinated bonds
449,100,671.37
Total 935,005,379.97 31 Dec. 2011
Change in fair value 95,686.37
-7,772,170.31
-4,000,361.48
-11,676,845.42
31 Dec. 2010
Change in fair value -685,740.49
-5,316,748.11
-11,229,353.55
-17,231,842.15
Opening balance
99,256,900.00
380,645,320.00
437,871,317.82
917,773,537.82
Fair value
99,979,500.00
1,445,892,580.00
215,840,480.00
1,761,712,560.00
Fair value
99,256,900.00
380,645,320.00
437,871,317.82
917,773,537.82
For details of available-for-sale financial assets in cash equivalents as of 31 Dec. 2011, please see the Note IV ( xlii ) /2.
For details of pledge and mortgage of available-for-sale financial assets as of 31 Dec. 2011, please see the Note VI ( ii ) /3.
106
2011 年度报告
ANNUAL REPORT
( ix ) Held-to-maturity investment
Opening balance
1,048,540,735.21
2,988,367,967.52
Policy bank bonds
1,780,766,426.02
762,109,620.36
Central bank bills
219,218,280.74
219,825,285.99
Corporation bonds
302,764,070.41
363,132,577.48
Commercial bank subordinated bond
Total 3,351,289,512.38
4,333,435,451.35
Less: provision for impairment of held-to-maturity investment Book value of held-to-maturity investment
3,351,289,512.38
4,333,435,451.35
For the details of mortgage and pledge of held-to-maturity investment as of 31 Dec. 2011, please see the Note VI/( ii ) /3.
( x ) Investment of accounts receivable
Opening balance
Financing product
575,253,230.67 193,955,573.44
Total investment of accounts receivable 575,253,230.67 193,955,573.44
Less: Provision for impairment of investment of accounts receivable Book value of investment of accounts receivable 575,253,230.67 193,955,573.44
( xi ) Long-term equity investment
Items China Union Pay Co., Ltd
City Commercial Bank Clearing Center
Closing balance
Opening balance
13,000,000.00
13,000,000.00
250,000.00
250,000.00
Taishun Wenyinn Village Bank
23,593,767.21
Total 36,843,767.21
13,250,000.00
Impairment provision Book value 36,843,767.21
13,250,000.00
107
( xii ) Investment real estate
1. Change in investment real estate
Items Opening balance Increase in 2011
Decrease in 2011
Closing balance
1. Total cost 17,125,260.55
17,125,260.55
17,125,260.55
17,125,260.55
2. Total accumulative depreciation
4,440,568.38
411,219.18
4,851,787.56
4,440,568.38
411,219.18
4,851,787.56
3. Total net value
12,684,692.17
12,273,472.99
12,684,692.17
12,273,472.99
4. Total provision for impairment
5. Total book value 12,684,692.17
12,273,472.99
12,684,692.17
12,273,472.99
2. Depreciation amount as of the year was RMB411,219.18.
3. As of 31 Dec. 2011, the original value of the investment real estate without the property ownership certificate was
RMB3,439,901.35, as well as accumulated depreciation of RMB1,052,253.70 and net value of RMB2,387,647.65.
( xiii ) Fixed assets
Opening balance
Original value of fixed assets
632,455,547.48
615,359,171.48
Accumulated depreciation 148,955,303.46
127,425,296.42
Net book value of fixed assets
483,500,244.02
487,933,875.06
Disposal of fixed assets
108
Construction in progress
155,937,378.33
102,958,376.63
Total 639,437,622.35
590,892,251.69
2011 年度报告
ANNUAL REPORT
2. Change in fixed assets
Items 1. Total cost Houses and buildings
Opening balance Increase in 2011
615,359,171.48
23,531,729.00
Decrease in 2011
Closing balance
6,435,353.00
632,455,547.48
461,101,519.57
461,101,519.57
Special-purpose equipment 95,978,992.50
18,405,918.00
4,476,483.50
109,908,427.00
General-purpose equipment
22,156,795.30
2,853,355.00
607,802.50
24,402,347.80
Transportation equipment 12,103,893.50
798,422.00
1,002,900.00
11,899,415.50
Other 24,017,970.61
1,474,034.00
348,167.00
25,143,837.61
27,724,406.26
2. Total accumulative depreciation
6,194,399.22
148,955,303.46
66,903,376.55
10,657,145.28
77,560,521.83
12,029,310.66
4,356,691.39
40,972,205.23
11,123,549.76
2,217,101.63
562,614.54
12,778,036.85
6,028,502.24
995,080.84
1,002,900.00
6,020,683.08
10,070,281.91
1,825,767.85
272,193.29
11,623,856.47
487,933,875.06
483,500,244.02
394,198,143.02
383,540,997.74
68,936,221.77
11,033,245.54
11,624,310.95
Transportation equipment Other 3. Total net book value
Transportation equipment Other 127,425,296.42
6,075,391.26
5,878,732.42
13,947,688.70
13,519,981.14
3. Depreciation amount of fixed assets as of the year was RMB27,724,406.26. The original value of construction in
progress transferring to fixed assets was RMB1,611,298.00; the original value of fixed assets through acquisition was
RMB21,920,431.00; the original value of disposal of fixed assets was RMB6,435,353.00.
4. Changing in construction in progress
Items Houses and buildings
Equipment
Software
Total
Opening balance 94,815,376.63
7,795,000.00
Increase in 2011
Transferred to fixed assets
65,575,952.60
11,348,600.40
76,924,553.00
Closing balance
21,986,253.30
138,405,075.93
1,611,298.00
17,532,302.40
348,000.00
102,958,376.63
Other decrease( Note ) 1,611,298.00
348,000.00
22,334,253.30
155,937,378.33
Note: Other decrease includes the furnishing expense of RMB 21,986,253.30 yuan of the second floor of operational building of Jiefanglu SubBranch, Business Department of Chengxi Branch, operational building of Jiefanglu Sub-Branch and shop front of Huahai Plaza of the Head
Office being transferred to long-term deferred expense; UFIDA software for human resource management of headquarter amounting to RMB
348,000.00 was transferred to intangible assets.
109
5. As of 31 Dec. 2011, the original value of the houses and buildings of which the owner on the property ownership certificate
was Bank of Wenzhou Co., Ltd. was RMB 310,091,618.98 yuan, as well as accumulated depreciation of RMB 50,899,970.47
and net value of RMB 259,346,193.51; the original value of the houses and buildings of which the owner on the property
ownership certificate was Wenzhou City Commercial Bank Co., Ltd. was RMB 59,383,586.30, as well as accumulated
depreciation of RMB9,915,702.07 and net value of RMB 49,467,884.23; the original value of the houses and buildings of which
the owner on the property ownership certificate was Wenzhou City Commercial Bank was RMB 48,556,640.40, as well as
accumulated depreciation of RMB 11,513,043.22 and net value of RMB 37,043,597.18; the original value of the houses and
buildings of which the owner on the land use right certificate was the former body of the Bank, City Credit Cooperatives, was
RMB 8,931,032.52, as well as accumulated depreciation of RMB 3,888,795.40 and net value of RMB 5,042,237.12; the original
value of the houses and buildings without property ownership certificate was RMB 33,984,096.37, as well as accumulated
depreciation of RMB 1,343,010.67 and net value of RMB32,641,085.70.
As of 31 Dec. 2011, the original value of the houses and buildings of which the owner on the land use right certificate was Bank
of Wenzhou Co., Ltd. was RMB 183,161,713.73, as well as accumulated depreciation of RMB10,764,064.45 and net value of
RMB172,552,194.28; the original value of the houses and buildings of which the owner on the land use right certificate was
Wenzhou City Commercial Bank Co., Ltd. was RMB 15,927,369.45, as well as accumulated depreciation of RMB1,770,257.50
and net value of RMB14,157,111.95; the original value of the houses and buildings of which the owner on the land use right
certificate was Wenzhou City Commercial Bank was RMB 26,725,690.47, as well as accumulated depreciation of RMB
3,460,965.77 and net value of RMB23,264,724.70; the original value of the houses and buildings of which the owner on the
land use right certificate was the former body of the Bank, City Credit Cooperatives, was RMB 18,261,059.50, as well as
accumulated depreciation of RMB7,093,783.94 and net value of RMB11,167,275.56; the original value of the houses and
buildings of which the owner on the land use right certificate was natural person was RMB 805,712.00, as well as accumulated
depreciation of RMB543,237.54 and net value of RMB262,474.46; the original value of the houses and buildings without land
use right certificate was RMB 216,219,974.42, as well as accumulated depreciation of RMB53,928,212.63 and net value of
RMB162,137,216.79.
As of 31 Dec. 2011, the original value of the houses and buildings of which the type of land use right was assignment was RMB
175,369,307.42, as well as accumulated depreciation of RMB12,014,305.91 and net value of RMB163,509,546.51.
( xiv ) Intangible assets
Items
Closing balance
Opening balance
Cost 123,428,361.80
108,654,166.80
35,121,196.16
27,782,216.57
Accumulative amortization
Impairment provision
Net amount 110
88,307,165.64
80,871,950.23
2011 年度报告
ANNUAL REPORT
2. Change in intangible
Items I. Original value Opening book balance Increase in 2011
Decrease in 2011
108,654,166.80
14,774,195.00
Closing book balance
123,428,361.80
Software
58,074,164.87
14,774,195.00
72,848,359.87
Land use right 50,580,001.93
50,580,001.93
II. Accumulated amortization 27,782,216.57
7,338,979.59
35,121,196.16
Software
23,777,014.19
6,074,481.63
29,851,495.82
4,005,202.38
1,264,497.96
5,269,700.34
Land use right III. Accumulative amount of provision for impairment Software
Land use right IV. Book value 80,871,950.23
7,435,215.41
Software
34,297,150.68
8,699,713.37
88,307,165.64
42,996,864.05
Land use right 46,574,799.55
( 1,264,497.96 ) 45,310,301.59
3. Of which, the amortization amount was RMB7,338,979.59 in 2011.
4. For the details of mortgage and pledge of the intangible assets of the Bank as of 31 Dec. 2011, please see the Note VI/( ii ) /3.
( xv ) Deferred income tax assets and liabilities
Opening balance
Deferred income tax assets:
Provision for assets impairment Unrealized gain or loss of available-for-salefinancial assets investment 69,648,244.70
37,998,123.35
2,919,211.36
4,307,960.54
Net amount of change in fair value of tradable financial assets Estimated welfare to early retirement Subtotal 117,150.00
837,306.61
1,165,044.52
73,404,762.67
43,588,278.41
Deferred income tax liabilities:
Net amount of change in fair value of tradable financial assets
1,552,425.00
Subtotal
1,552,425.00
( xvi ) Other assets
1. Balance breakdown:
Items Other receivables Assets for offsetting debts
Long-term deferred expense Expenses to be apportioned
Closing balance
Opening balance
85,460,655.65
87,126,770.84
1,522,867.82
1,522,867.82
42,057,895.16
28,311,628.55
1,524,189.00
1,307,269.17
Settlement fund
102,025,008.62
2,207,302.39
Total 232,590,616.25
120,475,838.77
111
2. Other receivables
( 1 ) Balance breakdown
Items
Closing balance
Deposit placed outside
Opening balance
1,215,000.00
1,215,000.00
19,855,579.59
16,564,871.90
Litigation expense paid on others' behalf
4,544,224.80
2,923,333.01
Cash pledge 5,368,140.24
5,204,464.24
Prepaid property rent 27,228,554.89
18,923,244.63
Prepayment for property purchase
20,000,000.00
20,000,000.00
3,632,427.00
11,247,002.80
Receivables of to-be-settled or cleared payments
Prepaid furnishing expense Golden Card settlement Other 9,454,065.43
17,834,049.06
Total 91,297,991.95
93,911,965.64
Less: Provision for bad debt of other receivables
Book value of other receivables
5,837,336.30
6,785,194.80
85,460,655.65
87,126,770.84
( 2 ) Aging analysis
Aging Within 1 year
Amount 55,551,322.07
Closing balance
Percentage ( % ) Provision for bad debt
Net value
60.84
3,411,749.79
52,139,572.28
1-2 years
7,027,556.37
7.70
1,054,796.25
5,972,760.12
2-3 years 1,478,971.01
1.62
248,158.01
1,230,813.00
3-4 years
5,806,034.50
6.36
898,524.25
4,907,510.25
4-5 years
20,028,235.00
21.94
28,235.00
20,000,000.00
Over 5 years
Total 1,405,873.00
1.54
195,873.00
1,210,000.00
91,297,991.95
100.00
5,837,336.30
85,460,655.65
Aging Within 1 year
1-2 years
Amount Opening balance
Percentage ( % ) Provision for bad debt
Net value
50,592,236.85
53.87
1,172,516.50
49,419,720.35
9,925,229.04
10.57
995,514.92
8,929,714.12
2-3 years 8,244,642.65
8.78
677,306.28
7,567,336.37
3-4 years
22,173,879.60
23.62
2,173,879.60
20,000,000.00
4-5 years
Over 5 years
Total 229,256.40
0.24
199,256.40
30,000.00
2,746,721.10
2.92
1,566,721.10
1,180,000.00
93,911,965.64
100.00
6,785,194.80
87,126,770.84
( 3 ) As at 31 Dec. 2011, no receivables were due from the shareholders holding 5% or above shares of the Bank.
112
2011 年度报告
ANNUAL REPORT
3. Assets for offsetting debts
Opening balance
Original value
Provision for devaluation Original value
Houses and buildings 2,737,033.57
1,214,165.75
2,737,033.57
Other Total Provision for devaluation
1,214,165.75
348,570.00
348,570.00
348,570.00
348,570.00
3,085,603.57
1,562,735.75
3,085,603.57
1,562,735.75
As at 31 Dec. 2011 the original value of the houses and buildings without property ownership certificate or land tenure
certificate in the assets for offsetting debts was RMB 1,871,500.73 yuan, the corresponding provision for impairment was RMB
912,799.33 yuan, as well as net book value of RMB 958,701.40; the original value of the assets that had not been changed the
name of the owner was RMB 625,600.00 yuan, the corresponding provision for impairment was RMB 181,400.00 yuan, as well
as net book value of RMB 444,200.00 yuan.
4. Long-term deferred expense
Items Property rent expense Renovation of leased fixed assets Advertising expense Total Opening Increase
Amortization/
Decrease transferred out in 2010
in 2011
Closing
balance
in 2011
2,137,223.57
2,496,940.00
2,279,657.33
2,354,506.24
24,850,291.07
23,622,049.50
9,654,798.98
38,817,541.59
1,324,113.91
438,266.58
885,847.33
12,372,722.89
42,057,895.16
28,311,628.55
26,118,989.50
balance
( xvii ) Assets impairment
Items
Opening balance
31 Dec. 2011
Increase Decrease Withdrawing
Increase Currency translation Written Transferred in 2011
in 2011
difference
off in 2011
out in 2011
Closing balance
1. Provision for bad debt
6,785,194.80
947,858.50
5,837,336.30
Of which: other receivables
6,785,194.80
947,858.50
5,837,336.30
Deposit in other banks
2. Provision for loss on loan
3. Provision for devaluation of assets for offsetting debt
Total 422,397,890.35
269,950,242.03 10,669,326.10
430,745,820.90
269,950,242.03 10,669,326.10
Items
44,532,012.90
1,562,735.75
Opening balance
658,485,445.58
1,562,735.75
45,479,871.40
665,885,517.63
Decrease Closing balance
31 Dec. 2010
Increase Withdrawing
Increase Currency translation Written Transferred in 2011
in 2011
difference
off in 2011
out in 2011
1. Provision for bad debt
5,285,194.80
1,500,000.00
6,785,194.80
Of which: other receivables
5,285,194.80
1,500,000.00
6,785,194.80
Deposit in other banks
2. Provision for loss on loan
3. Provision for devaluation of assets for offsetting debt
Total 331,702,390.35
138,994,805.82
4,083,252.71
52,382,558.53
1,562,735.75
338,550,320.90
140,494,805.82
4,083,252.71
52,382,558.53
422,397,890.35
1,562,735.75
430,745,820.90
113
( xviii ) Borrowing from the central bank
Opening balance
Borrowing from the central bank
500,000,000.00
200,000,000.00
( xix ) Deposits of other banks and financial institutions
Items Deposits of other banks
Deposits under agreement of other banks
Total Closing balance
Opening balance
2,050,112,560.78
160,700,376.79
600,000,000.00
1,900,000,000.00
2,650,112,560.78
2,060,700,376.79
As of 31 Dec. 2011, postal savings and terms of savings of Postal Savings Bank of China were as follows:
Amount of deposit
Deposit term
Interest rate
Beginning and ending date
5 years
Saving deposit interest rate of 1-year 15 Mar. 2007 -15 Mar. 2012
600,000,000.00
lump-sum deposit and lump-sum
withdrawal +fixed interest rate
( xx ) Borrowed inter-bank funds
Categories according to types:
Opening balance
Interbank borrowing
88,212,600.00
19,868,100.00
( xxi ) Sales of financial assets under agreements to repurchase:
1. Categories according to types:
Opening balance
Central government bonds 600,000,000.00
709,500,000.00
Local government bonds
130,000,000.00
240,000,000.00
2,867,700,000.00
457,000,000.00
Policy bank bonds
Central bank bills
Corporate bonds
Total 114
215,600,000.00
150,000,000.00
380,000,000.00
3,963,300,000.00
1,786,500,000.00
2011 年度报告
ANNUAL REPORT
2. Categories according to the parties of the transaction
Other party of the transaction Bank Closing balance
Opening balance
3,963,300,000.00
1,586,500,000.00
Insurance companies Fund Rural credit cooperative
Total 3,963,300,000.00
200,000,000.00
1,786,500,000.00
( xxii ) Deposits taking
Items Corporation deposits Closing balance
Opening balance
34,303,782,202.69
28,203,853,107.12
Personal deposits
17,872,342,732.91
13,706,166,275.76
Total 52,176,124,935.60
41,910,019,382.88
Closing balance
Opening balance
Current deposit
11,122,497,135.90 10,196,870,169.20
Fixed deposit
19,713,463,125.09 15,687,300,212.02
2. Corporation deposits
Items Fiscal deposit
Remittance to be paid and temporary deposit
Marginal deposit for security
Total 15,447,335.11 4,196,765.31
261,925,211.36 18,004,650.92
3,190,449,395.23 2,297,481,309.67
34,303,782,202.69 28,203,853,107.12
3. Personal deposits
Items Current deposit
Closing balance
Opening balance
6,845,197,099.61
5,506,699,030.21
Fixed deposit
11,027,145,633.30 8,199,467,245.55
Total 17,872,342,732.91
13,706,166,275.76
4. For the details of deposits of shareholders holding 5% or above shares of the Bank as of 31 Dec. 2011, please see Note VI/( ii )
/3/A.
