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CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON INTENSIFYING THE ADMINISTRATION OF ARCHIVAL MATERIALS CONCERNING THE INDIVIDUAL INCOME TAX ON FOREIGNERS

the State Administration of Taxation

Circular of the State Administration of Taxation on Intensifying the Administration of Archival Materials concerning the Individual
Income Tax on Foreigners

Guo Shui Han [2006] No. 58

The local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, and cities
as specifically designated in the state plan

With a view to intensifying and regulating the collection and administration of individual income tax on foreigners (including people
from Hong Kong, Macao and Taiwan as well as overseas Chinese, hereinafter the same), you are hereby notified of the relevant requirements
for the administration of archival materials concerning the individual income tax on foreigners as follows:

I.

Establishing an Account for Foreigners by Enterprise as the Basic Unit

With regard to those enterprises that employ foreigners within jurisdiction, the tax authority at the grass-root level shall establish
an administration account for foreigners by enterprise regardless of how many foreign employees there are or whether or not relevant
foreigners take their jobs for a long term or only temporarily. An administration account for foreigners shall include such information
of the relevant foreigners as name (Chinese and foreign language), nationality, post and tenure.

II.

Adopting the Administration Method of “One Archive for One Person” on the Basis of the Administration Account

The tax authority at the grass-root level shall, on the basis of the administration account for foreigners by enterprise, adopt the
administration method of “one tax return archive for one person”. An individual account shall include such information as: name (in
Chinese and foreign language), gender, birth place (in Chinese and English), birth date, overseas domicile (in Chinese and English),
name of the entity that has dispatches him, tenure of office in China or period of labor service, post, period of residence, time
of entry into or exit out of China, resident address in China, phone number, postal code, amount of income, payment place, withholding
agent, amount of tax declared, amount of tax payable, amount of tax paid and time of turning over the tax into the state treasury.

III.

Dynamic Administration

Dynamic administration shall be applied to the administration accounts for foreigners by enterprise as well as to the individual archives
of foreigners, which shall be updated according to the increase or decrease of the number of foreigners, change of posts, period
of residence, time of entry into or exit out of China and change of incomes so as to carry into effect the scientific and fine administration
over the individual income tax on foreigners.

IV.

Examination of the Established Accounts

All regions shall, according to the requirements of the State Administration of Taxation, improve by themselves the relevant mechanism
and intensify the administration of archival materials by the end of June, 2006. Any region that fails to meet the requirement of
the State Administration of Taxation of “establishing accounts by enterprise and establishing archives by individual ” shall establish
relevant rules and system as required as soon as possible so as to realize the objective of “administration by means of accounts
and one archive for one person”. All regions shall summarize their improvement on the administration of archival materials concerning
the individual income tax on foreigners, which shall be reported to the State Administration of Taxation (Department of International
Taxation) by July 31, 2006.

The State Administration of Taxation shall examine and summarize the administration of archival materials concerning the individual
income tax on foreigners from July to December of 2006. The examination result will be circulated.

State Administration of Taxation

January 23, 2006



 
the State Administration of Taxation
2006-01-23

 






CIRCULAR OF THE PEOPLE’S BANK OF CHINA ON THE RELEVANT MATTERS CONCERNING THE PILOTS OF RMB INTEREST RATE SWAP TRANSACTION

People’s Bank of China

Circular of the People’s Bank of China on the Relevant Matters concerning the Pilots of RMB Interest Rate Swap Transaction

Yin Fa [2006] No. 27

The headquarters of the People’s Bank of China in Shanghai and all branches and business management departments of the People’s Bank
of China, central sub-branches of the People’s Bank of China in all provincial capital cities, central sub-branches of the People’s
Bank of China in all deputy provincial capital cities, all policy banks, state-owned commercial banks, joint-stock banks, National
Inter-bank Funding Center and China Government Securities Depository Trust & Clearing CO., Ltd.,

For the purpose of diversifying the risk management tools of the national inter-bank bond market investors (hereinafter referred to
as the market investors), regulating and directing the RMB interest rate swap transaction, and accelerating the process of interest
marketization, hereby notified of the following matters relating to the pilots of RMB interest rate swap transaction:

I.

