INTERIM REPORT 2021
Date of Disclosure: 31 August 2021
China Merchants Port Group Co., Ltd. Interim Report 2021
Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior managers of China Merchants Port Group Co., Ltd. (hereinafter referred to asthe “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of thisReport and its summary, and shall be jointly and severally liable for any misrepresentations,misleading statements or material omissions therein.Wang Xiufeng, the Company’s legal representative, Tu Xiaoping, the Company’s Chief FinancialOfficer, and Sun Ligan, the person-in-charge of the accounting organ hereby guarantee that thefinancial statements carried in this Report are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Report and itssummary.Any forward-looking statements such as future plans or development strategies mentioned hereinshall not be considered as the Company’s promises to investors. And investors are reminded toexercise caution when making investment decisions.Possible risks faced by the Company and countermeasures have been explained in “Part IIIManagement Discussion and Analysis” herein, which investors are kindly reminded to pay attentionto.Securities Times, Shanghai Securities News, Ta Kung Pao (HK) and www.cninfo.com.cn have beendesignated by the Company for information disclosure. And all information about the Company shallbe subject to what’s disclosed on the aforesaid media.The Company is not subject to any industry-specific disclosure requirements.The Company has no interim dividend plan, either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
China Merchants Port Group Co., Ltd. Interim Report 2021
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 1
Part II Corporate Information and Key Financial Information ...... 6
Part III Management Discussion and Analysis ...... 10
Part IV Corporate Governance ...... 37
Part V Environmental and Social Responsibility ...... 40
Part VI Significant Events ...... 47
Part VII Share Changes and Shareholder Information ...... 60
Part VIII Preference Shares ...... 66
Part IX Bonds ...... 67
Part X Financial Statements ...... 71
China Merchants Port Group Co., Ltd. Interim Report 2021
Documents Available for Reference
I. Financial Statements carrying the signatures and stamps of the Company Principal, the ChiefFinancial Officer and the person in charge of accounting firm;II. Original copies of all documents and the announcements thereof disclosed in the reportingperiod on “Securities Times”, “Shanghai Securities News” and “Ta Kung Pao”.
China Merchants Port Group Co., Ltd. Interim Report 2021
Definitions
| Term | Definition |
| The “Company”, “CMPort” or “we” | China Merchants Port Group Co., Ltd., formerly known as “Shenzhen Chiwan Wharf Holdings Limited” |
| CMG | China Merchants Group Co., Limited |
| CMPort Holdings | China Merchants Port Holdings Company Limited (00144.HK) |
| CSRC | China Securities Regulation Commission |
| Jifa Logistics | Dalian Port Jifa Logistics Co., Ltd. |
| DPCD | Dalian Port Container Development Co., Ltd. |
| Yingkou Port Group | Yingkou Port Group Co., Ltd. |
| DPN | Dalian Port Logistics Network Co., Ltd. |
| YPIT | Yingkou Port Information Technology Co., Ltd. |
| CMIT/ CMHIT | China Merchants International Technology Co., Ltd., formerly known as China Merchants Holdings (International) Information Technology Co., Ltd. |
| Dongguan Machong | Dongguan Chiwan Port Service Co., Ltd. |
| Shantou Port | Shantou CMPort Group Co., Ltd. |
| Zhanjiang Port | Zhanjiang Port (Group) Co., Ltd. |
| Shunde New Port | Guangdong Yide Port Limited |
| Zhangzhou Port | Zhangzhou China Merchants Port Co., Ltd. |
| CMICT | Ningbo Daxie China Merchants International Container Terminal Co., Ltd. |
| CICT | Colombo International Container Terminals Ltd. |
| HIPG | Hambantota International Port Group |
| LCT | Lome Container Terminals Ltd. |
| TCP | TCP Participa??es S.A |
| CM ePort | The wharf e-commerce platform, i.e. the unified customer service platform |
| TEU | Twenty Foot Equivalent Unit |
| Haixing Harbor | Shenzhen Haixing Harbor Development Co., Ltd. |
| Yingkou Port | Yingkou Port Co., Ltd. |
| Liaoning Port/ Dalian Port | Liaoning Port Co., Ltd., formerly known as Dalian Port (PDA) Company Limited |
| SASAC of the State Council | State-Owned Assets Supervision and Administration Commission of the State Council |
| SIPG | Shanghai International Port (Group) Co., Ltd. |
| Tianjin Port Container Terminal | Tianjin Port Container Terminal Co., Ltd. |
| QQCTU | Qingdao Qianwan United Container Terminal Co., Ltd. |
| CMCS | China Merchants Container Services Limited |
| Modern Terminals | Modern Terminals Limited |
| Taiwan Kao Ming Container | Kao Ming Container Terminal Corp. |
| TL | Terminal Link S.A.S. |
| Kumport | Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim Sirketi |
| PDSA | Port de Djibouti S.A. |
| TICT | Tin-Can Island Container Terminal Ltd. |
| QQTU | Qingdao Qianwan United Terminal Co., Ltd. |
| Qingdao Dongjiakou | Qingdao Port Dongjiakou Ore Terminal Co., Ltd. |
| Laizhou Port | China Shipping Port (Laizhou) Co., Ltd. |
| Xiamen Port | Zhangzhou China Merchants Xiamen Port Affairs Co., Ltd. |
| Ningbo Port | Ningbo Zhoushan Port Company Limited |
| The cninfo website | www.cninfo.com.cn |
| COD | Chemical Oxygen Demand |
China Merchants Port Group Co., Ltd. Interim Report 2021
| RTG | Rubber Tyre Gantry |
| VOC | Volatile Organic Compounds |
| PCR | Polymerase Chain Reaction |
| Pk23 | Pk23 Community, Djibouti City |
| SZSE | Shenzhen Stock Exchange |
| The “Articles of Association” | The Articles of Association of China Merchants Port Group Co., Ltd. |
| RMB RMB’0,000 RMB’00,000,000 | Expressed in the Chinese currency of Renminbi Expressed in tens of thousands of Renminbi Expressed in hundreds of millions of Renminbi (unless otherwise specified) |
China Merchants Port Group Co., Ltd. Interim Report 2021
Part II Corporate Information and Key Financial Information
I Corporate Information
| Stock name | CM Port Group/ CM Port Group B | Stock code | 001872/201872 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 招商局港口集团股份有限公司 | ||
| Abbr. (if any) | 招商港口 | ||
| Company name in English (if any) | China Merchants Port Group Co., Ltd. | ||
| Abbr. (if any) | CMPort | ||
| Legal representative | Wang Xiufeng | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Li Yubin | Hu Jingjing |
| Address | 24/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street, Nanshan, Shenzhen, PRC | 24/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street, Nanshan, Shenzhen, PRC |
| Tel. | +86 755 26828888 | +86 755 26828888 |
| Fax | +86 755 26886666 | +86 755 26886666 |
| Email address | Cmpir@cmhk.com | Cmpir@cmhk.com |
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and theirzip codes, website address and email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2020Annual Report.
2. Media for Information Disclosure and Place where this Report is LodgedIndicate by tick mark whether any change occurred to the information disclosure media and the placefor lodging the Company’s periodic reports in the Reporting Period.
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Interim Report 2021
The newspapers designated by the Company for information disclosure, the website designated bythe CSRC for disclosing the Company’s periodic reports and the place for lodging such reports didnot change in the Reporting Period. The said information can be found in the 2020 Annual Report.
3. Other Relevant Information
Indicate by tick mark whether any change occurred to the other relevant information in the ReportingPeriod.
□ Applicable √ Not applicable
IV Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason: Business combination under common controlOn 18 December 2020, the Company signed the Equity Subscription and Capital Increase Agreementfor CMHIT with the Company's subsidiaries, CMPort Holdings and CMHIT, Jifa Logistics, DPCD,and Yingkou Port Group.According to the Equity Subscription and Capital Increase Agreement, Jifa Logistics and DPCDwould increase the capital of CMHIT with 29.40% and 49.63% of their respective shares in DPN,and Yingkou Port Group would increase the capital of CMHIT with 100% of its equity in YPIT.Before and after the merger, CMHIT, DPN and YPIT are all subject to the final control of CMG, theactual controller of the Company, and such control is not temporary.The above capital increase was completed on 9 February 2021. Upon completion of the capitalincrease, CMHIT changed its name to CMIT. The Company, CMPort Holdings, Jifa Logistics, DPCDand Yingkou Port Group will hold 13.18%, 43.74%, 13.26%, 22.38% and 7.44% equity in CMIT,respectively. CMIT remains a majority-owned subsidiary of the Company. CMIT holds 79.03%equity in DPN and 100% equity in YPIT respectively, and is able to exercise control over the lattertwo companies. Therefore, since 9 February 2021, the Company will follow the accounting
China Merchants Port Group Co., Ltd. Interim Report 2021
processing method for enterprise merger under the same control and include DPN and YPIT in theconsolidated scope of the Company's consolidated financial statements from the beginning of thecomparative financial statement period.
| H1 2021 | H1 2020 | Change (%) | ||
| Original | Restated | Restated | ||
| Operating revenue (RMB) | 7,339,942,862.26 | 5,922,497,158.48 | 5,962,497,716.96 | 23.10% |
| Net profit attributable to the listed company’s shareholders (RMB) | 1,677,035,346.17 | 632,798,585.83 | 632,292,086.16 | 165.23% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 1,644,696,060.97 | 544,591,914.54 | 544,085,414.87 | 202.29% |
| Net cash generated from/used in operating activities (RMB) | 2,934,960,407.96 | 2,071,426,144.92 | 2,057,741,203.08 | 42.63% |
| Basic earnings per share (RMB/share) | 0.87 | 0.33 | 0.33 | 163.64% |
| Diluted earnings per share (RMB/share) | 0.87 | 0.33 | 0.33 | 163.64% |
| Weighted average return on equity (%) | 4.43% | 1.77% | 1.76% | 2.67% |
| 30 June 2021 | 31 December 2020 | Change (%) | ||
| Original | Restated | Restated | ||
| Total assets (RMB) | 168,701,333,012.06 | 168,543,611,777.21 | 168,728,326,345.77 | -0.02% |
| Equity attributable to the listed company’s shareholders (RMB) | 38,143,327,362.51 | 37,117,806,052.18 | 37,165,277,744.78 | 2.63% |
The total share capital at the end of the last trading session before the disclosure of this Report:
| Total share capital at the end of the last trading session before the disclosure of this Report (share) | 1,922,365,124 |
Fully diluted earnings per share based on the latest total share capital above:
| Fully diluted earnings per share based on the latest total share capital above (RMB/share) | 0.87 |
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2021
3. Reasons for Accounting Data Differences between Domestics and Foreign AccountingPrinciple
□ Applicable √ Not applicable
VI Exceptional Gains and Losses
Unit: RMB
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 4,731,273.76 | - |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 292,333,022.53 | - |
| Capital occupation charges on non-financial enterprises that are charged to current profit or loss | 118,821,999.88 | - |
| Current profit or loss on subsidiaries obtained in business combinations involving enterprises under common control from the period-beginning to combination dates, net | -3,255,790.50 | - |
| Gain or loss on fair-value changes in held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other investments in debt obligations (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | -488,532,866.45 | - |
| Reversed portions of impairment allowances for accounts receivable and contract assets which are tested individually for impairment | 94,099.17 | - |
| Custodian fees earned from entrusted operation | 471,698.11 | - |
| Non-operating income and expense other than the above | 19,007,039.27 | - |
| Less: Income tax effects | -74,697,555.98 | - |
| Non-controlling interests effects (net of tax) | -13,971,253.45 | - |
| Total | 32,339,285.20 | -- |
Explanation of why the Company reclassifies recurrent gain/loss as an exceptional gain/loss itemdefined or listed in the Explanatory Announcement No. 1 on Information Disclosure for CompaniesOffering Their Securities to the Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2021
Part III Management Discussion and Analysis
I Principal Activity of the Company in the Reporting Period
1. Main business scope and business models
The Company is principally engaged in the handling, warehousing and transportation of containersand bulk cargoes, as well as the provision of other ancillary services. It principally operates 27container berths and 17 bulk cargo berths in the ports in West Shenzhen and Dongguan Machong, 9container berths, 2 bulk cargo berths, 10 general cargo berths, and 1 coal-handling specific berth inShantou Port, 2 container berths and 33 bulk cargo berths in Zhanjiang Port, 4 multi-purpose berthsin Shunde Port, 2 container berths and 6 bulk cargo berths in Zhangzhou Port, 4 container berths inNingbo Daxie, 4 container berths in CICT, Sri Lanka, 4 multi-purpose berths, 2 oil berths and 4container berths in HIPG, Sri Lanka, 3 container berths in LCT, Togo, and 4 container berths in TCP,Brazil. Moreover, the Company invests in container hubs in Shanghai, Ningbo and Tianjin andexpands its layout to ports in Asia, Africa, Europe, Oceania, South America and North America.The major business segments of China Merchants Port Group Co., Ltd. are as follows:
| Business Segments | Applications |
| Cargo handling and warehousing | Container handling and warehousing: the Company provides ship berthing, loading and discharging services to ship companies, offers container storage service to ship companies and cargo owners and provides overhead box services to tractor companies. The Company also engages in the businesses of division or merger of cargoes in containers, container leasing and container maintenance; Bulk cargo handling and warehousing: the Company is engaged in bulk cargo handling and transportation in port zones, as well as storage services in yards. The major types of cargoes handled include food, steel, woods and sandstones. |
| Ancillary port-related services | The ancillary port-related services of the Company mainly include tugboat berthing assistance and barge services at the arrival of ships to the ports, tallying in the course of cargo handling, and supply of shore power and freshwater for vessels. |
| Bonded logistics operations | The Company provides various services for clients (including logistics companies, trading companies or cargo owners), for example, warehouse/yard leasing, loading and unloading in warehouses/yards, customs clearance and division or merger of cargoes at terminals. It also provides documentation services for tractors arriving or leaving the bonded logistics parks. |
China Merchants Port Group Co., Ltd. Interim Report 2021
2. Development stage and cyclical characteristic of the industry in which the Company operatesand its industry position during the Reporting Period
(1) External economic environment
In the first half of 2021, major economies such as the United States and Europe have eased thepandemic and accelerated vaccination. Despite the recurring pandemic situations in some Europeanand American countries and developing countries, the global economy has recovered and continuedto recover amidst fluctuations because of the fiscal and monetary stimulus policies generally adoptedby various countries and the resumption of industrial production and consumption activities. Amongthem, the production side was gradually approaching the level before the pandemic, while theconsumption side was accelerating recovery, with the trade in goods and services continued to growsteadily. According to the “World Economic Outlook” report published by the International MonetaryFund (“IMF”) in July 2021, the global economy in 2021 was expected to grow by 6%, representinga year-on-year increase of 9.2 percentage points. Among that, growth forecasts for developedeconomies were adjusted upwards and they were projected to grow by 5.6%, up by 10.2 percentagepoints year-on-year, while growth prospects in emerging markets and developing economiesdeteriorated and they were expected to grow by 6.3%, up by 8.4 percentage points year-on-year.Besides, according to the forecast of the World Trade Organization (WTO) in April, global trade willincrease by 8% in 2021 due to the rapid promotion of vaccines and the strong government interventionin the economy.Benefiting from the good results of pandemic prevention and control and the support of the "SixStabilities"(六穩) and "Six Security"(六保) policies, China's macro economy recovered steadily andtended to be balanced in the first half of 2021. According to the National Bureau of Statistics, China'sGDP was RMB53.2167 trillion in the first half of 2021, up by 12.7% year-on-year at comparableprices. In terms of quarters, the first quarter increased by 18.3% year-on-year, and the second quarterby 7.9%. On the other hand, benefiting from the recovery of the global economy in the first half of2021, China's monthly import and export have achieved positive year-on-year growth for 13
China Merchants Port Group Co., Ltd. Interim Report 2021
consecutive months, further consolidating the steady growth of foreign trade. According to thestatistics published by the General Administration of Customs, the total value of China's import andexport of goods trade in the first half of 2021 was RMB18.07 trillion, representing an increase of
27.1% as compared to that of the corresponding period in 2020, among which the export value wasRMB9.8493 trillion, up by 28.1% year-on-year, and the import value was RMB8.2157 trillion, up by
25.9% year-on-year. With the export value offsetting by import value, the trade surplus wasRMB1.6336 trillion.
(2) Market environment of port and shipping industry
Since 2021, with the widespread use of the vaccination against COVID-19, pandemic prevention andcontrol in United States and European countries have been steadily improving, and the demand forglobal trade in goods has rebounded, inceasing the demand in the martime transport market. However,while export demand continues to increase, the backflow of empty containers in European andAmerican ports is slow due to the impact of the pandemic, coupled with the "black swan events" suchas the Suez Canal blockage and the pandemic in Yantian Port, resulting in ship delay, port congestion,route adjustments, etc. from time to time. The distribution of containers is partially unbalanced, andthe effective shipping capacity continues to decline, and the price of shipping in the internationalmarket continues to rise. According to the Drewry World Container Index, shipping price in the firsthalf of 2021 has set the largest increase record since 2012, and the freight rate has increased by morethan 300% compared with that of the same period in 2020.Due to gradual recovery of the global trade , in the first half of 2021, the overall operations of theport industry are in good condition, and port throughput and berth occupancy rate continued to rise.From a national perspective, the global demand and supply gap in the first half of 2021 led to theincrease in China's export. The container throughput of major ports showed a rapid growth trend.According to the data published by the Ministry of Transport, in the first half of 2021, the accumulatedcargo throughput handled by the Chinese ports reached 7.64334 billion tonnes, up by 13.2% year-on-year, and the accumulated container throughput handled was 138.18 million TEUs, representing an
China Merchants Port Group Co., Ltd. Interim Report 2021
increase of 15.0% year-on-year, of which, 4.96313 billion tonnes of cargo were handled by coastalports, representing a year-on-year increase of 10.3%, and totally 121.98 million TEUs were handledby coastal ports, representing a year-on-year increase of 14.0%. With regard to innovativedevelopment, new opportunities in the industry continue to emerge, and new outlets such asdigitization, carbon neutralization, and new infrastructure have brought new impetus to thetransformation and development of the industry.
(3) The position of the Company in the industry
The port industry is a crucial cornerstone industry for national economic and social development, andis closely linked to global economy and trade. The Company is the largest port developer, investorand operator in the PRC and the leading comprehensive port service provider in the world, with awell-developed port network at major hub locations along coastal China. It has also successfullyestablished presences in Asia, Africa, Europe, Oceania, South America and North America. By itsproactive, sound and efficient operating style, the Company capitalizes on its global port portfolio,professional management experience, the self-developed state-of-the-art terminal operation systemand integrated logistics management platform for exports and imports to provide timely and efficientport and maritime logistics services along with comprehensive and modern integrated logisticssolutions to its customers. In addition, the Company also invests in bonded logistics operation,launches integrated park development business, facilitates the transformation and upgrade of portindustry, and develops port supporting industries, dedicated to improving industry efficiency andcreating greater value through the synergies of the existing terminal network.II. Core competitiveness analysis
1. Sound shareholder background and resource integration abilityEstablished in 1872, which is 149 years ago, CMG, the actual controller of the Company, has becomean exemplary model for Chinese enterprises and developed strong brand power. It is also a key state-owned enterprise under the direct administration of the PRC central government. Headquartered in
China Merchants Port Group Co., Ltd. Interim Report 2021
Hong Kong, CMG is an integrated enterprise with diversified businesses and one of the four majorChinese enterprises in Hong Kong. Currently, it is mainly engaged in three core industries namelycomprehensive transportation, characteristic finance, and comprehensive development and operationof cities and parks, and is realizing the transformation from the three main businesses to the threemajor platforms of industrial operation, financial services, investment and capital operation. CMGhas been rated as a Grade A enterprise in the Operating Results Assessment of the State-owned AssetsSupervision and Administration Commission of the State Council for 17 consecutive years and is acentral state-owned enterprise that owns two Fortune 500 companies.Being a crucial player and facilitator of the national “Belt and Road” initiative, CMG has acceleratedits international development and preliminarily formed a relatively complete network of overseasports, logistics, finance, and park business. The sound shareholder background and ample domesticand overseas resources integration ability of CMG have provided strong support for CMPort toconstruct a global port investment and operation platform with international vision and globalexpansion capabilities and to stand out in the fierce global competition.
2. Balanced and established global port network presence ability
As an important carrier for domestic and overseas port investment and operation of CMG, theCompany gained in-depth insight into the current states, trends and driving factors of the globalindustrial chain. Based on the insight, it followed the development patterns of the global economyand trade and the industry, and seized the significant policy opportunities arising from the key “Beltand Road” initiative and the development of key regions such as the Guangdong-Hong Kong-MacaoGreater Bay Area and the integration of Yangtze River Delta to actively build a global port networkand arrange for the investment and allocation of global resources.In recent years, through mergers, acquisitions, reorganization, renovation of old ports, andconstruction of new ports, the Company has been consistently optimizing its modern port networkwith global coverage, enhancing the value of the port industry, and pushing forward balanced regional
China Merchants Port Group Co., Ltd. Interim Report 2021
development. After years of overseas development, CMPort has established global business presence.Its port network comprises 50 ports which are located in 26 countries and regions on six continents.Adhering to the principle of “extensive consultation, joint development and shared benefits”, CMPorthas developed local-based business operation and formed a community of shared future withstakeholders from countries and regions along the “Belt and Road” initiative to explore developmentopportunities with concerted efforts. At the same time, the diversified investment and operation ofport assets at home and abroad have also effectively enhanced its capabilities of resisting risks ofindustry fluctuations, trade fictions and unexpected events.
3. Continuously optimizing supply chain comprehensive service abilityThe Company is committed to becoming a world-class comprehensive port service provider andcenters on many aspects to continue to optimize the comprehensive service capabilities of the supplychain. The first aspect is the advanced comprehensive development capabilities. Taking port businessas the core and leveraging the synergy of different port zones as well as city industry integration, theCompany is actively exploring and facilitating the comprehensive port development model of “Port-Park-City”. Based on the traditional loading and discharging and ancillary services at ports, itestablished the comprehensive development model that offered high value-added services toenterprises. Currently, the Company has participated in promoting the port-oriented regionalcomprehensive development and construction in various overseas regions and has achieved phasedprogresses, fostering new profit growth points for the Company. The second aspect is soundcomprehensive logistics service capabilities. The Company aims at increasing its global presencewith shipping routes across five continents. As both the shipping and port sectors gradually shifted toforming alliances, the Company is actively integrating its domestic and overseas supply chainresources and centering on customer needs to provide more comprehensive and effective integratedlogistics service solutions for the global supply chain, forming its unique competitive strength. Basedon the West Shenzhen homebase port and the Shunde New Port, it built the first complex port in theGreater Bay Area to meet the unsatisfied customer needs, promoting the development of the
China Merchants Port Group Co., Ltd. Interim Report 2021
Guangdong-Hong Kong-Macao Greater Bay Area. The Company also secured the internationalsupply chain and supply for people’s livelihood in the country through serving domestic and foreigntrade business, thereby accelerating the formation of China’s new development pattern, the domesticeconomic cycle as the mainstay and the domestic and international economic cycles boosting eachother.
4. Independent and innovative smart port construction ability
Grasping the development opportunities of the new technology wave, the Company proactivelypushed forward the construction of smart ports and promoted the digital transformation and intelligentupgrade of ports through “CM Chip” and “CM ePort”. “CM Chip” is a core port operating systemindependently developed and built by the Company, including CTOS (Container Terminal OperationSystem), BTOS (Bulk Cargo Terminal Operation System), and LPOS (Logistics Park OperationSystem). At present, the “CM Chip” series of products independently developed by the Companyhave been basically applied to domestic and overseas terminals controlled by the Company, laying asolid foundation for the Company's smart port construction. “CM ePort” is a digital integrated serviceecological platform based on the Company's global port network and targeted at the port logisticsindustry, integrating ports, shipping, logistics and third-party e-commerce platforms and providingsmart logistics, smart ports and smart finance and business services to help build a smart portecosystem.The Company took the transformation project of Haixing Harbor as a pilot, and successfully built "Mawan Smart Port" by centering on 9 smart elements such as “CM Chip”, “CM ePort”, automationtechnology, smart port, 5G network application, blockchain, Beidou system, artificial intelligenceapplication, and green and low-carbon development, and " Mawan Smart Port" has become China'sfirst automated terminal upgraded from a traditional terminal, forming a comprehensive solution forsmart ports with " CMPort’s characteristics".
China Merchants Port Group Co., Ltd. Interim Report 2021
5. Sound and efficient port management ability
Adhering to the proactive, sound and efficient operating style and benefiting from its global portassets and resources portfolio, the Company is committed to providing customers with timely andefficient port and maritime logistics services as well as professional and first-class solutions, and hasbecome the preferred partner for customers and an important gateway for the country’s foreign trade,thereby making due contributions to the country’s foreign trade development. At the same time, theCompany also made an extensive investment in bonded logistics business to expand its port valuechain and enhance industrial value. Taking advantages of the synergy of its existing terminal network,the Company created values for both its customers and shareholders.The Company has earned itself good reputation across the industry by its professional managementexperience accumulated for years, its self-developed global leading terminal operating system andintegrated logistics management platform for import and export, its extensive maritime logisticssupport system with all-rounded modern integrated logistics solutions, and its high-qualityengineering management and reliable service offerings.III. Core Business Analysis
1. Port Business Review
(1) Overview of port business
In the first half of 2021, the Company’s ports handled a total container throughput of 67.23 millionTEUs, up by 21.1% year-on-year. Bulk cargo volume handled by the Company’s ports increased by
40.2% year-on-year to 308 million tonnes. With respect to container business, the containerthroughput handled by the Group’s ports in Mainland China reached 46.83 million TEUs, up by
17.5% year-on-year, which is mainly due to stable domestic pandemic situation and economicrecovery. The total container throughput handled by the Group’s ports in Hong Kong and Taiwanreached 3.77 million TEUs, up by 10.6% year-on-year. The Group’s overseas ports handled a totalcontainer throughput of 16.63 million TEUs, representing an increase of 35.8% year-on-year, which
China Merchants Port Group Co., Ltd. Interim Report 2021
was mainly benefited from the inclusion of the eight terminals newly acquired by TL in the statistics.With respect to bulk cargo business, total bulk cargo volume handled by the Group’s ports inMainland China increased by 40.6% year-on-year to 305 million tonnes, which is mainly due to theinclusion of Yingkou Port business in the statistics by the Company since February and the overallstrong rebound of the bulk cargo business.
Table 3-1 Throughput of the Company and changes in the first half of 2021
| Item | The first half of 2021 | The first half of 2020 | Changes |
| Container throughput (’0,000 TEU) | 6,723 | 5,550 | 21.1% |
| Among which: Mainland China | 4,683 | 3,984 | 17.5% |
| Hong Kong and Taiwan | 377 | 341 | 10.6% |
| Overseas | 1,663 | 1,225 | 35.8% |
| Bulk cargo throughput (hundred million tonnes) | 3.08 | 2.20 | 40.2% |
| Among which: Mainland China | 3.05 | 2.17 | 40.6% |
| Overseas | 0.03 | 0.03 | 0% |
Note: 1. The statistics represented the total throughput of the holding subsidiaries, associatesand joint ventures of the Company; 2. Due to the merger by absorption through share swap betweenDalian Port (PDA) Company Limited, a joint stock company of the Company, and Yingkou PortLiability Co., Ltd. (Yingkou Port) , which were consolidated as Liaoning Port Co., Ltd., theCompany has included Yingkou Port business in the statistics since February 2021.
(2) Operation condition of port business by region
Table 3-2 Container throughput of the Company and changes in the first half of 2021 (in ’
0,000 TEU)
| Region and port company | The first half of 2021 | The first half of 2020 | Changes | ||
| Pearl River Delta | Holding company | West Shenzhen Port Zone | 650 | 517 | 25.7% |
| Shunde New Port | 22 | 18 | 22.2% | ||
China Merchants Port Group Co., Ltd. Interim Report 2021
| Joint stock company | Chu Kong River Trade Terminal | 55 | 48 | 14.6% | |
| Yangtze River Delta | Joint stock company | SIPG Group | 2,294 | 2,006 | 14.4% |
| Holding company | Ningbo Daxie | 170 | 148 | 14.9% |
| Bohai Rim | Joint stock company | Tianjin Port Container Terminal | 447 | 367 | 21.8% |
| QQCTU | 418 | 381 | 9.7% | ||
| Liaoning Port Co., Ltd. | 465 | 360 | 29.2% | ||
| South-East region of Mainland China | Holding company | Zhangzhou Port | 12 | 16 | -25.0% |
| Shantou Port | 92 | 62 | 48.4% | ||
| South-West region of Mainland China | Holding company | Zhanjiang Port | 58 | 61 | -4.9% |
| Hong Kong and Taiwan | Holding company/ Joint stock company | CMCS/ Modern Terminals | 282 | 263 | 7.2% |
| Joint stock company | Taiwan Kao Ming Container | 95 | 78 | 21.8% |
| Overseas | Holding company | CICT | 150 | 138 | 8.7% |
| TCP | 54 | 48 | 12.5% | ||
| LCT | 73 | 61 | 19.7% | ||
| Joint stock company | TL | 1,274 | 860 | 48.1% | |
| Kumport | 62 | 60 | 3.3% | ||
| PDSA | 35 | 42 | -16.7% | ||
| TICT | 15 | 16 | -6.3% | ||
| Total | 6,723 | 5,550 | 21.1% | ||
China Merchants Port Group Co., Ltd. Interim Report 2021
Note: 1. The Company has included the business volume of eight terminals newly acquired bythe joint stock company Terminal Link in the statistics since April 2020; 2. Due to the merger byabsorption through share swap between Dalian Port (PDA) Company Limited, a joint stockcompany of the Company, and Yingkou Port Liability Co., Ltd. (Yingkou Port) , which wereconsolidated as Liaoning Port Co., Ltd., the Company has included Yingkou Port business in thestatistics since February 2021.Table 3-3 Bulk cargo volume handled by the Company and changes in the first half of 2021
(in ’0,000 tonnes)
| Region and port company | The first half of 2021 | The first half of 2020 | Changes | ||
| Pearl River Delta | Holding company | West Shenzhen Port Zone | 819 | 746 | 9.8% |
| Dongguan Machong | 789 | 770 | 2.5% | ||
| Shunde New Port | 260 | 154 | 68.8% | ||
| Joint stock company | Chu Kong River Trade Terminal | 142 | 121 | 17.4% | |
| Yangtze River Delta | Joint stock company | SIPG Group | 4,464 | 3,473 | 28.5% |
| Bohai Rim | Joint stock company | QQTU | 916 | 788 | 16.2% |
| Qingdao Port Dongjiakou | 3,373 | 3,038 | 11.0% | ||
| Liaoning Port Co., Ltd. | 12,973 | 6,794 | 90.9% | ||
| Laizhou Port | 1,244 | 978 | 27.2% | ||
| South-East region of Mainland China | Holding company | ||||
| Zhangzhou Port | 431 | 252 | 71.0% | ||
| Xia Men Port | 239 | 10 | 2,290.0% | ||
| Shantou Port | 162 | 160 | 1.3% | ||
| South-West region of Mainland China | Holding company | Zhanjiang Port | 4,700 | 4,425 | 6.2% |
| Overseas | Holding company | HIPG | 79 | 18 | 338.9% |
| Joint stock company | Kumport | 8 | 2 | 300.0% | |
| PDSA | 260 | 285 | -8.8% | ||
| Total | 30,859 | 22,014 | 40.2% | ||
China Merchants Port Group Co., Ltd. Interim Report 2021
Note: 1. HIPG has included liquid bulk cargo in the statistics of its business volume since 2020;
2. Due to the merger by absorption through share swap between Dalian Port (PDA) CompanyLimited, a joint stock company of the Company and Yingkou Port Liability Co., Ltd. (YingkouPort), which were consolidated as Liaoning Port Co., Ltd., the Company has included Yingkou Portbusiness in the statistics since February 2021.Pearl River Delta regionThe Group’s terminals in the West Shenzhen Port Zone handled a container throughput of 6.50 millionTEUs, up by 25.7% year-on-year, which was mainly benefited from the new routes in Asia and NorthAmerica, and the active efforts to serve overtime vessels. The Group’s terminals in the West ShenzhenPort Zone handled a bulk cargo volume of 8.19 million tonnes, up by 9.8% year-on-year, which wasmainly due to the significant increase in foreign trade feed grain business volume. Guangdong YidePort Limited (Shunde New Port) handled a container throughput of 0.22 million TEUs, up by 22.2%year-on-year, which was mainly benefited from increase in orders from local export enterprises andincrease in foreign trade volume year-on-year; and handled a bulk cargo volume of 2.60 milliontonnes, up by 68.8% year-on-year, which was mainly benefited from the major customers strategyand continuously optimization in the structure of customers and cargo types.Yangtze River Delta regionBenefiting from the growth of import and export trade driven by the steady recovery of the globaleconomy, SIPG handled a container throughput of 22.94 million TEUs, up by 14.4% year-on-year,and bulk cargo volume handled increased by 28.5% year-on-year to 44.64 million tonnes. NingboDaxie handled a container throughput of 1.70 million TEUs, representing an increase of 14.9% year-on-year, which was mainly benefited from the six new routes and the active efforts to serve overtimevessels, resulting in an increase in container volume of domestic and foreign trade.Bohai Rim regionQQCTU handled a container throughput of 4.18 million TEUs, representing an increase of 9.7% year-on-year, which was mainly benefited from an increase in foreign trade transshipment and container
China Merchants Port Group Co., Ltd. Interim Report 2021
volume of domestic trade. QQTU handled a bulk cargo volume of 9.16 million tonnes, representingan increase of 16.2% year-on-year, which was mainly attributable to reinforcing cooperation with keycustomers and the increase in major cargo types such as pulp. Thanks to the increased demand for theiron ore in the region, Qingdao Dongjiakou handled a bulk cargo volume of 33.73 million tonnes,indicating an increase of 11.0% year-on-year. Benefited from vigorously expanding the market andimproving the regional competition environment, Laizhou Port handled a bulk cargo volume of 12.44million tonnes, representing a year-on-year increase of 27.2%. Due to the merger by absorptionthrough share swap between Dalian Port, a joint stock company of the Company, and Yingkou Port,which were consolidated as Liaoning Port Co., Ltd., the Company has included Yingkou Port businessin the statistics since February 2021. Therefore, Liaoning Port Co., Ltd. handled a containerthroughput of 4.65 million TEUs, representing an increase of 29.2% year-on-year as compared to thatbefore the merger, and handled a bulk cargo volume of 129.73 million tonnes, representing an increaseof 90.9% year-on-year as compared to that before the merger. Tianjin Port Container Terminal Co.,Ltd. contributed a container throughput of 4.47 million TEUs, representing an increase of 21.8% year-on-year, which was mainly attributable to the increase in domestic trade throughput brought bydeepening cooperation with major customers.South-East region of Mainland ChinaZhangzhou Port handled a bulk cargo volume of 4.31 million tonnes, increased by 71.0% year-on-year, which was mainly due to the higher client demand in the hinterland, leading to an increase inimport cargoes. Xia Men Port handled a bulk cargo volume of 2.39 million tonnes, up by nearly 23times year-on-year, which was mainly benefited from the growth in domestic trade business ofsandstone driven by the increased client demand. Shantou Port handled a container throughput of
0.92 million TEUs, up by 48.4% year-on-year, mainly due to the development of domestic and foreigntrade routes, and a bulk cargo volume of 1.62 million tonnes, up by 1.3% year-on-year.
China Merchants Port Group Co., Ltd. Interim Report 2021
South-West region of Mainland ChinaZhanjiang Port handled a container throughput of 0.58 million TEUs, down by 4.9% year-on-year,mainly due to the decrease in the volume of domestic containers affected by the reduction of shippingroutes. It also handled a bulk cargo volume of 47.00 million tonnes, up by 6.2% year-on-year, whichwas mainly benefited from the improvement of the market environment and actively expanding intonew markets on the basis of consolidating existing customers.Hong Kong and Taiwan regionsCMCS and Modern Terminals in Hong Kong delivered an aggregate container throughput of 2.82million TEUs, up by 7.2% year-on-year.Taiwan Kao Ming Container in Kaohsiung, Taiwan handleda total container throughput of 0.95 million TEUs, representing an increase of 21.8% year-on-year.This is mainly because ports in the United States and European countries suffered from portcongestion due to the pandemic, with some cargoes loaded and unloaded in Kao Ming Terminal inadvance.Overseas operationCICT in Sri Lanka handled a container throughput of 1.50 million TEUs, up by 8.7% year-on-year,which was mainly benefited from the increase in transshipment container volume. HIPG handled abulk cargo volume of 0.79 million tonnes, increased by 338.9% year-on-year, which was mainly dueto the continuation of growth in the cement business volume starting from the second half of last year,and its RORO terminal handled 0.281 million vehicles, up by 56.2% year-on-year, mainly attributableto the growth in transshipment business. Container throughput handled by LCT in Togo increased by
19.7% year-on-year to 0.73 million TEUs, mainly attributable to the stable growth in containervolume from major customers. TL handled a container throughput of 12.74 million TEUs, up by
48.1% year-on-year, mainly benefited from the inclusion of business volume of the eight terminalsnewly acquired by TL in the statistics in April 2020 and the outstanding performance of its portslocated in European area. Benefited from the increase in local import container volume driven by the
China Merchants Port Group Co., Ltd. Interim Report 2021
resumption of work and production by the enterprises in Brazil in the first half of the year, TCP inBrazil handled a container throughput of 0.54 million TEUs, up by 12.5% year-on-year.
2. Implementation of business plan during the Reporting Period
During the Reporting Period, The Company actively grasped the continuous upward trend of thecontainer shipping market, consistently adhered to the business strategy of “giving due considerationand importance to both pandemic prevention and control and resumption of work and production”,continued to strengthen operations and management, and leveraged the Company's global portnetwork layout to provide strong support for smoothing domestic and foreign trade transportationchannels. Various businesses have achieved rapid growth and key projects have made significantprogress and fruitful results.
(1) Significant growth in business volume. In the first half of 2021, the Company’s ports handled atotal container throughput of 67.23 million TEUs, up by 21.1% year-on-year, and a bulk cargo volumeof 308 million tonnes, up by 40.2% year-on-year. The Company's business volume has achievedsubstantial growth, and its performance was better than the overall domestic levels. Among them,terminals in the West Shenzhen Port Zone controlled by the Company handled a container throughputof 6.50 million TEUs, up by 25.7% year-on-year, higher than the overall growth rate of ports inShenzhen, and its market share increased from 46.7% to 47.2%, representing an increase of 0.5percentage point.
(2) Giving due consideration and importance to both pandemic prevention and control andresumption of work and production. The Company has always highly concerned with pandemicprevention and control and emphasized that it is important to “attach great attention, high standards,efficient implementation, make constant efforts, consistent preparation, enhance pandemic preventionplans, optimise pandemic prevention processes, refine pandemic prevention measures, ensurecompliance and make sure everything is in order” in respect of pandemic prevention and control. Thepandemic in Yantian Port in May 2021 disturbed the stability of the South China regional supply
China Merchants Port Group Co., Ltd. Interim Report 2021
chain. Shekou Port, Chiwan Port and Mawan Port areas of the Company's West Shenzhen homebaseport strengthened the overall coordination of production and operation and ensured normal portoperations while handling the pandemic prevention and control properly, playing an important rolein guaranteeing the logistics supply chain in the South China region. These efforts not onlydemonstrate its responsibility as a central state-owned enterprise, but also reflect the advantages ofits strong operation and management ability.
(3) Mawan Smart Port putting into operation. Mawan Smart Port under the Company wasofficially put into operation in late June 2021, with the harbour area of 983,600 sq.m., the berthscoastline of 1,930 metres, and 5 berths in total, including two newly-built 200,000-ton classspecialized container dock berths which are the largest in South China. The mentioned berths are ableto moor the world’s largest container vessels, with a designed annual cargo handling capacity of 3million TEUs. As the number one project in the Company's smart terminal construction, MawanSmart Port, incorporating nine major intelligent elements, namely “CM Chip”, “CM ePort”, artificialintelligence, 5G network application, Beidou system, automation, intelligent ports, blockchain, andgreen and low-carbon development, is a model for intelligentisation upgrade of traditional terminalsat home and abroad. As compared with the traditional ports, Mawan Smart Port has significantlyincreased its operation efficiency. Its operational personnel decreased by 80%; comprehensiveoperational efficiency increased by 30%; potential safety hazards decreased by 50%; carbonemissions reduced by 90%, and the import and export clearance efficiency increased over 30%.Meanwhile, the reconstruction plan reduced the construction cost by 50% compared with that cost ofa newly-built fully automatic terminal, achieving considerable economic benefits. Mawan Smart Portis expected to have a positive impact on stabilizing the logistics supply chain in South China, and willfurther enhance the competitiveness and influence of the West Shenzhen homebase port in theregional market, thereby accelerating the construction of “a world-class leading port”.