115
( xxii ) Payroll payable
Items Opening balance
Increase in 2011
Paid in 2011
Closing balance
186,484,376.36
( 1 ) Salary and bonus, allowances and subsidies
83,933,321.64
437,035,288.88
334,484,234.16
( 2 ) Employees' welfare
41,489,997.35
41,489,997.35
( 3 ) Social insurance
31,267,938.28
31,267,938.28
Including: Medical insurance
8,565,844.13
8,565,844.13
Basic endowment insurance
19,118,995.95
19,118,995.95
Unemployment insurance
1,865,446.23
1,865,446.23
Work-related injury insurance
1,118,401.06
1,118,401.06
Maternal insurance
599,250.91
599,250.91
( 4 ) Housing funds
20,033,767.61
20,033,767.61
( 5 ) Labor union budget and employee educational budget
13,035,646.96
9,575,026.03
10,797,901.41
( 6 ) Compensation for termination of employment relation 316,498.00
316,498.00
( 7 ) Annuity payment
16,374,642.98
238,642.98
( 8 ) Salary and subsidy of early retired workers ( Note ) Total 14,258,522.34
16,136,000.00
4,660,178.08
451,124.03
1,762,075.66
3,349,226.45
99,391,401.13
560,004,904.09
439,168,180.07
220,228,125.15
Note: To employees who retire early before the legal retirement age ruled, the Bank promises to pay monthly compensation to these layoff
workers until they reach the legal retirement age. The Bank has estimated the compensation to be paid in the future and discounted to present
liability at the interest rate of government bond in the same period.
( xxiv ) Taxes and surcharge payable
Taxes
Closing balance
Opening balance
Corporation income tax
119,449,114.26 88,941,078.45
Business tax
103,308,498.09
36,421,295.88
City maintenance and construction tax
6,914,426.83
2,306,343.09
Educational surcharge
5,062,629.79
1,702,350.72
Water conservancy fund
1,424,426.32
454,382.71
Property tax
2,186,033.85
2,082,667.49
24,954,610.26
5,951,470.35
1,007.60
16,081.90
Personal income tax Interest tax on saving deposit Stamp duty Other Total 116
278,378.40
169,857.14
4,552,457.66
1,286,003.07
268,131,583.06
139,331,530.80
2011 年度报告
ANNUAL REPORT
( xxv ) Interest payables
Opening balance
Fixed deposit interest payable 275,670,899.56
106,443,487.58
Fixed saving deposit interest payable
157,628,334.56
104,838,070.45
1,648,785.91
1,167,131.08
447,212.17
318,665.08
Call deposit interest payable Call saving deposit interest payable
Interest payable of deposit of other banks
Long-term bond interest payable Total 13,497,541.67
2,601,222.23
8,738,888.88
8,738,888.89
457,631,662.75
224,107,465.31
2. As of 31 Dec. 2011, no payables were due to shareholders that held 5% or above shares of the Bank.
( xxvi ) Bond payable
Bond type
Issuing date
Due date Interest rate Opening balance Interest adjustment in this period Closing balance
Junior bond
18 Sep. 2007
17 Sep. 2017
The first five years 5.50%
548,665,333.68
667,333.56
549,332,667.24
The last five years 8.50%
On 28 Nov. 2006, in accordance with the resolution of the 2nd shareholders' general meeting, the Bank decided to issue
RMB subordinated bond of 550,000,000 yuan through public offering on the inter-bank bond market. Upon the Approval of
China Banking Regulatory Commission on Subordinated Bond Issuance of Wenzhou City Commercial Bank of ( YJF [2007]
No. 278 ) on 6 Jul. 2007 and the Administrative Licensing Letter of the People's Bank of China ( YSCZY Zi [2007] No. 24 )
on 27 Aug. 2007, the Bank was approved to issue commercial bank subordinated bond of 550,000,000 yuan through public
offering on the inter-bank bond market. The financial bond was finished offering on 14 Sep. 2007. The term of the bond is
10 years. The Bank has the right to choose if or not redeem all or part of the subordinated bond at the end of the fifth year.
If the Bank chooses to exercise the right, then the term of the bond is 5 years. The bond is applied to fixed interest rates
in different period. The interests are paid once a year. The annual interest rate for the first five years is 5.5% of the face
value. The vale date is 18 Sep. 2007. If the Bank does not choose to exercise the right, then the annual interest rate of the
next five years is 8.50%. The bond is applied to simple interest method to calculate interest annually. Compound interest is
not applied. No interest will be paid after the bond is mature. Interest is paid once a year. The payment of the principal and
interest of the bond is after the deposits and other liabilities of the bank but before stock capital. The capital raised from the
bond issuance would be used to supplement the supplementary capital of the Bank. The commission of the bond issuance
was RMB 3,575,000 yuan.
117
( xxvii ) Other liabilities
Items Payable of securities agent service
Closing balance
Opening balance
472,956.51
274,491.74
3,398,254.49
5,295,974.78
102,187,189.41
79,803,995.84
Deferred income 8,375,000.00
Profit payable
Other payables Other current liabilities 226,653,409.95
311,872,668.67
Other non-current liabilities 185,864.00
Total 332,711,810.36
405,807,995.03
Notes: 1 ) Payable of securities agent service is payable resulted from subscription price for fund agent service.
2 ) Deferred income is unrealized interest income due from other banks.
3 ) Other non-current liabilities is risk reserve funs for small and medium-sized enterprise through financial appropriations.
2. Other payables
( 1 ) Balance breakdown
Opening balance
Amount to be transferred 735,800.00
1,405,114.70
Long outstanding deposit 2,690,736.42
3,511,933.57
Clearing of exchange in the same city
29,420,789.38
16,602,849.00
Other payables
69,339,863.61
58,284,098.57
102,187,189.41
79,803,995.84
Total Note: Long outstanding deposit was transferred from the balance of the following two accounts:
A. To institutional current account that does not have any receipt or payment in one year and is not canceled the account in 30 days after the
Bank sends a notice, the balance of the account is transferred to the long outstanding deposit account.
B. To personal saving account ( excluding interest settlement ) that does not have any receipt or payment in three years and the account
balance is less than RMB5 yuan, the balance of the account is transferred to the long outstanding deposit account. If a joint-name card expires,
the balance is transferred to the long outstanding deposit account.
( 2 ) As at 31 Dec. 2011, no payment due to shareholder that held 5% or above shares of the Bank.
3. Other current liabilities
Opening balance
Issuing cashier's checks
219,199,099.89
277,630,339.18
6,899,707.56
3,315,329.49
Other agent service
Issuing drafts
Total
118
554,602.50
30,927,000.00
226,653,409.95
311,872,668.67
2011 年度报告
ANNUAL REPORT
( xxviii ) Stock capital
Opening balance
Shares held by the state
106,967,732.00
106,967,732.00
Shares held by state-owned corporations
372,672,767.00
372,672,767.00
Shares held by other corporation 768,695,325.00
768,695,325.00
Shares held by natural person 260,655,373.00
260,655,373.00
1,508,991,197.00
1,508,991,197.00
Total The stock capital verification of the Bank is as follows:
On 22 May 1998, upon the verification of Zhejiang Provincial Auditors' Firm with ZSYZ [1998] No. 017 Report on the Verification
of Capital, the stock capital of the Bank upon incorporation was RMB 290,495,800.00 yuan.
On 6 Feb. 2004, the Bank increased a capital of RMB 180,300,000.00 yuan, resulting in stock capital increasing to RMB
470,795,800.00 yuan, which has been verified by Wenzhou Huaming CPAs Firm with [2004] HYZi No. 39 Report on the
Verification of Capital.
On 23 Jun. 2006, the Bank increased a capital of RMB 536,417,731.00, resulting in stock capital increasing to RMB
1,007,213,531.00 yuan, which has been verified by Wenzhou Huaming CPAs Firm with [2006] HYZi No. 261 Report on the
On 25 Dec. 2006, the Bank increased a capital of RMB 15,968,390.00 yuan, resulting in stock capital increasing to RMB
1,023,181,921.00 yuan, which has been verified by Wenzhou Huaming CPAs Firm with [2006] HYZi No. 461 Report on the
On 31 Dec. 2009, the Bank increased a capital of RMB 160,324,193.00, resulting in stock capital increasing to RMB
1,183,506,114.00 yuan, which has been verified by Zhejiang Dewei CPAs Firm Wenzhou Branch with ( 2009 ) Y Zi ( 2009 ) No.
10110 the Capital Verification Report.
On 10 Nov. 2010, the Bank increased a capital of RMB 485,809,276.00, resulting in stock capital increasing to RMB
1,508,991,197.00 yuan, which has been verified by Zhejiang Dewei CPAs Firm Wenzhou Branch with ( 2010 ) No. 10075 the
Capital Verification Report.
( xxix ) Capital reserve
Items
Premium on capital stock
Opening balance 1,033,327,477.26
Increase/decrease in 2010
Closing balance 1,033,327,477.26
Reserve for change in fair value of
Total
available-for-sale financial assets
-12,923,881.61
1,020,403,595.65
4,166,247.55 4,166,247.55
-8,757,634.06
1,024,569,843.20
119
( xxx ) Surplus reserve
Items Statutory surplus reserve
Discretionary surplus reserve
Total
193,561,963.05
504,610,951.65
698,172,914.70
64,468,719.02 201,299,280.07
265,767,999.09
258,030,682.07 705,910,231.72 963,940,913.79
Opening balance
Withdrawal in 2011
Closing balance
In accordance with the Company Law and the Articles of Association of the Company, the Company appropriated 10% of
net profit as of year 2011 as statutory surplus reserve, amounting to RMB64,468,719.02. According to the WYG [2011] No.5
resolution made by the shareholders' general meeting of the Bank, the Company appropriated RMB201,299,280.07 of the
retained profit as of year 2010 as discretionary surplus reserve.
( xxxi ) Allowance for general risks
Items Allowance for general risks
Opening balance
Withdrawal in 2011
Closing balance
303,642,478.47
62,877,705.06
366,520,183.53
In according to the WYG [2011] No. 5 resolution made by the shareholders' general meeting of the Bank, the Company
appropriated the balance of allowance for general risk at 1% of the increase amount of risk assets.
( xxxii ) Retained profit
Items
2011
Opening balance 445,255,928.77
Add: Net profit as of the year
644,687,190.22
Less: appropriating statutory surplus reserve
Less: appropriating discretionary surplus reserve
Less: appropriating allowance for general risk
64,468,719.02
201,299,280.07
62,877,705.06
Less: dividend of common share payable
181,078,943.64
Closing balance 580,218,471.20
Profit distribution in the reporting period:
On 29 Apr. 2011, the Bank passed the Resolution on Profit Distribution Preplan for 2010 with WYG ( 2011 ) No. 5, the Bank
decided to distribute cash dividend at 12% of stock capital as of year 2010, totaling to RMB181,078,943.64, appropriated
allowance for general risk of RMB 62,877,705.06, as well as discretionary surplus reserve of RMB201,299,280.07.
