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1 Propelling Growth 扩 展 领 域 Annual Report 年 年 度 报 告 A subsidiary of China National Aviation Fuel Group Corporation 中 国 航 空 油 料 集 团 公 司 子 公 司

2 China Aviation Oil (Singapore) Corporation pariatur. Excepteur sint occaecat cupidatat non Ltd lorem ipsum dolor sit amet, consectetur proident, sunt in culpa qui officia deserunt mollit adipisicing our elit, sed do vision eiusmod tempor incididunt anim id est laborum. ut labore et dolore magna aliqua. To become an internationally competitive and growth-oriented Ut enim ad integrated minim veniam, energy quis trading nostrud company exercitation with synergetic assets, characterised by integrity and innovation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla 公 司 愿 景 our vision & MISSion China Aviation 坚 守 诚 信 Oil 勇 (Singapore) 于 创 新, 成 为 具 Corporation 有 跨 国 经 营 优 势 Ltd 的 能 lorem 源 贸 ipsum dolor sit amet, consectetur adipisicing 易 和 elit, 实 业 sed 协 同 do 发 展 eiusmod 型 企 业 tempor incididunt ut labore et dolore magna aliqua. Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, our values Ut enim ad minim veniam, quis ullamco laboris. CONTENTS 01 Corporate Profile 02 Vission & Mission 03 Financial Statements 80 Vission & Mission 88 Financial Statements 91 Corporate Profile 13 Corporate Profile 20 Vission & Mission 31 Financial Statements 54 Corporate Profile

3 DESIGN CONCEPT The concept behind this year s annual report is inspired by CAO s transformation and business expansion. The creative use of CAO s logo on the cover further strengthens brand awareness in a dynamic and sophisticated manner. The oil droplet is symbolic of CAO s core business operations in jet fuel supply and trading, while the ripples emanating from it signify CAO s aim to reach further and expand its scope of business. Vibrant colours are used to evoke the celebratory spirit of CAO s 10th anniversary of listing, and also reflect the radiant future and success that lay ahead for the company.

4 CONTENTS 目 录 Years As A Listed Company 上 市 十 周 年 回 顾 06 CAO At A Glance 公 司 简 介 08 Chairman s Statement 董 事 长 致 辞 14 Board of Directors 董 事 会 22 Key Management 管 理 层 主 要 人 员 简 介 23 Management 管 理 层 24 CEO s Review of Operations 首 席 执 行 官 业 绩 回 顾 30 Jet Fuel Supply & Trading 航 油 供 应 与 贸 易 32 Trading of Other Oil Products 其 他 油 品 贸 易 33 Investments in Oil-related Assets 油 品 相 关 实 业 投 资 36 Subsidiaries 子 公 司 37 Risk Management 风 险 管 理 40 Financial Review 业 绩 回 顾 42 Corporate Social Responsibility 企 业 社 会 责 任 44 Statement of Corporate Governance 公 司 治 理 报 告 59 Financial Statements 财 务 报 告 107 Supplementary Information 补 充 信 息 108 Statistics of Shareholdings 股 权 结 构 信 息 110 CAO Share Price and Trading Volume Information CAO 股 价 及 交 易 量 信 息 110 Corporate Calendar 公 司 事 务 时 间 表 111 Notice of Annual General Meeting 常 年 股 东 大 会 通 知 Proxy Form 代 理 表 格 Corporate Information 公 司 信 息

5 FINANCIAL HIGHLIGHTS 业 绩 亮 点 TOTAL JET FUEL SUPPLY AND TRADING VOLUME 航 油 供 应 与 贸 易 总 量 8.4m tonnes 5yr CAGR: 12% REVENUE 营 业 额 US$ 9.0b net profit 净 利 润 US$ 63.4m 5yr CAGR: 15%* TOTAL ASSETS 总 资 产 US$ 1.2b net asset value/share 每 股 净 资 产 值 US return on equity 股 本 回 报 率 17% *Excluding one-off non-operating gains in 2006 and 2007 * 剔 除 2006 年 和 2007 年 一 次 性 非 盈 利 收 益 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 1

6 10 YEARs as a Listed Company December Listed on the mainboard of Singapore Exchange Securities Trading Ltd and was the largest IPO in Singapore of that year April Announced acquisition of 5% stake in Compania Logistica de Hidrocarburos, S.A. ( CLH ) in Spain 23. July Announced acquisition of 33% stake in Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd ( SPIA ) November Announced loss of US$550 million from speculative options trading; trading of CAO shares was suspended; commenced debt restructuring exercise June Debt repayment scheme approved by creditors March CAO s shares resumed trading under the leadership of a new Board; marked the completion of restructuring 25. May Resumed jet fuel procurement business on a principal basis 14. November CAO adopted parent company s logo as its new logo January Divested 5% stake in CLH; repaid outstanding debts owed to creditors in May 2007 with proceeds from divestment, 4 years ahead of schedule 04. October Awarded Most Transparent Company (runner-up in the foreign listings category) by Securities Investors Association (Singapore) ( SIAS ), February Awarded the Global Trader Programme ( GTP ) status by IE Singapore 23. April Announced acquisition of 49% stake in China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd 01. October Diversified into other oil products with the establishment of petrochemicals trading team 05. December CAO s parent company, China National Aviation Fuel Group Corporation ( CNAF ), BP and Temasek injected US$130 million capital into CAO 04. December CAO signed interim trading agreement with BP; marked full resumption of trading activities 2 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

7 May Establishment of fuel oil trading team 16. August Appointed Mr Sun Li, President of CNAF, as Chairman of CAO January Named 9th in 2010 Singapore International 100 Ranking by IE Singapore 24. February Announced third consecutive year of record high full-year jet fuel supply and trading volume and net profit for FY August Announced foray into airlines jet fuel supply and marketing business; supplying jet fuel directly to Hainan Co. Ltd and Turkish Airlines at specified international airports outside the PRC 06. October Announced investment of 26% stake in Langsat Terminal (Three) Sdn Bhd for access to storage in Johor, Malaysia 05. October Awarded Most Transparent Company (runner-up in the foreign listings category) by Securities Investors Association (Singapore) ( SIAS ), October Entered into four-year trading collaboration agreement with BP to deepen co-operation 08. October Announced acquisition of 26% stake in Oilhub Korea Yeosu Co., Ltd for access to storage in Yeosu, Korea 26. October Awarded Most Transparent Company (runner-up in the foreign listings category) by Securities Investors Association (Singapore) ( SIAS ), December Celebrated 10th anniversary as a listed company Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 3

8 上 市 十 周 年 回 顾 月 6 日 在 新 加 坡 证 券 交 易 所 上 市, 是 当 年 新 加 坡 规 模 最 大 的 首 次 公 开 募 股 月 26 日 宣 布 收 购 西 班 牙 企 业 CLH 5% 的 股 权 7 月 23 日 宣 布 收 购 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 ( 简 称 浦 东 航 油 )33% 的 股 权 月 30 日 宣 布 因 投 机 性 期 权 交 易 亏 损 5.5 亿 美 元 ;CAO 股 票 停 盘 ; 开 始 债 务 重 组 月 8 日 债 权 人 批 准 公 司 的 债 务 重 组 计 划 12 月 5 日 CAO 母 公 司 中 国 航 空 油 料 集 团 公 司 BP 和 淡 马 锡 为 CAO 注 资 1.3 亿 美 元 月 29 日 在 新 一 届 董 事 会 领 导 下,CAO 股 票 恢 复 交 易, 标 志 着 公 司 完 成 重 组 5 月 25 日 重 新 启 动 主 体 模 式 的 航 油 采 购 业 务 11 月 14 日 采 用 母 公 司 的 企 业 标 志 月 24 日 出 售 CLH 5% 股 权, 用 此 交 易 所 得 资 金 提 前 4 年 于 2007 年 5 月 还 清 债 务 10 月 4 日 获 得 新 加 坡 证 券 投 资 者 协 会 ( 简 称 SIAS ) 授 予 2007 年 最 透 明 公 司 奖 ( 海 外 公 司 组 第 二 名 ) 月 14 日 获 得 新 加 坡 国 际 企 业 发 展 局 授 予 全 球 贸 易 商 计 划 成 员 地 位 4 月 23 日 宣 布 收 购 中 国 航 油 津 京 管 道 运 输 有 限 责 任 公 司 49% 的 股 权 10 月 1 日 成 立 化 工 品 贸 易 团 队, 开 展 其 他 油 品 贸 易 12 月 4 日 CAO 与 BP 签 署 临 时 贸 易 协 议, 标 志 公 司 全 面 恢 复 贸 易 活 动 4 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

9 月 17 日 建 立 燃 料 油 贸 易 团 队 8 月 16 日 任 命 CAO 母 公 司 中 国 航 空 油 料 集 团 公 司 总 经 理 孙 立 先 生 为 CAO 董 事 长 10 月 5 日 获 得 SIAS 授 予 2010 年 最 透 明 公 司 奖 ( 海 外 公 司 组 第 二 名 ) 月 20 日 在 新 加 坡 国 际 企 业 发 展 局 评 选 的 新 加 坡 国 际 100 家 企 业 排 名 中 名 列 第 9 位 2 月 24 日 宣 布 2010 年 全 年 航 油 业 务 量 及 净 利 润 连 续 第 3 年 创 历 史 新 高 8 月 4 日 宣 布 首 次 直 接 面 向 航 空 公 司 长 期 供 应 航 油, 首 批 客 户 包 括 海 南 航 空 公 司 和 土 耳 其 航 空 公 司, 为 其 在 中 国 以 外 的 指 定 国 际 机 场 供 应 航 油 10 月 6 日 宣 布 收 购 马 来 西 亚 柔 佛 州 浪 沙 油 库 ( 第 三 ) 私 营 有 限 公 司 26% 的 股 权 10 月 12 日 与 BP 签 订 4 年 合 作 协 议, 加 强 双 方 合 作 10 月 8 日 宣 布 收 购 韩 国 丽 水 枢 纽 油 库 有 限 公 司 26% 的 股 权 10 月 26 日 获 得 SIAS 授 予 2011 年 最 透 明 公 司 奖 ( 海 外 公 司 组 第 二 名 ) 12 月 6 日 庆 祝 公 司 上 市 十 周 年 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 5

10 CAO at A GLANCE 公 司 简 介 China Aviation Oil (Singapore) Corporation Ltd ( CAO ) was incorporated in Singapore on 26 May It was listed on the mainboard of the Singapore Exchange Securities Trading Limited on 6 December The single largest shareholder of CAO is China National Aviation Fuel Group Corporation ( CNAF ), which holds about 51% of the total issued shares of CAO. A large State-owned enterprise in the People s Republic of China ( PRC ), CNAF is the largest aviation transportation logistics service provider in the PRC, providing aviation fuel distribution, storage and refuelling services at most PRC airports. 中 国 航 油 ( 新 加 坡 ) 股 份 有 限 公 司 ( 简 称 CAO ) 于 1993 年 5 月 26 日 在 新 加 坡 注 册 成 立,2001 年 12 月 6 日 在 新 加 坡 证 券 交 易 所 主 板 上 市 CAO 最 大 的 股 东 是 中 国 航 空 油 料 集 团 公 司 ( 简 称 CNAF ),CNAF 持 有 CAO 约 51% 的 股 份, 是 中 国 大 型 国 有 企 业 之 一, 也 是 中 国 最 大 的 航 空 运 输 物 流 服 务 供 应 商, 为 中 国 大 部 分 机 场 提 供 航 空 油 料 的 分 配 存 储 和 加 注 服 务 BP 的 子 公 司 BP 投 资 亚 洲 有 限 公 司 是 CAO 的 战 略 投 资 者, 持 有 CAO 20% 的 股 份 BP Investments Asia Limited, a subsidiary of BP, is a strategic investor of CAO, which holds 20% of the total issued shares of CAO. Group structure (as at 12 March 2012) 公 司 结 构 图 ( 截 至 2012 年 3 月 12 日 ) BP Investments Asia Ltd BP 投 资 亚 洲 有 限 公 司 China National Aviation Fuel Group Corporation 中 国 航 空 油 料 集 团 公 司 Public 公 众 20.00%* 50.88%* 29.12%* CAO CAOT Pte Ltd 100% China Aviation Oil (Hong Kong) Company Limited # 中 国 航 油 ( 香 港 ) 有 限 公 司 # 100% North American Fuel Corporation # 北 美 航 油 有 限 公 司 # 100% Shanghai Pudong International Airport Aviation Fuel Supply Co 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 33% Oilhub Korea Yeosu Co., Ltd^ 韩 国 丽 水 枢 纽 油 库 有 限 公 司 ^ China National Aviation Fuel TSN-PEK PipelineTransportation Corp Ltd 中 国 航 油 集 团 津 京 管 道 运 输 有 限 责 任 公 司 49% China Aviation Oil Xinyuan Petrochemicals Co., Ltd 中 国 航 油 集 团 新 源 石 化 有 限 公 司 39% Langsat Terminal (Three) Sdn Bhd^ 浪 沙 油 库 ( 第 三 ) 私 营 有 限 公 司 ^ 26% 26% * Including treasury shares * 包 括 库 存 股 # Acquired on 1 March 2012 # 于 2012 年 3 月 1 日 完 成 收 购 ^ ^ Pending legal completion 待 交 割 6 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

11 Jet Fuel Supply & Trading CAO is the largest physical jet fuel trader in Asia Pacific and the sole importer of jet fuel into the PRC. We supply jet fuel to the key international airports in the PRC, including Beijing Capital International Airport, Shanghai Pudong International Airport and Guangzhou Baiyun International Airport. In 2011, CAO extended its supply of jet fuel to airports outside the PRC, including Frankfurt, Istanbul, Auckland, Dubai, Singapore and Bangkok. With the recent acquisitions of China Aviation Oil (Hong Kong) Company Limited and North American Fuel Corporation, CAO s supply locations outside the PRC have expanded further to airports at Hong Kong, Taiwan, Los Angeles, Anchorage and London. We continue to strive to consolidate our market position in the PRC and Asia Pacific. We are also proactively extending our business into Europe, North America and the Middle East to establish a global trading network. 航 油 供 应 与 贸 易 CAO 是 亚 太 地 区 最 大 的 航 油 实 货 贸 易 商, 是 中 国 独 家 航 油 进 口 商 我 们 向 中 国 主 要 的 国 际 机 场 供 应 航 油, 包 括 北 京 首 都 国 际 机 场 上 海 浦 东 国 际 机 场 和 广 州 白 云 国 际 机 场 等 2011 年, 我 们 也 开 始 在 中 国 境 外 机 场 供 油, 供 应 地 点 包 括 法 兰 克 福 阿 姆 斯 特 丹 伊 斯 坦 布 尔 奥 克 兰 迪 拜 新 加 坡 曼 谷 等 机 场 在 最 近 收 购 中 国 航 油 ( 香 港 ) 有 限 公 司 及 北 美 航 油 有 限 公 司 后,CAO 在 中 国 境 外 的 机 场 供 油 业 务 地 点 拓 展 到 香 港 台 湾 洛 杉 矶 安 克 雷 奇 伦 敦 等 CAO 致 力 于 巩 固 其 在 中 国 国 内 及 亚 太 地 区 的 市 场 地 位, 并 正 在 积 极 建 立 全 球 贸 易 网 络, 在 北 美 欧 洲 大 洋 洲 及 中 东 拓 展 业 务 Trading of Other Oil Products CAO aims to expand the sources of income and scale of its businesses by building up a diversified trading portfolio, which includes oil products such as gasoil, fuel oil and petrochemicals. CAO has established its presence in the Asia Pacific gasoil, fuel oil and petrochemicals markets. We will strive to build up our structural advantages in these oil products to sustain robust growth. 其 他 油 品 贸 易 业 务 我 们 通 过 建 立 多 元 化 业 务 来 拓 展 公 司 的 收 入 来 源, 提 升 公 司 的 业 务 规 模 我 们 的 贸 易 品 种 包 括 柴 油 燃 料 油 和 石 化 产 品 CAO 已 进 入 了 亚 太 地 区 的 柴 油 燃 料 油 和 石 化 产 品 市 场 我 们 将 致 力 于 建 立 这 些 油 品 贸 易 的 结 构 性 优 势, 实 现 可 持 续 的 健 康 增 长 Investments in Oil-related Assets We actively seek to deliver sustainable compounded growth for our shareholders through strategic acquisitions and investments in oil-related assets to achieve vertical integration of our value chain. CAO currently holds equity stakes in: Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd, the exclusive supplier of jet fuel at Shanghai Pudong International Airport (33% equity stake); China National Aviation Fuel TSN-PEK Pipeline Transportation Ltd, which owns a 185-km long pipeline that transports jet fuel to Beijing Capital International Airport and Tianjin Binhai International Airport (49% equity stake); China Aviation Oil Xinyuan Petrochemicals Co., Ltd, which owns oil storage facilities in Maoming, Guangdong Province, PRC (39% equity stake); Langsat Terminal (Three) Sdn Bhd, which is developing a 380,000m 3 oil storage terminal at Tanjung Lansat, Malaysia, specifically for CAO s use (26% equity stake)^; and Oilhub Korea Yeosu Co., Ltd, which is developing the Northeast Asia Hub Terminal in Yeosu, Korea, with total capacity of 1.3 million m 3 (26% equity stake)^. 油 品 相 关 实 业 投 资 我 们 通 过 纵 向 整 合 公 司 业 务 价 值 链, 对 油 品 相 关 实 业 资 产 进 行 战 略 收 购 与 投 资, 积 极 为 股 东 创 造 可 持 续 的 复 合 价 值 CAO 的 现 有 投 资 包 括 : 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 上 海 浦 东 国 际 机 场 的 独 家 航 油 供 应 商 ( CAO 持 股 33%) 中 国 航 油 集 团 津 京 管 道 运 输 有 限 责 任 公 司 该 公 司 拥 有 一 条 长 达 185 公 里 的 输 油 管 道, 将 航 油 运 至 北 京 首 都 国 际 机 场 和 天 津 滨 海 国 际 机 场 (CAO 持 股 49%) 中 国 航 油 集 团 新 源 石 化 有 限 公 司 该 公 司 拥 有 位 于 中 国 广 东 茂 名 的 油 库 (CAO 持 股 39%) 浪 沙 油 库 ( 第 三 ) 私 营 有 限 公 司 该 公 司 正 在 开 发 位 于 马 来 西 亚 丹 戎 浪 沙 供 CAO 专 用 的 38 万 立 方 油 库 (CAO 持 股 26%)^ 韩 国 丽 水 枢 纽 油 库 有 限 公 司 该 公 司 正 在 韩 国 丽 水 建 设 新 的 东 北 亚 油 库 枢 纽, 总 库 容 130 万 立 方 (CAO 持 股 26%)^ Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 7

12 chairman S statement 董 事 长 致 辞 Sun Li Chairman 8 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

13 Dear Shareholders, 2011 was an exciting and fruitful year for the CAO Group. The Group not only expanded its existing businesses and strengthened its position as the largest physical jet fuel trader in Asia Pacific, we also made successful forays into new businesses such as jet fuel supply to airline companies. Net profit and other key performance indicators hit record high levels. CAO made its first asset investment outside the People s Republic of China ( PRC ) since the restructuring in 2005 with the announced acquisitions of equity stakes in oil storage facilities in Malaysia and Korea. Record performance despite challenging environment Despite uncertainties and challenges in the global economic climate, I am pleased to report that the Group performed well in the financial year ended 31 December 2011 ( FY 2011 ). FY 2011 net profit of US$63.4 million was 15.9% higher than FY Our strong performance was mainly driven by robust growth of our core jet fuel supply and trading business. This demonstrates the versatility and adaptability of our trading and operational strategies to the challenging macro environment and market conditions. It is also testament to the resilience of the Group and its ability to navigate through volatile oil trading markets to achieve sustainable growth. Group revenue stood at US$9.0 billion for FY 2011, 65.3% higher than FY 2010, underpinned by strong growth of our jet fuel supply and trading business. The Group s jet fuel supply volume to the PRC continued to increase in FY 2011, as the sustained growth of the PRC s civil aviation industry led to higher demand for imported jet fuel. Despite strong competition in the Asia Pacific jet fuel market, CAO s jet fuel trading volume continued to grow at a double-digit rate and the Group consolidated its position as the largest physical jet fuel trader in the region. Total jet fuel supply and trading volume increased 16.7% to 8.4 million tonnes in FY Our proactive efforts to diversify into other oil products have started to yield results. Notwithstanding the volatile trading markets, we effectively improved the performance of our gasoil, fuel oil and petrochemicals trading businesses during the year under review. Trading volume of other oil products increased 45.8% to 0.8 million tonnes and all three trading books were profitable. Even as the earnings power of our core businesses strengthened significantly, profit contributions from our associated companies remain an important and stable source of income to the Group. Total profit contribution from our associated companies increased 6.9% over FY 2010 to US$40.2 million, which accounted for 63.4% of the Group s FY 2011 net profit. Our key associated company, Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd ( SPIA ) remains an important source of profit for the Group, contributing 59.8% of the Group s FY 2011 net profit. The Group s share of profit from SPIA was US$37.9 million, an increase of 5.9% as compared to US$35.8 million for FY The increase in profit contribution from SPIA was mainly due to higher revenue resulting from higher refuelling volumes. Driven by the healthy growth of the PRC civil aviation industry, SPIA s refuelling volume for FY 2011 increased 9.1% to 3.1 million tonnes. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 9

14 chairman S statement 董 事 长 致 辞 Breaking new grounds The Group achieved several breakthroughs during the year under review. The announcement on 6 October 2011 on the Group s proposed investment of a 26-percent equity stake in Langsat Terminal (Three) Sdn Bhd, which will build, own and operate an oil storage terminal located at Malaysia s Port of Tanjung Langsat marked the first acquisition by the Group outside the PRC since restructuring. Within the same month, we also announced the proposed acquisition of a 26-percent equity stake in Oilhub Korea Yeosu Co., Ltd ( OKYC ), which enables CAO to have access to oil storage facilities in Korea. These investments are yield-accretive and highly synergetic assets that are essential to supporting the growth of CAO s supply and trading activities. Another exciting breakthrough during the year was the Group s foray into the business of jet fuel supply to airline companies outside the PRC. CAO secured into-plane jet fuel supply contracts with international airline companies including China Southern Airlines, Hainan Airlines and Turkish Airlines to supply the jet fuel requirements of these airlines at designated international airports outside the PRC. This is a natural extension of the wholesale jet fuel supply business of the Group and is highly synergetic to our core business. We will continue to leverage on our strong links with Chinese airlines and other business partners to proactively expand this business. Seoul SOUTH KOREA Expanding beyond Asia Pacific In view of the globalised trading flow of oil products, we see a strategic need for CAO to establish a global trading network so as to grow and optimise its trading businesses. Specifically for jet fuel, we see imbalances in demand and supply in different regions across the world. Hence, the focus of CAO in 2012 is to establish its presence in markets outside the Asia Pacific to capture more business opportunities. More recently in January 2012, CAO announced the acquisitions of China Aviation Oil (Hong Kong) Company Limited ( CAOHK ) and North American Fuel Corporation ( NAFCO ) both wholly owned subsidiaries of CAO s parent company, China National Aviation Fuel Group Corporation ( CNAF ). Not only are these recently completed acquisitions earnings accretive, the integration of the businesses of CAOHK and NAFCO into CAO s jet fuel supply and trading business can create additional value to the Group. These acquisitions will help accelerate the pace of CAO establishing a global trading network. CAO intends to leverage on CAOHK and NAFCO to expand its geographical reach, extend its supply chain and enhance its competitiveness. Looking ahead, we expect to see continued volatility in the global economy and energy markets. Whilst China s economy has shown signs of easing, we expect that it will sustain a robust growth rate. PRC s civil aviation industry is projected to grow at an average annual rate of 12% from 2011 to 2015, which we expect will translate into about 11% average annual growth for jet fuel demand during this period. This will provide a firm foundation for growing our existing business. Despite the near-term economic uncertainties, the Group will continue to forge ahead with our plans to establish a global trading network by expanding into new regions including Europe, North America and the Middle East. We will evaluate the feasibility of setting up an office in Europe, explore business opportunities in the Middle East and leverage on NAFCO to expand the Group s presence in North America. We will also proactively look at opportunities to invest or acquire assets that are synergetic to our trading activities in these regions. At the same time, we will continue to strengthen and entrench our position as the largest physical jet fuel trader in the Asia Pacific region. Yeosu OKYC 10 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

15 Into-plane refuelling operations of our parent company, CNAF, in the PRC 我 们 母 公 司 CNAF 在 中 国 的 航 油 加 注 业 务 Awards and Accolades The Group remains committed to upholding high standards of corporate governance and transparency. Our efforts were recognised when we were awarded the Most Transparent Company (runner-up in the foreign listings category) in the 2011 Investors Choice Awards by Securities Investors Association (Singapore) for the second year running. In the July 2011 Governance and Transparency Index conducted by NUS Business School s Centre for Governance, Institutions and Organisations (CGIO) and The Business Times, CAO was ranked amongst top 8% of Singapore-listed companies. Appreciation To reward our loyal shareholders, the Board has recommended a taxexempt first and final dividend of S$0.02 per share for FY The Group has established a dividend policy. Going forward, the Group will continue to maintain consistent and stable dividend payouts. The Board may also consider proposing the distribution of interim or special dividends, depending on the Group s performance and capital expenditure requirements during the year. The Board and I would like to thank our management, staff, business associates, customers, investors and all other CAO stakeholders for their support. With the strong support and strategic guidance from CNAF, and tapping on the expertise of our strategic investor, BP, the Group will be prepared for challenging times ahead. I am confident that under the leadership of our Board of Directors and with continued support from customers and business associates, coupled with dedication from the management and staff, the Group is well prepared for potential challenges in the operating environment and is poised to deliver sustainable value growth for its shareholders. Sun Li Chairman Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 11

16 chairman S statement 董 事 长 致 辞 浦 东 航 油 的 并 账 利 润 为 3790 万 美 元, 较 2010 财 年 的 3580 万 美 元 上 升 5.9% 浦 东 航 油 并 账 利 润 增 加 主 要 得 益 于 加 注 量 增 加 带 来 的 营 业 额 提 升 受 中 国 民 航 业 稳 健 增 长 的 驱 动, 浦 东 航 油 在 2011 财 年 的 加 注 量 达 310 万 吨, 增 幅 为 9.1% 新 突 破 各 位 股 东 : MALAYSIA Port Tanjung Langsat Langsat Terminal (Three) 对 CAO 集 团 而 言,2011 年 是 精 彩 而 丰 收 的 一 年 这 一 年, 本 集 团 不 仅 扩 展 了 现 有 业 务, 巩 固 了 亚 太 最 大 航 油 实 货 贸 易 商 的 地 位, 还 启 动 了 向 航 空 公 司 销 售 航 油 等 新 业 务 本 集 团 净 利 润 和 其 他 主 要 业 绩 指 标 均 创 历 史 新 高 此 外,CAO 还 分 别 收 购 了 位 于 马 来 西 亚 和 韩 国 两 处 油 品 储 罐 资 产 的 股 权, 这 是 自 2005 年 重 组 以 来 在 中 国 境 外 的 首 例 实 业 投 资 2011 财 年, 本 集 团 实 现 了 几 项 突 破 本 集 团 在 2011 年 10 月 6 日 宣 布 收 购 浪 沙 第 三 油 库 私 人 有 限 公 司 26% 的 股 权, 该 公 司 将 建 造 拥 有 并 经 营 位 于 马 来 西 亚 丹 戎 浪 沙 码 头 的 一 处 油 库, 该 投 资 是 CAO 重 组 后 首 个 中 国 境 外 的 投 资 项 目 我 们 还 在 同 一 月 份 里 宣 布 收 购 韩 国 丽 水 枢 纽 油 库 ( 简 称 OKYC )26% 的 股 权, 该 收 购 让 CAO 获 取 了 处 于 韩 国 的 储 罐 资 源 这 两 项 投 资 项 目 属 增 值 型 投 资, 并 且 与 现 有 业 务 高 度 协 同, 能 有 力 支 持 CAO 供 应 与 贸 易 业 务 的 发 展 另 一 项 突 破 是 成 功 启 动 了 在 中 国 境 外 向 航 空 公 司 供 应 航 油 的 业 务 CAO 与 中 国 南 方 航 空 海 南 航 空 以 及 土 耳 其 航 空 等 数 家 国 际 航 空 公 司 签 订 了 航 油 供 应 合 同, 为 其 在 中 国 以 外 的 指 定 国 际 机 场 供 应 航 油 该 业 务 是 集 团 航 油 批 发 供 应 业 务 的 一 个 自 然 延 伸 我 们 将 继 续 借 助 与 中 国 的 航 空 公 司 以 及 其 他 业 务 伙 伴 之 间 的 良 好 关 系, 积 极 拓 展 该 项 业 务 A Medium Range (MR) vessel MR 型 轮 船 严 峻 形 势 下 再 创 佳 绩 尽 管 全 球 经 济 形 势 充 满 不 确 定 且 挑 战 重 重, 本 集 团 在 2011 年 财 年 ( 截 至 2011 年 12 月 31 日 ) 依 然 取 得 了 良 好 的 业 绩 2011 财 年, 本 集 团 实 现 净 利 润 6340 万 美 元, 同 比 增 加 15.9%, 这 主 要 得 益 于 航 油 供 应 与 贸 易 这 一 核 心 业 务 的 强 劲 增 长, 彰 显 了 本 集 团 的 贸 易 与 运 作 策 略 在 应 对 宏 观 环 境 和 市 场 挑 战 时 的 灵 活 性 和 适 应 能 力, 也 证 实 了 本 集 团 在 动 荡 的 油 品 贸 易 市 场 上, 化 弊 为 利 取 得 持 续 增 长 的 韧 性 在 航 油 供 应 与 贸 易 业 务 强 劲 增 长 的 驱 动 下, 本 集 团 2011 财 年 营 业 额 达 到 90 亿 美 元, 较 2010 财 年 上 升 65.3% 2011 财 年, 中 国 民 航 业 的 增 长 持 续 拉 动 中 国 对 进 口 航 油 的 需 求, 因 此 CAO 对 中 国 市 场 的 航 油 供 应 量 继 续 稳 步 增 加 尽 管 亚 太 航 油 市 场 竞 争 激 烈,CAO 的 航 油 贸 易 量 仍 保 持 两 位 数 增 长, 且 在 本 地 区 作 为 最 大 航 油 实 货 贸 易 商 的 地 位 也 进 一 步 得 到 巩 固 2011 财 年, 航 油 供 应 与 贸 易 总 量 为 840 万 吨, 增 幅 为 16.7% On the deck of a vessel 轮 船 的 甲 板 上 本 集 团 积 极 发 展 其 他 油 品 贸 易 的 努 力 也 初 见 成 效 2011 年, 尽 管 贸 易 市 场 充 满 动 荡, 本 集 团 还 是 有 效 改 善 了 柴 油 燃 料 油 和 化 工 品 业 务, 总 贸 易 量 为 80 万 吨, 增 幅 达 45.8%, 且 皆 实 现 盈 利 在 CAO 核 心 业 务 盈 利 能 力 大 幅 提 升 的 同 时, 联 营 公 司 的 并 账 利 润 仍 是 本 集 团 重 要 且 稳 定 的 利 润 来 源 2011 财 年, 联 营 公 司 并 账 利 润 共 计 4020 万 美 元, 同 比 增 加 6.9%, 占 本 集 团 2011 财 年 净 利 润 总 额 的 63.4% 主 要 联 营 公 司 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 ( 简 称 浦 东 航 油 ) 仍 然 是 利 润 的 主 要 贡 献 者, 占 集 团 净 利 润 的 59.8% 12 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

