Annual Report 2012

Notes to the financial statements(Expressed in millions of RMB, unless otherwise stated)1 Company informationThe history of China Construction Bank Corporation (the “Bank”) dates back to 1954, which was previously known as the People’sConstruction Bank of China when it was established. It administered and disbursed government funds for construction and infrastructurerelated projects under the state economic plan. The People’s Construction Bank of China gradually became a full service commercial bankfollowing the establishment of China Development Bank in 1994 to assume its policy lending functions. In 1996, the People’s ConstructionBank of China changed its name to China Construction Bank (“CCB”). On 17 September 2004, China Construction Bank Corporationwas formed as a joint-stock commercial bank in the People’s Republic of China (the “PRC”) as a result of a separation procedureundertaken by our predecessor, China Construction Bank. In October 2005 and September 2007, the Bank’s H-shares and A-shareswere listed on Hong Kong Stock Exchange (Stock Code: 939) and Shanghai Stock Exchange (Stock Code: 601939) respectively.The Bank obtained its finance permit No.B0004H111000001 from the China Banking Regulatory Commission (the “CBRC”) of the PRC.The Bank obtained its business license No.100000000039122 from the State Administration for Industry and Commerce of the PRC. Theregistered office of the Bank is located at No.25, Finance Street, Xicheng District, Beijing, the PRC.The principal activities of the Bank and its subsidiaries (collectively the “Group”) are the provision of corporate and personal bankingservices, conducting treasury business, the provision of asset management, trustee, finance leasing, investment banking, insurance andother financial services. The Group mainly operates in Mainland China and also has several overseas branches and subsidiaries. For thepurpose of these financial statements, Mainland China refers to the PRC excluding Hong Kong Special Administrative Region of thePRC (“Hong Kong”), Macau Special Administrative Region of the PRC and Taiwan. Overseas refers to countries and regions other thanMainland China.The Bank is under the supervision of the banking regulatory bodies empowered by the State Council of the PRC (the “State Council”). Theoverseas financial operations of the Bank are under the supervision of their respective local jurisdictions. Central Huijin Investments Ltd.(“Huijin”), a wholly owned subsidiary of China Investment Corporation (“CIC”), exercises the rights and obligations as an investor on behalfof the PRC government.These financial statements were authorised for issue by the board of directors of the Bank on 22 March 2013.2 Basis of preparationThe Group used the calendar year as the accounting year, which is from 1 January to 31 December.These financial statements for the year ended 31 December 2012 comprise the Bank and its subsidiaries and the Group’s interests inassociates and jointly controlled entities.(1) Basis of measurementThese financial statements have been prepared on the historical cost basis except that: (i) financial instruments at fair value throughprofit or loss are measured at fair value; (ii) derivative financial instruments are measured at fair value; (iii) available-for-sale financialassets are measured at fair value; and (iv) certain non-financial assets are measured at deemed cost. The measurement basis ofmajor assets and liabilities are further explained in Note 4.(2) Functional and presentation currencyThese financial statements are presented in RMB, unless otherwise stated, rounded to the nearest million, which is the functionalcurrency of domestic operations of the Group. The functional currencies of overseas branches and subsidiaries are determined inaccordance with the primary economic environment in which they operate, and are translated into RMB for the preparation of thesefinancial statements according to Note 4(2)(b).(3) Use of estimates and judgementsThe preparation of financial statements requires management to make judgements, estimates and assumptions that affect theapplication of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differfrom these estimates.The estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised inthe period in which the estimates are revised and in any future periods affected.Judgements that have a significant effect on the financial statements and estimates with a significant risk of material adjustments inthe subsequent period are discussed in Note 4(22).China Construction Bank Corporation annual report 201299