120
2011 年度报告
ANNUAL REPORT
( xxxiii ) Operating income
1. Net interest income
Items
Interest income 2011
2010
3,287,326,310.76
2,170,435,830.64
—Deposit in other banks
49,997,830.17
14,533,373.96
—Deposit in central bank
136,906,085.43
90,531,532.45
—Loans to other banks
—Financial assets purchased under agreements to resell 36,513,393.66
57,579,328.26
36,460,859.53
2,854,580,291.94
1,880,674,771.03
Loans issued to corporations and payments on corporations' behalf
1,694,914,933.60
921,747,304.49
Loans issued to individuals and payments on individuals' behalf
1,064,259,382.20
906,827,947.93
50,518,967.02
24,659,883.42
—Loan issued and payments on others' behalf
Of which:
Bills discount
Negotiation Overdue loan and penalty interest
—Bond investment —investment in accounts receivables
Interest expense 1,261,496.93
1,111,450.32
43,625,512.19
26,328,184.87
150,371,380.47
124,837,747.62
1,378,000.83
23,397,546.05
1,099,878,366.27
602,065,353.63
—Deposit due from other banks
94,434,874.28
86,981,255.22
—Borrowing from central bank
10,422,304.94
8,656,325.39
—Borrowed inter-bank funds
5,076,775.34
448,789.01
929,079,131.79
457,832,660.10
—Sales of financial assets under agreements to repurchase
—Deposit taking
29,947,946.37
17,138,168.46
—Issuance of bond 30,917,333.55
30,917,333.57
—Other 90,821.88
Net interest income
2,187,447,944.49
1,568,370,477.01
121
2. Net service charge and commission income
Items
Service charge and commission income 2011
2010
98,180,275.68 75,978,592.17
—Service charge income from domestic settlement 11,441,059.81 16,970,838.73
—Agent service charge income 14,411,021.59 5,594,352.51
—Bankcard service charge income 37,099,246.90 38,686,920.14
—Other service charge income 29,915,051.36 11,483,105.14
5,313,896.02 3,243,375.65
—Foreign exchange service charge income Service charge and commission expense
11,186,397.78 10,453,908.32
—Service charge expense of settlement 2,983,223.81 1,457,938.79
—Agent service charge expense
2,248,059.36 2,806,682.81
—Bankcard service charge expense
261,586.83 —Loss from foreign exchange
—Other service charge expense
Net service charge and commission income
1,745.87 5,691,781.91 6,189,286.72
86,993,877.90 65,524,683.85
3. Gains on investment
Items
2011
Income from equity investment -1,076,232.79
Price difference from transactions of tradable financial assets
2010
270,000.00
110,350.00
-11,150.00
Price difference from transactions of available-for-sale financial assets
-166,950.80
Income from disposal of held-to-maturity investment
149,960.26
Total -815,922.53
91,899.20
4. Income from change in fair value
Items
Unrealized profit or loss in the current period
Realized profit or loss in the current period
Total 2011
2010
6,209,700.00 -468,600.00
468,600.00 27,616.71
6,678,300.00
-440,983.29
5. Income from other operation
Items
Rental income Other Total 122
2011
1,125,675.85 2010
1,145,882.43
258,148.33 35,000.00
1,383,824.18
1,180,882.43
2011 年度报告
ANNUAL REPORT
( xxxiv ) Operating expense
1. Business tax and surcharges
Items
Business tax
City maintenance and construction tax
Educational surcharge
Total 2011
2010
172,764,170.81 106,929,495.89
11,555,456.30 7,144,504.91
8,638,208.68 5,310,126.02
192,957,835.79
119,384,126.82
2. Business and administrative expense
Items
2011
2010
Employee expense
560,004,904.09 389,063,212.33
Business expense
248,153,057.01 210,443,684.35
Depreciation of fixed assets
27,724,406.26 23,823,618.03
Amortization of long-term deferred expense 12,372,722.89 9,736,068.49
Amortization of intangible assets
Electronic equipment operation expense Safety and security expense Rent expense Taxes Total 7,338,979.59 6,213,331.54
27,850,779.01 25,906,019.46
6,714,633.44 6,705,283.95
40,207,467.52 38,246,752.06
7,320,548.47 6,487,211.06
937,687,498.28
716,625,181.27
3. Loss on assets impairment
Items
2011
Provision for bad debt of other receivables
2010
1,500,000.00
Loss on devaluation of assets for offsetting debts
Provision for loss on loan
269,950,242.03 138,994,805.82
Total 269,950,242.03 140,494,805.82
4. Cost of other operation
Items
2011
2010
Tax on rental income 225,286.69 197,166.24
Depreciation of investment real estate
411,219.18 345,028.92
Other Total 636,505.87
33,489.12
575,684.28
123
( xxxv ) Non-operating income
Items
2011
2010
Total gains from disposal of non-current assets
182,721.66 2,091.00
Of which: Gains from disposal of fixed assets and investment real estate
182,721.66 2,091.00
1,426,546.06 1,898,881.89
551,942.00 3,746,729.70
Long outstanding deposit
Penalty incomes
Government grant 200,000.00
Other 3,807,216.56 193,739.72
Total 5,968,426.28 6,041,442.31
( xxxvi ) Non-operating expense
Items
Total loss on disposal of non-current assets
2011
2010
205,618.44
401,361.20
Of which: loss on disposal of fixed assets and investment real estate
205,618.44
401,361.20
Long outstanding deposit 952,451.94
552,702.88
Donation and sponsorship expense 3,218,600.00
1,778,700.00
Special-purpose fund for water conservancy 2,061,077.50
1,316,332.30
Fines and overdue fine
3,372,029.74
2,938,160.13
Stability Preservation fee
11,130,000.00
Tax on disposal of assets for offsetting debts
2,518,808.51
Other 1,403,036.01
11,752.59
Total 13,731,622.14
18,129,009.10
( xxxvii ) Total profit
Currency 124
Original currency
2011
Exchange rates
Converted into RMB
RMB 859,622,023.32
1
859,622,023.32
EUR 423,284.18
8.1625
3,455,057.81
YEN
2,485,268.00
0.0811
201,562.70
USD
491,029.78
6.3009
3,093,930.07
HKD
-32,934.12
0.8107
-26,700.88
GBP
-796.83
9.6147
-7,661.32
AUD
2.41
6.4025
15.43
Total 866,338,227.13
2011 年度报告
ANNUAL REPORT
( xxxviii ) Income tax expenses
Items
Current income tax expense
Deferred income tax expense
Total 2011
251,303,845.35 -29,652,808.44
221,651,036.91 2010
175,205,325.40
-28,458,876.91
146,746,448.49
( xxxix ) Earnings per share
Net profit Weighted average shares issued of the year
Basic EPS
Diluted EPS
2011
644,687,190.22
1,508,991,197.00
0.43
0.43
2010
494,728,809.74
1,210,629,870.92
0.41
0.41
( xl ) Other comprehensive income
Items
2011
Gain/( loss ) on available-for-sale financial assets 5,860,508.36 Less: Influence on income tax due from available-for-sale financial assets
-1,388,749.18
Net amount measured into other comprehensive income in prior period -305,511.63
and transferred into profits and losses in current period Total 4,166,247.55
2010
-5,136,381.87
1,284,095.47
-3,852,286.40
( xli ) Notes to cash flow statement
1. Other cash receivable related to operating activities
Items
Income from disposal of assets for offsetting debts
Receipt of account to be transferred
Rental income Receipt of assets for agent services
Others Total 2011
24,334,222.16 1,125,675.85 5,771,540.32 31,231,438.33
2010
3,089,051.10
9,330,189.99
1,145,882.43
5,834,478.81
19,399,602.33
Items
2011
Payment of account to be cleared
177,476,029.23 Business expense 322,925,936.98 Stability preservation fee paid
Other 8,651,707.24
Total 509,053,673.45
2010
145,532,030.35
249,542,198.82
11,130,000.00
6,033,192.43
412,237,421.60
2. Other cash receivable related to operating activities
125
( xlii ) Supplementary information to cash flow statement
1. Adjusting net profit to cash flow from operating activities
Items
2011
2010
Net profit 644,687,190.22
494,728,809.74
Add: provision for assets impairment 269,950,242.03
140,494,805.82
27,724,406.26
23,823,618.03
411,219.18
345,028.92
7,338,979.59
6,213,331.54
12,372,722.89
9,736,068.49
Depreciation of fixed assets Depreciation of investment real estate
Amortization of intangible assets
Amortization of long-term prepaid expense Loss on disposal of fixed assets and other long-term assets
Loss on change in fair value Bond interest payable expense 22,896.78
399,270.20
-6,678,300.00
440,983.29
30,917,333.55
30,917,333.57
-150,933,458.77
-148,327,192.87
-31,205,233.44
-28,458,876.91
1,552,425.00
Decrease of loans -6,313,556,766.59
-5,628,327,240.10
Increase of deposits
10,266,105,552.72
10,950,566,479.19
Loss on investment Decrease of deferred income tax assets
Increase of deferred income tax liabilities Net increase of interbank loans
Decrease of operating receivables
Increase of operating payables Decrease of other operating assets
Increase of other operating liabilities
Net cash flow from operating activities 1,399,704,283.53
-1,092,111,900.00
-3,195,264,778.33
-2,412,656,517.24
1,394,770,487.28
-209,023,400.40
-216,919.83
2,291,250.93
-66,014,122.86
25,466,371.34
4,291,688,159.21
2,166,518,223.54
2. Cash and cash equivalents
Items
2011
I. Cash 5,056,624,753.16
4,449,054,339.73
260,495,785.97
274,010,396.43
Deposit available for payment placed in the central bank
3,291,538,261.27
3,685,389,130.93
Deposit on call in other banks 1,504,590,705.92
489,654,812.37
Of which: cash in hand
II. Cash equivalents
7,456,921,026.69
3,955,045,703.31
Three-month fixed-term deposit in other banks
1,460,812,500.00
1,331,545,703.31
Financial assets purchased under three-month agreement to resell 4,249,860,000.00
2,623,500,000.00
Three-month held-to-maturity investment Three-month call loan to banks
III. Balance of cash and cash equivalents at the end of the year
126
2010
199,324,700.00
1,546,923,826.69
12,513,545,779.85
8,404,100,043.04
2011 年度报告
ANNUAL REPORT
( xliii ) Segment report 2011
The Bank's information is listed by business segment. The main business of the Bank is banking and related financial services,
including corporate banking, individual banking, capital business and other businesses.
Corporate banking service is the banking service the Bank provides to corporate customers, including deposit in RMB and
foreign currencies, loan, products and settlement related to trade, agent, authorization and financial status certification, etc.
Individual banking service is the banking service the Bank provides to personal customers, including deposit in RMB and foreign
currencies, loan, bank card, personal wealth management service, settlement, agent, financial status certification, etc.
Capital businesses cover money market transactions, repurchase transaction, self-operating bond investment and asset liability
management.
Other businesses include the segment without forming separate list or can not distribution based on rational standard except
for the aforesaid corporate banking service, individual banking service and capital business.
The transferable price among different segments is determined by the fund source and using period with the corresponding
deposit and loan interest rate quoted by the People's Bank of China and the interest rate in the interbank market. Expenses are
distributed to different segments according to their benefiting situation.
Items
Net interest income Corporate banking service Personal Capital service Other
Total
banking service
1,194,954,967.68 776,243,854.86 216,249,121.95 2,187,447,944.49
35,745,196.24 36,837,660.07 14,411,021.59 86,993,877.90
1,230,700,163.92 813,081,514.93 230,660,143.54 2,274,441,822.39
( 1,076,232.79 ) 260,310.26 ( 815,922.53 )
Other operating income/expense
747,318.31 747,318.31
Income from changes in fair value
6,678,300.00 6,678,300.00
Net service charge and commission income
Net trading revenue/expense
Gains on investment
Exchange income
( 6,354,519.08 ) ( 6,354,519.08 )
Business taxes and surcharges
119,939,276.18 73,018,559.61 192,957,835.79
505,875,461.38 307,640,268.45 123,788,899.81 382,868.64 937,687,498.28
( Loss ) /recovery on impairment of loan
167,274,981.60 102,675,260.43 269,950,242.03
Operating profit
430,179,692.89 329,747,426.44 113,809,853.99 364,449.67 874,101,422.99
( 7,763,195.86 ) ( 7,763,195.86 )
430,179,692.89 329,747,426.44 113,809,853.99 ( 7,398,746.19 ) 866,338,227.13
Net non-operating income/expense
Profit before tax
Total assets
30,497,127,284.77 18,018,697,660.97 17,049,966,258.64 Total liabilities
34,756,751,002.76 18,118,897,288.68 Supplementary information
85,787,774.28 65,651,578,978.66
7,809,269,573.77 522,420,504.73 61,207,338,369.94
1. Depreciation and amortization expense
27,017,101.49 14,840,291.38 5,971,465.80 18,469.24 47,847,327.91
2. Capital expense
66,292,385.18 36,413,910.39 14,652,301.30 45,318.33 117,403,915.20
127
V. Related parties relationship and transactions
( i ) Related parties and related parties relationship
1. Related corporations
( 1 ) Shareholders that hold 5% and above shares of the Bank ( In RMB 10,000 shares ) :
Name of related parties Organization Relationship code
2011
Shareholding
2010
Percentage Shareholding
( % )
Percentage
(%)
China Huarong Asset Management Corporation ( CHAMC ) 71092557-7
Shareholder
10,699.77
7.09%
10,699.77
7.09%
00251857-5
Shareholder
10,696.77
7.09%
10,696.77
7.09%
47053639-5
Shareholder
10,550.68
6.99%
10,550.68
6.99%
71760827-5
Shareholder
6,500.00
8.62%
6,500.00
8.62%
70433439-1
Shareholder
6,500.00
6,500.00
75300811-1
Shareholder
9,648.41
6.39%
9,648.41
6.39%
72909484-9
Shareholder
7,800.00
5.17%
7,800.00
5.17%
Zhejiang Dongri Company Limited
71095874-X
Shareholder
7,800.00
5.17%
7,800.00
5.17%
( 2 ) Entities directly or indirectly controlled or jointly controlled by the insiders of the Bank and their immediate relatives, entities
that can be imposed material influence by the insiders of the Bank and their immediate relatives, or entities of which the
insiders of the Bank and their immediate relatives work as directors or high-rank managers.
Note: Insiders of the Bank refer to the directors, supervisors, key managers, high-rank managers of the Headquarters and branches, other
person who have the right to decide or participate in the credit line approval or assets transfer.
128
2011 年度报告
ANNUAL REPORT
2. Related natural persons include:
( 1 ) Directors, supervisors and key managers of the Bank;
( 2 ) Insiders of the Bank and their immediate relatives other than the directors, supervisors, and key managers of the Bank;
( 3 ) Controlling natural-person, directors and key managers of the related corporations of the Bank;
( 4 ) Table of shares held by directors, supervisors and high-rank managers ( Unit: share ) :
Name
Office title Closing shareholding
( Unit: share )
Xing Zengfu
Chairman
1,967,637.00
Huang Chenyuan
Director, Vice President and concurrently Secretary of the Board 1,428,981.00
Chen Jiwen
Chief Supervisor 504,999.00
Zhou Shuang Staff-representative Supervisor
897,502.00
Zhang Renhui
148,281.00
Zheng Jie
798,281.00
Li Weiming
Assistant President 446,324.00
Zhang Demin
Person in charge of Planning and Financing Department
220,641.00
Shen Yun
Person in charge of internal audit department 682,919.00
Lu Limin
Person in charge of credit management department 408,281.00
Total
7,503,846.00
( ii ) Related parties transactions and balance of transactions
( 1 ) Loan interest income
A. The Bank did not have any loan interest income from shareholders holding 5% or above shares of the Bank.
B. Loan interests income received from enterprises directly or indirectly controlled or jointly controlled by the insiders of the
Bank and their immediate relatives, enterprises that can be imposed material influence by the insiders of the Bank and their
immediate relatives, or enterprises of which the insiders of the Bank and their immediate relatives work as directors or highrank managers:
Name of related parties
2011
2010
Yongjia Sanhu Concrete Engineering Co., Ltd.
Yongjia Natural Real Estate Development Co., Ltd.
Nanjiang Group Co., Ltd.
Yueqing Sanhu Concrete Engineering Co., Ltd.
Zhejiang Zhongliang Valve Co., Ltd. 235,424.00
149,569.56
Wenzhou Yaermei Optical Co., Ltd.
167,422.31
71,454.19
Wenzhou Jiansheng Materials Co., Ltd.
122,239.50
69,224.71
Wenzhou Electricity Real Estate Development Co., Ltd.
129
C. Loan interest income received from the directors, supervisors and key managers of the Bank in the reporting period:
Interest income
Number of people
2011
2010
4,099,225.17
5,960,951.40
114
139
D. Loan interest income received from the insiders of the Bank and their immediate relatives other than directors, supervisors
and key managers of the Bank in the reporting period:
Interest income
Number of people
2011
2010
11,235,838.88
10,113,484.40
121
138
E. Loan interest income received from controlling natural-person shareholders, directors and key managers of the related
corporations of the Bank in the reporting period:
Interest income
Number of people
2011
2010
348,774.23
147,584.66
1
1
( 2 ) Deposit interest expense
A. Deposit interest expense paid to shareholders that hold 5% or above shares of the Bank in the reporting period:
2011
2010
12,911,482.45
42,665.48
653.83
6,474.46
43,127.84
1,576,524.93
17,061,185.86
2,883,025.97
498.74
1,270.57
130
2011 年度报告
ANNUAL REPORT
B. Deposit interest expense paid to enterprise directly or indirectly controlled or jointly controlled by the insiders of the Bank and
their immediate relatives, enterprises that can be imposed material influence by the insiders of the Bank and their immediate
relatives, or enterprises of which the insiders of the Bank and their immediate relatives work as directors or high-rank
managers:
Name of related parties Yongjia Sanhu Concrete Engineering Co., Ltd.
2011
2010
138.92
Hong Qing Ting Group Yongjia Shoes Co., Ltd.
11,151.83
2,377.07
2,185.23
12,977.76
402,165.53
107.41
Wenzhou Changtai Industrial Co., Ltd.
Shen'ou Communication Equipment Co., Ltd
19.40
11.49
Zhejiang Oriental Group Corp. 1,091,083.14
9.99
12.79
545.30
100.90
Zhejiang Zhongliang Valve Co., Ltd.
696.29
276.49
41,637.22
2,801,785.02
66.59
25,078.26
Wenzhou Dongri Real Estate Development Co., Ltd. Natural ( Kunshan ) Land Co., Ltd. Shude Group Co., Ltd.
320.68
Zhejiang Dongri Technological Education Development 97,953.00
C. Deposit interest expense paid to the directors, supervisors and key managers of the Bank in the reporting period:
Interest expense
Number of people
2011
2010
370,945.74
1,894,937.19
252 257
D. Deposit interest expense paid to the insiders of the Bank and their immediate relatives other than directors, supervisors and
key managers of the Bank in the reporting period:
Interest expense
Number of people
2011
2010
1,801,394.88
2,596,452.38
900 894
E. Deposit interest expense paid to controlling natural-person shareholders, directors and key managers of the related
corporations of the Bank in the reporting period:
Interest expense
Number of people
2011
2010
241.51
3,950.35
2
9
131
( 3 ) Balance of related parties transactions
A. As at the end of reporting period, the balance of transaction with shareholders that hold 5% or above shares of the Bank:
Loan balance
Deposit balance
Closing balance
L/C issued
Bank acceptance bill L/G issued
92,177,936.20 Sanhu Concrete Group Co., Ltd.
49,626.25 Changtai Holding Group Co., Ltd.
5,694,810.11
Wenzhou Jianghong Real Estate Development Co., Ltd.
17,075.76 Zhejiang Dongri Company Limited
14,173,030.23 Natural Real Estate Development Co., Ltd.
146,690.68 Name of related parties
Loan balance
Deposit balance
132
76,202,832.94
7,679.64
126,523.13
106,636,434.03
62,140,390.10
deposited
Opening balance
L/C issued
Pledge cash
Pledge cash
deposited
2011 年度报告
ANNUAL REPORT
B. Enterprise directly or indirectly controlled or jointly controlled by the insiders of the Bank and their immediate relatives,
enterprises that can be imposed material influence by the insiders of the Bank and their immediate relatives, or enterprises of
which the insiders of the Bank and their immediate relatives work as directors or high-rank managers:
Loan balance
Deposit balance
Closing balance
L/C issued
Zhejiang Zhongliang Valve Co., Ltd.
2,000,000.00
58,999.13
4,000,000.00
11,505.98
2,500,000.00
3,060.37
19.38
10,439.61
8,710.65
10,738,938.90
8,486,997.76
48,000,000.00
25,483.53
Loan balance
Deposit balance
Pledge cash
deposited
588,700.00
Opening balance
L/C issued
Pledge cash
deposited
Hong Qing Ting Group Yongjia Shoes Co., Ltd.
20,053.44
8,195,784.64
7,692,673.28
29,481.19
1,500,000.00
295.89
Natural ( Kunshan ) Land Co., Ltd. 24,977.76
19,583.45
Zhejiang Oriental Group Corp. Yongjia Zhongliang Power Station Valve Co., Ltd.
