Annual Report - Li Ning

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Li Ning Company Limited . Annual Report 2006
Notes to the Consolidated Financial Statements (Continued)
(All amounts in RMB unless otherwise stated)
6. Property, plant and equipment (Continued)
Construction-in-progress with net book value of RMB36,036,000 (2005: nil) as at 31 December 2006 is located in the PRC and are
built on land with respect to which the Group is in the process of applying for the formal legal title to its land use right.
Depreciation expenses of RMB10,498,000 (2005: RMB11,448,000) has been charged in administrative expenses, RMB11,720,000
(2005: RMB8,552,000) in distribution costs, RMB5,089,000 (2005: RMB2,310,000) in cost of inventories.
7. Land use rights
As at 1 January 2005
Cost 5,390
Accumulated amortisation (1,333)
Net book amount 4,057
Year ended 31 December 2005
Opening net book amount 4,057
Disposal (70)
Amortisation charge (130)
Closing net book amount 3,857
As at 31 December 2005
Cost 5,320
Accumulated amortisation (1,463)
Net book amount 3,857
Year ended 31 December 2006
Opening net book amount 3,857
Addition 22,002
Amortisation charge (276)
Closing net book amount 25,583
As at 31 December 2006
Cost 27,322
Accumulated amortisation (1,739)
Net book amount 25,583
Land use rights consist of prepaid lease payments for land for period varying from 20 to 50 years.
The Group is in the process of applying for formal legal title to land use right with net book value of RMB21,855,000 (2005: nil) as
at 31 December 2006.
Amortisation charge of RMB276,000 (2005: RMB130,000) is included in administrative expenses.
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