17 超 越 亚 太 获 奖 与 表 彰 鉴 于 当 前 油 品 贸 易 全 球 化 的 趋 势, 我 们 认 为 CAO 要 实 现 扩 展 必 须 建 立 全 球 性 的 贸 易 网 络, 以 发 展 和 优 化 自 身 的 贸 易 业 务 在 航 油 贸 易 领 域 方 面, 世 界 不 同 区 域 已 出 现 了 供 需 失 衡 因 此,CAO 在 2012 年 的 工 作 重 点 是 拓 展 亚 太 以 外 的 业 务, 以 争 取 更 多 的 贸 易 机 会 CAO 于 2012 年 1 月 宣 布 收 购 其 母 公 司 中 国 航 空 油 料 集 团 公 司 ( 简 称 CNAF ) 旗 下 的 两 家 全 资 子 公 司 中 国 航 油 ( 香 港 ) 有 限 公 司 ( 简 称 CAOHK ) 和 北 美 航 油 有 限 公 司 ( 简 称 NAFCO ) 这 两 项 最 近 已 完 成 的 收 购 项 目 能 为 CAO 增 加 利 润 ; 将 CAOHK 和 NAFCO 的 业 务 并 入 CAO 的 航 油 供 应 与 贸 易 业 务 还 可 为 本 集 团 创 造 额 外 价 值 这 两 项 收 购 也 将 加 快 CAO 建 立 全 球 性 贸 易 网 络 的 步 伐,CAO 将 通 过 这 两 家 子 公 司 延 伸 供 应 链 提 升 竞 争 力 展 望 今 年, 我 们 预 计 全 球 经 济 和 能 源 市 场 将 继 续 动 荡 尽 管 中 国 经 济 已 有 增 速 放 缓 的 迹 象, 其 增 速 预 期 将 依 然 稳 健 中 国 民 航 业 在 年 间 的 增 幅 预 测 为 年 均 12%, 这 意 味 着 同 期 航 油 需 求 的 年 均 增 幅 为 11% 左 右, 这 为 我 们 现 有 业 务 的 发 展 奠 定 了 坚 实 的 基 础 尽 管 短 期 内 经 济 形 势 仍 不 明 朗, 本 集 团 将 继 续 稳 步 推 行 发 展 计 划, 通 过 向 欧 洲 北 美 和 中 东 扩 张 实 现 全 球 贸 易 网 络 的 建 立 我 们 还 将 评 估 在 欧 洲 建 立 分 支 机 构 的 可 行 性, 继 续 探 索 中 东 的 业 务 机 会, 以 及 通 过 NAFCO 拓 展 本 集 团 在 北 美 的 业 务 我 们 将 在 这 些 地 区 积 极 寻 找 贸 易 协 同 资 产 的 收 购 和 投 资 机 会 同 时, 我 们 将 继 续 巩 固 作 为 亚 太 最 大 航 油 实 货 贸 易 商 的 地 位 本 集 团 坚 持 高 标 准 的 公 司 治 理 和 透 明 度 为 此, 我 们 再 次 获 得 了 新 加 坡 证 券 投 资 者 协 会 的 肯 定, 在 2011 年 连 续 第 二 年 获 得 该 协 会 颁 发 的 最 透 明 公 司 奖 ( 海 外 公 司 组 第 二 名 ) 在 新 加 坡 国 立 大 学 商 学 院 的 治 理 机 构 和 组 织 中 心 和 商 业 时 报 于 2011 年 7 月 联 合 发 表 的 治 理 与 透 明 排 名 中,CAO 名 列 新 交 所 上 市 公 司 的 前 8% 感 谢 为 了 回 馈 忠 诚 股 东, 董 事 会 提 议 为 2011 财 年 派 发 每 股 0.02 新 元 的 年 终 免 税 股 息 本 集 团 制 定 了 股 息 政 策, 按 照 股 息 政 策, 除 了 固 定 股 息 外, 董 事 会 也 将 根 据 当 年 的 业 绩 和 资 本 支 出 需 求, 考 虑 提 议 派 发 期 中 或 特 别 股 息 董 事 会 和 我 本 人 在 此 感 谢 管 理 层 全 体 员 工 联 营 公 司 客 户 投 资 者 和 所 有 为 CAO 发 展 提 供 支 持 的 各 界 人 士 虽 然 短 期 内 集 团 将 面 临 市 场 的 挑 战, 但 在 CNAF 的 战 略 引 导 和 大 力 支 持 下, 借 鉴 战 略 投 资 者 BP 的 宝 贵 经 验, 在 董 事 会 的 正 确 领 导 下 以 及 在 客 户 和 联 营 公 司 一 如 既 往 的 支 持 下, 经 过 管 理 层 和 全 体 员 工 的 共 同 努 力, 我 相 信 集 团 已 蓄 势 待 发, 将 全 力 迎 接 外 部 挑 战, 排 除 万 难, 持 续 为 股 东 创 造 价 值 孙 立 董 事 长 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 13

18 BOARD OF DIRECTORS 董 事 会 From left to right 左 到 右 Chen Liming 陈 黎 明, Ang Swee Tian 汪 瑞 典, Liu Fuchun 刘 福 春, Wang Kai Yuen 王 家 園 14 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

19 From left to right 左 到 右 Sun Li 孙 立, Meng Fanqiu 孟 繁 秋, Alan Haywood, Zhao Shousen 赵 寿 森, Luo Qun 罗 群 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 15

20 BOARD OF DIRECTORS 董 事 会 Sun Li Non-Executive Chairman Appointed to the Board on 30 April 2007 Mr Sun Li is the Chairman of China National Aviation Fuel Group Corporation ( CNAF ). Prior to the establishment of the Board of CNAF in 2011, Mr Sun was the President of CNAF since February Mr Sun held the position of Deputy President of CNAF from November 2005 to January Mr Sun has extensive management experience in the petroleum and chemical industry. He joined Liaoyang Petrochemical & Fibre Company ( Liaoyang Petrochemicals ) in December 1975 after graduation. He was promoted several times and was the Deputy General Manager when he left Liaoyang Petrochemicals in At Liaoyang Petrochemicals, he attended trainings on corporate management conducted by IBM, ENSPM (France) and ICI (Britain). He is thus familiar with various corporate management systems in large multi-national companies. Mr Sun was the Deputy Director of the Refinery Department of China National Petroleum Corporation from October 1998 to September From September 1999 to December 2002, he served as the General Manager of PetroChina Lanzhou Petrochemical Company. From December 2002 to November 2005, he was the General Manager of PetroChina Chemical and Sales Company. Mr Sun is currently the Chairman of CNAF Corporation Limited. He graduated from Tsinghua University, where he majored in polymer chemistry. Mr Sun holds a Postgraduate Diploma with the qualification title of Senior Engineer and he is entitled to the Special Allowance for Specialists from the State Council of the PRC. He attended the MBA course at Capital University of Economics and Business in Beijing. Mr Sun was recognised by the International Air Transport Association (IATA) in 2010 for outstanding progress in safety and technology management. He was also conferred Aviation Fuel Person of the Year by Armbrust Aviation Group in 孙 立 非 执 行 董 事 长 2007 年 4 月 30 日 加 入 董 事 会 孙 立 先 生 是 中 国 航 空 油 料 集 团 公 司 ( 简 称 CNAF ) 的 董 事 长 在 CNAF 于 2011 年 正 式 成 立 董 事 会 之 前, 孙 先 生 从 2007 年 2 月 起 出 任 CNAF 总 经 理 从 2005 年 11 月 到 2007 年 1 月, 任 CNAF 副 总 经 理 孙 先 生 在 石 化 行 业 担 任 过 各 种 职 位, 拥 有 丰 富 的 管 理 经 验 大 学 毕 业 后,1975 年 12 月 他 到 辽 阳 石 油 化 纤 公 司 工 作 此 后 他 多 次 被 提 拔,1998 年 他 离 开 该 公 司 时 的 职 务 是 副 总 经 理 通 过 在 辽 化 任 职 期 间 参 加 IBM 公 司 法 国 石 油 与 发 动 机 学 院 和 英 国 帝 国 化 学 公 司 的 现 代 企 业 管 理 培 训, 孙 先 生 通 晓 大 型 跨 国 企 业 的 多 种 企 业 管 理 体 制 1998 年 10 月 至 1999 年 9 月, 孙 先 生 任 中 国 石 油 天 然 气 集 团 公 司 炼 化 部 副 主 任 1999 年 9 月 至 2002 年 12 月, 任 中 国 石 油 兰 州 石 化 分 公 司 总 经 理 2002 年 12 月 至 2005 年 11 月, 任 中 国 石 油 天 然 气 股 份 有 限 公 司 化 工 与 销 售 分 公 司 总 经 理 孙 先 生 目 前 也 担 任 中 国 航 空 油 料 有 限 责 任 公 司 董 事 长 孙 先 生 毕 业 于 清 华 大 学 化 学 系 高 分 子 化 工 专 业 ; 研 究 生 学 历, 高 级 工 程 师 资 格, 享 受 国 务 院 特 殊 专 家 津 贴 ; 还 曾 在 首 都 经 贸 大 学 工 商 管 理 硕 士 研 究 生 班 学 习 孙 先 生 2010 年 被 国 际 航 协 授 予 安 全 技 术 管 理 杰 出 进 步 奖, 还 获 得 Armbrust Aviation Group 颁 发 的 2010 年 航 油 风 云 人 物 奖 Wang Kai Yuen Deputy Chairman / Lead Independent Director Appointed to the Board on 28 April 2008 Chairman of the Remuneration Committee Member of the Audit Committee and the Nominating Committee Dr Wang Kai Yuen holds directorship positions in a number of public-listed companies in Singapore. He retired from Fuji Xerox Singapore Software Centre in January 2010 as the Centre Manager. He is also a member of the Foreign Experts Committee of the Overseas Chinese Affairs Office of the State Council in the PRC. Dr Wang served as a Member of Parliament for the Bukit Timah Constituency from December 1984 till April He was the Chairman of the Feedback Unit from 2002 till his retirement from politics. From 2005 to 2006, he served as the founding Chairman of AIDS Business Alliance, an initiative of the Singapore Health Promotion Board to promote awareness of HIV/AIDS in the work place. Dr Wang graduated from the National University of Singapore with a Bachelor of Engineering (First Class Honours) in Electrical and Electronics. He also holds a Master of Science in Electrical Engineering, Masters of Science in Industrial Engineering and a PhD in Engineering from Stanford University, USA. He received a Friend of Labour Award in 1988 for his contributions to the Singapore labour movement. 王 家 園 副 董 事 长 / 首 席 独 立 董 事 2008 年 4 月 28 日 加 入 董 事 会 薪 酬 委 员 会 主 席 审 计 委 员 会 和 提 名 委 员 会 成 员 王 家 園 博 士 在 数 家 新 加 坡 上 市 公 司 担 任 董 事 职 务 在 2010 年 1 月 退 休 前, 王 博 士 是 富 士 施 乐 新 加 坡 软 件 中 心 的 中 心 经 理 他 也 是 中 国 国 侨 办 海 外 专 家 委 员 会 的 成 员 1984 年 12 月 至 2006 年 4 月, 王 博 士 是 新 加 坡 武 吉 知 马 选 区 的 国 会 议 员 从 2002 年 到 他 退 出 政 坛 之 前, 他 担 任 新 加 坡 民 意 处 理 组 主 席 2005 年 至 2006 年, 他 担 任 AIDS 商 业 联 盟 的 创 始 主 席, 该 组 织 由 新 加 坡 保 健 促 进 局 成 立, 旨 在 提 高 人 们 在 工 作 上 对 爱 滋 病 的 防 范 意 识 王 博 士 毕 业 于 新 加 坡 国 立 大 学, 拥 有 工 程 系 一 等 荣 誉 学 位 ( 电 器 与 电 机 工 程 ) 他 也 拥 有 美 国 斯 坦 福 大 学 电 机 工 程 硕 士 学 位 工 业 工 程 硕 士 学 位 和 工 程 学 博 士 学 位 1988 年, 他 因 对 新 加 坡 劳 动 运 动 的 贡 献 而 获 劳 工 之 友 奖 16 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

21 Meng Fanqiu Chief Executive Officer / Executive Director Appointed to the Board on 28 March 2006 Appointed as CEO on 9 May 2008 Mr Meng Fanqiu is the Chief Executive Officer/Executive Director of CAO. He is the Deputy Chairman of Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd and China Aviation Oil Xinyuan Petrochemicals Co. Ltd. He is also a Director of China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Limited. Prior to his current appointment, Mr Meng was the Division Director of the Planning and Development Division of China National Aviation Fuel Group Corporation ( CNAF ) from December 2007 to May He had been involved in strategic planning, investment, company reform and legal policy issues since he joined CNAF in He led the steering committee for the restructuring of China Aviation Oil Supply Corporation which resulted in the formation of China National Aviation Fuel Corporation Ltd one of the most strategic restructuring projects of CNAF. Mr Meng was one of the five members of the Corporate Governance Assessment Committee which was constituted during the restructuring of CAO. Mr Meng was an official of the Civil Aviation Administration of China ( CAAC ) from 1991 to 2003 where he had extensive experience in law and enterprise reform. He was directly involved in the drafting and enacting of the PRC Civil Aviation Law the first law on civil aviation in the PRC. He worked on the reform of the civil aviation management structure, and participated in the drafting of corporate reform plans for Air China Group, China Eastern Airlines Group, China Southern Airlines Group and logistic services. He was involved in the drafting of corporate reform plans for several Chinese airports. Mr Meng was the project leader of the merger between China Eastern and China Northwest Airlines. He was awarded the honorary title of Elite Civil Servant by CAAC. 孟 繁 秋 首 席 执 行 官 / 执 行 董 事 2006 年 3 月 28 日 加 入 董 事 会 2008 年 5 月 9 日 被 任 命 为 首 席 执 行 官 孟 繁 秋 先 生 是 CAO 的 首 席 执 行 官 兼 执 行 董 事 他 是 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 和 中 国 航 油 集 团 新 源 石 化 有 限 公 司 的 副 董 事 长, 也 是 中 国 航 油 集 团 京 津 管 道 运 输 有 限 责 任 公 司 的 董 事 孟 先 生 在 担 任 目 前 职 位 之 前, 从 2007 年 12 月 至 2008 年 5 月, 任 中 国 航 空 油 料 集 团 公 司 规 划 发 展 部 总 经 理 他 于 2003 年 加 入 中 国 航 空 油 料 集 团 公 司, 从 事 战 略 规 划 投 资 管 理 和 企 业 改 革 以 及 企 业 法 制 工 作 他 曾 是 中 国 航 空 油 料 总 公 司 改 制 重 组 项 目 综 合 组 组 长, 改 制 后 成 立 了 中 国 航 空 油 料 有 限 责 任 公 司, 是 中 国 航 空 油 料 集 团 公 司 最 具 战 略 意 义 的 重 组 改 制 项 目 孟 先 生 是 cao 重 组 期 间 公 司 治 理 评 估 委 员 会 5 名 委 员 之 一 孟 先 生 于 1991 年 至 2003 年 任 职 于 中 国 民 航 总 局, 在 法 律 与 企 业 改 革 方 面 拥 有 广 泛 的 工 作 经 验 他 直 接 参 与 了 中 华 人 民 共 和 国 民 用 航 空 法 起 草 和 制 定 工 作 该 法 为 中 华 人 民 共 和 国 第 一 部 关 于 民 用 航 空 的 法 律 他 曾 直 接 参 与 拟 订 民 用 航 空 企 业 的 整 体 改 制 重 组 方 案 ; 直 接 参 与 拟 订 中 国 航 空 集 团 公 司 中 国 东 方 航 空 集 团 公 司 和 中 国 南 方 航 空 集 团 公 司 以 及 服 务 保 障 企 业 改 革 重 组 方 案 ; 直 接 参 与 拟 订 成 都 双 流 国 际 机 场 西 安 咸 阳 国 际 机 场 沈 阳 桃 仙 国 际 机 场 等 机 场 的 股 份 制 改 造 方 案 和 空 管 改 革 方 案 ; 具 体 负 责 东 方 航 空 公 司 兼 并 西 北 航 空 公 司 项 目 他 曾 被 评 为 民 航 总 局 优 秀 公 务 员 他 毕 业 于 中 国 政 法 大 学 国 际 经 济 法 专 业, 并 获 得 中 国 人 民 大 学 民 商 法 硕 士 学 位 他 拥 有 新 加 坡 国 立 大 学 商 学 院 亚 太 高 层 企 业 主 管 硕 士 学 位 他 还 拥 有 中 华 人 民 共 和 国 律 师 资 格 和 中 华 人 民 共 和 国 企 业 法 律 顾 问 资 格 他 曾 参 与 由 新 加 坡 证 券 交 易 所 新 加 坡 董 事 学 会 和 立 杰 律 师 事 务 所 主 办 的 关 于 新 加 坡 监 管 环 境 的 培 训 课 程 Mr Meng graduated from China University of Political Science and Law (majored in International Economic Law) and holds a Master of Business Law from Renmin University of China. He holds an Asia Pacific Executive Master of Business Administration from the National University of Singapore. He is also a qualified legal attorney and is a qualified corporate legal adviser in the PRC. He attended trainings on Singapore s regulatory environment held by the Singapore Exchange, Singapore Institute of Directors and Rajah & Tann LLP. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 17

22 BOARD OF DIRECTORS 董 事 会 Zhao Shousen Non-Executive, Non-Independent Director Appointed to the Board on 28 March 2006 Vice Chairman of the Audit Committee Member of the Risk Management Committee Dr Zhao Shousen is a Senior Accountant (professor level). He is the Chief Accountant of China National Aviation Fuel Group Corporation ( CNAF ). He joined Shengli Petroleum Administration ( SPA ) in 1986, and had held several senior management positions, including Deputy Division Director of the Finance Division, Deputy Director and Director of the Department of Financial Assets. He held the position of Chief Accountant of SPA between February 2000 and December Mr Zhao was appointed Director and Vice President of Sinopec Shengli Oil Field Co. Ltd. ( SSOFC ) in May 2000, and subsequently as Director, Vice-President and Chief Accountant of SSOFC from December He was appointed Chief Accountant of CNAF in January Dr Zhao holds a Bachelor s degree (Financial Accounting) from Shandong Economic Institute. He also holds a PhD in Industrial Economics from Beijing Jiaotong University. 赵 寿 森 非 执 行 非 独 立 董 事 2006 年 3 月 28 日 加 入 董 事 会 审 计 委 员 会 副 主 席 风 险 管 理 委 员 会 成 员 赵 寿 森 博 士 是 ( 教 授 级 ) 高 级 会 计 师, 他 是 中 国 航 空 油 料 集 团 公 司 总 会 计 师 1986 年 他 加 入 胜 利 石 油 管 理 局, 此 后 曾 担 任 财 务 处 副 处 长 财 务 资 产 部 副 主 任 以 及 主 任 等 职 务,2000 年 2 月 至 2001 年 12 月 任 胜 利 石 油 管 理 局 总 会 计 师,2000 年 5 月 任 中 国 石 化 胜 利 油 田 有 限 公 司 董 事 副 总 经 理,2001 年 12 月 任 中 国 石 化 胜 利 油 田 有 限 公 司 董 事 副 总 经 理 总 会 计 师 2006 年 1 月, 他 被 任 命 为 中 国 航 空 油 料 集 团 公 司 总 会 计 师 赵 先 生 拥 有 山 东 财 经 学 院 财 会 专 业 学 士 学 位, 北 京 交 通 大 学 产 业 经 济 学 博 士 学 位 Liu Fuchun Independent Director Appointed to the Board on 28 March 2006 Chairman of the Nominating Committee Member of the Audit Committee and the Remuneration Committee Mr Liu Fuchun holds directorship positions in several companies including DaChan Food (Asia) Limited. He is also an independent director of CNAF. Mr Liu was the Director and CEO of China National Cereals, Oils & Foodstuffs Corp ( COFCO ) from June 2000 to April Prior to this position, Mr Liu was an officer of the General Office of COFCO and an executive at its U.S. representative office from 1964 to November Between November 1981 and July 1985, he was the Deputy Consul of Chinese Consular Section in Vancouver. From July 1985 to June 1991, Mr Liu held the positions of Deputy Division Director, Division Director of Oils and Fats Division of COFCO, and General Manager of Top Glory (London) Ltd. From June 1991 to June 2000, he served as Vice President, Managing Director and Deputy CEO of COFCO. Mr Liu holds the title of Senior International Commercialist awarded by the Ministry of Commerce of the PRC. He graduated from Beijing Foreign Trade Junior College and Beijing Foreign Trade Institute, where he majored in Accounting and English, respectively. 刘 福 春 独 立 董 事 2006 年 3 月 28 日 加 入 董 事 会 提 名 委 员 会 主 席 审 计 委 员 会 和 薪 酬 委 员 会 成 员 刘 福 春 先 生 在 数 家 公 司 担 任 董 事 职 务, 包 括 大 成 食 品 ( 亚 洲 ) 有 限 公 司 他 也 是 中 国 航 空 油 料 集 团 公 司 的 独 立 董 事 刘 先 生 自 2000 年 6 月 至 2007 年 4 月 担 任 中 国 粮 油 食 品 进 出 口 ( 集 团 ) 有 限 公 司 的 董 事 兼 总 裁 在 此 之 前, 他 从 1964 年 年 11 月 先 后 任 中 国 粮 油 食 品 进 出 口 总 公 司 综 合 处 职 员 驻 美 国 代 表 处 业 务 员 ;1981 年 11 月 年 7 月 任 中 国 驻 温 哥 华 总 领 馆 副 领 事 ;1985 年 7 月 年 6 月 先 后 任 中 国 粮 油 食 品 进 出 口 总 公 司 油 脂 处 副 处 长 处 长 鹏 利 ( 伦 敦 ) 有 限 公 司 总 经 理 ;1991 年 6 月 年 6 月 先 后 任 中 国 粮 油 食 品 进 出 口 总 公 司 副 总 经 理 常 务 董 事 副 总 裁 刘 先 生 拥 有 中 华 人 民 共 和 国 商 务 部 颁 发 的 高 级 国 际 商 务 师 职 称 他 毕 业 于 北 京 外 贸 专 修 学 院 财 会 专 业 和 北 京 外 贸 学 院 英 语 专 业 18 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

23 Alan Haywood Non-Executive, Non-Independent Director Appointed to the Board on 24 February 2011 Chairman of the Risk Management Committee Member of the Audit Committee Chen Liming Non-Executive, Non-Independent Director Appointed to the Board on 5 August 2009 Member of the Remuneration Committee and the Nominating Committee Mr Alan Haywood is the President of Downstream Gas and Head of Commercial Development at BP Integrated Supply and Trading ( IST ) since December He is responsible for the development of strategy and long-term commercial ventures across BP s supply and trading portfolio and leading BP s downstream gas development. He is also responsible for the provision of analytical support for trading and for the management of BP s response to regulatory change. Mr Haywood has more than 20 years of experience in the global energy industry. He has held various senior managerial positions at BP IST, including Chief Operating Officer (Global Gas), Head of Supply & Trading (Oil Europe & Finance), Business Unit Leader of BP IST Northern Europe Gas & Power and Regional Business Leader of BP IST Energy & Finance. He spent three years in BP Houston s North American Gas and Power, where he was responsible for the pricing, marketing and trading of structured products and the trading and marketing of natural gas and electricity in the Midwest. Mr Haywood holds a Bachelor of Arts from Merton College, Oxford University. Alan Haywood 非 执 行 非 独 立 董 事 2011 年 2 月 24 日 加 入 董 事 会 风 险 管 理 委 员 会 主 席 审 计 委 员 会 成 员 Alan Haywood 先 生 于 2010 年 12 月 出 任 BP 综 合 供 应 与 贸 易 ( 简 称 IST ) 下 游 天 然 气 总 裁 及 商 业 发 展 总 监, 负 责 BP 供 应 与 贸 易 业 务 的 战 略 及 长 期 商 业 投 资, 并 且 领 导 BP 下 游 天 然 气 业 务 的 开 发 他 还 负 责 为 贸 易 业 务 提 供 分 析 性 的 支 持, 并 负 责 管 理 BP 对 法 规 变 化 的 应 对 策 略 Haywood 先 生 在 全 球 能 源 领 域 拥 有 超 过 20 年 的 经 验 他 在 BP IST 担 任 过 多 个 高 级 管 理 职 位, 包 括 全 球 天 然 气 业 务 的 首 席 运 营 官 欧 洲 石 油 及 财 务 的 供 应 与 贸 易 主 管 BP IST 北 欧 天 然 气 与 电 力 业 务 主 管 及 BP IST 能 源 与 财 务 的 区 域 业 务 负 责 人 他 曾 在 BP 休 斯 敦 的 北 美 天 然 气 与 电 力 公 司 工 作 3 年, 负 责 结 构 性 产 品 的 定 价 市 场 营 销 和 贸 易, 以 及 中 西 部 地 区 天 然 气 和 电 力 的 贸 易 与 市 场 营 销 Mr Chen Liming is the President of BP China since November 2008 and the Chairman of BP (China) Holding Company. He joined BP from Sasol China where he served as the Executive Vice President. Mr Chen started his professional career in the field of petrochemical industry in Singapore since He worked consecutively as sales representative, business development manager, deputy general manager, general manager and managing director in several wholly foreign owned and sino-foreign joint ventures in areas of business development, negotiation on joint venture, commercial, and corporate management. He had served as executive director/ non-executive director in several chemical and trading companies. From 1991 to 1994, Mr Chen was a senior researcher in Singapore Institute of Standards & Industrial Research in charge of scientific research and negotiations on joint ventures. From 1986 to 1991, he studied and worked at Cornell University in the US. Before his studies in the US, he worked in a PRC institute for scientific research. Mr Chen was awarded a Bachelor of Science degree from Shihezi University, Xinjiang, PRC, in He received a Master degree in Science from Cornell University in 1989 and completed the Advanced Management Programme at Harvard Business School in 陈 黎 明 非 执 行 非 独 立 董 事 2009 年 8 月 5 日 加 入 董 事 会 薪 酬 委 员 会 和 提 名 委 员 会 成 员 陈 黎 明 先 生 于 2008 年 11 月 加 入 BP, 任 BP 中 国 总 裁 BP 中 国 控 股 公 司 董 事 长 加 入 BP 之 前, 陈 先 生 任 沙 索 公 司 中 国 区 执 行 副 总 裁 陈 先 生 于 1994 年 在 新 加 坡 开 始 其 石 油 化 工 职 业 生 涯, 曾 先 后 在 外 方 独 资 和 中 外 合 资 企 业 任 职, 历 任 销 售 代 表 业 务 发 展 经 理 副 总 经 理 总 经 理 董 事 总 经 理 等 职 务, 涉 足 业 务 开 发 合 资 谈 判 商 务 以 及 企 业 管 理 工 作 他 也 曾 出 任 多 家 化 学 及 贸 易 公 司 的 执 行 董 事 或 非 执 行 董 事 Haywood 先 生 为 牛 津 大 学 莫 顿 学 院 的 文 学 学 士 1991 年 至 1994 年, 陈 先 生 曾 作 为 高 级 研 究 员 就 职 于 新 加 坡 标 准 与 工 业 研 究 院, 负 责 科 研 与 合 资 公 司 谈 判 等 方 面 的 工 作 1986 年 至 1991 年, 他 曾 在 美 国 康 乃 尔 大 学 读 书 并 工 作, 工 作 涉 及 贸 易 及 销 售 领 域 赴 美 前, 陈 先 生 曾 在 中 国 一 所 研 究 院 从 事 科 研 工 作 陈 先 生 1982 年 获 得 新 疆 石 河 子 大 学 学 士 学 位 1989 年 获 得 美 国 康 乃 尔 大 学 硕 士 学 位, 并 于 2003 年 顺 利 完 成 美 国 哈 佛 商 学 院 高 级 管 理 课 程 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 19

24 BOARD OF DIRECTORS 董 事 会 Ang Swee Tian Independent Director Appointed to the Board on 14 November 2008 Chairman of the Audit Committee Member of the Remuneration Committee, the Nominating Committee and the Risk Management Committee Mr Ang Swee Tian is the Non-Executive Chairman of Singapore Mercantile Exchange Pte Ltd and an Independent, Non-Executive Director of Cosco Corporation (Singapore) Limited. Mr Ang was the President of the Singapore Exchange Ltd ( SGX ) from 1999 to 2005 during which he played an active role in successfully promoting SGX as a preferred listing and capital raising venue for Chinese enterprises. Mr Ang also played a pivotal role in establishing Asia s first financial futures exchange, the Singapore International Monetary Exchange ( SIMEX ) in Singapore in 1984 and was instrumental to establishing SGX AsiaClear which started offering OTC clearing facility in Following his retirement in January 2006, Mr Ang took on a new role as Senior Adviser to SGX until December In March 2007, Mr Ang became the first person from an Asian Exchange to be inducted into the Futures Industry Association s Futures Hall of Fame which was established to honour and recognise outstanding individuals for their contributions to the futures and options industry. Mr Ang graduated from Nanyang University of Singapore with a First-Class Honours Degree in Accountancy in He was conferred a Master Degree in Business Administration with distinction by the Northwestern University in 汪 瑞 典 独 立 董 事 2008 年 11 月 14 日 加 入 董 事 会 审 计 委 员 会 主 席 薪 酬 委 员 会 提 名 委 员 会 和 风 险 管 理 委 员 会 成 员 汪 瑞 典 先 生 是 新 加 坡 商 品 交 易 所 的 非 执 行 董 事 长 和 中 远 投 资 ( 新 加 坡 ) 有 限 公 司 的 独 立 董 事 汪 先 生 于 1999 年 至 2005 年 担 任 新 加 坡 交 易 所 ( 简 称 新 交 所 ) 总 裁 在 这 期 间, 新 交 所 成 为 中 国 企 业 挂 牌 和 筹 资 的 首 选 市 场, 他 在 该 过 程 中 发 挥 了 积 极 作 用 汪 先 生 在 建 立 亚 洲 第 一 个 金 融 期 货 交 易 中 心 1984 年 成 立 的 新 加 坡 国 际 金 融 交 易 所 (SIMEX) 这 一 项 目 中, 发 挥 了 关 键 作 用 ; 在 设 立 新 交 所 亚 洲 结 算 行 (AsiaClear, 于 2006 年 开 始 提 供 场 外 结 算 工 具 ) 过 程 中 也 做 出 了 杰 出 贡 献 在 2006 年 1 月 退 休 后 至 2007 年 12 月, 汪 先 生 担 任 新 交 所 高 级 顾 问 Luo Qun Non-Executive, Non-Independent Director Appointed to the Board on 26 February 2010 Vice Chairman of the Remuneration Committee and the Nominating Committee Mr Luo Qun is the Vice President of China National Aviation Fuel Group Corporation ( CNAF ). Prior to this appointment, Mr Luo was the President of CNAF Logistics Co., Ltd (previously known as CNAF Hai Tian Transportation Co., Ltd) from October 2004 to August 2008 and concurrently assumed the position of Assistant to the President of CNAF from December 2007 to August Mr Luo had held several senior management positions within the CNAF Group. He was the project leader of the construction of the new jet fuel supply facilities at Guangzhou Baiyun International Airport from 1999 to From 1997 to 2004, he was a director of South China Bluesky Aviation Oil Co., Ltd, a joint-venture between CNAF, BP Global Investments and Fortune Oil PLC. Mr Luo holds a Master degree in Engineering from South China University of Technology and an Executive Master of Business Administration from National University of Singapore. He is a qualified Senior Engineer, Certified Senior Manager and Certified Senior Risk Manager. 罗 群 非 执 行 非 独 立 董 事 2010 年 2 月 26 日 加 入 董 事 会 薪 酬 委 员 会 和 提 名 委 员 会 副 主 席 罗 群 先 生 是 中 国 航 空 油 料 集 团 公 司 ( 简 称 CNAF ) 副 总 经 理 被 任 命 为 CNAF 副 总 经 理 之 前, 罗 先 生 在 2004 年 10 月 至 2008 年 8 月 间 担 任 中 国 航 油 集 团 物 流 有 限 公 司 ( 前 身 为 中 国 航 油 集 团 海 天 航 运 有 限 公 司 ) 总 经 理 2007 年 12 月 至 2008 年 8 月, 他 还 兼 任 CNAF 总 经 理 助 理 罗 先 生 在 CNAF 集 团 担 任 过 多 个 领 导 岗 位, 曾 在 1999 年 至 2004 年 间 担 任 广 州 新 白 云 国 际 机 场 迁 建 供 油 工 程 指 挥 部 指 挥 长 1997 年 至 2004 年 间 任 华 南 蓝 天 航 空 油 料 有 限 公 司 董 事 ( 华 南 蓝 天 航 空 油 料 有 限 公 司 为 CNAF BP 环 球 投 资 有 限 公 司 及 香 港 富 地 石 油 有 限 公 司 的 合 资 公 司 ) 罗 先 生 曾 获 中 国 华 南 理 工 大 学 工 程 硕 士 新 加 坡 国 立 大 学 高 层 管 理 工 商 管 理 硕 士 学 位 他 是 中 国 高 级 工 程 师 注 册 高 级 经 理 人 和 高 级 风 险 管 理 师 2007 年 3 月, 汪 先 生 成 为 被 选 入 美 国 期 货 协 会 (FIA) 期 货 名 人 堂 的 首 位 来 自 亚 洲 交 易 所 的 业 者 该 奖 项 的 目 的 在 于 表 彰 对 期 货 和 期 权 市 场 有 杰 出 贡 献 的 人 士 汪 先 生 在 1970 年 毕 业 于 新 加 坡 南 洋 大 学, 获 得 会 计 学 一 级 荣 誉 学 位 1973 年, 他 以 优 异 的 成 绩 被 美 国 西 北 大 学 授 予 工 商 管 理 硕 士 学 位 20 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