3,000,000.00
3,016,992.32
2,358.55
37,874.02
Wenzhou Dongri Real Estate Development Co., Ltd. 2,000,000.00
11.47
133
C. Loan to directors, supervisor sand key managers at the end of the reporting period:
Content of transaction
Amount of loan
2011
2010
34,507,196.77 110,712,999.00
77
106
49,391,015.26
46,276,123.92
254 256
Number of person
Amount of deposit Number of person
D. Loans to the insiders of the Bank and their immediate relatives other than directors, supervisors and key managers of the
Bank in the reporting period:
Amount of loan
2011
2010
109,706,782.04
158,332,249.05
Number of person
Amount of deposit 71
98
76,481,736.04
129,850,248.42
887
874
Number of person
E. Loans to controlling natural-person shareholders, directors and key managers of the related corporations of the Bank in the
reporting period:
Amount of loan
2011
2010
3,060,000.00
2,050,000.00
1
1
11,136.43
803,727.18
2
9
Number of person
Amount of deposit Number of person
( 4 ) Enterprise annuity of related parties
Upon the approval by the resolutions of the 3rd meeting of the 3rd workers' representative assembly held on 24 Nov. 2007
and of the 12th meeting of the 3rd Board of Directors held on 25 Jan. 2007, the Bank started to implement enterprise annuity
since 2007, and entered into the Contract on Trusteeship of Enterprise Annuity of Bank of Wenzhou Co., Ltd. with China Pacific
Insurance Co., Ltd. on 25 Dec. 2007, entering into Pacific-ICBC Zhixin Enterprise Annuity Plan. After signing the contract with
China Pacific Insurance Co., Ltd. in 2007, the initial fee was RMB 8,232,000.00 yuan, the fee for every year and accumulative
fees are as below:
134
Unit: RMB Yuan
Year
Current year
Accumulated fees
Estimated value at the end of the reporting period
2011
2,614,000.00
47,916,000.00
45,058,990.37
2010
13,060,000.00
45,302,000.00
44,696,800.68
2011 年度报告
ANNUAL REPORT
( 5 ) Compensation for directors, supervisors and key managers
Compensation received by directors, supervisors and key managers from the Bank:
Unit: RMB 10,000 Yuan
Items 2011
Total annual remuneration 2010
1321
Total amount of the top three senior managerial staffs with the highest compensation 1107
405
358
Compensation to the independent directors 100,000/person
60,000/person
Compensation to the external supervisors
100,000/person
60,000/person
19 persons
23 persons
Total compensation between RMB 0 - RMB 400,000 ( incl. ) Total compensation between RMB 400,000 - RMB 800,000 ( incl. ) 6 persons
6 persons
Total compensation between RMB 800,000 - RMB 1,000,000 ( incl. ) 2 persons
3 person
Total compensation over RMB 1 million
6 persons
3 persons
VI. Contingencies, undertakings and main off-balance-sheet Activities
( i ) Contingencies caused by lawsuits
As at 31 December 2011, as plaintiff, the Bank was involved in 32 pending lawsuits, relating to an amount of RMB 100.42
million; as defendant, the Bank was involved in 1 pending lawsuits, relating to an amount of RMB 14.4838 million.
( ii ) Undertakings
1. Undertaking on capital expenditure
Contract signed but not provided
31 Dec. 2011
31 Dec. 2010
53,753,300.00
61,375,000.00
Approved but not signed contract yet 132,580,000.00
Total 193,955,000.00
53,753,300.00
2. Undertaking on operating lease
As of 31 Dec. 2011 and 31 Dec. 2010, the minimum rent in the future in the irreparable rent agreement for the Bank's business
locales and offices was as follows:
Within 1 year
31 Dec. 2011
31 Dec. 2010
10,675,938.60
32,501,120.87
1-2 years
9,285,466.00
29,202,157.05
2-3 years
8,639,687.10
25,543,182.03
3-4 years
8,636,133.35
20,619,799.56
4-5 years
8,187,723.74
14,026,728.18
Over 5 years
30,320,958.90
23,602,120.49
Total 75,745,907.69
145,495,108.18
135
3. Undertaking on pledges
( 1 ) Some of the government bonds and financial bonds in the held-to-maturity financial assets, available-for-sale financial
assets and tradable financial assets of the Bank were used as pledges for the deposits of Postal Saving Bank of China, interbank sale of financial asset under agreements to repurchase and reloan agreement with central bank. As of each balance sheet
date, the balance and the expiration date of the pledge were as follows
31 Dec. 2011
Under deposits of Postal Savings
Sales of securities under agreements to repurchase
Under reloan agreement with central bank
Total Expiration date of pledge
300,000,000.00
18 Mar. 2012
3,980,000,000.00
4 Jan. 2012—6 Jan. 2012
470,000,000.00
14 Oct. 2012
4,750,000,000.00
31 Dec. 2010
Expiration date of pledge
950,000,000.00
30 Apr. 2011—15 Mar. 2012
Sales of securities under agreements to repurchase
1,786,500,000.00
4 Jan. 2011—10 Jan. 2011
Total 2,736,500,000.00
Under deposits of Postal Savings
( 2 ) Upon the approval of WYD [2011] No. 46 Resolution of the Board of Directors on 25 Oct. 2011, the Bank applied a reloan of RMB 100 million from People's Bank of China Wenzhou Central Sub-branch with Land D02 in Longwan Administration
Center as mortgage. As at the balance sheet date, the related balance of the assets and the expiration date of the mortgage
were as follows:
Assets name 31 Dec. 2011
Accumulated Original value
Mortgage period
Net value depreciation
Land D02 in Longwan Administration Center
41,230,305.00
4,724,300.25
36,506,004.75
Total 41,230,305.00
4,724,300.25
36,506,004.75
19 Apr. 2011-19 Jan. 2012
( iii ) Main contingencies of off-balance-sheet activities
Items Amount Pledge percentage ( % )
L/C issued 4,097,169,028.73
1,080,331,094.41
26.37
L/G issued
753,294,112.74
167,362,670.22
22.22
Bank acceptance bill issued 9,755,495,419.25
1,110,107,339.08
11.38
Loan undertaking ( Credit card ) 1,562,283,882.55
Items 136
31 Dec. 2011
Related pledge amount
Amount 31 Dec. 2010
Related pledge amount
Pledge percentage ( % )
L/C issued 242,426,398.26
25,134,485.11
10.37
L/G issued
588,146,842.58
121,382,640.50
20.64
Bank acceptance bill issued 9,330,413,362.56
1,424,556,398.02
15.27
Loan undertaking ( Credit card ) 1,025,162,800.46
2011 年度报告
ANNUAL REPORT
L/C is a credit loan in which the Bank is requested and instructed by applicant to issue a written guarantee letter of certain
amount which guarantees to pay the amount in a given period at a given place upon given documents.
Bank acceptance bill is a credit loan business in which the payee or payer ( or cashing applicant ) issues a commercial
acceptance bill, the cashing applicant applies to the Bank and the Bank agrees to cash the commercial acceptance bill after
examination.
L/G is a credit loan business in which the Bank is requested by the applicant or authorized person to issue a letter of guarantee
promising to the beneficiary that when the applicant fails to fulfill the liabilities and undertakings set in the contract, the Bank will
cover the debt or bear the liabilities as ruled in the letter of guarantee.
Loan undertaking refers to the Bank promises to the customers to give a certain amount of credit line in a certain period after
the Bank discusses with the customer and issues a letter of undertakings.
VII. Events after the balance sheet date
( i ) On 23 Apr. 2012, the Bank held the meeting of the Board for 2011. In accordance with the provisions of the Measures of
Administrative for the Withdrawal of Reserves for Non-performing Debts of Financial Enterprises and the Financial Standard
for Financial Enterprises, the Board of Directors of the Bank appropriated 1% of the increased amount of risky assets, or RMB
134.02 million, as the provision for general risk; appropriated dividend of RMB 181.08 million to distribute to the shareholders;
the rest RMB265.12 million planned to be used for discretionary surplus reserve.
( ii ) No other significant events influencing the financial statements.
VIII. Management over financial instrument risks
( i ) Overview of management over financial instrument risks
1. Main financial risks
A lot of financial instruments are adopted in operating activities of the Bank. The Bank absorbs deposits with different terms at
fixed or floating interest rates and uses funds gathered in this way for issuing long-term loans with high interest rates, with the
purpose of increasing the margin. At the same time, the Bank manages to maintain sufficient liquidity so as to ensure that all
due liabilities will be paid off in time. Within the interest rate system set up by the People's Bank of China, the Bank operates
such a business in Wenzhou, Quzhou, Ningbo, Shanghai and Hangzhou and other regions in Zhejiang Province. By providing
credit service in various forms both for enterprises and individuals, the Bank obtains margins ( after deducting reserves ) higher
than average. Such financial instruments include not just issuing loans and advances within the balance sheet, but also providing
guarantees and other commitments.
137
2. Target of management over financial risks
The target of the management over financial risks is to, by means of active risk management, maximize capital earnings after
risk adjustment and achieve sustainable development.
3. Contents of management over financial risks
Main contents of the Bank's risk management are to identify, measure, test and control various risks arising from operating
activities. To be specific, the Bank's risk management includes: maintaining normal operation of the Bank's risk governance
structure; establishing and improving a policy system for risk management; authorized management; credit risk management;
market risk management; liquidity risk management; operation risk management; law and regulation compliance management;
developing risk measurement tools and a risk management system; producing risk reports on a regular basis; reporting to the
senior management and the Risk Management Committee; communicating with regulatory authorities; and other work related
to risk management.
4. Organizational structure of financial risk management
The Board of Directors of the Bank shoulders the ultimate responsibility for the risk management of the Bank. And the Risk
Management Committee and the Audit Committee supervise the Bank's function of risk management. The president of the
Bank supervises the Bank's risk management and directly reports risk management affairs to the Board of Directors of the
Bank. The Bank's function of risk management is performed by the head office of the Bank with specific rules for all internal
departments to monitor financial risks.
( ii ) Credit risk
The credit risk refers to the possibility that customers ( or transaction parties ) may not be able to or willing to perform duties to
the Bank as agreed upon. The credit risk of the Bank mainly arises from the issuance of loans and advances, credit businesses
such as off-balance-sheet credit commitments, investment in treasury bonds and notes not issued by the Ministry of Finance
or the People's Bank of China, and capital business with other financial institutions except for the People's Bank of China.
Core contents of the Bank's loan examination system and risk prevention system include: formulating credit policies; thorough
investigation before loan granting; rating ( or scoring ) of customer credit; guarantee evaluation; loan examination and approval;
loan issuance; management after loan issuance; management over non-performing loans; and pursuing responsibilities of
related personnel for credit assets which generate loss. The means of credit risk management are not limited to obtaining
ownership certificates of pledge objects and guarantees. As for off-balance-sheet credit commitments, the Bank usually
requires caution money so as to reduce credit risk.
138
2011 年度报告
ANNUAL REPORT
1. Credit risk exposure
Without consideration for available collateral security or other credit enhancement, amounts with the biggest credit risk
exposure on the balance sheet date is listed as follows:
Items Deposits due from other banks
Tradable financial assets ( Note 1/2 ) Financial assets purchased under agreement to resell ( Note 1 ) Interest receivable ( Note 1 ) Loans and advances issued 31 Dec. 2011
31 Dec. 2010
3,625,903,205.90
1,901,700,515.68
127,952,500.00
3,298,860,000.00
1,794,200,000.00
199,503,860.33
104,583,015.50
35,794,239,696.81
29,750,633,172.25
Available-for-sale financial assets ( Note 1/2 ) 1,661,733,060.00
818,516,637.82
Held-to-maturity investment ( Note 1 ) 3,201,294,668.52
1,345,067,483.83
575,253,230.67
193,955,573.44
36,843,767.21
13,250,000.00
Investment in accounts receivable categories
Long-term equity investment 187,485,664.27
89,334,073.23
Total of credit risk exposure within balance sheet Other assets ( Note 3 ) 48,581,117,153.71
36,139,192,971.75
Total of risk exposure off balance sheet 16,168,242,443.27
11,186,149,403.86
Total of credit risk exposure 64,749,359,596.98
47,325,342,375.61
Note 1:
The credit risk of the financial asset credit quality statements above and below does not include principals and related interest receivable of
treasury bonds and notes issued by the Ministry of Finance;
Note 2:
The biggest risk exposure of the financial assets measured at fair value mentioned at the financial asset credit quality statements above and
below only represents the biggest credit risk exposure at the present time, not the biggest credit risk exposure after fair value changes in the
future;
Note 3:
Other assets mentioned at the financial asset credit quality statements above and below do not include assets used for debt settlement, capital
expenses.
139
2. Credit quality of financial assets
( 1 ) Credit quality of assets with credit risk
Items
31 Dec. 2011
Undue financial assets with no
assets with no with impairment impairment
impairment
( Note )
3,625,903,205.90
Overdue financial Financial assets Impairment Total
reserve
3,625,903,205.90
Tradable financial assets Financial assets purchased under agreement to resell 3,298,860,000.00
Interest receivable 3,298,860,000.00
186,339,184.88
13,164,675.45
199,503,860.33
35,874,975,139.17
268,940,119.04
308,809,884.18
658,485,445.58
35,794,239,696.81
Available-for-sale financial assets 1,661,733,060.00
1,661,733,060.00
Held-to-maturity investment
3,201,294,668.52
3,201,294,668.52
575,253,230.67
575,253,230.67
36,843,767.21
36,843,767.21
Loans and advances issued Investment in accounts receivable categories
Long-term equity investment Other assets Total 193,323,000.57
5,837,336.30
187,485,664.27
48,654,525,256.92
282,104,794.49
308,809,884.18
664,322,781.88
48,581,117,153.71
Impairment Total
Items 31 Dec. 2010
Undue financial assets with no
assets with no with impairment impairment
impairment
( Note )
Overdue financial Financial assets reserve
1,901,700,515.68
1,901,700,515.68
127,952,500.00
127,952,500.00
1,794,200,000.00
1,794,200,000.00
101,548,286.33
3,034,729.17
104,583,015.50
29,849,724,809.66
91,096,237.19
232,210,015.75
422,397,890.35
29,750,633,172.25
818,516,637.82
818,516,637.82
1,345,067,483.83
1,345,067,483.83
193,955,573.44
193,955,573.44
13,250,000.00
Other assets 96,119,268.03
6,785,194.80
89,334,073.23
36,242,035,074.79
94,130,966.36
232,210,015.75
429,183,085.15
36,139,192,971.75
Tradable financial assets Financial assets purchased under agreement to resell Interest receivable Loans and advances issued Available-for-sale financial assets Held-to-maturity investment
Investment in accounts receivable categories
Total Note: Financial assets with impairment refer to financial assets with recognized impairment after an independent impairment test.
( 2 ) In the reporting period, there existed no book value of financial assets which had been formerly due or with impairment but
of which related contract terms had been revised.
140
2011 年度报告
ANNUAL REPORT
3. Objects of pledge and other credit enhancement
The Bank has formulated a series of policies to reduce credit risk through various forms, of which to obtain objects of pledge,
caution money and enterprise or individual guarantees are important means for the Bank to control credit risks. Specific types
and amounts of pledge objects depend on credit risk evaluation of transaction parties or customers. The management examines
the value of pledge objects at a regular basis and when necessary, may ask transaction parties or customers to increase pledge
objects according to what has been agreed upon.
The Bank accepted the following types of pledge objects:
The business of purchase under agreement to resell: notes, bonds, etc.;
The business of issuing loans and credit to enterprises: real estate, deposit receipts, pledge of accounts receivable and property
lease income accounts of a main project in Dongguan, bonds, cashier's checks, etc.;
The business of issuing loans and credit to individuals: real estate, deposit receipts, bonds, cashier's checks, etc..
Assets for debt settlement obtained and disposal of pledge objects in reporting period:
Item
2011
2010
Assets for debt settlement obtained 120,000.00
Disposal of pledge objects 3,209,051.10
4. Credit risk arising from loan and advance issuance, as well as off-balance-sheet credit issuance and other credit issuance
businesses
( 1 ) Analysis on concentration degree
The credit risk is high when loans and advances issued concentrate on a certain number of customers or when a certain
number of customers are operating the same business or operating in industries with similar economic characteristics.
Concentration degree of customers: see the Note Ⅳ/( ⅵ ) /10 Analysis on customer concentration degree;
Industrial concentration degree concerning enterprises to which the Bank issued loans and advances: see the Note Ⅳ/( ⅵ ) /3
Enterprise loans and advances classified according to industries;
Concentration degree of regions: The loan and advance issuance business of the Bank concentrates on Wenzhou, Quzhou,
Ningbo, Hangzhou and other regions of Zhejiang Province, Shanghai, Jiangsu and other places.
( 2 ) Classification of risks arising from loan and advance issuance
In accordance with the Guidelines for Classification of Loan Risks ( CBRC Issue [2000] No.54 ) and the Guidelines for
Classification of Loan Risks ( CBRC Issue [2007] No.63 ) promulgated by the China Banking Regulatory Commission, the
Bank classifies its loans and advances issued as normal, caution, inferior, doubtful and loss. Normal loans refer to those where
borrowers is able to execute contracts and there are not sufficient reasons to doubt that loan principals and interest can not be
repaid on time and in full amount; caution loans refer to those where borrowers is currently able to repay loan principals and
141
interest but there exist some factors unfavorable to such repayment; inferior loans refer to those where there exists an obvious
problem in the repaying ability of borrowers, loan principals and interest cannot be repaid in full amount completely by borrowers'
normal operating incomes and some loss may still be made despite execution of guarantees; doubtful loans refer to those where
borrowers are unable to repay loan principals and interest in full amount and a great loss is sure to be made despite execution
of guarantees; and loss loans refer to those where loan principals and interest cannot be repaid or can be repaid just by a small
amount after all possible measures and necessary legal procedures have been conducted. Of the five categories of loans, inferior,
doubtful and loss loans are referred to as non-performing loans, and normal and caution loans as performing loans. Meanwhile,
the Bank includes the off-balance-sheet business into the unified business of credit issuance to customers, implements credit
line management and conducts risk classification on main off-balance-sheet businesses according to the aforesaid Guidelines.
