Year ended December 31, 2021 (unless otherwise specified, monetary unit: RMB yuan) I. Basic Information
China International Capital Corporation Limited(601995) (the former China International Finance Corporation Limited, hereinafter referred to as “the company”) obtained the establishment approval of the people’s Bank of China on June 25, 1995, and obtained the enterprise legal person business license of the people’s Republic of China No. Qingdao Doublestar Co.Ltd(000599) issued by the State Administration for Industry and Commerce of the people’s Republic of China on July 31, 1995.
The company was restructured into a joint stock limited company on June 1, 2015, listed on the main board of the stock exchange of Hong Kong Limited on November 9, 2015 (Stock Code: 3908), and listed on the main board of the Shanghai Stock Exchange on November 2, 2020 (Stock Code: China International Capital Corporation Limited(601995) ).
The unified social credit code of the company is 9111 Shenzhen Huaqiang Industry Co.Ltd(000062) 5909986u, and the registered address is 27 and 28 floors, building 2, international trade building, No. 1 Jianguomenwai street, Chaoyang District, Beijing. As of December 31, 2021, the company has 4 securities business departments and 10 branches. Refer to note IV, 1 for details of subsidiaries of the company.
The main business scope of the company and its subsidiaries (hereinafter collectively referred to as “the group”) is to engage in investment banking, stock business, fixed income business, asset management business, private equity business, wealth management business and other business activities.
2、 Preparation basis of financial statements
Preparation basis
The group implements the accounting standards for business enterprises and relevant regulations (hereinafter referred to as the “accounting standards for business enterprises”) issued by the Ministry of finance of the people’s Republic of China (hereinafter referred to as the “Ministry of finance”). In addition, in accordance with the rules for the preparation of information disclosure of companies offering securities to the public No. 15 – General Provisions on financial reports (revised in 2014) (CSRC announcement [2014] No. 54) The standards for the content and format of annual reports of securities companies (revised in 2013) (CSRC announcement [2013] No. 41) and the special provisions on the preparation of notes to financial statements of securities companies (2018) (Accounting Department letter [2018] No. 590) disclose relevant financial information.
Going concern
The group has evaluated the continuous operation ability for 12 months from December 31, 2021, and found no events and situations that have significant doubts about the continuous operation ability. Therefore, the financial statements are prepared on the basis of going concern assumption.
3、 Major accounting policies and major accounting estimates 1 Statement of compliance with accounting standards for business enterprises
The financial statements prepared by the company comply with the requirements of the accounting standards for business enterprises issued by the Ministry of finance, and truly and completely reflect the consolidated and parent company’s financial position as of December 31, 2021, as well as the consolidated and parent company’s operating results and consolidated and parent company’s cash flow in 2021.
2. Accounting period
The accounting year of the group starts from January 1 to December 31 of the Gregorian calendar.
3、 Major accounting policies and major accounting estimates – continued 3 Recording currency and presentation currency
The bookkeeping base currency of the company is RMB, and the currency used in the preparation of financial statements is RMB. The bookkeeping functional currency selected by the company and its subsidiaries is based on the pricing and settlement currency of main business revenue and expenditure. Some subsidiaries of the company use currencies other than RMB as the bookkeeping base currency. When preparing the financial statements, the foreign currency financial statements of these subsidiaries are translated (see note III and 6).
4. Description of changes in accounting policies and accounting estimates 4.1 changes in accounting policies and impacts
On January 26, 2021, the Ministry of Finance promulgated the notice on printing and distributing the interpretation of accounting standards for Business Enterprises No. 14 (CAI Kuai [2021] No. 1), which shall come into force as of the date of promulgation. According to the relevant provisions of the interpretation of accounting standards for Business Enterprises No. 14 (hereinafter referred to as “Interpretation No. 14”), in the case of changes in the basis for determining the cash flow of relevant contracts due to the reform of the benchmark interest rate, if the basis for determining the cash flow of financial assets or financial liabilities using the effective interest rate method to determine interest income or expenses is changed only due to the reform of the benchmark interest rate, When the basis of determination before and after the change is economically equivalent, the group refers to the treatment method of floating interest rate change, recalculates the actual interest rate according to the future cash flow after the change only due to the benchmark interest rate reform, and makes subsequent measurement on this basis. In addition to the above changes, if there are other changes in the financial assets or financial liabilities whose interest income or expenses are determined by the effective interest rate method at the same time, the group will conduct accounting treatment for the changes caused by the reform of the benchmark interest rate according to the above provisions, and then evaluate whether other changes lead to the termination of the recognition of the financial assets or financial liabilities according to the accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments.