The term “RMB interest rate swap transaction” as mentioned in this Notice refers to a transaction in which both parties agree, within
a certain period in the future, to exchange cash flows on a agreed amount of RMB principal, with cash flow of one part calculated
on the basis of floating interest rate but the other part on the basis of fixed interest rate.

II.

Among the market investors, the commercial banks approved by the relevant regulatory institutions to engage in transactions business
of derivatives may, upon authorization of the regulatory institutions, conduct interest rate swap transactions with its clients of
deposits and loans, as well as other commercial banks approved to engage in derivatives transactions business, or provide their clients
of deposits and loans with interest rate swap transaction service. Other market investors are only allowed to conduct swap transactions
hedging for value protection purposes with the commercial banks that related to them due to deposits and loans and are approved to
engage in derivatives transactions business .

III.

The reference interest rates for swap transactions shall be the market interest rates possessing the benchmark character for the national
inter-bank bond market that are announced by the National Inter-bank Funding Center (hereinafter referred to as the NIFC) upon authorization
of the People’s Bank of China, and the one-year fixed deposit interest rate announced by the People’s Bank of China.

IV.

When engaging in swap transactions, the market investors shall be aware of the risks and establish and improve a sound risk control
system and internal control system so as to prevent the potential risks of the swap transactions indeed.

Before a market investor conducts a swap transaction, it shall submit the rules of the swap transaction risk control system and internal
control system to the regulatory institution and simultaneously send a copy to the NIFC.

V.

A swap transaction may be conducted through the trading system of the NIFC, or may be conducted by both parties via telephone, fax
or other means.

VI.

To conduct swap transactions, a market investor shall conclude a written transaction contract for each transaction, in which the transaction
elements shall be stipulated. If both parties to transaction believe necessary, they may enter into a separate agreement to clearly
specify the rights and obligations of both parties, circumstances of breach of contract, as well as handling of breach of contract,.
The aforesaid agreement and transaction contract constitute a complete contract for the swap transaction.

VII.

To conduct a swap transaction, a market investor may, according to the credit status of the opposite party, establish guaranty money
or securities. The submission, preservation and disposal of the guaranty money or securities shall be conducted with reference to
the forward bond transactions mode.

VIII.

After a swap transaction is clinched, both parties to the transaction shall strictly perform the obligations as stipulated in the
transaction contract.

IX.

A market investor engaging in swap transactions shall, within 3 working days after each period of ten days, report the swap transaction
information during the past period of ten days to the NIFC for archival purposes (except the transactions conducted through the trading
system of the NIFC). The NIFC shall, according to the provisions and authorization of the People’s Bank of China, disclose the relevant
information about the swap transactions to the market in a timely manner.

X.

In the case of breach of contract concerning a swap transaction, and existing any disputes over the fact of breach of contract or
liabilities therefore, both parties to the transaction may, upon negotiation, apply for arbitration or file a lawsuit to the people’s
court, and shall, no later than 12: 00 noon of the next working day after they received the final result of arbitration or litigation,
send the final result to the NIFC, which shall announce it to the general public on the same day when receives it.

XI.

The NIFC shall be responsible for the routine monitoring of the swap transactions. If it finds any abnormal transaction information,
it shall report it to the People’s Bank of China in a timely manner and shall, within 10 working days after the end of each month,
report in written form to the NIFC the swap transaction information of the current month.

XII.

All branches and sub-branches of the People’s Bank of China shall strengthen the communication with the NIFC and shall conduct routine
supervision and inspection over swap transactions of the market investors within their respective jurisdiction.

XIII.

This Notice shall come into force as of the date of issuance.