The Bank classifies risks arising from loans and advances issued to enterprises. Based on the repaying ability of borrowers
and at the same time considering guarantees, pledge, overdue time and other elements, lending officers classify unpaid loans
and advances; Sub-branches and branches gather, examine and confirm the classification information and report to the Risk
Management Department of the head office; And the Risk Management Department examines and confirms classification
of some loans and advances within its powers, and the final classification of loans and advances is determined by the Risk
Management Committee under the Board of Directors.
As for individual credits, the Bank mainly depends on credit evaluation of applicants for issuing credits to individuals. When
handling the individual credit business, customer managers need to evaluate the income, credit history, loan repaying ability
and other elements of credit applicants. Customer managers then submit related materials and their suggestions to the loan
approval organ. The Bank conducts a strict after-loan monitoring on loans to individuals, with special attention paid to the
repaying ability of borrowers and value changes of pledge objects. Once a loan is overdue, the Bank starts to call in the loan
according to relevant internal management rules.
The Bank stipulates different examination frequencies for different loan business. In general, classification is conducted on a
quarterly basis, dynamic adjustment on a monthly basis and loan loss reserve adjustment on a quarterly basis. As for some
significant loan projects, the Bank will properly adjust relevant classification based on information obtained in after-loan
examinations.
Classification of issued loans and advances as at balance sheet dates into five categories:
Five categories As at 31 Dec. 2010
Proportion in total Amount of Proportion in total
and advances
amount ( % )
loans and advances
amount ( % )
Subtotal of performing loans: 36,090,715,570.82
99.01
29,910,589,347.36
99.13
Normal
35,255,118,721.83
96.71
29,063,367,579.45
96.32
Caution
835,596,848.99
2.29
847,221,767.91
2.81
Subtotal of non-performing loans: 362,009,571.57
0.99
262,441,715.24
0.87
Inferior 260,411,630.83
0.71
179,407,494.05
0.60
Doubtful 142
As at 31 Dec. 2011
Amount of loans 91,678,702.58
0.25
77,728,776.27
0.26
Loss 9,919,238.16
0.03
5,305,444.92
0.02
Total 36,452,725,142.39
100.00
30,173,031,062.60
100.00
2011 年度报告
ANNUAL REPORT
( 3 ) Impairment evaluation
Impairment of loans and advances issued mainly refers to loan principals or interest being overdue, borrowers having a liquidity
problem, decrease of credit rating, less market competitiveness, or borrowers violating original contract terms. The Bank
recognizes impairment of issued loans and advances by means of single-item evaluation and group evaluation.
Single-item evaluation:
The Bank conducts impairment tests on all loans and advances with significant amounts. According to the risk classification
rules, the Bank conducts single-item evaluation on impairment of enterprise loans and advances classified as inferior, doubtful
and loss. When evaluating the impairment reserve for a single item, the Bank will take into consideration the following
elements: value of pledge objects, continuity of business plans of the borrower, the borrower's ability to improve earnings in a
financial difficulty, recoverable amount, recoverable amount after assumed bankruptcy and liquidation, other obtainable financial
sources, realizable amount of pledge objects, and time for expected cash inflows.
Group evaluation:
Loans and advances of which impairment is evaluated in a group way include all individual loans and advances expect for the
aforesaid ones evaluated in the single-item way, and all enterprise loans and advances of which impairment loss is unable to be
evaluated in the single-item way because there exists no loss or it is unreliable to measure influence of potential loss on future
cash flows. During the process of group evaluation, loans and advances are classified according to risks or further classified
into groups according to their characteristics based on the said risk classification. Objective evidence in the group evaluation of
impairment loss refers to the observable decrease amount of expected future cash flows of the type or the specified type of
loans and advances incurred after initial recognition of loans and advances. And such an observable amount includes unfavorable
changes in repayment of borrowers of such a type of loans and advances, as well as economic situation in industries or regions
related to violation of loan contracts.
Based on historical data and experience, as well as considering relevant guiding papers issued by the regulatory authority, the
Bank usually withdraws group reserves according to its operating experience and set up risk provision mechanism in line with
risk control and business development. Accordingly, the Company formulated systematic provision policy focusing on risk
management.
143
Classification of loan and advance risks into five categories and loan loss reserves withdrawn:
Five categories Amount of loans and advances
Normal 35,255,118,721.83
31 Dec. 2011
Reserve withdrawing ratio ( % ) 1.35
Amount of reserve
477,291,385.87
Caution 835,596,848.99
2.55
21,308,456.31
Inferior 260,411,630.83
35.13
91,482,288.98
91,678,702.58
63.79
58,484,076.26
9,919,238.16
100.00
9,919,238.16
1.81
658,485,445.58
Doubtful Loss Subtotal 36,452,725,142.39
Five categories Amount of loans and advances
Normal 29,063,367,579.45
31 Dec. 2010
Reserve withdrawing ratio ( % ) 1.00
Amount of reserve
290,633,675.79
Caution 847,221,767.91
2.00
16,944,435.35
Inferior 179,407,494.05
34.38
61,681,873.52
77,728,776.27
61.54
47,832,460.77
5,305,444.92
100.00
5,305,444.92
30,173,031,062.60
1.40
422,397,890.35
Doubtful Loss Subtotal ( 4 ) Classification of issued loans and advances according to overdue and impairment situation
Items
Undue loans with no impairment 31 Dec. 2010
29,849,724,809.65
Overdue loans with no impairment 268,940,119.04
91,096,237.19
Loans with impairment 308,809,884.18
232,210,015.75
Less: impairment reserve Net amount 144
31 Dec. 2011
35,874,975,139.17
658,485,445.58
422,397,890.35
35,794,239,696.81
29,750,633,172.24
2011 年度报告
ANNUAL REPORT
A. Breakdown of undue loans and advances with no impairment according to five categories of credit risks:
Items Corporation loans 31 Dec. 2011
Individual loans Total
Normal 21,600,041,944.60
13,675,308,025.31
35,275,349,969.91
Caution 555,429,693.39
44,106,177.44
599,535,870.83
Inferior 79,485.94
79,485.94
Doubtful 1,483.33
1,483.33
Loss 8,329.16
8,329.16
22,155,471,637.99
13,719,503,501.18
35,874,975,139.17
355,743,062.33
139,233,817.35
494,976,879.68
21,799,728,575.66
13,580,269,683.83
35,379,998,259.49
Total Less: impairment reserve Net amount Items Corporation loans 31 Dec. 2010
Individual loans Total
Normal 14,259,838,661.25
14,779,890,655.09
29,039,729,316.34
Caution 801,600,581.43
6,367,328.78
807,967,910.21
Inferior 2,027,583.10
2,027,583.10
Doubtful Loss Total Less: impairment reserve Net amount 15,061,439,242.68
14,788,285,566.97
29,849,724,809.65
158,630,398.24
148,433,148.90
307,063,547.14
14,902,808,844.44
14,639,852,418.07
29,542,661,262.51
145
B. Analysis on terms of overdue loans and advances with no impairment:
Items Overdue for 1-90 days ( including 90 days ) Overdue for 90-360 days ( including 360 days ) Overdue for 360 days to 3 years ( including 3 years ) 31 Dec. 2011
Corporation loans Individual loans Total
118,720,820.91
85,149,211.86
203,870,032.77
4,486,759.06
46,218,048.84
50,704,807.9
484,450.75
13,652,725.98
14,137,176.73
Overdue for more than 3 years Total Impairment reserve Net value 123,692,030.72
228,101.64
268,940,119.04
3,092,788.17
24,425,698.80
27,518,486.97
120,599,242.55
120,822,389.52
241,421,632.07
Items 228,101.64
145,248,088.32
31 Dec. 2010
Corporation loans Individual loans Total
20,029,948.14
31,543,442.18
51,573,390.32
3,484,450.75
21,915,447.28
25,399,898.03
Overdue for 360 days to 3 years ( including 3 years ) 13,895,817.37
13,895,817.37
Overdue for more than 3 years 227,131.47
227,131.47
23,514,398.89
67,581,838.30
91,096,237.19
470,287.98
14,990,862.47
15,461,150.45
23,044,110.91
52,590,975.83
75,635,086.74
Overdue for 1-90 days ( including 90 days ) Overdue for 90-360 days ( including 360 days ) Total Impairment reserve Net value C. Breakdown of issued loans and advances with impairment according to guarantee ways:
Credit loans 31 Dec. 2011
31 Dec. 2010
85,224.50
85,224.50
Guarantee loans 26,005,000.00
4,205,000.00
Mortgage loans 282,719,659.68
227,919,791.25
Pledge loans 146
Total 308,809,884.18
232,210,015.75
Less: impairment reserve 135,990,078.93
99,873,192.76
Net amount 172,819,805.25
132,336,822.99
2011 年度报告
ANNUAL REPORT
( ⅲ ) Liquidity risks
Liquidity risks include risks arising from inability to repay liabilities or inability to cash asset groups of the Bank in a timely way
or at reasonable prices so as to provide funds. Such risks may come from changes in the deposit-loan ratio required by the
central bank and various requirements for routine withdrawals facing the Bank recently. Such requirements for withdrawals
cover interbank placements, current deposits, due term deposits, loans to customers, guarantees and other cash settlement.
The Bank needs not to maintain a liquidity ability sufficient enough to satisfy all cash payment requirements and will not keep
a cash reserve in an equal amount to the said capital requirements because quite a sum of due deposits will not be withdrawn
immediately at the due date but will be retained in the Bank. However, in order to cope with unforeseeable capital requirements,
the Bank stipulates the lowest capital stock standard and the lowest interbank borrowing amount that should be maintained
so as to satisfy various withdrawal requirements. In addition, the Bank believes that in normal cases, the third party will not
withdraw capital at full amount as committed in guarantees or L/Cs issued. Therefore, capital needed to provide guarantees and
issue L/Cs is usually less than the amount in credit commitments. Meanwhile, a lot of credit commitments need not be actually
executed because they are overdue or discontinued. Therefore, the contract amount of credit commitments cannot represent
the future capital requirement. The Bank has formulated the temporary methods for liquidity risk management and established
an effective liquidity risk management system covering effective monitoring from the Board of Directors and senior executives,
sound policies and procedures for liquidity risk management, effective procedures to identify, measure, monitor and control
liquidity risks, sound internal control, effective supervision mechanism, a sufficient and appropriate information management
system, effective emergency treatment mechanism, etc.. At the beginning of the year, the Liquidity Risk Control Committee
was established under the Risk Management Committee, specializing in liquidity management and evaluating liquidity risk
management on a regular basis. The Financial Planning Department, the Capital Operation Department, the International
Business Department and the Internal Audit Department have been specified as main management departments for liquidity
risks, and other relevant functional departments cooperate in implementing the liquidity management policy, which enables the
Company to effectively control liquidity risks. The Financial Planning Department is responsible for routine liquidity management;
monitoring and analyzing various liquidity indexes, finding out reasons for those indexes close to or exceeding the alarm line and
putting forward policy suggestions for adjusting the asset-liability structure; formulating management measures for liquidity
risks; analyzing and reporting the liquidity risk situation of the Bank as a whole on a regular basis; and formulating emergency
handling plans for liquidity risks with the Capital Operation Department, as well as strategies to handle liquidity crises and
procedures to supplementing cash flows under emergent circumstances. The Capital Operation Department is responsible for
routine operation of liquidity management, setting up a capital position forecast system for the Bank as a whole, making sure
satisfaction of all capital need of the Bank, and maintaining sufficient liquidity for business development; when liquidity indicators
come close to or exceed the alarm line, adjusting capital operation strategies in a timely manner and maintaining routine liquidity
indicators at a reasonable level; establishing proper liability portfolios and maintaining a stable and long-term relationship with
main capital suppliers so as to maintain dispersed and stable capital sources; formulating emergency handling plans for liquidity
risks with the Financial Planning Department, as well as strategies to handle liquidity crises and procedures to supplementing
cash flows under emergent circumstances. The International Business Department is responsible for liquidity risk management
over the foreign currency business; formulating the liquidity risk management structure for the foreign currency business;
formulating liquidity management strategies for various currencies; and formulating liquidity emergency plans when the foreign
exchange financing ability is damaged. The Internal Audit Department is responsible for including liquidity risk management into
the internal audit scope, supervising, examining and evaluating sufficiency and effectiveness of the liquidity risk management
system. Other business functional departments formulate or adjust their own business strategies according to the liquidity
management requirements of the Bank, as well as business requirement of their own.
147
1. Maturity date of assets and liabilities as of 31 Dec. 2011:
Items Overdue Repayable on demand
Within 3 months 3 months - 1 years
1-5 years
Over 5 years
Total
Assets:
3,552,034,047.24
8,595,369,273.23
12,147,403,320.47
1,504,590,705.90
1,460,812,500.00
660,500,000.00
3,625,903,205.90
1,546,923,826.69
1,145,440,216.47
2,692,364,043.16
Interests receivable
Loans issued and payments on others behalf
13,164,675.45
340,642,858.28
670,121,662.57
152,561,550.00
152,561,550.00
4,249,860,000.00
4,249,860,000.00
139,714,528.59
65,255,248.12
8,244,223,373.71 25,076,516,397.55
218,134,452.16
1,092,885,646.24
369,849,758.46
35,794,239,696.81
199,324,700.00
381,225,120.00
992,050,520.00
189,112,220.00
1,761,712,560.00
Held-to-maturity investment 300,882,408.96
815,101,018.58
2,075,386,986.34
159,919,098.50
3,351,289,512.38
Investment in accounts receivable
400,136,564.00
175,116,666.67
575,253,230.67
36,843,767.21
12,273,472.99
12,273,472.99
Fixed assets 639,437,622.35
639,437,622.35
Intangible assets
88,307,165.64
88,307,165.64
73,404,762.67
Other assets
-
16,564,871.90
22,121,181.93
86,870,234.32
1,405,873.00
232,590,616.25
Total assets
353,807,533.73
5,743,311,287.61
16,647,506,357.05 28,166,159,182.65
4,648,276,366.24
10,092,518,251.38
65,651,578,978.66
105,628,455.10
73,404,762.67
Liabilities:
1,130,000,000.00
500,000,000.00
500,000,000.00
1,520,000,000.00
2,650,112,560.78
Deposits of other banks and financial institutions
112,560.78
Loans from other banks
69,309,900.00
18,902,700.00
88,212,600.00
3,963,300,000.00
3,963,300,000.00
Deposits received
16,323,551,241.77
Payroll payables
216,878,603.70
219,313.88
220,228,125.15
Taxes payable
268,131,583.06
268,131,583.06
Interests payable
2,095,998.08
14,660,008,913.54 17,217,379,327.08
391,887.87
148,449,089.54
972,901.25
251,124,147.05
3,975,185,453.21
1,765,418.45
55,962,428.08
Accrued liabilities
Bonds payable
549,332,667.24
Deferred income tax liabilities
1,552,425.00
Other liabilities
Total liabilities
Net on-balance-sheet liquidity Off-balance-sheet credit liquidity
148
-
332,711,810.36
-
-
-
19,921,052,590.95 19,489,476,375.38
52,176,124,935.60
457,631,662.75
549,332,667.24
1,552,425.00
-
332,711,810.36
-
17,212,791,697.75
4,583,798,391.98
219,313.88
61,207,338,369.94
353,807,533.73
-11,469,480,410.14
-3,273,546,233.90
8,676,682,807.27
64,477,974.26
10,092,298,937.50
4,444,240,608.72
1,473,171,504.66
94,054,183.89
6,926,237,023.70
7,589,530,461.07
85,249,269.95
-
16,168,242,443.27
2011 年度报告
ANNUAL REPORT
2. Maturity date of assets and liabilities as of 31 Dec. 2010:
Items Overdue Repayable on demand
Within 3 months 3 months - 1 years
1-5 years
Over 5 years
Total
Assets:
3,962,680,527.36
489,654,812.37
1,331,545,703.31
6,140,616,551.92
10,103,297,079.28
80,500,000.00
1,901,700,515.68
0.00
109,363,650.00
127,952,500.00
237,316,150.00
2,623,500,000.00
300,000,000.00
2,923,500,000.00
92,677,713.94
51,770,766.01
147,483,209.12
3,034,729.17
142,451,909.73
505,639,740.86
8,181,708,076.05 19,620,496,814.22
935,095,838.67
365,240,792.72
29,750,633,172.25
149,890,517.82
574,134,920.00
193,748,100.00
917,773,537.82
1,785,593,836.89
1,479,305,460.86
159,895,647.79
4,333,435,451.35
193,955,573.44
193,955,573.44
13,250,000.00
12,684,692.17
12,684,692.17
590,892,251.69
Intangible assets
80,871,950.23
80,871,950.23
43,588,278.41
Other assets
21,904,262.10
75,015,955.90
1,180,000.00
120,475,838.77
13,447,201,971.42 22,138,108,697.04
3,107,140,453.84
7,558,379,986.52
51,370,857,700.21
Total assets
145,486,638.90
16,564,871.90
4,974,539,952.49
5,810,748.87
43,588,278.41
Liabilities:
414,876.79
160,285,500.00
200,000,000.00
1,300,000,000.00
600,000,000.00
200,000,000.00
2,060,700,376.79
19,868,100.00
19,868,100.00
1,786,500,000.00
1,786,500,000.00
Deposits received
Payroll payables
5,165,262.38
14,167,286,499.58
94,731,223.05
464,409.93
Taxes payable
Interests payable
43,000,000.00
41,910,019,382.88
354,114.81
99,391,401.13
139,331,530.80
139,331,530.80
1,485,796.16
13,053,834,314.14 12,938,640,560.79
1,195,610.86
102,034,398.56
2,646,042.48
107,294,615.69
1,702,092,745.99
12,965,116.92
327,537.98
Accrued liabilities
Bonds payable
548,665,333.68
Other liabilities
405,807,995.03
224,107,465.31
0.00
548,665,333.68
0.00
405,807,995.03
Total liabilities
99,896,485.43
14,714,791,108.29
15,123,717,923.56 14,548,581,218.96
2,864,077,311.40
43,327,537.98
47,394,391,585.62
Net on-balance-sheet liquidity 45,590,153.47
-9,740,251,155.80
-1,676,515,952.14
7,589,527,478.08
243,063,142.44
7,515,052,448.54
3,976,466,114.59
136,453,429.19
1,050,021,296.72
1,294,448,543.86
3,300,014,939.39
5,323,859,689.36
81,351,505.34
11,186,149,403.86
Off-balance-sheet credit liquidity
149
( iv ) Market risk
Market risk refers to the risk of likely potential loss on future income or future cash flow because of changes in price of financial
instrument comprises interest rate, exchange rate and other market factors. Market risk with influence on businesses of the
Bank includes interest rate risk and foreign exchange risk.