25 Soaring Above AND beyond 腾 飞 超 群

26 key management 管 理 层 主 要 人 员 简 介 Meng Fanqiu Chief Executive Officer / Executive Director As the Chief Executive Officer, Mr Meng Fanqiu is responsible for the effective management and smooth running of the entire business of the Group. He develops and implements business strategies and corporate plans to enhance the competitiveness and profitability of the Group. He provides leadership and directions to the various business functions to achieve performance targets, ensures overall business growth and provides supervision and leadership in the business performance of the Group. Please refer to profile of Mr Meng under Board of Directors section for more information. 孟 繁 秋 首 席 执 行 官 / 执 行 董 事 作 为 首 席 执 行 官, 孟 繁 秋 先 生 负 责 有 效 管 理 和 平 衡 经 营 CAO 集 团 的 整 体 业 务 他 负 责 贯 彻 落 实 业 务 发 展 战 略 规 划, 提 升 本 集 团 的 竞 争 力 和 盈 利 能 力 他 也 负 责 领 导 和 指 导 各 业 务 部 门, 使 其 达 到 预 期 目 标, 确 保 整 体 业 务 增 长, 并 监 督 和 负 责 审 核 业 绩 公 告 关 于 孟 先 生 更 详 细 的 介 绍, 请 参 阅 董 事 会 部 分 Wang Chunyan Chief Financial Officer As the Chief Financial Officer, Mr Wang Chunyan directs and manages CAO s overall financial plans and accounting practices. He oversees the treasury, accounting, budget, tax and audit functions of CAO and also assists the Chief Executive Officer to oversee the IT and risk management functions. Mr Wang has more than 14 years of experience in China s petroleum industry. Prior to joining CAO, Mr Wang was the Deputy Head of Financial Assets Division at Shengli Petroleum Administrative Bureau, a subsidiary of Sinopec Group. Mr Wang began his career with Hekou Oil Production Plant, a subsidiary of Shengli Petroleum Administrative Bureau in He held several senior positions within the Financial Assets Division of Shengli Petroleum Administrative Bureau before his appointment as Deputy Head of Financial Assets Division in May Mr Wang is a qualified Senior International Finance Manager and Senior Accountant. He holds a Bachelor s Degree in Economics majoring in Accountancy from Changchun Taxation College, China. Standing (left to right) 后 排 ( 从 左 至 右 ) Guo Feng (Assistant to CEO) 郭 峰 ( 首 席 执 行 官 助 理 ), Chua Teng Hock (Operations Adviser) 蔡 丁 福 ( 运 作 顾 问 ), Lily Choo (Head of HR & Admin) 朱 莉 莉 ( 人 事 与 行 政 部 主 管 ), Yong Sin Han (Technical Specialist) 熊 新 漢 ( 技 术 专 家 ), Loh Woon Yen (Head of Investor Relations) 罗 文 燕 ( 投 资 者 关 系 部 主 管 ) 王 春 焱 财 务 总 监 作 为 财 务 总 监, 王 春 焱 先 生 负 责 领 导 和 管 理 CAO 整 体 财 务 规 划 与 会 计 事 务 他 监 管 CAO 的 资 金 运 作 会 计 核 算 预 算 税 收 和 审 计 事 宜, 并 协 助 首 席 执 行 官 监 管 公 司 的 IT 和 风 险 管 理 工 作 王 先 生 在 中 国 的 石 油 业 有 超 过 14 年 的 经 验 在 加 入 CAO 之 前, 王 先 生 是 胜 利 石 油 管 理 局 财 务 资 产 部 副 主 任 胜 利 石 油 管 理 局 是 中 国 石 油 化 工 集 团 公 司 的 下 属 企 业 王 先 生 于 1993 年 参 加 工 作, 在 胜 利 石 油 管 理 局 河 口 采 油 厂 工 作 他 曾 历 任 胜 利 石 油 管 理 局 财 务 部 多 个 高 级 职 位, 并 于 2006 年 5 月 被 任 命 为 财 务 资 产 部 副 主 任 王 先 生 拥 有 高 级 国 际 财 务 管 理 师 和 高 级 会 计 师 资 格, 并 拥 有 中 国 长 春 税 务 学 院 会 计 系 会 计 学 专 业 经 济 学 学 士 学 位 22 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

27 management 管 理 层 Sitting (left to right) 前 排 ( 从 左 至 右 ) Cheryl Chan (Head of Risk Management) 陈 逸 雯 ( 风 险 管 理 部 主 管 ), Wang Chunyan (Chief Financial Officer) 王 春 焱 ( 财 务 总 监 ), Doreen Nah (Head of Legal / Company Secretary) 蓝 肖 蝶 ( 法 律 部 主 管 兼 公 司 秘 书 ), Meng Fanqiu (Chief Executive Officer / Executive Director) 孟 繁 秋 ( 首 席 执 行 官 / 执 行 董 事 ), Jean Teo (Chief Operating Officer) 张 嫏 嫏 ( 首 席 运 营 官 ), Elizza Ding (Head of Trading) 丁 鑫 莉 ( 贸 易 部 主 管 ), Han Jing Xieng (Head of Business Development) 韩 靖 娴 ( 业 务 发 展 部 主 管 ), Tee Siew Kim (Head of Finance) 郑 秀 琴 ( 财 务 部 主 管 ) Jean Teo Chief Operating Officer As the Chief Operating Officer, Ms Jean Teo is responsible for the Trading and Operations Departments. This involves the development and execution of trading growth strategies and performance targets for all trading businesses of CAO, which currently include jet fuel, gasoil, fuel oil and petrochemical products. Her responsibilities also include assisting the CEO to identify investment projects or new businesses in line with CAO s growth strategy that can substantially benefit CAO. Ms Teo has more than 10 years of experience in the oil trading industry. Prior to joining CAO, she was a senior trader of distillates products at Cargill International Pte Ltd. Prior to this, Ms Teo was an employee of BP Singapore Pte. Ltd from July 1997 to September 2010 ( BPS ), where she was seconded to the position of Head of Trading of CAO from January 2008 to August Other positions that Ms Teo had held in BPS included the Lead Trader of Light Distillates. 张 嫏 嫏 首 席 运 营 官 作 为 首 席 运 营 官, 张 嫏 嫏 女 士 负 责 监 管 贸 易 部 和 运 作 部, 主 要 职 责 包 括 制 定 并 组 织 实 施 CAO 所 有 贸 易 业 务 ( 目 前 包 括 航 油 柴 油 燃 料 油 和 石 化 产 品 ) 的 发 展 战 略 及 业 绩 指 标 其 职 责 还 包 括 协 助 CEO 寻 找 符 合 CAO 战 略 并 对 CAO 有 实 质 效 益 的 投 资 项 目 和 新 业 务 张 女 士 在 石 油 贸 易 领 域 拥 有 超 过 10 年 的 经 验 在 加 入 CAO 之 前, 她 是 嘉 吉 国 际 私 人 有 限 公 司 中 馏 分 产 品 的 高 级 贸 易 员 加 入 嘉 吉 之 前, 张 女 士 在 1997 年 7 月 至 2010 年 9 月 之 间 效 力 于 BP 新 加 坡 私 人 有 限 公 司 ( 简 称 BPS ), 并 于 2008 年 1 月 至 2010 年 8 月 期 间 外 派 至 CAO 担 任 贸 易 部 主 管 张 女 士 在 BPS 还 担 任 过 轻 馏 分 产 品 首 席 贸 易 员 张 女 士 拥 有 英 国 曼 彻 斯 特 商 学 院 工 商 管 理 金 融 专 业 硕 士 学 位 新 加 坡 国 立 大 学 化 学 工 程 系 ( 荣 誉 ) 学 士 学 位 Ms Teo holds a Master of Business Administration (Finance) from Manchester Business School, United Kingdom and a Bachelor of Engineering, Chemical (Honours) from National University of Singapore. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 23

28 CEO S REVIEW OF OPerations 首 席 执 行 官 业 绩 回 顾 Dear Shareholders, 2011 marks the 10th anniversary of CAO s listing on the Singapore Exchange. It is also a year where CAO achieved its fourth consecutive year of record-high performance. This is an important milestone for CAO, which has entered into a new growth phase. In 2011, CAO had successfully overcome the challenges of a weakening global economy and more intense market competition. Key performance indicators including supply and trading volume, revenue, gross profit and net profit hit historical high levels in 2011 and increased significantly over Total supply and trading volume in 2011 stood at 9.1 million tonnes, up 18.7% over Group revenue was US$9.0 billion, up 65.3% yearon-year. Gross profit was up 34.4% and net profit increased 15.9% to US$63.4 million. The robust growth of net profit was driven by a significant increase in gross profit due to strong performance of our supply and trading business. This highlights the growing importance of our core business as a profit contributor to the Group s bottom line. Despite challenging global economic and market conditions, we achieved significant growth in the profitability of our supply and trading business, which is testament to CAO s strong trading capability and robust risk management ability. We achieved breakthroughs in the area of asset investment during the year under review. Furthermore, all three associated companies of the Group achieved good results in 2011 and remained stable sources of profit and provides a firm foundation for CAO s growth. We continued to practise high standards of corporate governance and stringent risk controls. In 2011, CAO was awarded the Most Transparent Company (runner-up in the foreign listings category) by the Securities Investors Association (Singapore). Review: Concerted efforts to build on our strengths 2011 is the second year of the implementation of CAO s corporate strategy. During the year, our operating environment was challenging. The jet fuel market in Asia Pacific remained oversupplied and competition had intensified. The international political and economic environment had become more complex and unpredictable, which caused dramatic oil price fluctuations and impacted the pace of recovery of the global economy. Despite the difficult external environment, we continued to expand our existing business and ventured into new business activities according to our corporate strategy. With concerted efforts from all employees of CAO, we successfully built on our strengths and established a strong foundation for our next lap of growth. During the year under review, we strengthened our position as the key importer of jet fuel into the People s Republic of China ( PRC ) as we continued to optimise our jet fuel procurement model and successfully completed all procurement and supply deliveries into the PRC. Our maiden time charter of a vessel effectively strengthened our ability to ensure the quality of jet fuel and timely delivery of the cargoes. Our ability to ensure certainty of jet fuel supply was further strengthened through the use of storage facilities to optimise supply and trading activities. Other business initiatives included opening a new supply route from Thailand to supply jet fuel to Yunnan and supplying jet fuel to the newly approved airports in the PRC eligible to procure imported jet fuel. We also enhanced our value-added services to our customers by providing in-depth oil market information and analyses. 24 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

29 Meng Fanqiu Chief Executive Officer/ Executive Director Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 25

30 CEO S REVIEW OF OPerations 首 席 执 行 官 业 绩 回 顾 We strengthened our co-operation with airline companies as we proactively expanded into jet fuel markets outside the PRC. CAO commenced the business of into-plane jet fuel supply to airline companies at designated airports outside the PRC. We further expanded our geographical footprint beyond China, as we secured supply contracts with airlines including China Southern Airlines, Hainan Airlines and Turkish Airlines to supply jet fuel at several airports outside the PRC. The ability of our jet fuel trading team to generate profit strengthened significantly in We expanded into new markets, including the Middle East, Europe and Australia. The profitability of our jet fuel trading activities and capabilities of our trading team were enhanced through storage and freight optimisation and trading on the Platts window. We continued to develop our business in the trading of other oil products with a focus on establishing structural advantages for these products, which led to improved performance in We expanded our petrochemicals trading business to North Asia and continued to build up the structural advantage of our fuel oil business. Despite the volatile market conditions, CAO s other oil products trading portfolio was profitable in We achieved breakthroughs in the area of assets investment as we made headway in establishing a network of assets in the Asia Pacific to support our supply and trading activities. CAO announced its investment of a 26-percent equity stake in an oil storage terminal in Tanjung Langsat, Malaysia on 6 October 2011 and the acquisition of a 26-percent equity stake in an oil storage hub in Yeosu, Korea on 8 October Together with the storage tanks that we currently lease in North Asia, these storage facilities will form an asset network to support our trading activities. More recently, we announced the acquisitions of China Aviation Oil (Hong Kong) Company Limited and North American Fuel Corporation in January 2012 and completed these acquisitions in March 2012, thus consolidating the foundation for CAO to establish a global trading network. We deepened our collaboration with our strategic investor, BP. Following an evaluation of the 2011 collaboration model with BP, CAO and BP agreed on a new business cooperation model, which allows more autonomy and flexibility for CAO and creates more trading opportunities. It also better suits CAO s needs to expand trading activities, build up capabilities and increase revenue. Even as we proactively expand our business, we remain committed to continuously strengthen our corporate governance and internal control practices. CAO continued to enhance its internal controls system and uphold high standards of corporate governance. In view of the volatility in the oil product markets, CAO attached more importance to risk management, especially in monitoring and mitigating market and credit risks, as well as strengthening our credit assessment and new project risk evaluation processes. To support business development, continuous effort and more resources were devoted to enhance the risk management information system and processes, as well as staff capability. In 2011, we continued to implement our Corporate Social Responsibilityy( CSR ) programme to give back to the communities in which we work and live. We continued to work with Tian Fu Association (Singapore) to disburse the CAO-Tian Fu Bursary Fund established jointly by CAO and Tian Fu Association (Singapore). Our staff volunteers flew to Chengdu to interact with the students of a Project Hope school which CAO is providing financial assistance to. We also collaborated with Beyond Social Services to provide financial support to children from underprivileged families in Singapore. The CSR activities have helped to instill a sense of responsibility and raised the awareness of returning to the society amongst our staff. Outlook: Establishing a global network and propelling growth Looking ahead in 2012, whilst the global economy and energy market is expected to remain volatile, we remain optimistic about CAO s performance. Despite a slowing growth momentum, China s economy is still expected to sustain robust growth in 2012, which will in turn drive demand growth for jet fuel in the country. Hence, we expect profit contributions from our associated companies to remain stable. These are favourable factors that will help to sustain stable growth for our existing business and provide strong foundation for developing new businesses. Notwithstanding the uncertain political and economic climate, CAO will continue to adopt a proactive yet prudent trading strategy to optimise supply activities and establish structural advantages whilst leveraging on our competitive strengths to sustain growth. In 2012, CAO aims to further enhance its trading capabilities and establish a global trading network to strengthen the ability of our trading business to generate sustainable profits. We will continue to build up the structural advantages of other oil products, diversify revenue sources and consolidate our position as the largest physical jet fuel trader in Asia Pacific. We will also continue to seek high quality assets with reasonable expected returns in Asia Pacific, North America and Europe that are synergetic to our trading business to further strengthen the asset base of the Group, focusing on logisticsrelated assets. We will continue to optimise our risk management system and uphold high standards of corporate governance to ensure all risks are under stringent control is crucial in our implementation of the corporate strategy as it sets the stage for the next phase of growth. We will adhere to our corporate strategy, consolidate our competitive strengths and navigate through the complex and unpredictable external conditions to establish a global trading network. We will continue to innovate and expand our business and work towards our strategic goal of becoming Asia Pacific s leading jet fuel trader and an important player of other oil products. 26 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

31 尊 敬 的 各 位 股 东 : 2011 年 是 CAO 在 新 加 坡 交 易 所 上 市 十 周 年, 公 司 业 绩 连 续 四 年 创 历 史 新 高, 十 年 磨 一 剑, 标 志 着 公 司 日 臻 成 熟, 已 步 入 崭 新 的 历 史 发 展 阶 段 2011 年,CAO 成 功 克 服 全 球 经 济 放 缓 油 品 市 场 竞 争 加 剧 等 不 利 因 素, 公 司 业 务 量 营 业 额 毛 利 净 利 润 等 主 要 业 绩 指 标 都 创 下 历 史 新 高, 且 同 比 均 有 大 幅 度 增 长 2011 年 油 品 供 应 与 贸 易 总 量 累 计 达 到 910 万 吨, 同 比 增 长 18.7%; 全 年 累 计 销 售 收 入 达 到 90 亿 美 元, 同 比 增 长 65.3%; 毛 利 总 额 增 加 34.4%, 累 计 实 现 净 利 润 6340 万 美 元, 同 比 增 长 15.9% 2011 年 净 利 润 猛 增 主 要 得 益 于 供 应 与 贸 易 业 务 的 强 力 拉 动, 促 使 本 集 团 毛 利 总 额 大 幅 提 高, 这 显 示 了 CAO 自 营 能 力 显 著 增 强 CAO 已 经 具 备 了 扎 实 的 贸 易 能 力 和 风 险 控 制 能 力, 尽 管 全 球 经 济 与 市 场 环 境 严 峻, 供 应 与 贸 易 利 润 仍 然 强 劲 增 长 2011 年,CAO 在 实 业 投 资 方 面 取 得 了 突 破 性 的 进 展 三 家 联 营 公 司 业 绩 均 表 现 良 好, 联 营 公 司 并 账 利 润 仍 然 是 CAO 稳 定 的 利 润 来 源, 是 公 司 业 务 发 展 的 坚 实 基 础 公 司 继 续 保 持 高 标 准 公 司 治 理 规 范, 严 格 控 制 风 险 2011 年, 公 司 再 次 获 得 新 加 坡 证 券 投 资 者 协 会 颁 发 的 2011 年 度 最 透 明 公 司 奖 ( 海 外 公 司 组 第 二 名 ) Joint-ventures with Oilhub Korea Yeosu Co., Ltd (above) and Centralised Terminals Sdn Bhd to develop oil storage facilities in Korea and Malaysia, respectively. 两 项 投 资 项 目 的 签 约 仪 式 : 在 韩 国 的 丽 水 枢 纽 油 库 投 资 项 目 ( 上 图 ) 及 马 来 西 亚 的 浪 沙 第 三 油 库 投 资 项 目 Acknowledgements On behalf of CAO, I would like to extend my appreciation to our shareholders for your continuous support, especially to our parent company, CNAF, for its strong support to our strategy and for consolidating its overseas businesses into CAO. I would like to thank BP for its support in the areas of trading and risk management. My appreciation also goes to all other shareholders for your understanding, support and encouragement. My appreciation also goes to our sister company, China National Aviation Fuel Corporation Ltd, our suppliers, counterparties, ship owners and other business partners. I look forward to deepening our co-operation for mutual benefit. I would like to thank our associated companies SPIA, TSN- PEKCL and Xinyuan. They have played critical roles in contributing to CAO s development. I would also like to express my gratitude to all staff of CAO for your hard work over the past year. CAO would not have achieved such strong performance without your commitment and team work. Last but not least, I would like to thank the government agencies and friends in China and Singapore for your continuous support to the growth of CAO. 回 顾 2011 上 下 齐 心 蓄 势 积 累 2011 年 是 公 司 实 施 五 年 发 展 规 划 ( 年 ) 的 第 二 年, 公 司 面 临 十 分 严 峻 的 经 营 形 势 亚 太 航 油 市 场 仍 然 供 大 于 求 竞 争 激 烈 国 际 政 治 经 济 形 势 复 杂 多 变, 国 际 市 场 油 价 剧 烈 波 动, 全 球 经 济 复 苏 严 重 受 阻 尽 管 外 部 环 境 充 满 挑 战, 公 司 仍 努 力 克 服 诸 多 不 利 因 素, 上 下 齐 心 蓄 势 积 累, 按 照 既 定 的 发 展 战 略 稳 步 推 进 现 有 业 务, 成 功 开 拓 新 业 务, 为 实 现 跨 越 式 发 展 奠 定 了 坚 实 的 基 础 公 司 继 续 优 化 采 购 供 应 模 式, 圆 满 完 成 2011 年 进 口 航 油 采 购 和 供 应 任 务, 中 国 进 口 航 油 采 购 主 体 地 位 得 到 进 一 步 巩 固 首 次 采 用 期 租 船 只 方 式 运 送 航 油, 有 效 地 保 证 了 质 量 和 船 期 ; 继 续 发 挥 储 罐 的 供 应 保 障 和 贸 易 作 用, 进 一 步 增 强 了 供 应 保 障 能 力 ; 继 续 拓 宽 采 购 渠 道, 开 辟 了 泰 国 到 云 南 新 的 供 应 渠 道 ; 增 加 了 新 的 保 税 油 机 场 ; 进 一 步 优 化 油 品 市 场 信 息, 为 国 内 用 户 不 断 提 供 增 值 服 务 加 强 与 航 空 公 司 合 作, 积 极 开 拓 中 国 海 外 航 油 市 场, 首 次 实 现 了 在 中 国 海 外 向 航 空 公 司 销 售 航 油 公 司 先 后 获 得 中 国 南 方 航 空 公 司 海 南 航 空 公 司 以 及 土 耳 其 航 空 公 司 等 航 空 公 司 在 中 国 境 外 多 个 机 场 的 航 油 供 应 权, 供 应 区 域 由 中 国 开 始 向 海 外 延 伸 航 油 自 营 贸 易 能 力 明 显 提 升 开 始 进 入 中 东 欧 洲 和 澳 洲 等 新 市 场, 贸 易 区 域 不 断 扩 大, 网 络 不 断 拓 展 ; 运 用 库 存 和 船 运 优 化 贸 易, 加 大 普 氏 窗 口 的 买 卖, 贸 易 盈 利 显 著 增 长, 综 合 贸 易 能 力 显 著 提 高 以 建 立 结 构 性 优 势 为 重 点, 稳 步 推 进 其 他 油 品 贸 易, 业 务 状 况 明 显 改 善 化 工 品 团 队 将 业 务 拓 展 到 北 亚, 燃 料 油 继 续 建 立 结 构 性 优 势 其 他 油 品 贸 易 业 务 在 市 场 波 动 剧 烈 的 情 况 下 仍 保 持 盈 利 Meng Fanqiu CEO/Executive Director Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 27

32 CEO S REVIEW OF OPerations 首 席 执 行 官 业 绩 回 顾 CAO 在 实 业 投 资 方 面 取 得 历 史 性 突 破, 在 亚 太 区 支 持 供 应 与 贸 易 业 务 的 资 产 网 络 雏 形 已 经 形 成 公 司 分 别 于 10 月 6 日 和 10 月 8 日, 宣 布 收 购 马 来 西 亚 浪 沙 第 三 油 库 私 人 有 限 公 司 26% 股 权 和 投 资 韩 国 丽 水 枢 纽 油 库 26% 股 权 这 两 个 库 区 连 同 我 们 目 前 在 北 亚 租 赁 的 储 罐, 初 步 构 成 了 支 持 贸 易 业 务 的 资 产 网 络 同 时, 在 2012 年 1 月 宣 布 3 月 完 成 收 购 中 国 航 油 ( 香 港 ) 有 限 公 司 和 北 美 航 油 有 限 公 司, 为 CAO 构 建 全 球 贸 易 网 络 奠 定 了 基 础 2011 年, 与 战 略 合 作 伙 伴 BP 的 业 务 合 作 进 一 步 深 化 经 过 评 估 与 BP 2011 年 的 业 务 合 作 模 式, 与 BP 达 成 了 新 的 业 务 合 作 模 式 新 模 式 进 一 步 增 强 了 CAO 贸 易 的 自 主 性 灵 活 性, 增 加 了 贸 易 机 会, 更 利 于 拓 展 贸 易 提 升 能 力 增 加 收 入 在 大 力 拓 展 公 司 业 务 之 际,CAO 仍 致 力 于 不 断 提 升 公 司 治 理 和 内 控 水 平 在 确 保 公 司 履 行 高 标 准 的 公 司 治 理 结 构 的 基 础 上, 进 一 步 完 善 内 控 体 系 2011 年 油 品 市 场 波 动 剧 烈, 公 司 更 注 重 风 险 管 理, 重 点 防 控 市 场 风 险 及 信 用 风 险, 并 且 强 化 信 用 评 估 和 新 业 务 风 险 评 估 为 了 支 持 业 务 发 展, 我 们 持 续 投 入 资 源 改 进 强 化 风 险 管 理 信 息 系 统 流 程 和 提 升 人 员 素 质 致 谢 在 此, 我 谨 代 表 公 司 向 股 东 长 期 以 来 的 支 持 表 示 感 谢 要 特 别 感 谢 母 公 司 CNAF 在 战 略 上 和 在 海 外 业 务 整 合 方 面 所 给 予 CAO 的 大 力 支 持 感 谢 BP 在 贸 易 和 风 险 控 制 方 面 给 予 CAO 的 帮 助 最 后, 感 谢 全 体 股 民 的 理 解 和 鼎 力 支 持, 激 励 我 们 为 公 司 发 展 不 遗 余 力 坚 持 不 懈 感 谢 中 国 航 空 油 料 有 限 责 任 公 司 供 应 商 贸 易 商 以 及 船 东 等 商 业 伙 伴 的 支 持 在 不 断 加 深 合 作 的 基 础 上, 希 望 双 方 继 续 互 利 共 赢 感 谢 上 海 浦 东 航 油 管 输 公 司 和 新 源 公 司, 联 营 公 司 的 发 展 对 于 CAO 的 发 展 十 分 重 要, 密 不 可 分 衷 心 感 谢 CAO 全 体 员 工 一 年 来 的 辛 勤 工 作 正 是 他 们 的 兢 兢 业 业 与 齐 心 协 力, 才 能 铸 就 公 司 今 天 所 取 得 的 成 绩 最 后, 感 谢 所 有 关 心 和 支 持 CAO 的 中 新 两 国 政 府 组 织 机 构 和 各 界 朋 友, 在 你 们 的 支 持 下,CAO 才 能 健 康 成 长 2011 年, 公 司 全 面 推 进 企 业 社 会 责 任 计 划, 回 馈 社 会 提 升 公 司 在 社 会 的 影 响 力 继 续 推 广 与 新 加 坡 天 府 会 创 立 的 教 育 助 学 基 金 计 划, 并 组 织 公 司 员 工 到 访 成 都 与 被 资 助 学 校 进 行 交 流 等 活 动 ; 与 彼 岸 社 会 福 利 合 作, 资 助 新 加 坡 当 地 低 收 入 家 庭 的 儿 童 教 育 通 过 参 与 一 系 列 社 会 公 益 活 动, 履 行 企 业 社 会 责 任, 加 强 员 工 责 任 心, 回 馈 社 会 孟 繁 秋 首 席 执 行 官 兼 执 行 董 事 展 望 2012 全 球 网 络 跨 越 发 展 展 望 2012 年, 虽 然 预 期 全 球 经 济 和 能 源 市 场 将 持 续 动 荡, 我 们 对 CAO 的 经 营 状 况 仍 然 保 持 较 乐 观 的 看 法 2012 年, 虽 然 中 国 经 济 预 期 放 缓, 但 依 然 会 保 持 快 速 增 长, 带 动 航 油 需 求 量 也 继 续 强 劲 增 长 联 营 公 司 的 并 账 利 润 预 期 将 依 然 保 持 稳 定 这 些 有 利 因 素 保 障 了 公 司 现 有 核 心 业 务 持 续 稳 定 发 展, 为 公 司 保 持 较 好 的 经 营 业 绩 和 新 业 务 拓 展 奠 定 了 基 础 虽 然 全 球 政 治 经 济 形 势 变 幻 莫 测, 但 CAO 坚 持 秉 承 的 稳 健 积 极 的 贸 易 方 针 和 供 应 优 化 和 建 立 结 构 性 优 势 的 贸 易 策 略, 在 目 前 的 市 场 条 件 下, 凸 显 优 势 2012 年 CAO 将 进 一 步 增 强 综 合 贸 易 能 力, 着 重 致 力 于 打 造 全 球 贸 易 网 络, 提 升 公 司 长 远 贸 易 盈 利 能 力 将 进 一 步 巩 固 亚 太 最 大 航 油 实 货 贸 易 商 的 地 位, 继 续 致 力 于 建 立 其 他 油 品 贸 易 的 结 构 性 优 势, 扩 大 利 润 来 源 将 进 一 步 巩 固 实 业 基 础, 以 物 流 相 关 资 产 为 重 点, 继 续 在 亚 太 北 美 及 欧 洲 寻 求 与 贸 易 相 协 同 和 具 合 理 回 报 的 优 质 资 产 将 进 一 步 优 化 风 险 管 理 体 系 和 持 续 保 持 高 标 准 的 公 司 治 理, 严 控 风 险 2012 年 是 公 司 实 施 年 战 略 规 划 承 上 启 下 的 一 年, 至 关 重 要 我 们 将 继 续 以 公 司 发 展 战 略 为 指 导, 进 一 步 巩 固 现 有 优 势, 顺 应 复 杂 多 变 的 宏 观 经 济 环 境, 以 构 建 全 球 化 贸 易 网 络 为 目 标, 开 拓 创 新 逆 势 而 上, 为 公 司 实 现 亚 太 地 区 航 油 贸 易 的 领 先 者 其 他 油 品 贸 易 的 重 要 参 与 者 的 战 略 目 标, 实 现 跨 越 式 发 展 积 蓄 能 量 创 造 条 件 奠 定 基 础 28 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

33 CAPITALISING ON OPPORTUNITIES 把 握 时 机

34 jet fuel supply & trading 航 油 供 应 与 贸 易 Global economic woes including the stagnating economy of the United States, Euro Zone debt crisis and global economic slowdown, coupled with natural disasters such as the Japan earthquakes and tsunamis and the political turmoil in Libya, Egypt and other countries in the Middle East, resulted in a year of market volatility for the oil product markets. Refinery fires in Taiwan and Singapore have added to the volatility of oil product prices during the course of the year and resulted in short term disruption to the demand and supply structure of jet fuel and other oil products. Despite the challenging environment, it was a year of opportunities and remarkable performance for our trading teams. CAO continued to consolidate its position as the largest physical jet fuel trader in Asia Pacific and made progress in its efforts to diversify into other oil products, i.e. gasoil, fuel oil and petrochemicals. Delivering another year of record performance The sustained growth of China s civil aviation industry, coupled with our proactive yet prudent trading strategy, resulted in another year of record performance for the jet fuel supply and trading team. Jet fuel supply and trading volume hit another record high of 8.4 million tonnes in 2011, an increase of 17% over We further strengthened our freight optimisation capability through time charter of a tanker. Not only did this initiative help to strengthen CAO s ability to ensure certainty of jet fuel supply and enhance trading flexibility, it has also boosted our trading profitability. We also participated more actively in the Platts physical and derivatives market and strengthened our paper trading capabilities. Building a global trading network In line with CAO s corporate strategy to build up a global company, a key focus for the jet fuel trading team this year is to establish our presence outside Asia Pacific, i.e. in the Middle East, Australia, Europe and North America, through initiatives such as arbitrage trading. We will also continue to strengthen our position in Asia Pacific by proactively expanding our business in the region. In 2012, CAO will continue to devote more resources to grow its gasoil trading business, which include increasing the headcount and also proactively looking at possible investments to complement gasoil trading. CNAF storage tanks in the PRC CNAF 在 中 国 的 储 罐 Against a backdrop of 9.2% growth of China s economy in 2011, China s civil aviation industry continued to grow total passenger turnover increased 11.8% from On the back of strong growth of China s civil aviation industry, jet fuel volume supplied by CAO to the People s Republic of China ( PRC ) saw a healthy growth in CAO continued to supply well over 90% of jet fuel import requirements, mainly to the three key international airports in the PRC, i.e. Beijing, Shanghai and Guangzhou. We have also expanded our supply locations in the PRC to other burgeoning cities including Nanjing and Hangzhou marked CAO s foray into the supply of jet fuel to airlines. This business initiative is a natural extension of our jet fuel wholesale supply business, which creates strong synergies with our trading activities and is an additional income stream for CAO. We have secured into-plane supply contracts with airlines including Hainan Airlines and Turkish Airlines to supply the jet fuel requirements of these airlines at specified international airports outside the PRC. Whilst the scale of this business is currently small, CAO strives to build up its jet fuel sales and marketing expertise to be a supplier of high quality jet fuel. Through our collaboration with BP, we expanded into new markets including Australia, Middle East and Europe. We also continued to lease storage tanks in China and Korea. Having access to storage strengthened our ability to ensure jet fuel supply, enhanced our logistics management capability and created more optimisation and trading opportunities. 30 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