(4) A new stage for market expansion. Relying on the substantial improvement of objectiveconditions such as the commissioning of the new berth at Mawan Smart Port and the all-weather
China Merchants Port Group Co., Ltd. Interim Report 2021
navigation of the 200,000-ton waterway, the Company strengthened its marketing and businesspromotion for the West Shenzhen Port Zone. In the first half of 2021, it added a number of new routessuch as North America line, Asia line and India line, further strengthened its in-depth cooperationwith CMA CGM (達飛輪船) and Mediterranean Shipping (地中海航運), and put more efforts tomaintain the existing routes and expand new routes, and the market share in South China hasincreased accordingly. In addition, the Company accelerated the construction of the coordinated portsin the Guangdong-Hong Kong-Macao Greater Bay Area and officially launched the “ShenzhenShekou-Shunde Beijiao Combined Port (深圳蛇口-順德北滘組合港)” project in the first half of theyear, further expanding the coordinated port sites.
(5) Comprehensive development. The Company actively explores and promotes comprehensivedevelopment business, taking Djibouti and HIPG as overseas pilots to promote the comprehensivedevelopment model of "Port-Park-City". In the first half of 2021, despite the adverse impact of thecontinuous spread of the global pandemic, the business and investment solicitation in overseas parksprogressed steadily. The number of contracted enterprises in the HIPG Industrial Park reached 27,and the number of contracted enterprises in the Djibouti Free Trade Zone reached 162.Comprehensive development business has made good progress.
3. Year-on-year Changes in Key Financial Data
Unit: RMB
| H1 2021 | H1 2020 | Change (%) | Main reason for change | |
| Operating revenue | 7,339,942,862.26 | 5,962,497,716.96 | 23.10% | - |
| Operating costs | 4,198,451,164.27 | 3,743,190,504.14 | 12.16% | - |
| Administrative expense | 766,369,973.37 | 745,721,965.45 | 2.77% | - |
| Finance costs | 730,109,013.88 | 841,408,636.18 | -13.23% | - |
| Income tax expense | 643,438,595.12 | 513,167,463.70 | 25.39% | - |
| R&D investments | 98,344,411.25 | 71,988,081.92 | 36.61% | New addition to the consolidation scope |
| Net cash generated from/used in operating activities | 2,934,960,407.96 | 2,057,741,203.08 | 42.63% | Increase in business volume |
| Net cash generated from/used in investing activities | 53,828,332.73 | -7,869,699,226.91 | 100.68% | Payment for the Tranche 1 of mandatory convertible bonds of TL, Payment for the Tranche 1 loan of TL and investment in China Merchants Northeast Asia |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Development and Investment Co., Ltd. in the same period of last year, with no comparable payment in the current period | ||||
| Net cash generated from/used in financing activities | -5,513,332,001.73 | 5,356,254,138.54 | -202.93% | Increase in repayment of due loans |
| Net increase in cash and cash equivalents | -2,551,095,256.98 | -487,601,731.66 | -423.46% | Increase in net cash used in financing activities |
Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.Breakdown of operating revenue:
Unit: RMB
| H1 2021 | H1 2020 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 7,339,942,862.26 | 100% | 5,962,497,716.96 | 100% | 23.10% |
| By operating division | |||||
| Port operations | 7,048,459,976.64 | 96.03% | 5,698,802,943.83 | 95.58% | 23.68% |
| Bonded logistics service | 204,996,959.89 | 2.79% | 191,942,345.76 | 3.22% | 6.80% |
| Property development and investment | 86,485,925.73 | 1.18% | 71,752,427.37 | 1.20% | 20.53% |
| By operating segment | |||||
| Mainland China, Hong Kong and Taiwan | 5,552,294,281.37 | 75.64% | 4,255,086,509.16 | 71.36% | 30.49% |
| Other countries and regions | 1,787,648,580.89 | 24.36% | 1,707,411,207.80 | 28.64% | 4.70% |
Operating division, product category or operating segment contributing over 10% of operatingrevenue or operating profit:
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Port operations | 7,048,459,976.64 | 3,968,490,374.19 | 43.70% | 23.68% | 12.85% | 5.40% |
| By operating segment | ||||||
| Mainland China, Hong Kong and Taiwan | 5,552,294,281.37 | 3,359,615,909.40 | 39.49% | 30.49% | 16.86% | 7.05% |
| Other countries | 1,787,648,580.89 | 838,835,254.87 | 53.08% | 4.70% | -3.40% | 3.94% |
China Merchants Port Group Co., Ltd. Interim Report 2021
Core business data restated according to the changed methods of measurement that occurred in theReporting Period:
□ Applicable √ Not applicable
Any over 30% YoY movements in the data above and why:
Operating revenue in Mainland China, Hong Kong and Taiwan increased 30.49% year-on-year, whichwas mainly benefited from the continued improvement of the container shipping market. TheCompany's West Shenzhen Port Zone and other terminal projects achieved substantial growth incontainer throughput.IV Analysis of Non-Core Businesses
Unit: RMB
and regions
| Amount | As % of profit before tax | Source/Reason | Recurrent or not | |
| Return on investment | 3,609,743,591.59 | 73.55% | Share of profits of joint ventures and associates, mainly share of the net profit of SIPG | Yes |
| Gain/loss on changes in fair value | -488,532,866.45 | -9.95% | Loss on changes in the fair value of held-for-trading financial liabilities | No |
| Other income | 305,982,258.62 | 6.23% | Government grants received | No |
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 30 June 2021 | 31 December 2020 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Accounts receivable | 1,853,240,938.06 | 1.10% | 1,393,349,417.02 | 0.83% | 0.27% | Increase in revenue |
| Long-term equity investments | 67,429,276,231.95 | 39.97% | 66,242,411,222.90 | 39.26% | 0.71% | New investment in Ningbo Port, and recognition of investment income from associates and joint ventures |
| Fixed assets | 30,664,411,611.93 | 18.18% | 29,479,755,159.21 | 17.47% | 0.71% | Transfer of the Haixing intelligent harbor project to fixed assets |
| Construction in progress | 4,082,810,291.73 | 2.42% | 5,381,430,606.18 | 3.19% | -0.77% | Transfer of the Haixing intelligent harbor project to fixed assets |
| Other receivables | 4,580,706,082.69 | 2.72% | 3,561,292,313.98 | 2.11% | 0.61% | Increase in dividends receivable from associates |
China Merchants Port Group Co., Ltd. Interim Report 2021
| and joint ventures | ||||||
| Other current assets | 821,942,182.54 | 0.49% | 434,074,085.16 | 0.26% | 0.23% | Increase in structured deposits |
| Short-term borrowings | 4,918,709,603.87 | 2.92% | 10,483,775,548.93 | 6.21% | -3.29% | Repayment of short-term borrowings upon maturity |
| Other payables | 3,866,179,811.31 | 2.29% | 2,481,217,568.40 | 1.47% | 0.82% | Increase in dividends payable to ordinary shareholders |
| Non-current liabilities due within one year | 8,743,691,405.73 | 5.18% | 3,564,587,701.07 | 2.11% | 3.07% | Increase in corporate bonds due within one year |
| Bonds payable | 17,283,407,358.74 | 10.24% | 21,090,545,845.56 | 12.50% | -2.26% | Increase in corporate bonds due within one year, which were presented in non-current liabilities due within one year |
2. Major Assets Overseas
| Asset | Source | Asset value (RMB’0,000) | Location | Operations | Control measures to protect asset safety | Return generated (RMB’0,000) | As % of the Company’s net asset value | Material impairment risk (yes/no) |
| Equity assets | Acquired via share offering | 14,004,192.38 | Hong Kong | Port investment and operations | Appointing director, supervisor and senior management /According to the political, economic and legal environment of different countries and regions, establish a targeted internal control system and early warning system. | 392,407.96 | 87.92% | No |
| Other information | N/A | |||||||
3. Assets and Liabilities at Fair Value
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes through equity | Impairment allowance made in the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
| Financial assets | ||||||||
| Held-for-trading financial assets | 850,165,448.59 | 7,839.21 | - | - | 3,580,000,000.00 | 3,430,000,000.00 | - | 1,000,173,287.80 |
China Merchants Port Group Co., Ltd. Interim Report 2021
| (exclusive of derivative financial assets) | ||||||||
| Other non-current financial assets | 910,807,452.56 | -45,536,366.63 | - | - | - | - | -1,362,000.24 | 863,909,085.69 |
| Investments in other equity instruments | 181,467,057.74 | - | 412,500.00 | - | - | - | 137,500.00 | 182,017,057.74 |
| Receivables financing | 217,449,966.41 | - | - | - | - | - | 55,439,353.42 | 272,889,319.83 |
| Subtotal of financial assets | 2,159,889,925.30 | -45,528,527.42 | 412,500.00 | - | 3,580,000,000.00 | 3,430,000,000.00 | 54,214,853.18 | 2,318,988,751.06 |
| Financial liabilities | 2,888,395,641.53 | -443,004,339.03 | - | - | - | - | 106,758,878.13 | 3,438,158,858.69 |
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
4. Restricted Asset Rights as at the Period-End
Restricted monetary assets were security deposits of RMB12,259,378.15.The carrying amount of fixed assets as bank loan mortgages was RMB341,262,588.64.The carrying amount of construction in progress as bank loan mortgages was RMB39,017,486.19.The carrying amount of intangible assets as bank loan mortgages was RMB215,521,701.84.The carrying amount of equities and interests as bank loan mortgages was RMB2,658,231,361.27.VI Investments Made
1. Total Investment Amount
| Total investment amount in the Reporting Period (RMB) | Total investment amount in the same period of last year (RMB) | Change (%) |
| 1,331,950,431.45 | 5,230,130,246.69 | -74.53% |
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Interim Report 2021
3. Major Non-Equity Investments Ongoing in the Reporting Period
Unit: RMB
| Item | Way of investment | Fixed assets investment or not | Industry involved | Input amount in the Reporting Period | Accumulative actual input amount as of the period-end | Capital resources | Progress | Estimated return on investment | Accumulative realized revenues as of the period-end | Reason for not reaching the schedule and anticipated income |
| Haixing Harbor 1#-4# berths renovation project—water engineering | Self-built | Yes | Support activities for water transportation | 475,615,870.23 | 2,019,842,686.83 | Self-funded and loan-funded | 87.11% | 0.00 | 0.00 | N/A |
| HIPG container and oil terminals and tank zone renovation project | Self-built | Yes | Support activities for water transportation | 1,671,680.20 | 1,552,112,017.05 | Self-funded and loan-funded | 56.19% | 0.00 | 0.00 | N/A |
| Machong Port 2# and 3# berths and bulk grain warehouse phase III project | Self-built | Yes | Support activities for water transportation | 20,596,884.33 | 507,647,601.58 | Self-funded and loan-funded | 81.88% | 0.00 | 0.00 | N/A |
| Zhanjiang Port Xiashan Port General Wharf | Self-built | Yes | Support activities for water transportation | 13,731,990.53 | 478,370,995.63 | Self-funded and loan-funded | 64.84% | 0.00 | 0.00 | N/A |
| General Cargo project of Zhanjiang Port Donghai Island | Self-built | Yes | Support activities for water transportation | 6,108,117.16 | 372,691,510.47 | Self-funded and loan-funded | 41.17% | 0.00 | 0.00 | N/A |
| Total | -- | -- | -- | 517,724,542.45 | 4,930,664,811.56 | -- | -- | 0.00 | 0.00 | -- |
4. Financial Investments
(1) Securities Investments
Unit: RMB
| Variety of security | Code of security | Name of security | Initial investment cost | Accounting measurement method | Beginning carrying amount | Gain/loss on fair value changes in the Reporting Period | Accumulated fair value changes recorded in equity | Purchased in the Reporting Period | Sold in the Reporting Period | Gain/loss in the Reporting Period | Ending carrying amount | Accounting title | Funding source |
| Stock | 6198 | Qingdao Port | 124,405,138.80 | Fair value method | 166,225,139.77 | -17,536,366.63 | - | - | - | 10,822,001.31 | 147,326,772.90 | Held-for-trading financial assets | Self-funded |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Stock | 601298 | Qingdao Port | 331,404,250.30 | Fair value method | 720,160,000.00 | -28,000,000.00 | - | - | - | 29,366,400.00 | 692,160,000.00 | Held-for-trading financial assets | Self-funded |
| Stock | 600377 | Jiangsu Expressway | 1,120,000.00 | Fair value method | 10,786,800.00 | - | 412,500.00 | - | - | 460,000.00 | 11,336,800.00 | Investment in other equity instruments | Self-funded |
| Stock | 400032 | Petrochemical A1 | 3,500,000.00 | Fair value method | 382,200.00 | - | - | - | - | - | 382,200.00 | Investment in other equity instruments | Self-funded |
| Stock | 600179 | Antong Holdings | 391,956.73 | Fair value method | 165,448.59 | 7,839.21 | - | - | - | - | 173,287.80 | Held-for-trading financial assets | Self-funded |
| Stock | 400009 | Guang Jian 1 | 27,500.00 | Fair value method | 17,000.00 | - | - | - | - | - | 17,000.00 | Investment in other equity instruments | Self-funded |
| Total | 460,848,845.83 | -- | 897,736,588.36 | -45,528,527.42 | 412,500.00 | 0.00 | 0.00 | 40,648,401.31 | 851,396,060.70 | -- | -- | ||
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.VII Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
VIII Principal Subsidiaries and Joint Stock CompaniesPrincipal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB
| Name | Relationship with the | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Company | ||||||||
| Shanghai International Port (Group) Co., Ltd. | Joint stock company | Business related to port, container and terminal | 23,173,674,650.00 | 165,927,983,549.06 | 101,672,988,842.61 | 17,362,678,537.04 | 10,568,397,229.38 | 9,168,282,128.06 |
| China Merchants Port Holdings Company Limited | Subsidiary | Port business, bonded logistics and property investment | 42,521,339,893.42(HKD) | 140,041,923,765.46 | 95,197,445,432.97 | 4,722,661,879.99 | 4,301,651,669.15 | 3,924,079,558.91 |
Subsidiaries obtained or disposed of in the Reporting Period:
| Subsidiary | How subsidiary was obtained or disposed in the Reporting Period | Effects on overall operations and operating performance |
| Yingkou Port Information Technology Co., Ltd. | Business combination under the same control | Business integration |
| Dalian Port Logistics Network Co., Ltd. | Business combination under the same control | Business integration |
Other information on principal subsidiaries and joint stock companies:
There is no other information on the Company’s principal subsidiaries and joint stock companies inthe Reporting Period that is required to be disclosed.IX Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
X. Risks faced by the Company and counter measures
1. Risk of macroeconomic fluctuations
Internationally, the world economic situation in 2021 is still complex and severe, the recovery isunstable and uneven, and various derivative risks caused by the impact of the pandemic cannot beignored. In the first half of the year, the pandemic in Europe and the United States eased andvaccination was accelerated, but the pandemic in Asia repeated. The world's top 10 developedcountries possess 80% of the world's COVID-19 vaccines. The uneven distribution of global COVID-19 vaccines has increased the uncertainty and imbalance of the global economic recovery. Followingthe pandemic, the new round of easing monetary policies will increase global debt level and emerging
China Merchants Port Group Co., Ltd. Interim Report 2021
markets’ economy will become more vulnerable. Traditional and non-traditional risks, such as naturaldisasters and geopolitical uncertainties, may aggregate volatility in the international financial market.Such risks of uncertainties will impact China’s foreign trade market, container shipping market, andbulk commodity demand, and pose certain challenges to the Company’s overseas investment andplanning.Domestically, China’s economic growth still faces uncertainties as a result of the pandemic, the Sino-US friction, and the effectiveness of vaccination, and the foundation for its economic recovery is notthat firm. In the first half of the year, due to the continued impact of the pandemic, the domesticconsumer industry was still relatively weak in driving the economic growth, which put a certainamount of pressure on the recovery process of domestic business and trade. In addition, the pandemichas accelerated the implementation of technological innovation policies on national level andamplified the urgency of the digital upgrade in the port and shipping industry.Facing the risk of macroeconomic fluctuations, especially the risks imposed on foreign trade andimport and export business by the COVID-19 pandemic, exchange rate fluctuations and other factors,the Company will take the initiative to identify and respond to changes. Firstly, it will work in fullswing to implement the national 14th Five-year Plan and achieve high-quality growth by facilitatingtransformation and upgrade of port industry. Secondly, it will follow the “Belt and Road” initiativeand the national strategies on building a strong transportation country, the Guangdong-Hong Kong-Macao Greater Bay Area, and the integrated development of Yangtze River Delta, so as to helpconstruct the new national dual circulation development regime. Thirdly, it will seize theopportunities arising from a new round of high-level opening-up policies to continuously improveservice quality of ports under the economic globalization trend. Fourthly, it will enhance capacitybuilding in respect of risk identification, warning, and solving, and continue to research and followup on the development trend in the global industrial chain and trade movements and adjust theCompany’s business operating strategies appropriately, in order to effectively prevent, control, andreduce external risks.
China Merchants Port Group Co., Ltd. Interim Report 2021
2. Policy risks
The policy risks in the port industry can be either positive or negative to the industry. On the onehand, under the new regime of dual circulation development, policies such as encouraging theexpansion of imports are expected to bring new opportunities to the development of the industry, andat the same time, national strategies such as the “Belt and Road” initiative and the Guangdong-HongKong-Macao Greater Bay Area will introduce favorable policies to the industrial development; Onthe other hand, policies and initiatives of the government for reducing costs and improving efficiencyin logistics, anti-monopoly, and environmental protection may put pressure on the profitability of theport industry.Facing the policy risks that might exist, on one hand, the Company will strengthen policy researchand proactively practice the “Belt and Road” initiative and a series of national strategies to seizefirmly the opportunities arising from these policies; On the other hand, in response to the negativerisks, the Company will improve its operation management capability and the sustainable profitabilityby continuously enhancing quality and efficiency and strengthening resource allocation.
3. Operation management risks
Under the favorable environment of domestic and overseas regional ports integration, the Companyhas swiftly strengthened its principal port business and successfully further optimized the network ofdomestic and overseas ports. However, the Company also faces unfavorable conditions, such asincreased difficulties in operation and management of ports in certain regions, relatively lowinvestment returns, and etc: (1) Investment decision-making of some projects will continue to beriskier and more difficult under the increasingly complicated external environment; (2) In the firsthalf of the year, international exchange rate fluctuations intensified. The RMB exchange rate rose andfell, and the two-way fluctuation characteristics became more obvious. In this regard, the Companyis working hard to form an exchange rate risk management and control mechanism to timely adjustresponse strategies according to exchange rate fluctuations, thus minimizing the impact of exchange
China Merchants Port Group Co., Ltd. Interim Report 2021
rate fluctuations on the Company’s performance. (3) The Company’s internationalized operationmanagement system still needs to be improved and the benefits of integration are to be enhancedthrough management output and other ways to accommodate with the Company’s rapid developmentand expansion; (4) The risk control system needs to be continuously developed and optimized toconstantly improve management efficiency.In terms of the Company’s internal operation management risks, the Company will: (1) increasecustomer loyalty and seize market opportunities based on three improvement elements, namely“market, resources, services”; (2) improve internal control system to take further precautions in riskcontrol and reinforce the stringent restrictions of internal control, ensuring effective risk identificationand control and consolidating the foundation of risk control; and (3) optimize risk warning system toprecisely keep abreast of the new developments with an aim to seize the opportunities while ensuringrisk control.
China Merchants Port Group Co., Ltd. Interim Report 2021
Part IV Corporate Governance
I Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Index to disclosed information |
| The 2020 Annual General Meeting | Annual General Meeting | 88.89% | 28 May 2021 | 29 May 2021 | See the resolution announcement (No. 2021-047) on www.cninfo.com.cn |
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders withResumed Voting Rights
□ Applicable √ Not applicable
II Change of Directors, Supervisors and Senior Management
| Name | Office title | Type of change | Date of change | Reason for change |
| Huang Chuanjing | Vice GM, Secretary of the Board | Left | 15 January 2021 | Job change |
| Su Jian | Director | Left | 5 March 2021 | Job change |
| Li Yubin | Secretary of the Board | Engaged | 13 April 2021 | Engaged |
| Tu Xiaoping | CFO | Engaged | 17 May 2021 | Engaged |
| Zhang Yiming | Vice GM | Engaged | 17 May 2021 | Engaged |
| Liu Weiwu | Director | Elected | 28 May 2021 | Elected |
| Zheng Yongkuan | Independent director | Elected | 28 May 2021 | Elected |
| Wang Zhenmin | Independent director | Left | 28 May 2021 | Personal reason |
| Zheng Shaoping | Vice GM | Left | 6 August 2021 | Personal reason |
| Liu Yingjie | Chairman of the Supervisory Committee | Left | 13 August 2021 | Job change |
| Bai Jingtao | Vice Chairman, CEO | Left | 20 August 2021 | Job change |
| Zhang Yi | Director, COO, GM | Left | 20 August 2021 | Job change |
| Wang Xiufeng | CEO | Engaged | 23 August 2021 | Engaged |
China Merchants Port Group Co., Ltd. Interim Report 2021
III Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployeesThe Company is implementing the stock option incentive plan, and the review and approvalprocedures carried out in connection with the Stock Option Incentive Plan are as follows:
(1) At the 1
st
Extraordinary Meeting of the 10
th Board of Directors in 2021 and the 1
stExtraordinaryMeeting of the 10
thSupervisory Committee in 2021 held on 29 January 2021, the Proposal onAdjusting the Exercise Price of the First Grant under the Stock Option Incentive Plan (Phase I) andthe Proposal on the Grant of Stock Option (the Reserved) to Incentive Objects of the Stock OptionIncentive Plan (Phase I) of the Company were considered and approved respectively. The SupervisoryCommittee reviewed the list of incentive objects for the reserved stock options under the Stock OptionIncentive Plan (Phase I) on the grant date, and independent directors expressed independent opinions.Refer to the relevant announcements (Announcement No. 2021-007, No. 2021-008) disclosed onwww.cninfo.com.cn for details.
(2) On 9 February 2021, the Company disclosed the Announcement on Notes of the SupervisoryCommittee on the Review and Publicity of the List of Incentive Objects for the Reservation under theStock Option Incentive Plan (Phase I) (Announcement No. 2021-009). The Company published thenames and positions of the incentive objects for reserved stock options in its internal OA system from29 January 2021 to 8 February 2021. By the end of the publicity, the Company’s SupervisoryCommittee had not received any objection against the incentive objects for reserved stock options.Refer to the relevant announcement (Announcement No. 2021-009) disclosed on www.cninfo.com.cnfor details.
(3) 5 March 2021, the Company has completed registration for the grant of stock option (the reserved)under the Stock Option Incentive Plan (Phase I). Refer to the Announcement on Completion of the
China Merchants Port Group Co., Ltd. Interim Report 2021
Grant of Stock Option (the Reserved) under the Stock Option Incentive Plan (Phase I) of the Company(Announcement No. 2021-013) disclosed on www.cninfo.com.cn for details.
China Merchants Port Group Co., Ltd. Interim Report 2021
Part V Environmental and Social ResponsibilityI Major Environmental Issues
1. Pollution Discharge
| Name of the company or subsidiary company | Names of major and characteristic pollutants | Discharge method | Outlet quantity | Outlet distribution | Discharge concentration | Pollutant discharge standards | Total discharge | Total discharge approved | Excessive discharge |
| The first branch of Zhanjiang Port (Group) Co., Ltd. | Particulate matters | Unorganized | -- | Plant boundary | 0.055 mg/m3 | Discharge Limits of Air Pollutants (DB44/27-2001) | -- | -- | No excessive discharge |
| SO2 | Unorganized | -- | Plant boundary | 0.008 mg/m3 | -- | -- | No excessive discharge | ||
| Oxynitride | Unorganized | -- | Plant boundary | 0.007 mg/m3 | -- | -- | No excessive discharge | ||
| PH | No efflux | -- | -- | 8.27 | Level-1 standards for the 2nd time interval of Discharge Limits of Water Pollutants (DB44/26-2001) | -- | -- | No excessive discharge | |
| Suspended substances | No efflux | -- | -- | 6 mg/L | -- | -- | No excessive discharge | ||
| Chemical oxygen demand (COD) | No efflux | -- | -- | 8 mg/L | -- | -- | No excessive discharge | ||
| Five-day biochemical oxygen demand (BOD5) | No efflux | -- | -- | 2.6 mg/L | -- | -- | No excessive discharge | ||
| Ammonia-nitrogen | No efflux | -- | -- | 0.108 mg/L | -- | -- | No excessive discharge | ||
| Petroleum | No efflux | -- | -- | 0.06 mg/L | -- | -- | No excessive discharge | ||
| Noise (plant boundary) | Unorganized | -- | Plant boundary | Daytime: (56.7 - 63.8) dB Nighttime: (47.3 - 53.1) dB | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | -- | -- | No excessive discharge | |
| The third branch of Zhanjiang Port (Group) Co., Ltd. | Particulate matters | Unorganized | -- | Plant boundary | 0.094 mg/m3 | Discharge Limits of Air Pollutants (DB44/27-2001) | -- | -- | No excessive discharge |
| SO2 | Unorganized | -- | Plant boundary | 0.007 mg/m3 | -- | -- | No excessive discharge | ||
| Oxynitride | Unorganized | -- | Plant boundary | 0.017 mg/m3 | -- | -- | No excessive discharge | ||
| PH | No efflux | -- | -- | 7.38 | Level-1 standards | -- | -- | No excessive discharge |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Suspended substances | No efflux | -- | -- | 56 mg/L | for the 2nd time interval of Discharge Limits of Water Pollutants (DB44/26-2001) | -- | -- | No excessive discharge | |
| Chemical oxygen demand (COD) | No efflux | -- | -- | 89 mg/L | -- | -- | No excessive discharge | ||
| Ammonia-nitrogen | No efflux | -- | -- | 3.9 mg/L | -- | -- | No excessive discharge | ||
| Petroleum | No efflux | -- | -- | 0.07 mg/L | -- | -- | No excessive discharge | ||
| Phosphate | No efflux | -- | -- | 0.45 mg/L | -- | -- | No excessive discharge | ||
| Noise (plant boundary) | Unorganized | -- | Plant boundary | Daytime: (55.8 - 59) dB Nighttime: (46.7 - 48.8) dB | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | -- | -- | No excessive discharge | |
| Zhanjiang Port Petrochemical Terminal Co., Ltd. | Volatile organic compounds (plant boundary) | Unorganized | -- | Plant boundary | 0.32 mg/m3 | Discharge Limits of Air Pollutants (DB44/27-2001) | -- | -- | No excessive discharge |
| Volatile organic compounds | Discontinuous discharge | 2 | Two exhaust outlets, one for vehicle loading, another for train loading | (4.55 - 20.7) g/m3 | Emission Standard of Air Pollutant for Bulk Petroleum Terminals (GB20950-2020) | 0.0030755 tons | 233.783 tons (total approved amount for one year) | No excessive discharge | |
| Volatile organic compounds | Unorganized | -- | Volatilization of storage tank (33 storage tank) | -- | Discharge Limits of Air Pollutants (DB44/27-2001) | 60.67 tons | No excessive discharge | ||
| Volatile organic compounds | Unorganized | -- | A dynamic or static sealing point around 21,500 | -- | Discharge Limits of Air Pollutants (DB44/27-2001) | 0.0728 tons | No excessive discharge | ||
| Noise (plant boundary) | Plant boundary | -- | Plant boundary | Daytime: (60.9 - 62.1) dB Nighttime: (51.7 - - 52.5) dB | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | -- | -- | No excessive discharge | |
| Chemical oxygen demand (COD) | Discontinuous discharge | 2 | Wastewater outlet, | Industrial wastewater: 43 - 63 mg/L Rainwater: | Discharge Limits of Water Pollutants | 0.386889495 tons | -- | No excessive discharge |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Rainwater outlet | 30 - 45 mg/L | (DB44/26-2001) of Guangdong Province | ||||||
| Ammonia-nitrogen (NH3-N) | Discontinuous discharge | 2 | Wastewater outlet, Rainwater outlet | Industrial wastewater: (0.23 - 0.325) mg/L Rainwater: (0.187 - 0.555) mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | 0.002147699 tons | -- | No excessive discharge |
| Petroleum | Discontinuous discharge | 2 | Wastewater outlet, Rainwater outlet | Industrial wastewater: (0.06 - 0.45) mg/L Rainwater: (0.21- 0.44) mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | 0.00185053 tons | -- | No excessive discharge |
| PH | Discontinuous discharge | 1 | Wastewater outlet | 7.17 - 7.79 | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| Suspended substances | Discontinuous discharge | 1 | Wastewater outlet | 6 mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| Total organic carbon (TOC) | Discontinuous discharge | 1 | Wastewater outlet | 13.8 mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | 0.11263135 tons | -- | No excessive discharge |
| Volatile phenols | Discontinuous discharge | 1 | Wastewater outlet | 0.01 g/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | 0.00008162 tons | -- | No excessive discharge |
| Total cyanide | Discontinuous discharge | 1 | Wastewater outlet | 0.004 mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | 0.00003265 tons | -- | No excessive discharge |
2. Construction and operation of pollution control facilities
(1) Wastewater treatment
① At present, the first branch of Zhanjiang Port (Group) Co., Ltd. has one industrial sewage treatmentplant, and industrial sewage is collected for watering and dust control in the port area after treatment;
China Merchants Port Group Co., Ltd. Interim Report 2021
while domestic sewage in the port area is assigned to a qualified third party for treatment incompliance with relevant standards.
② The third branch of Zhanjiang Port (Group) Co., Ltd. has a set of rainwater collection facilities,and the rainwater is collected for watering and dust control in the port area after treatment; whiledomestic sewage in the port area is assigned to a qualified third party for treatment in compliancewith relevant standards.
③ Zhanjiang Port Petrochemical Terminal Co., Ltd. has two sets of wastewater treatment equipmentand one set of COD treatment equipment.The above-mentioned equipment and facilities are in normal operation.
(2) Waste gas treatment
① The first and third branches of Zhanjiang Port (Group) Co., Ltd. use water spray, water mist spray,sprinkler and other facilities to meet the demand for dust control in mass stockpiles and workingplaces. To reduce dust emissions to the maximum, the stockpile is fully covered, and the dust controlmanagement in the process of static storage and dynamic operation is strengthened. The first branchowns a dust-free and sound-proof wall with a length of 160 meters and a height of 12 meters on thenorthern boundary of the plant; and the third branch has a dust suppression wall 427 meters long and17 meters high, a retaining wall 2.5 meters high and 3,100 meters long, and a green belt around theport area covering 60,000 square meters.
② Zhanjiang Port Petrochemical Terminal Co., Ltd. has two sets of waste gas treatment equipmentto recover the oil and gas generated during vehicle and train loading. One set is for the recovery ofoil and gas of vehicles, with a processing capacity of 200 m?/h. The other is for the recovery of oiland gas of trains, with a processing capacity of 1200 m?/h.The above-mentioned equipment and facilities are in normal operation.
(3) Hazardous waste
The first and third branches of Zhanjiang Port (Group) Co., Ltd., and Zhanjiang Port PetrochemicalTerminal Co., Ltd. provide seven special rooms for temporary storage of hazardous waste as required,and assign a qualified third party to transport the waste in time. This system is in normal operation.
3. Assessment of the environmental impact of construction projects and other administrativelicenses of environmental protectionAccording to the requirements of relevant laws and regulations, the first and third branches ofZhanjiang Port (Group) Co., Ltd., and Zhanjiang Port Petrochemical Terminal Co., Ltd. providevarious documents such as the environmental impact report, environmental inspection and acceptancereport, and approval and licenses of environmental authorities. The reply documents include: ReviewOpinions of the Current Environmental Impact Assessment Report of the First Branch of ZhanjiangPort (Group) Co., Ltd. (Document Z.X.H.J. [2018] No. 12); Review Opinions of the CurrentEnvironmental Impact Assessment Report of the Third Branch of Zhanjiang Port (Group) Co., Ltd.(Document Z.H.C.J. [2018] No. 31); Environmental Impact Assessment Report of the Current Statusof Crude Oil Storage Tank Farms of Zhanjiang Port Petrochemical Terminal Co., Ltd. (DocumentZ.X.H.J. [2019] No. 05); Environmental Impact Assessment Report of 1# Tank Farm Project ofZhanjiang Port Petrochemical Terminal Co., Ltd. (Document Z.H.J.X. [2021] No. 6), etc.
4. Contingency plan for environmental emergencies
In order to earnestly implement the Emergency Response Law of the People's Republic of China,other relevant laws, regulations and documents, and to prevent, prepare for and respond toenvironmental emergencies, as well as to protect the lives and reduce property losses, Zhanjiang Port
China Merchants Port Group Co., Ltd. Interim Report 2021
(Group) Co., Ltd. prepares Contingency Plan for Environmental Emergencies of Zhanjiang Port(Group) Co., Ltd. (including contingency plans for the first and third branches), and Zhanjiang PortPetrochemical Terminal Co., Ltd. prepares the Contingency Plan for Environmental Emergencies ofZhanjiang Port Petrochemical Terminal Co., Ltd. and has completed the filing of this document(Filing No. 440803-2019-0010-H).
5. Environmental self-monitoring program
The first and third branches of Zhanjiang Port (Group) Co., Ltd., and Zhanjiang Port PetrochemicalTerminal Co., Ltd. entrust environmental monitoring of wastewater, waste gas and noise to theinstitutions with nationally recognized qualifications. With accumulated data and a scientific outlookto further guide environmental protection, the Company strives to be an environment-friendlyenterprise which promotes social harmony.
6. Administrative penalties for environmental problems during the Reporting Period
| Name of the company or subsidiary company | Penalty reason | Violation situation | Penalty result | Impact on the production and operation of the Company | Remediation measures of the Company |
| Shenzhen Mawan Port Waterway Co., Ltd. | Administrative penalties for environmental protection problems | The lessees of Shenzhen Mawan Port Waterway Co., Ltd. did not take the airtight method to load and unload the muck | A fine of RMB10,000 | No significance influence | As required, Shenzhen Mawan Port Waterway Co., Ltd. talked with the two lessees and established a rectification period. The Operations Department of Shenzhen Mawan Port Waterway Co., Ltd. has improved the sprinkler equipment and installed a vehicle washing system for the muck operation site within the specified period. The Quality and Safety Department of China Merchants Port Service (Shenzhen) Co., Ltd.has intensified the inspection of musk dust and musk vehicle cleaning of Shenzhen Mawan Port Waterway Co., Ltd. |
7. Other environmental information that should be disclosed
□ Applicable √ Not applicable
8. Other information related to environmental protection
With the aim of building a green ecological port, the Company abides by relevant laws and regulationson environmental protection, improves the corporate environmental protection system, assumes itsresponsibilities for environmental protection, and further supports the management of energyconservation and environmental protection. The Company identifies and prepares for the risks posedby climate change, attaches great importance to typhoon precautions and actively responds to theimpact of climate change. It also keeps its pace with the strategies of "Emission Peak" and "CarbonNeutrality", and involves itself in the construction of national, provincial and ministerial "EmissionPeak" and "Carbon Neutrality" pilot projects as well as in carbon verification and performance.During the Reporting Period, while taking measures in normalizing pandemic prevention and control,the Company engages its subordinate companies in the fourth "Telling Stories on EnergyConservation" micro-video, photography and essay contest. In terms of ecological civilization andgreen development publicity, the Company adheres to the concept of green and low-carbonproduction and lifestyle, and guides all employees to participate in energy conservation and emissionreduction, promotes ecological civilization construction and thus creates a better living environment.Moreover, the Company and its subordinate companies have signed the letter of responsibility forenergy conservation and environmental protection at the beginning of this year in an effort to fulfill
China Merchants Port Group Co., Ltd. Interim Report 2021
the responsibilities for environmental protection and to strengthen the review of responsibilities.The Company firmly upholds the philosophy of green development, advances the reform of energy-saving technologies, promotes the application of green and low-carbon technologies, steadilyimproves operational efficiency and energy efficiency, seeking to build a green and low-carbon portwhich contributes to global climate governance. The Company complies with national and localstandards on environmental protection, adheres to a two-pronged approach of production andenvironmental protection, strengthens environmental protection governance, improves the capacityof environmental protection and anti-fouling performance, and enhances on-site control and routineinspection on environmental protection. It also adopts the principle of energy-saving technicaltransformation "integrating independent transformation with the assistance of external professionalinstitutions", and promotes new energy-saving technologies and products such as "shore-to-shippower supply", "oil to electricity" and "belt conveyor transformation", thus improving energyutilization efficiency. The Company complies with national and local energy-saving policies, phasesout obsolete storage facilities and refuses to purchase inefficient equipment. Also, we upgrade thetechnical equipment in operation with advanced technology to improve the performance of overalltechnical equipment. In terms of container business segment, shore-to-ship power supply and theconversion of oil-using RTG to electricity-driven RTG run smoothly. In respect of the bulk cargobusiness segment, the Company optimizes the bulk cargo loading and unloading operations, developsor purchases professional equipment, promotes the construction of silos, warehouses and otherstorage facilities to reduce dust emissions. In the petrochemical business segment, the oil and gasrecovery system of VOCs and the demolition of old storage tanks have been carried out steadily.II Corporate Social Responsibility (CSR)The Company highlights and practices corporate social responsibilities. While improving businessperformance and creating benefits for shareholders, the Company earnestly performs its socialresponsibilities for employees, society and environment, and promotes the sustainable developmentof the enterprise and society.The Company adheres to the philosophy of win-win integration, continues to help drive thedevelopment of poor communities, pays attention to groups with special needs, and works togetherwith local governments and people to fight the epidemic. In the first half of 2021, the Companydonated the following supplies: USD21,600 to the Government of Sri Lanka for the building ofCOVID-19 isolation centers; eight 20-foot containers to a hospital in Gampaha District, WesternProvince, Sri Lanka, which were transformed into nucleic acid testing laboratories; USD4,500 worthof anti-pandemic supplies (5,000 N95 respirator masks) to a hospital in Hambantota; USD10,000 toHambantota Zonal Education Office and a hospital, and additional USD75,000 worth of PCRdetection instruments to a hospital Hambantota. Through the Djibouti development project, theCompany made a donation of USD30,000 worth of supplies to 300 poverty-stricken families in Pk23,Dikhil and Tadjourah regions of Djibouti.In the first half of 2021, the Company continued to build the "Shaping Blue Dreams Together (C-Blue)" charity brand and to provide care for left-behind children and alleviate poverty for rural areaswith the support of the CM Port Group's team of "C-Blue" volunteers. In terms of activities in China,the Company hosted CM Port Group's "Caring for You, Standing by You" development camp forstudents in Weining in the first half of 2021. This camp was a six-day, five-night camp for 100 teachers
China Merchants Port Group Co., Ltd. Interim Report 2021
and students in Weining County, Guizhou Province and provided them with a platform to enrich themand develop their dreams. Through this program, CMPort showed its love and care for students aswell as expressed a wish to stand by them. In addition, Zhanjiang Port and CMICT initiatedcommunity care projects such as appliance repair service and haircut service for residents. As foroverseas activities, CICT has elementarily completed the construction of "Love Village" communitycenter in Kalutara District, Sri Lanka. In April, CICT and HIPG jointly launched the second "LoveVillage" project in Sri Lanka and conducted research on this project in a village of HambantotaDistrict.
China Merchants Port Group Co., Ltd. Interim Report 2021
Part VI Significant EventsI Commitments of the Company’s Actual Controller, Shareholders, Related Parties andAcquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Periodor Overdue at the Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.II Occupation of the Company’s Capital by the Controlling Shareholder or any of other RelatedParties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.IV Engagement and Disengagement of Independent AuditorAre the interim financial statements audited?
