Annual Report 2012

Notes to the financial statements(Expressed in millions of RMB, unless otherwise stated)58 Operating segmentsThe Group has presented the operating segments in a manner consistent with the way in which information is reported internally to theGroup’s chief operating decision makers for the purposes of resource allocation and performance assessment. Measurement of segmentassets and liabilities and segment income and results is based on the Group’s accounting policies.Transactions between segments are conducted under normal commercial terms and conditions. Internal charges and transfer prices aredetermined with reference to market rates and have been reflected in the performance of each segment. Net interest income and expensearising from internal charges and transfer pricing adjustments are referred to as “internal net interest income/expense”. Interest income andexpense earned from third parties are referred to as “external net interest income/expense”.Segment revenues, results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated ona reasonable basis. Segment income and results are determined before intra-group transactions are eliminated as part of the consolidationprocess. Segment capital expenditure is the total cost incurred during the period to acquire fixed assets, intangible assets and otherlong-term assets.(1) Geographical segmentsThe Group operates principally in Mainland China with branches covering all provinces, autonomous regions and municipalitiesdirectly under the central government, and several subsidiaries located in Mainland China. The Group also has bank branchoperations in Hong Kong, Singapore, Frankfurt, Johannesburg, Tokyo, Seoul, New York, Sydney and Ho Chi Minh City and certainsubsidiaries operations in Hong Kong and London.In presenting information on the basis of geographical segments, operating income is allocated based on the location of thebranches and subsidiaries that generate the income. Segment assets, liabilities and capital expenditure are allocated based on theirgeographical location.Geographical segments of the Group, as defined for management reporting purposes, are defined as follows:– “Yangtze River Delta” refers to the following areas where the tier-1 branches and the subsidiaries of the Bank operate:Shanghai Municipality, Jiangsu Province, Zhejiang Province, City of Ningbo and City of Suzhou;– “Pearl River Delta” refers to the following areas where the tier-1 branches of the Bank operate: Guangdong Province, City ofShenzhen, Fujian Province and City of Xiamen;– “Bohai Rim” refers to the following areas where the tier-1 branches and the subsidiaries of the Bank operate: BeijingMunicipality, Shandong Province, Tianjin Municipality, Hebei Province and City of Qingdao;– the “Central” region refers to the following areas where the tier-1 branches and the subsidiaries of the Bank operate: ShanxiProvince, Guangxi Autonomous Region, Hubei Province, Henan Province, Hunan Province, Jiangxi Province, Hainan Province,Anhui Province and the Three Gorges Area;– the “Western” region refers to the following areas where the tier-1 branches and the subsidiaries of the Bank operate:Sichuan Province, Chongqing Municipality, Guizhou Province, Yunnan Province, Tibet Autonomous Region, Inner MongoliaAutonomous Region, Shaanxi Province, Gansu Province, Qinghai Province, Ningxia Autonomous Region and XinjiangAutonomous Region; and– the “Northeastern” region refers to the following areas where the tier-1 branches and the subsidiaries of the Bank operate:Liaoning Province, Jilin Province, Heilongjiang Province and City of Dalian.China Construction Bank Corporation annual report 2012155