The People’s Bank of China

January 24, 2006



 
People’s Bank of China
2006-01-24

 






ANNOUNCEMENT NO. 6, 2006 OF MINISTRY OF COMMERCE, GENERAL ADMINISTRATION OF CUSTOMS AND GENERAL ADMINISTRATION OF QUALITY SUPERVISION, INSPECTION AND QUARANTINE OF THE PRC

20060501

Ministry of Commerce, General Administration of Customs and General Administration of Quality Supervision, Inspection and Quarantine

Announcement No. 6, 2006 of Ministry of Commerce, General Administration of Customs and General Administration of Quality Supervision,
Inspection and Quarantine of the PRC

[2006] No. 6

In accordance with related regulation of Memorandum of Understanding on Textile and Costume Trade between Peoples￿￿ Republic of China
and the United States of America, Ministry of Commerce, General Administration of Customs and General Administration of Quality Supervision,
Inspection and Quarantine of the PRC adjusted the Temporary Commodity Catalogue of Textile Exports as follows:

Add the following commodity codes of Customs to Item 222: 6002901000, 6002903000, 6002904000, 6002909000, 6004901000, 6004903000,
6004904000, 6004909000, 6006310000, 6006320000, 6006330000, 6006340000, 6006410000, 6006420000, 6006430000, 6006440000

Add the following commodity codes of Customs to Item 229: 6003300000, 6003400000

This announcement shall take effect as of January 27, 2006.

Ministry of Commerce

General Administration of Customs

General Administration of Quality Supervision, Inspection and Quarantine of the PRC

January 25, 2006



 
Ministry of Commerce, General Administration of Customs and General Administration of Quality Supervision, Inspection
and Quarantine
2006-01-25

 






NOTICE OF THE GENERAL AFFAIRS DEPARTMENT OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON RELEVANT ISSUES CONCERNING OPENING FOREIGN EXCHANGE CAPITAL ACCOUNTS BY INSURANCE INTERMEDIARY INSTITUTIONS

General Affairs Department of State Administration of Foreign Exchange

Notice of the General Affairs Department of the State Administration of Foreign Exchange on Relevant Issues concerning Opening Foreign
Exchange Capital Accounts by Insurance Intermediary Institutions

Hui Zong Fa [2006] No.6

The branches and the administration departments of foreign exchange under the State Administration of Foreign Exchange in all the
provinces, autonomous regions, and municipalities directly under the Central Government, and the branches of the State Administration
of Foreign Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo,

In order to facilitate the handling of such matters as establishment, capital alteration, and alteration of stock right, and etc.
by the insurance intermediary companies sharing by foreign capital , and regulate foreign exchange administration, the relevant
issues concerning foreign exchange administration of foreign exchange capital accounts opened by insurance intermediary companies
sharing by foreign capital are hereby notified as follow:

I.

As an insurance intermediary company sharing by foreign capital handles such matters as establishment, capital alteration, and alteration
of stock right, and etc., it may apply to the foreign exchange administration department, branch or sub-branch (hereinafter refers
to as foreign exchange bureau) of the State Administration of Foreign Exchange at the local place where it is located for opening
a foreign exchange capital account at a designated foreign exchange bank before obtaining the approval reply of China Insurance
Regulatory Commission.

1.

When filing an application, the materials shall be provided as follows:

(1)

An written application for opening an account (specifying the basic information of the enterprise, the amount of capital to be contributed,
equity structure, proportion of capital contributions, and organizations structure, and etc.).

(2)

Articles of association of the company or partnership agreement or the relevant agreement on alteration of stock right.

(3)

Photocopy of the pre-approval notice on enterprise name issued by the administrative department of industry and commerce.

(4)

Name list of the main personnel preparing for the establishment and the photocopy of their identity certificates (provided at the
time of establishing a new enterprise). And

(5)

Other documents provided as required by the foreign exchange bureau.

2.

The range of the use of the foreign exchange capital account shall be: for capital verification on the foreign exchange capital invested
by the foreign shareholders.. The capital in the account shall not be used for settlement of foreign exchange or for payment before
an insurance intermediary company with foreign shares obtains the documents of approval of the department of commerce.

3.

The time limit for using the capital account shall be: 6 months from the day that the account is opened after approval.

II.