35 2011 年, 美 国 经 济 停 滞 不 前 欧 洲 债 务 危 机 全 球 经 济 放 缓 日 本 大 地 震 等 自 然 灾 害 以 及 利 比 亚 及 埃 及 等 中 东 国 家 政 局 动 荡 等 不 利 因 素, 使 全 球 经 济 形 势 复 杂 莫 测, 导 致 世 界 油 品 市 场 充 满 了 变 数 台 湾 和 新 加 坡 炼 厂 相 继 发 生 火 患 等 事 件 更 是 雪 上 加 霜, 使 石 油 产 品 价 格 整 年 波 动 剧 烈, 也 造 成 了 航 油 和 其 他 石 油 产 品 市 场 短 期 的 供 需 结 构 出 现 较 大 变 化 尽 管 市 场 环 境 充 满 了 挑 战, 但 也 为 我 们 的 贸 易 团 队 带 来 了 机 遇 ; 我 们 仍 取 得 了 骄 人 业 绩 CAO 进 一 步 巩 固 了 作 为 亚 洲 最 大 航 油 实 货 贸 易 商 的 地 位, 并 且 在 拓 展 其 他 油 品 贸 易 方 面 ( 柴 油 燃 料 油 及 化 工 品 ) 取 得 了 积 极 的 进 展 再 创 纪 录 的 一 年 中 国 民 航 业 的 持 续 健 康 发 展, 加 上 公 司 采 取 积 极 且 谨 慎 的 贸 易 策 略, 促 使 CAO 的 航 油 供 应 和 贸 易 业 务 达 到 了 另 一 个 高 峰 2011 全 年 的 航 油 供 应 及 贸 易 总 量 达 到 了 840 万 吨, 比 2010 年 同 比 增 长 了 17%, 再 次 刷 新 历 史 记 录 Into-plane refuelling at Shanghai Pudong International Airport 在 上 海 浦 东 国 际 机 场 为 飞 机 加 注 2011 年 中 国 经 济 增 长 9.2%, 推 动 了 民 航 事 业 持 续 发 展, 全 年 旅 客 周 转 量 比 2010 年 增 长 11.8% 在 中 国 民 航 业 强 劲 发 展 的 推 动 下,2011 年 CAO 向 中 国 供 应 的 航 油 总 量 也 明 显 增 长 CAO 持 续 向 中 国 供 应 90% 以 上 的 进 口 航 油, 主 要 供 应 中 国 的 三 大 国 际 机 场, 即 北 京 上 海 和 广 州 同 时, 我 们 也 扩 大 了 在 中 国 的 供 应 地 点, 开 始 向 南 京 和 杭 州 等 新 兴 发 展 城 市 的 机 场 供 应 航 油 2011 年 也 是 CAO 首 次 涉 足 向 航 空 公 司 直 接 供 应 航 油 的 一 年 这 项 新 业 务 是 CAO 现 有 航 油 批 发 业 务 的 自 然 延 伸, 与 我 们 的 航 油 贸 易 业 务 具 有 很 强 的 协 同 效 应, 并 且 为 公 司 开 创 了 新 的 收 入 渠 道 CAO 已 经 与 包 括 海 南 航 空 公 司 和 土 耳 其 航 空 公 司 在 内 的 航 空 公 司 签 署 了 供 应 协 议, 为 这 些 航 空 公 司 在 中 国 以 外 的 指 定 机 场 供 应 航 油 尽 管 目 前 业 务 规 模 仍 相 对 较 小, 但 我 们 正 在 积 极 加 强 航 油 销 售 和 市 场 行 销 的 能 力, 力 求 成 为 高 品 质 航 油 供 应 商 TSN-PEKCL Tanggu Operation Centre 管 输 公 司 运 控 中 心 塘 沽 站 通 过 CAO 与 BP 的 合 作, 我 们 开 辟 了 包 括 澳 大 利 亚 中 东 和 欧 洲 在 内 的 新 贸 易 市 场 我 们 也 继 续 在 中 国 和 韩 国 租 用 储 罐, 利 用 储 罐 的 优 势 提 高 我 们 的 供 应 保 障 能 力 和 运 作 管 理 能 力, 同 时 创 造 更 多 的 贸 易 机 会 我 们 首 次 期 租 了 一 条 油 船, 进 一 步 加 强 了 我 们 的 船 运 优 化 能 力 这 不 仅 帮 助 我 们 提 升 了 供 应 保 障 能 力 和 贸 易 灵 活 性, 同 时 也 增 加 了 我 们 的 贸 易 盈 利 能 力 另 外, 我 们 还 积 极 参 与 普 氏 的 实 货 及 衍 生 品 贸 易 市 场, 有 效 地 提 高 了 我 们 的 纸 货 贸 易 能 力 构 建 全 球 贸 易 网 络 CAO 的 战 略 目 标 之 一 是 成 为 一 个 全 球 化 公 司 因 此, 今 年 贸 易 团 队 的 主 要 任 务 就 是 通 过 开 展 不 同 区 域 的 贸 易 套 利 业 务 等 方 式 来 开 辟 亚 太 地 区 以 外 的 市 场, 包 括 中 东, 澳 大 利 亚 欧 洲 以 及 北 美 洲 我 们 也 会 继 续 积 极 在 本 区 域 内 开 拓 新 业 务, 不 断 巩 固 和 加 强 我 们 在 亚 太 地 区 的 地 位 2012 年 我 们 会 投 入 更 多 的 资 源 继 续 努 力 开 辟 柴 油 业 务, 这 包 括 增 加 柴 油 贸 易 业 务 方 面 的 人 员 配 置 和 积 极 寻 找 与 柴 油 相 关 的 投 资 项 目, 推 动 这 项 业 务 更 快 速 的 发 展 CNAF storage tanks in the PRC CNAF 在 中 国 的 储 罐 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 31

36 TRADING OF OTHER OIL PRODUCTS 其 他 油 品 贸 易 FUEL OIL Building up scale and presence in Asia Pacific The fuel oil trading team, which was established in 2010, remained profitable and continued to build up its scale of business and established its presence in the fuel oil market, particularly the bunker market in Asia Pacific. We built up effective relationships with oil majors, large trading houses and reliable end-users worldwide. We have continued to grow our scale of physical and derivatives trading business in We will continue to focus on building up the competitive advantage of our fuel oil trading business in 2012 whilst making proactive efforts to grow this business. Plans include taking up storage tanks, commencing blending activities with more product types and increasing trading volumes. 燃 料 油 建 立 在 亚 太 地 区 的 业 务 规 模 CAO 2010 年 设 立 了 燃 料 油 贸 易 团 队, 去 年 该 贸 易 账 户 保 持 盈 利, 并 持 续 扩 展 业 务 规 模 和 提 高 市 场 参 与 度, 特 别 是 在 亚 太 地 区 的 船 舶 燃 料 油 市 场 上 我 们 与 全 球 主 要 的 石 油 巨 头 大 型 贸 易 公 司 以 及 可 靠 的 终 端 用 户 都 建 立 了 良 好 的 合 作 关 系 2011 年, 我 们 的 燃 料 油 业 务 在 实 货 和 衍 生 品 贸 易 方 面 均 有 了 一 定 规 模 的 发 展 2012 年, 我 们 会 继 续 着 重 建 立 燃 料 油 贸 易 的 竞 争 优 势, 积 极 努 力 扩 大 业 务 规 模, 主 要 计 划 包 括 租 用 储 罐 开 展 调 油 业 务 增 加 贸 易 品 种, 积 极 扩 大 贸 易 量 化 工 品 借 助 于 中 国 市 场 的 需 求 成 长 CAO 的 化 工 品 贸 易 业 务 经 历 了 两 年 的 发 展 后,2011 年 在 建 立 结 构 性 优 势 方 面 取 得 积 极 的 进 展 化 工 品 贸 易 团 队 有 效 地 提 升 了 在 本 区 域 的 参 与 度 2011 年 化 工 品 实 货 贸 易 总 量 达 到 了 13.8 万 吨, 与 上 年 同 比 增 长 32.7%, 总 价 值 亿 美 元 贸 易 产 品 包 括 苯 甲 苯 对 二 甲 苯 等 产 品 业 务 区 域 包 括 亚 太 中 东 及 美 国 2011 年, 化 工 品 贸 易 团 队 在 向 中 国 市 场 供 应 方 面 取 得 了 突 破 展 望 今 年, 我 们 会 利 用 我 们 在 中 国 的 用 户 网 络 优 势, 抓 住 中 国 对 化 工 品 需 求 日 益 增 长 的 机 遇, 创 造 更 多 的 贸 易 机 会 我 们 还 会 继 续 开 拓 在 其 他 亚 太 地 区 的 化 工 业 务, 进 一 步 提 高 盈 利 能 力 我 们 将 继 续 执 行 目 前 行 之 有 效 的 化 工 贸 易 策 略 Ship bunker fuel oil 船 用 燃 料 油 PETROCHEMICALS Leveraging on China s demand growth After two years of developing the petrochemicals trading business, we made good progress in 2011 in establishing a structural advantage in this field. CAO s petrochemicals trading team has increased its presence in the region. Total physical trading volume increased by 32.7% in 2011 to 138,000 tonnes with a total value of US$187.3 million. Products traded included benzene, toluene and paraxylene, which were sourced from and sold to markets in Asia Pacific, Middle East and the United States. The petrochemicals team has made a breakthrough in China by supplying aromatic products to counterparties in China. Looking ahead, we will continue to leverage on our links to China to capture opportunities from China s growing demand for petrochemical products. We will also extend our petrochemicals business in other Asia Pacific markets to increase profitability. We will continue to execute previously successful and profitable trading strategies. 32 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

37 investments in oil-related assets 油 品 相 关 实 业 投 资 Shanghai Pudong International Airport Aviation Fuel Supply Company ( SPIA ) As the exclusive supplier of jet fuel at PRC s second largest airport Shanghai Pudong International Airport ( Pudong Airport ), SPIA provides jet fuel distribution and refuelling service to 110 Chinese and foreign airlines operating at Pudong Airport. SPIA owns and operates all the refuelling facilities at Pudong Airport, including the hydrant system, dispenser fleet, refuelling stations, airport tank farm, storage terminal with total capacity of 140,000m 3 and a 42-km dedicated jet fuel pipeline connecting Pudong Airport to Waigaoqiao terminal. Despite complex economic conditions and volatile oil product markets in 2011 and a high-base effect from 2010 due to the Shanghai World Expo, SPIA continued to achieve record high performance in In 2011, total number of aircraft movements at Pudong Airport increased by 4% to 344,100 times. This led to an increase of about 9% in SPIA s refuelling volume to 3.1 million tonnes in On the back of higher refuelling volume and revenue, profit contribution from SPIA increased 5.9% to US$37.9 million. China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd ( TSN-PEKCL ) TSN-PEKCL s key asset is a 185-km long pipeline transporting the majority of jet fuel requirements of Beijing Capital International Airport and Tianjin Binhai International Airport ( the Pipeline ). Connecting Tianjin Nanjiang terminal with Beijing Capital International Airp ort and Tianjin Binhai International Airport, the Pipeline is the longest multi-oil product pipeline with the biggest diameter and highest transfer volume in the PRC civil aviation industry. CNAF Logistics and CAO hold 51% and 49% equity stakes in TSN- PEKCL, respectively. Jet fuel transportation volume increased steadily to 2.5 million tonnes in 2011, up 6.3% year-on-year, representing about 71% of the total volume of jet fuel consumed at the two airports. Share of profits from TSN-PEKCL was US$1.2 million for 2011, an increase of 14.5% attributable to higher revenue from increase in sales volume. We expect SPIA s refuelling volume to continue to grow in 2012, driven by sustained growth of the civil aviation industry of the PRC, which will mitigate the adverse impact of slower global economic growth and deteriorating situation in Europe and the US. SPIA Refuelling Volumes 浦 东 航 油 加 油 量 TSN-PEKCL Pipeline VolumeS 管 输 公 司 管 输 量 (million tonnes 百 万 吨 ) (million tonnes 百 万 吨 ) Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 33

38 investments in oil-related assets 油 品 相 关 实 业 投 资 China Aviation Oil Xinyuan Petrochemicals Co., Ltd ( Xinyuan ) Transit storage 中 转 库 Xinyuan is mainly engaged in the storage and trading of jet fuel and other oil products. Xinyuan owns a storage tank of 50,000m 3 capacity near Shuidong harbour located in the city of Maoming, Guangdong Province, PRC. Shenzhen Juzhengyuan Petrochemicals Co., Ltd, CAO and CNAF hold 60%, 39% and 1% equity stakes in Xinyuan, respectively. Xinyuan achieved record high performance in 2011 as it strengthened existing core business of jet fuel trading and storage and proactively expanded new distribution channels and products. CAO s share of profit from Xinyuan increased 40.4% to US$1.1 million in 2011, mainly due to higher gross profit from increase in sales volume and rental of oil storage tanks. In 2012, Xinyuan will continue to develop new distribution channels to grow its market share. Xinyuan will also modify and expand its storage facilities to increase income from storage business. Oil Storage Terminal in Yeosu, Korea^ CAO announced the acquisition of 26% equity stake in Oilhub Korea Yeosu Co., Ltd ( OKYC ) on 8 October OKYC is constructing the Northeast Asia Hub Terminal in Yeosu of Korea ( NEA Hub Terminal ). OKYC will develop, own, operate, manage and maintain the NEA Hub Terminal, which has a total storage capacity of 1.3 million m 3 for crude oil and oil products. CAO is the second largest shareholder of OKYC, after Korea National Oil Corporation ( KNOC ). Other investors include SK Energy Co., Ltd., GS Caltex Corporation, Samsung C&T Corporation, Seoul Line Corporation and LG International Corp. Korea is a main source of jet fuel supply for CAO. The NEA Hub Terminal is strategically located, requiring only 1.88 days and 1.21 days of shipping time to the cities of Tianjin and Shanghai in China, respectively. The terminal is able to support trading activities to the west coast of the United States and Southeast Asia. The terminal has 4 berths with a draft of 17.8 metres and capacities ranging between 10,000 to 200,000 dead-weight tonnage (DWT). It is able to access the adjacent 330,000 DWT very-large crude carrier (VLCC) jetty owned by KNOC. This project provides CAO with an important asset located in northeast Asia, highly synergetic with its international oil trading activities. It marks a significant milestone for CAO in establishing its storage asset network in Asia. CAO s access to middle distillates storage in NEA Hub Terminal will also strengthen CAO s ability to ensure certainty of jet fuel supply to its PRC customers and broaden its optimisation and trading opportunities to supply jet fuel and gasoil to other markets, thereby enabling CAO to generate additional trading value from this investment. We expect this investment to contribute positively to CAO s bottom line from 2013 following its completion by Oil Storage Terminal in Tanjung Langsat, MalaysiA^ CAO entered into a joint venture with a Malaysian company, Centralised Terminals Sdn Bhd ( CTSB ) on 6 October 2011 to construct, develop and operate a 380,000m 3 oil storage terminal for jet fuel, gasoil and fuel oil located at the Port of Tanjung Langsat, Johor, Malaysia ( Terminal Three Facility ), to be built specifically for CAO s use. Terminal Three Facility is located 32 nautical miles from Singapore Changi International Airport and 42 nautical miles from Jurong Island. CAO will acquire a 26% equity stake in Langsat Terminal (Three) Sdn Bhd ( Langsat Three ), with the right of utilisation and sub-lease. CTSB will own the remaining 74% equity stake in Langsat Three. Not only is this investment expected to provide CAO with a steady stream of income, it is also highly synergetic to CAO s jet fuel trading business. In addition, this investment will provide a platform for CAO to expand its gasoil and fuel oil trading businesses. Given the current limited access to storage facilities in the greater Singapore region and considering the attractive geographical location of Terminal Three Facility and that CAO will have the right of tank utilisation and sub-lease, the strategic value of this investment is high to CAO. ^ Pending legal completion 34 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

39 investments in oil-related assets 油 品 相 关 实 业 投 资 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 ( 浦 东 航 油 ) 浦 东 航 油 是 中 国 第 二 大 机 场 上 海 浦 东 国 际 机 场 ( 简 称 浦 东 机 场 ) 的 唯 一 航 油 供 应 商 浦 东 航 油 向 在 浦 东 机 场 运 营 的 110 家 中 国 及 其 他 国 家 的 航 空 公 司 提 供 销 售 和 加 注 航 油 服 务, 拥 有 并 经 营 浦 东 机 场 全 部 加 油 设 施, 包 括 全 套 机 坪 管 网 管 线 加 油 车 队 和 罐 式 加 油 车 队 航 空 加 油 站 机 场 内 油 库 码 头 油 库, 总 库 容 量 14 万 立 方 米 的 航 油 储 罐 以 及 连 接 浦 东 机 场 与 外 高 桥 码 头 的 42 公 里 专 用 航 油 管 线 尽 管 2011 年 经 济 形 势 复 杂 多 变 油 品 市 场 动 荡 不 定, 浦 东 航 油 继 2010 年 受 世 博 效 应 带 动 的 基 础 上 仍 继 续 保 持 增 长, 业 绩 再 创 历 史 新 高 2011 年, 浦 东 机 场 飞 机 的 起 降 架 次 增 加 约 4% 至 万 架 次 浦 东 航 油 的 加 油 量 在 2011 年 达 到 310 万 吨, 比 2010 年 增 加 9% 销 售 量 及 销 售 收 入 的 增 加, 带 动 浦 东 航 油 的 并 账 利 润 增 加 5.9% 至 3790 万 美 元 虽 然 2012 年 整 体 经 济 展 望 暗 淡, 欧 美 经 济 恶 化 的 趋 势 日 益 显 著, 但 受 中 国 民 航 运 输 业 的 稳 定 增 长 的 推 动, 我 们 预 期 浦 东 航 油 2012 年 的 业 务 量 仍 将 继 续 增 长 中 国 航 油 集 团 津 京 管 道 运 输 有 限 公 司 ( 管 输 公 司 ) 管 输 公 司 拥 有 全 长 185 公 里 的 天 津 - 北 京 管 道 ( 简 称 津 京 管 道 ), 并 通 过 该 管 道 向 北 京 首 都 国 际 机 场 和 天 津 滨 海 国 际 机 场 提 供 航 油 输 送 服 务 津 京 管 道 连 接 天 津 南 疆 码 头 和 北 京 首 都 国 际 机 场 天 津 滨 海 国 际 机 场, 是 中 国 民 航 最 长 管 径 最 大 和 输 油 量 最 高 的 多 油 品 输 送 管 道 中 国 航 油 集 团 物 流 有 限 公 司 和 CAO 分 别 拥 有 管 输 公 司 51% 和 49% 的 股 权 2011 年, 管 输 公 司 航 油 输 送 量 约 250 万 吨, 较 2010 年 管 输 量 增 长 6.3%, 占 北 京 天 津 机 场 航 油 加 注 量 的 71% 管 输 公 司 2011 年 全 年 并 账 利 润 总 额 达 120 万 美 元, 比 2010 年 增 长 14.5%, 这 主 要 是 因 为 销 售 量 增 加 带 动 销 售 收 入 提 高 中 国 航 油 集 团 新 源 石 化 有 限 公 司 ( 新 源 公 司 ) 新 源 公 司 主 要 从 事 航 油 和 其 他 油 品 的 储 运 和 贸 易 业 务, 拥 有 位 于 中 国 广 东 省 茂 名 库 容 为 5 万 立 方 米 的 水 东 油 库 新 源 公 司 的 股 东 为 深 圳 巨 正 源 石 化 有 限 公 司 ( 拥 有 60% 股 权 ) CAO( 拥 有 39% 股 权 ) 和 中 国 航 空 油 料 集 团 公 司 ( 拥 有 1% 股 权 ) 韩 国 丽 水 枢 纽 油 库 ^ 2011 年 10 月 8 日,CAO 宣 布 认 购 韩 国 丽 水 枢 纽 油 库 有 限 公 司 ( 简 称 OKYC )26% 的 股 权 OKYC 正 在 韩 国 丽 水 新 建 东 北 亚 油 库 枢 纽 项 目 OKYC 将 开 发 拥 有 运 营 管 理 和 维 护 该 东 北 亚 油 库 枢 纽, 原 油 成 品 油 总 库 容 130 万 立 方 CAO 是 OKYC 的 第 二 大 股 东 ; 第 一 大 股 东 是 韩 国 国 家 石 油 公 司 ( 简 称 KNOC ), 其 他 股 东 包 括 SK 能 源 GS 加 德 士 三 星 C&T 首 尔 来 恩 LG 等 大 型 集 团 韩 国 是 CAO 的 主 要 航 油 供 应 地 之 一 东 北 亚 油 库 枢 纽 地 理 位 置 优 越, 距 离 中 国 天 津 船 运 时 间 仅 1.88 天, 距 离 上 海 船 运 时 间 仅 1.21 天, 同 时 又 可 以 辐 射 到 美 国 西 海 岸 和 东 南 亚 油 库 拥 有 四 个 1 万 吨 级 到 20 万 吨 级 不 等 的 泊 位, 水 深 17.8 米 同 时 油 库 还 可 以 共 享 临 近 的 KNOC 码 头 33 万 吨 级 超 大 油 轮 泊 位 该 项 目 将 为 CAO 海 外 贸 易 在 北 亚 区 构 成 一 个 重 要 资 产 支 点, 与 油 品 国 际 贸 易 高 度 协 同, 是 CAO 实 施 海 外 贸 易 整 体 布 局 的 重 要 举 措, 使 得 CAO 在 亚 洲 区 油 库 网 络 布 局 雏 形 初 现, 具 有 里 程 碑 式 的 意 义 CAO 在 这 一 地 点 有 自 己 的 中 馏 分 油 库 也 会 加 强 CAO 对 中 国 航 油 供 应 的 保 障 能 力, 同 时 拓 宽 向 其 他 市 场 供 应 航 油 柴 油 的 贸 易 优 化 机 会, 使 CAO 能 从 投 资 中 获 取 额 外 贸 易 价 值 该 投 资 项 目 预 期 在 2012 年 年 底 之 前 竣 工 马 来 西 亚 丹 戎 浪 沙 港 油 库 ^ 2011 年 10 月 6 日,CAO 与 马 来 西 亚 中 央 油 库 公 司 ( 简 称 CTSB ) 签 署 合 资 协 议, 拟 共 同 在 马 来 西 亚 柔 佛 州 丹 戎 浪 沙 港 建 设 开 发 经 营 总 库 容 38 万 立 方 的 航 油 柴 油 燃 料 油 库 区 ( 浪 沙 第 三 库 区 ), 为 CAO 专 属 油 库 该 库 区 距 离 新 加 坡 樟 宜 机 场 仅 32 海 里, 距 裕 廊 岛 42 海 里 CAO 持 股 26%, 作 为 股 东 方 将 拥 有 油 库 专 属 使 用 权 及 转 租 权 CTSB 持 有 该 公 司 其 余 74% 的 股 权 马 来 西 亚 丹 戎 浪 沙 港 投 资 项 目 不 仅 将 为 CAO 带 来 稳 定 的 收 益, 而 且 它 与 CAO 航 油 贸 易 业 务 高 度 协 同, 同 时 将 为 CAO 拓 展 柴 油 和 燃 料 油 贸 易 业 务 提 供 有 利 的 平 台 由 于 目 前 大 新 加 坡 地 区 的 储 罐 资 源 有 限, 浪 沙 第 三 库 区 的 地 理 位 置 十 分 优 越, 且 CAO 对 该 库 区 的 储 罐 有 独 家 使 用 权 和 转 租 权, 因 此 该 投 资 项 目 对 CAO 而 言 具 有 里 程 碑 式 的 重 要 战 略 价 值 2011 年, 新 源 公 司 在 进 一 步 稳 定 核 心 航 油 贸 易 和 仓 储 业 务 的 基 础 上, 积 极 开 发 新 的 购 销 渠 道 并 增 加 新 的 经 营 品 种, 推 动 了 公 司 整 体 业 绩 明 显 提 升, 再 次 创 下 历 史 最 高 水 平 2011 年 对 新 源 的 投 资 收 益 为 110 万 美 元, 较 上 年 增 加 40.4%, 主 要 因 为 销 量 增 加 促 使 毛 利 增 加 以 及 油 品 储 罐 租 赁 收 入 增 加 2012 年, 新 源 公 司 计 划 持 续 开 发 新 的 购 销 渠 道, 进 一 步 扩 大 公 司 的 市 场 份 额 ; 与 此 同 时, 将 进 行 水 东 油 库 的 改 造 与 扩 建 工 程, 以 增 加 公 司 仓 储 业 务 的 收 入 ^ 待 交 割 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 35

40 SUBSIDIARies 子 公 司 NAFCO CAO HK CAO CHINA AVIATION OIL (HONG KONG) COMPANY LIMITED ( CAOHK ) # Established in May 1998, CAOHK is principally involved in the business of jet fuel trading and supply of jet fuel to airline companies at various airports including Hong Kong, London, Taiwan and domestic airports in the People s Republic of China ( PRC ). Its airport sales customers include major airline companies from China and other countries. NORTH AMERICAN FUEL CORPORATION ( NAFCO ) # NAFCO, which commenced operations in 2010, is an agent and wholesaler of jet fuel in the United States of America ( USA ). NAFCO commenced its agency business for local fuel suppliers and major Chinese airlines since January NAFCO s geographical presence as a jet fuel supply agent in the USA currently includes various airports. NAFCO has obtained Aircraft Jet Fuel Dealer s Permit in California, Aircraft Distributor Jet Fuel in the State of Washington and Motor Fuel License in Alaska. CAOHK and NAFCO are highly synergetic to CAO s core business of jet fuel supply and trading and will expand the geographical footprint of CAO s business to new markets, including term contracts to supply jet fuel to airlines at airports at Shenzhen and other PRC domestic airports, Hong Kong, Taiwan and Los Angeles and Anchorage in the USA. This will enable CAO to accelerate its pace of building a global trading network. The integration of the businesses of CAOHK and NAFCO into the CAO Group will enable CAO to consolidate its trading business and strengthen CAO s position and competitiveness as the largest physical jet fuel trader in the Asia Pacific region. In addition to potential synergies, CAO will be able to realise benefits such as an increase in revenue from the cross-selling of products and savings in storage and freight costs. 中 国 航 油 ( 香 港 ) 有 限 公 司 ( CAOHK ) # CAOHK 于 1998 年 5 月 成 立, 主 要 业 务 为 航 油 贸 易 以 及 在 中 国 大 陆 香 港 台 湾 以 及 英 国 伦 敦 等 地 的 多 个 机 场 向 航 空 公 司 供 应 航 油 其 机 场 业 务 的 客 户 包 括 中 国 及 其 他 国 家 和 地 区 的 主 要 航 空 公 司 北 美 航 油 有 限 公 司 ( NAFCO ) # NAFCO 于 2010 年 投 入 经 营, 是 美 国 的 航 油 代 理 和 批 发 商 NAFCO 自 2011 年 1 月 开 始 其 代 理 业 务, 为 美 国 航 油 供 应 商 和 中 国 大 型 航 空 公 司 提 供 代 理, 并 开 始 在 部 分 机 场 直 接 向 航 空 公 司 销 售 航 油 美 国 公 司 已 获 得 美 国 加 利 福 尼 亚 州 华 盛 顿 州 和 阿 拉 斯 加 州 的 航 油 销 售 资 质 CAOHK 和 NAFCO 对 CAO 航 油 供 应 与 贸 易 的 核 心 业 务 具 有 很 强 的 协 同 性, 进 一 步 扩 大 了 业 务 区 域, 增 加 了 在 中 国 大 陆 深 圳 等 地 香 港 台 湾 以 及 美 国 洛 杉 矶 和 安 克 雷 奇 等 机 场 的 供 油 长 期 合 同, 向 航 空 公 司 供 应 航 油, 这 将 帮 助 CAO 加 快 搭 建 全 球 贸 易 网 络 的 速 度 将 CAOHK 和 NAFCO 的 业 务 并 入 CAO 集 团 也 将 有 助 于 CAO 巩 固 其 贸 易 业 务, 并 且 加 强 CAO 作 为 亚 太 区 最 大 的 航 油 实 货 贸 易 商 的 地 位 和 能 力 此 项 收 购 除 了 带 来 协 同 效 应 以 外,CAO 还 可 通 过 交 叉 销 售 油 品 以 及 节 省 储 罐 租 用 费 和 船 运 费 来 创 造 效 益 # Acquired on 1 March 2012 # 于 2012 年 3 月 1 日 完 成 收 购 36 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

41 risk management 风 险 管 理 EFFECTIVELY NAVIGATING THROUGH MARKET VOLATILITY We witnessed a few significant events that affected oil trading in 2011, including the Japan earthquakes and tsunami, the Euro Zone debt crisis and turmoil in Libya. These events have increased the risks CAO faced given the global exposure of our business activities, especially in the areas of credit and market risks. However, with a firm risk management foundation that CAO has built up over the years, we were able to effectively identify and manage the risks. The Risk Management Foundation The three main pillars of risk management foundation remained unchanged, i.e.: 1) three-tier management and control structure; 2) policies, guidelines and control framework; and 3) systems, processes and people. More resources and effort were devoted to further strengthen our risk management foundation and enhance its value proposition to the Group. Three-Tier Management Control Structure Our three-tier management and control structure has enabled strong support and sound governance over the execution of effective risk management practices for CAO. At the Board level, the Risk Management Committee ( RMC ) oversees strategic risk management issues. The RMC sets the limits for various types of risks, such as market, credit, operational, compliance and reputational risks. The RMC also approves new activities that CAO plans to embark on and oversees the risk management practices of CAO. At the Management level, the Company Risk Meeting ( CRM ) plans and implements risk management strategies to control risks such as market, credit, operational, compliance and reputational risks. The CRM operates within the delegated authority set at the RMC level. The CRM is chaired by the Head of Risk Management, who reports to the CEO but has an independent direct reporting line to the RMC. At the Operational level, the Risk Management Department ensures that risk management activities have been executed daily and that all risk-related policies, processes and limits are implemented and adhered to. Policies, Guidelines and Control Framework The Risk Management Manual serves as a central repository of policies, procedures and delegation of authorities relating to trading and risk management. The Trading Guidelines comprises the rules of trading compliance, trading principles and behaviour and general requirements related to an oil trading business. Compliance to the guidelines helps us to achieve the aim of conducting and expanding our business in accordance with good practices, high ethical standards and all applicable laws and regulations. All employees are required to attend relevant internal training courses and sit for tests to ensure sound understanding of the trading guidelines and risk management practices. New traders are required to pass relevant in-house tests before commencement of trading. Systems, Processes and People We continued to invest in strengthening our systems, processes and people to support the business. This is especially important as greater uncertainties and risks have emerged in the global trading environment and CAO is venturing into new businesses. We commenced a review of our integrated front-to-back risk management information system to evaluate the suitability of the system to cope with anticipated increase of business activities over the next five years. Phone trading system 电 话 交 易 系 统 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 37

42 RISK MANAGEMENT 风 险 管 理 ROBUST MANAGEMENT CONTROL 严 谨 的 管 理 控 制 架 构 Board of Directors 董 事 会 Strategy/Governance 战 略 / 监 管 Remuneration Committee 薪 酬 委 员 会 Risk Management Committee 风 险 管 理 委 员 会 Nominating Committee 提 名 委 员 会 Audit Committee 审 计 委 员 会 Tactical/Policy 策 略 / 政 策 Management/Company Risk Meeting 管 理 层 / 公 司 风 险 会 Head of Department 部 门 主 管 Head of Risk Management 风 险 管 理 部 主 管 Head of Department 部 门 主 管 Operation/Control 运 作 / 控 制 Front Office 前 台 Risk Management Department 风 险 管 理 部 Back Office 后 台 Internal Audit (outsourced) 内 部 审 计 ( 外 包 ) Control processes have been strengthened to oversee key risks along the transaction pipeline and mitigating controls have been put in place to manage the risks. Regular tests of controls are carried out to ensure that effective key controls are in place and our employees follow the standard operating procedures. The CAO Enterprise Risks Register is being refreshed regularly to capture key risks faced by CAO timely and accurately and we continued to implement actions to mitigate risks. Supporting Business Growth and Expanded Trading Activities CAO has a set of internal Investment Governance Standards in place to identify risks associated with new investment projects and to implement mitigating controls before the commencement of any new activity or investment project. Besides obtaining prior approvals from the Board of Directors on new activities or investment projects, the RMC reviews the projects from a risk perspective. New business activities are implemented at the company level within the delegated authorities from the RMC. A review of trading limits was carried out to assess the appropriateness of these limits as control levers for the businesses. This has enabled CAO to ascertain appropriate limits that are relevant to the current trading environment and serve as effective boundaries for our trading activities. Our Commitment to Effective Control, Timely Support and Balanced Growth We continuously strengthen our ability to manage risks to support business growth. CAO continued to leverage on BP s extensive experience and control processes to improve internal control practices. CAO s risk management team also gave presentations on risk control practices and experiences to key counterparties. In the area of market risk management, regular stress testings were carried out with a dynamic set of scenarios to capture the potential impact on our portfolio in the event of exceptional market conditions. In the area of credit risk management, we further expanded our sources of information and analytic capabilities through subscriptions to external news sources and credit assessment tools. This enabled us to assess counterparties based in China, where previously information was difficult to obtain. In light of the potential impact of the Euro Zone debt crisis, we reassessed CAO s credit risk appetite and made necessary changes to limits where applicable. Efforts were made to enhance the effectiveness of our processes and create greater efficiency, for example the use of web-based credit forecast tool. This enabled the risk management team to achieve significant time savings and devote the time saved to providing more in-depth analyses and supporting new businesses. In CAO, building a stronger risk management foundation remains a commitment of the company. As the Group expands into new businesses and geographical regions to achieve its aim of establishing global trading network, our risk management practices will continue to play an important role in ensuring effective control of risks whilst providing timely support for business activities to achieve balanced growth. Risk Awareness Culture We remain committed to building up a risk awareness culture that is entrenched in the organisation, where everyone is involved and risks are managed in all aspects, and where all employees are aware of and proactive about preventing and controlling risks. 38 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