□Yes √ No
The interim financial statements are unaudited.V Explanations Given by the Board of Directors and the Supervisory Committee Regarding theIndependent Auditor’s “Modified Opinion” on the Financial Statements of the ReportingPeriod
□ Applicable √ Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor’s“Modified Opinion” on the Financial Statements of Last Year
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2021
VIII Legal MattersMajor lawsuits and arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Other legal matters:
| Basic information | Amount involved (RMB’0,000) | Whether formed expected liabilities | Progress | The results and influence of lawsuits (arbitrations) | Execution of judgment | Disclosure date | Index to disclosed information |
| The summary of Brazil TCP cases (note) | 22,360.49 | Partly | Unsettled | Low risk | - | - | - |
| The summary of other matters not met disclosure standards of major lawsuits (arbitrations) | 20,254 | Partly | Unsettled | Low risk | - | - | - |
Note: refer to Notes to Financial Statements-Commitments or Contingency for details of Brazil TCPcases.IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.X Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XI Major Related-Party Transactions
1. Continuing Related-Party Transactions
| Related party | Relationship with the Company | Type of transaction | Specific transaction | Pricing principle | Transaction price | Total value (RMB’0,000) | As % of the total value of all the same-type transactions | Approved transaction line (RMB’0,000) | Over the approved line or not | Way of settlement | Obtainable market price for same-type transactions | Disclosure date | Index to disclosed information |
| Liaoning Port Group Co., Ltd. and its subsidiaries | Under the control of ultimate shareholder | Render service and lease to related party, receive service and lease | Lease, labor cost, information service income, etc. | Market price | 4,935.20 | 4,935.20 | 12.31% | 29,728.29 | No | Settled monthly | 4,935.20 | 31 March 2021 | www.cninfo.com.cn (Announcement No. 2021-021) |
China Merchants Port Group Co., Ltd. Interim Report 2021
| from related party | |||||||||||||
| Antong Holdings Co., Ltd. and its subsidiaries | Affiliated legal person | Render service to related party, receive service and lease from related party | Labor cost, freight forwarding agent, Port service charge | Market price | 9,854.19 | 9,854.19 | 31.36% | 13,522.24 | No | Settled monthly | 9,854.19 | ||
| Sinotrans Limited and its subsidiaries | Under the control of ultimate shareholder | Render service and lease to related party, receive service from related party | Labor cost, demurrage, lease, etc. | Market price | 6,325.89 | 6,325.89 | 15.78% | 14,637.11 | No | Settled monthly | 6,325.89 | ||
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. and its subsidiaries | Under the control of ultimate shareholder | Render service and lease to related party, receive service and lease from related party | Labor cost, lease expense of land and houses | Market price | 3,577.80 | 3,577.80 | 8.93% | 9,506.17 | No | Settled monthly | 3,577.80 | ||
| Total | -- | -- | 24,693.08 | -- | 67,393.81 | -- | -- | -- | -- | -- | |||
| Large-amount sales return in detail | None | ||||||||||||
| Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of continuing related-party transactions by type to occur in the Reporting Period | The Proposal on Recognition of 2020 Daily Related-party Transaction and the Forecast of 2021 Daily Related-party Transaction was reviewed and approved on the 2020 Annual General Meeting on 28 May 2021, which allowed the Company and subsidiaries to conduct daily business transaction including office leasing, providing or receiving labor services. The amount of daily related-party transactions in 2021 is estimated to be RMB909 million. During the Reporting Period, there was no significant difference between the actual amount and the estimated amount. | ||||||||||||
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | N/A | ||||||||||||
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
4. Credits and Liabilities with Related Parties
Credits receivable with related parties
China Merchants Port Group Co., Ltd. Interim Report 2021
| Related party | Related relationship | Forming reason | Whether there is occupation on non-operating capital or not | Beginning balance (RMB’0,000) | Increased in the Reporting Period (RMB’0,000) | Recovered in the Reporting Period (RMB’0,000) | Interest rate | Interest in the Reporting Period (RMB’0,000) | Ending balance (RMB’0,000) |
| China Merchants Bank | The ultimate controlling shareholder has major influence on it | Bank deposits/Structured deposits | No | 275,126.26 | 2,800,073.24 | 2,706,074.41 | 1.65%-3.16% | 2,770.91 | 369,125.09 |
| Effects of credits with related parties on the Company’s operating results and financial conditions | The above credits receivable with related parties were mainly deposits in financial institutions which has no major influence on the Company’s operating results and financial conditions. | ||||||||
Liabilities payable with related parties:
| Related party | Related relationship | Forming reason | Beginning balance (RMB’0,000) | Increased in the Reporting Period (RMB’0,000) | Recovered in the Reporting Period (RMB’0,000) | Interest rate | Interest in the Reporting Period (RMB’0,000) | Ending balance (RMB’0,000) |
| China Merchants Bank | The ultimate controlling shareholder has major influence on it | Borrowing | 10,903.32 | 6,581.43 | 0.00 | 3.35% | 326.88 | 17,484.75 |
| Effects of liabilities with related parties on the Company’s operating results and financial conditions | The above liabilities payable with related parties were mainly financial institution loans which had no major influence on the Company’s operating results and financial conditions. | |||||||
5. Transactions with Related Finance Companies, or Finance Companies Controlled by theCompanyDeposit business
| Related party | Related relationship | Daily maximum limits (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount (RMB’0,000) | Ending balance (RMB’0,000) |
| China Merchants Group Finance Co., Ltd. | Other company under the same control of controlling shareholder | 500,000.00 | 1.495%-2.025% | 156,892.42 | -66,391.20 | 90,501.22 |
Loan business
| Related party | Related relationship | Loan limit (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount (RMB’0,000) | Ending balance (RMB’0,000) |
| China | Other company | 1,000,000.00 | 3.45%-4.80% | 312,156.42 | -219,847.73 | 92,308.69 |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Merchants Group Finance Co., Ltd. | under the same control of controlling shareholder |
Credit or other finance businessThe Company did not make deposits in, receive loans or credit from and was not involved in anyother finance business with any related finance company, finance company controlled by theCompany or any other related parties.
6. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.XII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
Details of entrustmentOn 13 December 2018, the Company held the 10
th
Extraordinary Meeting in 2018 of the 9
th
Board ofDirectors, on which the Proposal on Signing Custody Agreement of Equity of Liaoning Port GroupCo., Ltd. between the Company and China Merchants (Liaoning) Port Development Co., Ltd. wasreviewed and approved. The Company was allowed to sign the Custody Agreement of Equity ofLiaoning Port Group Co., Ltd. with China Merchants (Liaoning) Port Development Co, Ltd., theindirect wholly-owned subsidiary of CMG, and made an appointment that China Merchants (Liaoning)Port Development entrusted all 49.9% shares of Liaoning Port Group Co., Ltd. held by it as of 13December 2018 to the Company for management.Project which generates profit or loss reaching over 10% of total profits of the Company during theReporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2021
2. Major Guarantees
Unit: RMB'0,000
| Guarantees provided by the Company for external parties (exclusive of those for subsidiaries) | ||||||||
| Guarantee-receiving entity | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date (date of agreement signing) | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Terminal Link SAS | N/A | 6,714.48 | 11 June 2013 | 6,714.48 | General guarantee | About 20 years | Not | Not |
| KHOR AMBADO FZCO | 30 March 2019 | 18,669.28 | 24 May 2019 | 11,238.83 | Joint-liability | About 13 years | Not | Yes |
| KHOR AMBADO FZCO | 31 March 2021 | 7,000.00 | - | - | - | - | - | - |
| Total approved line for such guarantees in the Reporting Period (A1) | 7,000.00 | Total actual amount of such guarantees in the Reporting Period (A2) | - | |||||
| Total approved line for such guarantees at the end of the Reporting Period (A3) | 32,383.76 | Total actual balance of such guarantees at the end of the Reporting Period (A4) | 17,953.31 | |||||
| Guarantees provided by the Company as the parent for its subsidiaries | ||||||||
| Guarantee-receiving entity | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date (date of agreement signing) | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Chiwan Wharf Holdings (Hong Kong) Limited | 16 April 2020 | 150,000.00 | 28 July 2020 | 150,000.00 | Joint-liability | About 1 year | Not | Not |
| Chiwan Wharf Holdings (Hong Kong) Limited | 31 March 2021 | 150,000.00 | - | - | - | - | - | - |
| Zhanjiang Port (Group) Co., Ltd. | 31 March 2021 | 200,000.00 | - | - | - | - | - | - |
| Total approved line for such guarantees in the Reporting Period (B1) | 350,000.00 | Total actual amount of such guarantees in the Reporting Period (B2) | - | |||||
| Total approved line for such guarantees at the end of the Reporting Period (B3) | 500,000.00 | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 150,000.00 | |||||
| Guarantees provided between subsidiaries | ||||||||
| Guarantee-receiving entity | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date (date of agreement signing) | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| China Merchants International Terminal (Qingdao) Co., Ltd. | 16 April 2020 | 59,010.00 | 1 January 2021 | 2,830.00 | Joint-liability | N/A | Not | Not |
| Shenzhen Jinyu Rongtai Investment Development Co., Ltd. | N/A | 80,000.00 | 12 January 2017 | 68,000.00 | Joint-liability | About 10 years | Not | Not |
China Merchants Port Group Co., Ltd. Interim Report 2021
| China Merchants International (China) Investment Co., Ltd. | N/A | 2,500.00 | 30 June 2016 | 2,500.00 | Joint-liability | About 10 years | Not | Not |
| China Merchants Finance Company Limited | 4 May 2012 | 324,119.45 | 4 May 2012 | 324,119.45 | General guarantee | About 10 years | Not | Not |
| China Merchants Finance Company Limited | 3 August 2015 | 324,119.45 | 3 August 2015 | 324,119.45 | General guarantee | About 10 years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 6 August 2018 | 583,415.01 | 6 August 2018 | 583,415.00 | General guarantee | About 5 years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 6 August 2018 | 388,943.34 | 6 August 2018 | 388,943.34 | General guarantee | About 10 years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 26 September 2020 | 555,000.00 | 9 October 2020 | 388,943.34 | General guarantee | About 3 years | Not | Not |
| 129,647.78 | General guarantee | About 5 years | Not | Not | ||||
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | N/A | 226,818.79 | 16 September 2012 | 5,701.36 | General guarantee | About 13 years | Not | Not |
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | N/A | 9,723.58 | 16 September 2012 | 0.00 | General guarantee | Unlimited | Not | Not |
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | N/A | 16,205.97 | 16 September 2012 | 0.00 | General guarantee | Unlimited | Not | Not |
| Lome Container Terminal Co., Ltd. | N/A | 7,732.59 | June 2015 | 1,129.92 | General guarantee | About 9 years | Not | Not |
| Lome Container Terminal Co., Ltd. | N/A | 7,732.59 | June 2015 | 1,129.92 | General guarantee | About 9 years | Not | Not |
| Lome Container Terminal Co., Ltd. | N/A | 7,732.59 | June 2015 | 1,129.92 | General guarantee | About 9 years | Not | Not |
| China Merchants Port Development (Shenzhen) Co., Ltd. | N/A | 320,000.00 | 31 July 2017 | 15,334.00 | Joint-liability | About 5 years | Not | Not |
| TCP - TERMINAL DE CONTElNERES DE PARANAGUA S/A. | N/A | 39,507.00 | 19 April 2018 | 18,358.90 | General guarantee | About 6 years | Not | Not |
| TCP - TERMINAL DE CONTElNERES DE PARANAGUA S/A. | N/A | 56,369.51 | 7 November 2016 | 56,369.50 | General guarantee | About 6 years | Not | Not |
| Shenzhen Haixing Harbor Development Co., Ltd. | 30 March 2019 | 327,000.00 | 26 June 2019 | 19,934.51 | Joint-liability | About 18 years | Not | Not |
| China Merchants International Terminal (Qingdao) Co., Ltd. | 31 March 2021 | 60,000.00 | - | - | - | - | - | - |
| Zhanjiang Port (Group) Co., Ltd. | 31 March 2021 | 80,000.00 | - | - | - | - | - | - |
| Hambantota International Port Group (Pvt) Ltd. | 31 March 2021 | 100,000.00 | - | - | - | - | - | - |
China Merchants Port Group Co., Ltd. Interim Report 2021
| CMHI Finance (BVI) Co., Ltd | 31 March 2021 | 800,000.00 | - | - | - | - | - | - |
| TCP - TERMINAL DE CONTElNERES DE PARANAGUA S/A. | 31 March 2021 | 10,000.00 | - | - | - | - | - | - |
| Total approved line for such guarantees in the Reporting Period (C1) | 1,050,000.00 | Total actual amount of such guarantees in the Reporting Period (C2) | 2,830.00 | |||||
| Total approved line for such guarantees at the end of the Reporting Period (C3) | 4,385,929.87 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 2,331,606.41 | |||||
| Total guarantee amount (total of the three kinds of guarantees above) | ||||||||
| Total guarantee line approved in the Reporting Period (A1+B1+C1) | 1,407,000.00 | Total actual guarantee amount in the Reporting Period (A2+B2+C2) | 2,830.00 | |||||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 4,918,313.63 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 2,499,559.72 | |||||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net asset value | 65.53% | |||||||
| Of which: | ||||||||
| Balance of guarantees provided for shareholders, actual controller and their related parties (D) | 11,238.83 | |||||||
| Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) | 2,392,989.60 | |||||||
| Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) | 592,393.36 | |||||||
| Total of the three amounts above (D+E+F) | 2,996,621.78 | |||||||
| Joint responsibilities possibly borne in the Reporting Period for undue guarantees (if any) | N/A | |||||||
| Provision of external guarantees in breach of the prescribed procedures (if any) | N/A | |||||||
3. Cash Entrusted for Wealth Management
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Continuing Major Contracts
□ Applicable √ Not applicable
5. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2021
XIII Other Significant Events
1. Index to Disclosed Information
The significant events disclosed by the Company on Securities Times, Shanghai Securities News, TaKung Pao and www.cninfo.com.cn during the Reporting Period are as follows:
| Announcement No. | Date of the announcement | Title of the announcement |
| 2021-001 | 16 January 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of December 2020 |
| 2021-002 | 16 January 2021 | Announcement on Resignation of Vice General Manager & Secretary of the Board and the Vice General Manager Acting As the Secretary of the Board |
| 2021-003 | 21 January 2021 | Reminder of the Issuance of 2021 Phase I Super-short-term Financing Bonds |
| 2021-004 | 26 January 2021 | Announcement on Issue Results of 2021 Phase I Super-short-term Financing Bonds |
| 2021-005 | 30 January 2021 | Announcement on Resolutions of the 1st Special Meeting of the 10th Board of Directors in 2021 |
| 2021-006 | 30 January 2021 | Announcement on Resolutions of the 1st Special Meeting of the 10th Supervisory Committee in 2021 |
| 2021-007 | 30 January 2021 | Announcement on Adjusting the Exercise Price of the First Grant under the Stock Option Incentive Plan (Phase I) |
| 2021-008 | 30 January 2021 | Announcement on the Grant of Stock Option (the Reserved) to Incentive Objects of the Stock Option Incentive Plan (Phase I) of the Company |
| 2021-009 | 9 February 2021 | Announcement on Notes of the Supervisory Committee on the Review and Publicity of the List of Incentive Objects for the Reservation under the Stock Option Incentive Plan (Phase I) |
| 2021-010 | 19 February 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of January 2021 |
| 2021-011 | 3 March 2021 | Announcement on the Due Payment of 2020 Phase III Super & Short-term Commercial Paper |
| 2021-012 | 6 March 2021 | Announcement on Resignation of Director |
| 2021-013 | 6 March 2021 | Announcement on Completion of the Grant of Stock Option (the Reserved) under the Stock Option Incentive Plan (Phase I) of the Company |
| 2021-014 | 16 March 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of February 2021 |
| 2021-015 | 19 March 2021 | Reminder of the Issuance of 2021 Phase II Super-short-term Financing Bonds |
| 2021-016 | 24 March 2021 | Announcement on Issue Results of 2021 Phase II Super-short-term Financing Bonds |
| 2021-017 | 31 March 2021 | Announcement on Resolutions of the 3rd Meeting of the 10th Board of Directors |
| 2021-018 | 31 March 2021 | Announcement on Resolutions of the 3rd Meeting of the 10th Supervisory Committee |
| 2021-019 | 31 March 2021 | Announcement on 2020 Profit Distribution Plan |
| 2021-020 | 31 March 2021 | Abstract of 2020 Annual Report (Chinese and English Versions) |
| 2021-021 | 31 March 2021 | Announcement on the Confirmation of the Continuing Related-Party Transactions in 2020 and the Estimation of Such Transactions in 2021 |
| 2021-022 | 31 March 2021 | Announcement on the Related-Party Transaction Regarding Making Deposits in and Obtaining Loans from China Merchants Bank in 2021 |
| 2021-023 | 31 March 2021 | Announcement on the External Guarantee Progress of a Majority-Owned Subsidiary of the Company in 2020 and the Expected New External Guarantee Line in the Next 12 Months |
| 2021-024 | 31 March 2021 | Special Report on Deposit and Usage of Raised Fund in 2020 |
China Merchants Port Group Co., Ltd. Interim Report 2021
| 2021-025 | 31 March 2021 | Announcement on Reappointment of Accounting Firm in 2021 |
| 2021-026 | 31 March 2021 | Announcement on By-election of Director |
| 2021-027 | 31 March 2021 | Announcement on the Disclosure of the 2020 Annual Results by the Majority-Owned Subsidiary |
| 2021-028 | 31 March 2021 | Announcement on the Online Investor Communication on the 2020 Annual Results to Be Held |
| 2021-029 | 13 April 2021 | Reminder of the Issuance of 2021 Phase I Medium Term Notes |
| 2021-030 | 14 April 2021 | Announcement on Resolutions of the 2nd Special Meeting of the 10th Board of Directors in 2021 |
| 2021-031 | 14 April 2021 | Announcement on Appointment of Secretary of the Board |
| 2021-032 | 15 April 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of March 2021 |
| 2021-033 | 15 April 2021 | 2021 First Quarter Performance Forecast |
| 2021-034 | 20 April 2021 | Announcement on Issue Results of 2021 Phase I Medium Term Notes |
| 2021-035 | 23 April 2021 | Announcement on the Due Payment of 2021 Phase I Super & Short-term Commercial Paper |
| 2021-036 | 30 April 2021 | Announcement on Resolutions of the 3rd Special Meeting of the 10th Board of Directors in 2021 |
| 2021-037 | 30 April 2021 | The Text of the First Quarter Report 2021 (Chinese and English Versions) |
| 2021-038 | 30 April 2021 | Announcement on Related-Party Transaction regarding Conducting Entrusted Wealth Management with Self-Owned Idle Funds |
| 2021-039 | 30 April 2021 | Announcement on Adjustment of Providing Financial Aid by Majority-owned Subsidiaries |
| 2021-040 | 30 April 2021 | Notice on Convening the 2020 Annual General Meeting |
| 2021-041 | 7 May 2021 | Reminder of Convening the 2020 Annual General Meeting |
| 2021-042 | 15 May 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of April 2021 |
| 2021-043 | 18 May 2021 | Announcement on Resolutions of the 4th Special Meeting of the 10th Board of Directors in 2021 |
| 2021-044 | 18 May 2021 | Announcement on Appointment of Chief Financial Officer and Vice General Manager |
| 2021-045 | 18 May 2021 | Announcement on Resignation of Independent Director and By-election of Independent Director |
| 2021-046 | 18 May 2021 | Announcement on Adding a Impromptu Proposal for the 2020 Annual General Meeting and the Supplementary Notice Thereof |
| 2021-047 | 29 May 2021 | Announcement on Resolutions of the 2020 Annual General Meeting |
| 2021-048 | 4 June 2021 | Reminder of the Issuance of 2021 Phase III Super-short-term Financing Bonds |
| 2021-049 | 8 June 2021 | Announcement on Issue Results of 2021 Phase III Super-short-term Financing Bonds |
| 2021-050 | 16 June 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of May 2021 |
2. Progress of the Internal Control Work
According to the requirements of Basic Rules for Enterprise Internal Control and relevant regulations,the internal control work carried out by the Company during the Reporting Period is as follows:
(1) In terms of construction and evaluation of internal control system, the Company continued topromote the building of CMPort's internal control system and achieved the goal of full coverage ofinternal control in the Company. It also carried out the evaluation of internal control system, andappraised and reported the work of subordinate units on a quarterly basis. In the first half of 2021, the
China Merchants Port Group Co., Ltd. Interim Report 2021
Company conducted the supervision and inspection on internal control of three institutions asscheduled.
(2) In respect of comprehensive risk management, the Company normalized the tracking of majorrisk mitigation, established a quantitative monitoring mode for major risks, and applied relevantindicators to identify and assess risks. The Company further improved the risk management andcontrol with measures such as optimizing the risk preference index system, enhancing the quantitativemanagement of overseas risks, strengthening the early warning system for customer credit risks anddeveloping key risk monitoring, etc.
3. Communications with the Investment Community such as Researches, Inquiries andInterviews
(1) During the Reporting Period
| Date | Place | Way of communication | Type of communication party | Object of communication | Index to basic information of researches |
| 22 January 2021 | China Merchants Port Building | One-on-one meeting | Institution | Orient Securities | Main discussions: the basic condition of operations, investments made and the financial condition of the Company; Materials provided: None Index: SZSE EasyIR (http://irm.cninfo.com.cn/ircs/index) |
| 31 March 2021 | China Merchants Port Building | Teleconferencing | Institution | Changjiang Securities, CICC, Industrial Securities, Guotai Junan Securities, China Merchants Securities, Guosen Securities, Golden Eagle Fund, Ping An Capital, Hwabao WP Fund, Yinhua Fund, CICC Capital Management, Green Court Capital, HighGear Capital, Fangyuan Tiancheng, Rongyuan Dingfeng Asset Management, Panpei Investment, Honghu Venture Capital, Yong An Insurance, Beijing Optimus Prime Investment Management Co., Ltd. | |
| 25 May 2021 | China Merchants Port Building | One-on-one meeting | Institution | Hua Chuang Securities, CICC | |
| 1 January 2021 to 30 June 2021 | China Merchants Port Building | By phone, or written inquiry (the EasyI | Individual | Individual investors |
China Merchants Port Group Co., Ltd. Interim Report 2021
| R platform of SZSE or email) | |||
| Times of communications | 49 | ||
| Number of institutions communicated with | 22 | ||
| Number of individuals communicated with | 46 | ||
| Number of other communication parties | 0 | ||
| Tip-offs or leakages of substantial supposedly-confidential information during communications | No | ||
(2) Period-end to Disclosure Date
| Date | Place | Way of communication | Type of communication party | Object of communication | Index to basic information of researches |
| From 1 July 2021 to 31 August 2021 | China Merchants Port Building | By phone, or written inquiry (the EasyIR platform of SZSE or email) | Individual | Individual investors | Main discussions: the basic condition of operations, investments made and the financial condition of the Company; Materials provided: None Index: SZSE EasyIR (http://irm.cninfo.com.cn/ircs/index) |
| Times of communications | 15 | ||||
| Number of institutions communicated with | 0 | ||||
| Number of individuals communicated with | 15 | ||||
| Number of other communication parties | 0 | ||||
| Tip-offs or leakages of substantial supposedly-confidential information during communications | No | ||||
XIV Significant Events of SubsidiariesOn 30 March 2021, the Company's majority-owned subsidiary CMPort Holdings (00144.HK)announced that it would distribute in the form of scrip dividend the final dividend for the yearended 31 December 2020, equivalent to HKD0.51 per ordinary share of CMPort Holdings, to theshareholders of record on 9 June 2021. The shareholders may choose otherwise to receive the final
China Merchants Port Group Co., Ltd. Interim Report 2021
dividend in cash in lieu of all or parts of the equity in scrip dividend. The Company held1,532,248,957 ordinary shares of CMPort Holdings, accounting for 41.85% of its total shares. TheCompany has chosen to collect the dividend in the form of scrip dividend. Thus, it obtained68,862,087 ordinary shares of CMPort Holdings, with its shareholding in CMPort Holdingsincreasing to 1,601,111,044 shares (representing a stake of 42.77%).
China Merchants Port Group Co., Ltd. Interim Report 2021
Part VII Share Changes and Shareholder InformationI Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the Reporting Period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| I. Restricted shares | 1,148,658,144 | 59.75% | 0 | 0 | 0 | -2,130 | -2,130 | 1,148,656,014 | 59.75% |
| 1. Shares held by state | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. Shares held by state-owned legal person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Shares held by other domestic investors | 9,496 | 0.00% | 0 | 0 | 0 | -2,130 | -2,130 | 7,366 | 0.00% |
| Including: Shares held by domestic legal person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by domestic natural person | 9,496 | 0.00% | 0 | 0 | 0 | -2,130 | -2,130 | 7,366 | 0.00% |
| 4. Shares held by foreign investors | 1,148,648,648 | 59.75% | 0 | 0 | 0 | 0 | 0 | 1,148,648,648 | 59.75% |
| Including: Shares held by foreign legal person | 1,148,648,648 | 59.75% | 0 | 0 | 0 | 0 | 0 | 1,148,648,648 | 59.75% |
| Shares held by foreign natural person | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. | 773,706,980 | 40.25% | 0 | 0 | 0 | 2,130 | 2,130 | 773,709,110 | 40.25% |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Unrestricted shares | |||||||||
| 1. RMB ordinary shares | 593,820,070 | 30.89% | 0 | 0 | 0 | 0 | 0 | 593,820,070 | 30.89% |
| 2. Domestically listed foreign shares | 179,886,910 | 9.36% | 0 | 0 | 0 | 2,130 | 2,130 | 179,889,040 | 9.36% |
| 3. Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total shares | 1,922,365,124 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,922,365,124 | 100.00% |
Reasons for the share changes:
During the reporting period, changes in restricted shares held by the then senior management.Approval of the share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of the share changes on the basic and diluted earnings per share, equity per share attributableto the Company’s ordinary shareholders and other financial indicators of the prior year and the prioraccounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator tobe disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
Unit: share
| Name of shareholders | Number of restricted shares at the period-begin | Number of released restricted shares | Number of increased restricted shares | Number of restricted shares at the period-end | Reason for restriction | Date of restriction release |
| China Merchants Port Investment Development Company Limited | 1,148,648,648 | 0 | 0 | 1,148,648,648 | According to relevant laws and regulations and the shareholder commitment | June 2022 |
| Zheng Shaoping | 9,496 | 2,130 | 0 | 7,366 | According to the Articles of Association and the relevant laws | November 2023 |
China Merchants Port Group Co., Ltd. Interim Report 2021
| and regulations | ||||||
| Total | 1,148,658,144 | 2,130 | 0 | 1,148,656,014 | -- | -- |
II Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings as at the Period-End
Unit: share
| Number of ordinary shareholders at the period-end | 31,810 | Number of preferred shareholders with resumed voting rights at the period-end (if any) | 0 | |||||
| 5% or greater ordinary shareholders or top 10 ordinary shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total ordinary shares held at the period-end | Increase/decrease in the Reporting Period | Restricted ordinary shares held | Unrestricted ordinary shares held | Shares in pledge, marked or frozen | |
| CHINA MERCHANTS PORT INVESTMENT DEVELOPMENT COMPANY LIMITED | Foreign legal person | 59.75% | 1,148,648,648 | 0 | 1,148,648,648 | 0 | 0 | |
| CHINA MERCHANTS GANGTONG DEVELOPMENT (SHENZHEN) CO., LTD. | State-owned legal person | 19.29% | 370,878,000 | 0 | 0 | 370,878,000 | 0 | |
| SHENZHEN INFRASTRUCTURE INVESTMENT FUND-SHENZHEN INFRASTRUCTURE INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) | Funds, wealth management products, etc. | 3.37% | 64,850,182 | 0 | 0 | 64,850,182 | 0 | |
| CHINA-AFRICA DEVELOPMENT FUND | State-owned legal person | 3.33% | 64,102,564 | 0 | 0 | 64,102,564 | 0 | |
| BROADFORD GLOBAL LIMITED | State-owned legal person | 2.88% | 55,314,208 | 0 | 0 | 55,314,208 | 0 | |
| HONG KONG SECURITIES CLEARING COMPANY LTD. | Foreign legal person | 0.24% | 4,523,430 | 1,815,529 | 0 | 4,523,430 | Unknown | |
| CHINA MERCHANTS SECURITIES (HK) CO., LTD. | State-owned legal person | 0.14% | 2,693,355 | 87,000 | 0 | 2,693,355 | Unknown | |
| ARROWSTREET EMERGING MARKET ALPHA EXTENSION TRUST FUND | Foreign legal person | 0.12% | 2,247,991 | 1,328,401 | 0 | 2,247,991 | Unknown | |
China Merchants Port Group Co., Ltd. Interim Report 2021
| MAI SHUQING | Domestic natural person | 0.11% | 2,129,247 | 0 | 0 | 2,129,247 | Unknown | ||
| ZHU HUI | Domestic natural person | 0.09% | 1,807,526 | 1,807,526 | 0 | 1,807,526 | Unknown | ||
| Strategic investors or general legal person becoming top-ten ordinary shareholders due to placing of new shares (if any) | N/A | ||||||||
| Related or acting-in-concert parties among the shareholders above | China Merchants Gangtong Development (Shenzhen) Co., Ltd. is a majority-owned subsidiary of Broadford Global Limited, and Broadford Global Limited is the controlling shareholder of China Merchants Port Investment Development Company Limited. The Company does not know whether the other unrestricted shareholders are related parties or not. | ||||||||
| Above shareholders involved in entrusting/being entrusted and giving up voting rights | None | ||||||||
| Special account for share repurchases (if any) among the top 10 shareholders (see note 11) | N/A | ||||||||
| Top 10 unrestricted ordinary shareholders | |||||||||
| Name of shareholder | Unrestricted ordinary shares held at the period-end | Shares by type | |||||||
| Type | Shares | ||||||||
| CHINA MERCHANTS GANGTONG DEVELOPMENT (SHENZHEN) CO., LTD. | 370,878,000 | RMB ordinary share | 370,878,000 | ||||||
| SHENZHEN INFRASTRUCTURE INVESTMENT FUND-SHENZHEN INFRASTRUCTURE INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) | 64,850,182 | RMB ordinary share | 64,850,182 | ||||||
| CHINA-AFRICA DEVELOPMENT FUND | 64,102,564 | RMB ordinary share | 64,102,564 | ||||||
| BROADFORD GLOBAL LIMITED | 55,314,208 | Domestically listed foreign share | 55,314,208 | ||||||
| HONG KONG SECURITIES CLEARING COMPANY LTD. | 4,523,430 | RMB ordinary share | 4,523,430 | ||||||
| CHINA MERCHANTS SECURITIES (HK) CO., LTD. | 2,693,355 | Domestically listed foreign share | 2,693,355 | ||||||
| ARROWSTREET EMERGING MARKET ALPHA EXTENSION TRUST FUND | 2,247,991 | Domestically listed foreign share | 2,247,991 | ||||||
| MAI SHUQING | 2,129,247 | RMB ordinary share | 2,129,247 | ||||||
| ZHU HUI | 1,807,526 | RMB ordinary share | 1,807,526 | ||||||
| SHEN HUAILING | 1,630,749 | Domestically listed foreign share | 1,630,749 | ||||||
| Related or acting-in-concert parties among top 10 unrestricted ordinary shareholders, as well as between top 10 unrestricted ordinary shareholders and top 10 ordinary shareholders | China Merchants Gangtong Development (Shenzhen) Co., Ltd. is a majority-owned subsidiary of Broadford Global Limited. The Company does not know whether the other unrestricted shareholders are related parties or not. | ||||||||
| Top 10 ordinary shareholders involved in securities margin trading (if any) | N/A | ||||||||
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted
China Merchants Port Group Co., Ltd. Interim Report 2021
ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.IV Change in Shareholdings of Directors, Supervisors and Senior Management
| Name | Office title | Incumbent/Former | Beginning shareholding (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Ending shareholding (share) | Beginning restricted shares granted (share) | Restricted shares granted during the Reporting Period (share) | Ending restricted shares granted (share) |
| Deng Renjie | Chairman of the Board | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Yan Shuai | Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Liu Weiwu | Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Song Dexing | Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Gao Ping | Independent director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Zheng Yongkuan | Independent director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Li Qi | Independent director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Hu Qin | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Yang Yuntao | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Gong Man | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Xu Jia | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Wang Xiufeng | CEO | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Tu Xiaoping | CFO | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Lu Yongxin | Vice GM | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Li Yubin | Vice GM and Secretary of the Board | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Zhang Yiming | Vice GM | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Xu Song | Vice GM | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Liu Libing | General Counsel | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Bai Jingtao | Former Vice Chairman, CEO | Former | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Su Jian | Former Director | Former | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Zhang Yi | Former Director, COO, GM | Former | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Wang Zhenmin | Former Independent director | Former | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Liu Yingjie | Former Chairman of the Supervisory Committee | Former | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Zheng Shaoping | Former Vice GM | Former | 9,821 | 0 | 0 | 9,821 | 0 | 0 | 0 |
| Huang Chuanjing | Former Vice GM and Former Secretary of the Board | Former | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | -- | 9,821 | 0 | 0 | 9,821 | 0 | 0 | 0 |
V Change of the Controlling Shareholder or the De Facto ControllerChange of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.Change of the de facto controller in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2021
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2021
Part IX BondsI Enterprise Bonds
□ Applicable √ Not applicable
No enterprise bonds in the Reporting Period.II Corporate Bonds
1. Basic Information of the Corporate Bonds
| Name | Abbr. | Code | Date of issuance | Value date | Maturity | Bonds balance (RMB) | Interest rate | Way of redemption | Trading place |
| 2020 Public Offering of Corporate Bonds of China Merchants Port Group Co., Ltd. (for qualified investors) (Phase I) | 20 CMPort 01 | 149170 | 7 July 2020 | 7 July 2020 | 8 July 2023 | 2,000,000,000.00 | 3.36% | Simple interest is adopted and calculated by year. No compound interest is calculated. Interests are paid once every year and principals paid in lump sum at maturity. In the last installment, the interests are paid together with principal repayment. | Shenzhen Stock Exchange |
| Appropriate arrangement of the investors (if any) | The Company's bonds are publicly issued to eligible investors who comply with the Measures for Issuance and Trading of Corporate Bonds and have opened an eligible A-share securities account with Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. (CSDC). | ||||||||
| Applicable trading mechanism | Bilateral listing transactions through the centralized bidding system of Shenzhen Stock Exchange and the comprehensive agreement transactions platform | ||||||||
| Risk of termination of listing transactions (if any) and countermeasures | No | ||||||||
Overdue bonds
□ Applicable √ Not applicable
2. The Trigger and Execution of the Option Clause of the Issuers or Investors and the InvestorProtection Clause
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Interim Report 2021
3. Adjustment of Credit Rating Results during the Reporting Period
□ Applicable √ Not applicable
4. Execution and Changes of Guarantee, Repayment Plan and Other Repayment GuaranteeMeasures as well as Influence on Equity of Bond Investors during the Reporting Period
□ Applicable √ Not applicable
III Debt Financing Instruments of Non-financial Enterprises
1. Basic Information of Debt Financing Instruments of a Non-financial Enterprise
| Name | Abbr. | Code | Date of issuance | Value date | Maturity | Bonds balance (RMB’00,000,000) | Interest rate (%) | Way of redemption | Trading place |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase IV 2021) | 21 CMPort SCP004 | 012102633.IB | 19 July 2021 | 20 July 2021 | 18 October 2021 | 10 | 2.3 | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase III 2021) | 21 CMPort SCP003 | 012102083.IB | 4 June 2021 | 7 June 2021 | 4 December 2021 | 10 | 2.55 | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Medium-term Notes of China Merchants Port Group Co., Ltd. (Phase I 2021) | 21 CMPort MTN001 | 102100703.IB | 14 April 2021 | 16 April 2021 | 16 April 2024 | 20 | 3.52 | Interests paid once every year and principals paid in lump sum on the redemption date | Interbank bond market |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase II 2021) | 21 CMPort SCP002 | 012101135.IB | 19 March 2021 | 22 March 2021 | 18 September 2021 | 10 | 2.73 | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Super-short-term Commercial Papers of China Merchants Port | 21 CMPort SCP001 | 012100333.IB | 21 January 2021 | 22 January 2021 | 22 April 2021 | 0 | 2.3 | Principals and interest paid in | Interbank bond |
China Merchants Port Group Co., Ltd. Interim Report 2021
| Group Co., Ltd. (Phase I 2021) | lump sum at maturity | market | |||||||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase IV 2020) | 20 CMPort SCP004 | 012003945.IB | 12 November 2020 | 13 November 2020 | 12 May 2021 | 0 | 2.5 | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase III 2020) | 20 CMPort SCP003 | 012002045.IB | 3 June 2020 | 5 June 2020 | 2 March 2021 | 0 | 1.99 | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Appropriate arrangement of the investors (if any) | Not applicable | ||||||||
| Applicable trading mechanism | Inquiry | ||||||||
| Risk of termination of listing transactions (if any) and countermeasures | None | ||||||||
Matured bonds unredeemed
□ Applicable √ Not applicable
2. Triggering and Implementation of Issuer or Investor Option Clauses and Investor ProtectionClauses
□ Applicable √ Not applicable
3. Credit Rating Adjustments during the Reporting Period
□ Applicable √ Not applicable
4. Implementation and Changes of Guarantees, Repayment Plan and Other RepaymentGuarantee Measures during the Reporting Period, and their Impact on the Equity Ownershipof bond holdersDuring the Reporting Period, the Company's credit enhancement mechanism for existing debtfinancing instruments remained unchanged. The repayment plan and other repayment guaranteemeasures did not undergo significant changes. There was no adverse impact on the equityownership of debt financing instrument holders.
China Merchants Port Group Co., Ltd. Interim Report 2021
IV Convertible Corporate Bonds
□ Applicable √ Not applicable
No such cases in the Reporting Period.V Losses of Scope of Consolidated Financial Statements during the Reporting Period Exceeding10% of Net Assets up the Period-end of Last Year
□ Applicable √ Not applicable
VI The Major Accounting Data and the Financial Indicators of the Recent 2 Years of theCompany up the Period-end
Unit: RMB’0,000
| Item | 30 June 2021 | 30 June 2020 | Increase/decrease |
| Current ratio | 78.89% | 83.48% | -4.59% |
| Debt/asset ratio | 35.82% | 37.29% | -1.47% |
| Quick ratio | 77.98% | 82.56% | -4.58% |
| H1 2021 | H1 2020 | Increase/decrease | |
| Net profit after deducting non-recurring profit or loss | 164,469.61 | 54,408.54 | 202.29% |
| Debt/EBITDA ratio | 12.09% | 7.68% | 4.41% |
| Interest cover (times) | 5.24 | 2.25 | 132.89% |
| Cash-to-interest cover (times) | 4.90 | 3.5 | 40.00% |
| EBITDA-to-interest cover (times) | 7.80 | 4.70 | 65.96% |
| Loan repayment rate | 100.00% | 100.00% | - |
| Interest coverage | 100.00% | 100.00% | - |
Part X Financial StatementsI Independent Auditor’s ReportThese interim financial statements have not been audited by an independent auditor.II Financial StatementsSee attached.
Wang XiufengLegal representative ofChina Merchants Port Group Co., Ltd.