After obtaining the documents of approval of the department of commerce for its establishment, capital alteration, or alteration of
stock right, or any other matter, an insurance intermediary company sharing by foreign capital shall go through formalities for
foreign capital and foreign exchange (or alteration) registration and formalities for alteration of foreign exchange capital account
at the foreign exchange bureau at its locality according to the relevant provisions on foreign exchange administration in a timely
manner.

III.

At the time when the capital account as mentioned in Article I of the present Notice is due, if an insurance intermediary company
sharing by foreign capital has not obtained the documents of approval of the department of commerce for the establishment, capital
alteration, or alteration of stock right, or any other matter, the foreign exchange capital account shall be closed immediately,
and remitted out the capital invested by foreign shareholders upon the approval of the foreign exchange bureau at its locality.

IV.

The present Notice shall be implemented as of the day of its promulgation. If any problem is encountered in the implementation, please
report it back to the department of capital projects of the State Administration of Foreign Exchange.

Contact Person: Wang Lei

Contact Telephone: 68402348

General Affairs Department of the State Administration of Foreign Exchange

January 25, 2006



 
General Affairs Department of State Administration of Foreign Exchange
2006-01-25

 






ACCOUNTING STANDARDS FOR ENTERPRISES NO. 27 – EXPLOITATION OF PETROLEUM AND NATURAL GAS

Ministry of Finance

Accounting Standards for Enterprises No. 27 – Exploitation of Petroleum and Natural Gas

Cai Kuai [2006] No. 3

February 15, 2006

Chapter I General Provisions

Article 1

In order to regulate the accounting treatments for the exploitation activity of petroleum and natural gas (hereinafter referred to
as oil and gas) and the disclosure of relevant information, these Standards are formulated in accordance with Accounting Standards
for Enterprises – Basic Standards.

Article 2

The exploitation activity of oil and gas includes the stages of obtainment of rights and interests of mining areas, as well as exploration,
development and production of oil and gas.

Article 3

Except for the exploitation activity of oil and gas, the accounting treatments for the storage, centralized transport, processing,
distribution of oil and gas shall be governed by other relevant accounting standards.

Chapter II Accounting Treatments of Rights and Interests of Mining Areas

Article 4

The rights and interests of mining areas refers to the rights obtained by enterprises to explore, develop and produce oil and gas
in mining areas.

The rights and interests of mining areas shall be classified into the rights and interests of proved and unproved mining areas. A
proved mining area refers to a mining area in which an economically exploitable reserve has been discovered and proved after exploration.
An unproved mining area refers to a mining area in which no economically exploitable reserve has been discovered and proved yet.

The term “economically exploitable reserve is proved” refers to the amount of oil and gas that can be reasonably determined and be
exploited from a known oil and gas reserve under the current technological and economic conditions in the light of the geological
and engineering analyses.

Article 5

The costs for obtaining the rights and interests of a mining area shall be capitalized when they are incurred. The rights and interests
of a mining area obtained by an enterprise shall be measured initially according to the costs of obtainment:

(1)

The costs for the obtainment of the rights and interests of a mining area shall include the use fee of the exploration right, the
use fee of the mining right, the disbursements for the use right of land or sea area, commissions, and other disbursements directly
attributable to applying for obtainment of the rights and interests of the mining area.

(2)

The costs for the obtainment of the rights and interests of a mining area by way of purchase shall include the purchase price, commissions,
and other purchasing disbursements directly attributable to the obtainment of the rights and interests of the mining area.

After the obtainment of the rights and interests of a mining area, the use fee of the exploration right, the use fee of mining right,
rent and other disbursements for maintaining the rights and interests of the mining area shall be recorded into the profits and losses
of the current period.