The Board of Directors of the Bank takes responsibility for the management of overall market risk, including examining
and approving management strategy, procedure, quantitative standardization and risk limitation of market risk, etc. Senior
Management is in charge of formulating, examining regularly, monitoring and implementing policies, procedures, specific
operating instructions of market risk management. Risk Management Department and Capital Management Department are
specific responsibility for market risk management, carrying out middle ground monitor to the market risk and risk limitation of
the Bank complying with the regulations, timely reporting and managing abnormal conditions and situations in violation of the
rules, so as to monitor and manage market risk. Risk Management Department also regularly submits report on market risk to
the Board of Directors and the Top Management. The Capital Management Department implements foreground transaction of
funds according to the Measures for Management of Market Risk of the Bank and market risk limitation approved by the Bank.
The Bank separates assets into trading book and banking book for management. The financial instrument that can be freely
tradable for the purpose of trading or getting away from risk of other items under trading book is entered in trading book, the
other is entered in banking book.
1. Interest rate risk
Interest risk is the risk that the fair value of a financial instrument or future cash flow will fluctuate because of change in
exchange rate. The interest rate risk of the Bank is mainly caused by the mismatch between the maturity date of interestsensitive assets and liabilities or repricing term, resulting in influence on net interest income from the fluctuation in interest rate
level. Due to the fluctuation of market interest rate, the margin of the Bank may be increase, or decrease, even a loss, due to
unpredictable change. The Bank runs its businesses in line with system of bank interest rates stipulated by People's Bank. In
accordance with historical experience, the People's Bank generally makes adjustment in the same direction simultaneously
to benchmark interest rate of both interest-bearing loans and interest-bearing deposit ( but amplitude of fluctuation is not
necessarily the same ) . Additionally, according to the regulations of People's Bank, interest rate for a Renminbi loan can
fluctuate up or down based on benchmark interest rate. Therefore, the Bank controls its interest rate risk through controlling
maturity date of loan or deposit.
150
2011 年度报告
ANNUAL REPORT
( 1 ) As at 31 Dec. 2011, Exposure analysis on interest rate of the earlier date between repricing date and maturity date for
assets or liabilities
Items
Within 1 month
1-3 months
3 months-1 years
1-5 years
Over 5 years
Overdue/non-
interest bearing
Total
Assets:
3,291,538,261.27 8,855,865,059.20 12,147,403,320.47
2,015,403,205.90
800,000,000.00
810,500,000.00
3,625,903,205.90
905,440,786.43
641,483,040.26
1,145,440,216.47
2,692,364,043.16
152,561,550.00
152,561,550.00
4,249,860,000.00
4,249,860,000.00
2,883,655,386.94
218,134,452.16
218,134,452.16
5,360,680,101.21 26,539,251,802.25 1,010,652,406.41 35,794,239,696.81
99,417,100.00
399,325,700.00
381,225,120.00
692,632,420.00 189,112,220.00
1,761,712,560.00
99,995,935.44
200,886,473.52
914,949,826.94
1,975,538,177.98 159,919,098.50
3,351,289,512.38
400,136,564.00
175,116,666.67
575,253,230.67
36,843,767.21
12,273,472.99
12,273,472.99
639,437,622.35
Intangible assets
88,307,165.64
88,307,165.64
73,404,762.67
73,404,762.67
Other assets
232,590,616.25
232,590,616.25
Total assets
13,945,447,239.98
7,402,375,314.99 29,791,366,965.66
2,995,848,814.65 349,031,318.50 11,167,509,324.88 65,651,578,978.66
Liabilities:
500,000,000.00
500,000,000.00
112,560.78
1,130,000,000.00
1,520,000,000.00
2,650,112,560.78
69,309,900.00
18,902,700.00
88,212,600.00
Tradable financial liabilities
-
Deposits received
3,963,300,000.00
16,038,020,536.38 14,660,008,913.54 17,217,379,327.08
3,975,185,453.21
-
3,963,300,000.00
285,530,705.39 52,176,124,935.60
Payroll payables
220,228,125.15
220,228,125.15
Taxes payable
268,131,583.06
268,131,583.06
Interests payable
457,631,662.75
457,631,662.75
Accrued liabilities
-
Bonds payable
549,332,667.24
-
-
Total liabilities
Other liabilities
20,001,433,097.16 15,859,318,813.54 19,256,282,027.08
-
-
4,524,518,120.45
Interest rate sensitivity gap
-6,055,985,857.18 -8,456,943,498.55 10,535,084,938.58
-
549,332,667.24
1,552,425.00
1,552,425.00
332,711,810.36
332,711,810.36
- 1,565,786,311.71 61,207,338,369.94
-1,528,669,305.80 349,031,318.50 9,601,723,013.17
4,444,240,608.72
151
( 2 ) As at 31 Dec. 2010, Exposure analysis on interest rate of the earlier date between repricing date and maturity date for
assets or liabilities
Items
Within 1 month
1-3 months
3 months-1 years
1-5 years
Over 5 years
Overdue/non-
interest bearing
Total
Assets:
9,798,645,501.04
670,801,644.69
1,150,398,870.99
304,651,578.24 10,103,297,079.28
80,500,000.00
1,901,700,515.68
109,363,650.00
127,952,500.00
237,316,150.00
2,623,500,000.00
300,000,000.00
2,923,500,000.00
147,483,209.12
648,091,650.59 29,750,633,172.25
2,624,857,720.42
5,556,850,355.63 20,920,833,445.61
359,187,363.13
149,890,517.82
2,037,833,412.72
574,134,920.00 193,748,100.00
1,326,976,087.23
147,483,209.12
917,773,537.82
59,985,445.59
4,333,435,451.35
193,955,573.44
193,955,573.44
13,250,000.00
12,684,692.17
12,684,692.17
590,892,251.69
Intangible assets
80,871,950.23
80,871,950.23
43,588,278.41
43,588,278.41
Other assets
120,475,838.77
120,475,838.77
Total assets
16,267,258,008.83
7,369,755,813.19 23,617,009,876.15
1,901,111,007.23 253,733,545.59 1,961,989,449.22 51,370,857,700.21
Liabilities:
200,000,000.00
118,030,300.00
42,670,076.79
1,300,000,000.00
200,000,000.00
600,000,000.00
2,060,700,376.79
19,868,100.00
19,868,100.00
Tradable financial liabilities Assets Sold Under Agreements to Repurchase
Deposits received
1,786,500,000.00
14,140,331,768.81 13,053,834,314.14 12,938,640,560.79
1,702,092,745.99
43,000,000.00
1,786,500,000.00
32,119,993.15 41,910,019,382.88
Payroll payables
99,391,401.13
99,391,401.13
Taxes payable
139,331,530.80
139,331,530.80
Interests payable
224,107,465.31
224,107,465.31
Accrued liabilities
Bonds payable
548,665,333.68
548,665,333.68
Other liabilities
405,807,995.03
Total liabilities
900,758,385.42 47,394,391,585.62
Interest rate sensitivity gap
152
15,969,501,845.60 13,391,732,714.14 14,238,640,560.79
297,756,163.23 -6,021,976,900.95
9,378,369,315.36
2,850,758,079.67
43,000,000.00
-949,647,072.44 210,733,545.59 1,061,231,063.80
405,807,995.03
3,976,466,114.59
2011 年度报告
ANNUAL REPORT
( 3 ) On the basis of the exposure analysis on interest rate, the Bank adopts the sensitivity analysis to judge sensibility of
bank values on change in interest rate. Suppose there is a 100 basis point fluctuation parallel in the yield curve in the foreign
currencies on each balance sheet date, the influence on each year is as follows:
Unit: RMB'000 Yuan
Fluctuation in interest rates( in basis point ) Up 100 basis points
Down 100 basis points
Net interest income sensitivity
2011
2010
( 16,588.58 ) ( 29,416.31 )
16,588.58 29,416.31
Unit: RMB'000 Yuan
Fluctuation in interest rates( in basis point ) Up 100 basis points
Down 100 basis points
Equity sensitivity
31 Dec. 2011
31 Dec. 2010
( 40,396.21 ) ( 60,686.72 )
40,396.21 60,686.72
This sensitivity analysis is based on a static gap on the balance sheet date, and based on the assumptions, i.e., there is parallel
shift in the yield curve along with the change of interest rate, the interest rates of all terms change in the same direction
simultaneously, and influence by the repricing of the Bank's assets and liabilities within a year.
The above assumptions ignore the change of business after the balance sheet date, influence of fluctuation in interest rate on
consumer behaviors, complicated relationship between complicated structural products and fluctuation in interest rate, influence
of fluctuation in interest rate on market price and influence of fluctuation in interest rate on off-balance-sheet products.
2. Currency risk
Currency risk is the risk that the fair value of a financial instrument or future cash flow will fluctuate because of change in
exchange rate. The most of business of the Bank is Renminbi business, additionally, USD business, HKD business and other
foreign currency. At present, foreign exchange business of the Bank is largely business of settlement and sales of foreign
exchange. Therefore, the currency risk mainly derived from assets/liabilities currency mismatch in the business on behalf of
customers, resulting in currency position mismatch risks.
In order to manage currency risk, the Bank tries to match debt and credit of every currency as much as possible. Meanwhile,
the Bank avoids and controls its currency risk arising from foreign exchange exposure through such ways as specification of
foreign currency exposure limitation, day's coverage of foreign exchange position.
153
( 1 ) As at 31 Dec. 2011, exchange rate risk exposure listed by the different currencies:
Items USD
HKD
JYE
EURO
Other RMB and foreign currency
RMB
Equivalent in Equivalent in Equivalent in Equivalent in Equivalent in Equivalent in
RMB Yuan
RMB Yuan
RMB Yuan
RMB Yuan
RMB Yuan
RMB Yuan
Assets:
12,093,323,132.59
23,843,897.34
2,860,599,726.10
472,024,368.47
3,333,809.96
3,625,903,205.90
2,692,364,043.16
2,692,364,043.16
152,561,550.00
152,561,550.00
4,249,860,000.00
4,249,860,000.00
804,968.35
4,239,472.40
245,299.67
29,431,322.19
285,460,529.30
12,147,403,320.47
217,483,605.66
599,566.49
51,280.01
218,134,452.16
35,634,075,590.43
149,658,968.88
10,505,137.50
35,794,239,696.81
1,761,712,560.00
1,761,712,560.00
Held-to-maturity investment 3,351,289,512.38
3,351,289,512.38
575,253,230.67
575,253,230.67
36,843,767.21
12,273,472.99
12,273,472.99
639,437,622.35
639,437,622.35
88,307,165.64
88,307,165.64
73,404,762.67
73,404,762.67
Other assets
224,158,980.72
8,334,311.93
-
97,323.60
-
-
232,590,616.25
Total assets
64,662,948,722.57
654,461,113.11
5,044,440.75
342,623.27
325,448,269.00
3,333,809.96
65,651,578,978.66
Liabilities:
Borrowing from the Central Bank
500,000,000.00
97,760.04
2,650,112,560.78
88,212,600.00
88,212,600.00
Tradable financial liabilities -
Deposits received
3,963,300,000.00
51,424,835,448.89
425,935,511.20
5,040,525.12
77,502.19
316,700,805.05
3,535,143.15
3,963,300,000.00
52,176,124,935.60
Payroll payables
220,228,125.15
220,228,125.15
Taxes payable
268,130,164.60
325.31
268,131,583.06
Interests payable
453,103,643.97
1,273,035.16
Accrued liabilities
Bonds payable
1,093.15
11,826.69
457,631,662.75
-
25,514.29
3,217,642.64
-
549,332,667.24
549,332,667.24
1,552,425.00
1,552,425.00
Other liabilities
320,213,732.79
10,449,246.50
3.10
63,260.34
1,985,567.63
-
332,711,810.36
Total liabilities
60,350,711,008.38
525,968,478.21
5,067,135.66
140,762.53
321,904,015.32
3,546,969.84
61,207,338,369.94
4,312,237,714.19
128,492,634.90
-22,694.91
201,860.74
3,544,253.68
-213,159.88
4,444,240,608.72
15,498,985,877.26
667,253,629.90
-
77,502.03
1,925,434.09
-
16,168,242,443.28
Net position on-balance-sheet Net credit position of off-balance-sheet
154
500,000,000.00
2,650,014,800.74
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( 2 ) As at 31 Dec. 2010, exchange rate risk exposure listed by the different currencies:
Items USD
HKD
JYE
EURO
Other RMB and foreign currency
RMB
Equivalent in Equivalent in Equivalent in Equivalent in Equivalent in Equivalent in
RMB Yuan
RMB Yuan
RMB Yuan
RMB Yuan
RMB Yuan
RMB Yuan
Assets:
10,049,408,680.69
31,622,432.12
1,347,096,174.64
127,304,619.58
1,072,775.96
1,625.20
1,911,645.28 42,741,584.98
21,191,565.31
382,623,432.37
23,058.83
10,103,297,079.28
1,901,700,515.68
237,316,150.00
237,316,150.00
2,923,500,000.00
2,923,500,000.00
146,503,214.19
29,479,501,914.12
933,440.03
15,676.76
30,878.14
147,483,209.12
235,118,035.60 18,205,246.62
17,807,975.91
29,750,633,172.25
917,773,537.82
917,773,537.82
4,333,435,451.35
4,333,435,451.35
193,955,573.44
193,955,573.44
13,250,000.00
12,684,692.17
12,684,692.17
590,892,251.69
590,892,251.69
80,871,950.23
80,871,950.23
43,588,278.41
Other assets
117,164,488.77
Total assets
50,486,942,357.52
398,289,877.33
Liabilities:
Borrowing from the Central Bank
3,311,350.00
2,984,421.24 60,964,133.56
421,653,851.73
23,058.83
200,000,000.00
43,588,278.41
120,475,838.77
51,370,857,700.21
200,000,000.00
1,900,401,410.39
99,353,966.40 60,945,000.00
2,060,700,376.79
19,868,100.00
19,868,100.00
Tradable financial liabilities Assets Sold Under Agreements to Repurchase
Deposits received
Payroll payables
1,786,500,000.00
41,359,261,894.17
136,219,198.86
2,925,245.38
0.16
411,612,874.09
170.22
99,391,401.13
Taxes payable
139,330,112.34
325.31
Interests payable
219,069,446.81
1,591,041.69
1,093.15
14,408.21
238,809.65
3,193,758.95
1,786,500,000.00
41,910,019,382.88
99,391,401.13
139,331,530.80
224,107,465.31
Accrued liabilities
Bonds payable
548,665,333.68
548,665,333.68
Other liabilities
392,329,466.77
Total liabilities
46,644,949,065.29
265,728,170.09
3,841,993,292.23
132,561,707.24
Net position on-balance-sheet Net credit position of off-balance-sheet
10,943,723,005.60
8,695,537.83
2,940,746.74 61,183,809.81
43,674.50
-219,676.25
242,355,534.60
4,782,990.43
405,807,995.03
419,589,623.47
170.22
47,394,391,585.62
2,064,228.26
22,888.61
3,976,466,114.59
70,863.66
11,186,149,403.86
155
( 3 ) On the basis of the analysis of foreign exchange position, the Bank adopts the sensitivity analysis to judge sensibility of
bank values on change in foreign exchange rate. Suppose the fluctuation in exchange rate of RMB against the foreign currency
is 1%, the influence on each balance sheet date is as follows:
Fluctuation in exchange rate of Renminbi against foreign currencies
Unit: RMB'000 Yuan
Net interest income sensitivity
Up 1%
Down 1%
2011
2010
( 1,454.22 ) ( 1,506.82 )
1,454.22 1,506.82
Unit: RMB'000 Yuan
Fluctuation in exchange rate of Renminbi against foreign currencies
Up 1%
Down 1%
Equity sensitivity
31 Dec. 2011
31 Dec. 2010
( 1,454.22 ) ( 1,506.82 )
1,454.22 1,506.82
This sensitivity analysis on foreign rate is based on a sum of net position on-balance-sheet and net off-balance-sheet credit
position on the balance sheet date, and based on the assumptions, i.e., there is a influence on exchange gain or loss arising
from fluctuation of various currencies in the same direction simultaneously at 1% of absolute fluctuation in exchange rate of
closing price ( middle price ) on the balance sheet date.