According to Interpretation No. 14, the group will handle the new business related to the benchmark interest rate reform from January 1, 2021 to the implementation date of Interpretation No. 14 in accordance with the provisions of Interpretation No. 14. For the business related to the benchmark interest rate reform before December 31, 2020, the Group believes that the adoption of this provision has no significant impact on the group’s financial statements.
On May 26, 2021, the Ministry of Finance issued the notice of the Ministry of Finance on adjusting the scope of application of the provisions on accounting treatment of rent concessions related to covid-19 pneumonia epidemic (CAI Kuai [2021] No. 9), which has come into force since the date of promulgation. This provision has no significant impact on the financial status and operating results of the group.
Except for the above issued and revised accounting standards for business enterprises, other major accounting policies of the group have not changed in this year.
4.2 changes and impact of accounting estimates
There is no significant change in the main accounting estimates of the group in this year.
5. Business combinations and consolidated financial statements 5.1 business combinations under the same control
A business combination under the same control is a business combination in which the enterprises participating in the merger are ultimately controlled by the same party or the same parties before and after the merger, and the control is not temporary. The assets and liabilities acquired by the combining party in the business combination shall be measured according to the book value in the consolidated financial statements of the final controller on the combination date. For the difference between the book value of the net assets obtained and the book value of the merger consideration paid (or the total face value of the issued shares), adjust the share capital premium in the capital reserve; If the capital stock premium in the capital reserve is insufficient to be offset, the retained earnings shall be adjusted.
The directly related expenses incurred for business combination shall be included in the current profit and loss when incurred. The date of merger is the date on which the combining party actually obtains control over the combined party.
3、 Major accounting policies and major accounting estimates – continued
5. Business combination and consolidated financial statements – continued
5.2 business combination not under the same control
If the parties involved in the merger are not ultimately controlled by the same party or the same parties before and after the merger, it is a business merger not under the same control. The sum of the assets paid by the group as the acquirer to obtain the control of the acquiree (including the equity of the acquiree held before the acquisition date), the liabilities incurred or assumed and the fair value of the issued equity securities on the acquisition date minus the difference between the fair value share of the identifiable net assets of the acquiree obtained in the merger on the acquisition date. If it is positive, it is recognized as goodwill; If it is negative, it shall be included in the current profit and loss. The group will include the transaction costs of equity securities or debt securities issued as merger consideration into the initially recognized amount of equity securities or debt securities. Other direct expenses incurred by the group for business combination are included in the current profit and loss. The Group recognizes the identifiable assets, liabilities and contingent liabilities of the acquiree that meet the recognition conditions at fair value on the acquisition date. The date of purchase refers to the date on which the purchaser actually obtains control over the acquiree.
5.3 consolidated financial statements
The consolidation scope of consolidated financial statements is determined on the basis of control, including the company and subsidiaries controlled by the company (including structured entities, the same below). Control means that the group has the power over the investee, enjoys variable returns through participating in relevant activities of the investee, and is able to use the power over the investee to affect its return amount. Once the relevant factors involved in the above control definition are changed due to the change of relevant facts and circumstances, the group will reassess. The financial position, operating results and cash flow of subsidiaries are included in the consolidated financial statements from the control start date to the control end date.
For subsidiaries acquired through business combination not under the same control, when preparing the consolidated financial statements of the current period, the purchased subsidiaries shall be included in the consolidation scope of the company from the acquisition date on the basis of the fair value of all identifiable assets and liabilities of the purchased subsidiaries determined on the acquisition date.
If the accounting period or accounting policy adopted by the subsidiary is inconsistent with that of the company, the financial statements of the subsidiary shall be adjusted according to the accounting period or accounting policy of the company when preparing the consolidated financial statements of the current period. All intra group transactions and balances, including unrealized internal transaction gains and losses, are offset at the time of consolidation. For the unrealized loss of intra group transactions, if there is evidence that the loss is the impairment loss of relevant assets, the loss shall be recognized in full.
The equity, profit and loss and total comprehensive income attributable to minority shareholders of subsidiaries are listed separately after the shareholders’ equity in the consolidated balance sheet and the net profit and total comprehensive income in the consolidated income statement. If the current loss shared by minority shareholders of a subsidiary exceeds the share of minority shareholders in the owner’s equity of the subsidiary at the beginning of the period, the balance shall still be offset against the reduced shareholder’s equity. Under the condition of not losing control, the change of minority shareholders’ equity is regarded as equity transaction.
When the group loses control over its original subsidiaries, any disposal gains or losses arising therefrom shall be included in the investment income of the current period when the control is lost. For the remaining equity investment, the group remeasures it according to its fair value on the date of loss of control, and any income or loss arising therefrom is also included in the investment income of the current period of loss of control.
6. Foreign currency business and translation of foreign currency financial statements
When the group receives the capital invested by investors in foreign currency, it is converted into RMB at the spot exchange rate of the current day, and other foreign currency transactions are converted into RMB at the approximate exchange rate of the spot exchange rate on the transaction date at the initial recognition.
The spot exchange rate refers to the RMB foreign exchange rate published by the people’s Bank of China or the exchange rate calculated according to the published foreign exchange rate. The approximate exchange rate of spot exchange rate is determined according to a systematic and reasonable method, which is the current average exchange rate similar to the spot exchange rate on the transaction date.
3、 Major accounting policies and major accounting estimates – continued
6. Foreign currency business and translation of foreign currency financial statements – continued
On the balance sheet date, foreign currency monetary items are translated at the spot exchange rate on that date. The exchange difference arising from the difference between the spot exchange rate on that date and the spot exchange rate at the time of initial recognition or the previous balance sheet date, except: (1) the exchange difference of foreign currency special borrowings meeting the capitalization conditions is capitalized during the capitalization period and included in the cost of relevant assets; (2) The exchange differences of hedging instruments that are hedged in order to avoid foreign exchange risks shall be treated according to the hedging accounting method; (3) For monetary items classified as measured at fair value and whose changes are included in other comprehensive income, exchange differences arising from changes in other book balances other than amortized costs are included in other comprehensive income, and are included in current profits and losses. Foreign currency non monetary items measured at historical cost are still translated at the spot exchange rate on the transaction date. Foreign currency non monetary items measured at fair value are translated at the spot exchange rate on the date when the fair value is determined. The difference between the amount of the converted bookkeeping functional currency and the amount of the original bookkeeping functional currency is treated as a change in fair value (including exchange rate change), included in the current profit and loss or recognized as other comprehensive income. If there is a substantial exchange difference between foreign currency and other foreign currency items involved in the preparation of the consolidated financial statements, if there is a change in the “foreign currency exchange rate” of foreign currency items, it shall be included in the consolidated financial statements; The disposal of overseas operations shall be included in the current profits and losses.
When the financial statements of overseas operations are translated, the assets and liabilities in the balance sheet are translated at the spot exchange rate on the balance sheet date. In the owner’s equity, except for the undistributed profits and the translation difference of foreign currency financial statements in other comprehensive income, other items are translated at the spot exchange rate at the time of occurrence. The undistributed profit at the beginning of the year is the undistributed profit at the end of the year after conversion of the previous year. The undistributed profit at the end of the year is calculated and listed according to the profit distribution items after conversion. The income and expense items in the income statement are translated at the approximate exchange rate of the spot exchange rate on the transaction date. The translation difference of foreign currency financial statements generated according to the above translation is listed in other comprehensive income. When disposing of overseas operations, the translation difference of relevant foreign currency financial statements is transferred from other comprehensive income to the current profit and loss of disposal.
Foreign currency cash flows and cash flows of overseas subsidiaries are translated at the spot exchange rate on the date of cash flow. The impact of exchange rate changes on cash and cash equivalents is taken as an adjustment item and separately presented in the cash flow statement as “impact of exchange rate changes on cash and cash equivalents”.