43 市 场 动 荡 中 破 浪 前 行 2011 年, 一 些 重 大 事 件 接 踵 发 生, 包 括 日 本 地 震 和 海 啸 欧 洲 债 务 危 机 以 及 利 比 亚 战 争 等, 对 油 品 贸 易 产 生 了 重 要 影 响 这 些 事 件 增 加 了 公 司 经 营 风 险, 尤 其 是 信 用 风 险 和 市 场 风 险 然 而, 凭 借 CAO 多 年 来 建 立 起 来 的 坚 实 的 风 险 管 理 体 系, 我 们 有 效 地 识 别 和 管 理 了 这 些 风 险 风 险 管 理 基 础 继 续 保 持 风 险 管 理 的 三 个 主 要 支 柱 : 三 重 风 险 管 理 体 制 ; 政 策 指 导 方 针 和 控 制 架 构 ; 系 统 流 程 和 人 的 因 素 为 进 一 步 强 化 管 理 基 础 以 提 升 风 险 管 理 在 公 司 的 价 值, 我 们 投 入 了 更 多 的 资 源, 付 出 了 更 多 的 努 力 三 重 管 理 控 制 架 构 三 重 管 理 控 制 架 构 为 CAO 实 施 有 效 的 风 险 管 理 提 供 了 强 有 力 的 支 持 和 保 障 在 董 事 会 层 面, 风 险 管 理 委 员 会 负 责 监 管 战 略 风 险 风 险 管 理 委 员 会 设 定 市 场 信 用 运 作 守 规 和 信 誉 等 各 类 风 险 的 最 高 限 额, 审 批 CAO 计 划 开 展 的 新 业 务, 监 督 公 司 的 风 险 管 理 工 作 开 展 情 况 在 管 理 层 层 面, 公 司 风 险 会 议 在 风 险 管 理 委 员 会 授 权 之 下, 具 体 负 责 拟 定 市 场 信 用 运 作 守 规 和 信 誉 等 各 类 风 险 管 理 策 略 并 组 织 和 实 施 公 司 风 险 会 议 的 主 席 由 风 险 管 理 部 主 管 担 任, 既 向 首 席 执 行 官 负 责, 同 时 也 有 独 立 直 接 向 风 险 管 理 委 员 会 汇 报 的 职 权 在 运 作 层 面, 风 险 管 理 部 负 责 日 常 风 险 管 理 业 务 的 执 行, 并 负 责 确 保 所 有 与 风 险 相 关 的 政 策 流 程 和 限 额 得 到 遵 守 和 落 实 政 策 指 导 方 针 和 控 制 框 架 风 险 管 理 手 册 是 贸 易 和 风 险 管 理 相 关 政 策 流 程 和 授 权 的 主 要 依 据 和 基 础 贸 易 守 则 包 含 了 贸 易 守 规 准 则 贸 易 原 则 和 行 为 标 准, 以 及 与 油 品 贸 易 业 务 相 关 的 一 般 性 要 求 遵 照 该 守 则 有 助 于 我 们 按 照 良 好 的 实 践 范 例 较 高 的 道 德 标 准 和 适 用 的 法 律 法 规 指 导 和 开 展 业 务 所 有 员 工 都 要 参 加 公 司 组 织 的 相 关 培 训 课 程 并 参 加 测 试, 以 确 保 他 们 全 面 理 解 和 掌 握 贸 易 守 则 和 风 险 管 理 措 施 新 交 易 员 在 开 始 交 易 前, 必 须 通 过 相 关 的 内 部 测 试 系 统 流 程 和 人 的 因 素 为 支 持 业 务 发 展, 我 们 持 续 投 入 资 源 改 进 强 化 风 险 管 理 信 息 系 统 流 程 和 提 升 人 员 素 质 这 在 全 球 贸 易 环 境 风 云 突 变 险 象 迭 出,CAO 新 业 务 陆 续 展 开 的 情 况 下, 显 得 更 加 重 要 我 们 对 覆 盖 前 中 后 台 的 风 险 管 理 信 息 系 统 进 行 了 评 估, 以 检 测 其 在 未 来 五 年, 公 司 有 更 多 业 务 时 系 统 的 适 用 性 我 们 改 进 了 控 制 流 程, 监 控 交 易 过 程 中 的 主 要 风 险, 适 时 采 取 有 效 的 风 险 缓 解 控 制 措 施 此 外, 我 们 定 期 进 行 控 制 测 试, 确 保 控 制 有 效, 以 及 员 工 遵 守 标 准 操 作 流 程 定 期 更 新 CAO 企 业 风 险 管 理 注 册 表, 及 时 追 踪 明 确 公 司 面 临 的 主 要 风 险, 并 落 实 相 关 的 风 险 缓 解 措 施 支 持 业 务 发 展 并 扩 展 贸 易 活 动 CAO 有 一 系 列 内 部 投 资 治 理 标 准, 其 主 要 目 的 是 识 别 与 新 投 资 项 目 有 关 的 各 种 风 险, 并 在 开 展 新 业 务 或 投 资 项 目 之 前 把 相 应 的 风 险 缓 解 措 施 落 实 到 位 除 开 展 新 业 务 或 新 投 资 项 目 需 要 事 先 获 得 董 事 会 的 批 准 之 外, 风 险 管 理 委 员 也 会 从 风 险 的 角 度 审 查 新 项 目 公 司 在 风 险 管 理 委 员 授 权 下 实 施 新 业 务 我 们 对 贸 易 限 额 进 行 了 回 顾 审 查, 以 评 估 这 些 限 额 对 于 风 险 管 控 的 科 学 性, 确 定 了 与 贸 易 环 境 波 动 相 匹 配 的 限 额, 为 贸 易 活 动 设 定 了 适 当 的 边 界 和 限 额 管 控 有 效 支 持 有 力 平 衡 发 展 的 承 诺 我 们 不 断 强 化 风 险 管 理 的 能 力 以 支 持 业 务 的 发 展 CAO 继 续 借 鉴 BP 的 先 进 经 验 和 做 法 以 改 善 内 部 控 制 CAO 的 风 险 管 理 团 队 也 向 主 要 交 易 对 家 介 绍 了 风 险 管 理 方 面 的 经 验 和 做 法 在 管 理 市 场 风 险 方 面, 设 定 一 组 动 态 场 景, 定 期 进 行 压 力 测 试, 预 测 在 异 常 的 市 场 情 况 下 可 能 对 公 司 造 成 的 影 响, 特 别 关 注 小 概 率 事 件 对 公 司 可 能 造 成 的 风 险 在 管 理 信 用 风 险 方 面, 我 们 通 过 订 阅 外 部 新 闻 和 信 用 评 估 资 料, 进 一 步 扩 大 了 信 息 来 源, 获 得 了 一 些 以 前 难 以 获 得 的 信 息, 增 强 了 分 析 的 可 靠 性 这 使 得 我 们 可 以 更 好 地 评 估 贸 易 对 家 考 虑 到 欧 洲 的 债 务 危 机 的 影 响, 我 们 重 新 评 估 了 公 司 的 信 用 风 险 偏 好, 并 对 信 用 限 额 做 了 必 要 的 调 整 我 们 也 致 力 于 强 化 流 程 的 有 效 性 以 提 高 效 率, 比 如 使 用 以 网 络 为 基 础 的 信 用 预 测 工 具, 为 风 险 管 理 团 队 节 省 了 可 观 的 工 作 时 间, 从 而 可 以 腾 出 更 多 的 时 间 从 事 更 深 层 次 的 分 析 及 支 持 新 业 务 工 作 我 们 将 继 续 致 力 于 打 造 更 加 坚 实 的 风 险 管 理 基 础 在 CAO 集 团 不 断 扩 展 业 务 范 围 和 扩 大 业 务 区 域 建 立 全 球 贸 易 网 络 的 过 程 中, 风 险 管 理 工 作 将 为 业 务 活 动 提 供 及 时 支 持, 在 确 保 有 效 控 制 风 险 方 面 发 挥 至 关 重 要 的 作 用 风 险 管 理 文 化 我 们 始 终 坚 持 打 造 全 程 管 理 全 员 参 与 的 风 险 管 理 文 化, 使 风 险 意 识 成 为 全 体 员 工 共 同 的 价 值 观, 防 控 风 险 成 为 全 体 员 工 主 动 自 觉 的 行 动 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 39

44 financial review 业 绩 回 顾 Group revenue for FY 2011 increased by US$3,559.4 million (65.3%) to US$9,012.0 million from US$5,452.6 million for FY This was mainly attributable to higher volume of jet fuel supply and trading coupled with higher jet fuel prices which averaged at US$ per barrel for FY 2011 compared to an average price of US$90.15 per barrel for FY Driven by higher gains from oil trading activities and higher demand for imported jet fuel from the PRC, gross profit derived from jet fuel supply and trading and trading of other oil products was US$40.0 million for FY 2011, an increase of 34.4% compared to US$29.7 million for FY Other operating income was US$2.2 million for FY 2011 compared to US$0.6 million for FY 2010, an increase of 246.2%. This was mainly due to a foreign exchange gain of US$1.9 million derived from the strengthening of the Renminbi and the Singapore dollar against the US dollar. Bank interest income of US$0.3 million for FY 2011 was 55.4% lower, mainly due to lower time deposits placed with banks. Total expenses were US$16.5 million for FY 2011, an increase of 34.1% compared to US$12.3 million for FY The increase in expenses was mainly due to the provision of doubtful debts for amount due from MF Global following the bankruptcy proceedings of its holding company, higher finance costs relating to bank charges for the issuance of letters of credit and interest expense on bank borrowings, increase in professional fees incurred for evaluation of potential new business and travelling expenses as a result of increased business activities, partially offset by the reversal of an over-provision in staff costs. US$210.9 million to US$964.8 million due to an increase in (i) trade and other receivables; and (ii) cash and cash equivalents. Non-current assets increased US$25.4 million to US$229.5 million mainly attributable to the share of profits in associated companies. Current liabilities, which comprise trade and other payables and bank borrowings, increased by US$178.8 million to US$786.6 million, mainly due to increases in supply and trading volume and oil prices. The Group s net assets stood at US$401.3 million as at 31 December 2011, or US cents per share, compared to US$345.2 million as at 31 December 2010 or US cents per share. The increase was primarily due to an increase in retained earnings. Cash and cash equivalents stood at US$88.1 million, an increase of US$30.1 million, which was mainly attributable to cash inflow of US$25.5 million from operating activities, cash inflow of US$19.1 million from investing activities less the cash outflow of US$14.8 million for financing activities. Storage facilities of SPIA 浦 东 航 油 的 储 罐 The share of profits from associated companies was US$40.2 million for FY 2011 compared to US$37.6 million for FY 2010, an increase of 6.9%. SPIA contributed US$37.9 million for FY 2011, an increase of 5.9% compared to US$35.8 million for FY 2010, which was mainly due to higher gross profit on the back of higher refuelling volume. Share of profits from TSN-PEKCL was US$1.2 million for FY 2011 compared to US$1.0 million for FY 2010, an increase of 14.5% due to higher revenue from an increase in sales volume. Share of results in Xinyuan increased by 40.4% to US$1.1 million for FY 2011, mainly due to higher gross profit derived from increase in sales volume and rental of oil storage tanks. Tax expense of US$2.5 million for FY 2011 was 150.9% higher than FY 2010, due to the recognition of deferred tax liabilities on the Company s share of undistributed retained earnings from associated companies. The Group turned in a creditable performance for FY Net profit for FY 2011 was US$63.4 million compared to US$54.7 million for FY 2010, an increase of US$8.7 million (15.9%), mainly due to higher gross profit and higher share of profits from associated companies. Earnings per share was 8.84 US cents for FY 2011 compared to 7.61 US cents for FY The Group s financial position remains healthy. Total assets stood at US$1,194.3 milion as at 31 December 2011 compared to US$957.9 million as at 31 December Current assets increased by 40 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

45 2011 年 总 销 售 收 入 累 计 为 90.1 亿 美 元, 较 去 年 同 期 的 54.5 亿 美 元, 增 加 35.6 亿 美 元, 增 长 65.3%, 主 要 是 由 于 航 油 供 应 和 贸 易 总 量 增 加 以 及 航 油 价 格 上 升 2011 年 平 均 航 油 价 格 为 美 元 / 桶, 而 上 年 同 期 为 美 元 / 桶 贸 易 活 动 收 益 增 加 以 及 来 自 中 国 的 航 油 进 口 量 增 加, 推 动 来 自 航 油 供 应 与 油 品 贸 易 的 毛 利 较 2010 年 的 2970 万 美 元 增 长 34.4%, 达 4000 万 美 元 2011 年 其 他 营 业 收 入 为 220 万 美 元, 较 2010 年 的 60 万 美 元 增 长 246.2%, 主 要 是 由 于 2011 年 人 民 币 及 新 元 兑 美 元 汇 率 增 强 而 形 成 汇 兑 收 益 190 万 美 元 2011 年 银 行 利 息 收 入 为 30 万 美 元, 较 2010 年 减 少 55.4%, 主 要 是 由 于 银 行 存 款 降 低 导 致 利 息 收 入 减 少 2011 年 总 费 用 为 1650 万 美 元, 较 上 年 同 期 的 1230 万 美 元 升 高 34.1% 总 费 用 增 加 主 要 是 由 于 : 继 曼 氏 金 融 的 控 股 公 司 申 请 破 产 后 的 计 提 坏 账 准 备, 开 取 信 用 证 费 用 银 行 贷 款 利 息 费 用 增 加 导 致 财 务 费 用 增 加, 业 务 活 动 增 加 导 致 差 旅 费 增 加 以 及 为 评 估 潜 在 新 业 务 所 支 出 的 专 业 费 用 增 加 ; 其 中, 冲 回 以 前 年 度 多 提 的 人 工 成 本 抵 消 了 部 分 的 费 用 增 加 2011 年 对 联 营 公 司 的 投 资 收 益 为 4020 万 美 元, 较 2010 年 的 3760 万 美 元 增 加 6.9% 其 中 来 自 对 浦 东 航 油 的 投 资 收 益 3790 万 美 元,2010 年 同 期 为 3580 万 美 元, 同 比 增 长 5.9%, 主 要 因 为 航 油 加 注 量 上 升 导 致 的 毛 利 增 加 2011 年 管 输 公 司 的 并 账 利 润 为 120 万 美 元, 较 2010 年 同 期 的 100 万 美 元 增 长 14.5%, 主 要 因 为 销 售 量 增 加 引 起 的 收 入 增 加 所 致 2011 年 对 新 源 的 投 资 收 益 增 加 40.4% 至 110 万 美 元, 主 要 因 为 销 量 增 加 引 起 的 毛 利 增 加 以 及 油 品 储 罐 租 赁 收 入 增 加 2011 年 所 得 税 费 用 为 250 万 美 元, 同 比 增 长 150.9%, 主 要 为 联 营 公 司 可 分 配 利 润 中 向 中 国 境 外 分 红 时 代 扣 代 缴 税 所 确 认 的 递 延 所 得 税 负 债 本 集 团 2011 年 表 现 良 好, 净 利 润 为 6340 万 美 元, 较 2010 年 的 5470 万 美 元 增 加 870 万 美 元 (15.9%), 主 要 是 由 于 毛 利 增 长 以 及 联 营 公 司 投 资 收 益 增 加 所 致 2011 年 每 股 净 收 益 为 8.84 美 分,2010 年 为 7.61 美 分 本 集 团 的 财 务 状 况 保 持 稳 健, 截 至 2011 年 12 月 31 日 的 总 资 产 为 11.9 亿 美 元, 截 至 2010 年 12 月 31 日 为 9.6 亿 美 元 流 动 资 产 增 加 2.1 亿 美 元 至 9.6 亿 美 元, 主 要 来 自 于 贸 易 应 收 款 及 其 他 应 收 款, 以 及 现 金 和 现 金 等 价 物 余 额 的 增 加 联 营 公 司 投 资 收 益 增 加, 促 使 非 流 动 资 产 增 加 2540 万 美 元 至 2.3 亿 美 元 主 要 包 括 应 付 款 其 他 应 付 款 以 及 银 行 借 款 的 流 动 负 债 增 加 1.8 亿 美 元 至 7.8 亿 美 元, 主 要 是 由 于 供 应 与 贸 易 量 增 加 及 油 价 上 涨 截 至 2011 年 12 年 31 日, 本 集 团 的 净 资 产 为 4.0 亿 美 元, 每 股 净 资 产 为 美 分 2010 年 底 净 资 产 为 3.5 亿 美 元, 每 股 净 资 产 为 美 分 净 资 产 增 加 主 要 是 因 为 2011 年 累 计 未 分 配 利 润 增 加 现 金 和 现 金 等 价 物 余 额 增 加 3010 万 美 元 至 8810 万 美 元, 主 要 来 源 为 : 经 营 活 动 产 生 的 净 现 金 流 入 2550 万 美 元 ; 投 资 活 动 产 生 的 净 现 金 流 入 1910 万 美 元 ; 扣 除 财 务 活 动 产 生 的 净 现 金 流 出 1480 万 美 元 REVENUE 营 业 额 US$ 9,012.0m % gross profit 毛 利 US$ 40.0m % associated companies 联 营 公 司 US$ 40.2m + 6.9% net profit 净 利 润 US$ 63.4m % total assets 总 资 产 US$ 1,194.3m % net assets 净 资 产 US$ 401.3m % Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 41

46 Corporate social responsibility 企 业 社 会 责 任 Strengthening Our Commitment to the Society Following the implementation of our Corporate Social Responsibility ( CSR ) programme in 2010, CAO employees continued to devote more time and effort towards contributing to our society, particularly in the areas of children, new immigrants and the environment, through partnerships with non-profit organisations and promoting environmentally-friendly practices to encourage socially responsible behavior amongst CAO employees. Through our partnership with Beyond Social Services, we worked hand in hand with Healthy Start Child Development Centre ( HSCDC ), which is dedicated to offer help and provide quality childcare and pre-school education to less privilleged children from the neighbouring Bukit Merah and Redhill estates. Besides providing financial support, CAO volunteers participated in several activities such as hosting a Lunar New Year reception for the children and bringing the children from HSCDC on a field trip to the Jurong Bird Park where the children had fun learning about the avian world. CAO sponsored the HSCDC Awards Day, which was held to celebrate the children s academic achievements for the past year. CAO volunteers also assisted with logistical and coordination support for the Awards Day, such as venue setup and packing of food hampers. CAO-Tian Fu Bursary Fund awards were given out to students from lower-income new immigrant families who have excelled in their studies. By committing to the educational needs of the needy and underprivileged in the Chinese migrant community, CAO aims to help the students and working adults to fulfill their academic and professional aspirations. CAO donated another S$30,000 to the CAO-Tian Fu Bursary Fund in February In 2012, besides disbursing the fund to children of new immigrant families in Singapore through the provision of education bursaries, we will also assist low-income new immigrants working in Singapore in their skills training to enhance employability. As CAO expands its global footprint, we aim to use our resources and expertise to make a sustainable difference in the communities where we do business. Through a partnership with Tian Fu Association (Singapore), CAO volunteers travelled to Chengdu, China in October 2011 to contribute time, energy and skills to enhance the learning experience of the children of Chinese migrant workers and/or left-behind children at a Project Hope school. While there, our volunteers played basketball and other games with the children and introduced Singapore through an English Language lesson to foster cross-cultural awareness among the children. We also signed a MOU with the school to demonstrate our commitment to provide assistance to the school over the next five years, in the form of donations to improve the facilities of the school, bursaries and other appropriate forms of assistance. The CAO Green Fund that was set up in 2010 with the Community Foundation of Singapore to support environmental sustainability projects continued to seek promising opportunities for our employees to contribute and make a difference in the communities where we live and work. Through this partnership, we have identified a student-initiated project, Project Green Paradise, run by Singapore Management University students, which aims to create and raise environmental consciousness in local communities. Mentoring the youth on project management and beautifying our surroundings will be one of many volunteering opportunities through which our employees will participate and apply our commitment to environmental sustainability. Award presentation ceremony of CAO-Tian Fu Bursary Fund CAO- 天 府 会 助 学 金 颁 发 仪 式 (Top) Spending time with children of HSCDC at Jurong Bird Park and doing handicraft ( 上 图 ) 与 HSCDC 的 儿 童 同 游 裕 廊 飞 禽 公 园 及 与 HSCDC 的 儿 童 一 起 做 手 工 42 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

47 Cheque presentation ceremony for the CAO-Tian Fu Bursary Fund CAO- 天 府 会 助 学 金 支 票 捐 赠 仪 式 加 大 承 诺, 持 续 回 馈 继 2010 年 成 功 开 展 一 系 列 企 业 社 会 责 任 活 动 之 后,CAO 的 员 工 在 2011 年 再 接 再 厉, 继 续 投 身 社 会 公 益 活 动 公 司 尤 其 关 注 儿 童 新 移 民 和 环 保 问 题, 通 过 与 非 营 利 机 构 合 作, 倡 导 环 保 并 鼓 励 员 工 从 自 我 做 起, 履 行 社 会 责 任 在 与 彼 岸 社 会 服 务 的 合 作 中, 我 们 积 极 支 持 健 康 起 点 儿 童 发 展 中 心 ( 简 称 HSCDC ) 的 工 作, 帮 助 该 中 心 为 武 吉 美 拉 和 红 山 区 来 自 困 难 家 庭 的 学 前 儿 童 提 供 保 育 和 学 前 教 育 除 了 提 供 经 济 支 援 之 外,CAO 的 志 愿 者 还 亲 自 参 与 HSCDC 的 活 动 中, 比 如 为 小 朋 友 举 办 春 节 活 动 带 领 小 朋 友 参 观 裕 廊 飞 禽 公 园 等 在 飞 禽 公 园 的 远 足 活 动 中,HSCDC 的 小 朋 友 在 游 玩 过 程 中 也 增 长 了 对 飞 禽 世 界 的 知 识 公 司 赞 助 了 HSCDC 的 年 终 颁 奖 日, 活 动 当 天 CAO 的 志 愿 者 也 参 与 了 后 勤 工 作, 帮 助 布 置 场 地 和 包 装 礼 品, 陪 伴 小 朋 友 度 过 了 愉 快 的 一 天 公 司 还 与 天 府 会 共 同 设 立 了 CAO 天 府 会 助 学 基 金, 资 助 来 自 低 收 入 新 移 民 家 庭 中 成 绩 优 异 的 学 生 通 过 该 基 金,CAO 为 身 处 经 济 困 难 有 求 学 需 求 的 中 国 移 民 伸 出 援 手, 帮 助 学 生 和 在 职 人 士 一 圆 学 业 和 事 业 的 理 想 CAO 在 2012 年 2 月 再 次 向 该 基 金 捐 赠 3 万 新 元 在 2012 年, 除 了 继 续 向 新 移 民 家 庭 中 的 儿 童 提 供 助 学 金 外, 我 们 还 将 支 持 新 加 坡 在 职 移 民 接 受 职 业 培 训 提 升 就 业 技 能 Pledging our support to the Project Hope School in Sichuan, China 承 诺 资 助 中 国 四 川 省 希 望 小 学 Interacting with students at the Project Hope School 与 希 望 小 学 学 生 互 动 在 CAO 努 力 打 造 全 球 业 务 网 络 的 过 程 中, 我 们 也 不 忘 为 社 区 发 展 尽 心 尽 力 通 过 与 天 府 会 的 合 作,CAO 的 志 愿 者 们 在 2011 年 10 月 奔 赴 四 川, 为 当 地 希 望 小 学 的 农 民 工 子 弟 和 贫 困 家 庭 学 生 带 来 了 新 加 坡 朋 友 的 关 怀 我 们 的 志 愿 者 在 那 里 与 当 地 的 学 生 一 起 进 行 了 篮 球 和 其 他 比 赛, 还 在 英 语 课 上 向 他 们 介 绍 了 新 加 坡 的 历 史 和 民 俗, 为 两 地 友 好 搭 建 了 桥 梁 CAO 还 与 该 学 校 签 署 谅 解 备 忘 录, 承 诺 在 今 后 五 年 通 过 捐 赠 物 品 改 善 学 校 设 施 提 供 助 学 金 等 方 式 为 该 小 学 提 供 援 助 CAO 在 2010 年 与 新 加 坡 社 区 基 金 携 手 成 立 环 保 基 金, 支 持 本 地 可 持 续 性 发 展 的 环 保 项 目, 并 号 召 员 工 参 与 其 中, 为 社 会 做 出 贡 献 通 过 与 这 一 基 金 的 合 作, 我 们 参 与 支 持 由 新 加 坡 管 理 大 学 学 生 发 起 的 绿 色 天 堂 项 目, 该 项 目 旨 在 提 高 居 民 的 环 保 意 识 我 们 的 志 愿 者 还 将 辅 导 青 年 学 生 进 行 项 目 管 理 美 化 社 区, 真 正 履 行 我 们 对 环 保 的 诺 言 Bonding with children of HSCDC 与 HSCDC 的 小 朋 友 郊 游 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 43

48 statement of corporate governance The Board of Directors ( Board ) and Management of China Aviation Oil (Singapore) Corporation Ltd ( Company ) are committed to achieving the highest standards of corporate governance and in keeping with the Company s corporate philosophy of transparency and integrity. We strive to surpass the minimum requirements of openness, integrity and accountability prescribed by the Singapore Exchange Securities Trading Limited ( SGX-ST ) and the recommendations of the Code of Corporate Governance ( 2005 Code ). With the view to preserving and growing shareholder value through strong and effective corporate governance, the Board has put in place a set of well-defined controls and processes. This report primarily describes the Company s corporate governance practices for the financial year ended 31 December 2011 with specific reference to the 2005 Code. (A) BOARD MATTERS The Board s Conduct of its Affairs Principle 1 Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board. Commentary The current Board comprises eight Non-Executive Directors and the Chief Executive Officer/Executive Director. All Independent Directors as well as those nominated by the two major shareholders, namely China National Aviation Fuel Group Corporation ( CNAF ) and BP Investments Asia Limited ( BP ), were appointed on the strength of their expertise, experience and stature. The details, qualifications and major appointments of each Director are provided under the Board of Directors section of this Annual Report. The Directors collectively consider and decide on issues of strategy, performance, resources and standard of conduct. They provide the Company with the core competencies, drive and direction for its businesses, so as to enhance long-term shareholder value. The Board is in a unique position to implement new thinking, strategies and direction for the Company without being restrained by the past. As such, the Board has implemented many new internal controls and processes for the benefit of the Company. Some of the businesses that the Board transacts include: a) Setting, reviewing and approving corporate strategies, annual budgets and financial plans; b) Reviewing the adequacy and integrity of the Company s internal controls, risk management systems, financial reporting systems and monitoring the performance of the Group and the Management; c) Ensuring that the Group and Management comply with all laws, regulations, policies, directives, guidelines and internal code of conduct; d) Considering and approving the nominations of suitable candidates to the Board of Directors; and e) Ensuring accurate, adequate and timely reporting to, and communication with shareholders. Matters that are specifically reserved for the Board s consideration and decision include, but are not limited to, corporate planning, material acquisitions and disposals of assets, corporate or financial restructuring, declaration of dividends and interested person transactions. 44 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

49 statement of corporate governance To ensure the efficient discharge of its responsibilities and to provide independent oversight of Management, various Board committees namely, the Audit Committee, the Nominating Committee, the Remuneration Committee and the Risk Management Committee have been constituted with clear written terms of reference. Each Committee has the authority to examine issues relevant to their terms of reference and to make recommendations to the Board for action. The ultimate responsibility and decision on all matters still lies with the Board. Board meetings are held at least once a quarter, and as required by business imperatives, to review and approve the release of the quarterly and full-year results and to discuss reports by Management including significant acquisitions and divestments, approving the annual budget and reviewing performance of the Group s businesses. The Board met four times in When Directors cannot be physically present, telephonic attendance and conference via audio-visual communication at Board and Board committee meetings are allowed under the Company s Articles of Association. The number of meetings of the Board and Board Committees held in 2011, as well as the attendance of each Board member at these meetings, are disclosed below: Board Committee Meetings Board Meetings Audit Risk Nominating Remuneration Management Sun Li 4 N.A. N.A. N.A. N.A. Wang Kai Yuen N.A. Meng Fanqiu 4 N.A. N.A. N.A. N.A. Zhao Shousen 4 4 N.A. N.A. 4 Liu Fuchun N.A. Timothy Bullock (1) 1 1 N.A. N.A. 1 Alan Haywood (1) 3 3 N.A. N.A. 3 Ang Swee Tian Chen Liming 4 N.A. 1 4 N.A. Luo Qun 3 N.A. 1 4 N.A. Number of Meetings Held Notes: (1) Mr Alan Haywood was appointed as Non-Executive/Non-Independent Director, Chairman of the Risk Management Committee and a member of the Audit Committee on 24 February 2011 in place of Mr Timothy Bullock who resigned as a Director on 24 February A formal letter is sent to newly appointed Directors upon their appointment explaining their duties and obligations as a Director as well as the governance policies and practices of the Group. Appropriate training is provided for all new Directors appointed to the Board as part of their orientation to ensure that they are familiar with the Company s businesses, operations, governance practices and regulatory requirements. Facility visits to our associated companies premises are also arranged to enable newly appointed Directors to acquire an understanding of the Group s business operations. To ensure that the Directors are competent in carrying out their roles and responsibilities, regular and on-going training is provided for the Directors. These include attendance of courses co-organised by the Singapore Exchange Limited and the Singapore Institute of Directors. Courses attended by some Directors included a luncheon presentation and panel discussion on the SGX s Reminder To Audit Committees on (I) Implementing proper controls to safeguard cash and other assets; and (II) Incorporating provisions in articles of association of key PRC subsidiaries to change legal representative. All Directors are required to officially disclose their interests in the Company including any interested person transactions with the Company. All Directors practise good governance by updating the Company about changes to their interests in a timely manner. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 45

50 statement of corporate governance Board Composition and Balance Principle 2 There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board s decision making. Commentary The Nominating Committee determines on an annual basis whether or not a Director is independent, taking into consideration the 2005 Code s definition of an independent director and guidance as to relationships the existence of which would deem a director not to be independent. Of the nine members on the Board, six are nominated by substantial shareholders and are deemed as nonindependent. The three Independent Directors namely, Dr Wang Kai Yuen, Mr Liu Fuchun and Mr Ang Swee Tian, constitute at least one-third of the Board. Currently, at least two Independent Directors are resident in Singapore. These two Independent Directors are Dr Wang Kai Yuen and Mr Ang Swee Tian. None of the nine Board members is related to one another. Mr Liu Fuchun has been appointed as an Independent Director of a newly constituted Board of Directors of CNAF, for a term of two years commencing from 30 November The Nominating Committee (with Mr Liu Fuchun, the Chairman of the Nominating Committee, abstaining from review and determination) is of the view that other than his appointment as an Independent Director of CNAF, Mr Liu has no relationship with CNAF and its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director s independent business judgment. Accordingly, the Nominating Committee has determined that Mr Liu remains an Independent Director of the Company. The composition of the Board is also reviewed annually by the Nominating Committee. The Nominating Committee is satisfied that the Board comprises Directors who as a group possess the necessary calibre, experience and core competencies for effective decisionmaking. Individual directors profiles can be found in Board of Directors section of the Annual Report. Chairman and Chief Executive Officer Principle 3 There should be a clear division of responsibilities at the top of the company the working of the Board and the executive responsibility of the company s business which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power. Commentary The Chairman, with the assistance of the Deputy Chairman, is primarily responsible for overseeing the overall management and strategic development of the Company. With the assistance of the Company Secretary, schedules Board meetings and prepares meeting agendas as well as ensures that all procedures and good governance practices are complied with. The Chairman, Mr Sun Li, is familiar with the business environment and the industry issues relevant to the Company in the People s Republic of China ( PRC ), having had extensive experience in the industry in the PRC since Mr Sun Li is also familiar with the corporate governance practices and procedures of listed company boards in Singapore. The Deputy Chairman/Lead Independent Director of the Board, Dr Wang Kai Yuen has extensive experience as Director of publiclisted companies in Singapore. He has good working relationships with the various regulators in Singapore. The Chief Executive Officer of the Company, Mr Meng Fanqiu, executes the Board s decisions and is responsible for the day-to-day running of the Company s business, making operational decisions for the Company and implementing the Company s business, direction, strategies and policies. 46 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