The above assumptions ignore the change of business after the balance sheet date, influence of fluctuation in exchange rate
on consumer behaviors, complicated relationship between complicated structural products and fluctuation in exchange rate,
influence of fluctuation in exchange rate on market price and influence of fluctuation in exchange rate on off-balance-sheet
products.
( v ) Fair value of financial instrument
Fair value refers to the amount that the both parties in the know voluntarily conduct assets exchange or discharge in the fair
transaction.
As for tradable financial assets and available-for-sale financial asset in the active market, the Bank recognizes their fair value at
the market price. As for other financial assets and financial liabilities without the market price or market interest rate that held or
issued by the Bank, the Bank recognizes their fair value according to the following methods:
1. Cash and deposits in the central bank, deposits in other banks, deposits of other banks and financial institutions and loans
from other banks
The above-mentioned financial assets and financial liabilities due within 12 months, if their book value is close to their fair value,
then their fair value is recognized at their book value; apart from this, the estimated fair value of the said financial assets and
financial liabilities is expected future cash flow, which is recognized at discounted value of the current market rate.
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2. Repurchase and resell agreements
Repurchase and resell agreements are mainly involved in note and bond investment due within one year, the fair value of such
short-term financial arrangement is close to their book value, then their fair value is recognized at their book value.
3. Loans issued and payments on others behalf, Held-to-maturity investment and other financial assets
As for loans issued and payments on others behalf, held-to-maturity investment and other financial assets due within 12
months, their fair value is recognized at net book value after deducting provision for impairment; apart from this, the estimated
fair value of loans issued and payments on others behalf, held-to-maturity investment and other financial assets is expected
future cash flow, which is recognized at discounted value of the current market rate.
4. Deposits received and other financial liabilities
As for checking account, saving account and short-term money market deposit and other financial liabilities due within 12
months, their fair value is payables on demand to customers. Apart from this, the fair value of deposits received and other
financial liabilities is calculated based on cash flow discount model, with approximative leading fixed deposit rate during the rest
maturity as discount rate.
5. Bond payable
No quotation for the bond payable of the Bank, its fair value is calculated based on cash flow discount model, with the current
market rate of similar bond as discount rate
( vi ) Capital management
Capital management of the Bank is with capital adequacy rate and core capital adequacy ratio at the core for the purpose of
making it accord with requirements such as external supervision, credit rating, risk compensation and shareholder return, and
promoting risk management of the Bank, closely combining development planning, achieving expansion in scale and profitability,
optimizing total amount of capital and capital structure, and coordinating optimal capital scale and capital return.
In accordance with the order of China Banking Regulatory Commission on Measure for Management of Capital Adequacy Rate
of Commercial Bank ( [2004] No. 2 ) , and document YJF [2007] No. 82 the Circular on Relevant Issues of Calculation of Capital
Adequacy Rate after Performing Accounting Standard for Business Enterprise and other relevant provisions, the Bank carries
out regular monitor to capital adequacy rate and use of regulatory capital, and gives the Banking Regulatory Department the
information required at the end of each year and at the every quarter, and ensure capital adequacy rate being not lower than 8%
and core capital adequacy ratio being not lower than 4% that are requirements from CBRC to the commercial banks.
157
Rate of capital sufficiency on the balance sheet date
Unit: RMB'000
Items
31 Dec. 2011
Core capital Share capital 1,508,991.20
Reserves 2,355,030.94
Retained profit 399,139.53
Minority interest Total core capital Supplementary capital 4,263,161.67
General reserve
171,422.90
Issued junior bond
550,000.00
Available-for-sale fair value change transferred into capital Total supplementary capital Total capital base before deduction
Deduction Investment in financial institutions without being consolidated into the financial statement Investment in properties 6,678.30
728,101.20
4,991,262.87
24,950.00
Investment in Business Enterprises
Investment in junior bond of the Bank Other deduction Total core capital base after deduction
4,170,716.67
Total capital base after deduction
4,886,342.87
Total risk assets
Core capital adequacy ratio ( % ) Capital adequacy ratio ( % ) 158
79,970.00
42,309,916.20
9.86
11.55
2011 年度报告
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IX. Supplementary Information
Extraordinary gains and losses and net profit after extraordinary gains and losses
In accordance with the regulations of China Securities Regulatory Commission on 31 Oct. 2008, the extraordinary gains and
losses and net profit after extraordinary gains and losses in the reporting period of the Bank are as follows:
Item
( 1 ) Gains/( losses ) on disposal of non-current assets
( 2 ) Income from government grants 2011
2010
-22.896.78
( 399,270.20 ) 200,000.00 Reasons
Gains on disposal of fixed assets
Rewarding for attracting merchants
and luring investments
( 3 ) Net non-operating income and expense other than the above items
Donation and penalty cost, stability preservation
( 7,740,299.08 ) ( 11,888,296.59 ) ( 4 ) Effected amount of income tax
1,097,791.53 ( 495,148.34 ) Total extraordinary gains and losses
( 6,665,404.33 ) ( 12,582,715.13 ) fee and income of long outstanding deposit
Earnings per share ( EPS ) and Return on equity ( ROE )
Year 2011
ROE ( % ) EPS ( RMB Yuan )
Fully diluted
Weighted average
Basic EPS
Diluted EPS
Net profit attributed to the holders of common shares of the Company 14.51
15.37
0.43
0.43
Net profit after extraordinary gains and losses attributed to the holders of common shares of the Company 14.66 15.53 0.43
0.43
2010
ROE ( % ) EPS ( RMB Yuan )
Fully diluted
Weighted average
Basic EPS
Diluted EPS
Net profit attributed to the holders of common shares of the Company 12.44
17.19 0.41
0.41
Net profit after extraordinary gains and losses attributed to the holders of common shares of the Company 12.76
17.62
0.42
0.42
X. Approval for the financial statement
The Financial Statements has been approved by the Board of Directors of the Bank on 23 Apr. 2012.
Bank of Wenzhou Co., Ltd.
23 April 2012
159
II. Internal Control Examination Report of the Company
Internal Control Assurance Report
XKSBZ ( 2012 ) No. 130264
All Shareholders of Bank of Wenzhou Co., Ltd.:
We were entrusted to audit the effectiveness of the internal control related to the financial statements as of 31 December 2011
prepared by the management Bank of Wenzhou Co., Ltd. ( hereinafter referred to as the Company ) pursuant to Basic Standards
for Enterprise Internal Control and relevant regulations.
I. Explanation on significant inherent limitation
The internal control is characterized by inherent limitation and has the possibility of false statement and undiscovered false
information due to errors of fraudulent practices. Besides, the circumstances changes may cause internal control improper or
lower the degree of internal control following the controlling policy and process. It has some risks to use the internal control
appraisal result to speculate the effectiveness of the internal control in the future.
II. Restriction on the report users and purpose
The assurance report is only used for the Annual Report of the Company and may not be used for any o other purpose. We
agree that the report is necessary for the Annual Report of the Company and will be disclosed with other documents.
III. Management's responsibilities
The management of the Company is responsible for establishing and optimizing the internal control and keeping its
effectiveness. Meanwhile, they audit the effectiveness of the internal control related to the financial statements as of 31
December 2011 in accordance with Basic Standard for Enterprise Internal Control ( CK [2008] No. 7 ) released jointly by Ministry
of Finance and Other Four Ministries and Commissions and relevant regulations and responsible for the audit.
IV. CPAs' responsibilities
We bear responsibility to give our opinions on the effectiveness of the internal control of the Company based on the audit.
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V. Job outlines
We carried out the assurance services in line with the Standards on Other Assurance Engagements of China's CPAs No. 3101
-- Assurance Engagements other than Audits or Reviews of Historical Financial Information ( hereinafter referred to as the
Standards ) . We are required to plan and carry out the assurance services in the light of the above regulations in order to gain
proper evidence indicating if the Company had no material error in all material aspects in the assessment. During the assurance
we learned, tested and assessed the rationality of design of the internal control and the effectiveness of the implementation
of the internal control and fulfilled other procedures we believed necessary. We believe our assurance services provided
reasonable basis for our opinions.
VI. Conclusion
In our opinion, the Company, according to Basic Standard for Enterprise Internal Control released jointly by Ministry of Finance
and Other Four Ministries and Commissions and relevant regulations, kept effective internal control related to the financial
statement as of 31 December 2011 in all material aspects.
The conclusion was made under the condition of inherent limitation hereof.
Shu Lun Pan Certified Public Accountants Co., Ltd. Shanghai, China
Tong Bingwei, China CPA
Qian Yan, China CPA
23 April 2012
161
Self-Assessment Report on Effectiveness of Internal Control of the Bank
I. Internal Control Environment
( I ) Governance Structure
Bank of Wenzhou Co., Ltd. ( hereinafter referred to as “the Bank” ) has optimized a corporate governance structure making
up of Shareholders' General Meeting, Board of Directors, Supervisory Board and the senior management. The Bank has specific
committees including Strategic Development Committee, Risk Management Committee, Audit Committee, Committee of
Related Party Transaction Control, Nomination and Compensation Committee, and Information Technology Management
Committee, etc. and the Office of Board under the Board. Under the supervisory Board, there is Nomination Committee, Audit
Committee and the Office of Supervisory Board. The Board, the Supervisory Board and the various specific committees under
them formulated the rules of procedure and process for decision-making. Each governance subject is able to exercise its
responsibilities in line with its duties and rules and process.
The governance structure of the Bank is as follows:
Shareholders’ General Meeting
Office of the Board
Board of Directors
Supervisory Board
IT Management Committee
Office of Supervisory Board
Strategic Development Committee
Office of President
Committee of Related Party Transaction Control
Audit Committee
Nomination Committee
Risk Management Committee
Audit Committee
Nomination and Compensation Committee
Assets and Liabilities Management Committee
Financial Management Committee
Credit Review Management Committee
Compliance Management Committee
Risk Loans Responsibility Review Committee
Internal Control Committee
Defeat Lawsuit Responsibility Review Committee
Risk Conreol Committee
Departments of the Headquarters
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The Board of Directors is responsible for the establishment, optimization and effective implementation of the internal control
system; planning for overall business strategies and major policies and checking and assessing the implementation regularly;
ensuring the Bank to operate business prudently in the legal and policy frame and setting acceptable risk degree; ensuring the
organization structure frame of the Bank; and ensuring the senior management to supervise and assess the completeness and
effectiveness of the internal control system, in which:
1. The Strategic Development Committee makes the general business operation and development strategies for the Bank and
gives related advice.
2. The Risk Management Committee is responsible for the risk management policy and related advice and participates in the
management of major risk matters.
3. The committee of Related Party Transaction Control manages the related parties of the Bank, examines the recognition of
the related parties and examines and approves material related transactions.
4. The Nomination and Compensation Committee selects, examines, advises the members of the Board and the senior
management and assesses their performance.
5. The Audit Committee supervises, assesses the internal control of the Bank and feeds back information.
6. The IT Management Committee is responsible for specific information technology development strategies, gives related
suggestions and participates in the management of major information system projects.
The Supervisory Board supervises the Board of Directors and the senior management to perfect the internal control system;
supervises the members of the Board of Directors, the senior management and high-rank managerial staff to fulfill the
responsibilities of internal control; and prevents the directors, the chairman and high-rank managerial staff damaging the
interests of the Bank and supervises implementation, in which:
( 1 ) The Nomination Committee of the Supervisory Board is responsible for examining the qualification of the nominees for
supervisors and gives suggestions.
( 2 ) The Audit Committee is responsible for related intermediary agency's annual external audit and resignation of directors and
senior management of the Bank.
Upon the authorization of the Board, the top management formulates the internal control policy, supervises and assesses the
completeness and effectiveness of the internal control system; carries out the decisions of the Board; recognizes, measures
and supervises related risks and controls the risks; establishes and optimizes the internal organization structure and ensures the
effective fulfillment of all responsibilities of the internal control.
163
( II ) Organization Structure
According to the requirements on internal control, the functional departments of the Bank fall into three categories as marketing
department, risk control department, and operation and support department to separate front-end marketing, mid-end risk
control and back-end support and assurance for various business. The Bank realized separation of duties in the following main
business lines and links:
Firstly, the position investigating credit and position examining and approving credit are separated;
Secondly, the position examining and approving loan is separated from account processing;
Thirdly, financial expenditures and accounting is separated from reimbursement;
Fourthly, over-the-counter settlement business management is separated from authorization;
Fifthly, information system development and system operation are separated;
Sixthly, investment and financing business transaction is separated from authorization and liquidity;
Seventhly, separate business operation management and supervision and examination;
Eighthly, execution of internal control is separated from supervision and evaluation.
Department of internal audit management, compliance management and risk management of the Company performed
their duties and cooperated with each other, which was in line with the operation actuality and in favor of risk control and
strengthening organization structure of internal management.
( III ) Internal Control Policies
According to laws, regulations and regulatory requirements and taking into account of the reality of the Bank, the Bank has
basically established an internal control system on the basis of ISO9000 quality management system. It covers the internal
control system for the management activities of various businesses of the Bank, falling into ten categories as corporate
governance, credit approval business, credit card business, international business, capital business, financial accounting and
settlement, human resource, technological information, internal audit, examination and assessment, and administration, support
and others.
( IV ) Company culture construction
The Bank is creating common values to instruct staff to deal with the relation between personal interest and collective
interest, and between collective interest and social interest. The values will influence the development of the Bank, guide and
regulate the behavior mode of the staff, and motivate their sense of responsibility and sense of master. Meanwhile, the Bank
is developing fair, clean, law-abiding, service and diligent professional ethics of the staff, which encourages the staff to be
enterprising, hardworking and disciplined, and urge the staff to obey the law and regulations. Also, the Bank is making efforts to
create good company spirit and company image.
( V ) Human resource policy
The Bank is establishing a market-oriented HR management system, carrying out appointment and compensation system
reform following the liberal market principle and optimizing staff incentive mechanism. The Bank recruits and hires personnel,
decides pay and assesses performance according to the positions, establishes incentive mechanism and training system
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for different levels of staff so as to create a fair competition environment and career development for the staff. The Bank is
reforming the salary management system in order to establish a set of more fair, scientific and reasonable remuneration and
appraisal incentive mechanism.
II. Risk Identification and Control
The Bank is implementing the overall risk management framework and has established Risk Management Department to
exercise the overall risk management function. The Bank has been starting formulating the rules, process and methods to
identify, measure, monitor and manage risks and recognized and managed major risks such as credit risk, operating risk, legal
risk and ethical risk. The Bank is setting up related process and models to identify and measure market risk and liquidity risk. The
senior management of the Bank is able to identify and control risks in time and sends the information to the decision makers via
regular reports and irregular brief reports. The Bank has reintegrated risk control function of each committee under the Office of
President to clearly define risk management functions and boundaries of each subject of responsibility, and strengthen vertical
management of risk through carrying out the accredited system to such position as risk officer, accounting officer and internal
audit officer. The Bank, in line with the requirements of internal control of commercial bank set by the Banking Regulatory
Commission, has set up the frame for the internal control of risk management and was putting it into practice. The Bank has
appropriated adequate capital for all risks borne by the Bank according to the requirements on management of capital adequacy
ratio of commercial banks set by the Banking Regulatory Commission. The Bank is establishing a complete and reliable
management information system for the measure, supervision and control of market risk and credit risk and taking actions to
ensure the data accuracy, reliability, timeliness and safety.
III. Controlling Approaches for Main Business
The Bank have formulated complete rules and regulations for daily business activities including credit approval business, capital
business, intermediary business, foreign exchange business, and over-the-counter business. The process of each business
has defined authorization and approval and can be reported to the financial accounting and related departments for recording,
checking and filing the original vouchers.
( I ) Control over credit approval business
1. Established Risk Management Committee and Committee of Related Party Transaction Control and the decision-making
system for credit management.
2. Carried out System of Separating the Process of Checking and Actual Lending to enhance the credit risk control capability.
3. Perfected customer assessment system and credit rating system, formulated Rules on Corporation Credit Rating
Assessment Management and Rules on Management of Loan Quality Monitoring and Early Warning Reporting.
4. Established a management system of credit approval, credit line management and risk monitoring; set authority limit for
each branch or sub-branch and signed letter of re-authorization with them. Within the authority limit, the branch or sub-branch
has the right to examine and approve loans. For loans out of the authority, Risk Management Department and Retail Credit and
Loan Approval Department of the Headquarters will examine and approve the loan and the Center for Lending will release the
fund in a centralized manner.
165
5. Set up a platform for auditing fund released in the centralized manner. The Center for Lending of the Headquarters will
audited credit business of sub-branches in Wenzhou City and release the fund in a centralized manner. The Sub-Center for
Lending of the Branch will audited credit business of branches and release the fund in a centralized manner. Sub-branch will
only examine and approve low-risk businesses so as to reinforce compliance supervision to loan business.
6. Established credit approval business management and credit approval risk control over group customers and related-party
customers, formulated Rules on Risk Management of Centralized Credit Approval for Group Customers and Implementing
Rules on Management of Related Parties Transaction.
7. Created and carried out the five-degree loan risk system.
8. Created collateral assessment system under credit approval business.
9. Established early risk warning system for credit approval business to reinforce risk control over credit approval business.
