Vision - Alibaba

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112 Annual Report 2007 Notes to the Financial Statements 4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (Continued) (b) Recognition of income taxes and deferred tax assets (Continued) On March 16, 2007, the National People’s Congress approved the PRC Enterprise Income Tax Law (the “New EIT Law”). The New EIT Law, which became effective from January 1, 2008, unifi es the corporate income tax rate for domestic enterprises and foreign invested enterprises to 25%. In addition, among others, the New EIT Law provides for a preferential tax rate of 15% for enterprises qualifi ed as High and New Technology Enterprises (“HNTE”). However, the detailed rules on the applicable requirements and procedures to apply for preferential tax treatment as HNTE have not yet been announced. In December 2007, Alibaba (China) Technology Co., Ltd. (“Alibaba China”) obtained a certifi cate issued by the Science and Technology Department of Zhejiang Province confi rming Alibaba China’s status as a high and new technology enterprise. This certifi cate is valid for a period of two years from the date of issuance. In addition, management has conducted research and consulted relevant third parties as well as performed certain due diligence procedures to confi rm the view of the Board of Directors that Alibaba China will obtain its formal HNTE designation in 2008 under the New EIT Law upon the completion of certain administrative approval procedures. Consequently, Alibaba China used 15% in the computation of deferred taxes as of December 31, 2007. Should the Group have reported deferred taxes at the new unifi ed corporate income tax rate of 25%, the deferred tax assets and profi t attributable to equity owners of the Company would have been increased by approximately RMB173,500,000 for the year ended December 31, 2007. (c) Depreciation The costs of property and equipment are charged as depreciation expense over the estimated useful lives of the respective assets using the straight-line method. The Group periodically reviews changes in technology and industry conditions, asset retirement activity and residual values to determine adjustments to estimated remaining useful lives and depreciation rates. Actual economic lives may differ from estimated useful lives. Periodic reviews could result in a change in depreciable lives and therefore depreciation expense in future periods. 5 SEGMENT INFORMATION In the respective years presented, the Group had one single business segment: the provision of the B2B services. Although the B2B services consist of the operations of the international marketplace and the China marketplace, management considers that these underlying marketplaces are subject to similar risks and returns. Therefore, management has only relied on the reported revenue associated from these underlying marketplaces in making fi nancial decisions and allocating resources, and signifi cant costs incurred associated with the revenue generated cannot be separately identifi ed by marketplaces. In addition, substantially all of the Group’s revenue was generated in the PRC. Accordingly, no business or geographical segment information is presented.
6 REVENUE Notes to the Financial Statements 2007 2006 RMB’000 RMB’000 International marketplace Gold Supplier 1,503,331 967,858 International TrustPass 32,825 24,011 Other revenue (i) 11,539 — 1,547,695 991,869 China marketplace China TrustPass 594,098 369,653 Other revenue (ii) 20,964 2,340 615,062 371,993 2,162,757 1,363,862 (i) Other revenue received from the international marketplace mainly represents commission income from a fellow subsidiary for crossselling certain software products (Note 33(b)). (ii) Other revenue received from the China marketplace mainly represents promotional income from certain third party customers. 7 OTHER OPERATING INCOME 2007 2006 RMB’000 RMB’000 Government grants (i) 17,215 13,500 Others 2,662 4,412 19,877 17,912 (i) Alibaba China, a wholly-owned subsidiary of the Company, received grants from government authorities in the PRC of RMB17,215,000 during the year. In 2006, Alibaba China received RMB13,500,000 government grants in relation to technology development in the PRC. 113
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Financial and Operational Highlight
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orld’s leading nline marketplace
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CORPORATE HEADQUARTERS 6th Floor, C
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November Launched TradeManager inst
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Awards and Recognitions Awards and
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Global E-Commerce Leader Alibaba.co
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Along with other members of Alibaba
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2007 Financial highlights We achiev
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CEO’s Statement This mission star
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Global Trade Starts Here Alibaba.co
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BUSINESS ENVIRONMENT Buoyant China
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International marketplace operating
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localize user services and facilita
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selling branded advertisements main
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Management Discussion and Analysis
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provider and other related expenses
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expenses include a royalty fee paid
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Profi t attributable to equity owne
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such land to accommodate our growth
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Corporate Social Responsibility —
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Biographical Details of Directors a
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Directors’ Report RETIREMENT SCHE
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Directors’ Report DIRECTORS’ RE
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52 Annual Report 2007 Notes: (a) Th
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56 Annual Report 2007 2. Outstandin
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58 Annual Report 2007 D = the maxim
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60 Annual Report 2007 (ii) Maximum
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