51 statement of corporate governance The Chairman is in constant consultation with the Deputy Chairman/Lead Independent Director as well as other members of the Board and Board committees on major issues. As such, the Board believes there are adequate safeguards in place against having a concentration of power and authority in a single individual. The Chairman and the Chief Executive Officer are not related to each other. Board Membership Principle 4 There should be a formal and transparent process for the appointment of new Directors to the Board. Commentary The Nominating Committee was established by the Board to make recommendations for all Board appointments. The Nominating Committee comprises five members, the majority of whom, including its Chairman, are Independent Non-Executive Directors: Nominating Committee Liu Fuchun Luo Qun Wang Kai Yuen Chen Liming Ang Swee Tian Chairman Vice Chairman Member Member Member Other than being an Independent Director of CNAF, Mr Liu Fuchun, the Chairman of the Nominating Committee is not associated with any substantial shareholder of the Company. The responsibilities of the Nominating Committee include: a) evaluation and nomination of suitable candidates or, as the case may be, re-nominate retiring Directors to the Board; b) determination of each Board member s independence status on an annual basis; and c) evaluation of the effectiveness of the Board as a whole and independently evaluate each Board member s performance and contribution to the Board. CNAF and BP have agreed under a Shareholders Agreement that each shall nominate four and two Directors respectively to the Board, out of a maximum nine Directors. The remaining three shall be Independent Directors. Pursuant to Article 91, one-third of the members of the Board of Directors shall retire. For the AGM, Mr Sun Li, Mr Luo Qun and Mr Chen Liming are due for retirement and re-election. The Nominating Committee has recommended and the Board agreed that all retiring directors be nominated for re-election at the AGM. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 47

52 statement of corporate governance Board Performance Principle 5 There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each Director to the effectiveness of the Board. Commentary The Nominating Committee evaluated the performance of each Director and the effectiveness of the Board as a whole. The Nominating Committee completed a Board assessment and effectiveness questionnaire for 2011 and evaluated the Board s performance based on how the Board has enhanced the long-term shareholder value. The Nominating Committee is satisfied with the current composition and performance of the Board as a whole. In its evaluation, the Nominating Committee considered the expertise and experience of each member, his attendance, participation and contributions to the Board both inside and outside of Board meetings. The Nominating Committee is satisfied with the performance of the Board and its members. Access to Information Princitple 6 In order to fulfil their responsibilities, Board members should be provided with complete, adequate and timely information prior to Board meetings and on an on-going basis. Commentary The Company has put in place enhanced communication processes between the Board and Management in terms of information flow. Agenda for meetings and all Board papers for discussions are circulated to Directors at least 10 days in advance so that the Directors are prepared for the meetings. However, sensitive matters may be tabled at the meeting itself or discussed without any papers being distributed. Management and senior executives of the Company would be present during the Board meeting or Board Committee meeting, as the case may be, to present their proposals or to answer any questions that Board members may have. The Board as a whole as well as individual Directors have direct access to Management represented by senior executive officers of the Company and Group. The Management provides the Directors with monthly updates on the operational and financial performance of the Group, and also responds to regular questions from the Board or individual Directors in a timely manner. Where the Board deems it necessary, the Board can obtain independent advice from external consultants. This enhances the Board s ability to discharge its functions and duties. All Board members have direct access to and the advice and services of the Company Secretary. The Company Secretary attends all Board and Board Committee meetings and assists the respective Chairman of the Board/Board Committees in ensuring that Board/ Board Committee papers, procedures and the applicable laws and regulations are adhered to. Information about the Company and the Group are freely available to each Board member. Management will promptly supply any additional information that the Board requires. The Board also has ready access to external professionals for consultations. 48 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

53 statement of corporate governance (B) REMUNERATION MATTERS Procedures for developing Remuneration Policies Principle 7 There should be a formal and transparent procedure for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his own remuneration. Level and Mix of Remuneration Principle 8 The level of remuneration should be appropriate to attract, retain and motivate the Directors needed to run the company successfully but companies should avoid paying more for this purpose. A proportion of the remuneration, especially that of executive Directors, should be linked to performance. Disclosure on Remuneration Principle 9 Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration, in the company s annual report. Commentary The Board adopted the recommendations of the 2005 Code and established a Remuneration Committee to consider and to make recommendations on remuneration matters for the Directors and senior executives of the Group. Apart from ensuring consistencies with good practices, the Remuneration Committee is also mindful of the need to ensure that the Company and the Group are able to attract and retain good Directors and senior executives to the business. The Remuneration Committee comprises five members, the majority of whom, including its Chairman, are Independent Non-Executive Directors: Remuneration Committee Wang Kai Yuen Luo Qun Liu Fuchun Chen Liming Ang Swee Tian Chairman Vice Chairman Member Member Member The Remuneration Committee assists the Board and Management by assessing and making remuneration recommendations for the Executive Directors and senior executives of the Company. The Remuneration Committee also administers the performance bonus scheme and China Aviation Oil Share Option Scheme of the Company ( CAO Share Option Scheme ). The CAO Share Option Scheme expired on 9 November Broadly, remuneration for the Executive Directors and senior executives for the financial year ended 31 December 2011 are based on the Company s and individual performances and the remuneration for Non-Executive Directors in the form of fees is based on responsibilities and memberships in the Board and its committees. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 49

54 statement of corporate governance The remuneration of Directors for the financial year ended 31 December 2011, in bands of S$250,000 are set out below: Remuneration Band & Name of Director Fee Base/fixed salary and allowance Variable/ performance Others Share options/ Long Term incentives Above S$750,000 to S$1,000,00 (%) (%) (%) (%) (%) (%) Meng Fanqiu Above S$500,000 to S$750,000 Above S$250,000 to S$500,000 Below S$250,000 (%) (%) (%) (%) (%) (%) Sun Li Wang Kai Yuen Zhao Shousen Liu Fuchun Timothy Bullock (1) Alan Haywood (2) Chen Liming Ang Swee Tian Luo Qun Total Notes: (1) Mr Timothy Bullock resigned as a Director on 24 February He concurrently relinquished his appointments as Chairman of Risk Management Committee and as a member of the Audit Committee. (2) Mr Alan Haywood was appointed as Non-Executive/Non-Independent Director, Chairman of the Risk Management Committee and a member of the Audit Committee on 24 February 2011 in place of Mr Timothy Bullock. The number of six key executives (who are not also Directors) for the financial year ended 31 December 2011 in remuneration bands is set out below: Remuneration Bands Number of Executives Above S$500,000 to S$600,000 3 Above S$300,000 to S$500,000 3 For confidentiality reasons, the Company is not disclosing each individual executive s remuneration and their names. 50 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

55 statement of corporate governance There are no employees in the Group who are immediate family members of the Chairman or any of the Directors during the financial year ended 31 December immediate family member means the spouse, child, adopted child, step child, brother, sister and parent. The remuneration of the Group s top six key executives takes into consideration the pay and employment conditions within the same industry and is performance related. The remuneration package of Directors and senior executive officers include the following: Basic/fixed salary - The basic salary (inclusive of statutory employer contributions to Central Provident Fund) for each Executive Director or key management personnel is recommended by the Remuneration Committee, taking into account the performance of the individual for the financial year 2011, the inflation price index and information from independent sources on the pay scale for similar jobs in a selected group of comparable organisations. Fees - The structure for the payment of Directors fees for Non-Executive Directors is based on a framework comprising basic fee and additional fees for serving on the Board Committees and also undertaking additional services for the Group. Fees paid or payable to Non-Executive Directors take into account factors such as effort and time spent, and responsibilities of these Directors. The Chief Executive Officer/ Executive Director does not receive Directors fees for his Board directorships with the Company. Variable/Performance - The Group operates a bonus scheme for all employees including the Executive Director. The criteria for the bonus scheme are the level of profit achieved from certain aspects of the Group s business activities against targets, together with an assessment of the Company s and individual s performance during the year. The remuneration disclosed above for the Executive Director and the six key executives included the 2011 variable bonuses payable in relation to profit targets achieved for the Company s oil trading activities during the financial year Others - Benefits in kind such as private medical cover and car are made available where appropriate and consistent with common industry practices. - Allowances include travel allowance. Share Options - The Non-Executive Directors of the Company are eligible to participate in the CAO Share Option Scheme which was established since 9 November On 9 October 2011, the Company made its first and only grant of 5,860,000 share options to eligible participants of the CAO Share Option Scheme which did not include the Independent Directors of the Company. To maintain the internal equity between the Independent Directors and the other Directors of the Company, the Company enlisted the assistance of Hay Group to compute the option value with the purpose of converting the share options grant of 150,000 each to the other Directors into the cash equivalent value for the Independent Directors of the Company. ( Cash Value In Lieu of Options ). - To better align the interest of the Independent Directors who are not granted share options, Independent Directors are encouraged to acquire Shares of the Company each year from the open market to the extent of one-third of their Cash Value In Lieu of Options until they hold the equivalent of the Cash Value In Lieu of Options in Shares of the Company while they remain on the Board. The Cash Value In Lieu of Options to Independent Directors would be a one-off payment to be made to the Independent Directors for the financial year Details on the CAO Share Option Scheme are disclosed in the Appendix to this report. The CAO Share Option Scheme expired on 9 November Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 51

56 statement of corporate governance (C) ACCOUNTABILITY AND AUDIT Accountability Principle 10 The Board should present a balanced and understandable assessment of the company s performance, position and prospects. Commentary The Board, through the Audit Committee and the Group s external auditors KPMG LLP ( KPMG ) and internal auditors, Grant Thornton Specialist Services Pte Ltd ( Grant Thornton ), scrutinises Management s conduct of the Company s and Group s business processes and financials. Each area of the Company and Group is audited on an ongoing basis to ensure that the Company and Group maintain good corporate practices and governance and financial integrity. The Board, with the assistance of the Audit Committee, reviews all financial statements of the Company and Group. The Board is accountable to shareholders and always aims to present a balanced and understandable assessment of the Company s and Group s financial position and prospects to shareholders on a timely basis. The quarterly, half-year and full-year results are announced or issued within the mandatory period. Management provides the Board members with management accounts on a monthly basis. Such reports keep the Board informed, on a balanced and understandable basis, of the Group s performance, financial position and prospects and consist of the consolidated profit and loss accounts, analysis of sales, operating profit, pre-tax and attributable profit by business segments compared against the budgets, together with explanation given for significant variances for the month and year-to-date. Audit Committee Principle 11 The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties. Commentary The Audit Committee comprises five members, all of whom are Non-Executive Directors and the majority, including its Chairperson, are Independent Directors: Audit Committee Ang Swee Tian Zhao Shousen Wang Kai Yuen Liu Fuchun Alan Haywood (1) Chairman Vice-Chairman Member Member Member Note: (1) Mr Alan Haywood was appointed as a member of the Audit Committee on 24 February 2011 in place of Mr Timothy Bullock 52 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

57 statement of corporate governance The Audit Committee held four meetings in 2011 where it met with external and internal auditors to review both the Company and Group s financials and audit reports. A key issue for discussion is the financial statements and announcements made by the Company to shareholders. The members of the AC, collectively, have expertise or experience in financial management and are qualified to discharge the Audit Committee s responsibilities. The Audit Committee met with both the external and internal auditors at least once without the presence of the Management. The Audit Committee reviews the quarterly and annual financial statements and the integrity of financial reporting of the Company, including the accounting principles, for recommendation to the Board for approval. The Audit Committee also reviews and approves the internal auditors and external auditor s plans to ensure that the plans adequately cover, in particular, significant internal controls of the Company relating to financial, operational and compliance-related matters. Significant issues are discussed at Audit Committee meetings. The Audit Committee has full authority to investigate into any matter within its terms of reference, including any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations. The Audit Committee has full access to and co-operation of the Management. The Audit Committee also has full discretion to invite any Director or executive officer from the Company or the Group to attend its meetings. The Audit Committee has full access to both external and internal auditors. Where required, the Audit Committee is empowered to obtain external legal advice or such other independent professional advice as the Committee deems necessary. The Audit Committee monitors all interested person transactions, including transactions under the general mandate on Interested Person Transactions approved by shareholders at the Extraordinary General Meeting held in April 2011, and conflict of interest situations including transactions, procedures or actions taken which may raise issues about the Management s integrity. The Audit Committee also evaluates the scope and results of internal audit reports as well as Management s responses to the findings of the internal audit reports. For further discussions about internal audit, please see section (D) INTERNAL CONTROLS. The Audit Committee nominated KPMG for re-appointment as auditors of the Company at the AGM. The Audit Committee has also conducted an annual review of non-audit services and is satisfied that the nature and extent of such services provided by KPMG will not prejudice their independence and objectivity before confirming their re-nomination. The Company has put in place a suitable whistle blowing policy and procedure, by which staff of the Company may, in confidence, raise concerns about possible improprieties regarding financial reporting or other matters. Further, CAO has also put in place a Fraud Control Plan and an Enterprise Risk Management Framework and Process. The Fraud Control Plan comprises periodic fraud risk assessments on the Company. The Enterprise Risk Management Framework and Process ensures that the Company has a structured approach and framework to regularly assess its enterprise-wide risks. An Enterprise Risk Assessment has been conducted to identify and deliver an inventory of key risks for the Company and to develop a list of key risk indicators that can help the Company monitor its key risks. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 53

58 statement of corporate governance (D) INTERNAL CONTROLS Principle 12 The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders investments and the company s assets. Commentary The Board recognises the importance of sound internal control and risk management practices. In this regard, the Board affirms that it is responsible for the Group s systems of internal control and risk management system and has in accordance with the CGAC s recommendation, established the Risk Management Committee. The Risk Management Committee comprises three members, all of whom are Non-Executive Directors: Risk Management Committee Alan Haywood (1) Zhao Shousen Ang Swee Tian Chairman Member Member Note: (1) Mr Alan Haywood was appointed as Chairman of the Risk Management Committee on 24 February 2011in place of Mr Timothy Bullock. The Risk Management Committee is responsible for assessing and making recommendations to the Board concerning how to manage the Company s and the Group s business risks. The Head of the Risk Management Department reports directly to the Risk Management Committee. The Risk Management Committee has reviewed the Risk Management Manual by which the Company identifies and manages business risks. With the assistance of the Audit Committee and the Risk Management Committee, the Board reviews the adequacy and integrity of those control systems from time to time. In addition to the Risk Management Manual, the Board has also developed the Financial Management Manual. These two manuals are strict guidelines which the Management and all staff of the Company and the Group must comply with. Corporate Policy on Anti-Money Laundering Measures, including the appointment of an Anti-Money Laundering Compliance Officer, together with other trading related policies such as Out-of-Office Dealing policy, Telephone Taping/Instant Messaging/Mobile Phone policy and Deal Entry policy have been adopted by the Risk Management Committee. The internal audit function, as discussed under Principle 13, assists the Audit Committee and the Board in evaluating internal controls, financial and accounting matters, compliance and business and financial risk management. The Audit Committee s responsibilities in the Group s internal controls are complemented by the work of the in-house Legal Counsels. Having considered the financial statements audit carried out by the external auditor, the internal controls in place in CAO and the reviews carried out by the internal auditor as well as the Audit Committee and Risk Management Committee, the Board opines that CAO s framework of internal controls is adequate to provide satisfactory assurance on the integrity and effectiveness of CAO in safeguarding its assets and shareholders interests. We believe CAO s framework serves to provide reasonable assurance against material misstatement, misrepresentation or loss. 54 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

59 statement of corporate governance Internal Audit Principle 13 The company should establish an internal audit function that is independent of the activities it audits. Commentary Both the Board and the Audit Committee agree that it is important to have a strong professional internal audit function to enhance their ability to manage risk and safeguard shareholders interest. The Audit Committee thus appointed Grant Thornton as the Company s independent internal auditor. The internal auditors review the Company s processes and procedures on a continual basis to ensure compliance with the best corporate governance practices. It also reviews interested person transactions. The Audit Committee is satisfied that Grant Thornton has the adequate resources to perform its functions and has appropriate standing within the Company. Grant Thornton had presented their internal audit plan 2011 to the Audit Committee. The Audit Committee adopted the proposed audit plan. (E) COMMUNICATION WITH SHAREHOLDERS Principle 14 Companies should engage in regular, effective and fair communication with shareholders. Commentary The Board is careful to observe regulations of the SGX-ST governing the requirements to make appropriate announcements on a timely basis. Transparency and integrity of information is also important to the Board. All material announcements are vetted by the Chief Executive Officer, in consultation with the Chairman and/or the Deputy Chairman, as may be required, before release by the Company via SGXnet. Principle 15 Companies should encourage greater shareholder participation at Annual General Meetings and allow shareholders the opportunity to communicate their views on various matters affecting the company. Commentary The Company s Articles of Association allows a shareholder to appoint up to two proxies to attend and vote in his/her place at general meetings. While the Company does not have a specific limit in the Articles of Association on the number of proxy votes for nominee companies, there is a limit for the number of proxies. This is to prevent the creation of separate classes of rights in shareholders. Moreover, on a show of hands, only one vote is counted, under the current law. At each AGM, shareholders are encouraged to participate in the question and answer session. The Board of Directors, senior management, the external auditors and the Company Secretary are present to respond to shareholders questions. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 55

60 statement of corporate governance Where there are items of special business to be transacted at the AGM, comprehensive explanatory notes will be sent together with the notice of the AGM. The Company Secretary prepares minutes of shareholders meetings, which incorporates substantial comments or queries from shareholders and responses from the Board and Management. These minutes are available to shareholders upon their requests. DEALINGS IN THE COMPANY S SECURITIES In line with the recommended best practices on dealings in securities set out under Rule 1207(18) of the SGX-ST Listing Manual, the Company has issued a directive to all employees and directors not to deal in the Company s securities on short-term considerations and to abstain from dealing with the Company s securities for a period commencing two weeks before the announcement of the results of the first three quarters and one month before the announcement of the full year results and ending on the date of the announcement of the relevant results. INTERESTED PERSON TRANSACTIONS Shareholders have approved the renewal of the general mandate for interested person transactions of the Group on 28 April 2011 ( IPT Mandate ). The IPT Mandate sets out the levels and procedures to obtain approval for such transactions. Information regarding the IPT Mandate is available on the Company s website at All business units are required to be familiar with the IPT Mandate and report any such transactions to the Finance Department. The Finance Department keeps a register of the Group s interested person transactions. Information on interested person transactions for 2011 is found under Supplementary Information on page 107. REVIEW OF SYSTEM OF INTERNAL CONTROLS As part of the Company s ongoing process of ensuring effectiveness of its system of internal controls, the Board decided that the established system of internal controls of the Company be subject to review by an independent external reviewer with appropriate experience in corporate governance and risk management processes on a biennial basis. Following a review of the Company s established system of internal controls ( Review of System of Internal Controls ) undertaken by BDO Consultants Pte Ltd ( BDO Consultants ) in late 2010 ( 2010 Review ), the Company engaged BDO Consultants to undertake a follow-up review on the implementation status of issues arising from its 2010 Review. Upon completion of its follow-up review in late 2011, BDO concluded that nothing had come to their attention that the internal controls of the processes reviewed were not satisfactory or operating as intended. 56 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

61 statement of corporate governance Appendix (1) Details of the CAO Share Option Scheme CAO Share Option Scheme was approved by shareholders at an extraordinary general meeting of the Company held on 9 November 2001 which allows share options to be granted to full-time confirmed employees and Directors (including Non-Executive Directors) of the Group. Full-time confirmed employees and directors (excluding non-executive Directors) of the parent company and its subsidiaries ( Parent Group Executives/Directors ) are also eligible to participate in the Share Option Scheme if, in the opinion of the Remuneration Committee, such persons have contributed or will contribute to the success of the Company. Persons who are controlling shareholders of the Group or their associates are not eligible to participate in the Share Option Scheme. The aggregate number of ordinary shares in the capital of the Company ( Shares ) over which the Remuneration Committee may grant options on any date, when added to the number of Shares issued and issuable in respect of all options granted under the Share Option Scheme, shall not exceed 15% of the total number of issued Shares excluding treasury shares from time to time. The Exercise Price for each Share in respect of which an Option is exercisable shall be determined by the Remuneration Committee, and fixed at the highest of: (i) (ii) (iii) a price equal to the last dealt price of the Shares as at the close of trading on the Offer Date of the Option, as determined by reference to the website of the SGX-ST, rounded up to the nearest whole cent in the event of fractional prices; or a price (the Market Price ) equal to the average of the last dealt prices for a Share, as determined by reference to the local English newspapers, the Business Times or other publication published by the SGX-ST for the 5 consecutive trading days immediately preceding the Offer Date of that Option, rounded up to the nearest whole cent in the event of fractional prices; or a price which is set at a discount to the Market Price, provided that: (1) the maximum discount shall not exceed 20% of the Market Price; and (2) the Shareholders of the Company in an AGM or EGM shall have authorised the making of offers and grants of Options under this Scheme at a discount not exceeding the maximum discount as aforesaid in a separate resolution, Provided always that the Remuneration Committee shall have the discretion to revise the Exercise Price for each Share in respect of which an Option is exercisable in order to comply with the requirements of any regulatory authority (in Singapore or elsewhere) which are binding on the Company, subject to applicable laws and the listing rules of the SGX-ST. Options granted at the exercise price at no discount to the Market Price shall only be exercisable at any time (in whole or in part) by a participant after the second anniversary of the offer date of that share option or in such tranches over such period after such second anniversary date as the Remuneration Committee may determine and set out in the Offer Letter, provided always that share options shall be exercised before the tenth anniversary of the relevant offer date, in the case of share options granted to full-time confirmed employees of the Group (including executive directors and Parent Company Executives/Directors) (collectively referred to as Executive Options ); and before the fifth anniversary of the relevant offer date, in the case of non-executive Options, or such earlier date as may be determined by the Remuneration Committee. Options granted with the exercise price set at a discount to the Market Price shall only be exercisable at any time (in whole or in part) by a participant after the second anniversary of the offer date of that option, provided always that options shall be exercised before the tenth anniversary of the relevant offer date in the case of Executive Options or the fifth anniversary of the relevant offer date in the case of non-executive Options, or such earlier date as may be determined by the Remuneration Committee. The Share Option Scheme which was in force for a maximum period of ten (10) years, commencing on the date on which the Share Option Scheme is adopted by shareholders at the extraordinary general meeting of the Company (i.e. 9 November 2001) expired on 9 November Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 57

62 statement of corporate governance (2) Charter of Lead Independent Director China Aviation Oil (Singapore) Corporation Ltd (the Company ) shall have a Lead Independent Director who shall be an independent director as defined under the Code of Corporate Governance 2005 ( 2005 Code ). Purpose In circumstances where the Chairman of the Board of Directors is not independent, the Board of Directors of the Company considers it to be useful and appropriate to designate a Lead Independent Director to coordinate the activities of the independent directors of the Company and performing such other duties and responsibilities as the Board may determine from time to time. Duties and Responsibilities In addition to the duties of Board members as set forth in the 2005 Code, the specific duties and responsibilities of the Lead Independent Director shall be as follows: Function as Principal Liaison with the Chairman and Senior Management Act as the principal liaison between the Independent Directors of the Company and the Chairman of the Board, and between the Independent Directors of the Company and senior management. Call Meetings of Independent Directors Has the authority to convene meetings, as appropriate, among the Independent Directors of the Company and to ensure that Independent Directors have adequate opportunities to meet and discuss issues in sessions of the Independent Directors without the presence or participation of management. Preside at Meetings Preside at any meetings held among the Independent Directors of the Company. Approve Appropriate Provision of Information to the Board and the Board Committees Review the quality, quantity and timeliness of the information submitted to the Board and Board Committees. Advise and assist the Chairman on the meeting agenda items. Advise the Chairman and facilitate Board s approval of the number and frequency of meetings of the Board and Board Committees (including any special meetings of the Board) as well as meeting schedules to ensure that there is sufficient time for discussion of all agenda items. Initiate Actions to Address any Concerns on Corporate Compliance Matters Has authority to initiate actions, for and on behalf of the Independent Directors of the Company, to address any concerns on corporate compliance matters including the engaging of external advisers and consultants, even at the displeasure of the Management or majority shareholders of the Company. Function as Principal Liaison in Shareholder Communication Respond directly to the shareholders of the Company, questions and comments that are directed to the Lead Independent Director or to the Independent Directors of the Company as a group, with such consultation with the Chairman of the Board and the other Non-Independent Directors, as the Lead Independent Director may deem appropriate. 58 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

63 financial statements CONTENTS 60 Directors Report 64 Statement by Directors 65 Independent Auditors Report 66 Statement of Financial Position 67 Consolidated Income Statement 68 Consolidated Statement of Comprehensive Income 69 Consolidated Statement of Changes in Equity 71 Consolidated Statement of Cash Flows 72 Notes to the Financial Statements

64 Directors report We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 31 December Directors The directors in office at the date of this report are as follows: Sun Li Wang Kai Yuen Meng Fanqiu Ang Swee Tian Chen Liming Alan Haywood Liu Fuchun Luo Qun Zhao Shousen Chairman Deputy Chairman/Lead Independent Director Chief Executive Officer/Executive Director Directors interests According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act, Chapter 50 (the Act), none of the directors who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations either at the beginning, date of appointment if later, or at the end of the financial year except as follows: Holdings registered in the name of Director or nominee At 1 January 2011 At 31 December 2011 Holdings in which Director is deemed to have an interest At 1 January 2011 At 31 December 2011 The Company Sun Li Options to subscribe for ordinary shares at: S$0.91 per share from 10 October 2013 to 9 October ,000 Wang Kai Yuen Ordinary shares 100,000 (1) 100,000 (1) Meng Fanqiu Options to subscribe for ordinary shares at: S$0.91 per share from 10 October 2013 to 9 October ,000 Luo Qun Options to subscribe for ordinary shares at: S$0.91 per share from 10 October 2013 to 9 October ,000 Zhao Shousen Options to subscribe for ordinary shares at: S$0.91 per share from 10 October 2013 to 9 October ,000 (1) Held by Wang Kai Yuen s spouse. 60 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

65 Directors report directors interest (cont d) The Directors interest in the ordinary shares of the Company as at 21 January 2012 were the same as those as at 31 December Neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Except as disclosed under the Share Options section of this report and in note 27 to the financial statements, neither at the end of, nor at any time during the financial year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm he is a member, or with a company in which he has a substantial financial interest. Share options The China Aviation Oil Share Option Scheme (the Scheme ) of the Company was approved and adopted by its members at an Extraordinary General Meeting held on 9 November The Scheme is administered by the Remuneration Committee of the Company, comprising five directors, Wang Kai Yuen, Luo Qun, Ang Swee Tian, Liu Fuchun and Chen Liming. Other information regarding the Scheme is set out below: Under the Scheme, share options to subscribe for the ordinary shares of the Company ( Shares ) are granted to full-time confirmed employees and Directors (including Non-Executive Directors) of the Group. The aggregate number of ordinary shares in the capital of the Company (the Shares ) over which the Remuneration Committee may grant share options on any date, when added to the number of Shares issued and issuable in respect of all share options granted under the Scheme, shall not exceed 15% of the total number of issued Shares (excluding treasury shares) from time to time. The exercise price for each Share in respect of which a share option is exercisable shall be determined by the Remuneration Committee, and fixed at the highest of: (i) (ii) (iii) a price equal to the last dealt price of the Shares as at the close of trading on the date of grant ( Offer Date ) of the share option, as determined by reference to the website of the Singapore Exchange Securities Trading Limited ( SGX-ST ), rounded up to the nearest whole cent in the event of fractional prices; or a price (the Market Price ) equal to the average of the last dealt prices for a Share, as determined by reference to the Singapore English newspapers, or other publication published by the SGX-ST for the 5 consecutive trading days immediately preceding the Offer Date of that share option, rounded up to the nearest whole cent in the event of fractional prices; or a price which is set at a discount to the Market Price, provided that: (1) the maximum discount shall not exceed 20% of the Market Price; and (2) the Shareholders of the Company in an AGM or EGM shall have authorised the making of offers and grants of share options under the Scheme at a discount not exceeding the maximum discount as aforesaid in a separate resolution, provided that the Remuneration Committee shall always have the discretion to revise the exercise price for each Share in respect of which a share option is exercisable in order to comply with the requirements of any regulatory authority (in Singapore or elsewhere) which are binding on the Company, subject to applicable laws and the listing rules of the SGX-ST. Share options granted at the exercise price at no discount to the Market Price shall only be exercisable at any time (in whole or in part) by a participant after the second anniversary of the offer date of that share option or in such tranches over such period after such second anniversary date as the Remuneration Committee may determine and set out in the letter of offer, provided always that share options shall be exercised before the tenth anniversary of the relevant offer date, in the case of share options granted to fulltime confirmed employees of the Group including executive directors (collectively referred to as Executive Options ); and before the fifth anniversary of the relevant offer date, in the case of options issued to non-executive directors, or such earlier date as may be determined by the Remuneration Committee. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 61

66 Directors report Share options (ConT D) The Scheme which was in force for a maximum period of ten (10) years, commencing on the date on which the Scheme is adopted by shareholders at the extraordinary general meeting of the Company (i.e. 9 November 2001) expired on 9 November As at the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of the Company, are as follows: Date of grant of options Exercise price per share Options granted and outstanding as of 9 October 2011 Options exercised Options forfeited/ expired Options outstanding at 31 December 2011 Number of options holders at 31 December 2011 Exercise period 9 October 2011 S$0.91 5,260,000 5,260, October 2013 to 9 October October 2011 S$ , , October 2013 to 9 October ,860,000 5,860,000 Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options granted by the Company or its subsidiaries as at the end of financial year. Details of options granted to directors of the Company under the Scheme are as follows: Name of director Options granted for financial year 31 December 2011 Aggregate options granted since commencement of Scheme as at 31 December 2011 Aggregate options exercised since commencement of Scheme as at 31 December 2011 Aggregate options outstanding as at 31 December 2011 Sun Li 300, , ,000 Meng Fanqiu 498, , ,000 Zhao Shousen 150, , ,000 Luo Qun 150, , ,000 Since the commencement of the Scheme, no options have been granted to the controlling shareholders of the Company or their associates and no participant under the Scheme has been granted 5% or more of the total options available under the Scheme. Since the commencement of the Scheme, no options have been granted to employees of the immediate holding company or its related companies under the Scheme, except for 3 employees of the immediate holding company who are also the directors of the Company, who were granted options to subscribe for an aggregate of 600,000 ordinary shares in the Company. The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to any rights to participate in any share issue of any other company. Share Repurchases For the period ended 30 April 2011, the Company purchased 1,332,000 of its own shares by way of market acquisition pursuant to the authority given to the directors under the Share Purchase Mandate approved by the shareholders at the Extraordinary General Meeting of the Company held on 18 September The Share Purchase Mandate was last renewed at the Extraordinary General Meeting of the Company held on 28 April China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

67 Directors report Audit Committee The members of the Audit Committee during the year and at the date of this report are: Ang Swee Tian (Chairman), non-executive, independent director Zhao Shousen (Vice-Chairman), non-executive, non-independent director Wang Kai Yuen, non-executive, independent director Liu Fuchun, non-executive, independent director Alan Haywood, non-executive, non-independent director The Audit Committee performs the functions specified in Section 201B of the Act, the SGX Listing Manual and the Code of Corporate Governance. The Audit Committee has held four meetings since the last directors report. In performing its functions, the Audit Committee met with the Company s external and internal auditors to discuss the scope of their work, the results of their examination and evaluation of the Company s internal accounting control system. The Audit Committee also reviewed the following: assistance provided by the Company s officers to the internal and external auditors; quarterly financial information and annual financial statements of the Group and the Company prior to their submission to the directors of the Company for adoption; and interested person transactions (as defined in Chapter 9 of the SGX Listing Manual). The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees. The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company. In appointing our auditors for the Company, subsidiaries and significant associated companies, we have complied with Rules 712 and 715 of the SGX Listing Manual. The auditors, KPMG LLP, have indicated their willingness to accept re-appointment. On behalf of the Board of Directors Wang Kai Yuen Deputy Chairman Meng Fanqiu Chief Executive Officer/Executive Director 14 March 2012 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 63

68 Statement by Directors In our opinion: (a) (b) the financial statements set out on pages 66 to 106 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2011 and the results, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. The Board of Directors has, on the date of this statement, authorised these financial statements for issue. On behalf of the Board of Directors Wang Kai Yuen Deputy Chairman Meng Fanqiu Chief Executive Officer/Executive Director 14 March China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