10. Established credit approval risk responsibility system and specified the risk responsibilities of each department and each
position.
11. Established and carried out non-performing loan assets responsibility investigation system to reinforce position
responsibility discipline and further specified the responsibilities of the credit approval positions.
12. The credit approval positions had reasonable work division and clear responsibilities. Different positions were cooperative
and inter-restrictive. The loan checking and actual lending were separated. Business processing and accounting were
separated.
13. Each organization specified the authority and work process between examiner and credit approver to examine and approve
business strictly under the authority and process.
14. On-balance-sheet and off-balance-sheet credit approval including loan, trade financing, bill acceptance and discount,
overdraft, factoring, guarantee, loan undertaking, L/C issuance for single customer was controlled under a total amount.
15. Established unified credit approval operation rules to clearly define the work standards and due diligence requirements on
each process including pre-loan-issuance investigation, loan issuance examination and post-loan-issuance examination.
16. Formulated unified management measures for various credit products and specified the transaction conditions for each
business.
17. Followed the principle of confirming the condition before approving credit when the condition was allowed. If the condition
for approving the credit is not met or the condition is changed and the new decision is not made, the credit shall not be
approved.
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18. Carried out independent due diligence investigation for credit approval. Decision on credit approval was made in line with
set process. During the decision-making process of credit approval, the staff approving the credit must follow objective and fair
principle and give decision-making opinions independently.
19. Formulated rules in line with the requirements of “Three Measures and One Guideline”; examined and monitored
the purpose of the loan; examined the validity, financing background of the borrower and the authenticity of the application
documents and completeness of the loan contract to prevent the borrower swindling loan or doing other financial frauds.
20. Established asset quality monitoring system to monitor the change of asset quality, discover the potential risk of asset
quality in time, analyze the reasons for the formation of non-performing asset and work out countermeasures preventing and
resolving the risk in time.
21. Established credit management information system to monitor the full course of credit approval constantly in order to
provide true credit business status and asset quality information and analyze the credit risk and return comprehensively.
22. Established customer management information system to learn the financial standing, business and financial status,
solvency and non-financial factors of the customer in a complete and centralized manner; pushed forward categorized
management of customers to ban credit approval to the borrower with bad credit.
23. According to the risk level, specified different approving authorities for credits of different types, terms and guarantee
conditions. Both qualitative and quantitative methods were used in credit approval. Tried to quantify risk indicators to improve
the operability of the business.
( II ) Control of capital business
1. Adopted unified credit approval, multi-level authorization and centralized management for capital business.
2. The development and operation of new capital business products must be approved by the authorization of the senior
management.
3. Optimized the internal control for capital operation. Transferred in and out capitals according to the true business background,
operated business strictly according to the authority and allocated the fund and entered transaction diary in time.
4. The operation, approval and accounting of capital business were separated. The front-end trade and back-end settlement
were separated. Business operation and risk monitoring and control were separated.
5. Gave necessary assessment on the risks and loss of capital business. Bond transactions were set stop-loss point. When
the loss exceeds the stop-loss point, the operator must take action to stop loss. Borrowing and lending between other banks
were set risk alarm line.
6. Formulated capital business operation standards and checked it on a regular basis.
167
7. Accounted for capital business in a centralized way and checked transaction diary and accounting books in time.
8. Established a proper restrictive mechanism for capital traders to manage capital traders effectively.
9. Established the reflection and supervision mechanism of the mid-stage and back-stage departments for the front-stage
trade.
10. Established capital trade risk assessment indicator system to appraise the earnings and risks of capital trade in time and
prudently in order to control all risk indicators of capital business within the prescribed limits.
11. According to the risk degree and management ability of the capital trade, grant authority to the capital trader for trade
product, trade amount and stop-loss point.
12. Calculated the market value and floating gain or loss of the trade position according to the market price and monitored the
market risk and change in the market value of the position of capital trade products in real time.
13. Established internal reporting system for the risk and market value of capital trade and specified the sending scope, process
and frequency for different level reports and different kinds of reports.
14. Established pressure test process to simulate and estimate the possible potential loss caused by incidents such as sharp
changes in market price or unexpected political and economic events so as to appraise the Bank's ability to bear the loss under
extremely adverse conditions.
15. Established risk responsibility system of capital business and regulated the risk responsibility of every department and
position definitely.
( III ) Control of intermediary business
1. Established management rules and operation rules for various intermediary businesses to prevent operation risk.
2. Established responsibility system for each position. Specified the functions of each position and established accountability
system to identify liability of the risks caused by acts in violation of laws and rules.
3. Checked the business data compared with accounting data and statistic data for off-balance-sheet items.
4. In purchasing, selling foreign currencies and making payment in foreign currencies, the responsibilities of approving,
operating and account bookkeeping were separated. Strictly carried out internal management and inspection regulations to
ensure the purchase, sale of foreign currencies and payment in foreign currencies conforming to the regulations.
5. In handling authorized business, the Bank sets separate accounts for the transactions and optimized the procedures such as
payment, collection and check of authorized capital to avoid authorized capital to be used or embezzled and ensure specific fund
for specific purpose.
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6. Examined and managed authorized fund payment and capital transfer procedure according to the engagement of the agency
agreement. Followed the principle of not paying on behalf of the client and not involving in trade disputes between the client
and others.
7. Strictly calculated and recognized the income of various authorized businesses according to the accounting system. The
authorized receipt and payment were separated to avoid income from authorized business to be retained or embezzled.
( IV ) Control of bank card business
1. The Bank opened accounting under real name in issuing debit card. For cash withdrawal, account transfer and spending
payment of debit card, the Bank formulated and carried out related management rules and operation regulations.
2. The Bank established effective monitoring mechanism for the overdraft behavior of credit card holders. The business
processing system had real-time monitoring, excess amount control and stopping payment for abnormal transaction. The
Bank checked the account with the credit card holders on a regular basis, strictly managed overdraft amount to prevent vicious
overdraft risk.
3. The Bank set necessary monitoring approaches for capital transaction of bankcard when it dealt with bankcard deposit,
withdrawal and account transfer business to prevent the card holder used the bankcard for illegal activities.
4. The Bank managed appointed stores of bankcard, regulated related operation process and handling procedures and
formulated corresponding emergency and preventive approaches for the business risk and operation errors of appointed stores.
( V ) Control of over-the-counter business.
1. Set settlement management position to manage over-the-counter settlement business of the Bank. Grant system
authorities for various business and personnel in a centralized manner to control internal risk.
2. Made related operation rules to prevent operation risk.
3. Separated the management of seal and voucher. The staff using and keeping important business seals was not allowed to
keep related business vouchers to prevent operation risk and internal crimes.
4. Carried out post-transaction supervision system for over-the-counter business, which ensured the separation of
processing staff and supervising staff.
5. Implemented multi-leveled authorization and double-signature system for the issue and withdrawal of big-amount deposit
certificate and recorded and reported the receipt and payment of big-amount fund to ensure the information of big-amount
transactions true and complete so as to prevent such illegal activities as money laundry, financial fraud and etc.
6. Established standards, reporting process and responsibility investigation system for major mistakes in over-the-counter
business.
169
7. Strictly carried out the regulations on account management to check the identity of the depositor and the authenticity,
completeness and legality of the account information. Checked account opening, change and cancellation regularly to avoid
depositors to rent or lend out accounts or use the accounts to do illegal activities.
8. Managed the reserved seals and deposit payment vouchers; improved the ability to identify if the seals and vouchers were
real and used computer technology to enhance the technology content in the management of reserved seals to prevent frauds.
9. Carried out effective management for deposit accounts; established and optimized diary and account checking system to
check the accounts between the Bank and customers, the Bank and other banks and within the bank. Specified the frequency,
object and participants of the account check.
10. Monitored special internal account transfers and abnormal account changes and tracked and analyzed unusual account
changes.
11. Effectively managed the account records at the end of the working day. The vouchers of the day were recorded on the day.
Carried out internal approving and recording process for wrong bookkeeping and untaken bills or returned bills.
12. Established checking system for cash receipt and payment, fund transfer, change of accounting information, change of
password, loss reporting and cancellation of loss reporting to ensure transaction records complete and traceability.
13. Carried out strict accounting and management for cash, precious metals, important blank vouchers and value bills; followed
the procedures for the storage, recording and taking out of the above items and check the storage on a regular basis.
IV. Internal Control of Accounting System
( i ) The accounting rules and management system of the Bank was formulated and come into force in line with the Accounting
Standards for Business Enterprises.
( ii ) Defined the independence of accounting work and the accounting department and accounting personnel being able to
process accounting independently according of China's unified accounting system of the accounting rules of the Bank.
( iii ) The Setup of accounting positions followed the principle of separation of duties and restricting each other. It was strictly
banned to allow one person to work in two incompatible positions or finish the entire business process alone.
( iv ) Defined the authorities of the accounting department and accounting personnel. The accounting department in different
levels and accounting personnel worked within their authorities. Business beyond the authority should be processed after being
authorized.
( v ) Supervised the entire process of account processing. Accounting records, accounting records and vouchers, accounting
records and funds, accounting records and facts, accounting records and financial statements and internal external accounts
shall be accordant.
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2011 年度报告
ANNUAL REPORT
( vi ) Adopted professional qualification management for accounting supervisor and person in charge of accounting. Established
files of accounting personnel. Hired accounting supervisor, person in charge of accounting and accounting personnel who have
the professional qualification or skills for the position.
( vii ) The accounting supervisor of the lower-level organization was assigned by the upper-level organization. The transfer or
resignation of accounting personnel shall finish handover procedure.
( viii ) Established compulsory vacation system for accounting personnel. Personnel in important accounting positions and
accounting supervisors changed positions on regular basis. Adopted leaving-position audit system.
( ix ) Adopted investigations system for accounting errors. If serious accounting error, malpractice or case occurs, besides
investigating the responsibility of the directly responsible person, the person in charge of the accounting department and the
person in charge of accounting shall bear related responsibilities.
( x ) Accounting records and account processing were legal, true, complete and correct.
( xi ) Established normative information disclosure system and disclose accounting and financial information in time, truly and
completely to satisfy the information demand of shareholders, the regulatory authority and the public.
( xii ) Gradually perfected accounting file management and adopted accounting file consultation procedures to prevent
accounting files being changed, altered, damaged, missing or secret being disclosed.
V. Control of Computer System
At present, the computer systems used by the Bank include general business system, credit management system, credit card
system, international business system, online banking system, financial management system and office automation system.
The main controlling procedures of the computer systems include:
( i ) Formulated position responsibility system to make clear the position responsibilities of system developers, managerial staff
and operators of the computer information system. It was not allowed to take two positions so that different positions could
restrict each other. Meanwhile, the Bank assigned computer security management staff to reinforce the security management
of the computers.
( ii ) Managed the entire process from the project establishment, development, inspection and acceptance, operation and
maintenance of the computer information system. The development environment and production environment were separated
to ensure the security of the system.
( iii ) While buying computer software and hardware, examined the qualification of the supplier and performed security test
before use. Defined the responsibility of the supplier during the period when the product was in use so as to ensure the normal
use and effective maintenance of the product.
171
( iv ) The construction of the computer room was in line with related governmental standards. Entering and leaving the
computer room had strict approving procedure and kept records to ensure the physical safety of computer hardware and
various storage media.
( v ) The computer room and banking offices were equipped with computer monitoring system to ensure the normal use of
technology equipment.
( vi ) The Bank is taking actions to establish and optimize the network management system to manage the safety, malfunctions,
performance and configuration of the network. Carried out security management for internet access.
( vii ) User management and password management were adopted in the computer information system to control the creation,
change, deletion of the user and the length and valid period of the user's password so as to avoid the possibility of operation
risk and internal crimes.
( viii ) Established proper authorization process for the information system and took post-access security control to ensure the
security of the computer system.
( ix ) Updated system security settings, virus source code database, attack feature codes, software patches, etc. Adopted
technology approaches including certification, encryption, content filtering and intrusion monitoring to ensure the safe operation
of the computer information system.
( x ) Set necessary logs for the operation system, database system and application programs.
( xi ) Managed various kinds of data information and formulated management rules on data operation, the storage, transfer and
destroying of data backup media to ensure data information secure.
( xii ) E-banking service had customer ID identification and security certification features to avoid the leakage of secrets.
( xiii ) Established computer security emergency system and formulated emergency program, which was revised and drilled on
a regular basis. Data backup was kept in another place. Established computer disaster backup center.
( xiv ) Prevented various operation risks and illegal activities and crimes by making the most use of the system setting of the
computer information system.
VI. Supervising and Correcting System
( i ) The Internal Audit Department of the Bank in an audit department specifically for internal audit. It is authorized to monitor
and appraise all departments, positions and businesses.
( ii ) Formulated the rule that the Internal Audit Department could report to the Board of Directors or the Audit Committee
directly.
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2011 年度报告
ANNUAL REPORT
( iii ) The Internal Audit Department had qualified internal auditors. Established professional training system. Every person must
have certain time of off-position or full-time training every year.
( iv ) Established the reporting and information feedback system for internal control. The business department, internal audit
department or other controlling staff was able to report to the Board of Directors, the management team or the related
department when they found hidden problem or defects in internal control.
( v ) The Internal Audit Department examined and appraised the system construction and implementation of the internal control,
gave advice on improvement and suggested on how to punish organizations and personnel breaking the rules.
( vi ) The upper-level organization appraised the internal control performance of the lower-level organization on a regular
basis according to the internal control information it had and take the assessment result as an important basis for operation
performance assessment.
( vii ) Established the punishing and corrective system for internal control problems and defects. The management team brought
up rectification opinions and corrective approaches according to the internal control examination and assessment result and
urged the business department and branches to carry them out.
( viii ) Established the risk responsibility system of internal control.
VII. Fields to be perfected in internal control and improvement measures
( I ) Weaknesses existing in the internal control
1. With regard to human resources policies, staff assignment in the part of positions can't completely meet the internal control
demands due to fast-expanding business scale and tight staff assignment; short-term incentive compensation and long-term
incentive compensation need to be perfected; a gap remains between the human resources management of the Bank and the
advanced banks, and such respects as actively coordinating of organizational relations in the Bank, controlling and planning staff
development and providing consultation to senior management need to be much improved.
2. Audit Department conducted audit on fund position, wealth management, IT, finance and key businesses.
3. With regard to credit approval business management, the Bank has deficiencies in validity of system implementation, and
has to reinforce regularity and compliance in business activities.
( II ) Improvement measures
As for the above-mentioned weaknesses, the Bank has taken measures and worked out policies and processes to further
improve its internal control system. At present, all improvements are underway:
173
1. In accordance with business development program, the Bank is positively recruiting middle- and high- ranking financial
professional, enhancing professional training measures, unceasingly advancing compensation reforms and optimizing
assessment mechanism. Based upon the unity among safety, efficiency and benefit, the Bank is optimizing human resources
allocation to satisfy and ensure adaptation between human resources and business development, as well as internal control
management.
2. Strengthening internal department staffing and supervision on effectiveness and flexibility of risk management. The Audit
Department shall arrange internal audit on all core business lines on annual basis.
3. Strengthening implementation force in the systems of credit approval business and increasing inspection and supervision to
legitimacy education and validity of system implementation to enhance internal control level of credit approval business.
Therefore, the Bank formulated the internal control systems over all businesses, which was basically in compliance with the
requirements of internal control of commercial bank. Through effective implementation, the systems played an important role in
intensifying business management, controlling business risk and prevention of fraud so as to ensure the Bank's property safety
and completeness, to protect rights and interests of stake holders related with the Bank and to strengthen the Bank's credibility
and market competitiveness.
174
Legal Representative: Xing Zengfu
President: Wu Hua
Person in Charge of Accounting Department: Zhang Demin
23 April 2012
2011 年度报告
ANNUAL REPORT
Confirmation Opinion of the Directors of Bank of Wenzhou Co., Ltd.
Concerning the Annual Report 2011
Pursuant to the information disclosure control requirements, as the director of the Bank of Wenzhou Co., Ltd., via our overall
understanding and verification to the main body and the summary of the Annual Report 2011, we expressed our opinions as
below:
1. The Company standardized its operations strictly in accordance with the Accounting Standard for Business Enterprise, the
Accounting System for Business Enterprise and the Accounting Regulations for Financial Enterprises. And the main body and
the summary of the Annual Report 2011 fairly reflected the Company's financial status and operation results for the year ended
2011.
2. The Financial Report for year 2011 had been audited by Shulun Pan Certified Public Accountants Co., Ltd. according to the
Chinese Audit Standards. And Shulun Pan Certified Public Accountants Co., Ltd. issued an Auditor's Report with unqualified
opinion.
3. In our opinion, the information in the main body and the summary of the Annual Report 2011 do not contain any false
statements, misleading statements, materials omissions and jointly and individually accept full responsibility for the truthfulness,
accuracy and completeness of the contents of this report.
23 April 2012
Sign by Directors:
Xing Zengfu,
Wu Hua, Huang Chenyuan, Yang Lin, Zhang Yili, Yao Xianguo, Liang Lifang, Lin Jiangfan, Gu Chang, Chen Shengquan,
Zheng Nianhong,
Zhou Dingwen, Li Yuping, Shao Fenghua, Ying Shude,
Zhou Qun,
Fang Xuanping
175

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