Dated 31 August 2021
FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
CONTENTS PAGES
THE CONSOLIDATED AND COMPANY BALANCE SHEETS 1 - 4
THE CONSOLIDATED AND COMPANY INCOME STATEMENTS 5 - 6
THE CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS 7 - 8
THE CONSOLIDATED AND COMPANY'S STATEMENTS OF CHANGES INSHAREHOLDERS' EQUITY 9 - 12
NOTES TO THE FINANCIAL STATEMENTS 13 - 148
- 1 -
AT 30 JUNE 2021
Consolidated Balance Sheet
Unit: RMB
| Item | Notes | 30/6/2021 | 31/12/2020 (Restated) |
| Current assets: | |||
| Cash and bank balances | (V)1 | 9,379,373,597.24 | 11,918,423,758.71 |
| Held-for-trading financial assets | (V)2 | 1,000,173,287.80 | 850,165,448.59 |
| Notes receivable | (V)3 | 23,664,430.98 | 5,391,994.84 |
| Accounts receivable | (V)4 | 1,853,240,938.06 | 1,393,349,417.02 |
| Accounts receivable financing | (V)5 | 272,889,319.83 | 217,449,966.41 |
| Prepayments | (V)6 | 86,414,385.31 | 51,217,870.43 |
| Other receivables | (V)7 | 4,580,706,082.69 | 3,561,292,313.98 |
| Inventories | (V)8 | 210,008,947.15 | 214,823,976.30 |
| Assets held for sale | (V)9 | 337,442,757.28 | 337,442,757.28 |
| Non-current assets due within one year | (V)10 | 74,802,029.68 | 67,692,473.44 |
| Other current assets | (V)11 | 821,942,182.54 | 434,074,085.16 |
| Total current assets | 18,640,657,958.56 | 19,051,324,062.16 | |
| Non-current Assets: | |||
| Long-term receivables | (V)12 | 3,566,899,467.01 | 3,887,949,993.10 |
| Long-term equity investments | (V)13 | 67,429,276,231.95 | 66,242,411,222.90 |
| Other investments in equity instruments | (V)14 | 182,017,057.74 | 181,467,057.74 |
| Other non-current financial assets | (V)15 | 863,909,085.69 | 910,807,452.56 |
| Investment properties | (V)16 | 5,465,221,390.32 | 5,558,755,275.21 |
| Fixed assets | (V)17 | 30,664,411,611.93 | 29,479,755,159.21 |
| Construction in progress | (V)18 | 4,082,810,291.73 | 5,381,430,606.18 |
| Right-of-use assets | (V)19 | 8,890,396,679.43 | 9,087,741,812.94 |
| Intangible assets | (V)20 | 18,508,045,341.12 | 18,772,180,542.10 |
| Development expenditure | (V)21 | 83,411,622.76 | 64,237,735.23 |
| Goodwill | (V)22 | 6,802,141,621.90 | 6,675,939,930.13 |
| Long-term prepaid expenses | (V)23 | 865,843,967.74 | 874,999,735.91 |
| Deferred tax assets | (V)24 | 490,392,389.90 | 420,857,076.76 |
| Other non-current assets | (V)25 | 2,165,898,294.28 | 2,138,468,683.64 |
| Total non-current assets | 150,060,675,053.50 | 149,677,002,283.61 | |
| TOTAL ASSETS | 168,701,333,012.06 | 168,728,326,345.77 |
- 2 -
AT 30 JUNE 2021
Consolidated Balance Sheet - continued
Unit: RMB
| Item | Notes | 30/6/2021 | 31/12/2020 (Restated) |
| Current liabilities: | |||
| Short-term borrowings | (V)26 | 4,918,709,603.87 | 10,483,775,548.93 |
| Notes payable | (V)27 | 10,456,401.57 | 7,081,772.32 |
| Accounts payable | (V)28 | 745,241,136.72 | 607,972,699.59 |
| Receipts in advance | (V)29 | 20,592,775.04 | 39,510,127.90 |
| Contract liabilities | (V)30 | 188,322,263.74 | 157,442,109.67 |
| Employee benefits payable | (V)31 | 665,604,858.00 | 726,897,125.42 |
| Taxes payable | (V)32 | 2,305,150,402.37 | 2,370,258,689.99 |
| Other payables | (V)33 | 3,866,179,811.31 | 2,481,217,568.40 |
| Non-current liabilities due within one year | (V)34 | 8,743,691,405.73 | 3,564,587,701.07 |
| Other current liabilities | (V)35 | 2,165,517,831.24 | 2,383,668,985.94 |
| Total current liabilities | 23,629,466,489.59 | 22,822,412,329.23 | |
| Non-current Liabilities: | |||
| Long-term borrowings | (V)36 | 7,334,778,282.88 | 7,406,322,693.81 |
| Bonds payable | (V)37 | 17,283,407,358.74 | 21,090,545,845.56 |
| Including: Preferred shares | - | - | |
| Perpetual bonds | - | - | |
| Lease liabilities | (V)38 | 1,222,109,735.26 | 1,327,850,984.08 |
| Long-term payables | (V)39 | 1,218,295,779.86 | 1,228,461,573.69 |
| Long-term employee benefits payable | (V)40 | 490,799,539.52 | 507,714,699.46 |
| Provisions | (V)41 | 137,443,350.34 | 100,406,745.66 |
| Deferred income | (V)42 | 1,091,904,196.33 | 1,113,180,823.99 |
| Deferred tax liabilities | (V)24 | 4,491,273,249.00 | 4,347,553,142.73 |
| Other non-current liabilities | (V)43 | 3,525,608,365.56 | 2,982,220,894.03 |
| Total non-current liabilities | 36,795,619,857.49 | 40,104,257,403.01 | |
| TOTAL LIABILITIES | 60,425,086,347.08 | 62,926,669,732.24 | |
| SHAREHOLDERS' EQUITY: | |||
| Share capital | (V)44 | 1,922,365,124.00 | 1,922,365,124.00 |
| Capital reserve | (V)45 | 22,955,923,020.10 | 22,839,598,324.56 |
| Other comprehensive income | (V)46 | -916,798,522.86 | -826,697,303.06 |
| Special reserve | (V)47 | 15,490,721.24 | 10,201,178.30 |
| Surplus reserve | (V)48 | 890,690,322.28 | 890,690,322.28 |
| Unappropriated profit | (V)49 | 13,275,656,697.75 | 12,329,120,098.70 |
| Total shareholders' equity attributable to equity holders of the parent | 38,143,327,362.51 | 37,165,277,744.78 | |
| Total minority interests | 70,132,919,302.47 | 68,636,378,868.75 | |
| TOTAL SHAREHOLDERS' EQUITY | 108,276,246,664.98 | 105,801,656,613.53 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 168,701,333,012.06 | 168,728,326,345.77 |
The accompanying notes form part of the financial statements.
The financial statements on pages 1 to 148 were signed by the following:
Wang Xiufeng Tu Xiaoping Sun Ligan
Legal Representative Chief Financial Officer Head of Accounting Department
- 3 -
AT 30 JUNE 2021
Balance Sheet of the Company
Unit: RMB
| Item | Notes | 30/6/2021 | 31/12/2020 |
| Current Assets: | |||
| Cash and bank balances | 1,232,631,940.36 | 753,590,556.77 | |
| Held-for-trading financial assets | 500,000,000.00 | 800,000,000.00 | |
| Accounts receivable | 293.35 | - | |
| Prepayments | 46,244.77 | 32,236.27 | |
| Other receivables | (XIV)1 | 1,999,190,308.29 | 1,102,712,752.04 |
| Other current assets | 2,988,850.89 | 2,574,148.83 | |
| Total current assets | 3,734,857,637.66 | 2,658,909,693.91 | |
| Non-current Assets: | |||
| Long-term receivables | 8,608,371.77 | 8,667,950.38 | |
| Long-term equity investments | (XIV)2 | 37,473,353,363.21 | 37,236,798,123.55 |
| Other investments in equity instruments | 156,160,830.00 | 155,610,830.00 | |
| Fixed assets | 1,270,187.24 | 748,147.75 | |
| Construction in progress | 4,239,077.41 | 3,502,416.12 | |
| Intangible assets | 55,323,370.73 | 56,760,723.98 | |
| Long-term prepaid expenses | 1,397,920.79 | 1,572,660.89 | |
| Deferred tax assets | 2,427,747.08 | 1,846,793.34 | |
| Total non-current assets | 37,702,780,868.23 | 37,465,507,646.01 | |
| TOTAL ASSETS | 41,437,638,505.89 | 40,124,417,339.92 |
- 4 -
AT 30 JUNE 2021
Balance Sheet of the Company - continued
Unit: RMB
| Item | Notes | 30/6/2021 | 31/12/2020 |
| Current liabilities: | |||
| Short-term borrowings | 1,000,888,889.00 | 2,174,486,432.93 | |
| Employee benefits payable | 28,598,142.54 | 27,085,844.52 | |
| Taxes payable | 129,047,384.38 | 208,459,425.46 | |
| Other payables | 1,176,834,631.06 | 460,457,238.16 | |
| Non-current liabilities due within one year | 81,485,296.82 | 33,040,000.00 | |
| Other current liabilities | 2,012,802,318.59 | 2,224,519,555.57 | |
| Total current liabilities | 4,429,656,662.39 | 5,128,048,496.64 | |
| Non-current Liabilities: | |||
| Bonds payable | 4,000,000,000.00 | 2,000,000,000.00 | |
| Deferred tax liabilities | 43,557,026.51 | 43,419,526.51 | |
| Total non-current liabilities | 4,043,557,026.51 | 2,043,419,526.51 | |
| TOTAL LIABILITIES | 8,473,213,688.90 | 7,171,468,023.15 | |
| SHAREHOLDERS' EQUITY | |||
| Share capital | 1,922,365,124.00 | 1,922,365,124.00 | |
| Capital reserve | 27,600,679,342.67 | 27,591,847,402.73 | |
| Other comprehensive income | 105,948,722.50 | 105,536,222.50 | |
| Surplus reserve | 890,690,322.28 | 890,690,322.28 | |
| Unappropriated profit | 2,444,741,305.54 | 2,442,510,245.26 | |
| TOTAL SHAREHOLDERS' EQUITY | 32,964,424,816.99 | 32,952,949,316.77 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 41,437,638,505.89 | 40,124,417,339.92 |
The accompanying notes form part of the financial statements.
- 5 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
Consolidated Income Statement
Unit: RMB
| Item | Notes | Amount incurred in the current period | Amount incurred in the previous period (Restated) |
| I. Operating income | (V)50 | 7,339,942,862.26 | 5,962,497,716.96 |
| Less: Operating costs | (V)50 | 4,198,451,164.27 | 3,743,190,504.14 |
| Taxes and levies | (V)51 | 87,671,634.48 | 77,572,744.95 |
| Administrative expenses | (V)52 | 766,369,973.37 | 745,721,965.45 |
| Research and development expenses | 98,344,411.25 | 71,988,081.92 | |
| Financial expenses | (V)53 | 730,109,013.88 | 841,408,636.18 |
| Including: Interest expenses | 892,510,549.76 | 997,965,862.47 | |
| Interest income | 183,191,011.93 | 142,692,352.77 | |
| Add: Other income | (V)54 | 305,982,258.62 | 56,117,166.36 |
| Investment income | (V)55 | 3,609,743,591.59 | 1,504,609,268.47 |
| Including: Income from investments in associates and joint ventures | (V)55 | 3,557,359,417.25 | 1,393,872,651.34 |
| Gains from changes in fair value (Loss is marked with "-") | (V)56 | -488,532,866.45 | -295,735,653.30 |
| Gains on impairment of credit (Loss is marked with "-") | (V)57 | -2,586,332.20 | -3,583,778.71 |
| Gains on impairment of assets (Loss is marked with "-") | (V)58 | - | 947,693.77 |
| Gains on disposal of assets (Loss is marked with "-") | (V)59 | 9,432,717.92 | 560,256,383.38 |
| II. Operating profit | 4,893,036,034.49 | 2,305,226,864.29 | |
| Add: Non-operating income | (V)60 | 28,987,669.73 | 27,745,365.39 |
| Less: Non-operating expenses | (V)61 | 14,323,864.27 | 23,110,322.51 |
| III. Gross profit | 4,907,699,839.95 | 2,309,861,907.17 | |
| Less: Income tax expenses | (V)62 | 643,438,595.12 | 513,167,463.70 |
| IV. Net profit | 4,264,261,244.83 | 1,796,694,443.47 | |
| (I) Categorization by continuity of operation | |||
| 1. Net profit of continued operation | 4,264,261,244.83 | 1,796,694,443.47 | |
| 2. Net profit of discontinued operation | - | - | |
| (II) Categorization by attribution of ownership | |||
| 1. Net profit attributable to shareholders of the parent | 1,677,035,346.17 | 632,292,086.16 | |
| 2. Profit or loss attributable to minority shareholder | 2,587,225,898.66 | 1,164,402,357.31 | |
| V. Amount of other comprehensive net income after tax | (V)46 | -314,186,364.19 | -1,105,459,189.10 |
| Amount of other comprehensive net income after tax attributable to equity holders of the parent | -89,607,300.16 | -379,729,287.29 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | 228,315.37 | -1,463,343.44 | |
| 1. Other comprehensive income under the equity method that will not be reclassified to profit or loss | -184,184.63 | -1,350,843.44 | |
| 2. Fair value changes of other investments in equity instruments | 412,500.00 | -112,500.00 | |
| (II) Other comprehensive income that will be reclassified subsequently to profit or loss | -89,835,615.53 | -378,265,943.85 | |
| 1. Other comprehensive income under the equity method that will be reclassified to profit or loss | -23,133,723.56 | 12,154,545.52 | |
| 2. Translation differences of financial statements denominated in foreign currencies | -66,701,891.97 | -390,420,489.37 | |
| Amount of other comprehensive net income after tax attributable to minority shareholders | -224,579,064.03 | -725,729,901.81 | |
| VI. Total comprehensive income attributable to: | 3,950,074,880.64 | 691,235,254.37 | |
| Shareholders of the parent | 1,587,428,046.01 | 252,562,798.87 | |
| Minority shareholders | 2,362,646,834.63 | 438,672,455.50 | |
| VII. Earnings per share | |||
| (I) Basic earnings per share | 0.87 | 0.33 | |
| (II) Diluted earnings per share | 0.87 | 0.33 |
The accompanying notes form part of the financial statements.
- 6 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
Income Statement of the Company
Unit: RMB
| Item | Notes | Amount incurred in the current period | Amount incurred in the previous period |
| I. Operating income | (XIV)3 | 471,974.86 | 94,339.62 |
| Less: Operating costs | (XIV)3 | 1,132,979.75 | 1,132,979.82 |
| Administrative expenses | 62,053,671.27 | 56,541,697.34 | |
| Financial expenses | 80,011,675.00 | 1,306,524.34 | |
| Including: Interest expenses | 103,671,335.55 | 15,828,399.34 | |
| Interest income | 26,740,035.75 | 17,871,242.91 | |
| Add: Other income | 122,335.30 | 355,292.70 | |
| Investment income | (XIV)4 | 1,005,277,395.49 | 1,326,631,915.23 |
| Including: Income from investments in associates and joint ventures | (XIV)4 | 86,382,211.38 | 28,229,153.26 |
| Gains from changes in fair value (Loss is marked with "-") | - | 12,306,522.15 | |
| II. Operating profit | 862,673,379.63 | 1,280,406,868.20 | |
| Add: Non-operating income | 424,555.92 | 5,000.00 | |
| III. Gross profit | 863,097,935.55 | 1,280,411,868.20 | |
| Less: Income tax expenses | 130,368,128.15 | 174,535,694.16 | |
| IV. Net profit | 732,729,807.40 | 1,105,876,174.04 | |
| V. Amount of other comprehensive net income after tax | 412,500.00 | -112,500.00 | |
| (I) Other comprehensive income that will not be reclassified subsequently to profit or loss | 412,500.00 | -112,500.00 | |
| 1. Changes as a result of remeasurement of the net defined benefit plan | - | - | |
| 2. Other comprehensive income under the equity method that will not be reclassified to profit or loss | - | - | |
| 3. Fair value changes of other investments in equity instruments | 412,500.00 | -112,500.00 | |
| (II) Other comprehensive income that will be reclassified to profit or loss | - | - | |
| 1. Other comprehensive income under the equity method that will be reclassified to profit or loss | - | - | |
| 2. Translation differences of financial statements denominated in foreign currencies | - | - | |
| VI. Total comprehensive income | 733,142,307.40 | 1,105,763,674.04 |
The accompanying notes form part of the financial statements.
- 7 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
Consolidated Cash Flow Statement
Unit: RMB
| Item | Notes | Amount incurred in the current period | Amount incurred in the previous period (Restated) |
| I. Cash Flows from Operating Activities | |||
| Cash received from sales of goods and rendering of services | 6,999,276,674.02 | 5,663,032,758.45 | |
| Refunds of taxes | 85,780,705.21 | 14,275,811.60 | |
| Cash received relating to other operating activities | (V)65(1) | 603,526,364.98 | 426,982,722.38 |
| Sub-total of cash inflows | 7,688,583,744.21 | 6,104,291,292.43 | |
| Cash paid for goods purchased or services received | 1,903,206,790.90 | 1,626,411,856.74 | |
| Cash paid to and on behalf of employees | 1,709,301,832.87 | 1,480,656,394.52 | |
| Tax payments | 733,071,668.17 | 566,177,888.65 | |
| Cash paid relating to other operating activities | (V)65(2) | 408,043,044.31 | 373,303,949.44 |
| Sub-total of cash outflows | 4,753,623,336.25 | 4,046,550,089.35 | |
| Net Cash Flows from Operating Activities | (V)66(1) | 2,934,960,407.96 | 2,057,741,203.08 |
| II. Cash Flows from Investing Activities | |||
| Cash received from disposal and recovery of investments | 3,630,000,000.00 | 2,541,647,276.82 | |
| Cash received from investment income | 1,520,388,115.39 | 243,248,600.44 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 21,022,377.14 | 109,636,776.06 | |
| Cash received relating to other investing activities | (V)65(3) | 355,653,171.58 | 509,787,186.59 |
| Sub-total of cash inflows | 5,527,063,664.11 | 3,404,319,839.91 | |
| Cash paid to acquire or construct fixed assets, intangible assets and other long-term assets | 1,124,649,979.59 | 1,082,342,987.89 | |
| Cash paid to acquire investments | 4,337,300,451.86 | 7,181,906,008.80 | |
| Cash paid relating to other investing activities | (V)65(4) | 11,284,899.93 | 3,009,770,070.13 |
| Sub-total of cash outflows | 5,473,235,331.38 | 11,274,019,066.82 | |
| Net Cash Flows from Investing Activities | 53,828,332.73 | -7,869,699,226.91 | |
| III. Cash Flows from Financing Activities | |||
| Cash received from borrowings | 3,694,414,917.83 | 13,298,279,106.51 | |
| Cash received from issue of bonds | 4,800,000,000.00 | 700,000,000.00 | |
| Sub-total of cash inflows | 8,494,414,917.83 | 13,998,279,106.51 | |
| Repayments of borrowings | 13,053,373,996.07 | 6,724,017,083.73 | |
| Dividends paid, profit distributed or interest paid | 942,876,415.60 | 1,161,435,086.07 | |
| Including: Dividends paid, profit distributed to minority shareholders. | - | 162,311,700.49 | |
| Cash paid relating to other financing activities | (V)65(5) | 11,496,507.89 | 756,572,798.17 |
| Sub-total of cash outflows | 14,007,746,919.56 | 8,642,024,967.97 | |
| Net Cash Flows from Financing Activities | -5,513,332,001.73 | 5,356,254,138.54 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | -26,551,995.94 | -31,897,846.37 | |
| V. Net Decrease in Cash and Cash Equivalents | -2,551,095,256.98 | -487,601,731.66 | |
| Add: Opening Balance of Cash and Cash Equivalents | (V)66(2) | 11,898,618,327.29 | 7,787,660,214.80 |
| VI. Closing Balance of Cash and Cash Equivalents | (V)66(2) | 9,347,523,070.31 | 7,300,058,483.14 |
The accompanying notes form part of the financial statements.
- 8 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
Cash Flow Statement of the Company
Unit: RMB
| Item | Notes | Amount incurred in the current period | Amount incurred in the previous period |
| I. Cash Flows from Operating Activities | |||
| Cash received relating to other operating activities | 218,034,986.32 | 23,510,809.16 | |
| Sub-total of cash inflows | 218,034,986.32 | 23,510,809.16 | |
| Cash paid for goods purchased and services received | 40,000.00 | - | |
| Cash paid to and on behalf of employees | 32,829,622.92 | 25,483,852.31 | |
| Tax payments | 209,567,259.29 | 208,942,631.96 | |
| Cash paid relating to other operating activities | 33,094,186.67 | 17,929,140.00 | |
| Sub-total of cash outflows | 275,531,068.88 | 252,355,624.27 | |
| Net Cash Flows from Operating Activities | -57,496,082.56 | -228,844,815.11 | |
| II. Cash Flows from Investing Activities: | |||
| Cash received from disposals and recovery of investments | 2,480,000,000.00 | 1,400,000,000.00 | |
| Cash received from investments income | 293,098,915.83 | 184,352,981.91 | |
| Cash received relating to investing activities | - | 222,500,000.00 | |
| Sub-total of cash inflows | 2,773,098,915.83 | 1,806,852,981.91 | |
| Cash paid to acquire or construct fixed assets, intangible assets and other long-term assets | 1,732,237.00 | 600,000.00 | |
| Cash paid for investments | 2,386,523,799.86 | 2,409,178,988.47 | |
| Cash paid relating to other investing activities | 198,583,388.96 | 137,944,110.77 | |
| Sub-total of cash outflows | 2,586,839,425.82 | 2,547,723,099.24 | |
| Net Cash Flows from Investing Activities | 186,259,490.01 | -740,870,117.33 | |
| III. Cash Flows from Financing Activities: | |||
| Cash received from borrowings | 5,797,840,000.00 | 2,999,433,243.33 | |
| Cash received relating to other financing activities | 25,000,000.00 | 544,400,000.00 | |
| Sub-total of cash inflows | 5,822,840,000.00 | 3,543,833,243.33 | |
| Repayments of borrowings | 5,381,742,457.36 | 715,904,918.03 | |
| Dividends paid, profit distributed or interest paid | 89,771,518.67 | 619,875.00 | |
| Cash paid relating to other financing activities | 982,254.76 | 721,400,000.00 | |
| Sub-total of cash outflows | 5,472,496,230.79 | 1,437,924,793.03 | |
| Net Cash Flows from Financing Activities | 350,343,769.21 | 2,105,908,450.30 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | -65,793.07 | 27,149.74 | |
| V. Net Increase in Cash and Cash Equivalents | 479,041,383.59 | 1,136,220,667.60 | |
| Add: Opening balance of Cash and Cash Equivalents | 753,590,556.77 | 690,685,211.42 | |
| VI. Closing Balance of Cash and Cash Equivalents | 1,232,631,940.36 | 1,826,905,879.02 |
The accompanying notes form part of the financial statements.
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 9 -
Consolidated Statement of Changes in Shareholders' Equity
Unit: RMB
| Item | Current Period | |||||||
| Attributable to shareholders of the parent | Minority interests | Total shareholders' equity | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | |||
| I. Closing balance of the preceding year | 1,922,365,124.00 | 22,805,069,335.49 | -826,697,303.06 | 10,201,178.30 | 890,690,322.28 | 12,316,177,395.17 | 68,559,161,478.89 | 105,676,967,531.07 |
| Add: Changes in accounting policies | - | - | - | - | - | - | - | - |
| Corrections of prior period errors | - | - | - | - | - | - | - | - |
| Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
| Others | - | 34,528,989.07 | - | - | - | 12,942,703.53 | 77,217,389.86 | 124,689,082.46 |
| II. Opening balance of the period | 1,922,365,124.00 | 22,839,598,324.56 | -826,697,303.06 | 10,201,178.30 | 890,690,322.28 | 12,329,120,098.70 | 68,636,378,868.75 | 105,801,656,613.53 |
| III. Changes for the period | - | 116,324,695.54 | -90,101,219.80 | 5,289,542.94 | - | 946,536,599.05 | 1,496,540,433.72 | 2,474,590,051.45 |
| (I) Total comprehensive income | - | - | -89,607,300.16 | - | - | 1,677,035,346.17 | 2,362,646,834.63 | 3,950,074,880.64 |
| (II) Owners' contributions and reduction in capital | - | 116,324,695.54 | -493,919.64 | - | - | - | 233,353,705.33 | 349,184,481.23 |
| 1．Capital contribution from shareholders | - | - | - | - | - | - | - | - |
| 2．Capital contribution from other equity investment holder | - | - | - | - | - | - | - | - |
| 3．Share-based payment recognized in shareholders' equity | - | 5,859,913.77 | - | - | - | - | 4,913,360.76 | 10,773,274.53 |
| 4．Business combination involving enterprises under common control | - | -38,392,129.42 | - | - | - | - | - | -38,392,129.42 |
| 5．Others | - | 148,856,911.19 | -493,919.64 | - | - | - | 228,440,344.57 | 376,803,336.12 |
| (III) Profit distribution | - | - | - | - | - | -730,498,747.12 | -1,105,762,332.14 | -1,836,261,079.26 |
| 1．Transfer to surplus reserve | - | - | - | - | - | - | - | - |
| 2．Transfer to general reserve | - | - | - | - | - | - | - | - |
| 3．Distributions to shareholders | - | - | - | - | - | -730,498,747.12 | -1,012,637,696.25 | -1,743,136,443.37 |
| 4．Others | - | - | - | - | - | - | -93,124,635.89 | -93,124,635.89 |
| (IV) Transfers within shareholders' equity | - | - | - | -1,815,265.74 | - | - | - | -1,815,265.74 |
| 1．Capitalization of capital reserve | - | - | - | - | - | - | - | - |
| 2．Capitalization of surplus reserve | - | - | - | - | - | - | - | - |
| 3．Loss made up by surplus reserve | - | - | - | - | - | - | - | - |
| 4．Others | - | - | - | -1,815,265.74 | - | - | - | -1,815,265.74 |
| (V) Special reserve | - | - | - | 7,104,808.68 | - | - | 6,302,225.90 | 13,407,034.58 |
| 1．Withdrawn in the period | - | - | - | 23,456,646.73 | - | - | 28,184,953.20 | 51,641,599.93 |
| 2．Utilized in the period | - | - | - | -16,351,838.05 | - | - | -21,882,727.30 | -38,234,565.35 |
| (VI) Others | - | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 1,922,365,124.00 | 22,955,923,020.10 | -916,798,522.86 | 15,490,721.24 | 890,690,322.28 | 13,275,656,697.75 | 70,132,919,302.47 | 108,276,246,664.98 |
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 10 -
Consolidated Statement of Changes in Shareholders' Equity - continued
Unit: RMB
| Item | Prior Period | |||||||
| Attributable to shareholders of the parent | Minority interests | Total shareholders' equity | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | |||
| I. Closing balance of the preceding year | 1,922,365,124.00 | 22,296,485,467.35 | -355,944,565.91 | 12,386,734.70 | 630,345,307.43 | 11,467,166,351.85 | 59,017,403,192.82 | 94,990,207,612.24 |
| Add: Changes in accounting policies | - | - | - | - | - | - | - | - |
| Corrections of prior period errors | - | - | - | - | - | - | - | - |
| Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
| Others | - | 34,528,989.07 | - | - | - | 4,421,264.15 | 62,531,504.60 | 101,481,757.82 |
| II. Opening balance of the period | 1,922,365,124.00 | 22,331,014,456.42 | -355,944,565.91 | 12,386,734.70 | 630,345,307.43 | 11,471,587,616.00 | 59,079,934,697.42 | 95,091,689,370.06 |
| III. Changes for the period | - | -235,191,631.56 | -379,729,287.29 | 10,205,542.71 | - | -251,995,870.88 | -713,368,126.28 | -1,570,079,373.30 |
| (I) Total comprehensive income | - | - | -379,729,287.29 | - | - | 632,292,086.16 | 438,672,455.50 | 691,235,254.37 |
| (II) Owners' contributions and reduction in capital | - | -235,191,631.56 | - | - | - | - | 195,733,139.46 | -39,458,492.10 |
| 1．Capital contribution from shareholders | - | - | - | - | - | - | - | - |
| 2．Capital contribution from other equity investment holder | - | - | - | - | - | - | - | - |
| 3．Share-based payment recognized in shareholders' equity | - | 4,385,994.73 | - | - | - | - | 4,298,990.17 | 8,684,984.90 |
| 4．Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
| 5．Others | - | -239,577,626.29 | - | - | - | - | 191,434,149.29 | -48,143,477.00 |
| (III) Profit distribution | - | - | - | - | - | -884,287,957.04 | -1,358,489,636.85 | -2,242,777,593.89 |
| 1．Transfer to surplus reserve | - | - | - | - | - | - | - | - |
| 2．Transfer to general reserve | - | - | - | - | - | - | - | - |
| 3．Distributions to shareholders | - | - | - | - | - | -884,287,957.04 | -1,358,489,636.85 | -2,242,777,593.89 |
| 4．Others | - | - | - | - | - | - | - | - |
| (IV) Transfers within shareholders' equity | - | - | - | - | - | - | - | - |
| 1．Capitalization of capital reserve | - | - | - | - | - | - | - | - |
| 2．Capitalization of surplus reserve | - | - | - | - | - | - | - | - |
| 3．Loss made up by surplus reserve | - | - | - | - | - | - | - | - |
| 4．Others | - | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | 10,205,542.71 | - | - | 10,715,915.61 | 20,921,458.32 |
| 1．Withdrawn in the period | - | - | - | 26,720,701.58 | - | - | 28,574,355.01 | 55,295,056.59 |
| 2．Utilized in the period | - | - | - | -16,515,158.87 | - | - | -17,858,439.40 | -34,373,598.27 |
| (VI) Others | - | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 1,922,365,124.00 | 22,095,822,824.86 | -735,673,853.20 | 22,592,277.41 | 630,345,307.43 | 11,219,591,745.12 | 58,366,566,571.14 | 93,521,609,996.76 |
The accompanying notes form part of the financial statements.
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 11 -
Statement of Changes in Shareholders' Equity of the Company
Unit: RMB
| Item | Current Period | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | Total shareholders' equity | |
| I. Closing balance of the preceding year | 1,922,365,124.00 | 27,591,847,402.73 | 105,536,222.50 | - | 890,690,322.28 | 2,442,510,245.26 | 32,952,949,316.77 |
| Add: Changes in accounting policies | - | - | - | - | - | - | - |
| Corrections of prior period errors | - | - | - | - | - | - | - |
| Others | - | - | - | - | - | - | - |
| II. Opening balance of the period | 1,922,365,124.00 | 27,591,847,402.73 | 105,536,222.50 | - | 890,690,322.28 | 2,442,510,245.26 | 32,952,949,316.77 |
| III. Changes for the period | - | 8,831,939.94 | 412,500.00 | - | - | 2,231,060.28 | 11,475,500.22 |
| (I) Total comprehensive income | - | - | 412,500.00 | - | - | 732,729,807.40 | 733,142,307.40 |
| (II) Owners' contributions and reduction in capital | - | 8,831,939.94 | - | - | - | - | 8,831,939.94 |
| 1．Capital contribution from shareholders | - | - | - | - | - | - | - |
| 2．Share-based payment recognized in shareholders' equity | - | 8,831,939.94 | - | - | - | - | 8,831,939.94 |
| 3．Others | - | - | - | - | - | - | - |
| (III) Profit distribution | - | - | - | - | - | -730,498,747.12 | -730,498,747.12 |
| 1．Transfer to surplus reserve | - | - | - | - | - | - | - |
| 2．Transfer to general reserve | - | - | - | - | - | - | - |
| 3．Distributions to shareholders | - | - | - | - | - | -730,498,747.12 | -730,498,747.12 |
| 4．Others | - | - | - | - | - | - | - |
| (IV) Transfers within shareholders' equity | - | - | - | - | - | - | - |
| 1．Capitalization of capital reserve | - | - | - | - | - | - | - |
| 2．Capitalization of surplus reserve | - | - | - | - | - | - | - |
| 3．Loss made up by surplus reserve | - | - | - | - | - | - | - |
| 4．Others | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | - | - | - | - |
| 1．Withdrawn in the period | - | - | - | - | - | - | - |
| 2．Utilized in the period | - | - | - | - | - | - | - |
| (VI) Others | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 1,922,365,124.00 | 27,600,679,342.67 | 105,948,722.50 | - | 890,690,322.28 | 2,444,741,305.54 | 32,964,424,816.99 |
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 12 -
Statement of Changes in Shareholders' Equity of the Company - continued
Unit: RMB
| Item | Current Period | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | Total shareholders' equity | |
| I. Closing balance of the preceding year | 1,922,365,124.00 | 27,576,242,527.73 | 105,594,576.25 | - | 630,345,307.43 | 983,693,068.62 | 31,218,240,604.03 |
| Add: Changes in accounting policies | - | - | - | - | - | - | - |
| Corrections of prior period errors | - | - | - | - | - | - | - |
| Others | - | - | - | - | - | - | - |
| II. Opening balance of the period | 1,922,365,124.00 | 27,576,242,527.73 | 105,594,576.25 | - | 630,345,307.43 | 983,693,068.62 | 31,218,240,604.03 |
| III. Changes for the period | - | 8,733,181.83 | -112,500.00 | - | - | 221,588,217.00 | 230,208,898.83 |
| (I) Total comprehensive income | - | - | -112,500.00 | - | - | 1,105,876,174.04 | 1,105,763,674.04 |
| (II) Owners' contributions and reduction in capital | - | 8,733,181.83 | - | - | - | - | 8,733,181.83 |
| 1．Capital contribution from shareholders | - | - | - | - | - | - | - |
| 2．Share-based payment recognized in shareholders' equity | - | 8,733,181.83 | - | - | - | - | 8,733,181.83 |
| 3．Others | - | - | - | - | - | - | - |
| (III) Profit distribution | - | - | - | - | - | -884,287,957.04 | -884,287,957.04 |
| 1．Transfer to surplus reserve | - | - | - | - | - | - | - |
| 2．Transfer to general reserve | - | - | - | - | - | - | - |
| 3．Distributions to shareholders | - | - | - | - | - | -884,287,957.04 | -884,287,957.04 |
| 4．Others | - | - | - | - | - | - | - |
| (IV) Transfers within shareholders' equity | - | - | - | - | - | - | - |
| 1．Capitalization of capital reserve | - | - | - | - | - | - | - |
| 2．Capitalization of surplus reserve | - | - | - | - | - | - | - |
| 3．Loss made up by surplus reserve | - | - | - | - | - | - | - |
| 4．Others | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | - | - | - | - |
| 1．Withdrawn in the period | - | - | - | - | - | - | - |
| 2．Utilized in the period | - | - | - | - | - | - | - |
| (VI) Others | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 1,922,365,124.00 | 27,584,975,709.56 | 105,482,076.25 | - | 630,345,307.43 | 1,205,281,285.62 | 31,448,449,502.86 |
The accompanying notes form part of the financial statements.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 13 -
I. GENERAL INFORMATION OF THE COMPANY
China Merchants Port Group Company Limited was a stock limited company incorporated inShenzhen, Guangdong Province, on 16 January 1993.
The headquarters of the Company is located in Shenzhen, Guangdong Province. The Company andits subsidiaries (collectively the "Group") are principally engaged in the rendering of port service,bonded logistics services and other businesses such as property development and investment.
The Company's and consolidated financial statements have been approved by the Board of Directorson 30 August 2021.
See Note (VII) "Equity in other entities" for details of the scope of consolidated financial statementsin the current period. See Note (VI) "Changes in scope of consolidation" for details of changes inthe scope of consolidated financial statements in the current period.
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
Basis of preparation of financial statements
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") issued by theMinistry of Finance ("MoF"). In addition, the Group has disclosed relevant financial information inaccordance with Information Disclosure and Presentation Rules for Companies Offering Securitiesto the Public No. 15 - General Provisions on Financial Reporting (Revised in 2014).
Going concern
As at 30 June 2021, the Group had total current liabilities in excess of total current assets ofRMB 4,988,808,531.03. On 30 June 2021, the Group had available and unused line of creditamounting to RMB 44,924,971,453.51, which is greater than the balance of the net current liabilities.The Group can obtain financial support from the available line of credit when needed. Therefore,the financial statements have been prepared on a going concern basis.
Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for certain financial instrumentswhich are measured at fair value, the Group adopts the historical cost as the principle ofmeasurement of the financial statements. Upon being restructured into a stock company, the fixedassets and intangible assets initially contributed by the state-owned shareholders are recognizedbased on the valuation amounts confirmed by the state-owned assets administration department.Where assets are impaired, provisions for asset impairment are made in accordance with the relevantrequirements.
Where the historical cost is adopted as the measurement basis, assets are recorded at the amount ofcash or cash equivalents paid or the fair value of the consideration given to acquire them at the timeof their acquisition. Liabilities are recorded at the amount of proceeds or assets received or thecontractual amounts for assuming the present obligation, or, at the amounts of cash or cashequivalents expected to be paid to settle the liabilities in the normal course of business.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 14 -
II. BASIS OF PREPARATION OF FINANCIAL STATEMENTS - continued
Basis of accounting and principle of measurement - continued
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date, regardless of whether thatprice is directly observable or estimated using valuation technique. Fair value measurement and/ordisclosure in the financial statements are determined according to the above basis.
Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputsto the fair value measurements are observable and the significance of the inputs to the fair valuemeasurement in its entirety, which are described as follows:
? Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities thatthe entity can access at the measurement date;? Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and? Level 3 inputs are unobservable inputs for the asset or liability.
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES
All the following significant accounting policies and accounting estimates are based on AccountingStandards for Business Enterprises ("ASBE").
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with the ASBE, andpresent truly and completely, the Company's and consolidated financial position as of 30 June 2021,and the Company's and consolidated results of operations, the Company's and consolidatedshareholders' equity and cash flows for the period from 1 January 2021 to 30 June 2021.
2. Accounting period
The Group has adopted the calendar year as its accounting year, e.g. from 1 January to 31 December.
3. Operating cycle
An operating cycle refers to the period since when an enterprise purchases assets for processingpurpose till the realization of those assets in cash or cash equivalents. The Group are principallyengaged in the rendering of port service, bonded logistics service and other business such asproperty development and investment with an operating cycle of one year.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 15 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
4. Functional currency
Renminbi ("RMB") is the currency of the primary economic environment in which the Companyand its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries chooseRMB as their functional currency. The Company's subsidiaries choose their functional currency onthe basis of the primary economic environment in which they operate. The Company adopts RMBto prepare its financial statements.
5. The accounting treatment of business combinations involving or not involving
enterprises under common control
Business combinations are classified into business combinations involving enterprises undercommon control and business combinations not involving enterprises under common control.
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination inwhich all of the combining enterprises are ultimately controlled by the same party or parties bothbefore and after the combination, and that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recordedby the combining entities at the date of the combination. The difference between the carryingamount of the net assets obtained and the carrying amount of the consideration paid for thecombination is adjusted to the share premium in capital reserve. If the share premium is notsufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period inwhich they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business combinationin which all of the combining enterprises are not ultimately controlled by the same party or partiesbefore and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assetsgiven, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange forcontrol of the acquire. Where a business combination not involving enterprises under commoncontrol is achieved in stages that involve multiple transactions, the cost of combination is the sumof the consideration paid at the acquisition date and the fair value at the acquisition date of theacquirer's previously held interest in the acquiree. The intermediary expenses (fees in respect ofauditing, legal services, valuation and consultancy services, etc.) and other administrative expensesattributable to the business combination are recognized in profit or loss in the periods when theyare incurred.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 16 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
5. The accounting treatment of business combinations involving or not involving
enterprises under common control - continued
5.2 Business combinations not involving enterprises under common control and goodwill - continued
The acquiree's identifiable assets, liabilities and contingent liabilities acquired by the acquirer in abusiness combination that meet the recognition criteria shall be measured at fair value at theacquisition date.
When a business combination contract provides for the acquirer's recovery of considerationpreviously paid contingent on one or multiple future event(s), the Group recognizes the contingentconsideration provided in the contract as an asset, as part of the consideration transferred in thebusiness combination, and includes it in the cost of business combination at the fair value at theacquisition date. Within 12 months after the acquisition, where the contingent consideration needsto be adjusted as new or further evidences are obtained in respect of the circumstances existed atthe acquisition date, the adjustment shall be recognized and the amount originally recognized ingoodwill or non-operating income shall be adjusted. A change in or adjustment to the contingentconsideration under other circumstances shall be accounted for in accordance with AccountingStandard for Business Enterprise No. 22 - Financial Instruments: Recognition and Measurementand Accounting Standard for Business Enterprises No. 13 - Contingencies. Any change oradjustment is included in profit or loss for the current period.
Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree'sidentifiable net assets, the difference is treated as an asset and recognized as goodwill, which ismeasured at cost on initial recognition. Where the cost of combination is less than the acquirer'sinterest in the fair value of the acquiree's identifiable net assets, the acquirer reassesses themeasurement of the fair values of the acquiree's identifiable assets, liabilities and contingentliabilities and measurement of the cost of combination. If after that reassessment, the cost ofcombination is still less than the acquirer's interest in the fair value of the acquiree's identifiable netassets, the acquirer recognizes the remaining difference immediately in profit or loss for the currentperiod.
If either the fair values of identifiable assets, liabilities and contingent liabilities acquired in acombination or the cost of business combination can be determined only provisionally by the endof the period in which the business combination was effected, the acquirer recognizes and measuresthe combination using those provisional values. Any adjustments to those provisional values withintwelve months after the acquisition date are treated as if they had been recognized and measured onthe acquisition date.
Goodwill arising on a business combination is measured at cost less accumulated impairment losses,and is presented separately in the consolidated financial statements.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 17 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
6. Preparation of consolidated financial statements
6.1 Preparation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis ofcontrol. Control exists when the investor has power over the investee; is exposed, or has rights, tovariable returns from its involvement with the investee; and has the ability to use its power over theinvestee to affect its returns. The Group reassesses whether or not it controls an investee if facts andcircumstances indicate that there are changes of the above elements of the definition of control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiaries andceases when the Group loses control of the subsidiary.
For a subsidiary already disposed of by the Group, the operating results and cash flows before thedate of disposal (the date when control is lost) are included in the consolidated income statementand consolidated statement of cash flows, as appropriate.
For subsidiaries acquired through a business combination involving enterprises not under commoncontrol, the operating results and cash flows from the acquisition date (the date when control isobtained) are included in the consolidated income statement and consolidated statement of cashflows, as appropriate.
No matter when the business combination occurs in the reporting period, subsidiaries acquiredthrough a business combination involving enterprises under common control or the party beingabsorbed under merger by absorption are included in the Group's scope of consolidation as if theyhad been included in the scope of consolidation from the date when they first came under thecommon control of the ultimate controlling party. Their operating results and cash flows from thedate when they first came under the common control of the ultimate controlling party are includedin the consolidated income statement and consolidated statement of cash flows, as appropriate.
The significant accounting policies and accounting periods adopted by the subsidiaries aredetermined based on the uniform accounting policies and accounting periods set out by theCompany.
Where the accounting policies / accounting periods adopted by subsidiaries are inconsistent withthose of the Company, appropriate adjustments are made to the subsidiaries' financial statements inaccordance with the accounting policies of the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 18 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
6. Preparation of consolidated financial statements - continued
6.1 Preparation of consolidated financial statements - continued
The portion of subsidiaries' equity that is not attributable to the parent is treated as minority interestsand presented as "minority interests" in the consolidated balance sheet under shareholders' equity.The portion of net profits or losses of subsidiaries for the period attributable to minority interests ispresented as "minority interests" in the consolidated income statement under the "net profit" lineitem.