69 Independent auditors report Members of the Company China Aviation Oil (Singapore) Corporation Ltd Report on the financial statements We have audited the accompanying financial statements of China Aviation Oil (Singapore) Corporation Ltd (the Company) and its subsidiary (the Group), which comprise the statement of financial position of the Group and the Company as at 31 December 2011, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory note, as set out on pages 66 to 106. Management s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 judgement, 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 auditor considers internal control relevant to the entity s preparation of the financial statements that give a true and fair view 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 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. Opinion In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2011 and the results, changes in equity and cash flows of the Group for the year ended on that date. Report on other legal and regulatory requirements In our opinion, the accounting and other records required by the Act to be kept by the Company and by the subsidiary incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. KPMG LLP Public Accountants and Certified Public Accountants Singapore 14 March 2012 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 65

70 Statement of financial position As at 31 December 2011 Group Company Note US$ 000 US$ 000 US$ 000 US$ 000 Restated Restated Non-current assets Property, plant and equipment 4 8,568 8,777 8,568 8,777 Intangible assets Subsidiary 6 Associates 7 216, ,175 81,236 81,236 Deferred tax assets 8 3,980 3,980 3,980 3, , ,036 94,027 94,097 Current assets Inventories 9 38, ,230 38, ,230 Trade and other receivables , , , ,642 Cash and cash equivalents 11 88,065 57,988 88,063 57, , , , ,852 Total assets 1,194, ,896 1,058, ,949 Equity attributable to owners of the parent Share capital , , , ,573 Reserves , ,658 56,597 24,574 Total equity 401, , , ,147 Non-current liabilities Deferred tax liabilities 8 6,282 4,858 Current liabilities Trade and other payables , , , ,278 Loans and borrowings 15 30,000 30,524 30,000 30, , , , ,802 Total liabilities 792, , , ,802 Total equity and liabilities 1,194, ,896 1,058, ,949 The accompanying notes form an integral part of these financial statements. 66 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

71 Consolidated income statement Year ended 31 December 2011 Note US$ 000 US$ 000 Revenue 18 9,011,978 5,452,639 Cost of sales (8,972,012) (5,422,905) Gross profit 39,966 29,734 Other income 19 2, Administrative expenses (7,598) (9,456) Other operating expenses (6,132) (1,475) Results from operating activities 28,445 19,441 Finance costs 20 (2,757) (1,371) Share of profits of associates (net of income tax) 40,232 37,643 Profit before income tax 65,920 55,713 Income tax expense 21 (2,519) (1,004) Profit for the year 19 63,401 54,709 Attributable to: Owners of the Company 63,401 54,709 Earnings per share: Basic earnings per share (cents) Diluted earnings per share (cents) The accompanying notes form an integral part of these financial statements. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 67

72 Consolidated statement of comprehensive income Year ended 31 December US$ 000 US$ 000 Profit for the year 63,401 54,709 Other comprehensive income Translation differences relating to financial statements of foreign associates 5,837 5,128 Other comprehensive income for the year, net of income tax 5,837 5,128 Total comprehensive income for the year 69,238 59,837 Attributable to: Owners of the Company 69,238 59,837 The accompanying notes form an integral part of these financial statements. 68 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

73 Consolidated statement of changes in equity Year ended 31 December 2011 Note Share Foreign currency translation Statutory Reserve for own Share option Accumulated Total capital reserve reserve shares reserve profits equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January ,573 12,175 7,377 (721) 75, ,735 Total comprehensive income for the year Profit for the year 54,709 54,709 Other comprehensive income Translation differences relating to financial statements of foreign associates 5,128 5,128 Total other comprehensive income 5,128 5,128 Total comprehensive income for the year 5,128 54,709 59,837 Contributions by and distributions to owners Share of associates accumulated profits transferred to statutory reserve 449 (449) Own shares acquired (3,185) (3,185) Dividends to equity holders 13 (21,156) (21,156) Total transactions with owners 449 (3,185) (21,605) (24,341) At 31 December ,573 17,303 7,826 (3,906) 108, ,231 The accompanying notes form an integral part of these financial statements. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 69

74 Consolidated statement of changes in equity Year ended 31 December 2011 Note Share Foreign currency translation Statutory Reserve for own Share option Accumulated Total capital reserve reserve shares reserve profits equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January ,573 17,303 7,826 (3,906) 108, ,231 Total comprehensive income for the year Profit for the year 63,401 63,401 Other comprehensive income Translation differences relating to financial statements of foreign associates 5,837 5,837 Total other comprehensive income 5,837 5,837 Total comprehensive income for the year 5,837 63,401 69,238 Contributions by and distributions to owners Share of associates accumulated profits transferred to statutory reserve 340 (340) Own shares acquired (1,576) (1,576) Dividends to equity holders 13 (11,612) (11,612) Share-based payment transactions Total transactions with owners 340 (1,576) 54 (11,952) (13,134) At 31 December ,573 23,140 8,166 (5,482) , ,335 The accompanying notes form an integral part of these financial statements. 70 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

75 Consolidated statement of cash flows Year ended 31 December US$ 000 US$ 000 Restated Cash flows from operating activities Profit for the year 63,401 54,709 Adjustments for: Depreciation of property, plant and equipment Amortisation of intangible assets Gain on sale of property, plant and equipment (33) Property, plant and equipment written off 24 Allowance for impairment loss on doubtful debts 4,276 Share-based payment 54 Share of profits of associates (net of tax) (40,232) (37,643) Income tax expense 2,519 1,004 Interest income (270) (605) Interest expense 1,080 Unrealised exchange differences (228) (38) 31,216 17,866 Change in inventories 116,017 (116,624) Change in trade and other receivables (296,393) (161,561) Change in trade and other payables 175, ,141 Cash generated from/(used in) operating activities 26,597 (132,178) Income tax paid (1,095) (111) Net cash from/(used in) operating activities 25,502 (132,289) Cash flows from investing activities Proceed from disposal of property, plant and equipment 85 Interest received Acquisition of property, plant and equipment (410) (1,000) Acquisition of intangible assets (191) (93) Deposit for acquisition of associate (1,505) Dividends from associate 20,969 2,235 Net cash from investing activities 19,132 1,864 Cash flows from financing activities Interest paid (1,073) Proceeds from loans and borrowings 508,887 30,524 Repayment of loans and borrowings (509,411) Repurchase of own shares (1,576) (3,185) Dividends paid (11,612) (21,156) Net cash (used in)/from financing activities (14,785) 6,183 Net increase/(decrease) in cash and cash equivalents 29,849 (124,242) Cash and cash equivalents at 1 January 57, ,192 Effect of exchange rate fluctuations on cash held Cash and cash equivalents at 31 December 88,065 57,988 The accompanying notes form an integral part of these financial statements. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 71

76 notes to the financial statements Year ended 31 December 2011 These notes form an integral part of the financial statements. The financial statements were authorised for issue by the Board of Directors on 14 March Domicile and activities China Aviation Oil (Singapore) Corporation Ltd (the Company ) is a company incorporated in the Republic of Singapore. The address of the Company s registered office is 8 Temasek Boulevard, #31-02 Suntec Tower Three, Singapore The financial statements of the Company as at and for the year ended 31 December 2011 comprise the Company, its subsidiary and the Group s interests in associates (together referred to as the Group and individually as Group entities ). The principal activities of the Company are those relating to trading in aviation oil and petroleum products, and investment holding. The principal activity of the subsidiary is set out in note 6 below. The immediate and ultimate holding company during the financial year was China National Aviation Fuel Group Corporation (CNAF), a company incorporated in the People s Republic of China (PRC). 2 Basis of preparation 2.1 Statement of compliance The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS). 2.2 Basis of measurement The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which are measured at fair value. 2.3 Functional and presentation currency The financial statements are presented in United States (US) dollars which is the Company s functional currency. All financial information presented in US dollars has been rounded to the nearest thousand, unless otherwise stated. 2.4 Use of estimates and judgements The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements and in arriving at estimates with a significant risk of resulting in a material adjustment in the following year are discussed in note China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

77 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Basis of preparation (Cont d) 2.5 Changes in accounting policies Identification of related party relationships and related party disclosures From 1 January 2011, the Group has applied the revised FRS 24 Related Party Disclosures (2010) to identify parties that are related to the Group and to determine the disclosures to be made on transactions and outstanding balances, including commitments, between the Group and its related parties. FRS 24 (2010) improved the definition of a related party in order to eliminate inconsistencies and ensure symmetrical identification of relationships between two parties. The adoption of FRS 24 (2010) did not result in additional parties being identified as related to the Group. The adoption of FRS 24 (2010) affects only the disclosures made in the financial statements. There is no financial effect on the results and financial position of the Group for the current and previous financial years. Accordingly, the adoption of FRS 24 (2010) has no impact on earnings per share. 3 Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by the Group entities, except as explained in note 2.5, which addresses changes in accounting policies. 3.1 Basis of consolidation Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree s employees (acquiree s awards) and relate to past services, then all or a portion of the amount of the acquirer s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree s awards and the extent to which the replacement awards relate to past and/or future service. Subsidiaries Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 73

78 notes to the financial statements Year ended 31 December Significant accounting policies (Cont d) 3.1 Basis of consolidation (Cont d) Investment in associates Associates are those entities in which the Group has significant influence, but not control, over their financial and operating policies of these entities. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Investment in associates are accounted for using the equity method and are recognised initially at cost. The cost of the investments includes transaction costs. The consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted investees with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds its interest in an associate, the carrying amount of that interest, including any longterm investments, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Jointly controlled operations A jointly controlled operation is a joint venture carried on by each venturer using its own assets in pursuit of the joint operations. The consolidated financial statements include the assets that the Group controls and the liabilities that it incurs in the course of pursuing the joint operation, and the expenses that the Group incurs and its share of the income it earns from the joint operation. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Accounting for subsidiary and associates Investments in subsidiary and associates are stated in the Company s statement of financial position at cost less accumulated impairment losses. 3.2 Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to US dollars or the Chinese renminbi, which are the functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are translated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using exchange rate at the date of the transaction. Foreign currency differences arising on translation are recognised in profit or loss. 74 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

79 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Significant accounting policies (Cont d) 3.2 Foreign currencies (Cont d) Foreign operations The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to US dollars at exchange rates at the end of the reporting date. The income and expenses of foreign operations are translated to US dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the closing rate. For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used. Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign currency translation reserve is transferred to profit or loss as part of the gain or loss on disposal. 3.3 Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognised net within other income/other expenses in profit or loss. The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. The estimated useful lives for the current and comparative periods are as follows: Current period Comparative period Leasehold properties 50 years 50 years Motor vehicles 8 years 10 years Furniture and fittings 8 years 5 years Office equipment 4-8 years 5 years Renovations 5 years 5 years Computers 4-5 years 3 years During the year, the Group reviewed the useful lives of each category of property, plant and equipment and revised the useful lives of the respective categories of property, plant and equipment in order to better reflect their expected rate of utilisation. The effect of the revision in useful lives resulted in an increase in depreciation expense of US$80,000 in the current year. Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period, and adjusted as appropriate. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 75

80 notes to the financial statements Year ended 31 December Significant accounting policies (Cont d) 3.4 Intangible assets Goodwill Goodwill represents the excess of: the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree, over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investee. Other intangible assets Other intangible assets that are acquired by the Group, and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. Other intangible assets are amortised in profit or loss on a straight-line basis over the estimated useful lives of 3 years, from the date on which they are available for use. 3.5 Financial instruments Non-derivative financial instruments The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Company has the following non-derivative financial assets: loans and receivables, and cash and cash equivalents. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Cash and cash equivalents Cash and cash equivalents comprise cash balances and bank deposits with original maturities of three months or less. For the purpose of the statement of cash flows, pledged deposits are excluded whilst bank overdrafts that are repayable on demand and that form an integral part of the Group s cash management are included in cash and cash equivalents. 76 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

81 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Significant accounting policies (Cont d) 3.5 Financial instruments (Cont d) Non-derivative financial liabilities Financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired. The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. Other financial liabilities comprise loans and borrowings, and trade and other payables. Derivative financial instruments The Group holds oil commodity derivatives that are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred. These derivative financial instruments are not designated in a hedge relationship, all changes in its fair value are recognised immediately in profit or loss. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. When share capital recognised as equity is repurchased, the amount of the consideration paid which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserve for own share account. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in nondistributable capital reserve. 3.6 Impairment Financial assets (including receivables) A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together loans and receivables with similar risk characteristics. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 77

82 notes to the financial statements Year ended 31 December Significant accounting policies (Cont d) 3.6 Impairment (Cont d) Financial assets (including receivables) (Cont d) In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss. Non-financial assets The carrying amounts of the Group s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cashgenerating unit ( CGU ) exceeds its estimated recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. The Group s corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amounts of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would be determined, net of depreciation or amortisation, if no impairment loss had been recognised. Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired. 3.7 Inventories Inventories held for trading purposes are stated at fair value less costs to sell and any changes in fair value less costs to sell are recognised in profit or loss in the period of change. Inventories held by associates, for sale to customers, are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average basis and includes expenditures incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. 78 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

83 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Significant accounting policies (Cont d) 3.8 Employee benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. Share-based payment transactions The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and nonmarket vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. 3.9 Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost Revenue recognition Sale of goods Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. Trading of paper swaps Gains or losses on oil commodity derivatives which are classified as held for trading purposes are recognised in profit or loss on a net basis. Interest income Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income Dividend income is recognised on the date that the Group s right to receive payment is established. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 79

84 notes to the financial statements Year ended 31 December Significant accounting policies (Cont d) 3.11 Operating leases Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease Finance costs Finance costs comprise bank charges and interest expenses on loan and borrowings. Interest expenses are recognised in profit or loss using the effective interest method Income tax Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that they relate to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or recoverable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following: temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future; and taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. In the ordinary course of business, there are many transactions and calculations for which the ultimate tax treatment is uncertain. Therefore, the Company recognises tax liabilities based on estimates of whether additional taxes and interest will be due. These tax liabilities are recognised when the Company believes that certain positions may not be fully sustained upon review by tax authorities, despite the Company s belief that its tax return positions are supportable. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of multifaceted judgements about future events. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact tax expense in the period that such a determination is made Earnings per share The Group presents basic and diluted earnings per share ( EPS ) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to directors and employees. 80 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

85 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Significant accounting policies (Cont d) 3.15 Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group s other components. All operating segments operating results are reviewed regularly by the Group s CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company s headquarters), head office expenses, and income tax assets and liabilities. Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill. Segment total assets are the total assets utilised by the respective operating segment in its operations New standards and interpretations not adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2011, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Group and the Company, except for the amendments to FRS 107 Financial Instruments: Disclosures Transfers of Financial Assets which will become mandatory for the Group and the Company s financial statements for The adoption of these amendments would result in additional disclosures in the financial statements with respect to transferred financial assets that are not derecognised in their entirety, and transferred financial assets that are derecognised in their entirety but for which the entity retains continuing involvement. The adoption of these amendments would only affect the disclosures made in the financial statements. There will be no effect on the results and financial position of the Group and the Company. The Group does not plan to adopt these amendments early. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 81

86 notes to the financial statements Year ended 31 December Property, plant and equipment Group and Company Leasehold properties Motor vehicles Furniture and fittings Office equipment Renovations Computers Total US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Cost At 1 January , ,664 Additions ,151 Disposals (216) (61) (25) (549) (43) (894) At 31 December , ,921 Additions At 31 December , ,276 Accumulated depreciation At 1 January , ,603 Depreciation for the year Disposals (162) (60) (25) (528) (43) (818) At 31 December , ,144 Depreciation for the year At 31 December , ,708 Carrying amounts At 1 January , ,061 At 31 December , ,777 At 31 December , ,568 The following are properties held by the Group and Company: Location Description/ Uses of property Land area/ Built-up area (square meters) Leasehold term 8 Temasek Boulevard #31-01 Suntec Tower Three Singapore Office years from 1 March Temasek Boulevard #31-02 Suntec Tower Three Singapore Office years from 1 March China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

87 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Intangible assets Group and Company US$ 000 Cost At 1 January Additions 93 At 31 December Additions 191 At 31 December Accumulated amortisation At 1 January Amortisation for the year 89 At 31 December Amortisation for the year 52 At 31 December Carrying amounts At 1 January At 31 December At 31 December The intangible assets of the Group and the Company comprise purchased software systems. 6 Subsidiary Company US$ 000 US$ 000 Unquoted equity investment, at cost Details of the subsidiary are as follows: Country of Ownership Name of subsidiary incorporation % % CAOT Pte Ltd (1) (CAOT) Singapore (1) Audited by KPMG LLP, Singapore. As of 31 December 2011, no activities were carried out by CAOT. The above subsidiary is not considered a significant subsidiary of the Group. For this purpose, a subsidiary is considered significant as defined under the Singapore Exchange Limited Listing Manual if its net tangible assets represent 20% or more of the Group s consolidated net tangible assets, or if its pre-tax profit accounts for 20% or more of the Group s consolidated pre-tax profit. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 83

88 notes to the financial statements Year ended 31 December Associates Group Company US$ 000 US$ 000 US$ 000 US$ 000 Investments in associates 216, ,175 82,625 82,625 Impairment losses (1,389) (1,389) 216, ,175 81,236 81,236 In 2011, dividends declared by associates amounted to US$20,558,177 (2010: US$2,531,695) of which US$20,558,177 (2010: US$2,235,295) was received during the financial year. Details of the associates are as follows: Country of Ownership Name of associate incorporation % % # Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd (SPIA) People s Republic of China 33 China Aviation Oil Xinyuan Petrochemicals Co. Ltd (Xinyuan) People s Republic of China 39 China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd (TSN-PEKCL) People s Republic of China # Audited by Crowe Horwath China Certified Public Accountants, LLP Shanghai Branch, a member of the Chinese Institute of Certified Public Accountants, for statutory audit purposes. Audited by a member firm of KPMG International for consolidation Not considered a significant associate of the Group. For this purpose, an associate is considered significant as defined under the Singapore Exchange Limited Listing Manual if the Group s share of its net tangible assets represents 20% or more of the Group s consolidated net tangible assets, or if the Group s share of its pre-tax profit accounts for 20% or more of the Group s consolidated pre-tax profit. Summary financial information of associates not adjusted for the percentage ownership held by the Group are as follows: US$ 000 US$ 000 Assets and liabilities Non-current assets 88,110 95,269 Current assets 781, ,825 Total assets 869, ,094 Current and total liabilities (390,159) (326,036) Results Revenue 3,544,846 2,333,165 Expenses (3,421,118) (2,216,985) Profit after taxation 123, ,180 Group s share of associates contingent liabilities (refer to Note 25) 18,365 17, China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

89 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Deferred tax assets and liabilities Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Group Company US$ 000 US$ 000 US$ 000 US$ 000 Deferred tax asset Tax losses carry-forward 3,980 3,980 3,980 3,980 Deferred tax liabilities Investments in associates (6,282) (4,858) Movements in temporary differences during the year are as follows: At 1 January 2010 Recognised in profit or loss At 31 December 2010 Recognised in profit or loss At 31 December 2010 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Group Investments in associates 4,858 4,858 1,424 6,282 Tax losses carry-forward (3,980) (3,980) (3,980) ,424 2,302 Company Tax losses carry-forward (3,980) (3,980) (3,980) Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Group Company US$ 000 US$ 000 US$ 000 US$ 000 Other temporary differences Tax losses carry-forward 215, , , , , , , ,846 The tax losses carry-forward relate to losses arising from prior years during which the Company was granted concessionary rate of tax under the Global Trader Programme (GTP). In accordance with Section 37B of the Income Tax Act, the utilisation of these tax losses is adjusted after considering the tax rate applicable for the Company s chargeable income prior to set-off. Tax losses and other temporary differences do not expire under current tax legislations. Deferred tax assets have not been recognised in respect of these items due to the uncertainty of the availability of future taxable profit against which the Group can utilise the benefits therefrom. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 85

90 notes to the financial statements Year ended 31 December Inventories Group and Company US$ 000 US$ 000 Trading inventories at fair value less costs to sell 38, ,230 In the current year, trading inventories recognised in cost of sales amounted to US$8,758,477,000 (2010: US$5,343,835,000) for the Group and the Company. 10 Trade and other receivables Group and Company US$ 000 US$ 000 Restated Trade receivables 296, ,285 Other receivables 3,416 1,085 Deposits 18,776 9,035 Amounts due from: - immediate and ultimate holding company (non-trade) associate (non-trade) related corporations (trade) 344, ,104 - related corporation for impairment loss on a corporate shareholder (trade) 161,865 85, , ,006 Total receivables 825, ,411 Less: Allowance for impairment loss on doubtful debts (4,276) 820, ,411 Derivatives financial assets-oil commodity derivatives 15,516 12,058 Loans and receivables 836, ,469 Prepayments 2, , ,642 Transactions with related parties are unsecured and priced on terms agreed between the parties. There is no allowance for impairment loss arising from the outstanding balances. The non-trade amounts due from the immediate and ultimate holding company, and an associate were unsecured and interestfree, and were repaid during the financial year. The Group s primary exposure to credit risk arises through its trade receivables. The Group s trade receivables are due mainly from customers in the jet fuel industry, which are pre-dominantly located in the People s Republic of China. The Group and the Company s exposure to credit and currency risks, and impairment losses related to trade and other receivables, are disclosed in note China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

91 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Cash and cash equivalents Group Company US$ 000 US$ 000 US$ 000 US$ 000 Cash at bank and in hand 26,154 5,875 26,152 5,867 Deposits with financial institutions 61,911 52,113 61,911 52,113 Cash and cash equivalents in the statement of cash flows 88,065 57,988 88,063 57,980 The weighted average effective interest rates per annum relating to deposits with financial institutions at the balance sheet date are as disclosed below (Interest rates reprice at intervals of one, three or six months): Group and Company Interest rate Carrying amount Interest rate Carrying amount % US$ 000 % US$ 000 US$ deposits , ,962 RMB deposits , ,151 61,911 52,113 The Group and the Company s exposure to foreign currency risk and interest rate risk are disclosed in note Share capital Company Number Number of shares of shares ( 000) ( 000) Fully paid ordinary shares, with no par value: At 1 January and 31 December 722, ,821 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company s residual assets. Capital management The Company defines capital as share capital and reserves. The Board s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Group defines as net operating income divided by total shareholders equity. The Board also monitors the level of dividends declared to ordinary shareholders. From time to time, the Group purchases its own shares on the market; the timing of these purchases depends on market prices. Primarily, the shares are intended to be used for issuing shares under the Group s share option programme. The purchase price (excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses) to be paid for the shares is determined by the Directors or such authorised personnel as appointed by the Board of Directors for the purposes of effecting purchases or acquisitions of shares by the Company under the Share Purchase Mandate. There were no changes in the Group s approach to capital management during the year. The Company and its subsidiary are not subject to externally imposed capital requirements. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 87

92 notes to the financial statements Year ended 31 December Reserves Group Company US$ 000 US$ 000 US$ 000 US$ 000 Foreign currency translation reserve 23,140 17,303 Statutory reserve 8,166 7,826 Reserve for own shares (5,482) (3,906) (5,482) (3,906) Share option reserve Accumulated profits 159, ,435 62,025 28, , ,658 56,597 24,574 (a) (b) The foreign currency translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company. The associates of the Group established in the People s Republic of China ( PRC ) follow the accounting principles and relevant financial regulations of the PRC applicable to enterprises established in the PRC (PRC GAAP) in the preparation of the accounting records and its financial statements. Pursuant to accounting regulations for foreign-invested PRC enterprises and the PRC Company Law, the associates are required to appropriate 10% of the profit arrived at in accordance with PRC GAAP for each year to a statutory reserve. The profit arrived at must be used to set off against any accumulated losses. The appropriation to statutory reserve, after offsetting against any accumulated losses, must be made before the distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends. During the current financial year, SPIA did not appropriate any profit to the statutory reserve as the statutory reserve of SPIA has reached 50% of its registered capital. (c) The reserve for the Company s own shares comprises the cost of the Company s shares held by the Group. At 31 December 2011, the Group held 6,000,000 (2010: 4,668,000) of the Company s shares. (d) (e) The share option reserve comprise the cumulative value of services received from directors and employees for the issue of the share options. The following (one-tier tax exempt) dividends were declared and paid by the Group and Company: Group and Company US$ 000 US$ 000 Final exempt dividends paid in respect of the previous financial year of S$0.02 (2010: S$0.02) per share 11,612 10,184 Interim exempt dividends paid in respect of the current financial year of S$ Nil (2010: S$0.02) per share 10,972 11,612 21,156 (f) The Directors have proposed a final (one-tier tax exempt) ordinary dividend of S$0.02 (2010: S$0.02) per share, amounting to US$11,039,000 (2010: US$10,184,000). The dividends have not been provided for. 88 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

93 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Trade and other payables Group Company US$ 000 US$ 000 US$ 000 US$ 000 Restated Restated Trade payables 520, , , ,668 Accrued operating expenses 13,288 14,592 13,283 14,587 Other payables 196 1, ,785 Amount due to: - immediate and ultimate holding company (non-trade) related corporation of a corporate shareholder (trade) 205,894 79, ,894 79,296 Derivatives financial liabilities oil commodity derivatives 16,854 14,942 16,854 14, , , , ,278 Amount due to immediate and ultimate holding company is unsecured, interest-free, and is repayable on demand. The Group and the Company s exposures to foreign currency risk are described in note Loans and borrowings This note provides information about the contractual terms of the Group s interest-bearing loans and borrowings, which are measured at amortised cost. For more information about the Group s exposure to interest rate, foreign currency and liquidity risk, see note 17. Group and Company US$ 000 US$ 000 Current liabilities Trust receipts unsecured 30,524 Short-term loan unsecured 30,000 30,000 30,524 Terms and debt repayment schedule Terms and conditions of outstanding loans and borrowings are as follows: Currency Nominal Year of Face Carrying interest rate maturity value amount % U$ 000 U$ Short-term loan USD ,000 30, Trust receipts USD ,524 30,524 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 89

94 notes to the financial statements Year ended 31 December Share-based payment arrangements On 9 November 2001, the Company established a share-based payment programme that entitles directors and employees to purchase shares in the Company. On 9 October 2011, a grant on similar terms (except for exercise price and option period) was offered to directors and employees subject to approval by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) of the People s Republic of China (PRC). Subsequently, SASAC granted its approval for the offer and grant of options on 8 November In accordance with this programme, holders of vested options are entitled to purchase shares at the exercise price determined at the date of grant. All options are to be settled by delivery of shares. Information on the share-based payment programme are as follows: (i) (ii) The exercise price of the options is set at S$0.91 per share. The options granted to directors and employees (other than to senior executives of the Company who are secondees of the parent company, China National Aviation Fuel Group Corporation ( CNAF Secondees ) are subject to the following vesting conditions: (a) (b) (c) Up to a maximum of one-third of the number of option shares shall be exercisable in the period from the day after the second anniversary of the Offer Date to the third anniversary of the Offer Date; Up to a maximum of one-third of the number of option shares and any number of option shares in respect of which the option has not been exercised under paragraph (a), shall be exercisable in the period from the day after the third anniversary of the Offer Date to the fourth anniversary of the Offer Date; and The remaining number of option shares and any number of option shares in respect of which the option has not been exercised under paragraphs (ii) (a) and (ii) (b), shall be exercisable in the period from the day after the fourth anniversary of the Offer Date to the date immediately preceding the fifth anniversary of the Offer Date. (iii) The options granted to the CNAF Secondees are subject to the following vesting conditions: (a) (b) (c) Up to a maximum of one-third of 80% of the number of option shares shall be exercisable in the period from the day after the second anniversary of the Offer Date to the third anniversary of the Offer Date; Up to a maximum of one-third of 80% of the number of option shares, and any number of option shares in respect of which the option has not been exercised under paragraph (iii) (a), shall be exercisable in the period from the day after the third anniversary of the Offer Date to the fourth anniversary of the Offer Date; and The remaining number of option shares not exceeding 80% of the total number of option shares, and any number of option shares in respect of which the option has not been exercised under paragraphs (iii) (a) and (iii) (b), shall be exercisable in the period from the day after the fourth anniversary of the Offer Date to the date immediately preceding the fifth anniversary of the Offer Date. The option in respect of the remaining 20% of the option shares, together with any option shares in respect of which the option has not been exercised under paragraphs (iii) (a), (iii) (b) and (iii) (c) above, shall be exercisable only after the end of the secondment term of the CNAF Secondees. (iv) In addition, the option may only be exercised if, at the relevant date of exercise, the following conditions have been met: (a) (b) (c) service on the Company s board of directors and/or employment service with the Company over the vesting period; achievement of pre-determined target set for key performance indicators on (i) market capitalisation, (ii) net profit after tax, and (iii) return on equity; and achievement of individual s performance targets set by the Company or by its immediate holding company. (v) The options granted expire after five or ten years from the date of grant. 90 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

95 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Share-based payment arrangements (Cont d) The number of share options and their related weighted average exercise prices are as follows: 2011 Weighted average exercise price No. of options ( 000) At 1 January Granted during the year S$0.91 5, December 5,860 The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimated fair value of the services is measured based on the Black-Scholes-Merton Model. The expected life used in the model has been adjusted, based on management s best estimate, for the effects of non-transferability exercise restrictions and behavioural considerations. Fair value of share options and assumptions are set out below: Date of grant options 9 October 2011 Fair value of measured date S$0.23 Share price S$0.95 Exercise price S$0.91 Expected volatility 44.46% Expected dividend rate 2.53% Risk-free interest rate 2.50% The expected volatility is based on the historical volatility (calculated based on the weighted average expected life of the share options), adjusted for any expected changes to future volatility due to publicly available information. The market condition associated with the share options granted are factored in the measurement of fair value. Service conditions and non-market performance conditions are not taken into account in the measurement of the fair value of services to be received at the grant date. 17 Financial instruments Credit risk Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: Group Company Carrying amount Carrying amount US$ 000 US$ 000 US$ 000 US$ 000 Loans and receivables 836, , , ,469 Cash and cash equivalents 88,065 57,988 88,063 57, , , , ,449 The Group s maximum exposure to credit risk for loans and receivables are predominantly located in the People s Republic of China. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 91

96 notes to the financial statements Year ended 31 December Financial instruments (Cont d) Credit risk (Cont d) Impairment losses The ageing of trade receivables (including trade amounts due from related corporations and related corporation of a corporate shareholder) at the reporting date is: Group and Company Gross Impairment losses Gross Impairment losses US$ 000 US$ 000 US$ 000 US$ 000 Not past due 802, ,816 Based on historical default rates, the Group believes that no impairment allowance is necessary in respect of trade receivables not past due. These receivables are arising mainly from customers and related parties that have a good repayment record. Liquidity risk The following are the expected contractual undiscounted cash outflows of financial liabilities, including interest payments and excluding the impact of netting agreements: Group 2011 Carrying amount Cash flows Contractual cash flows Within 1 year Within 2 to 5 years More than 5 years US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Non-derivative financial liabilities Trade and other payables 739,790 (739,790) (739,790) Loans and borrowings 30,000 (30,044) (30,044) Derivative financial liabilities Oil commodity derivatives 16,854* (16,854)* (16,854)* 786,644 (786,688) (786,688) 2010 Non-derivative financial liabilities Trade and other payables 562,341 (562,341) (562,341) Loans and borrowings 30,524 (42,819) (42,819) Derivative financial liabilities Oil commodity derivatives - restated 14,942* (14,942)* (14,942)* 607,807 (620,102) (620,102) 92 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

97 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Financial instruments (Cont d) Liquidity risk (Cont d) Company 2011 Carrying amount Cash flows Contractual cash flows Within 1 year Within 2 to 5 years More than 5 years US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Non-derivative financial liabilities Trade and other payables 739,785 (739,785) (739,785) Loans and borrowings 30,000 (30,044) (30,044) Derivative financial liabilities Oil commodity derivatives 16,854* (16,854)* (16,854)* 786,639 (786,683) (786,683) 2010 Non-derivative financial liabilities Trade and other payables 562,336 (562,336) (562,336) Loans and borrowings 30,524 (42,819) (42,819) Derivative financial liabilities Oil commodity derivatives - restated 14,942* (14,942)* (14,942)* 607,802 (620,097) (620,097) * The carrying amount and the contractual cash flows relate to the negative fair value of the derivative financial instruments. Currency risk Exposure to currency risk The Group s and Company s exposures to foreign currency risk were as follows based on notional amounts: Group 31 December December 2010 Singapore Singapore dollar Renminbi dollar Renminbi US$ 000 US$ 000 US$ 000 US$ 000 Trade and other receivables Cash and cash equivalents 494 3, ,153 Trade and other payables (4,736) (282) (6,552) (144) (3,427) 3,004 (5,701) 2,516 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 93