Article 6

An enterprise shall adopt the output method or the average method of year limit to calculate the depletion of the rights and interest
of the proved mining areas. If it adopts the output method to calculate the depletion, the depletion amount shall be calculated in
the light of each single mining area, or in the light of a group of adjacent mining areas with identical or similar geological structure
features or deposit layer conditions. The calculation formula shall be as follows:

The depletion amount of the rights and interests of the proved mining areas = the book value of the proved mining areas ￿￿the depletion
rate of the rights and interests of the proved mining areas

The depletion rate of the rights and interests of the proved mining areas = the output of the proved mining areas in the current period
/ (the proved economically exploitable reserve at the end of the period of the proved mining areas + the output of the proved mining
areas of the current period)

Article 7

For the impairment of the rights and interests of a mining area, an enterprise shall recognize the impairment losses in accordance
with the following different circumstances, respectively:

(1)

It shall treat the impairment of rights and interests of the proved mining areas in the light of the Accounting Standard for Enterprises
No. 8 – Asset Impairment.

(2)

The rights and interests of the unproved mining areas shall be tested on impairment at least once a year.

If the amount of costs incurred by the obtainment of a single mining area is relatively huge, the tests on impairment shall be performed
on the basis of a single mining area and the amount of impairment of the rights and interests of the unproved mining area shall be
confirmed. If the amount of costs incurred by the obtainment of a single mining area is relatively small and if its geological structure
features or deposit layer conditions are the same as or similar to those of other adjacent mining areas, a test on impairment may
be performed on the basis of a group of mining areas consisting of several adjacent mining areas with identical or similar geological
structure features or deposit layer conditions.

If the fair value of the rights and interests of the unproved mining areas is lower than the book value thereof, the difference between
them shall be considered as an impairment loss and shall be recorded in the profits and losses of the current period. Once an impairment
loss on the rights and interests of the unproved mining areas has been recognized, it shall not be reversed.

Article 8

Where an enterprise transfers the rights and interests of a mining area, it shall be subject to the provisions as follows:

(1)

If it transfers all the rights and interests of a mining area, the difference between the transfer income and the book value of the
rights and interests of the mining area shall be recorded in the profits and losses of the current period.

If it transfers parts of the rights and interests of the mining area, in the light of the proportion between the fair value of the
transferred rights and interests and the fair value of the retained rights and interests, it shall calculate and determine the book
value of the transferred portion of rights and interests of the mining area, and the difference between the transfer income and the
book value of the transferred rights and interests of the mining area shall be recorded in the profits and losses of the current
period.

(2)

If it transfers all the rights and interests of an unproved mining area, for which it calculates the impairment separately, the difference
between the transfer income and the book value of the rights and interests of the unproved mining area shall be recorded in the profits
and losses of the current period.

If it transfers parts of the rights and interests of an unproved mining area, for which it calculates the impairment separately and
if the transfer income is more than the book value of the rights and interests of the mining area, the difference between them shall
be recorded in the profits and losses of the current period. If the transfer income is less than the book value of the rights and
interests of the mining area, the transfer income shall offset against the book value of the rights and interests of the mining area
and any profits and losses shall not be recognized.

(3)

If it transfers the rights and interests of any unproved mining areas, for which it calculates the impairment on the basis of a group
of mining areas, and if the transfer income is more than the original book value of the rights and interests of the mining areas,
the difference between them shall be recorded in the profits and losses of the current period; if the transfer income is less than
the original book value of the rights and interests of the mining areas, the transfer income shall offset against the original book
value of the rights and interests of the mining areas, any profits and losses shall not be recognized.

When it transfers the residual rights and interests of the final unproved mining area among the group of the mining areas, the difference
between the transfer income and the book value of the unproved mining area shall be recorded in the profits and incomes of the current
period.

Article 9

Where an unproved mining area (portfolio) is changed into a proved mining area (or groups of mining areas) because an economically
exploitable reserve is discovered and proved in such an unproved mining area (portfolio), it shall be shifted into the rights and
interests of proved mining areas according to its book value.

Article 10

Where an enterprise eventually abandons an unproved mining area due to its failure to discover and prove any economically exploitable
reserve therein, its book value at the time of abandonment shall be written off the rights and interests of the unproved mining area,
and be recorded in the profits and losses of the current period. The abandonment costs, which are incurred due to the unfinished
obligatory workload or other factors shall be recorded in the profits and losses of the current period.

