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Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
1
/ China Communications Services Corporation Limited
1
Principal activities and organisation
(a) Principal activities
China Communications Services Corporation Limited (the “Company”) and its subsidiaries
(hereinafter collectively referred to as the “Group”) is a leading integrated service provider to the
telecommunications industry in the People’s Republic of China (the “PRC”). Its principal activities
comprise provision of a full range of telecommunications support services in the PRC and overseas,
including (i) telecommunications infrastructure design, construction and supervision and management;
(ii) business process outsourcing (including network maintenance, facilities management, distribution
of telecommunications service and products); and (iii) a variety of other services including applications,
content and others.
(b) Organisation
The Company was established in the PRC on 30 August 2006 as a joint stock limited company under
the Company Law of the PRC as part of the Restructuring (as defined below) of CTC, a state-owned
enterprise under the direct supervision of the State Council of the PRC. Pursuant to the Restructuring
(as defined below), the Group assumed the telecommunications support services previously carried
on by various subsidiaries wholly-owned or controlled by CTC in six provinces and municipality in the
PRC, namely, Guangdong Province, Zhejiang Province, Shanghai Municipality, Fujian Province, Hubei
Province and Hainan Province (collectively, the “Predecessor Operations”) from CTC. The Company
was founded by CTC, Guangdong Telecom Industry Group Corporation and Zhejiang Telecom Industry
Corporation by ways of the injection of those subsidiaries carrying on the Predecessor Operations and
cash contributions.
In connection with the Restructuring (as defined below), the Predecessor Operations together with
the related assets and liabilities that were to be transferred to the Group were segregated from CTC
effective on 31 March 2006 (the “Restructuring”). The Restructuring comprised the following:
(i)
CTC underwent a rest ructur ing programme in connect ion wi th i ts ful l range of
telecommunications related services, namely (1) telecommunications infrastructure design,
construction and supervision and management; (2) business process outsourcing (including
network maintenance, facilities management and distribution of telecommunications services
and products); and (3) a variety of other services including applications, content and others.
(ii)
The net assets were injected into the Company by ways of asset injection of those subsidiaries
carrying on the Predecessor Operations in consideration of approximately 3,623.4 million
ordinary shares with a par value of RMB1 each.
(iii)
The Group, immediately after the Restructuring, contains substantially all of the operating
assets and liabilities relating to the Predecessor Operations, comprising (1) telecommunications
infrastructure design, construction and supervision and management; (2) business process
outsourcing ( including network maintenance, faci l ities management, distribution of
telecommunications services and products); and (3) a variety of other services including
applications, content and others.
(iv)
In connection with the Restructuring, certain assets and liabilities historically associated with
the Predecessor Operations were not transferred to the Company and were retained by CTC.
The above Restructuring procedures primarily resulted in an effect of the transfer from CTC to the
Company of the operating assets and liabilities relating to the telecommunications related services
carried on by the Predecessor Operations, which were previously owned or controlled by CTC prior to
the Restructuring.