98 notes to the financial statements Year ended 31 December Financial instruments (Cont d) Currency risk (Cont d) Exposure to currency risk (Cont d) Company 31 December December 2010 Singapore Singapore dollar Renminbi dollar Renminbi US$ 000 US$ 000 US$ 000 US$ 000 Trade and other receivables Cash and cash equivalents 491 3, ,153 Trade and other payables (4,730) (282) (6,547) (144) (3,424) 3,004 (5,704) 2,516 Sensitivity analysis A 10% strengthening of the US dollar against the following currencies at 31 December would increase/(decrease) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Group and Company Profit or loss US$ 000 US$ 000 Singapore dollar Renminbi (300) (252) A 10% weakening of the US dollar against the above currencies at 31 December would have an equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. Interest rate risk Profile At the reporting date, the interest rate profile of the interest-bearing financial instruments was: Group and Company Carrying amount US$ 000 US$ 000 Fixed rate instruments Financial assets 88,065 57,988 Financial liabilities (30,000) (30,524) 58,065 27, China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

99 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Financial instruments (Cont d) Interest rate risk (Cont d) Fair value sensitivity analysis The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore a change in interest rates at the reporting date would not affect profit or loss. Fair values Fair values versus carrying amounts The carrying amounts of the Company s financial instruments carried at cost or amortised cost approximate their fair values as at 31 December 2011 and 31 December 2010 because of the short period to maturity. Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Group and Company Level 1 Level 2 Level 3 Total US$ 000 US$ 000 US$ 000 US$ December 2011 Derivative financial assets 15,516 15,516 Derivative financial liabilities (16,854) (16,854) (1,338) (1,338) 31 December restated Derivative financial assets 12,058 12,058 Derivative financial liabilities (14,942) (14,942) (2,884) (2,884) Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 95

100 notes to the financial statements Year ended 31 December Revenue Group US$ 000 US$ 000 Revenue from middle distillates 8,630,797 5,211,001 Revenue from other oil products 381, ,638 9,011,978 5,452,639 Included in revenue are net loss of US$16,177,000 (2010: net gain of US$18,650,000) recognised in relation to derivative financial instruments. 19 Profit for the year The following items have been included in arriving at profit for the year: Group US$ 000 US$ 000 Other income Gain on sale of property, plant and equipment 33 Interest income Foreign exchange gain 1,939 2, Foreign exchange loss (453) Audit fees paid and payable to: - auditor of the Company (247) (238) - other auditors (127) (120) Non-audit fees paid and payable to auditors of the Company (173) (16) Property, plant and equipment written off (24) Allowance for impairment loss on doubtful debts (4,276) Operating lease expense (14,400) (4,110) Staff costs (including traders commission) (10,217) (9,681) Contributions to defined contribution plans, included in staff costs (283) (211) Share-based payment, included in staff costs (54) 20 Finance costs Group US$ 000 US$ 000 Bank charges 1,677 1,371 Interest expense 1,080 2,757 1, China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

101 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Income tax expense Group US$ 000 US$ 000 Deferred tax expense Origination and reversal of temporary differences 1,424 4,858 Recognition of previously unrecognised tax losses (3,980) 1, Withholding tax expense 1, Total tax expense 2,519 1,004 Group Reconciliation of effective tax rate US$ 000 US$ 000 Profit before income tax 65,920 55,713 Income tax using Singapore tax rate of 17% (2010: 17%) 11,206 9,471 Tax effects of revenue at concessionary tax rate (3,055) (1,547) Effects of results of associates presented net of tax (6,839) (6,399) Other income not subject to tax (6) Expenses not deductible for tax purposes Utilisation of tax losses (1,437) (1,606) Recognition of previously unrecognised tax losses (3,980) Temporary differences arising from investments in associates 1,424 4,858 Withholding tax expense 1, ,519 1,004 The Company was granted concessionary rate of tax under the Global Trader Programme (GTP), which was renewed for a period of 5 years from 1 August 2010 to 31 July Under the GTP, income derived from qualifying trading transactions of approved products by the Company is taxed at the concessionary rate of 5% instead of the normal statutory rate of 17%. This incentive is granted subject to the achievement of certain business volume and other terms and conditions. 22 Earnings per share Basic earnings per share The calculation of basic earnings per share at 31 December 2011 was based on the profit attributable to ordinary shareholders of US$63,401,000 (2010: US$54,709,000), and a weighted average number of ordinary shares outstanding of 716,938,000 (2010: 718,585,000), calculated as follows: Profit attributable to ordinary shareholders US$ 000 US$ 000 Basic and diluted earnings per share is based on: Net profit attributable to ordinary shareholders 63,401 54,709 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 97

102 notes to the financial statements Year ended 31 December Earnings per share (Cont d) Weighted average number of ordinary shares Number Number of shares of shares ( 000) ( 000) Issued ordinary shares at 1 January 718, ,821 Effect of own shares held (1,215) (4,236) Weighted average number of ordinary shares at 31 December 716, ,585 Diluted earnings per share The calculation of diluted earnings per share at 31 December 2011 was based on the profit attributable to ordinary shareholders of US$63,401,000, and a weighted average number of ordinary shares outstanding of 717,805,000, calculated as follows: Weighted average number of ordinary shares (diluted) 2011 Number of shares ( 000) Weighted average number of ordinary shares (basic) 716,938 Effect of share options on issue 867 Weighted average number of ordinary shares (diluted) 717,805 The average market value of the Company s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. Management assessed that earnings per share was not dilutive in Operating segments The Group has three reportable segments, as described below, which are the Group s strategic business units. The strategic business units offer different products and services, and are managed separately. For each of the strategic business units, the Group s CEO reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group s reportable segments: Middle distillates: Jet fuel and gas oil supply and trading Other oil products: Fuel oil and petrochemicals products supply and trading Others: Investments in oil-related assets Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Group s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. 98 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

103 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Operating segments (Cont d) 2011 Middle Other oil distillates products Others Total US$ 000 US$ 000 US$ 000 US$ 000 Revenue 8,630, ,181 9,011,978 Gross profit 38,784 1,182 39,966 Other operating expenses (8,796) (548) (3,770) (13,114) Depreciation and amortisation (616) (616) Foreign exchange gain 1,939 1,939 Interest income Finance costs (2,582) (174) (1) (2,757) Share of profits of associates (net of income tax) 40,232 40,232 Income tax expense (2,519) (2,519) Reportable segment profits/(losses) after income tax 28, ,942 63,401 Reportable segment total assets 946,652 30, ,686 1,194, Revenue 5,211, ,638 5,452,639 Gross profit 30,355 (621) 29,734 Other operating expenses (6,742) (684) (2,604) (10,030) Depreciation and amortisation (448) (448) Foreign exchange loss (453) (453) Interest income Other operating income Finance costs (1,264) (107) (1,371) Share of profits of associates (net of income tax) 37,643 37,643 Income tax expense 3,980 (4,984) (1,004) Reportable segment profits/(losses) after income tax 26,066 (1,412) 30,055 54,709 Reportable segment total assets - restated 723,648 43, , ,896 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 99

104 notes to the financial statements Year ended 31 December Operating segments (Cont d) Geographical segments The People s Republic of China is a major market for trading in aviation oil and petroleum products. The Group also operates in other regions including Singapore. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of the revenue transacted. Segment assets are based on the geographical location of the assets. Geographical information Revenue US$ 000 Non-current assets US$ People s Republic of China 6,651, ,686 Hong Kong 894,557 Singapore 466,438 8,811 Middle East 476,575 Malaysia 190,448 Other regions 332,314 9,011, , People s Republic of China 4,222, ,175 Hong Kong 421,703 Singapore 420,431 8,881 United States of America 194,547 Korea 74,265 Other regions 119,548 5,452, ,056 Major customers Revenue from an associate and related corporations of the Company totalled approximately US$6,154,204,000 (2010: US$3,768,988,000), representing 68% (2010: 69%) of the Group s total revenue. 24 Financial risk management Overview The Company has exposure to the following risks from its use of financial instruments: credit risk liquidity risk interest rate risk foreign currency risk market risk commodity price risk This note presents information about the Company s exposure to each of the above risks, the Company s objectives, policies and processes for measuring and managing risk, and the Company s management of capital. Additional quantitative disclosures are included throughout these financial statements. 100 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

105 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Financial risk management (Cont d) Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Group s risk management framework. The Board has established the Risk Management Committee, which is responsible for developing and monitoring the Group s risk management policies. The committee reports regularly to the Board of Directors on its activities. The Group s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment which all employees understand their roles and obligations. The Risk Management Committee oversees how management monitors compliance with the Group s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group s receivables from its customers and financial assets. The Group has procedures in place to manage credit risk and exposure to such risk is monitored on an ongoing basis. Trade and other receivables The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. This allowance is a specific loss component that relates to individually significant exposures. The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset. Cash and fixed deposits are placed with banks and financial institutions which are regulated. At the balance sheet date, there was no significant concentration of credit risk except for amounts receivable due from 3 (2010: 2) major customers amounting to US$261,848,000 (2010: US$128,725,000) which accounted for 88% (2010: 80%) of the Group s total trade receivables. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. In respect of the Group s associates, there was an amount due from a major customer amounting to US$139,655,000 (2010: US$99,105,000) to an associate, which accounted for 55% (2010: 38%) of the associate s total trade receivables. Except for this receivable, there was no significant concentration of credit risk. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset. The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group s operations and to mitigate the effects of fluctuations in cash flows. Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Group manages its liquidity risk by maintaining adequate lines of credit. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 101

106 notes to the financial statements Year ended 31 December Financial risk management (Cont d) Interest rate risk It is the Group and the Company s policy to obtain the most favourable interest rates available without increasing its foreign currency exposure. Surplus funds are placed with reputable banks to earn interest income. As the Group s and the Company s interest bearing financial assets and liabilities are short term in nature, any future variations in interest rates will not have a material impact on the results of the Group and the Company. Foreign currency risk The Group is exposed to foreign currency risk on sales and purchases that are denominated in currencies other than the respective functional currencies of Group entities. The currency giving rise to this foreign currency risk is primarily the Singapore dollar and the Chinese renminbi. Currently, the Group does not hedge this foreign currency exposure. The Group monitors its foreign currency exposures on an on-going basis and ensures that the net exposure is kept to an acceptable level. The Group is also exposed to currency translation risk on its net investments in foreign operations. Such exposures are reviewed and monitored on a regular basis. Market risk Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Group s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. The Group buys and sells derivatives in order to manage market risk. All such transactions are carried out within the guidelines set by the Risk Management Committee. Commodity price risk The Group s policy is to manage its costs of purchase and sales of jet fuel using commodity paper swaps. The Group enters into commodity paper swaps, in which it agrees to exchange the difference between the fixed and floating oil prices, calculated by reference to an agreed-upon principal quantity, with its counterparties. The commodity paper swaps commit the Group to buy or sell commodities at a pre-determined price with settlement dates that range from one month to three months. Sensitivity analysis A change of 10% in oil forward price at the reporting date would have increased/(decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for Profit or loss 10% 10% increase decrease US$ 000 US$ Oil physical and paper forward contracts 1,800 (1,800) 2010 Oil physical and paper forward contracts (19,314) 19,314 The Group considers holding oil inventory as part of their overall trading strategy. An increase of 10% in the fair value of oil inventory would have increased profit or loss by US$3,821,000 (2010: US$15,423,000). A 10% weakening of the fair value of oil inventory would have an equal but opposite effect on oil inventory. The above sensitivity analysis is hypothetical and should not be predictive of the Group s future performance as the physical inventory volume and derivative positions change daily and are not static. 102 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

107 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Financial risk management (Cont d) Estimation of fair values The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the Group and the Company. Derivative financial instruments The fair value of commodity paper swaps is determined based on price indices. Other financial assets and liabilities The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) approximate their fair values because of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair values. 25 Contingent liabilities Claim of customs duties and value added tax The turnover of SPIA comprises domestic sales and international sales. Domestic sales refer to aviation fuel supplied to airlines for consumption in domestic air lanes which are subject to a value added tax rate (VAT) of 17%. International sales refer to aviation fuel supplied to airlines for consumption in international air lanes which are exempt from VAT. SPIA obtained exemption of VAT from the relevant authorities for international sales generated from 1 July 2001 onwards. International sales recognised prior to 1 July 2001 were subject to VAT at 17%. In addition, SPIA is exempt from the payment of customs duties in respect of aviation fuel imported for international sales. On 29 July 2003, SPIA received a letter of demand from an existing customer which claimed that they should be the beneficiary of the exemption from VAT and customs duty in respect of the international sales from 1999 onwards as they had paid the customs duty and VAT to SPIA during that period. Accordingly, the customer requested the refund of the overcharged customs duties and VAT for the first half of 2003 amounting to RMB42 million (US$5.3 million). On 28 September 2004, SPIA received a legal letter from the customer which claimed that they should be paid for overcharged customs duties and VAT for the period from October 1999 to June 2004 amounting to RMB570 million (US$71.8 million). In the previous and current financial years, SPIA did not receive any claim for overcharged custom duties and VAT from this customer. SPIA s management is of the opinion that the claim made by the customer is invalid. No claims from other customers has been received by the associate. Although an agreement to settle this claim has not been reached as at the end of the current financial year, the accumulated claim indicated by the customer has been substantially reduced. Management of SPIA and the immediate holding company of the Company, CNAF, will continue to negotiate with this customer to reach an amicable settlement of this claim. 26 Operating leases Leases as lessee Non-cancellable operating lease rentals are payable as follows: US$ 000 US$ 000 Within one year 3,531 5,677 Between one and five years ,130 6,041 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 103

108 notes to the financial statements Year ended 31 December Related parties For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Key management personnel compensation Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and monitoring the activities of the Group. The directors of the Company and the executive officers of the Group are considered as key management personnel of the Group. Key management personnel compensation comprises: Group US$ 000 US$ 000 Directors fees Directors remuneration Key executive officers remuneration 2,146 1,207 Share-based payments 20 3,561 2,435 The 2011 variable bonuses of US$997,276 were approved by the Remuneration Committee on 22 February 2012 and payable on 30 March Other related party transactions Other than as disclosed elsewhere in the financial statements, there were the following transactions carried out on terms agreed with related parties: Group US$ 000 US$ 000 Related corporation of a corporate shareholder Sale of jet fuel 1,508, ,781 Sale of gas oil 29,939 14,136 Sale of fuel oil 11,368 Purchase of jet fuel 2,026,562 1,181,724 Purchase of gas oil 8,614 Purchase of fuel oil 20,081 Related corporations Sale of jet fuel 2,736,804 1,812,168 Sale of fuel oil 32,359 Associate Sale of jet fuel 2,706,529 1,680, China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

109 NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December Accounting estimates and judgement in applying accounting policies The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group believes the following critical accounting policies involved the most significant judgements and estimates used in the preparation of the financial statements. Key source of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below: Impairment loss on trade receivables The Group evaluates whether there is any objective evidence that trade receivables are impaired and determine the amount of impairment loss as a result of the inability of the debtors to make required payments. The Group bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the debtors and historical write-off experience. If the financial conditions of the debtors were to deteriorate, actual write-offs would be higher than estimated. Impairment loss on investment in associates The Group evaluates whether there are any indicators of impairment in the investment in associates. If there are indicators of impairment, management performs an evaluation of the investment s recoverable amount. The recoverable amount is based on the higher of value-in-use or fair value less cost to sell. Value-in-use is estimated based on management s forecast of future cash flows discounted to present value using the pre-tax discount rate. The fair value less cost to sell requires an estimate of the market value of the investments. Significant estimates and assumptions are made in determining value-in-use and fair value less cost to sell. Income taxes Significant judgement is required in determining the capital allowances, taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes and deferred tax liabilities. The Company exercise significant judgement to determine the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Fair value of derivative financial instruments The Company holds derivative financial instruments to hedge the changes in jet fuel prices. The Company has not applied hedge accounting to derivative financial instruments that economically hedge the exposure of the changes in jet fuel prices. All outstanding derivative financial instruments are recognised initially at fair value. Subsequent to initial recognition, they are remeasured at fair value. The gain or loss on remeasurement to fair value is recognised immediately in the income statement as revenue. The fair value of the derivative financial instruments is based on the price index, Platts. The use of a different price index may impact the Company s estimate of the fair value of its derivative financial instruments. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 105

110 notes to the financial statements Year ended 31 December Comparative information Change in classification During the year, the Group and Company reclassified derivatives financial assets, previously presented net in derivatives financial liabilities, to trade and other receivables to reflect more appropriately the way in which economic benefits are derived. Comparative amounts of US$12,058,000 were reclassified from trade and other payables to trade and other receivables. Management assessed that the impact of the reclassification is not significant to the statement of financial position as of 1 January Subsequent events On 1 March 2012, the Company completed the acquisition of all the shares of China Aviation Oil (Hong Kong) Company Limited ( CAOHK ) and North American Fuel Corporation ( NAFCO ) for a total consideration of US$15,734, China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

111 Supplementary information interested person transactions Aggregate value of interested person transactions excluding transactions conducted under shareholders Aggregate value of interested person transactions conducted under shareholders mandate pursuant to Rule mandate pursuant to Rule 920 of the SGX Listing Manual 920 of the SGX Listing Manual US$ 000 US$ 000 US$ 000 US$ 000 Sales revenue from related corporations 2,736,804 1,844,527 Sales revenue from related corporation of a corporate shareholder 1,549, ,917 Purchases from related corporation of a corporate shareholder 2,046,643 1,190,338 (Loss)/Gain from trading of derivative financial instruments with related corporation of a corporate shareholder (5,295) 622 Supply chain services rendered from related corporation 3,092 2,364 Supply chain services rendered from related corporation of a corporate shareholder Transportation revenue earned by associate from related corporations 8,987 7,853 Purchases from related corporation by associate 114 Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 107

112 STATISTICS OF SHAREHOLDINGS as at 9 March 2012 Number of Issued Shares : 722,820,537 Number of Issued Shares (excluding Treasury Shares) : 716,820,537ordinary shares Number/Percentage of Treasury Shares : 6,000,000 (0.83%) Class of Shares : Ordinary Shares Voting Rights (excluding Treasury Shares) : 1 vote per share Based on information available to the Company as at 9 March 2012, 28.53% of the issued ordinary shares of the Company is held by the public and, therefore, Rule 723 of the Listing Manual issued by SGX-ST is complied with. DISTRIBUTION OF SHAREHOLDINGS SIZE OF SHAREHOLDINGS NO. OF SHAREHOLDERS % NO. OF SHARES % , ,321, ,000-10,000 10, ,697, ,001-1,000,000 3, ,697, ,000,0001 AND ABOVE ,103, TOTAL 16, ,820, TWENTY LARGEST SHAREHOLDERS NO. NAME NO. OF SHARES % 1 DBS VICKERS SECURITIES (S) PTE LTD 369,725, BP INVESTMENTS ASIA LIMITED 144,564, OCBC SECURITIES PRIVATE LTD 6,919, DBS NOMINEES PTE LTD 6,251, UNITED OVERSEAS BANK NOMINEES PTE LTD 6,188, CITIBANK NOMINEES SINGAPORE PTE LTD 4,806, UOB KAY HIAN PTE LTD 3,645, LEE FOOK CHOY 2,500, PHILLIP SECURITIES PTE LTD 2,097, BANK OF SINGAPORE NOMINEES PTE LTD 1,839, HSBC (SINGAPORE) NOMINEES PTE LTD 1,641, OCBC NOMINEES SINGAPORE PTE LTD 1,611, CHNG GIM HUAT 1,500, CIMB SECURITIES (SINGAPORE) PTE LTD 1,369, DBSN SERVICES PTE LTD 1,225, KANG HIAN SOON 1,160, BANK OF CHINA NOMINEES PTE LTD 1,059, LER HOCK SENG 1,000, LAM YEW CHONG 973, CITIBANK CONSUMER NOMINEES PTE LTD 925, TOTAL 561,001, China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

113 STATISTICS OF SHAREHOLDINGS as at 9 March 2012 SUBSTANTIAL ORDINARY SHAREHOLDERS (As shown in the Register of Substantial Shareholders as at 9 March 2012) No. of Shares NO. NAME Direct Interest Deemed Interest % 1 China National Aviation Fuel Group Corporation 367,777,427* BP Investments Asia Limited 144,564, * China National Aviation Fuel Group Corporation is deemed to have an interest in 367,777,427 shares of CAO held by DBS Vickers Securities (S) Pte Ltd. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 109

114 share price information / corporate calendar 2011 CAO Share Price Movement and Trading Volume Share Price (S$) Volume M 0.5M Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Share Price (S$) As at last trading day of the year High Low Average Source: Bloomberg Corporate Calendar 2012 Announcement of 2011 full-year results 22 February Despatch of Summary Reports to shareholders On or about 30 March 18 th Annual General Meeting/Extraordinary General Meeting 26 April Proposed First and Final Dividend for FY2011 Books closure date Payment date Announcement of 1Q 2012 results Announcement of 2Q 2012 results Announcement of 3Q 2012 results Announcement of 2012 full-year results May 21 May April August November February 110 China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

115 notice of annual general meeting CHINA AVIATION OIL (SINGAPORE) CORPORATION LTD Incorporated in the Republic of Singapore Company Registration No Z NOTICE IS HEREBY GIVEN that the 18th Annual General Meeting of the Company will be held at Suntec Singapore International Convention and Exhibition Centre, Meeting Rooms , 1 Raffles Boulevard, Singapore on Thursday, 26 April 2012 at 3:00 p.m. for the following purposes: AS ORDINARY BUSINESS 1. To receive and adopt the Directors report and the audited financial statements for the financial year ended 31 December 2011 together with the auditors report thereon. (Resolution 1) 2. To declare a final (one-tier, tax exempt) dividend of S$0.02 per ordinary share for the year ended 31 December (Resolution 2) 3. To approve Directors Fees of S$732,200 for the year ended 31 December 2011 (2010: S$561,964). (Resolution 3) 4. To re-elect the following Directors, each of whom will retire by rotation pursuant to Article 91 of the Company s Articles of Association and who, being eligible, will offer themselves for re-election:- Mr Sun Li Mr Luo Qun Mr Chen Liming (Resolution 4) (Resolution 5) (Resolution 6) 5. To re-appoint Messrs KPMG LLP as the Company s auditors and to authorise the Directors to fix their remuneration. (Resolution 7) AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions: 6. That pursuant to Section 161 of the Companies Act, Cap. 50 and the Listing Manual of the Singapore Exchange Securities Trading Limited ( SGX-ST ) authority be and is hereby given to the Directors of the Company to: (a) (i) issue shares in the capital of the Company ( shares ) whether by way of rights, bonus or otherwise; and/or (ii) make or grant offers, agreements or options (collectively, Instruments ) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and (b) (notwithstanding that the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance to any Instrument made or granted by the Directors while this Resolution was in force, Provided that: (1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50% of the issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20% of the issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with subparagraph (2) below); Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 111

116 notice of annual general meeting (2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the percentage of issued share capital shall be based on the issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for: a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding at the time of the passing of this Resolution; and b) any subsequent consolidation or subdivision of shares; (3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and (4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. (Resolution 8) 7. To transact any other ordinary business which may properly be transacted at an Annual General Meeting. BY ORDER OF THE BOARD Doreen Nah Company Secretary Singapore 30 March China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

117 notice of annual general meeting Notes: 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy need not be a member of the Company. 2. The instrument appointing a proxy or proxies must be deposited at the Company s registered office at 8 Temasek Boulevard, #31-02, Suntec Tower Three, Singapore not later than 3.00 p.m. on 24 April Explanatory Notes: Resolution 4 Resolution 5 Resolution 6 Resolution 8 Mr Sun Li will upon re-appointment, continue as Chairman of the Board. He is considered a Non-Executive, Non-Independent Director. Mr Luo Qun will upon re-appointment continue as Vice Chairman of the Nominating Committee and the Remuneration Committee. He is considered a Non-Executive, Non-Independent Director. Mr Chen Liming will upon re-appointment continue as a member of the Nominating Committee and the Remuneration Committee. He is considered a Non-Executive, Non-Independent Director. The ordinary resolution proposed in item 6 above, if passed, will empower the Directors of the Company, from the date of the above Annual General Meeting until the next Annual General Meeting, to issue shares in the Company. The aggregate number of shares which the Directors may issue under this Resolution shall not exceed fifty per cent (50%) of the issued shares (excluding treasury shares) in the capital of the Company, of which the aggregate number of shares to be issued other than on a pro-rata basis to existing shareholders shall not exceed twenty per cent. (20%) of the issued shares (excluding treasury shares) in the capital of the Company. The percentage of issued share capital is based on the Company s issued shares (excluding treasury shares) in the capital of the Company at the time this proposed Ordinary Resolution is passed, after adjusting for (a) new shares arising from the conversion of convertible securities or share options on issue at the time this proposed Ordinary Resolution is passed; and (b) any subsequent consolidation or subdivision of shares. Article 91 of the Articles of Association of the Company Every Director shall retire from office once every three years and for this purpose, at each Annual General Meeting, one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not less than one-third) shall retire from office by rotation. Annual Report 2011 China Aviation Oil (Singapore) Corporation Ltd 113

118 notice of annual general meeting Notice of Book Closure Date and Payment Date for Final Dividend (One-Tier, Tax-Exempt) ( Dividend ) The Company gives notice that, subject to the approval of the shareholders to the Dividend at the Annual General Meeting, the Register of Members and the Transfer Books of the Company will be closed on 11 May 2012 for the preparation of dividend warrants. The Register of Members and the Transfer Books will re-open on 14 May Duly completed registered transfers of ordinary shares in the capital of the Company received by the Company s Share Registrar, Boardroom Corporate & Advisory Services Pte Ltd at 50 Raffles Place, Singapore Land Tower, #32-01, Singapore before 5.00 p.m. on 10 May 2012, will be registered in the Register of Members and the Transfer Books of the Company to determine shareholders entitlements to the Dividend. In respect of ordinary shares in securities accounts with The Central Depository (Pte) Limited ( CDP ), the Dividend will be paid by the Company to CDP which will, in turn, distribute the entitlements to the Dividend to CDP account-holders in accordance with its normal practice. The Dividend, if approved by shareholders, will be paid on 21 May China Aviation Oil (Singapore) Corporation Ltd Annual Report 2011

119 CHINA AVIATION OIL (SINGAPORE) CORPORATION LTD Incorporated in the Republic of Singapore Company Registration No Z PROXY FORM IMPORTANT: 1. For investors who have used their CPF monies to buy China Aviation Oil (Singapore) Corporation Ltd s shares, this Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. 3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf. I/We, of being a member/members of China Aviation Oil (Singapore) Corporation Ltd (the Company ), hereby appoint: Name NRIC/Passport Proportion of Shareholdings Number of Shares % Address and/or (delete as appropriate) Name NRIC/Passport Proportion of Shareholdings Number of Shares % Address or failing him/her/them, the Chairman of the Meeting as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the 18th Annual General Meeting of the Company, to be held at Suntec Singapore International Convention and Exhibition Centre, Meeting Rooms , 1 Raffles Boulevard, Singapore on Thursday, 26 April 2012 at 3:00 p.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specific directions as to voting are given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Meeting. (Please indicate your vote For or Against with a tick [ ] within the box provided.) No. Resolutions relating to: For Against 1 Directors Report and Audited Accounts 2 Declaration of Dividend 3 Directors fees 4 Re-election of Mr Sun Li as a Director 5 Re-election of Mr Luo Qun as a Director 6 Re-election of Mr Chen Liming as a Director 7 Auditors and their remuneration Special Business 8 Authority to Directors to issue new shares pursuant to Section 161 of the Companies Act, Cap. 50 and the Listing Manual of the Singapore Exchange Securities Trading Limited Dated this day of 2012 Total number of Shares in: (a) CDP Register (b) Register of Members No. of Shares Signature of Shareholder(s) or Common Seal of Corporate Shareholder * Delete where inapplicable IMPORTANT: PLEASE READ NOTES OVERLEAF BEFORE COMPLETING THIS FORM

120 Notes: 1. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company. 2. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy. 3. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in section 130A of the Companies Act, Cap.50 of Singapore), he should insert that number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, the instrument appointing a proxy or proxies will be deemed to relate to all the shares held by the member. 4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 8 Temasek Boulevard #31-02, Suntec Tower Three Singapore not less than 48 hours before the time appointed for the Meeting. Fold along this line (1) Affix Postage Stamp The Company Secretary China Aviation Oil (Singapore) Corporation Ltd 8 Temasek Boulevard #31-02 Suntec Tower Three Singapore Fold along this line (2) 5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his/her attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. 6. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid. 7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. 8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his/her name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

121 CORPORATE INFORMATION (as at 12 March 2012) Directors Sun Li (Chairman / Non-Independent, Non-Executive Director) Wang Kai Yuen (Deputy Chairman / Lead Independent Director) Meng Fanqiu (Chief Executive Officer / Executive Director) Ang Swee Tian (Independent Director) Chen Liming (Non-Independent, Non-Executive Director) Alan Haywood (Non-Independent, Non-Executive Director) Liu Fuchun (Independent Director) Luo Qun (Non-Independent, Non-Executive Director) Zhao Shousen (Non-Independent, Non-Executive Director) Audit Committee Ang Swee Tian (Chairman) Zhao Shousen (Vice Chairman) Wang Kai Yuen Liu Fuchun Alan Haywood Remuneration Committee Wang Kai Yuen (Chairman) Luo Qun (Vice Chairman) Liu Fuchun Chen Liming Ang Swee Tian Nominating Committee Liu Fuchun (Chairman) Luo Qun (Vice Chairman) Wang Kai Yuen Chen Liming Ang Swee Tian Risk Management Committee Alan Haywood (Chairman) Zhao Shousen Ang Swee Tian Company Secretary Doreen Nah Auditors KPMG LLP Public Accountants and Certified Public Accountants Partner in charge: Ang Fung Fung (Since financial year 2011) Share Registrar And Share Transfer Office Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore Principal Bankers ABN AMRO Bank N.V., Singapore Branch Agricultural Bank of China, Singapore Branch ANZ Bank Bank of China Limited, Singapore Branch Bank of Communications Co., Ltd, Singapore Branch China Development Bank, Hong Kong Branch Crédit Agricole, Singapore Branch Industrial and Commercial Bank of China, Singapore Branch ING Bank N.V., Singapore Branch J.P.Morgan Rabobank International, Singapore Branch United Overseas Bank Limited Registered Office 8 Temasek Boulevard #31-02 Suntec Tower Three Singapore Tel: (65) Fax: (65) Website: 公 司 信 息 ( 截 至 2012 年 3 月 12 日 ) 董 事 孙 立 ( 董 事 长 / 非 独 立 非 执 行 董 事 ) 王 家 園 ( 副 董 事 长 / 首 席 独 立 董 事 ) 孟 繁 秋 ( 首 席 执 行 官 / 执 行 董 事 ) 汪 瑞 典 ( 独 立 董 事 ) 陈 黎 明 ( 非 独 立 非 执 行 董 事 ) Alan Haywood ( 非 独 立 非 执 行 董 事 ) 刘 福 春 ( 独 立 董 事 ) 罗 群 ( 非 独 立 非 执 行 董 事 ) 赵 寿 森 ( 非 独 立 非 执 行 董 事 ) 审 计 委 员 会 汪 瑞 典 ( 主 席 ) 赵 寿 森 ( 副 主 席 ) 王 家 園 刘 福 春 Alan Haywood 薪 酬 委 员 会 王 家 園 ( 主 席 ) 罗 群 ( 副 主 席 ) 刘 福 春 陈 黎 明 汪 瑞 典 提 名 委 员 会 刘 福 春 ( 主 席 ) 罗 群 ( 副 主 席 ) 王 家 園 陈 黎 明 汪 瑞 典 风 险 管 理 委 员 会 Alan Haywood ( 主 席 ) 赵 寿 森 汪 瑞 典 公 司 秘 书 蓝 肖 蝶 外 部 审 计 师 KPMG LLP Public Accountants and Certified Public Accountants 负 责 合 伙 人 : 洪 芳 芳 ( 从 2011 财 年 起 ) 股 票 登 记 处 和 转 让 处 Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore 主 要 银 行 ABN AMRO Bank N.V., Singapore Branch Agricultural Bank of China, Singapore Branch ANZ Bank Bank of China Limited, Singapore Branch Bank of Communications Co., Ltd, Singapore Branch China Development Bank, Hong Kong Branch Crédit Agricole, Singapore Branch Industrial and Commercial Bank of China, Singapore Branch ING Bank N.V., Singapore Branch J.P.Morgan Rabobank International, Singapore Branch United Overseas Bank Limited 注 册 办 公 室 淡 马 锡 林 荫 道 8 号 新 达 城 第 3 大 厦 31 楼 2 号 新 加 坡 邮 区 电 话 :(65) 传 真 :(65) 网 址 :

122 Company Registration No Z 8 Temasek Boulevard, #31-02 Suntec Tower Three, Singapore Tel: (65) Fax: (65) Website: