Laws of the People's Republic of China

Circular of the Ministry of Finance on Printing and Distributing of Final Financial and Accounting Statements of Enterprises Abroad for the Year 2006

Cai Qi [2006] No.341

Relevant departments under the Central Committee of the CPC, relevant ministries and commissions of and relevant institutions directly under the State Council, General Office of the Standing Committee of National People's Congress, General Office of the CPPCC, Higher People's Courts, Higher People's Procuratorates, relevant mass organizations, Xinjiang Production and Construction Corps, departments (bureaus) of the public finance of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan, and relevant enterprises directly under the Central Government:

For the purpose of ensuring correct formulation of accounting statements of enterprises abroad for the year 2006 and keeping breast in a timely manner of the financial conditions and operating results of state-owned enterprises (administrative organs) abroad, the Ministry of Finance hereby prints and distributes the Final Financial and Accounting Statements of Enterprises Abroad for the Year 2006 to you all, and related matters are notified as follows:

I.

This set of statements shall apply to state-owned enterprise groups abroad invested and established outside the territory of the People's Republic of China or in Hong Kong and Macao Special Administrative Regions, domestic investment entities that have established enterprises abroad or administrative organs abroad outside the territory of China or in Hong Kong and Macao Special Administrative Regions and enterprises abroad directly invested and controlled by the domestic investment entities as mentioned above.

The state-owned enterprise groups abroad refer to China Merchant Group Co., Ltd Hong Kong, China Travel Service (Holdings) Hong Kong Limited, China Resources (Holdings) Co., Ltd, Macao Nam Kwong (Group) Company Limited and relevant local enterprise groups abroad.

Finance and insurance enterprises abroad are not within the scope of filling-in of this set of statements prescribed in the Circular herein.

II.

This set of statements shall be submitted to a higher body by the state-owned enterprise groups abroad and domestic investment entities after consolidation or collection of all the accounting statements and materials of enterprises abroad. All state-owned enterprise groups abroad and domestic investment entities shall, in accordance with the requirements as prescribed in this Circular, carry out in a serious manner the arrangement and organization of accounting statements of their subordinate enterprises abroad.

III.

The statements of enterprises abroad for the year 2006 of all state-owned enterprise groups abroad and domestic investment entities shall be filled in on the basis of final accounting results and relevant documents on December 31, 2006. In addition, the work of typing, examination and approval, and collection shall be done in a serious manner so as to ensure the authenticity, completeness and legitimacy of the data.

IV.

The Final Financial and Accounting Statements of Enterprises Abroad for the Year 2006 shall be filled in and typed separately for each enterprise with U.S dollars as the unit of amount. Where other foreign currencies are to be converted into U.S. dollars, the middle price of the exchange rates of the functional currency declared by the local bank thereabout on December 31, 2006 against U.S dollars shall be complied with.

V.

This set of statements shall serve as the uniform format of final accounting statements submitted to competent financial authorities by enterprises abroad. Departments (bureaus) of the public finance of all provinces, autonomous regions, municipalities directly under the Central Government and cities specially designated in the state plan, departments (entities) directly under the Central Government and relevant enterprises directly under the Central Government shall, on the basis of errorless examination and verification of the data of statements of enterprises abroad under their jurisdiction, submit one copy of the following materials to the Enterprise Department of the Ministry of Finance before July 31, 2007. Enterprises directly under the Central Government shall, while submitting this set of statements to the Ministry of Finance, submit another copy to the State-owned Assets Supervision and Administration Commission of the State Council. The specific contents to be submitted are listed as follows:

1.

Collective Accounting Statement (with "1000 U.S. dollars" as the unit of amount). It shall be bound in order of the statement cover, the tree derivation of enterprises within the scope of compilation (not required of local enterprises), the main form, the attached table, the table of basic conditions of enterprises abroad, the analytical statement of changes of the number of enterprises within the scope of compilation. Signature and official seal shall be essential herein.

2.

Notes to the Accounting Statements. See Appendix 3 for details, concrete contents and requirements thereof.

3.

Directions of Financial Conditions, which mainly include the following contents:

(1)

The scope of consolidation or collection of accounting statements of enterprises abroad, the changes of the number of enterprises in the year 2006 and the causes thereof;

(2)

The basic conditions of production and operation of enterprises abroad;

(3)

The realization and distribution of profits;

(4)

The increase and decrease and turnover of capital;

(5)

Brief analysis of the assets quality of enterprise abroad, such as analysis of the age of accounts receivable and analysis of income from investment.

(6)

Significant financial transactions of enterprises abroad such as heavy losses of assets, the tendering of external guarantee, transactions involving unsettled lawsuits and arbitration, mortgage of property and risk businesses beyond the authorized scope of business.

(7)

The tax policy and adjustment of tax payment of the country (region) where the enterprise abroad locates, and

(8)

Other transactions that have significant influences on the financial conditions, operational results and cash flow of the enterprise as well as other matters that need elaboration and reflection.

4.

Soft disks of collective data and separate data for each enterprise (with U.S. dollar as the unit of amount).

VI.

The software of data processing of the Final Financial and Accounting Statements of Enterprises Abroad for the Year 2006 shall be separately distributed later.

All entities and regions, where any question emerges in the process of the formulation and submission of the statements, shall contact the Enterprise Department of the Ministry of Finance in a timely manner.

Appendix:

(1)

Final Financial and Accounting Statements of Enterprises Abroad for the Year 2006 (Omitted)

(2)

Descriptions to the Formulation of Final Financial and Accounting Statements of Enterprises Abroad for the Year 2006 (Omitted)

(3)

Synopsis of the Notes to the Accounting Statements (Omitted)

The Ministry of Finance of the People's Republic of China

September 30, 2006