When the amount of loss for the period attributable to the minority shareholders of a subsidiaryexceeds the minority shareholders' portion of the opening balance of shareholders' equity of thesubsidiary, the excess amount is still allocated against minority interests.
Acquisition of minority interests or disposals of interests in a subsidiary that do not result in theloss of control over the subsidiary are accounted for as equity transactions. The carrying amountsof the parent's interests and minority interests are adjusted to reflect the changes in their relativeinterests in the subsidiary. The difference between the amount by which the minority interests areadjusted and the fair value of the consideration paid or received is adjusted to capital reserve. If thecapital reserve is not sufficient to absorb the difference, the excess are adjusted against retainedearnings.
For the stepwise acquisition of equity interest till acquiring control after a few transactions andleading to business combination not involving enterprises under common control, this should bedealt with based on whether this belongs to 'package deal': if it belongs to 'package deal',transactions will be dealt as transactions to acquire control. If it does not belong to 'package deal',transactions to acquire control on acquisition date will be under accounting treatment, the fair valueof acquirees' shares held before acquisition date will be revalued, and the difference between fairvalue and book value will be recognized in profit or loss of the current period; if acquirees' sharesheld before acquisition date involve in changes of other comprehensive income and other equity ofowners under equity method, this will be transferred to income of acquisition date.
When the Group loses control over a subsidiary due to disposal of equity investment or otherreasons, any retained interest is remeasured at its fair value at the date when control is lost. Thedifference between (i) the aggregate of the consideration received on disposal and the fair value ofany retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculatedfrom the acquisition date according to the original proportion of ownership interests is recognizedas investment income in the period in which control is lost, and the goodwill is offset accordingly.Other comprehensive income associated with investment in the former subsidiary is reclassified toinvestment income in the period in which control is lost.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 19 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
6. Preparation of consolidated financial statements - continued
6.1 Preparation of consolidated financial statements - continued
When the Group loses control of a subsidiary in two or more arrangements (transactions), termsand conditions of the arrangements (transactions) and their economic effects are considered. Oneor more of the following indicate that the Group shall account for the multiple arrangements as a'package deal': (i) they are entered into at the same time or in contemplation of each other; (ii) theyform a complete transaction designed to achieve an overall commercial effect; (iii) the occurrenceof one transaction is dependent on the occurrence of at least one other transaction; (iv) onetransaction alone is not economically justified, but it is economically justified when consideredtogether with other transactions. Where the transactions of disposal of equity investments in asubsidiary until the loss of control are assessed as a package deal, these transactions are accountedfor as one transaction of disposal of a subsidiary with loss of control. Before losing control, thedifference of consideration received on disposal and the share of net assets of the subsidiarycontinuously calculated from acquisition date is recognized as other comprehensive income. Whenlosing control, the cumulated other comprehensive income is transferred to profit or loss of theperiod of losing control. If the transactions of disposal of equity investments in a subsidiary are notassessed as a package deal, these transactions are accounted for as unrelated transactions.
7. Types of joint arrangements and the accounting treatment of joint operation
There are two types of joint arrangements - joint operations and joint ventures. The classificationof joint arrangements under is determined based on the rights and obligations of parties to the jointarrangements by considering the structure, the legal form of the arrangements, the contractual termsagreed by the parties to the arrangement. A joint operation is a joint arrangement whereby the partiesthat have joint control of the arrangement have rights to the assets, and obligations for the liabilities,relating to the arrangement. A joint venture is a joint arrangement whereby the parties that havejoint control of the arrangement have rights to the net assets of the arrangement.
Investments in joint ventures are accounted for using the equity method by the Group, which isdetailed in Notes (III) 16.3.2, A long-term equity investment accounted for using the equity method
The Group as a joint operator recognizes the following items in relation to its interest in a jointoperation: (1) its solely-held assets, including its share of any assets held jointly; (2) its solely-assumed liabilities, including its share of any liabilities incurred jointly; (3) its revenue from thesale of its share of the output arising from the joint operation; (4) its share of the revenue from thesale of the output by the joint operation; and (5) its solely-incurred expenses, including its share ofany expenses incurred jointly. The Group accounts for the recognized assets, liabilities, revenuesand expenses relating to its interest in a joint operation in accordance with the requirementsapplicable to the particular assets, liabilities, revenues and expenses.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 20 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
8. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cashequivalents are the Group's short-term(generally due within 3 months since the acquisition date),highly liquid investments that are readily convertible to known amounts of cash and which aresubject to an insignificant risk of changes in value.
9. Foreign currency transactions
9.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchangerate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currencyusing the spot exchange rates at the balance sheet date. Exchange differences arising from thedifferences between the spot exchange rates prevailing at the balance sheet date and those on initialrecognition or at the previous balance sheet date are recognized in profit or loss for the period,except that (1) exchange differences related to a specific-purpose borrowing denominated in foreigncurrency that qualify for capitalization are capitalized as part of the cost of the qualifying assetduring the capitalization period; (2) exchange differences related to hedging instruments for thepurpose of hedging against foreign currency risks are accounted for using hedge accounting; (3)exchange differences arising from changes in the carrying amounts (other than the amortized cost)of monetary items at fair value through other comprehensive income are recognized as othercomprehensive income.
When the consolidated financial statements include foreign operation(s), if there is foreign currencymonetary item constituting a net investment in a foreign operation, exchange difference arisingfrom changes in exchange rates are recognized as "exchange differences arising on translation offinancial statements denominated in foreign currencies " in other comprehensive income, and inprofit and loss for the period upon disposal of the foreign operation.
Foreign currency non-monetary items measured at historical cost are translated to the amounts infunctional currency at the spot exchange rates on the dates of the transactions; the amounts infunctional currency remain unchanged. Foreign currency non-monetary items measured at fairvalue are re-translated at the spot exchange rate on the date the fair value is determined. Differencebetween the re-translated functional currency amount and the original functional currency amountis treated as changes in fair value (including changes of exchange rate) and is recognized in profitand loss or as other comprehensive income.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 21 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
9. Foreign currency transactions - continued
9.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a foreignoperation are translated from the foreign currency into RMB using the following method: assetsand liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balancesheet date; shareholders' equity items except for unappropriated profit are translated at the spotexchange rates at the dates on which such items arose; all items in the income statement as well asitems reflecting the distribution of profits are translated at the average exchange rates of theaccounting period of the consolidated financial statements; the opening balance of unappropriatedprofit is the translated closing balance of the previous year's unappropriated profit; the closingbalance of unappropriated profit is calculated and presented on the basis of each translated incomestatement and profit distribution item. The difference between the translated assets and theaggregate of liabilities and shareholders' equity items is recognized as other comprehensive incomeand included in shareholders' equity.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign subsidiaryare translated at average exchange rate during the accounting period of consolidated financialstatements. The effect of exchange rate changes on cash and cash equivalents is regarded as areconciling item and presented separately in the cash flow statement as "effect of exchange ratechanges on cash and cash equivalents".
The closing balances and the comparative figures of previous year are presented at the translatedamounts in the previous year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over aforeign operation due to disposal of certain interest in it or other reasons, the Group transfers theaccumulated exchange differences arising on translation of financial statements of this foreignoperation attributable to the owners' equity of the Company and presented under owners' equity, toprofit or loss in the period in which the disposal occurs.
In case of a disposal of part equity investments or other reason leading to lower interest percentagein foreign operations but does not result in the Group losing control over a foreign operation, theproportionate share of accumulated exchange differences arising on translation of financialstatements are re-attributed to minority interests and are not recognized in profit and loss. For partialdisposals of equity interests in foreign operations which are associates or joint ventures, theproportionate share of the accumulated exchange differences arising on translation of financialstatements of foreign operations is reclassified to profit or loss.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 22 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to thecontractual provisions of a financial instrument.
All regular way purchases or sales of financial assets are recognized and derecognized on a tradedate basis.
Financial assets and financial liabilities are initially measured at fair value. For financial assetsand financial liabilities at fair value through profit or loss, relevant transaction costs are directlyrecognized in profit or loss; transaction costs relating to other categories of financial assets andfinancial liabilities are included in the value initially recognized. For accounts receivablerecognized that do not contain a significant financing component or a financing componentincluded in the contracts less than one year which are not considered by the Group, which arewithin the scope of Accounting Standard for Business Enterprises No.14 - Revenue (hereinafterreferred to as "revenue standards"), transaction prices defined in the standards shall be adopted oninitial recognition.
The effective interest method is a method that is used in the calculation of the amortized cost of afinancial asset or a financial liability and in the allocation of the interest income or interestexpense in profit or loss over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash flows through theexpected life of the financial asset or financial liability to the gross carrying amount of a financialasset or to the amortized cost of a financial liability. When calculating the effective interest rate,the Group estimates future cash flows by considering all the contractual terms of the financialasset or financial liability (for example, prepayment, extension, call option or similar options) butshall not consider the expected credit losses.
The amortized cost of a financial asset or a financial liability is the amount of a financial asset or afinancial liability initially recognized net of principal repaid, plus or less the cumulative amortizedamount arising from amortization of the difference between the amount initially recognized andthe amount at the maturity date using the effective interest method, net of cumulative credit lossallowance (only applicable to financial assets).
10.1 Classification, recognition and measurement of financial assets
Subsequent to initial recognition, the Group's financial assets of various categories aresubsequently measured at amortized cost, at fair value through other comprehensive income or atfair value through profit or loss.
If contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding, and the financial asset isheld within a business model whose objective is to hold financial assets in order to collectcontractual cash flows, such asset is classified into financial assets measured at amortized cost,which include cash and bank balances, notes receivable, accounts receivable, other receivables,debt investments, and long-term receivables and etc.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 23 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets - continued
Financial assets that meet the following conditions are subsequently measured at fair value throughother comprehensive income ("FVTOCI"): the financial asset is held within a business model whoseobjective is achieved by both collecting contractual cash flows and selling; and the contractual termsof the financial asset give rise on specified dates to cash flows that are solely payments of principaland interest on the principal amount outstanding. Financial assets at FVTOCI are presented as otherdebt investments. Other debt investments due within one year (inclusive) since the balance sheetdate are presented as non-current assets due within one year. Other debt investments due within oneyear (inclusive) upon acquisition are presented as other current assets.
On initial recognition, the Group may irrevocably designate non-trading equity instruments, otherthan contingent consideration recognized through business combination not involving enterprisesunder common control, as financial assets at FVTOCI on an individual basis. Such financial assetsat FVTOCI are presented as other equity instrument.
A financial asset is classified as held for trading if one of the following conditions is satisfied:
? It has been acquired principally for the purpose of selling in the near term; or? On initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and there is objective evidence that the Group has a recent actual pattern of short-term profit-taking; or? It is a derivative that is not a financial guarantee contract or designated and effective as a hedginginstrument.
Financial assets measured at fair value through profit or loss ("FVTPL") include those classified asfinancial assets at FVTPL and those designated as financial assets at FVTPL.
? Any financial assets that does not qualify for amortized cost measurement or measurement at
FVTOCI or designated at FVTOCI are classified into financial assets at FVTPL.? Upon initial recognition, in order to eliminate or significantly reduce accounting mismatch and
qualified hybrid financial instrument combines financial asset with embedded derivatives, the
Group will irrevocably designated it as financial liabilities at FVTPL.
Financial assets at FVTPL assets other than derivative financial assets are presented as "held-for-trading financial assets". Such financial assets at FVTPL which may fall due more than one year(or without fixed term) since the balance sheet date and will be held more than one year arepresented as other non-current financial assets.
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using theeffective interest method. Gain or loss arising from impairment or derecognition is recognized inprofit or loss.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 24 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets - continued
10.1.1 Financial assets measured at amortized cost - continued
For financial assets measured at amortized cost, the Group recognizes interest income usingeffective interest method. The Group calculates and recognizes interest income through book valueof financial assets multiplying effective interest, except for the following circumstances:
? For purchased or originated credit-impaired financial assets with credit impairment, the Groupcalculates and recognizes its interest income based on amortized cost of the financial asset and theeffective interest through credit adjustment since initial recognition.
10.1.2 Financial assets at FVTOCI
Impairment losses or gains related to financial assets at FVTOCI, interest income measured usingeffective interest method and exchange gains or losses are recognized into profit or loss for thecurrent period, except for the above circumstances, changes in fair value of the financial assets areincluded in other comprehensive income. Amounts charged to profit or loss for every period equalto the amount charged to profit or loss as it is measured at amortized costs. When the financial assetis derecognized, the cumulative gains or losses previously recognized in other comprehensiveincome shall be removed from other comprehensive income and recognized in profit or loss.
Changes in fair value of non-trading equity instrument investments designated as financial assets atFVTOCI are recognized in other comprehensive income, and the cumulative gains or lossespreviously recognized in other comprehensive income allocated to the part derecognized aretransferred and included in retained earnings. During the period in which the Group holds the non-trading equity instrument, revenue from dividends is recognized in profit or loss for the currentperiod when (1) the Group has established the right of collecting dividends; (2) it is probable thatthe associated economic benefits will flow to the Group; and (3) the amount of dividends can bemeasured reliably.
10.1.3 Financial assets at FVTPL
Financial assets at FVTPL are subsequently measured at fair value. Gain or loss arising fromchanges in fair values and dividends and interests related to the financial assets are recognized inprofit or loss.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 25 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments
The Group makes accounting treatment on impairment and recognizes loss allowance for expectedcredit losses ("ECL") on financial assets measured at amortized cost, financial assets classified asat FVTOCI, lease receivables, contract assets, loan commitments that are not financial liabilities atFVTPL, financial liabilities not measured at FVTPL, financial guarantee contracts arising fromtransfer of financial assets which does not satisfy derecognition criteria or continuing involvementof transferred financial assets.
The Group makes a loss allowance against amount of lifetime ECL of the contract assets, notesreceivable and accounts receivable arising from transactions adopting the Revenue Standard as wellas lease receivables arising from transactions adopting ASBE No. 21- Leases.
For other financial instrument, other than purchased or originated credit-impaired financial assets,the Group assesses changes in credit risks of the relevant financial asset since initial recognition ateach balance sheet date. If the credit loss of the financial instrument has been significantly increasedsince initial recognition, the Group will make a loss allowance at an amount of expected credit lossduring the whole life; if not, the Group will make a loss allowance for the financial instrument atan amount in the future 12-month expected credit losses. Except for the financial assets classifiedas at FVTOCI, increase in or reversal of credit loss allowance is included in profit or loss asloss/gain on impairment. For the financial assets classified as at FVTOCI, the Group recognizescredit loss allowance in other comprehensive income and recognizes the loss/gain on impairmentin profit or loss, while the Group does not decrease the carrying amount of such financial assets inthe balance sheet.
The Group has makes a loss allowance against amount of expected credit losses during the wholelife in the prior accounting period. However, at the balance sheet date, the credit risk on a financialinstrument has not increased significantly since initial recognition; the Group will measure the lossallowance for that financial instrument at an amount in the future 12-month expected credit losses.Reversed amount of loss allowance arising from such circumstances shall be included in profit orloss as impairment gains.
10.2.1 Significant increase of credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Groupcompares the risk of a default occurring on the financial instrument as at the reporting date with therisk of a default occurring on the financial instrument as at the date of initial recognition. For loancommitments, the date that the Group becomes a party to the irrevocable commitment is consideredto be the date of initial recognition in the application of criteria related to the financial instrumentfor impairment.
In particular, the following information is taken into account when assessing whether credit risk hasincreased significantly:
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.1 Significant increase of credit risk - continued
(1) Significant changes in internal price indicators of credit risk as a result of a change in credit
risk;
(2) Other changes in the rates or terms of an existing financial instrument that would besignificantly different if the instrument was newly originated or issued at the balance sheetdate (such as more stringent covenants, increased amounts of collateral or guarantees, orhigher income coverage).
(3) Significant changes in external market indicators of credit risk for a particular financial
instrument or similar financial instruments with the same expected life. These indicatorsinclude the credit spread, the credit swap prices for the borrower, the length of time or theextent to which the fair value of a financial asset has been less than its amortized cost andother market information related to the borrower, such as changes in the price of a borrower'sdebt and equity instruments.
(4) Significant changes in actual or expected external credit rating for the financial instruments;
(5) An actual or expected internal credit rating downgrade for the borrower
(6) Adverse changes in business, financial or economic conditions that are expected to cause a
significant change in the debtor's ability to meet its debt obligations;
(7) An actual or expected significant change in the operating results of the debtor;
(8) Significant increases in credit risk on other financial instruments of the same borrower;
(9) Significant adverse change in the regulatory, economic, or technological environment of the
debtor;
(10) Significant changes in the value of the collateral supporting the obligation or in the quality ofthird-party guarantees or credit enhancements, which are expected to reduce the debtor'seconomic incentive to make scheduled contractual payments or to otherwise have an effecton the probability of a default occurring.
(11) Significant changes in circumstances expected to reduce the debtor's economic incentive tomake scheduled contractual payments;
(12) Expected changes in the loan documentation including an expected breach of contract that
may lead to covenant waivers or amendments, interest payment holidays, interest rate step-ups, requiring additional collateral or guarantees, or other changes to the contractualframework of the financial instrument;
(13) Significant changes in the expected performance and behavior of the debtor;
(14) Changes in the entity's credit management approach in relation to the financial instrument;
(15) Past due of contract payment.
The Group assumes that the credit risk on a financial instrument has not increased significantlysince initial recognition if the financial instrument is determined to have lower credit risk at thebalance sheet date. A financial instrument is determined to have lower credit risk if: i) it has a lowerrisk of default, ii) the borrower has a strong capacity to meet its contractual cash flow obligationsin the near term and iii) adverse changes in economic and business conditions in the longer termmay, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flowobligations.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.2 Credit-impaired financial assets
When the Group expected occurrence of one or more events which may cause adverse impact onfuture cash flows of a financial asset, the financial asset will become a credit-impaired financialassets. Objective evidence that a financial asset is impaired includes but not limited to the followingobservable events:
(1) Significant financial difficulty of the issuer or debtor;
(2) A breach of contract by the debtor, such as a default or delinquency in interest or principalpayments;
(3) The creditor, for economic or legal reasons relating to the debtor's financial difficulty, grantinga concession to the debtor;
(4) It becoming probable that the debtor will enter bankruptcy or other financial reorganizations;
(5) The disappearance of an active market for that financial asset because of financial difficulties
of the issuer or the debtor;
(6) Purchase or originate a financial asset with a large scale of discount, which reflects facts of
credit loss incurred.
10.2.3 Determination of expected credit loss
Lease receivables are assessed for ECL individually by the Group. In addition, the Group usesprovision matrix to calculate ECL for notes receivable, accounts receivable, other receivables,contract assets, debt investments and other debt investments based on a portfolio basis. The Groupclassifies financial instruments into different groups based on common risk characteristics.Common credit risk characteristics include credit risk rating, the date of initial recognition,remaining contractual maturity, industry of borrower and geographical location of the borrower etc.
The Group determines expected credit losses of relevant financial instruments using the followingmethods:
? For a financial asset, a credit loss is the present value of the difference between the contractualcash flows that are due to the Group under the contract and the cash flows that the Groupexpects to receive;? For a lease receivable, a credit loss is the present value of the difference between the
contractual cash flows that are due to the Group under the contract and the cash flows that theGroup expects to receive;
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.3 Determination of expected credit loss - continued
? For undrawn loan commitments (refer to Note III, 10.4.1.3 for the detail of accounting
policies), the ECL is the present value of the difference between the contractual cash flowsthat are due to the Group if the holder of the loan commitments draws down the loan, and thecash flows that the Group expects to receive if the loan is drawn down. The Group's estimationof the ECL for loan commitments is consistent with its expectation of the loan commitmentsdrawn down.? For a financial guarantee contract (refer to Note III, 10.4.1.3 for the detail of accountingpolicies ), the expected losses is the present value of the expected payments to reimburse theholder for a credit loss that it incurs less any amounts that the Group expects to receive fromthe holder, the debtor or any other party.? For a financial asset with credit-impaired at the balance sheet date, but not purchased ororiginated credit-impaired, a credit losses is the difference between the asset's gross carryingamount and the present value of estimated future cash flows discounted at the financial asset'soriginal effective interest rate.
The factors reflected in methods of measurement of expected credit losses include an unbiased andprobability-weighted amount that is determined by evaluating a range of possible outcomes; timevalue of money; reasonable and supportable information about past events, current conditions andforecasts on future economic status at balance sheet date without unnecessary additional costs orefforts.
10.2.4 Write-down of financial assets
When the Group will no longer reasonably expect that the contractual cash flows of financial assetscan be collected in aggregate or in part, the Group will directly write down the carrying amount ofthe financial asset, which constitutes derecognition of relevant financial assets.
10.3 Transfer of financial assets
The Group will derecognize a financial asset if one of the following conditions is satisfied: (i) thecontractual rights to the cash flows from the financial asset expire; (ii) the financial asset has beentransferred and substantially all the risks and rewards of ownership of the financial asset istransferred to the transferee; or (iii) although the financial asset has been transferred, the Groupneither transfers nor retains substantially all the risks and rewards of ownership of the financialasset but has not retained control of the financial asset.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.3 Transfer of financial assets - continued
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of afinancial asset, and it retains control of the financial asset, the Group will recognize the financialasset to the extent of its continuing involvement in the transferred financial asset and recognize anassociated liability. The Group will measure relevant liabilities as follows:
? For transferred financial assets carried at amortized cost, the carrying amount of relevantliabilities is the carrying amount of financial assets transferred with continuing involvementless amortized cost of the Group's retained rights (if the Group retains relevant rights upontransfer of financial assets) with addition of amortized cost of obligations assumed by theGroup (if the Group assumes relevant obligations upon transfer of financial assets). Relevantliabilities are not designated as financial liabilities at fair value through profit or loss.? For transferred financial assets carried at fair value, the carrying amount of relevant financialliabilities is the carrying amount of financial assets transferred with continuing involvementless fair value of the Group's retained rights (if the Group retains relevant rights upon transferof financial assets) with addition of fair value of obligations assumed by the Group (if theGroup assumes relevant obligations upon transfer of financial assets). Accordingly, the fairvalue of relevant rights and obligations shall be measured on an individual basis.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the differencebetween (1) the carrying amount of the financial asset transferred and (2) the sum of theconsideration received from the transfer and accumulated changes in fair value initially recorded inother comprehensive income is recognized in profit or loss. For the non-tradable equity instrumentdesignated as financial assets at FVTOCI, cumulative gain or loss that has been recognized in othercomprehensive income should be removed from other comprehensive income but be recognized inretained earnings.
For a part of transfer of a financial asset that satisfies the derecognition criteria, the carrying amountof the transferred financial asset is allocated between the part that is derecognized and the part thatis continuously involved, based on the respective fair values of those parts on transfer date. Thedifference between (1) the sum of the consideration received for the part derecognized and anycumulative gain or loss allocated to the part derecognized which has been previously recognized inother comprehensive income; and (2) the carrying amount allocated to the part derecognized onderecognition date; is recognized in profit or loss. For the non-tradable equity instrument designatedas financial assets at FVTOCI, cumulative gain or loss that has been recognized in othercomprehensive income should be removed from other comprehensive income but be recognized inretained earnings.
For a transfer of a financial asset in its entirety that does not satisfy the derecognition criteria, theGroup will continuously recognize the transferred financial asset in its entirety. Considerationsreceived due to transfer of assets should be recognized as a liability upon receipts.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities equity instruments
Financial instruments issued by the Group are classified into financial liabilities or equityinstruments on the basis of the substance of the contractual arrangements and the economic naturenot only its legal form, together with the definition of financial liability and equity instruments oninitial recognition.
10.4.1 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at FVTPL and otherfinancial liabilities.
10.4.1.1 Financial liabilities at FVTPL
Financial liabilities at FVTPL consist of financial liabilities held for trading (including derivativesclassified as financial liabilities) and those designated as at FVTPL. Except for derivative financialliabilities presented separately, the financial liabilities at FVTPL are presented as held-for-tradingfinancial liabilities.
A financial liability is classified as held for trading if one of the following conditions is satisfied:
? It has been acquired principally for the purpose of repurchasing in the near term; or? On initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and there is objective evidence that the Group has a recent actual pattern ofshort-term profit-taking; or? It is a derivative that is not a financial guarantee contract or designated and effective as ahedging instrument.
A financial liability may be designated as at FVTPL on initial recognition when one of the followingconditions is satisfied: (i) Such designation eliminates or significantly reduces accounting mismatch;or (ii) The Group makes management and performance evaluation on a fair value basis, inaccordance with the Group's formally documented risk management or investment strategy, andreports to key management personnel on that basis. (iii) The qualified hybrid financial instrumentcombines financial asset with embedded derivatives.
Transaction financial liabilities are subsequently measured at fair value. Any gains or losses arisingfrom changes in the fair value and any dividend or interest expenses paid on the financial liabilitiesare recognized in profit or loss.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.1 Financial liabilities at FVTPL - continued
The amount of change in the fair value of the financial liability that is attributable to changes in thecredit risk of that liability shall be presented in other comprehensive income, other changes in fairvalues are included in profit or loss for the current period. Upon the derecognition of such liability,the accumulated amount of change in fair value that is attributable to changes in the credit risk ofthat liability, which is recognized in other comprehensive income, is transferred to retained earnings.Any dividend or interest income earned on the financial liabilities are recognized in profit or loss.If the impact of the change in credit risk of such financial liability dealt with in the above way wouldcreate or enlarge an accounting mismatch in profit or loss, the Group shall present all gains or losseson that liability (including the effects of changes in the credit risk of that liability) in profit or loss.
Financial liabilities are measured at FVTPL when the financial liabilities is arising from contingentconsideration recognized by the Group as an acquirer in a business combination not involvingenterprises under common control.
10.4.1.2 Other financial liabilities
Except for financial liabilities, financial guarantee contracts and loan commitments arising fromtransfer of financial assets that do not meet the derecognition criteria or those arising fromcontinuing involvement in the transferred financial assets, other financial liabilities aresubsequently measured at amortized cost, with gain or loss arising from derecognition oramortization recognized in profit or loss.
That the Group and its counterparty modify or renegotiate the contract does not result inderecognition of a financial liability subsequently measured at amortized cost but result in changesin contractual cash flows, the Group will recalculate the carrying amount of the financial liability,with relevant gain or loss recognized in profit or loss. The Group will determine carrying amountof the financial liability based on the present value of renegotiated or modified contractual cashflows discounted at the financial liability's original effective interest rate. For all costs or expensesarising from modification or renegotiation of the contract, the Group will adjust the modifiedcarrying amount of the financial liability and make amortization during the remaining term of themodified financial liability.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.3 Financial guarantee contracts and loan commitments
A financial guarantee contract is a contract that requires the issuer to make specified payments toreimburse the holder of the contract for a loss it incurs because a specified debtor fails to makepayment when due in accordance with the original or modified terms of a debt instrument.Subsequent to initial recognition, financial guarantee contracts that are not designated as financialliabilities at fair value through profit or loss or financial liabilities arising from transfer of financialassets that do not meet the derecognition criteria or those arising from continuing involvement inthe transferred financial assets, and loan commitments to provide a loan at a below-market interestrate, which are not designated at fair value through profit or loss, are measured at the higher of: (1)amount of loss provision; and (2) the amount initially recognized less cumulative amortizationamount determined based on the revenue standard.
10.4.2 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation(or part of it) is discharged. An agreement between the Group (the debtor) and the creditor to replacethe original financial liability with a new financial liability with substantially different terms isaccounted for as an extinguishment of the original financial liability and the recognition of a newfinancial liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference betweenthe carrying amount of the financial liability (or part of the financial liability) derecognized and theconsideration paid (including any non-cash assets transferred or new financial liabilities assumed)in profit or loss.
10.4.3 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Groupafter deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased,sold and cancelled by the Group are recognized as changes of equity. Changes of fair value of equityinstruments is not recognized by the Group. Transaction costs related to equity transactions arededucted from equity.
The Group recognizes the distribution to holders of the equity instruments as distribution of profits,dividends paid do not affect total amount of shareholders' equity.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.5 Derivatives and embedded derivatives
Derivatives include forward exchange contracts, currency swaps, interest rate swaps and foreignexchange options, etc. Derivatives are initially measured at fair value at the date when the derivativecontracts are entered into and are subsequently remeasured at fair value.
Derivatives embedded in hybrid contracts with a financial asset host are not separated by the Group.The hybrid contract shall apply to the relevant accounting standards regarding the classification offinancial assets as a whole.
Derivatives embedded in hybrid contracts with hosts that are not financial assets are separated andtreated as separate derivatives by the Group when they meet the following conditions:
(1) the economic characteristics and risks of the embedded derivative are not closely related tothose of the host contract;
(2) a separate instrument with the same terms as the embedded derivative would meet thedefinition of a derivative.
(3) the hybrid contracts are not measured at fair value through profit or loss.
For the embedded derivative separated from the host contracts, the Group accounts for the hostcontracts in the hybrid contracts with applicable accounting standards. When the embeddedderivatives whose fair value cannot be measured reliably by the Group according to the terms andconditions of the embedded derivatives, the fair value of such derivatives are measured at thedifference between the fair value of the hybrid contracts and the fair value of the host contracts.By adopting the above method, if the embedded derivative cannot be measured on a stand-alonebasis at the time when acquired or at subsequent balance sheet dates, the hybrid instrument isdesignated as financial instruments at fair value through profit or loss as a whole.
10.6 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognized financialassets and financial liabilities, and intends either to settle on a net basis, or to realize the financialasset and settle the financial liability simultaneously, a financial asset and a financial liability shallbe offset and the net amount is presented in the balance sheet. Except for the above circumstances,financial assets and financial liabilities shall be presented separately in the balance sheet and shallnot be offset.
10.7 Reclassification of financial instruments
When the Group changes the business model to manage the financial assets, the financial assetsaffected will be reclassified and no financial liabilities will be reclassified.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.7 Reclassification of financial instruments - continued
The financial assets are reclassified by the Group and are accounted for prospectively since the dateof reclassification (i.e. the first date of the initial reporting period after the business model of whichthe financial assets are reclassified by the enterprise is changed).
Where a financial asset at amortized cost is reclassified as a financial assets at fair value throughprofit or loss ("FVTPL") by the Group, such financial asset is measured at fair value at the date ofreclassification and the difference between the original carrying amount and the fair value isrecognized in profit or loss for the period.
Where a financial asset at amortized cost is reclassified as a financial asset at fair value throughother comprehensive income ("FVTOCI") by the Group, such financial asset is measured at the fairvalue at the date of reclassification, and the difference between the original amount and the fairvalue is recognized in other comprehensive income.
Where a financial asset at FVTOCI is reclassified as a financial asset at amortized cost by the Group,the accumulated gains or losses previously recognized in other comprehensive income aretransferred out and the fair value is adjusted as the fair value at the date of reclassification. Theadjusted fair value is recognized as the new carrying amount, as if the financial asset had beenmeasured at amortized cost.
Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group, suchfinancial asset continues to be accounted for at fair value. At the same time, the accumulated gainsor losses previously recognized in other comprehensive income are transferred to profit or loss forthe period.
Where a financial asset at FVTPL is reclassified as a financial asset at amortized cost by the Group,the fair value at the date of reclassification is recognized as the new account balance.
Where a financial asset at FVTPL is reclassified as a financial asset at FVTOCI by the Group, suchfinancial asset continues to be measured at fair value.
Where a financial asset at FVTPL is reclassified, the effective interest rate is determined on thebasis of the fair value of the financial asset at the date of reclassification.
11. Accounts receivable
The Group makes internal credit ratings on customers and determines expected losses rate of notesreceivable, accounts receivable and other receivables. Basis for determining ratings and theexpected losses rates are as follows:
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
11. Accounts receivable - continued
| Internal credit rating | Basis for determining portfolio | Average expected loss rate (%) |
| A | Customers can make repayments within credit term and have good credit records based on historical experience. The probability of unpayment of due amount are extremely low in the foreseeable future. | 0.00-0.10 |
| B | The customer may have overdue payment based on historical experience but they can make repayments. | 0.10-0.30 |
| C | The evidences indicate that the overdue credit risks of the customer are significantly increased and there is probability of unpayment and default. | 0.30-50.00 |
| D | The evidences indicate that the accounts receivable are impaired or the customer has significant financial difficulty. The amounts cannot be recovered in the foreseeable future. | 50.00-100.00 |
12. Accounts receivable financing
Notes receivable classified to hedging instruments for the purpose of hedging, should be listed asaccounts receivable financing within one year (including one year). If the term above one year, itshould be listed as other investment on bonds. Related accounting policies refer to Note III 10.
13. Inventories
13.1 Categories of inventories
Inventories include raw materials, merchandise and others. Inventories are initially measured at cost.Cost of inventories comprises all costs of purchase, costs of conversion and other expendituresincurred in bringing the inventories to their present location and condition.
13.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
13.3 Basis for determining net realizable value of inventories and provision methods for decline
in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. Ifthe cost of inventories is higher than the net realizable value, a provision for decline in value ofinventories is made. Net realizable value is the estimated selling price in the ordinary course ofbusiness less the estimated costs of completion, the estimated costs necessary to make the sale andrelevant taxes. Net realizable value is determined on the basis of clear evidence obtained, aftertaking into consideration the purposes of inventories being held and effect of post balance sheetevents.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
13. Inventories - continued
13.3 Basis for determining net realizable value of inventories and provision methods for
decline in value of inventories - continued
Provision for decline in value of other inventories is made based on the excess of cost ofinventory over its net realizable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances thatpreviously caused inventories to be written down below cost no longer exist so that the netrealizable value of inventories is higher than their cost, the original provision for decline in valueis reversed and the reversal is included in profit or loss for the period.
13.4 Inventory count system
The perpetual inventory system is maintained for stock system.
13.5 Amortization methods for low cost and short-lived consumable items and packaging
materials
Packaging materials and low cost and short-lived consumable items are amortized using theimmediate write-off method.
14. Contract assets
14.1 Recognition and criteria of contract assets
A contract asset represents the Group's right to consideration in exchange for goods or servicesthat the Group has transferred to a customer, and such right depends on factors other than thepassage of time. The Group's unconditional right (only the passage of time is required) toconsideration from the customer is separately presented as " accounts receivable".
14.2 Determination and accounting treatments of expected credit losses ("ECL") for contract
assets
Refer to Note III, 10.2 "Impairment of financial instruments" for determination and accountingtreatments of expected credit losses for contract assets.
15. Assets held for sale
When the Group withdraw the book value of certain assets or disposal group mainly throughdisposal instead of continual application, the assets should be classified as held-for-sale assets.
Assets or disposal group classified as held-for-sale assets should meat following conditions: (1)The current status is available for immediate distribution according to similar transactions of thiscategory of assets or disposal group; (2) The transaction is likely to occur, i.e. the Group has madeits resolution over the distribution arrangements and acquired purchase commitment. Also thedistribution is going to be fulfilled within a year.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
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15. Assets held for sale - continued
If the holding company loses control of its subsidiary for reasons like subsidiary disposal, inregardless of whether the holding company still keeps part of equity investment, once the proposedinvestment disposal meets the requirements of being classified as available for sale assets in theholding company's individual statement, all assets and liabilities of the subsidiary should beclassified as held-for-sale in consolidated financial statement.
The group's non-current assets and disposal group are measured at the lower of book value and thenet value of fair value less costs to sell. Once the book value is higher than the net value of fairvalue less costs to sell, the book value should be adjusted to the net value and the excess should berecognized as impairment losses and provision for held-for-sale assets impairment should be made.A gain and a reverse in the previous provision for held-for-sale assets impairment can be recognizedfor any increase in fair value less costs to sell at subsequent balance sheet dates, to the extent thatit is not in excess of the cumulative impairment loss that has been recognized. Asset impairmentlosses recognized before such assets are classified as held for sale will not be reversed.
Non-current held-for-sale assets is not subject to depreciation and amortization. The creditorinterest and other expenses of disposal group classified as held-for-sale asset should still berecognized.
Once the associate or joint venture equity investment is completely or partly classified as held-for-sale assets, the classified part of the investment is not subject to equity method measurement.
If an asset or a disposal group has been classified as held for sale but the recognition criteria fornon-current assets held for sale are no longer met, the Group shall cease to classify the asset ordisposal group as held for sale. It shall be measured at the lower of (1) the carrying amount beforethe asset or disposal group was classified as held for sale, adjusted for any depreciation,amortization or impairment that would have been recognized had the asset or disposal group notbeen classified as held for sale; and (2) the recoverable amount at the date of the decision not to sell.
For equity investments in associates or joint ventures that are classified as held for sale but therecognition for non-current assets held for sale are no longer met, such investments are accountedfor retrospectively using the equity method from the date when they classified as held for sale. Thefinancial statements for the held-for-sale period are adjusted accordingly.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
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16. Long-term equity investments
16.1 Basis for determining joint control and significant influence over investee
Control is archived when the Group has the power over the investee and has rights to variablereturns from its involvement with the investee; and has the ability to use its power to affect itsreturns. Joint control is the contractually agreed sharing of control over an economic activity, andexists only when the strategic financial and operating policy decisions relating to the activity requirethe unanimous consent of the parties sharing control. Significant influence is the power toparticipate in the financial and operating policy decisions of the investee but is not control or jointcontrol over those policies. When determining whether an investing enterprise is able to exercisecontrol or significant influence over an investee, the effect of potential voting rights of the investee(for example, warrants and convertible debts) held by the investing enterprises or other parties thatare currently exercisable or convertible shall be considered.
16.2 Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprisesunder common control, the investment cost of the long-term equity investment is the attributableshare of the carrying amount of the shareholders' equity of the acquiree at the date of combination.The difference between the initial investment cost and the carrying amount of cash paid, non-cashassets transferred and liabilities assumed shall be adjusted to capital reserve. If the balance of capitalreserve is not sufficient, any excess shall be adjusted to retained earnings. If the consideration ofthe combination is satisfied by the issue of equity securities, the initial investment cost of the long-term equity investment shall be the share of party being absorbed of the owners' equity in theconsolidated financial statements of the ultimate controlling party at the date of combination. Theaggregate face value of the shares issued shall be accounted for as share capital. The differencebetween the initial investment cost and the aggregate face value of the shares issued shall beadjusted to capital reserve. If the balance of capital reserve is not sufficient, any excess shall beadjusted to retained earnings. Where equity interests in an acquiree are acquired in stages throughmultiple transactions ultimately constituting a business combination involving entities undercommon control, the acquirer shall determine if these transactions are considered to be a "packagedeal". If yes, these transactions are accounted for as a single transaction where control is obtained.If no, the initial investment cost of the long-term equity investment is the share of book value ofowners' equity of the acquired entity in the ultimate controlling party's consolidated financialstatements at the date of combination. The difference between the initial investment cost and thesum of carrying amount of equity investments previously held in the acquiree and the newinvestment cost is adjusted to capital reserve. If the balance of capital reserve is not sufficient toabsorb the difference, any excess is adjusted to retained earnings. Other comprehensive incomerecognized for the previously held equity investments by accounting treatment of equity method oravailable-for-sale financial assets is not subject to accounting treatment temporarily.
For a long-term equity investment acquired through business combination not involving enterprisesunder common control, the investment cost of the long-term equity investment acquired is the costof acquisition.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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16. Long-term equity investments - continued
16.2 Determination of investment cost - continued
The absorbing party's or purchaser's intermediary expenses (fees in respect of auditing, legalservices, valuation and consultancy services, etc.) and other administrative expenses attributable tothe business combination are recognized in profit or loss in the periods when they are incurred.
The long-term equity investment acquired otherwise than through a business combination is initiallymeasured at its cost. When the entity is able to exercise significant influence or joint control (butnot control) over an investee due to additional investment, the cost of long-term equity investmentsis the sum of the fair value of previously-held equity investments determined in accordance withAccounting Standard for Business Enterprises No.22 - Financial Instruments: Recognition andMeasurement (ASBE No. 22) and the additional investment cost.
16.3 Subsequent measurement and recognition of profit or loss
16.3.1 A long-term equity investment accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in theCompany's separate financial statements. A subsidiary is an investee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.Additional or withdrawing investment would affect the cost of long-term equity investment.Investment income is recognized in the period in accordance with the attributable share of cashdividends or profit distributions declared by the investee.
16.3.2 A long-term equity investment accounted for using the equity method
Except associate and joint venture investment completely or partly classified as available for sale,and The Group accounts for investment in associates and joint ventures using the equity method.An associate is an entity over which the Group has significant influence and a joint venture is ajoint arrangement whereby the parties that have joint control of the arrangement have rights to thenet assets of the joint arrangement.