Chapter III Accounting Treatments of Oil and Gas Exploration

Article 11

The expression “oil and gas exploration” refers to the geological investigations, geophysical prospecting, drilling activities and
other relevant activities carried out for the purpose of identifying the exploration region or exploring the oil and gas reserve.

Article 12

The disbursements for oil and gas exploration shall include the drilling exploration disbursements and the non-drilling exploration
disbursements.

The drilling exploration disbursements shall mainly include the disbursements incurred by the exploratory drilling in the exploration
region, the drilling for detailed prospecting, the appraisal well, the data well as well as other activities. The non-drilling exploration
disbursements shall mainly include the disbursements for geological investigation, geophysical exploration as well as other activities.

Article 13

With a view to the drilling exploration disbursements, after a well is completed, if it is sure that an economically exploitable reserve
is discovered and proved in the well, the disbursements for drilling this well shall be carried forward as cost of the well and relevant
facilities.

If it is sure that no economically exploitable reserve is discovered and proved in the well, the result of the disbursements for drilling
this well less the net salvage value shall be recorded in the profits and losses of the current period.

If it is sure that an economically exploitable reserve is discovered and proved in a section of the well, among the portion of drilling
exploration disbursements for the effective section of the well where an economically exploitable reserve is discovered and proved
shall be carried forward as the cost of the well and relevant facilities. The accumulative drilling exploration disbursements for
the ineffective section of the well shall be changed into the profits and currents of the current period.

If it is not sure that whether or not an economically exploitable reserve is discovered and proved in the well, the disbursements
for drilling the well shall be temporarily capitalized within 1 year after it is completed.

Article 14

If one year has lapsed since the completion of the well, it is still impossible to make sure whether or not an economically exploitable
reserve is discovered and proved in a well, if the following conditions are satisfied simultaneously, the capitalized disbursements
for drilling the well shall continue to be temporarily capitalized, otherwise they shall be recorded in the profits and losses of
the current period:

(1)

A sufficient reserve has been discovered in the well, but in order to make sure whether or not it is an economically exploitable reserve,
it is necessary to carry out further exploration activities in order to make sure whether or not it is an proved economically exploitable
reserve;

(2)

Further exploration activities are being implemented or are about to be implemented under a specific plan.

Where a new economically exploitable reserve is discovered and proved in a well for which the drilling exploration disbursements have
been expensed, no adjustment may be made to the expensed drilling exploration disbursements and the disbursements for re-drilling
exploration and for the completion of the well shall be capitalized.

Article 15

The non-drilling exploration disbursements shall be recorded in the profits and losses of the current period at the time of incurrence.

Chapter IV Accounting Treatments of Oil and Gas Development

Article 16

The term “oil development” refers to the activities such as the construction or renovation of wells and other relevant facilities
in order to acquire the oil and gas of a proved mining area.

Article 17

The disbursements incurred during the oil and gas development activities shall be capitalized respectively in the light of their purposes
and be recognized as the cost of well and relevant facilities formed by the oil and gas development.

The cost of well and relevant facilities formed by the oil and gas development mainly includes:

(1)

The pre-drilling preparation disbursements, including the pre-phase research, project geological investigation, project design, determination
of location of the well, cleaning up the well site, building roads, as well as other activities;

(2)

The disbursements for the purpose of purchasing equipment of the well and for the construction of the well. The equipment of the well
shall include the casing pipes, oil pipes, oil pump equipment and well mouth devices, etc. The construction of the well shall include
the drilling and completion of the well;

(3)

The disbursements for the purpose of purchasing and constructing the systems for promoting the exploitation rate; and

(4)

The disbursements for the purpose of purchasing and constructing the centralized transport facilities, separation processing facilities,
measurement equipment, storage facilities, various off-shore platforms, seabed and land cables, etc. within the mining area.

