Annual Report 2009 - Greentown China Holdings Limited

Notes to the Consolidated Financial Statements
For The Year Ended 31 December 2009
27. TRUST (Continued)
(D)
The net proceeds received from the Trust under the sale and repurchase arrangements in relation to the
25% equity interest in Hangzhou Greentown Haiqi and the 45% equity interest in Wuxi Greentown and the
Trust Loans have been split into a liability component and a number of derivatives as follows:
(i)
Liability component represents the present value of the contractually determined stream of future
cash flows discounted at the prevailing market interest rate at that time applicable to instruments
of comparable credit status and providing substantially the same cash flows, on the same terms,
but without the derivatives.
The interest charged for the year is calculated by applying an effective interest rate of
approximately 22% per annum to the liability component since the Trust Establishment Date.
The cash receipts of RMB45,900,000 and RMB250,000,000 are accounted for as borrowings of the
Group as a result of the sale and repurchase arrangements in relation to the 45% equity interest in
Wuxi Greentown and the 25% equity interest in Hangzhou Greentown Haiqi respectively.
The cash receipts from the Trust Loans granted by the Trust to Hangzhou Greentown Haiqi and
Wuxi Greentown are accounted for as borrowings of the Group and associate respectively in the
principal amount of RMB1,250,000,000 and RMB437,100,000 respectively.
The liability component is classified as a non-current amount due to related party.
(ii)
The Trust Put, the Guarantee and the RMB1 Options (together, the “Trust-related financial
derivatives”) are accounted for as separate derivatives at fair value.
The movements of the liability component and Trust-related financial derivatives for the year are set out
below:
Liability
RMB1
component Trust Put Guarantee Options Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 20 April 2009 1,286,720 186,360 71,730 1,090 1,545,900
Interest charged during the
year 199,363 – – – 199,363
Interest paid during the
year (119,068) – – – (119,068)
Changes in fair value – (16,460) 96,220 (860) 78,900
At 31 December 2009 1,367,015 169,900 167,950 230 1,705,095
Greentown China Holdings Limited Annual Report 2009 155