Under the equity method, where the initial investment cost of a long-term equity investment exceedsthe Group's share of the fair value of the investee's identifiable net assets at the time of acquisition,no adjustment is made to the initial investment cost. Where the initial investment cost is less thanthe Group's share of the fair value of the investee's identifiable net assets at the time of acquisition,the difference is recognized in profit or loss for the period, and the cost of the long-term equityinvestment is adjusted accordingly.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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16. Long-term equity investments - continued
16.3 Subsequent measurement and recognition of profit or loss - continued
16.3.2 A long-term equity investment accounted for using the equity method - continued
Under the equity method, the Group recognizes its share of the other comprehensive income andnet profit or loss of the investee for the period as other comprehensive income and investmentincome or loss respectively for the period, and the carrying amount of the long-term equityinvestment is adjusted accordingly. The carrying amount of the investment shall be reduced by theportion of any profit distributions or cash dividends declared by the investee that is distributed tothe investing enterprise. The investing enterprise shall adjust the carrying amount of the long-termequity investment for other changes in owners' equity of the investee (other than net profits or losses,other comprehensive income and profit distribution), and include the corresponding adjustment incapital reserve. The Group recognizes its share of the investee's net profit or loss based on the fairvalue of the investee's individually identifiable assets at the acquisition date after makingappropriate adjustments. Where the accounting policies and accounting period adopted by theinvestee are different from those of the investing enterprise, the investing enterprise shall adjust thefinancial statements of the investee to conform to its own accounting policies and accounting period,and recognize other comprehensive income and investment income or losses based on the adjustedfinancial statements. Unrealized profits or losses resulting from the Group's transactions and assetsinvested or sold that are not recognized as business transactions with its associates and joint venturesare recognized as investment income or loss to the extent that those attributable to the Group's,equity interest are eliminated. However, unrealized losses resulting from the Group's transactionswith its associates and joint ventures which represent impairment losses on the transferred assetsare not eliminated.
The Group discontinues recognizing its share of net losses of the investee after the carrying amountof the long-term equity investment together with any long-term interests that in substance form partof its net investment in the investee are reduced to zero. Except that if the Group has incurredobligations to assume additional losses, a provision is recognized according to the obligationexpected, and recorded in the investment loss for the period. Where net profits are subsequentlymade by the investee, the Group resumes recognizing its share of those profits only after its shareof the profits exceeds the share of losses previously not recognized.
16.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the proceeds actually receivedand receivable and the carrying amount is recognized in profit or loss for the period. For long-termequity investments accounted for using the equity method, if the remaining interest after disposal isstill accounted for using the equity method, other comprehensive income previously recognized forusing the equity method is accounted for on the same basis as would have been required if theinvestee had directly disposed of related assets or liabilities, and transferred to profit or loss for theperiod on a pro rata basis; owners' equity recognized due to changes in other owners' equity of theinvestee (other than net profit or loss, other comprehensive income and profit distribution) istransferred to profit or loss for the period on a pro rata basis.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments - continued
For long-term equity investments accounted for using the cost method, if the remaining interestafter disposal is still accounted for using the cost method, other comprehensive income previouslyrecognized for using the equity method or in accordance with the standards for the recognition andmeasurement of financial instruments before obtaining the control over the investee, is accountedfor on the same basis as would have been required if the investee had directly disposed of relatedassets or liabilities, and transferred to profit or loss for the period on a pro rata basis; changes inother owners' equity in the investee's net assets recognized under the equity method (other than netprofit or loss, other comprehensive income and profit distribution) is transferred to profit or loss forthe period on a pro rata basis.
17. Investment properties
Investment property is property held to earn rentals or for capital appreciation or both. It includes aland use right that is leased out; a land use right held for transfer upon capital appreciation; and abuilding that is leased out.
An investment property is measured initially at cost. Subsequent expenditures incurred for suchinvestment property are included in the cost of the investment property if it is probable thateconomic benefits associated with an investment property will flow to the Group and the subsequentexpenditures can be measured reliably, other subsequent expenditures are recognized in profit orloss in the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts adepreciation or amortization policy for the investment property which is consistent with that forbuildings or land use rights.
An investment property is derecognized upon disposal or when the investment property ispermanently withdraw from use and no future economic benefits are expected from the disposal.
When an investment property is sold, transferred, retired or damaged, the Group recognizes theamount of any proceeds on disposal net of the carrying amount and related taxes in profit or lossfor the period.
18. Fixed assets
18.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or services,for rental to others, or for administrative purposes, and have useful lives of more than oneaccounting year. A fixed asset is recognized only when it is probable that economic benefitsassociated with the asset will flow to the Group and the cost of the asset can be measured reliably.Fixed assets are initially measured at cost. Upon being restructured into a stock company, the fixedassets initially contributed by the state-owned shareholders are recognized based on the valuationamounts confirmed by the state-owned assets administration department.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
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18. Fixed assets - continued
18.1 Recognition criteria for fixed assets - continued
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset andif it is probable that economic benefits associated with the asset will flow to the Group and thesubsequent expenditures can be measured reliably. Meanwhile the carrying amount of the replacedpart is derecognized. Other subsequent expenditures are recognized in profit or loss in the period inwhich they are incurred.
18.2 Depreciation of each category of fixed assets
A fixed asset is depreciated over its useful life using the straight-line method starting from themonth subsequent to the one in which it is ready for intended use. The useful life, estimated netresidual value rate and annual depreciation rate of each category of fixed assets are as follows:
| Category | Useful lives | Estimated residual value (%) | Annual depreciation rate (%) |
| Port and terminal facilities | 5-50 years | 5.00 | 1.90-19.00 |
| Buildings | 10-30 years | 5.00 | 3.17-9.50 |
| Machinery and equipment, furniture and fixture and other equipment | 3-20 years | 5.00 | 4.75-31.67 |
| Motor vehicles and cargo ships | 5-25 years | 5.00 | 3.80-19.00 |
Estimated net residual value of a fixed asset is the estimated amount that the Group would currentlyobtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset werealready of the age and in the condition expected at the end of its useful life.
18.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated fromits use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired ordamaged, the amount of any proceeds on disposal of the asset net of the carrying amount and relatedtaxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and thedepreciation method applied at least once at each financial year-end, and account for any change asa change in an accounting estimate.
19. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include variousconstruction expenditures during the construction period, borrowing costs capitalized before it isready for intended use and other relevant costs. Construction in progress is not depreciated.Construction in progress is transferred to a fixed asset when it is ready for intended use.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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20. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifyingasset are capitalized when expenditures for such asset and borrowing costs are incurred andactivities relating to the acquisition, construction or production of the asset that are necessary toprepare the asset for its intended use or sale have commenced. Capitalization of borrowing costsceases when the qualifying asset being acquired, constructed or produced becomes ready for itsintended use or sale. Capitalization of borrowing costs is suspended during periods in which theacquisition, construction or production of a qualifying asset is interrupted abnormally and when theinterruption is for a continuous period of more than 3 months. Capitalization is suspended until theacquisition, construction or production of the asset is resumed. Other borrowing costs arerecognized as an expense in the period in which they are incurred.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to becapitalized is the actual interest expense incurred on that borrowing for the period less any bankinterest earned from depositing the borrowed funds before being used on the asset or any investmentincome on the temporary investment of those funds. Where funds are borrowed under general-purpose borrowings, the Group determines the amount of interest to be capitalized on suchborrowings by applying a capitalization rate to the weighted average of the excess of cumulativeexpenditures on the asset over the amounts of specific-purpose borrowings. The capitalization rateis the weighted average of the interest rates applicable to the general-purpose borrowings. Duringthe capitalization period, exchange differences related to a specific-purpose borrowing denominatedin foreign currency are all capitalized. Exchange differences in connection with general-purposeborrowings are recognized in profit or loss in the period in which they are incurred.
21. Intangible assets
21.1 Valuation method and useful life of intangible assets
An intangible asset is measured initially at cost. Upon being restructured into a stock company, theintangible assets initially contributed by the state-owned shareholders are recognized based on thevaluation amounts confirmed by the state-owned assets administration department. When anintangible asset with a finite useful life is available for use, its original cost is amortized over itsestimated useful life. Intangible assets with uncertain service life will not be amortize. The terminaloperating rights are amortized using the output method, that is, amortized through periods accordingto the ratio of the estimated minimum guaranteed throughput to the estimated minimum guaranteedtotal throughput during the operation period. When the estimated minimum guaranteed throughputcannot be measured reliably, the straight-line method will be used for amortization. An intangibleasset with uncertain useful life will not be amortized. The amortization method, useful life andestimated net residual value of various intangible assets are as follows:
| Category | Amortization Method | Useful Life (year) | Residual value (%) |
| Land use rights | Straight-line method | 40-50 | - |
| Port operating right | Output method/Straight-line method | 30-35 | - |
| Others | Straight-line method | 5-50 | - |
For an intangible asset with a finite useful life, the Group reviews the useful life and amortizationmethod at the end of the year, and makes adjustments when necessary.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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21. Intangible assets - continued
21.2 Research and development expenditure
Expenditure during the research phase is recognized as an expense in the period in which it isincurred.
Expenditure during the development phase that meets all of the following conditions at the sametime is recognized as intangible asset. Expenditure during development phase that does not meetthe following conditions is recognized in profit or loss for the period.
(1) It is technically feasible to complete the intangible asset so that it will be available for use orsale;
(2) The Group has the intention to complete the intangible asset and use or sell it;
(3) The Group can demonstrate the ways in which the intangible asset will generate economicbenefits, including the evidence of the existence of a market for the output of the intangibleasset or the intangible asset itself or, if it is to be used internally, the usefulness of theintangible asset;
(4) The availability of adequate technical, financial and other resources to complete thedevelopment and the ability to use or sell the intangible asset; and
(5) The expenditure attributable to the intangible asset during its development phase can bereliably measured.
If the expenditures cannot be distinguished between the research phase and development phase, theGroup recognizes all of them in profit or loss for the period. The costs of intangible assets generatedby the internal research only include the total expenditure incurred for the period from the timepoint of capitalization to the intangible assets are ready for intended use. For the identical intangibleasset, the expenditures recorded as expenses before they qualify for capitalization during thedevelopment process are not adjusted.
22. Impairment of long-term assets
The Group assesses at the balance sheet date whether there is any indication that the long-termequity investments, investment properties measured at cost method, construction in progress, fixedassets, right-of-use assets and intangible assets with a finite useful life may be impaired. If there isany indication that such assets may be impaired, recoverable amounts are estimated for such assets.Intangible assets with indefinite useful life and intangible assets not yet available for use are testedfor impairment annually, irrespective of whether there is any indication that the assets may beimpaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the recoverableamount of an individual asset, the recoverable amount of the asset group to which the asset belongswill be estimated. The recoverable amount of an asset is the higher of its fair value less costs ofdisposal and the present value of the future cash flows expected to be derived from the asset.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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22. Impairment of long-term assets - continued
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficitis accounted for as an impairment loss and is recognized in profit or loss.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairmenttesting, goodwill is considered together with the related assets groups, i.e., goodwill is reasonablyallocated to the related assets groups or each of assets groups expected to benefit from thesynergies of the combination. In testing an assets group with goodwill for impairment, animpairment loss is recognized if the recoverable amount of the assets group or sets of assetsgroups (including goodwill) is less than its carrying amount. The impairment loss is firstlyallocated to reduce the carrying amount of any goodwill allocated to such assets group or sets ofassets groups, and then to the other assets of the group pro-rata basis on the basis of the carryingamount of each asset (other than goodwill) in the group.
Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in anysubsequent period.
23. Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized overthe current and subsequent periods (together of more than one year). Long-term prepaid expensesare amortized using the straight-line method over the expected periods in which benefits arederived.
24. Contract liabilities
A contract liability represents the Group's obligation to transfer goods or services to a customerfor which the Group has received consideration (or an amount of consideration is due) from thecustomer. A contract asset and a contract liability relating to the same contract are accounted forand presented on a net basis.
25. Employee benefits
25.1 The accounting treatment of short-term employee benefits
Actually occurred short-term employee benefits are recognized as liabilities, with a correspondingcharge to the profit or loss for the period or in the costs of relevant assets in the accounting periodin which employees provide services to the Group. Staff welfare expenses incurred by the Groupare recognized in profit or loss for the period or the costs of relevant assets based on the actuallyoccurred amounts when it actually occurred. Non-monetary staff welfare expenses are measuredat fair value.
Payment made by the Group of social security contributions for employees such as premiums orcontributions on medical insurance, work injury insurance and maternity insurance, etc. andpayments of housing funds, as well as union running costs and employee education costs providedin accordance with relevant requirements, are calculated according to prescribed bases andpercentages in determining the amount of employee benefits and recognized as relevant liabilities,with a corresponding charge to the profit or loss for the period or the costs of relevant assets in theaccounting period in which employees provide services.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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25. Employee benefits - continued
25.2 The accounting treatment of post-employment benefits
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
During the accounting period of rendering service to employees of the Group, amount which shouldbe paid according to defined contribution plans is recognized as liabilities, and recognized in profitor loss or related costs of assets.
During the accounting period of rendering service to employees of the Group, amount which shouldbe paid according to defined contribution plans is recognized as liabilities, and recognized in profitor loss or related costs of assets.
For defined benefit plans, the Group calculates defined benefit plan obligations using projected unitcredit method and the service cost resulting from employee service in the current period is recordedin profit or loss or the cost of related assets. Defined benefit costs are categorized as follows:
? Service cost (including current service cost, past service cost, as well as gains and losses onsettlements);? Net interest of net liabilities or assets of defined benefit plan (including interest income of
planned assets, interest expenses of defined benefit plan liabilities and effect of asset ceiling);and? Changes arising from remeasurement of net liabilities or net assets of defined benefit plans.
Service costs and net interest of net liabilities and net assets of defined benefit plans are recognizedin profit or loss of current period or costs of related assets. Remeasurement of the net defined benefitliability (asset) (including actuarial gains and losses, the return on plan assets, excluding amountsincluded in net interest on the net defined benefit liability (asset), and any change in the effect ofthe asset ceiling, excluding amounts included in net interest on the net defined benefit liability(asset)) are recognized in other comprehensive income.
25.3 The accounting treatment of termination benefits
When the Group provides termination benefits to employees, employee benefit liabilities arerecognized for termination benefits, with a corresponding charge to the profit or loss for the periodat the earlier of: (1) when the Group cannot unilaterally withdraw the offer of termination benefitsbecause of the termination plan or a curtailment proposal; and (2) when the Group recognizes costsor expenses related to restructuring that involves the payment of termination benefits.
26. Provisions
Provisions are recognized when the Group has a present obligation related with contingencies, it isprobable that the Group will be required to settle that obligation causing an outflow of economicbenefits, and a reliable estimate can be made of the amount of the obligation.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
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26. Provisions - continued
The amount recognized as a provision is the best estimate of the consideration required to settle thepresent obligation at balance sheet date, taking into account the risks, uncertainties and time valueof money surrounding the obligation. When a provision is measured using the cash flows estimatedto settle the present obligation, its carrying amount is the present value of those cash flows wherethe effect of the time value of money is material.
When some or all of the economic benefits required to settle a provision are expected to berecovered from a third party, a receivable is recognized as an asset if it is virtually certain thatreimbursement will be received and the amount of the receivable should not exceed the carryingamount of provisions.
27. Revenue
The Group's revenue is mainly from the following business types:
(1) Port service;
(2) Bonded logistics service
(3) Other business such as property development and investment.
The Group recognizes revenue based on the transaction price allocated to such performanceobligation when a performance obligation is satisfied, i.e. when "control" of the goods or servicesunderlying the particular performance obligation is transferred to the customer. A performanceobligation represents the commitment that a good and service that is distinct shall be transferred bythe Group to the customer. Transaction price refers to the consideration that the Group is expectedto charge due to the transfer of goods or services to the customer, but it does not include paymentsreceived on behalf of third parties and amounts that the Group expects to return to the customer.
If one of the following criteria is met and it is a performance obligation performed over time, theGroup recognizes the revenue within a certain period of time according to the progress of theperformance: (1) the customer simultaneously receives and consumes the benefits provided by theGroup's performance as the Group performs; (2) the customer is able to control the goods underconstruction in the course of the Group's performance; (3) the goods produced by the Group duringthe performance of the contract are irreplaceable and the Group has the right to charge for theaccumulated part of the contract that has been performed so far during the whole contract period.Otherwise, the Group recognizes revenue at a certain point in time when "control" of the goods orservices is transferred to the customer.
The Group adopts output method, i.e. the value of goods or services transferred to customers todetermine the appropriate progress of performance. Where the progress cannot be determinedreasonably, the revenue is recognized based on the amount of cost that is expected to becompensated based on the cost already incurred, until the progress of performance is reasonablydetermined.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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27. Revenue - continued
If the contract includes two or more performance obligations, at contract inception, the Groupallocates the transaction price to single performance obligation according to relative proportion ofthe stand-alone selling prices of the goods or services promised by single performance obligation.However, where there is conclusive evidence that the contract discount or variable consideration isonly related to one or more (not all) performance obligations in the contract, the Group shall allocatethe contract discount or variable consideration to relevant one or more performance obligations.The stand-alone selling price is the price at which the Group would sell a promised good or serviceseparately to a customer. If a stand-alone selling price is not directly observable, the Group shallconsider all information that is reasonably available to the Group and maximize the use ofobservable inputs and apply estimates methods consistently in similar circumstances.
For contracts that contain variable consideration (e.g. sales discount), the Group estimates theamount of consideration using either the expected value or the most likely amount. The transactionprice that includes variable consideration is only to the extent that it is highly probable that such aninclusion will not result in a significant revenue reversal in the future when the uncertainty issubsequently resolved. At the end of each reporting period, the Group reevaluates the variableconsideration included in the transaction price.
For non-cash consideration from customer, the Group recognizes the transaction price based on thefair value of the non-cash consideration. Where the fair value of the non-cash consideration cannotbe reasonably estimated, the Group recognizes the transaction price indirectly by reference to thestand-alone price of the promised goods or services promised transferred to the customer.
If the contract includes significant financing component, the Group determines the transaction pricebased on the amount payable under the assumption that the customer pays that amount payable incash when "control" of the goods or services is obtained by the customer. The difference betweenthe transaction price and the contract consideration shall be amortized within the contract periodusing effective interest rate. If the Group expects, at contract inception, that the period betweenwhen the Group transfers a promised good or service to a customer and when the customer pays forthat good or service will be one year or less, the Group needs not to consider the significantfinancing component.
The Group determines whether it is a principal or an agent at the time of the transaction based onwhether it owns the "control" of the goods or services before the transfer of such goods or servicesto the customer. The Group is a principal if it controls the specified good or service before that goodor service is transferred to a customer, and the revenue shall be recognized based on the totalconsideration received or receivable; otherwise, the Group is an agent, and the revenue shall berecognized based on the amount of commission or handling fee that is expected to be charged, andsuch amount is determined based on the net amount of the total consideration received or receivableafter deducting the prices payable to other related parties or according to the established commissionamount or proportion.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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27. Revenue - continued
Where payment is received in advance, the advance payment received shall be recorded as a liabilityand recognized as revenue when the relevant performance obligation is satisfied. The above amountwill be recognized as revenue proportionately in accordance with the model of contractual rightsexercised by the customer if (1) the Group's advance payment does not need to be returned, (2) thecustomer may waive all or part of its contractual rights, and (3) the Group expects to be entitled tothe amount related to the contractual rights waived by the customer. Otherwise, the balance of theliabilities is recognized as revenue by the Group only when the possibility of the customerrequesting the satisfaction of the remaining performance obligations is extremely remote.
28. Contract costs
28.1 Costs to fulfill a contract
If the costs incurred in fulfilling a contract are not within the scope of other standard other than therevenue standard, the Group shall recognized an asset from the costs incurred to fulfill a contractonly if those costs meet all of the following criteria: (1) the costs relate directly to a contract or toan anticipated contract that the Group can specifically identify; (2) the costs generate or enhanceresources of the entity that will be used in satisfying performance obligations in the future; and (3)the costs are expected to be recovered. The asset mentioned above shall be amortized on a basis thatis consistent with the transfer to the customer of the goods or services to which the asset relates andrecognized in profit or loss for the period.
28.2 Impairment of contract costs
In determination of impairment losses of assets related to contract costs, firstly impairment lossesof other assets related to the contract recognized based on other relevant accounting standards;secondly, the Group shall recognized an impairment loss to the extent that the carrying amount ofan asset exceeds: (1) the remaining amount of consideration that the Group expects to receive inexchange for the goods or services to which the asset relates; (2) the estimated costs that relate toproviding those goods or services.
The Group shall, after the impairment has been provided, recognized in profit or loss a reversal ofsome or all of an impairment loss previously recognized when the impairment conditions no longerexist or have improved. The increased carrying amount of the asset shall not exceed the carryingamount that would have been determined if no impairment loss had been recognized previously.
29. Types and accounting methods of government grants
Government grants are transfer of monetary assets or non-monetary assets from the government tothe Group at no consideration. A government grant is recognized only when the Group can complywith the conditions attached to the grant and the Group will receive the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amountreceived or receivable.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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29. Types and accounting methods of government grants - continued
29.1 The accounting treatment of government grants related to assets
Government grants, such as special funds for modern logistics project and special funds for energy-saving and emission reduction of transportation, are government grants related to assets as they areall related to the construction and use of assets.
A government grant related to an asset is recognized as deferred income, and evenly amortized toprofit or loss over the useful life of the related asset.
29.2 The accounting treatment of government grants related to income
The Group's government grant, such as financial support funds of business tax converted to VATand reward for energy saving, if used to compensate the related expenses or losses to be incurred insubsequent periods, is determined to be government grant relating to income.
A government grant relating to income, if used to compensate the related cost, expenses or lossesto be incurred in subsequent periods, is determined as deferred income and recognized in profit orloss over the periods in which the related costs are recognized; if used to compensate the relatedcost, expenses or losses already incurred, is recognized immediately in profit or loss for the period.
A government grant relating to the Group's daily activities, is recognized in other income in linewith the nature of economic transaction. A government grant not relating to the Group's dailyactivities, is recognized in non-operating income.
30. Deferred tax assets/ deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
30.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periodsare measured at the amount expected to be paid (or recovered) according to the requirements of taxlaws.
30.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their taxbase, or between the nil carrying amount of those items that are not recognized as assets or liabilitiesand their tax base that can be determined according to tax laws, deferred tax assets and liabilitiesare recognized using the balance sheet liability method.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 51 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
30. Deferred tax assets/ deferred tax liabilities - continued
30.2 Deferred tax assets and deferred tax liabilities - continued
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred taxassets for deductible temporary differences are recognized to the extent that it is probable thattaxable profits will be available against which the deductible temporary differences can be utilized.However, for temporary differences associated with the initial recognition of goodwill and theinitial recognition of an asset or liability arising from a transaction (not a business combination)that affects neither the accounting profit nor taxable profits (or deductible losses) at the time oftransaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognizedto the extent that it is probable that future taxable profits will be available against which thedeductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated withinvestments in subsidiaries and associates, and interests in joint ventures, except where the Groupis able to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future. Deferred tax assets arising fromdeductible temporary differences associated with such investments and interests are onlyrecognized to the extent that it is probable that there will be taxable profits against which to utilizethe benefits of the temporary differences and they are expected to reverse in the foreseeable future.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates applicablein the period in which the asset is realized or the liability is settled according to tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, exceptwhen they arise from transactions or events that are directly recognized in other comprehensiveincome or in equity, in which case they are recognized in other comprehensive income or in equity,and when they arise from business combinations, in which case they adjust the carrying amount ofgoodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if itis no longer probable that sufficient taxable profits will be available in the future to allow thebenefit of deferred tax assets to be utilized. Any such reduction in amount is reversed when itbecomes probable that sufficient taxable profits will be available.
30.3 Offset of income tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basisor to realize the assets and settle the liabilities simultaneously, current tax assets and current taxliabilities are offset and presented on a net basis.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 52 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
30. Deferred tax assets/ deferred tax liabilities - continued
30.3 Offset of income tax - continued
When the Group has a legal right to settle current tax assets and liabilities on a net basis, anddeferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxationauthority on either the same taxable entity or different taxable entities which intend either to settlecurrent tax assets and liabilities on a net basis or to realize the assets and liabilitiessimultaneously, in each future period in which significant amounts of deferred tax assets orliabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset andpresented on a net basis.
31. Leases
Lease is a contract that conveys the right to use an asset for a period of time in exchange forconsideration.
For contracts that are signed or modified after the date of initial application, atinception/modification of the contracts, the Group assesses whether the contract is, or contains, alease. Unless the terms and conditions of the contract are changed, the Group does not reassesswhether a contract is, or contains, a lease.
31.1 The Group as Lessee
31.1.1 Separating components of a lease
If a contract contains a lease component and one or more non-lease components, the Groupallocates the consideration in the contract to each lease component on the basis of the relativestand-alone price of the lease components and the aggregate stand-alone price of the non-leasecomponents.
31.1.2 Right-of-use assets
Except for short-term leases and leases for which the underlying asset is of low value, at thecommencement date of the lease, the Group recognizes a right-of-use assets. The commencementdate of the lease is the date on which a lessor makes an underlying asset available for use by theGroup. The Group measures the right-of-use assets at cost. The cost of the right-of-use assetscomprises:
? the amount of the initial measurement of the lease liabilities;? any lease payments made at or before the commencement date, less any lease incentives;? any initial direct costs incurred by the Group;? an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the conditionrequired by the terms and conditions of the lease.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 53 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.2 Right-of-use assets - continued
Right-of-use assets are depreciated by the Group in accordance with the ASBE No.4 Fixed Assets.If the Group is reasonably certain, that the lease will transfer ownership of the underlying asset tothe Group by the end of the lease term, the right-of-use assets is depreciated from thecommencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-use assets is depreciated from the commencement date to the earlier of the end of the useful life ofthe right-of-use assets or the end of the lease term.
The Group applies ASBE No. 8 Impairment of Assets, to determine whether the right-of-use assetsare impaired and to account for any impairment loss identified.
31.1.3 Lease liabilities
Except for short-term leases and leases for which the underlying asset is of low value, at thecommencement date of the lease, the Group measures the lease liabilities at the present value of thelease payments that are not paid at that date. If the interest rate implicit in the lease cannot be readilydetermined, the lessee shall use the lessee's incremental borrowing rate.
The lease payments comprise the following payments by the Group for the right to use theunderlying asset during the lease term:
? fixed payments (including in-substance fixed payments), less any lease incentives;? variable lease payments that depend on an index or a rate;? the exercise price of a purchase option if the Group is reasonably certain to exercise that
option;? payments for terminating the lease, if the lease term reflects the Group exercising an optionto terminate the lease;? amounts expected to be payable by the Group under residual value guarantees.
Variable lease payments that depend on an index or a rate, are initially measured using the index orrate as at the commencement date. Variable lease payments not included in the measurement of thelease liabilities, are recognized in profit or loss, or in the cost of relevant assets, in the period ofthose payments.
Interest on the lease liabilities in each period during the lease term is calculated by a constantperiodic rate of interest on the remaining balance of the lease liabilities.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 54 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.3 Lease liabilities - continued
After the commencement date, if one of the following occurs, the lease liability is remeasured bythe Group with the adjustment to the right-of-use asset. If the carrying amount of the right-of-useasset is reduced to zero and there is further reduction in the measurement of the lease liability, theremaining remeasurement should be recognized in profit or loss.
? there is a change in the lease term, or in the assessment of an option to purchase theunderlying asset, the Group remeasures the lease liabilities, on the basis of the revised leaseterm and the revised discount rate;? there is a change in the amounts expected to be payable under a residual value guarantee, or
in future lease payments resulting from a change in an index or a rate used to determinethose payments, the Group remeasures the lease liabilities, on the basis of the revised leasepayments and the unchanged discount rate, unless the change in the lease payments resultsfrom a change in floating interest rates, in which case a revised discount is applied to thepresent value.
31.1.4 Short-term leases and leases for which the underlying asset is of low value
The Group elects not to recognize right-of-use assets or lease liabilities for short-term leases andleases for which the underlying asset is of low value, i.e. port and terminal facilities, buildings,machinery and equipment, furniture and fixture and other equipment, motor vehicles and cargoships, other short-term leases and leases for which the underlying asset is of low value. A shorts-term lease is a lease that, at the commencement date, has a lease term of 12 months or less. Alease for which the underlying asset is of low value is that, the value of the underlying asset is lowwhen it is new. For short-term leases and leases for which the underlying asset is of low value, theGroup recognizes the lease payments associated with those leases as an expense or cost ofrelevant asset on a straight-line basis over the lease term.
31.1.5 Lease modifications
A lease modification should be accounted for as a separate lease if both of the following apply:
? the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and? the consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope and any appropriate adjustments to that stand-alone price
according to the circumstances of the particular contract
For a lease medication that is not accounted for as a separate lease, at the effective date of the leasemodification, the Group should allocate the consideration in the modified contract, determine thelease term of the modified lease and remeasure the lease liability by discounting the revisedpayments using a revised discount rate.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 55 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.5 Lease modifications - continued
For lease modifications that decrease the scope of the lease or narrow the term of the lease, theGroup should decrease the carrying amount of the right-of-use asset with any gain or loss relatingto the partial or full termination of the lease should be recognized in profit or loss. Forremeasurement of lease liabilities from all other lease modifications, a corresponding adjustment ismade to the carrying amount of the right-of-use asset.
31.2 The Group as Lessor
31.2.1 Separating components of a lease
For a contract that contains lease and non-lease components, the Group shall allocate theconsideration in the contract in accordance with the allocation of the transaction price under therevenue standard, on the basis of the relative stand-alone price of the lease components and theaggregate stand-alone price of the non-lease components.
31.2.2 Classification of leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all therisks and rewards of ownership. All other leases are classified as operating leases.
31.2.2.1 The Group as lessor under operating leases
The Group recognizes lease payments from operating leases as income on a straight-line basis. TheGroup capitalizes initial direct costs incurred in obtaining an operating lease and recognizes thosecosts as an expense over the lease term on the same basis as the lease income.
Variable lease receipts relating to an operating lease not included in the lease receipts are recognizedin profit or loss by the Group when incurred.
31.2.2.2 The Group as lessor under finance leases
At the commencement date, the Group recognizes a finance lease receivable at the amount equal tothe net investment in the lease with finance lease assets derecognized. The net investment in thelease is the sum of any unguaranteed residual value and lease payments receivable from thecommencement date, discounted at the interest rate implicit in the lease.
The amount of the lease payments receivable refers to the amount that the Group should collectfrom the lessee for the purpose of transferring the leased assets during the lease term, including:
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 56 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.2 Classification of leases - continued
31.2.2.2 The Group as lessor under finance leases - continued
? fixed payments (including in-substance fixed payments) paid by the lessee, less any leaseincentives;? variable lease payments that depend on an index or a rate;? the exercise price of a purchase option, provided that it is reasonably determined that the
lessee will exercise the option;? the lessee exercises the amount to be paid for the termination of the lease option, providedthat the lease term reflects the lessee's exercise of the option to terminate the lease;? the residual value of the guarantee provided by the lessee, the party concerned with the lesseeand the independent third party with the financial ability to perform the guarantee obligation.
Variable payments receivable not included in the net investment in the lease are recognized in profitor loss when they arise.
Interest income for each period over the lease term is recognized by the Group at the fixed periodicrate.
31.2.3 Subleases
As a lessor of the sublease, the Group accounts for the original lease contract and the subleasecontract as two separate contracts. The Group classifies the subleases based on the right-of-useassets generating from the original lease rather than the underlying assets of the original lease.
31.2.4 Lease modifications
The Group accounts for a modification to an operating lease as a new lease from the effective dateof the modification, considering any lease advances or receivables relating to the original lease asthe lease receipts for the new lease.
The Group should account for a modification to a finance lease as a separate lease if both:
? the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and? The consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope with any appropriate adjustment to that stand-alone price.
For a modification to a finance lease that is not accounted for as a separate lease, the Group shouldaccount for the modification as follows:
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 57 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.4 Lease modifications - continued
? if the lease would have been classified as an operating lease had the modification been effectat the inception date, the Group should account for the lease modification as a new lease fromthe effective date of the modification, and measure the carrying amount of the underlyingasset as the net investment in the lease before the effective date of the lease modification.? If the lease would have been classified as an operating lease if the modification had been ineffect at the inception date, the Group should apply the requirements of contract modificationand renegotiation under the ASBE No. 22 Financial Instruments: Recognition andMeasurement.
31.2.5 Sale and leaseback transactions
31.2.5.1 The Group as the seller-lessee
The Group applies the requirements of the revenue standard to determine whether the transfer of anasset is accounted for as a sale of that asset. If the transfer of an asset does not constitute a sale, theGroup should continue to recognize the transferred assets and should recognize a financial liabilityequal to the transfer proceeds applying ASBE No. 22 Financial Instruments: Recognition andMeasurement. If the transfer of an asset is a sale, the Group should measure the right-of-use assetarising from the leaseback at the proportion of the previous carrying amount of the asset that relatesto the right of use, and recognize only the amount of any gain or loss that relates to the rightstransferred to the lessor.
32. Exchange of Non-Monetary Assets
Where a non-monetary assets transaction satisfies the following conditions at the same time, itshould calculated based on fair value. The transaction is commercial in nature and the fair value ofthe assets received or surrendered can be measured reliably. The fair value of the assets surrenderedand relevant payable taxes shall be regarded as the transaction cost of the assets received. For assetssurrendered, the difference between the fair value and the carrying value of the asset surrenderedshall be recorded into the profit or loss of the current period. If any exact evidence showing that thefair value of the assets received is more reliable, the cost of assets received and surrendered shallbe calculated as different way. For assets received, its cost shall be calculated based on fair valueof assets received and relevant payable taxes. For the assets surrendered, the difference between thefair value of the assets received and the carrying value of the asset surrendered shall be recordedinto the profit or loss of the current period.
Where a non-monetary assets transaction does not meet the conditions as prescribed, the carryingvalue and relevant payable taxes of the assets surrendered shall be the cost of the assets receivedand no profit or loss is recognized.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 58 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
33. Discontinued Operation
Discontinued operation refers to the separately identifiable components that have been disposedof or classified as held for sale and meet one of the following conditions:
(1) The component represents an independent main business or a major business area;
(2) This component is a part of a related plan that intends to dispose an independent mainbusiness or a separate main operating area;
(3) This component is a subsidiary acquired exclusively for resale.
Profits or losses from discontinued operations are presented separately in the income statementfrom continuing operations. Profits and losses from operations or disposals (e.g. impairmentlosses and reversals of discontinued operations) are presented under discontinued operations. Fordiscontinued operations presented in the current period, the information previously undercontinuing operations is presented under discontinued operations by the Group in the financialstatements for the comparable accounting period.
34. Safety Production Cost
According to the Administrative Rules on Provision and Use of Enterprise Safety Production Costjointly issued by the Ministry of Finance and the State Administration of Work Safety on 14February 2012 (filed as Cai Qi [2012] No. 16), safety production cost set aside by the Group isdirectly included in the cost of relevant products or recognized in profit or loss for the period, aswell as the special reserve. When safety production cost set aside is utilized, if the costs incurredcan be categorized as expenditure, the costs incurred should be charged against the specialreserve. If the costs set aside are used to build up fixed assets, the costs should be charged toconstruction in progress, and reclassified to fixed assets when the safety projects are ready forintended use. Meantime, expenditures in building up fixed assets are directly charged against thespecial reserve with the accumulated depreciation recognized at the same amount. Depreciationwill not be made in the future period on such fixed assets.
35. Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates
In the application of accounting policies as set out in Note (III), the Company is required to makejudgments, estimates and assumptions about the carrying amounts of items in the financialstatements that cannot be measured accurately, due to the internal uncertainty of the operatingactivities. These judgments, estimates and assumptions are based on historical experiences of theCompany's management as well as other factors that are considered to be relevant. Actual resultsmay differ from these estimates.
The Company regularly reviews the judgments, estimates and assumptions on a going concernbasis. Changes in accounting estimates which only affect the current period should be recognizedin current period; changes which not only affect the current but the future periods should berecognized in current and future periods. At the balance sheet date, key assumptions anduncertainties that are likely to lead to significant adjustments to the book values of assets andliabilities in the future are:
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 59 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
35. Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates - continued
Goodwill impairment
For the purpose of impairment testing, the present value of the expected future cash flows of theassets group or portfolio including goodwill shall be calculated, and such expected future cash flowsshall be estimated. Meantime, a pre-tax rate shall be determined that should reflect the time valueof money on the current market and the specific interest risks.
Recognition of deferred tax
The Group calculates and makes provision for deferred income tax liabilities according to the profitdistribution plan of subsidiaries, associates and the joint ventures subject to the related law. Forretained earnings which are not allocated by the investment company, since the profits will be usedto invest the company's daily operation and future development, no deferred income tax liabilitiesare recognized. If the actually distributed profits in the future are more or less than those expected,corresponding deferred tax liabilities will be recognized or reversed at the earlier of profitsdistribution date and the declaration date, in the profit and loss of the current period.
Deferred tax assets are recognized based on the deductible temporary difference and thecorresponding tax rate, to the extent that it has become probable that future taxable profit will beavailable for the deductible temporary difference. If in the future the actual taxable income does notcoincide with the amount currently expected, the deferred tax assets resulting will be recognized orreversed in the period when actually incurred, in profit or loss.
36. Changes in significant accounting policies
(1) Interpretation No. 14 of Accounting Standards for Business Enterprises
On 26 January 2021, the Ministry of Finance promulgated the "Accounting Standards for BusinessEnterprises Interpretation No. 14" (Cai Kuai [2021] No. 1, hereinafter referred to as "InterpretationNo. 14"). Interpretation No. 14 Question 1 "On the accounting treatment of government-privatepartnership (PPP) project contracts by the private party" stipulates that the private party providingconstruction services or contracting to other parties shall comply with the "Accounting Standardsfor Business Enterprises No. 14 ——Accounting shall be carried out according to the provisions of"Income". Interpretation No. 14 Question 2 "Accounting treatment of changes in the basis fordetermining contractual cash flows caused by the reform of the benchmark interest rate" stipulatesthat the reform of the benchmark interest rate leads to changes in the basis for determining thecontractual cash flow of financial assets or financial liabilities and the results of the reform of thebenchmark interest rate. Accounting treatment of lease changes. Interpretation No. 14 has nosignificant impact on the 2021 interim financial statements of the Group and the Company.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 60 -
III. THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
36. Changes in significant accounting policies - continued
(2) Provisions on Accounting Treatment of Rent Concessions Related to the COVID-19
On 26 May 2021, the Ministry of Finance ("MoF") issued the Circular on Adjusting the Scope ofApplication of the Provisions on Accounting Treatment of Rent Concessions Related to the COVID-19 (Cai Kuai [2021] Document No. 9) (the "Doc. No. 9"), adjusting the scope of application of theProvisions on Accounting Treatment of Rent Concessions Related to the COVID-19 (Cai Kuai[2021] Document No. 10) (the "Doc. No. 10") issued by MoF on 19 June 2020. The Doc. No. 9extended the application period of rent concession applicable to simplified method under Doc.No.10, i.e. adjusting "Rent concession is only applicable to lease payments payable before 30 June2021. Any increase in lease payments payable after 30 June 2021 does not affect the satisfaction ofthe criteria, but decrease in lease payments payable after 30 June 2021 does not satisfy the criteria."to "Rent concession is only applicable to lease payments payable before 30 June 2022. Any increasein lease payments payable after 30 June 2022 does not affect the satisfaction of the criteria, butdecrease in lease payments payable after 30 June 2022 does not satisfy the criteria.". The othercriteria remain unchanged. The above provisions have no significant impact on the Group's andCompany's financial statements for the period ended 30 June 2021.
37. Changes in significant accounting estimates
The Group has no significant changes in accounting estimates in the current period.
IV. TAXES
1. Major taxes and tax rates
| Taxes | Tax basis | Tax rate |
| Enterprise income tax | Taxable income | 16.5%-34% (Note 1) |
| Dividend income tax | 5%, 10%, 25% (Note 2) | |
| Value-added Tax ("VAT") (Note 3) | Income from sale of goods (Note 4) | 9%,13% |
| Income from transportation, loading and unloading business and part of modern service industries | 6% | |
| Income from sale of real estate, property management, real estate lease, etc. | 5%, 6%, 9% | |
| Social contribution tax (Note 5) | Income | 0.65% -7.6% |
| Deed tax | Land use right and property transfer amount | 3%-5% |
| Property tax | 70% of cost of property or rental income | 1.2% or 12% |
| City maintenance and construction tax | VAT paid | 1%-7% |
| Education surtax | VAT paid | 3% |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 61 -
IV. TAXES - continued
1. Major taxes and tax rates - continued
Note 1: The Group's enterprise income tax is calculated based on the current tax rate stipulated by
local tax laws. Among them, the Company are subject to an enterprise income tax rate of25%, the subsidiaries set up in Hong Kong are subject to an enterprise income tax rate of
16.5%, the majority of subsidiaries set up in China are subject to an enterprise income taxrate of 25% and certain others are subject to the preferential tax rate for small and microenterprises of 20%, and the other overseas subsidiaries are subject to enterprise income taxrates between 28% and 34%.