Article 18

In a proved mining area, the disbursements incurred during the process from the drilling to the current layer that has been proved
shall be considered as the disbursements for oil and gas development. The disbursements incurred due to the continuous drilling till
the unproved layer in order to obtain the new proved economically exploitable reserve shall be considered as the drilling exploration
disbursements, and be treated in the light of Articles 13 and 14 of these Standards.

Chapter V Accounting Treatments for the Oil and Gas Production

Article 19

The expression “oil and gas production” refers to the activities such as extracting any oil and gas from the oil and gas deposit to
the surface of the earth, gathering, transporting, processing, storing on the spot within the scope of the mining area, as well as
the management of the mining area.

Article 20

The cost of oil and gas production shall include the depletion of the rights and interests of the relevant mining area, the depletion
of the wells and relevant facilities, the depreciation of the auxiliary equipment and facilities, as well as the operating expenses.
The term “operating expenses” include the direct and indirect expenses incurred during the period of the oil and gas production and
the management of the mining area.

Article 21

An enterprise shall compute the depletion of its wells and other relevant facilities by adopting the output method or the straight-line
method. The wells and relevant facilities shall include the exploration wells where the economically exploitable reserve is discovered
and proved, wells formed in the exploitation activities, and other various facilities directly related to the exploitation activities.
If the output method is adopted for calculation of the depletion, the depletion amount shall be computed in the light of a single
mining area or in the light of a group of adjacent mining areas with identical or similar geological structure features or deposit
layer conditions. The calculation formula shall be given as follows:

The depletion amount of the wells and other relevant facilities of the mining areas = the book value of the wells and relevant facilities
of the mining areas at the end of the period ￿￿the depletion rate of the wells and relevant facilities of the mining areas

The depletion rate of the wells and relevant facilities of the mining areas = the output of the proved mining areas in the current
period / (the economically exploitable reserves at the end of the period which has been proved and have been exploited + the output
of the mining areas in the current period)

The economically exploitable reserves at the end of the period which have been proved and have been exploited include the economically
exploitable reserves which have been proved and have been put into full exploitation after the completion of the drilling of the
net of development wells and the construction of the supporting facilities, and the increased exploitable reserves correspondingly
after the facilities necessary for the technologies to promote the exploitation rate have been finished and these facilities have
been put into operation.

Article 22

The earthquake equipment, construction equipment, vehicles, maintenance workshops, warehouses, supply stations, communication equipment,
office facilities and other auxiliary equipment and facilities shall be treated in accordance with the Accounting Standard for Enterprises
No. 4 – Fixed Assets.

Article 23

For an enterprise’ obligation to do the discarded dispose for any mining area,, if this obligation satisfies the conditions for the
recognition of the expected liabilities as prescribed in the Accounting Standards for Enterprises No. 13 – Contingencies, it shall
recognize this obligation as an expected liability and shall increase the corresponding book value of the wells and relevant facilities.

If the conditions for the recognition of the expected liabilities are not satisfied, the disbursements for the disassembly, removal
and site cleaning at the time of discard shall be recorded in the profits and losses of the current period.

The discard of a mining area refers to the termination of production of the last well of a mining area.

Article 24

The impairment of the wells and relevant facilities, auxiliary equipment and facilities shall be treated in the light of the Accounting
Standard for Enterprises No. 8 -Impairment of Assets.

Chapter VI Disclosure

Article 25

An enterprise shall disclose the information related to the oil and gas exploitation activities as follows in its notes:

(1)

The data of the beginning and the end of the year of the domestic and overseas oil and gas reserves that they possessed.

(2)

The total amount of all disbursements incurred in the current period in order to obtain the rights and interests of domestic and overseas
mining areas, the oil and gas exploration as well as the oil and gas development.

(3)

The original book value of the rights and interests of the proved mining areas, wells and relevant facilities, the accumulative depletion
amounts and the accumulative amounts of the impairment provisions as well as their calculation methods. The original book value of
the auxiliary equipment and facilities for the oil and gas exploitation activities, the accumulative depreciation amounts and the
accumulative amounts of the impairment provisions as well as their calculation methods.



 
Ministry of Finance
2006-02-15

 






CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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