Note 2: Foreign investors who receive dividends of profits from Chinese subsidiaries in 2008 and
thereafter generally shall pay withholding income tax at a rate of 10% in accordance withthe relevant provisions of the PRC enterprise income tax. For companies incorporated incertain regions (including Hong Kong and Singapore), if the companies are actual ownersholding more than 25% interest in the subsidiaries in China, they will enjoy a preferentialtax rate of 5%.
The Company obtains dividends distributed by overseas subsidiaries and should payenterprise income tax at a rate of 25% in accordance with relevant Chinese tax laws. TheCompany obtains taxable income outside of China, and the amount of income tax that hasbeen paid abroad can be offset with the current taxable amount. The credit limit is thetaxable amount calculated in accordance with the provisions of the Enterprise Income TaxLaw.
Note 3: The VAT amount is the balance of the output tax less the deductible input tax, and the output
tax is calculated in accordance with the sales income and the corresponding tax ratestipulated in the relevant tax laws of China.
Note 4: Pursuant to Announcement of Customs on Relevant Policies for Deepening the Value-Added
Tax Reform issued by the Ministry of Finance, the State Taxation Administration and theGeneral Administration (Announcement No. 39 [2019] of the Ministry of Finance, the StateTaxation Administration and the General Administration of Customs), from 1 April 2019,the tax rate of 16% and 10% applicable to the VAT taxable sale or import of goods areadjusted to 13% and 9%, respectively.
Note 5: The social contribution tax is the tax paid by the overseas subsidiaries of the Group to the
local government.
2. Tax preference
Some subsidiaries of the Group in China are recognized as high-tech enterprises orencouraged industrial enterprises in the region and are subject to an enterprise income taxrate of 15%. The Group's subsidiaries outside China may be subject to enterprise incometax preference in accordance with relevant local tax policies.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 62 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Cash | 363,642.53 | 575,797.26 |
| RMB | 51,542.58 | 37,045.02 |
| USD | 150,714.70 | 146,078.94 |
| HKD | 24,454.21 | 24,653.41 |
| BRL | 6,447.44 | 5,997.01 |
| Others | 130,483.60 | 362,022.88 |
| Bank deposit (Note 1) | 9,003,695,587.20 | 11,547,077,133.15 |
| RMB | 6,640,184,246.92 | 7,585,560,643.67 |
| USD | 842,552,750.96 | 817,495,062.65 |
| EUR | 939,406,425.46 | 770,193,517.95 |
| BRL | 418,096,134.27 | 273,701,827.77 |
| HKD | 152,384,041.68 | 2,076,664,153.73 |
| AUD | 424,576.33 | 557,797.36 |
| Others | 10,647,411.58 | 22,904,130.02 |
| Other cash and bank balances (Note 2) | 375,314,367.51 | 370,770,828.30 |
| RMB | 375,270,597.94 | 370,726,535.43 |
| HKD | 43,769.57 | 44,292.87 |
| Total | 9,379,373,597.24 | 11,918,423,758.71 |
| Including: Total amount of funds deposited overseas | 2,857,588,296.09 | 5,313,591,920.43 |
Note 1:At the end of the current period, the Group's bank deposits that were deposited overseas and
restricted for capital repatriation totaled nil (at the beginning of the current period: nil).
Note 2:The structured deposits that could be readily withdrawn on demand in the other cash and
bank balances of the Group totaled RMB 362,980,035.90, the restricted deposit totaledRMB 12,259,378.15, and the balance of the margin maintenance account was RMB74,953.46.
2. Held-for-trading financial assets
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Financial assets measured at fair value through profit or loss | 1,000,173,287.80 | 850,165,448.59 |
| Including: Structured deposits | 1,000,000,000.00 | 850,000,000.00 |
| Equity investment instruments | 173,287.80 | 165,448.59 |
| Total | 1,000,173,287.80 | 850,165,448.59 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 63 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Notes receivable
(1) Classification of notes receivable
Unit: RMB
| Category | Closing balance | Opening balance (Restated) |
| Bank acceptance | 23,664,430.98 | 2,245,000.16 |
| Commercial acceptance | - | 3,146,994.68 |
| Total | 23,664,430.98 | 5,391,994.84 |
| Less: Provision for credit losses (Note) | - | - |
| Carrying amount | 23,664,430.98 | 5,391,994.84 |
Note: The Group believes that the acceptor of its bank acceptance and commercial acceptance
have high credit ratings with no significant credit risks; therefore, no provision for creditloss is made.
(2) As at 30 June 2021, there are no notes receivable pledged.
(3) As at 30 June 2021, the Group has no notes receivable endorsed or discounted but unmatured
at the balance sheet date.
(4) As at 30 June 2021, there are no notes reclassified to accounts receivable due to the
drawers' inability to settle the note.
(5) The Group has no notes receivable written off for the period from 1 January to 30 June 2021.
4. Accounts receivable
(1) Accounts receivable disclosed by aging
Unit: RMB
| Aging | Closing balance | ||
| Accounts receivable | Provision for credit loss | Proportion (%) | |
| Within 1 year | 1,833,629,561.08 | 18,474,325.56 | 1.01 |
| More than 1 year but not exceeding 2 years | 50,613,308.68 | 17,682,820.43 | 34.94 |
| More than 2 years but not exceeding 3 years | 5,082,039.70 | 2,840,927.94 | 55.90 |
| More than 3 years | 40,585,676.63 | 37,671,574.10 | 92.82 |
| Total | 1,929,910,586.09 | 76,669,648.03 | |
(2) Disclosure of accounts receivable by categories
Unit: RMB
| Credit rating | Expected credit loss rate (%) | Closing balance | Opening balance (Restated) | ||||
| Carrying amount | Provision for credit loss | Book value | Carrying amount | Provision for credit loss | Book value | ||
| A | 0.00-0.10 | 968,715,740.70 | 641,983.99 | 968,073,756.71 | 680,599,675.12 | 658,001.13 | 679,941,673.99 |
| B | 0.10-0.30 | 545,761,792.88 | 1,529,163.25 | 544,232,629.63 | 520,087,318.71 | 639,654.91 | 519,447,663.80 |
| C | 0.30-50.00 | 347,540,479.95 | 24,250,944.08 | 323,289,535.87 | 207,630,761.65 | 23,911,382.65 | 183,719,379.00 |
| D | 50.00-100.00 | 67,892,572.56 | 50,247,556.71 | 17,645,015.85 | 60,465,077.73 | 50,224,377.50 | 10,240,700.23 |
| Total | 1,929,910,586.09 | 76,669,648.03 | 1,853,240,938.06 | 1,468,782,833.21 | 75,433,416.19 | 1,393,349,417.02 | |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Accounts receivable - continued
(3) Changes in provision for credit loss of accounts receivable
Unit: RMB
| Item | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | Total |
| Opening balance (Restated) | 25,209,038.69 | 50,224,377.50 | 75,433,416.19 |
| Carrying amount of accounts receivable at 1 January 2021 | |||
| -- Transferred to credit-impaired accounts receivables | - | - | - |
| -- Reversed to not credit-impaired accounts receivable | - | - | - |
| Provision for the period | 3,416,820.67 | 232,035.00 | 3,648,855.67 |
| Reversal for the period | -2,378,003.37 | -94,712.96 | -2,472,716.33 |
| Impact of foreign currency statement translation | 174,235.33 | -114,142.83 | 60,092.50 |
| Closing balance | 26,422,091.32 | 50,247,556.71 | 76,669,648.03 |
There are no accounts receivable written off during this period.
(4) The top five balances of account receivables classified by debtor
Unit: RMB
| Name of entity | Closing balance | Aging | Proportion of the amount to the total accounts receivable (%) | Closing balance of provision for credit loss |
| Client A | 177,065,984.10 | Within 1 year | 9.18 | 177,065.98 |
| Client B | 84,452,452.50 | Within 1 year, more than 1 year but not exceeding 2 years | 4.38 | 69,700.20 |
| Client C | 78,575,366.80 | Within 1 year, more than 1 year but not exceeding 2 years | 4.07 | 32,399.01 |
| Client D | 64,839,808.72 | Within 1 year, more than 1 year but not exceeding 2 years | 3.36 | 10,996,831.56 |
| Client E | 55,855,729.72 | Within 1 year, more than 1 year but not exceeding 2 years | 2.89 | 94,092.90 |
| Total | 460,789,341.84 | 23.88 | 11,370,089.65 |
5. Accounts receivable financing
(1) Accounts receivable financing classification
Unit: RMB
| Items | Closing balance | Opening balance |
| Bank acceptance measured at fair value | 272,889,319.83 | 217,449,966.41 |
(2) On 30 June 2021, the Group has no pledged account receivables financing.
(3) As at 30 June 2021, account receivables financing endorsed or discounted which are not yet
due at the balance sheet date are as follows
Unit: RMB
| Items | Closing balance | Opening balance | ||
| Derecognized | Recognized | Derecognized | Recognized | |
| Bank acceptance measured at fair value | 35,921,012.26 | - | 129,866,604.18 | - |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Prepayments
(1) Aging analysis of prepayment
Unit: RMB
| Aging | Closing balance | Opening balance (Restated) | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 86,006,306.73 | 99.53 | 50,438,796.50 | 98.48 |
| More than 1 year but not exceeding 2 years | 313,849.85 | 0.36 | 585,435.07 | 1.14 |
| More than 2 years but not exceeding 3 years | 8,020.97 | 0.01 | - | - |
| More than 3 years | 86,207.76 | 0.10 | 193,638.86 | 0.38 |
| Total | 86,414,385.31 | 100.00 | 51,217,870.43 | 100.00 |
(2) As at 30 June 2021, the Group has no significant prepayments aged more than one year.
(3) The top five balances of prepayments classified by entities
Unit: RMB
| Name of entity | Relationship with the Company | Closing balance | Proportion of the closing balance to the total prepayments (%) |
| Saham Assurance Togo S.A. | Non-related party | 6,584,963.34 | 7.61 |
| Fairfax Brasil Seguros Corporativos S.A. | Non-related party | 4,555,092.72 | 5.27 |
| Jianshi Construction Co., Ltd. | Non-related party | 3,142,057.55 | 3.64 |
| Shenyang Ruilida Technology Co., Ltd. | Non-related party | 3,011,882.88 | 3.49 |
| CCCC First Harbour Consultants CO.,LTD | Non-related party | 2,852,256.00 | 3.30 |
| Total | 20,146,252.49 | 23.31 |
7. Other receivables
7.1 Summary of other receivables
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Dividend receivable | 1,257,817,553.23 | 258,137,208.69 |
| Other receivables | 3,322,888,529.46 | 3,303,155,105.29 |
| Total | 4,580,706,082.69 | 3,561,292,313.98 |
7.2 Dividend receivable
(1) Presentation of dividend receivable
Unit: RMB
| Name of investee | Closing balance | Opening balance (Restated) |
| Shanghai International Port (Group) Co., Ltd. | 756,630,823.35 | - |
| China Nanshan Development (Group) Incorporation ("Nanshan Group") | 316,246,500.00 | 210,831,000.00 |
| Liaoning Port Co., Ltd. | 74,242,730.44 | - |
| Qingdao Port International Co., Ltd. | 39,116,713.02 | - |
| Tin-Can Island Container Terminal Ltd | 22,996,441.34 | 33,289,037.77 |
| Others | 49,843,421.71 | 14,275,566.52 |
| Total | 1,259,076,629.86 | 258,395,604.29 |
| Less: Provision for credit loss | 1,259,076.63 | 258,395.60 |
| Book value | 1,257,817,553.23 | 258,137,208.69 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.2 Dividend receivable - continued
(2) Significant dividend receivable aged more than 1 year
Unit: RMB
| Name of investee | Closing balance | Aging | Why unrecovered | Closing balance of provision for credit losses |
| Nanshan Group | 140,554,000.00 | More than 1 year but not exceeding 2 years | Relevant procedures are being handled and it is expected to be recovered by the end of 2021 | 140,554.00 |
| Total | 140,554,000.00 | 140,554.00 |
(3) Changes in provision for credit loss of dividend receivable
Unit: RMB
| Item | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss in 12 months | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | ||
| Opening balance | 258,395.60 | - | - | 258,395.60 |
| Carrying amount of dividend receivables at 1 January 2021 | ||||
| -- Transfer to Stage 2 | - | - | - | - |
| -- Transfer to Stage 3 | - | - | - | - |
| -- Reverse to Stage 2 | - | - | - | - |
| -- Reverse to Stage 1 | - | - | - | - |
| Provision for the period | 1,000,681.03 | - | - | 1,000,681.03 |
| Reversal for the period | - | - | - | - |
| Transfer-out on derecognition of financial assets (including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| Closing balance | 1,259,076.63 | - | - | 1,259,076.63 |
7.3 Other receivables
(1) Other receivables disclosed by aging
Unit: RMB
| Aging | Closing balance | ||
| Other receivables | Provision for credit loss | Proportion (%) | |
| Within 1 year | 2,572,619,131.98 | 57,240.17 | - |
| More than 1 year but not exceeding 2 years | 431,767,085.80 | 71,268.54 | 0.02 |
| More than 2 years but not exceeding 3 years | 502,052,317.18 | 295,399,464.85 | 58.84 |
| More than 3 years | 321,708,078.61 | 209,730,110.55 | 65.19 |
| Total | 3,828,146,613.57 | 505,258,084.11 | |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(2) Disclosure of other receivables by nature
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Land compensation (Note 1) | 2,742,032,000.00 | 2,742,032,000.00 |
| Operation compensation (Note 2) | 662,024,082.30 | 687,057,815.03 |
| Temporary payments | 196,310,928.35 | 159,559,495.82 |
| Compensation for profit or loss on transition | 6,654,751.43 | 38,312,376.24 |
| Deposits | 21,836,368.72 | 24,819,304.63 |
| Others | 199,288,482.77 | 173,665,086.98 |
| Total | 3,828,146,613.57 | 3,825,446,078.70 |
| Less: Provision for credit loss | 505,258,084.11 | 522,290,973.41 |
| Book value | 3,322,888,529.46 | 3,303,155,105.29 |
Note 1: On 5 November 2019, Shantou China Merchants Port Group Co., Ltd.(hereinafter referred
to as "Shantou Port") entered into the Contract for the Acquisition of State-Owned LandUse Rights in Shantou with Shantou Land Reserve Center. Pursuant to the contract, the landand attached buildings of approximately 370.96 mu located in Zhuchi deepwater port on thesouth of Zhongshan East Road of Shantou will be returned to Shantou Land Reserve Centerby Shantou Port, amounting to RMB 1,558,032,000.00. The above mentioned land andattached buildings have been transferred before 31 December 2020. As of 30 June 2021, theland compensation totaling to RMB 1,208,032,000.00 has not been recovered yet.
On 21 August 2020, Shantou Port entered into the Contract for the Acquisition of State-Owned Land Use Rights in Shantou with Shantou Haojiang District Land Reserve Center.Pursuant to the contract, the land and attached buildings of approximately 152.34 mu locatedin Queshi Wutian, Haojiang District, Shantou City will be returned to Shantou HaojiangDistrict Land Reserve Center by Shantou Port, amounting to RMB 250,000,000.00. Theabove mentioned land and attached buildings have been transferred before 31 December2020. As of 30 June 2021, the land compensation of RMB 200,000,000.00 has not beenrecovered yet.
On 22 December 2020, Shantou Port entered into the Contract for the Acquisition of State-Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant to thecontract, the land and attached buildings of approximately 648.78 mu located in Zhuchideepwater port of Shantou will be returned to Shantou Land Reserve Center by ShantouPort, amounting to RMB 2,724,876,000.00. 320 mu of land and attached buildings havebeen transferred before 31 December 2020. As of 30 June 2021, the land compensation ofRMB 1,334,000,000.00 has not been recovered yet. The remaining 328.78 mu of land andattached buildings have not been transferred, which will be presented as held-for-sale assetsby the Group.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(2) Disclosure of other receivables by nature - continued
Note 2:It refers to the operating compensation that the subsidiary of the Company shall collect from
the holding company of its minority shareholders according to the agreement, amounting toRMB 662,024,082.30. The above amount has been overdue. On 30 June 2021, thecorresponding balance of impairment on credit loss amounted to RMB 468,709,082.30.
(3) Provision for credit loss on other receivables
As part of the Group's credit risk management, the Group conducts internal credit ratings for itscustomers and determines the expected loss rate for other receivables for each rating. Such expectedaverage loss rates are based on actual historical impairments while taking account of the currentand future economic conditions.
As at 30 June 2021, the credit risk and expected credit loss of other receivables of each category ofcustomers are presented as below:
Unit: RMB
| Credit rating | Expected credit loss rate (%) | Closing balance | Opening balance (Restated) | ||||||
| Expected credit loss in 12 months | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | Total | Expected credit loss in 12 months | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | Total | ||
| A | 0.00-0.10 | 3,129,879,304.06 | - | - | 3,129,879,304.06 | 3,102,785,902.96 | - | - | 3,102,785,902.96 |
| B | 0.10-0.30 | - | - | - | - | - | - | - | - |
| C | 0.30-50.00 | - | - | - | - | - | - | - | - |
| D | 50.00-100.00 | - | - | 698,267,309.51 | 698,267,309.51 | - | - | 722,660,175.74 | 722,660,175.74 |
| Account balance | 3,129,879,304.06 | - | 698,267,309.51 | 3,828,146,613.57 | 3,102,785,902.96 | - | 722,660,175.74 | 3,825,446,078.70 | |
| Provision for credit loss | 332,459.65 | - | 504,925,624.46 | 505,258,084.11 | 308,222.19 | - | 521,982,751.22 | 522,290,973.41 | |
| Book value | 3,129,546,844.41 | - | 193,341,685.05 | 3,322,888,529.46 | 3,102,477,680.77 | - | 200,677,424.52 | 3,303,155,105.29 | |
(4) Changes in provision for credit loss of other receivables
Unit: RMB
| Item | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss in 12 months | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | ||
| Opening balance (Restated) | 308,222.19 | - | 521,982,751.22 | 522,290,973.41 |
| Carrying amount of other receivables at 1 January 2021 | ||||
| --Transfer to Stage 2 | - | - | - | - |
| --Transfer to Stage 3 | -109,558.16 | - | 109,558.16 | - |
| -- Reverse to Stage 2 | - | - | - | - |
| --Reverse to Stage 1 | - | - | - | - |
| Provision for the period | 146,421.25 | - | 808,708.09 | 955,129.34 |
| Reversal for the period | -12,625.63 | - | -218,736.67 | -231,362.30 |
| Impact of foreign currency statement translation | - | - | -17,756,656.34 | -17,756,656.34 |
| Closing balance | 332,459.65 | - | 504,925,624.46 | 505,258,084.11 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(5) The Group has no other receivables written off for the period from 1 January to 30 June
2021.
(6) At the end of the year, the top five balances of other receivables classified by debtor are as
below:
Unit: RMB
| Name of entity | Nature | Closing balance | Aging | Proportion of the amount to the other receivables (%) | Provision for credit loss at the end of the period |
| Entity A | Land compensation | 2,542,032,000.00 | Within 1 year; More than 1 year but not exceeding 2 years | 66.40 | 39,052.09 |
| Entity B | Operation compensation | 662,024,082.30 | More than 2 years but not exceeding 3 years; More than 3 years | 17.30 | 468,709,082.30 |
| Entity C | Land compensation | 200,000,000.00 | Within 1 year | 5.22 | 3,072.51 |
| Entity D | Temporary payments | 45,174,070.15 | Within 1 year; More than 3 years | 1.18 | 4,355.19 |
| Entity E | Temporary payments | 33,692,528.00 | More than 3 years | 0.88 | 3,369.25 |
| Total | 3,482,922,680.45 | 90.98 | 468,758,931.34 |
8. Inventories
(1) Categories of inventories
Unit: RMB
| Item | Closing balance | Opening balance (Restated) | ||||
| Carrying amount | Provision for decline in value of inventories | Book value | Carrying amount | Provision for decline in value of inventories | Book value | |
| Raw materials | 168,953,489.68 | 884,061.15 | 168,069,428.53 | 168,411,323.61 | 884,061.15 | 167,527,262.46 |
| Goods on hand | 28,930,830.87 | - | 28,930,830.87 | 34,780,194.84 | - | 34,780,194.84 |
| Revolving materials | - | - | - | - | - | - |
| Others | 13,008,687.75 | - | 13,008,687.75 | 12,516,519.00 | - | 12,516,519.00 |
| Total | 210,893,008.30 | 884,061.15 | 210,008,947.15 | 215,708,037.45 | 884,061.15 | 214,823,976.30 |
(2) Provision for decline in value of inventories
Unit: RMB
| Item | Opening balance | Provision | Decrease | Closing balance | |
| Reversal | Write-off | ||||
| Raw materials | 884,061.15 | - | - | - | 884,061.15 |
Note: As at 30 June 2021, the Group has no capitalized borrowing cost in the balance of
inventories.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Assets held for sale
| Item | Book value at the end of the period | Fair value at the end of the period | Estimated disposal expenses | Estimated disposal time |
| Long-term assets held for sale | 337,442,757.28 | 1,380,876,000.00 | 5,608,306.69 | The relocation will be completed in the second half of 2021 |
| Less: Provision for impairment of assets held for sale | - | - | - | |
| Book value | 337,442,757.28 | - | - |
Note: See Note (V) 7.3 (2) for details.
10. Non-current assets due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term receivables due within one year | 74,876,906.59 | 67,760,233.67 |
| Less: Provision for credit loss | 74,876.91 | 67,760.23 |
| Book value | 74,802,029.68 | 67,692,473.44 |
11. Other current assets
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Structural deposits | 455,413,041.12 | 102,749,431.10 |
| Including: Principal | 450,000,000.00 | 100,000,000.00 |
| Interest receivable | 5,413,041.12 | 2,749,431.10 |
| Prepaid taxes | 69,620,382.35 | 47,556,756.97 |
| Others (Note) | 296,908,759.07 | 283,767,897.09 |
| Total | 821,942,182.54 | 434,074,085.16 |
| Less: Provision for credit loss | - | - |
| Book value | 821,942,182.54 | 434,074,085.16 |
Note: Refer to the VAT credits of domestic subsidiaries.
12. Long-term receivables
(1) Details of long-term receivables
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Account balance | Provision for credit loss | Book value | Account balance | Provision for credit loss | Book value | |
| Principal and interest of receivables for cooperation | - | - | - | 286,330,144.62 | 286,330.14 | 286,043,814.48 |
| Advances to shareholders (Note) | 3,635,346,843.54 | 3,635,346.85 | 3,631,711,496.69 | 3,663,271,923.98 | 3,663,271.92 | 3,659,608,652.06 |
| Financing lease deposits | 10,000,000.00 | 10,000.00 | 9,990,000.00 | 10,000,000.00 | 10,000.00 | 9,990,000.00 |
| Total | 3,645,346,843.54 | 3,645,346.85 | 3,641,701,496.69 | 3,959,602,068.60 | 3,959,602.06 | 3,955,642,466.54 |
| Less: Long-term receivables due within 1 year | 74,876,906.59 | 74,876.91 | 74,802,029.68 | 67,760,233.67 | 67,760.23 | 67,692,473.44 |
| Long-term receivables due over 1 year | 3,570,469,936.95 | 3,570,469.94 | 3,566,899,467.01 | 3,891,841,834.93 | 3,891,841.83 | 3,887,949,993.10 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(1) Details of long-term receivables - continued
Note: It refers to the terminal acquisition project funds advanced by the Group to its associate
Terminal Link SAS. As at 31 June 2021, the principal and interest totaledRMB 2,771,361,793.06. See Note (V) 13 for details.
(2) Provision for credit loss on long-term receivables
Unit: RMB
| Item | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit loss in 12 months | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | ||
| Opening balance | 3,959,602.06 | - | - | 3,959,602.06 |
| Carrying amount of long-term receivables at 1 January 2021 | ||||
| -- Transfer to Stage 2 | - | - | - | - |
| -- Transfer to Stage 3 | - | - | - | - |
| -- Reverse to Stage 2 | - | - | - | - |
| -- Reverse to Stage 1 | - | - | - | - |
| Provision for the period | 7,116.69 | - | - | 7,116.69 |
| Reversal for the period | -321,371.90 | - | - | -321,371.90 |
| Transfer-out on derecognition of financial assets(including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| Closing balance | 3,645,346.85 | - | - | 3,645,346.85 |
(3) As at 30 June 2021, there are no long-term receivables derecognized due to the transfer of
financial assets.
(4) There are no assets and liabilities arising from the transfer or continuing involvement of
long-term receivables at 30 June 2021.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments
Unit: RMB
| Investees | Accounting method | Opening balance (Restated) | Changes for the year | Closing balance | Closing value of provision for impairment | |||||||
| Increase | Investment profit or loss under equity method | Reconciling items from other comprehensive income | Other equity movements | Cash dividends or profits announced of issuance | Others | Provision for impairment | Effect of translation of financial statements denominated in foreign currencies | |||||
| I. Joint ventures | ||||||||||||
| Euro-Asia Oceangate S.à r.l. | Equity method | 2,533,296,561.96 | - | 35,657,835.28 | - | - | - | - | - | -16,457,622.51 | 2,552,496,774.73 | - |
| Port of Newcastle | Equity method | 2,149,048,944.67 | - | 4,976,890.86 | - | - | -14,535,702.56 | - | - | -47,195,626.40 | 2,092,294,506.57 | - |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Equity method | 1,507,359,082.53 | - | 30,849,525.86 | - | 2,892,779.72 | - | - | - | - | 1,541,101,388.11 | - |
| Yantai Port Group Laizhou Port Co., Ltd. | Equity method | 782,832,086.50 | - | 16,309,101.16 | - | - | -24,643,441.33 | - | - | - | 774,497,746.33 | - |
| Fujian Zhaohang Logistics Management Partnership (Limited Partnership) ("Zhanhang Logistics") | Equity method | 452,283,105.00 | - | 933,240.00 | - | - | - | - | - | - | 453,216,345.00 | - |
| Others | Equity method | 1,441,507,425.18 | - | 6,310,579.77 | - | 46,231.88 | -5,626,285.18 | - | - | 87,526.04 | 1,442,325,477.69 | - |
| Subtotal | Equity method | 8,866,327,205.84 | - | 95,037,172.93 | - | 2,939,011.60 | -44,805,429.07 | - | - | -63,565,722.87 | 8,855,932,238.43 | - |
| II. Associates | Equity method | |||||||||||
| Shanghai International Port (Group) Co., Ltd. | Equity method | 25,361,783,181.41 | 2,327,928,232.22 | -2,048,420.87 | -55,795,954.31 | -793,927,959.22 | - | - | 128,559.17 | 26,838,067,638.40 | - | |
| Nanshan Group | Equity method | 5,390,946,895.65 | - | 560,718,761.21 | -25,111.72 | -11,872,718.00 | -110,922,285.34 | - | - | - | 5,828,845,541.80 | - |
| Terminal Link SAS (Note 1) | Equity method | 6,803,553,044.91 | 2,114,714.77 | 182,473,114.97 | -68,157,830.91 | -2,261,145.24 | -1,393,859,331.74 | - | - | -235,560,046.61 | 5,288,302,520.15 | - |
| Liaoning Port Co., Ltd. | Equity method | 3,455,964,513.62 | - | 91,600,129.01 | -361,292.97 | 430,925,728.64 | -81,444,346.03 | - | - | 4,629,361.40 | 3,901,314,093.67 | 351,616,807.79 |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | Equity method | 7,176,706,008.55 | - | 108,224,200.00 | - | - | - | - | - | - | 7,284,930,208.55 | - |
| China Merchants Northeast Asia Development Investment Co., Ltd. | Equity method | 1,007,786,285.71 | - | 6,331,456.35 | - | - | - | - | - | - | 1,014,117,742.06 | - |
| Others | Equity method | 8,179,344,087.21 | 207,300,447.62 | 185,046,350.56 | 14,874,835.21 | 40,666.37 | -136,978,096.10 | - | - | -31,862,041.98 | 8,417,766,248.89 | - |
| Subtotal | 57,376,084,017.06 | 209,415,162.39 | 3,462,322,244.32 | -55,717,821.26 | 361,036,577.46 | -2,517,132,018.43 | - | - | -262,664,168.02 | 58,573,343,993.52 | 351,616,807.79 | |
| Total | 66,242,411,222.90 | 209,415,162.39 | 3,557,359,417.25 | -55,717,821.26 | 363,975,589.06 | -2,561,937,447.50 | - | - | -326,229,890.89 | 67,429,276,231.95 | 351,616,807.79 | |
Note 1: As at 25 November 2019, CMPort Co., Ltd. (hereinafter referred to as "CMPort"), a subsidiary of the Company, entered into a comprehensive
Memorandum of Agreement with Terminal Link, an associate of the Company, and CMA CGM S.A., the controlling shareholder of TerminalLink, pursuant to which the CMPort proposes to subscribe for the US$468 million Mandatory Convertible Bonds issued by Terminal LinkSAS, and to grant the US$500 million Loan to Terminal Link SAS to finance its proposed acquisition of 10 terminals. The Group subscribedthe mandatory convertible bonds (equivalent to RMB 2,746,841,398.03) on 26 March 2020, and offered Terminal Link SAS a long-term loanat the interest rate of 6% to support its proposed acquisition of the terminals. As of 30 June 2021, the Company's total principal and interestdue from Terminal Link SAS is equivalent to RMB 2,771,361,793.06.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 73 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Other investments in equity instruments
(1) Details of other investments in equity instruments
Unit: RMB
| Investees | Closing balance | Opening balance |
| China Ocean Shipping Agency (Shenzhen) Co., Ltd. | 144,424,830.00 | 144,424,830.00 |
| Others | 37,592,227.74 | 37,042,227.74 |
| Total | 182,017,057.74 | 181,467,057.74 |
(2) Details of non-trading equity instruments
Unit: RMB
| Item | Dividends income recognized for the year | Accumulated gains/losses | Amounts transferred to retained earnings from other comprehensive income | Why designated as FVTOIC | Why transferred to retained earnings from other comprehensive income |
| China Ocean Shipping Agency (Shenzhen) Co., Ltd. | - | 130,914,830.00 | - | The intention of holding is neither for sale nor profits in short-term | N/A |
| Others | 460,000.00 | 9,749,796.00 | - | The intention of holding is neither for sale nor profits in short-term | N/A |
| Total | 460,000.00 | 140,664,626.00 | - |
15. Other non-current financial assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets at FVTPL | 863,909,085.69 | 910,807,452.56 |
| Including: Investments in equity instruments | 863,909,085.69 | 910,807,452.56 |
| Including: Qingdao Port International Co., Ltd. | 839,486,772.90 | 886,385,139.77 |
| Others | 24,422,312.79 | 24,422,312.79 |
16. Investment properties
(1) Investment properties measured under cost method
Unit: RMB
| Item | Land use rights | Buildings | Total |
| I. Total original carrying amount | |||
| 1. Balance at 1 January 2021 | 105,727,492.82 | 6,278,220,271.05 | 6,383,947,763.87 |
| 2. Increase in the current period | - | 1,301,543.51 | 1,301,543.51 |
| 3. Balance at 30 June 2021 | 105,727,492.82 | 6,279,521,814.56 | 6,385,249,307.38 |
| II. Accumulated depreciation and amortization | |||
| 1. Balance at 1 January 2021 | 33,534,616.24 | 791,657,872.42 | 825,192,488.66 |
| 2. Increase in the current period | 1,141,052.03 | 93,694,376.37 | 94,835,428.40 |
| 3. Balance at 30 June 2021 | 34,675,668.27 | 885,352,248.79 | 920,027,917.06 |
| III. Impairment provision | |||
| 1. Balance at 1 January 2021 | - | - | - |
| 2. Increase in the current period | - | - | - |
| 3. Decrease in the current period | - | - | - |
| 4. Balance at 30 June 2021 | - | - | - |
| IV. Book value | |||
| 1. At 30 June 2021 | 71,051,824.55 | 5,394,169,565.77 | 5,465,221,390.32 |
| 2. At 1 January 2021 | 72,192,876.58 | 5,486,562,398.63 | 5,558,755,275.21 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Investment properties - continued
(2) Investment properties without ownership certificates
Unit: RMB
| Item | Closing balance | Opening balance |
| Buildings and land use rights | 18,481,584.41 | 19,256,400.05 |
17. Fixed assets
17.1 Summary of fixed assets
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Fixed assets | 30,663,383,834.76 | 29,478,004,411.21 |
| Disposal of fixed assets | 1,027,777.17 | 1,750,748.00 |
| Total | 30,664,411,611.93 | 29,479,755,159.21 |
17.2 Fixed assets
(1) Details of fixed assets
Unit: RMB
| Item | Port and terminal facilities | Buildings | Machinery and equipment, furniture and fixture and other equipment | Motor vehicles and cargo ships | Total |
| I. Total original carrying amount | |||||
| 1. Balance at 1 January 2021 (Restated) | 29,858,213,065.80 | 1,847,328,245.18 | 15,259,298,893.86 | 2,133,169,183.60 | 49,098,009,388.44 |
| 2. Increase for the period | 1,119,106,131.48 | 34,529.27 | 922,689,183.47 | 42,212,223.03 | 2,084,042,067.25 |
| (1) Purchase | 7,208,444.44 | 34,529.27 | 46,162,076.39 | 1,603,929.52 | 55,008,979.62 |
| (2) Transfer from construction in progress | 1,111,897,687.04 | - | 876,527,107.08 | 40,608,293.51 | 2,029,033,087.63 |
| 3. Decrease for the period | 52,003,686.97 | - | 128,369,056.74 | 19,861,149.00 | 200,233,892.71 |
| (1) Disposal or retirement | 52,003,686.97 | - | 128,369,056.74 | 19,861,149.00 | 200,233,892.71 |
| 4. Reclassification adjustment | 15,713,152.86 | -14,125,996.90 | -1,587,155.96 | - | - |
| 5. Effect of changes in foreign exchange | 62,874,766.83 | -773,479.99 | -18,033,622.16 | -4,577,767.79 | 39,489,896.89 |
| 6. Closing balance | 31,003,903,430.00 | 1,832,463,297.56 | 16,033,998,242.47 | 2,150,942,489.84 | 51,021,307,459.87 |
| II. Accumulated depreciation | |||||
| 1. Balance at 1 January 2021 (Restated) | 8,832,870,876.12 | 468,211,667.37 | 9,319,665,495.98 | 941,729,519.54 | 19,562,477,559.01 |
| 2. Increase for the period | 452,410,453.01 | 38,568,823.81 | 372,794,122.43 | 50,527,215.20 | 914,300,614.45 |
| (1) Provision | 452,410,453.01 | 38,568,823.81 | 372,794,122.43 | 50,527,215.20 | 914,300,614.45 |
| 3. Decrease for the period | 44,695,567.65 | - | 117,981,301.56 | 17,139,001.83 | 179,815,871.04 |
| (1) Disposal or retirement | 44,695,567.65 | - | 117,981,301.56 | 17,139,001.83 | 179,815,871.04 |
| 4. Reclassification adjustment | 7,053,281.89 | -6,877,372.10 | -175,909.79 | - | - |
| 5. Effect of changes in foreign exchange | 8,041,299.17 | -273,181.04 | -3,197,969.19 | -1,136,244.47 | 3,433,904.47 |
| 6. Closing balance | 9,255,680,342.54 | 499,629,938.04 | 9,571,104,437.87 | 973,981,488.44 | 20,300,396,206.89 |
| III. Impairment provision | |||||
| 1. Balance at 1 January 2021 | 57,419,468.96 | 63,906.47 | 44,042.79 | - | 57,527,418.22 |
| 2. Increase for the period | - | - | - | - | - |
| 3. Decrease for the period | - | - | - | - | - |
| 4. Closing balance | 57,419,468.96 | 63,906.47 | 44,042.79 | - | 57,527,418.22 |
| IV. Book value | |||||
| 1. Closing book value | 21,690,803,618.50 | 1,332,769,453.05 | 6,462,849,761.81 | 1,176,961,001.40 | 30,663,383,834.76 |
| 2. Book value at 1 January 2021 (Restated) | 20,967,922,720.72 | 1,379,052,671.34 | 5,939,589,355.09 | 1,191,439,664.06 | 29,478,004,411.21 |
(2) The Group has no fixed assets that are temporarily idle as at 30 June 2021.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets - continued
(3) Fixed assets leased out under operating leases
Unit: RMB
| Item | Closing carrying amount | Opening carrying amount |
| Buildings | 227,514,640.19 | 291,567,507.17 |
| Port and terminal facilities | 20,157,074.22 | 79,578,478.13 |
| Machinery and equipment, furniture and fixture and other equipment | 6,448,730.20 | 8,646,797.33 |
| Commercial and residential housing | 1,478,120.99 | 4,757,652.18 |
| Total | 255,598,565.60 | 384,550,434.81 |
(4) Fixed assets without ownership certificates
Unit: RMB
| Item | Closing carrying amount | Opening carrying amount |
| Buildings, port and terminal facilities | 1,704,969,754.34 | 1,751,680,587.08 |
(5) Other issues
Unit: RMB
| Item | Closing balance | Remark |
| Cost of fixed assets fully depreciated but still in use as at 30 June 2021 | 4,005,652,647.56 | |
| Cost of fixed assets temporarily idle as at 30 June 2021 | - | |
| Fixed assets disposed and retired for the period: | ||
| Cost of fixed assets disposed and retired | 200,233,892.71 | |
| Net value of fixed assets disposed and retired | 20,418,021.67 | |
| Profit or loss on disposal or retirement of fixed assets | 7,938,502.51 |
17.3 Disposal of fixed assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Machinery and equipment, furniture and fixture and other equipment | 891,665.65 | 1,216,187.48 |
| Motor vehicles and cargo ships | 111,866.95 | 17,000.05 |
| Port and terminal facilities | 24,244.57 | 517,560.47 |
| Total | 1,027,777.17 | 1,750,748.00 |
18. Construction in progress
18.1 Summary of construction in progress
Unit: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 4,062,944,531.95 | 5,366,181,331.72 |
| Materials for construction of fixed assets | 19,865,759.78 | 15,249,274.46 |
| Total | 4,082,810,291.73 | 5,381,430,606.18 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
18.2 Construction in progress
(1) Details of construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Port and terminal facilities | 3,408,458,381.00 | - | 3,408,458,381.00 | 4,662,213,617.98 | - | 4,662,213,617.98 |
| Berths and yards | 253,837,731.30 | - | 253,837,731.30 | 336,353,712.35 | - | 336,353,712.35 |
| Infrastructure | 202,849,501.52 | - | 202,849,501.52 | 197,699,601.64 | - | 197,699,601.64 |
| Ship under construction | 35,875,862.57 | - | 35,875,862.57 | 58,674,526.32 | - | 58,674,526.32 |
| Others | 161,923,055.56 | - | 161,923,055.56 | 111,239,873.43 | - | 111,239,873.43 |
| Total | 4,062,944,531.95 | - | 4,062,944,531.95 | 5,366,181,331.72 | - | 5,366,181,331.72 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
18.2 Construction in progress - continued
(2) The top ten balances of construction in progress
Unit: RMB
| Item | Budget amount | Opening balance | Increase for the period | Transfer to fixed assets | Other decreases for the period | Effect of changes in foreign exchange | Closing balance | Proportion of accumulated construction investment in budget (%) | Construction progress (%) | Amount of accumulated capitalized interest | Including: capitalized interest for the period | Interest capitalization rate for the current period (%) | Capital source |
| Reconstruction project of Berth 1#-4#, Haixing Wharf | 2,315,216,765.16 | 1,544,226,816.60 | 475,615,870.23 | 1,800,807,797.76 | 3,040,699.54 | - | 215,994,189.53 | 87.11 | 87.11 | 66,037,883.84 | 25,219,359.80 | 3.87 | Self-funding and loan |
| Reconstruction project of container, oil terminal and tank area, HIPG | 2,622,414,278.20 | 986,965,991.96 | 1,671,680.20 | - | - | -6,425,952.26 | 982,211,719.90 | 56.19 | 56.19 | 798,733.97 | 264,284.00 | 2.35 | Self-funding and loan |
| Project of Grain Dispatch Warehouse at Berth 2#,3# Phase III , Machong Port | 620,000,000.00 | 487,050,717.25 | 20,596,884.33 | - | - | - | 507,647,601.58 | 81.88 | 81.88 | 5,821,698.43 | 3,268,813.97 | 4.19 | Self-funding and loan |
| Xiashan port general wharf project, Zhanjiang Port | 737,792,300.00 | 464,639,005.10 | 13,731,990.53 | - | - | - | 478,370,995.63 | 64.84 | 64.84 | 21,301,444.40 | 7,282,727.04 | 4.41 | Self-funding and loan |
| Donghaidao port wharf project for bulk grains, Zhanjiang Port | 905,348,400.00 | 366,583,393.31 | 6,108,117.16 | - | - | - | 372,691,510.47 | 41.17 | 41.17 | 37,593,000.95 | 6,108,117.16 | 4.41 | Self-funding and loan |
| Petrifaction old tank area reconstruction, Phase I, Zhanjiang Port | 218,378,500.00 | 182,469,597.24 | 275,922.32 | - | - | - | 182,745,519.56 | 83.68 | 83.68 | 5,024,262.73 | - | - | Self-funding and loan |
| Baoman Port container wharf extension project, Phase I, Zhanjiang Port | 2,342,775,800.00 | 156,012,479.92 | 1,458,658.08 | - | - | - | 157,471,138.00 | 6.72 | 6.72 | 964,740.46 | - | - | Self-funding and loan |
| Baoman stuffing and destuffing service area, Phase I Project, Zhanjiang Port | 606,521,505.83 | 137,075,214.56 | - | - | - | - | 137,075,214.56 | 22.60 | 22.60 | 16,689,500.56 | - | - | Self-funding and loan |
| Guangao starting project, Shantou Port | 120,120,000.00 | 99,337,616.67 | 700,420.39 | 7,766,623.83 | - | - | 92,271,413.23 | 83.28 | 83.28 | - | - | - | Self-funding |
| Reconstruction project of Bulk cargo terminal Yard 16#, Zhanjiang Port | 190,000,000.00 | 68,846,809.70 | 792,954.16 | - | - | - | 69,639,763.86 | 36.65 | 36.65 | 1,091,753.38 | 792,954.16 | 4.41 | Self-funding and loan |
| Total | 10,678,567,549.19 | 4,493,207,642.31 | 520,952,497.40 | 1,808,574,421.59 | 3,040,699.54 | -6,425,952.26 | 3,196,119,066.32 | 155,323,018.72 | 42,936,256.13 |
18.3 Materials for construction of fixed assets
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Materials for construction of fixed assets | 19,865,759.78 | - | 19,865,759.78 | 15,249,274.46 | - | 15,249,274.46 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets
(1) Details of right-of-use assets
Unit: RMB
| Item | Port and terminal facilities | Buildings | Machinery and equipment, furniture and fixture and other equipment | Motor vehicles and cargo ships | Others | Total |
| I. Cost | ||||||
| 1. Balance at 1 January 2021 (Restated) | 6,772,369,651.12 | 161,394,715.13 | 466,008,746.03 | 7,620,740.24 | 2,662,142,323.86 | 10,069,536,176.38 |
| 2. Increase for the period | 1,011,596.29 | 15,605,749.60 | 2,498,995.66 | - | 496,541.00 | 19,612,882.55 |
| (1) Purchase | 1,011,596.29 | 15,605,749.60 | 2,498,995.66 | - | 496,541.00 | 19,612,882.55 |
| 3. Decrease for the period | - | 790,335.73 | 1,112,176.23 | - | 5,875,368.95 | 7,777,880.91 |
| (1) Termination of lease | - | 790,335.73 | 1,112,176.23 | - | 5,875,368.95 | 7,777,880.91 |
| 4. Effect of changes in foreign exchange | -35,642,868.79 | -988,717.80 | 209,513.70 | - | -17,183,063.80 | -53,605,136.69 |
| 5. Balance at 30 June 2021 | 6,737,738,378.62 | 175,221,411.20 | 467,605,079.16 | 7,620,740.24 | 2,639,580,432.11 | 10,027,766,041.33 |
| II. Accumulated depreciation | ||||||
| 1. Balance at 1 January 2021 (Restated) | 588,760,107.94 | 30,621,557.69 | 109,303,923.22 | 3,743,305.60 | 249,365,468.99 | 981,794,363.44 |
| 2. Increase for the period | 118,847,081.95 | 9,919,043.59 | 16,141,188.11 | 802,075.20 | 20,818,094.41 | 166,527,483.26 |
| (1) Provision | 118,847,081.95 | 9,919,043.59 | 16,141,188.11 | 802,075.20 | 20,818,094.41 | 166,527,483.26 |
| 3. Decrease for the period | - | 782,821.60 | 1,112,176.23 | - | 5,875,368.95 | 7,770,366.78 |
| (1) Termination of lease | - | 782,821.60 | 1,112,176.23 | - | 5,875,368.95 | 7,770,366.78 |
| 4 Effect of changes in foreign exchange | -1,783,727.14 | -118,239.26 | 192,602.23 | - | -1,472,753.85 | -3,182,118.02 |
| 5. Closing balance | 705,823,462.75 | 39,639,540.42 | 124,525,537.33 | 4,545,380.80 | 262,835,440.60 | 1,137,369,361.90 |
| III. Impairment provision | ||||||
| 1. Balance at 1 January 2021 | - | - | - | - | - | - |
| 2. Increase for the period | - | - | - | - | - | - |
| 3. Decrease for the period | - | - | - | - | - | - |
| 4. Balance at 30 June 2021 | - | - | - | - | - | - |
| IV. Book value | ||||||
| 1. Book value at 30 June 2021 | 6,031,914,915.87 | 135,581,870.78 | 343,079,541.83 | 3,075,359.44 | 2,376,744,991.51 | 8,890,396,679.43 |
| 2. Book value at 1 January 2021 (Restated) | 6,183,609,543.18 | 130,773,157.44 | 356,704,822.81 | 3,877,434.64 | 2,412,776,854.87 | 9,087,741,812.94 |
(2) Amount recognized in profit or loss
Unit: RMB
| Category | Amount incurred in the current period |
| Depreciation expenses of right-of-use assets (Note 1) | 166,527,483.26 |
| Interest expenses on lease liabilities (Note 2) | 41,716,504.99 |
| Expenses for short-term leases | 26,645,495.07 |
| Expenses for leases of low value assets | 380,593.33 |
| Variable lease payments not included in the measurement of lease liabilities (Note 3) | - |
| Revenue from sublease of right-of-use assets | 9,959,795.19 |
Note 1:No depreciation expenses of right-of-use assets are capitalized in the period from 1 January
to 30 June 2021.
Note 2: No interest expenses of lease liabilities are capitalized in the period from 1 January to 30
June 2021.
Note 3: No variable lease payments were included in the measurement of lease liabilities in the
period from 1 January to 30 June 2021.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets - continued
(3) The total cash outflows in relation to leases for the period from 1 January to 30 June 2021
amounting to RMB 163,769,387.34.
(4) Lease assets of the Group with the lease term as follows:
| Category | Lease term |
| Port and terminal facilities | 1-99 years |
| Buildings | 1-5 years |
| Machinery and equipment, furniture and fixture and other equipment | 1-6 years |
| Motor vehicles and cargo ships | 5 years |
| Others | 1-35 years |
(5) As at 30 June 2021, the Group's port and terminal facilities and machinery and equipment
and vessels amounting to RMB 1,006,264,593.38 are subject to a purchase option at the endof the renewal lease at a price below the market price.
20. Intangible assets
(1) Details of intangible assets
Unit: RMB
| Items | Land use rights (Note 1) | Terminal management rights | Others | Total |
| I. Total original carrying amount | ||||
| 1. Balance at 1 January 2021 (Restated) | 13,925,403,678.69 | 8,996,212,561.23 | 1,123,714,042.87 | 24,045,330,282.79 |
| 2. Increase for the year | 324,710.39 | 17,000,554.83 | 15,059,741.62 | 32,385,006.84 |
| (1) Purchase | - | 17,000,554.83 | 12,019,042.08 | 29,019,596.91 |
| (2) Other increase | 324,710.39 | - | 3,040,699.54 | 3,365,409.93 |
| 3. Decrease for the period | 9,813,069.25 | - | 402,167.37 | 10,215,236.62 |
| (1) Disposal | 9,813,069.25 | - | 402,167.37 | 10,215,236.62 |
| 4. Effect of changes in foreign exchange | 267,799.32 | 8,103,283.29 | 20,371,745.93 | 28,742,828.54 |
| 5. Balance at 30 June 2021 | 13,916,183,119.15 | 9,021,316,399.35 | 1,158,743,363.05 | 24,096,242,881.55 |
| II. Accumulated depreciation | ||||
| 1. Balance at 1 January 2021 (Restated) | 3,399,466,693.48 | 1,444,000,560.60 | 429,682,486.61 | 5,273,149,740.69 |
| 2. Increase for the year | 161,360,563.78 | 111,569,935.99 | 30,682,691.23 | 303,613,191.00 |
| (1) Provision | 161,360,563.78 | 111,569,935.99 | 30,682,691.23 | 303,613,191.00 |
| 3. Decrease for the period | 1,400,681.08 | - | 11,171.28 | 1,411,852.36 |
| (1) Disposal | 1,400,681.08 | - | 11,171.28 | 1,411,852.36 |
| 4. Effect of changes in foreign exchange | 214,583.93 | 8,028,047.76 | 4,603,829.41 | 12,846,461.10 |
| 5. Balance at 30 June 2021 | 3,559,641,160.11 | 1,563,598,544.35 | 464,957,835.97 | 5,588,197,540.43 |
| III. Impairment provision | ||||
| 1. Balance at 1 January 2021 | - | - | - | - |
| 2. Increase for the period | - | - | - | - |
| 3. Decrease for the period | - | - | - | - |
| 4. Balance at 30 June 2021 | - | - | - | - |
| IV. Book value | ||||
| 1. Book value at 30 June 2021 | 10,356,541,959.04 | 7,457,717,855.00 | 693,785,527.08 | 18,508,045,341.12 |
| 2. Book value at 1 January 2021 (Restated) | 10,525,936,985.21 | 7,552,212,000.63 | 694,031,556.26 | 18,772,180,542.10 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets - continued
(1) Details of intangible assets - continued
Note 1:The Group has obtained the land use right of 1,049,946.00 square meters of berths and
storage yards in Chiwan Port Area from Nanshan Group (These plots are included withinthe Chiwan watershed, including the 2.2 square kilometers invested by the shareholder ofNanshan Group—Shenzhen Investment Holding Co., Ltd. and the plots formed from landreclamation by Nanshan Group). The cost was RMB 1,400,288,984.00, with a useful life of20 to 50 years. Among the plots, the land use right with an area of 270,692.00 square meters(the cost was RMB122,623,476.00) was invested by Nanshan Group upon restructuring ofthe Company, and the remaining land use rights were obtained by the Group from NanshanGroup in the form of long-term lease.
At present, since Nanshan Group has not obtained the land use right of the land within theChiwan watershed, including the land leased to the Group as capital investment mentionedabove, the Group is unable to obtain the property right certificate of relevant land andbuildings built on the aforesaid land.
On 20 March 2001, 18 June 2003, 29 September 2004 and 2 July 2020, Nanshan Groupmade a commitment to all the land use rights obtained by the Group as of that date: NanshanGroup will irrevocably and unconditionally agree that such land use rights are attributed tothe Group. Nanshan Group guarantees that the assignees of such land use rights and theirsuccessors and their assignees are fully indemnified against any loss, costs and liabilities,claims or legal proceedings arising out of or in connection with any actual or potentialillegality and unenforceability of the land use agreements and related documents executedby the Group and hereafter to be executed by the Group. Accordingly, the management ofthe Company considers that the relevant assets will not have any significant impairment riskdue to the failure to obtain the relevant land use certificate, and the Group will not have anysignificant contingent liabilities arising therefrom.
The management of the Company understands that Nanshan Group is actively negotiatingwith relevant government departments about the land issues left over from the past, but it isimpossible to reliably estimate the date when the Group can obtain the property rightcertificate of relevant land and the buildings thereon.
As at 30 June 2021, the lease agreement on the land use right of 194,293.90 square metersof the above land with the cost of RMB 137,749,984.16 has expired.
(2) Land use rights without ownership certificates on 30 June 2021:
Unit: RMB
| Item | Closing carrying amount | Opening carrying amount |
| Land use rights | 1,033,428,561.05 | 1,051,555,795.12 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Development expenditure
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | |||
| Transfer to intangible assets | Transfer to construction in progress | Transfer to fixed assets | Transfer to profit or loss for the period | ||||
| CTOS upgrading | - | 22,228,037.18 | - | - | - | 22,228,037.18 | - |
| Research and development of quay crane auxiliary production monitoring | - | 15,857,995.47 | - | - | - | 15,857,995.47 | - |
| Research and development of intelligent gate entry system | - | 6,281,699.80 | - | - | - | 6,281,699.80 | - |
| Integrated ICT solution for China Merchants smart container terminal | - | 6,233,232.01 | - | - | - | 6,233,232.01 | - |
| Development and application of automatic control system for heavy oil, diesel, gasoline and methanol process | 19,689,935.13 | 6,095,701.06 | - | - | - | - | 25,785,636.19 |
| Research and development of automatic box grasping and placing system in remote RTG box area based on vision technology | - | 3,283,319.72 | - | - | - | 3,283,319.72 | - |
| Research and development of crane remote monitoring and management system based on fieldbus and real-time Ethernet communication technology | - | 2,597,904.63 | - | - | - | 2,597,904.63 | - |
| Customized development of block chain customs clearance project in Dawan District | - | 2,532,946.93 | - | - | - | 2,532,946.93 | - |
| Research and development of intelligent tally system based on many to many operation and multi engine recognition pattern | - | 2,344,425.68 | - | - | - | 2,344,425.68 | - |
| Crude oil unit train loading equipment key technology research | 20,656,125.15 | 1,218,823.23 | - | - | - | - | 21,874,948.38 |
| Others | 23,891,674.95 | 48,844,213.07 | - | - | - | 36,984,849.83 | 35,751,038.19 |
| Total | 64,237,735.23 | 117,518,298.78 | - | - | - | 98,344,411.25 | 83,411,622.76 |
22. Goodwill
(1) Original value of goodwill
Unit: RMB
| Investee | Opening balance | Increase | Decrease | Effect of changes in foreign exchange | Closing balance |
| TCP Participa??es S.A. ("TCP") | 2,562,567,253.74 | - | - | 126,201,691.77 | 2,688,768,945.51 |
| Mega Shekou Container Terminals Limited | 1,815,509,322.42 | - | - | - | 1,815,509,322.42 |
| CMPort | 993,992,000.00 | - | - | - | 993,992,000.00 |
| Shantou Port | 552,317,736.65 | - | - | - | 552,317,736.65 |
| Zhanjiang Port (Group) Co., Ltd. ("Zhanjiang Port") | 418,345,307.68 | - | - | - | 418,345,307.68 |
| Shenzhen Mawan Project | 408,773,001.00 | - | - | - | 408,773,001.00 |
| Ningbo Daxie China Merchants International Terminals Company Limited ("Ningbo Daxie") | 188,497,194.41 | - | - | - | 188,497,194.41 |
| Others | 288,255,850.88 | - | - | - | 288,255,850.88 |
| Total | 7,228,257,666.78 | - | - | 126,201,691.77 | 7,354,459,358.55 |
(2) Provision for impairment of goodwill
| Investee | Opening balance | Increase | Decrease | Effect of changes in foreign exchange | Closing balance |
| Shantou Port | 552,317,736.65 | - | - | - | 552,317,736.65 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Long-term prepaid expenses
Unit: RMB
| Item | Opening balance (Restated) | Increase in the current period | Amortization in the current period | Other changes | Closing balance |
| Tonggu channel widening project (Note 1) | 491,846,986.99 | - | 9,317,926.36 | - | 482,529,060.63 |
| West port area public channel widening project (Note 2) | 249,214,515.10 | - | 3,167,126.46 | - | 246,047,388.64 |
| Relocation project of Nanhai Rescue Bureau | 39,768,848.30 | - | 553,684.20 | - | 39,215,164.10 |
| Expenditures for the improvement of leasedfixed assets | 17,479,223.03 | - | 657,165.60 | - | 16,822,057.43 |
| Others | 76,690,162.49 | 14,313,122.72 | 9,772,988.27 | - | 81,230,296.94 |
| Total | 874,999,735.91 | 14,313,122.72 | 23,468,890.89 | - | 865,843,967.74 |
Note 1: This represent the Group's actual expenses on the Shenzhen West Port Area Tonggu
Channel 210-270 Meters Widening Project. According to relevant resolutions of Shenzhenmunicipal government, the expenses incurred for the 210-240 Meters Widening Projectare born by the enterprise and government on 60% to 40% principle, and the 240-270Meters Widening Project are born by the enterprise and government on 50% to 50%principle. The Company's subsidiary has included the expenses on deepening the channelin the item of "long-term prepaid expenses", and amortized such expenses over theexpected useful life of 35 or 40 years using straight-line method since the completion ofthe two widening projects in 2008 and 2019, respectively.
Note 2: This represent the Group's actual expenses on the Shenzhen Western Port Area Public
Channel Widening Project, of which the widening of 240-270 meters in the first sectionwas completed on 1 June 2019 and the widening of 240-270 meters in the second and thirdsections was completed on 5 November 2020. According to relevant resolutions ofShenzhen Municipal Government, the expenses incurred for the project are born by theenterprise and government on 50% to 50% principle. The Company's subsidiary hasincluded the expenses on deepening the channel in the item of "long-term prepaidexpenses", and amortized such expenses over the expected useful life of 40 years usingstraight-line method since the completion of each section of the channel widening project.
24. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Unit: RMB
| Item | Closing balance | Opening balance(restated) | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Unrealized profit | 779,690,982.52 | 190,320,514.68 | 782,637,004.71 | 190,978,844.60 |
| Depreciation of fixed assets | 121,310,030.64 | 28,712,287.01 | 121,474,197.24 | 30,363,658.82 |
| Deductible losses | 572,737,154.46 | 189,371,992.77 | 375,133,696.59 | 121,834,055.80 |
| Provision for credit loss | 44,383,253.14 | 11,664,894.56 | 44,716,751.81 | 11,155,565.87 |
| Provisions | 91,170,414.60 | 24,817,367.97 | 83,415,919.34 | 22,408,962.33 |
| Deferred income | 36,918,962.56 | 8,713,485.37 | 40,760,480.40 | 9,289,713.04 |
| Amortization of computer | 11,007,022.11 | 2,751,755.53 | 11,007,022.11 | 2,751,755.53 |
| Organization costs | 8,436,714.76 | 2,109,178.68 | 8,436,714.76 | 2,109,178.68 |
| Provision for impairment losses of assets | 4,012,361.15 | 1,003,090.29 | 884,061.15 | 221,015.29 |
| Others | 120,673,655.70 | 30,927,823.04 | 121,790,935.17 | 29,744,326.80 |
| Total | 1,790,340,551.64 | 490,392,389.90 | 1,590,256,783.28 | 420,857,076.76 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred tax assets and deferred tax liabilities - continued
(2) Deferred tax liabilities without offsetting
Unit: RMB
| Item | Closing balance | Opening balance (restated) | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Withholding dividend income tax | 30,831,586,676.38 | 2,098,951,939.51 | 28,188,540,389.01 | 1,925,457,143.90 |
| Fair value adjustment of assets acquired by business combination | 8,370,676,375.40 | 1,895,744,093.18 | 8,566,522,113.13 | 1,925,197,755.69 |
| Changes in fair value of other non-current financial assets | 1,596,786,871.29 | 218,756,520.99 | 1,625,996,080.95 | 225,877,441.96 |
| Depreciation of fixed assets | 850,552,596.25 | 226,633,992.82 | 826,231,081.71 | 217,461,491.73 |
| Changes in fair value of other equity investments | 115,753,452.78 | 32,705,069.78 | 140,581,630.00 | 35,145,407.50 |
| Others | 87,476,715.26 | 18,481,632.72 | 87,206,887.29 | 18,413,901.95 |
| Total | 41,852,832,687.36 | 4,491,273,249.00 | 39,435,078,182.09 | 4,347,553,142.73 |
(3) Deferred tax assets or liabilities presented at the net amount after offsetting
Unit: RMB
| Item | Offset amount of deferred tax assets and liabilities in the current period | Deferred tax assets or liabilities after offsetting in the current period | Offset amount of deferred tax assets and liabilities in the prior period | Deferred tax assets or liabilities after offsetting in the prior period (restated) |
| Deferred tax assets | - | 490,392,389.90 | - | 420,857,076.76 |
| Deferred tax liabilities | - | 4,491,273,249.00 | - | 4,347,553,142.73 |
(4) Details of unrecognized deferred tax assets
Unit: RMB
| Item | Closing balance | Opening balance(restated) |
| Deductible temporary differences | 470,699,766.13 | 428,572,235.55 |
| Deductible losses | 2,327,577,006.82 | 2,518,481,088.94 |
| Total | 2,798,276,772.95 | 2,947,053,324.49 |
The Group recognizes deferred income tax assets to the extent of future taxable income that is likelyto be obtained to offset the deductible temporary differences and deductible losses. For the excessof deductible temporary differences and deductible losses over future taxable income, no deferredtax assets is recognized.
(5) Deductible losses for unrecognized deferred tax assets will be expired in the following years:
Unit: RMB
| Year | Closing balance | Opening balance |
| 2021 | 69,294,264.10 | 244,394,853.17 |
| 2022 | 601,982,775.30 | 630,217,470.89 |
| 2023 | 787,117,391.41 | 793,817,471.49 |
| 2024 | 506,944,165.04 | 508,391,813.28 |
| 2025 | 338,117,516.17 | 341,622,332.73 |
| 2026 | 23,382,229.62 | - |
| No expiration date | 738,665.18 | 37,147.38 |
| Total | 2,327,577,006.82 | 2,518,481,088.94 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Other non-current assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Dachanwan port area Phase II land replacement payment (Note 1) | 916,884,222.49 | 916,884,222.49 |
| Advances of channel project (Note 2) | 954,021,599.64 | 940,472,488.75 |
| Prepayments of land use rights | 132,410,404.86 | 132,334,704.86 |
| Prepayments of fixed assets | 56,867,265.58 | 32,623,333.85 |
| Prepayments of terminal franchise | 30,060,781.71 | 31,113,113.10 |
| Others | 75,654,020.00 | 85,040,820.59 |
| Total | 2,165,898,294.28 | 2,138,468,683.64 |
Note 1: Primarily the lands located in Shenzhen Qianhaiwan Logistics Park has been returned to
government in 2019 by the Company's subsidiaries Antongjie Terminal Services (Shenzhen)Co., Ltd. ("ATJ") and Ansujie Terminal Services (Shenzhen) Co., Ltd., in which QianhaiAdministration replaced 55% of the total land area of T102-0166 and T102-0167 held byATJ and ASJ and the corresponding shoreline (the land area is approximately 531,300square meters) to the Phase II of Dachan Bay Port Area. As of 30 June 2021, the changeprocedures for the land use right of Phase II of Dachan Bay Port have not yet been completed.
Note 2: This represent that the Company's subsidiary Zhanjiang Port, upon its reorganization into a
joint stock company in 2007, signed the Channel Arrangement Agreement with State-ownedAssets Supervision and Administration Commission of Zhanjiang ("Zhanjiang SASAC")and China Merchants International Terminal (Zhanjiang) Co., Ltd. According to theagreement, the channel belongs to Zhanjiang SASAC, therefore the Company included theadvances of channel project that should be repaid by Zhanjiang SASAC in other non-currentassets.
26. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Credit loan | 3,411,832,103.87 | 8,976,788,882.26 |
| Guaranteed loan (Note) | 1,506,877,500.00 | 1,506,986,666.67 |
| Total | 4,918,709,603.87 | 10,483,775,548.93 |
Note: The loan is guaranteed by the Company.
(2) At 30 June 2021, the Group has no short-term borrowings that were overdue.
27. Notes payable
Unit: RMB
| Category | Closing balance | Opening balance |
| Bank acceptance | 3,071,689.38 | 1,600,100.00 |
| Commercial acceptance | 7,384,712.19 | 5,481,672.32 |
| Total | 10,456,401.57 | 7,081,772.32 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28. Accounts payable
(1) Details of accounts payable are as follows:
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Service fee | 248,936,293.62 | 146,212,519.71 |
| Construction fee | 100,743,629.49 | 117,439,992.70 |
| Material purchase | 172,352,075.72 | 144,294,086.08 |
| Rental fee | 14,113,730.16 | 7,494,989.48 |
| Equipment payments | 19,673,881.49 | 20,712,191.08 |
| Others | 189,421,526.24 | 171,818,920.54 |
| Total | 745,241,136.72 | 607,972,699.59 |
(2) Significant accounts payable aged more than one year
Unit: RMB
| Item | Amount | Reason for outstanding |
| Shenzhen Municipal Bureau of Land and Resources | 21,642,795.50 | The government planning project has not been completed, and the certificates of property rights has not been processed. |
29. Receipts in advance
(1) Summary of receipts in advance
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Administrative fee receipt in advance | 11,822,984.86 | 10,350,161.96 |
| Rental fee receipt in advance | 1,926,687.04 | 2,715,835.65 |
| Equity transfer payment receipt in advance | - | 20,492,849.00 |
| Ship transfer payment receipt in advance | - | 3,450,560.00 |
| Others | 6,843,103.14 | 2,500,721.29 |
| Total | 20,592,775.04 | 39,510,127.90 |
(2) There is no significant receipts in advance aged more than one year at 30 June 2021,
30. Contract liabilities
(1) Summary of contract liabilities
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Port charges received in advance | 101,290,640.18 | 78,789,466.29 |
| Warehousing fee received in advance | 10,605,233.98 | 18,460,680.90 |
| Service fee received in advance | 51,091,543.88 | 49,782,911.22 |
| Others | 25,334,845.70 | 10,409,051.26 |
| Total | 188,322,263.74 | 157,442,109.67 |
(2) There is no significant change in the book value of contract liabilities in the current period.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Contract liabilities - continued
(3) There is no significant contract liabilities aged more than one year at the end of the period.
(4) Qualitative and quantitative analysis of contract liabilities
The contract liability mainly represents the amount received by the Group to provide portservices to customers. The payment is collected according to the contractual payment time.The Group recognizes contract revenue based on the progress of the contract. The contractliabilities will be recognized as income after the Group fulfills its performance obligations.
(5) Revenue recognized in the current period and included in the opening carrying amount of
contract liabilities
An amount of RMB 128,507,666.65 included in the book value of contract liabilities at thebeginning of 2021 has been recognized as revenue in the current period, including contractliabilities arising from settled but unfinished construction resulting from the contract ofreceipt of port charges in advance amounting to RMB 75,071,420.10, contract liabilitiesarising from settled but unfinished construction resulting from the contract of receipt ofservice fee in advance amounting to RMB 41,265,052.90, contract liabilities arising fromsettled but unfinished construction resulting from the other contracts in advance amountingto RMB 10,770,493.42 as well as contract liabilities arising from settled but unfinishedconstruction resulting from other contracts amounting to RMB 1,400,700.23.
31. Employee benefits payable
(1) Details of employee benefits payable are as follows
Unit: RMB
| Item | Opening balance (Restated) | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Short-term benefits | 721,298,746.97 | 1,514,037,351.27 | 1,577,859,716.50 | 657,476,381.74 |
| 2. Post-employment benefits - defined contribution plan | 6,217,684.84 | 149,016,929.25 | 147,057,080.31 | 8,177,533.78 |
| 3. Termination benefits | - | 3,294,150.13 | 3,294,150.13 | - |
| 4. Other benefits due within one year | - | 1,887,726.57 | 1,887,726.57 | - |
| 5. Others | -619,306.39 | 3,579,963.29 | 3,009,714.42 | -49,057.52 |
| Total | 726,897,125.42 | 1,671,816,120.51 | 1,733,108,387.93 | 665,604,858.00 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Employee benefits payable - continued
(2) Short-term benefits
Unit: RMB
| Item | Opening balance (Restated) | Increase in the current period | Decrease in the current period | Closing balance |
| I. Wages and salaries, bonuses, allowances and subsidies | 688,968,854.26 | 1,267,933,479.70 | 1,336,413,637.85 | 620,488,696.11 |
| II. Staff welfare | - | 56,281,483.93 | 53,860,289.30 | 2,421,194.63 |
| III. Social insurance charges | 16,094,126.74 | 75,148,996.45 | 73,410,034.22 | 17,833,088.97 |
| Including: Medical insurance | 14,865,150.41 | 61,270,708.40 | 59,733,267.04 | 16,402,591.77 |
| Work injury insurance | 6,258.14 | 6,264,226.00 | 6,220,517.02 | 49,967.12 |
| Maternity insurance | 30,801.59 | 3,993,677.27 | 3,984,217.91 | 40,260.95 |
| Others | 1,191,916.60 | 3,620,384.78 | 3,472,032.25 | 1,340,269.13 |
| IV. Housing funds | -490,321.89 | 88,201,016.89 | 87,804,379.22 | -93,684.22 |
| V. Labor union and employee education funds | 16,726,087.86 | 22,391,926.44 | 22,290,928.05 | 16,827,086.25 |
| VI. Other short-term benefits | - | 4,080,447.86 | 4,080,447.86 | - |
| Total | 721,298,746.97 | 1,514,037,351.27 | 1,577,859,716.50 | 657,476,381.74 |
(3) Defined contribution plan
Unit: RMB
| Item | Opening balance (Restated) | Increase in the current period | Decrease in the current period | Closing balance |
| I. Basic pension | 6,112,958.64 | 113,229,739.45 | 111,413,897.60 | 7,928,800.49 |
| II. Unemployment insurance | 64,028.24 | 1,914,909.47 | 1,908,541.53 | 70,396.18 |
| III. Enterprise annuity plan | 40,697.96 | 33,872,280.33 | 33,734,641.18 | 178,337.11 |
| Total | 6,217,684.84 | 149,016,929.25 | 147,057,080.31 | 8,177,533.78 |
The Company and its subsidiaries participates in the social security contributions and theunemployment insurance plan established by government institutions as required. According tosuch plans, the Group contributes in proportion to the local government. Except for the above-mentioned deposit fees, the Group have no outstanding contributions to be paid to the social securitycontributions and the unemployment insurance plan. The corresponding expenses are included inthe current profit and loss or the cost of related assets when incurred.
32. Taxes payable
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Enterprise income tax | 2,202,241,094.68 | 2,320,197,283.53 |
| VAT | 20,811,984.10 | 13,239,447.16 |
| Others | 82,097,323.59 | 36,821,959.30 |
| Total | 2,305,150,402.37 | 2,370,258,689.99 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables
(1) Summary of other payables
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Dividends payable | 1,782,621,471.55 | 70,388,849.49 |
| Other payables | 2,083,558,339.76 | 2,410,828,718.91 |
| Total | 3,866,179,811.31 | 2,481,217,568.40 |
(2) Dividends payable
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Ordinary share dividends | 1,782,621,471.55 | 70,388,849.49 |
| Including: External entities (Public minority shareholders/Public Hong Kong shares) | 546,522,246.55 | - |
| China Merchants Port Investment Development Co., Ltd. | 436,486,486.24 | - |
| China Merchants Union Development Co., Ltd. | 348,500,295.23 | - |
| China Merchants Gangtong Development (Shenzhen) Co., Ltd. | 140,933,640.00 | - |
| Economic and Trade Guande Development Co., Ltd. | 75,608,046.12 | - |
| Public A shares | 60,075,288.32 | - |
| Public B shares | 47,340,864.36 | - |
| Sri Lanka Ports Authority | 34,032,542.04 | 34,255,854.79 |
| Shenzhen Infrastructure Investment Fund Partnership (LLP) | 24,643,069.16 | - |
| Broadford Global Limited | 21,019,399.04 | - |
| China Merchants Zhangzhou Development Zone Co., Ltd. | 20,000,000.00 | 20,000,000.00 |
| Dalian Port Container Development Co., Ltd. ("Dalian Port Container") | 12,160,517.31 | 12,160,517.31 |
| Sinotrans Shipping Co., Ltd. | 10,049,355.79 | - |
| Dalian Port Centralized Logistics Co., Ltd. ("Centralized Logistics") | 3,972,477.39 | 3,972,477.39 |
| Orienture Holdings Company Limited | 1,277,244.00 | - |
As at 30 June 2021, the dividend payable aged over one year amounts to RMB 16,132,994.70,representing the dividends not yet received by the investor.
(3) Other payables
(a) Disclosure of other payables by nature
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Amount payable for construction and quality warranty | 846,691,892.68 | 1,044,821,435.49 |
| Deposits | 438,293,530.71 | 360,604,022.08 |
| Customer discount | 107,997,934.21 | 119,368,121.44 |
| Accrued expenses | 187,582,826.10 | 229,820,205.45 |
| Port construction and security fee | 55,473,279.54 | 55,085,280.96 |
| Balance of land use rights transfer | 11,295,700.00 | 11,295,700.00 |
| Others | 436,223,176.52 | 589,833,953.49 |
| Total | 2,083,558,339.76 | 2,410,828,718.91 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(3) Other payables - continued
(b) Significant other payables with aging over 1 year
Unit: RMB
| Company name | Closing balance | Reason for being outstanding or carried forward |
| Shenzhen Transportation Committee | 65,157,128.97 | To be paid after confirmation by mutual parties |
| Wuxi HDHM Co., Ltd. | 44,295,045.47 | To be paid after confirmation by mutual parties |
| Shanghai Zhenhua Heavy Industries Co., Ltd. | 33,244,983.56 | To be paid after confirmation by mutual parties |
| China First Metallurgical Group Co., Ltd. | 31,590,351.07 | The contracted settlement condition has not been reached |
| Shantou Transportation Bureau | 31,358,355.47 | To be paid after confirmation by mutual parties |
| Guangdong Jiaye Reserve Logistics Co., Ltd. | 25,000,000.00 | The contracted settlement condition has not been reached |
| CCCC-FHDI Engineering Co., Ltd. | 21,878,790.74 | The contracted settlement condition has not been reached |
| Qingdao Maritime Bureau | 20,713,982.12 | To be paid after confirmation by mutual parties |
| Zhanjiang Transportation Bureau | 19,643,770.17 | To be paid after confirmation by mutual parties |
| Shantou Finance Bureau | 10,000,000.00 | To be paid after confirmation by mutual parties |
| Harman Technology (Shenzhen) Co., Ltd. | 5,917,392.48 | The contracted settlement condition has not been reached |
| CCCC Fourth Harbor Engineering Co., Ltd. | 5,711,128.84 | The contracted settlement condition has not been reached |
| Total | 314,510,928.89 |
34. Non-current liabilities due within one year
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Long-term loans due within one year | 1,411,312,342.09 | 2,074,906,728.26 |
| Including: Credit loan | 476,229,413.83 | 749,046,479.86 |
| Guaranteed loan | 315,299,410.01 | 739,805,701.02 |
| Mortgage loan | 619,783,518.25 | 586,054,547.38 |
| Bonds payable due within one year | 6,836,936,147.15 | 1,042,773,072.37 |
| Long-term payable due within one year | 69,078,497.48 | 3,562,994.44 |
| Long-term employee benefits payable due within one year | 36,811,951.00 | 36,811,951.00 |
| Lease liabilities due within one year | 299,138,901.13 | 322,950,258.37 |
| Other non-current liabilities due within one year | 90,413,566.88 | 83,582,696.63 |
| Total | 8,743,691,405.73 | 3,564,587,701.07 |
35. Other current liabilities
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Short-term bonds payable | 2,009,274,534.10 | 2,215,478,001.40 |
| Accrued professional agency fee | 125,942,529.78 | 138,158,158.51 |
| Others | 30,300,767.36 | 30,032,826.03 |
| Total | 2,165,517,831.24 | 2,383,668,985.94 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Other current liabilities - continued
Changes of short-term bonds payable:
Unit: RMB
| Name of bond | Face value | Date of issue | Term of the bond | Amount of issue | Opening balance | Amount issued in the current period | Interest accrued based on par value | Discount or premium amortization | Repayment in the current period | Closing balance |
| 1.99% RMB1 billion, Super & Short-term Commercial Paper | 1,000,000,000.00 | 2020-06-05 | 270 days | 1,000,000,000.00 | 1,011,418,032.80 | - | 3,302,515.17 | - | 1,014,720,547.97 | - |
| 2.5% RMB1.2 billion Super & Short-term \ Commercial Paper | 1,200,000,000.00 | 2020-11-13 | 180 days | 1,200,000,000.00 | 1,204,059,968.60 | - | 11,340,579.32 | - | 1,215,400,547.92 | - |
| 2.30% RMB 800 million Super & Short-term Commercial Paper | 800,000,000.00 | 2021-01-22 | 90 days | 800,000,000.00 | - | 800,000,000.00 | 4,593,698.63 | - | 804,593,698.63 | - |
| 2.73% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2021-03-22 | 180 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 7,581,054.65 | - | - | 1,007,581,054.65 |
| 2.55% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2021-06-07 | 180 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 1,693,479.45 | - | - | 1,001,693,479.45 |
| Total | 5,000,000,000.00 | 5,000,000,000.00 | 2,215,478,001.40 | 2,800,000,000.00 | 28,511,327.22 | - | 3,034,714,794.52 | 2,009,274,534.10 |
36. Long-term borrowings
(1) Classification of long-term borrowings
Unit: RMB
| Item | Closing balance | Opening balance |
| Credit borrowings | 5,232,812,170.21 | 5,258,127,800.87 |
| Guaranteed borrowings (Note 1) | 1,097,904,954.91 | 1,629,960,889.64 |
| Mortgage borrowings (Note 2) | 2,415,373,499.85 | 2,593,140,731.56 |
| Total | 8,746,090,624.97 | 9,481,229,422.07 |
| Less: Long-term borrowings due within one year | 1,411,312,342.09 | 2,074,906,728.26 |
| Including: Credit borrowings | 476,229,413.83 | 749,046,479.86 |
| Guaranteed borrowings | 315,299,410.01 | 739,805,701.02 |
| Mortgage borrowings | 619,783,518.25 | 586,054,547.38 |
| Long-term borrowings due after one year | 7,334,778,282.88 | 7,406,322,693.81 |
During the period, the annual interest rate of the borrowing ranges from 1.20% to 5.78%.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Long-term borrowings - continued
(1) Classification of long-term borrowings - continued
Note 1: The loan was guaranteed by Shenzhen Magang Cangma Co., Ltd, China Merchants Port
Services (Shenzhen) Co., Ltd, CMPort.
Note 2: As at 30 June 2021, the Group obtained the long-term loan of RMB 2,415,373,499.85 (31
December 2020: RMB 2,593,140,731.56) with its entire equity in Colombo InternationalContainer Terminals Limited (hereinafter referred to as "CICT"), and the entire equity inThesar Maritime Limited (hereinafter referred to as "TML"),, and the land use right, fixedassets and construction in progress held by Guangdong Yide Port Co., Ltd. (hereinafterreferred to as "Yide Port"), the land use rights of Shenzhen Haixing Harbor DevelopmentCo., Ltd. as well as the sea area use rights of Dongguan Chiwan Port Service Co., Ltd.mortgaged as collaterals.
Details of mortgage borrowings are as follows:
Unit: RMB
| Company name | Closing balance | Opening balance | Collateral |
| China Development Bank Corporation | 890,910,467.90 | 1,027,981,472.96 | The Group's entire equity in CICT |
| International Finance Corporation | 299,127,562.75 | 364,480,624.59 | The Group's entire equity in TML |
| African Development Bank | 137,436,988.29 | 167,372,490.13 | |
| Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. | 113,183,402.12 | 137,905,387.30 | |
| The Opec Fund For International Development | 97,014,344.68 | 118,146,703.89 | |
| Societe de Promotion et de Participation pour la Cooperation Economique S.A. | 97,014,344.67 | 118,218,277.06 | |
| Deutsche Investitions-und Entwicklungsgesellschaft MBH | 80,845,287.23 | 98,452,963.64 | |
| Bank of China Qianhai Shekou Branch | 241,341,293.92 | 241,370,822.05 | Land use rights of Shenzhen Haixing Harbor Development Co., Ltd (see Note (V) 63) |
| China Construction Bank Shunde Branch | 274,236,922.78 | 210,178,757.55 | Land use rights, fixed assets and construction in progress of Yide Port (see Note (V) 63) |
| China Merchants Bank Dongguan Branch | 184,262,885.51 | 109,033,232.39 | Sea area use rights of Dongguan Chiwan Warf Co., Ltd. (see Note (V) 63) |
| Total | 2,415,373,499.85 | 2,593,140,731.56 |
37. Bonds payable
(1) Bonds payable
Unit: RMB
| Item | Closing balance | Opening balance |
| 4.375%, USD 900 million corporate bond | 5,913,943,487.58 | 5,948,107,858.02 |
| 5.000%, USD 600 million corporate bond | 3,926,753,639.09 | 3,950,488,734.13 |
| 4.750%, USD 500 million corporate bond | 3,293,570,634.41 | 3,314,305,348.22 |
| 5.000%, USD 500 million corporate bond | 3,262,240,035.06 | 3,280,606,167.04 |
| 4.890%, RMB 2.5 billion corporate bond | 2,523,780,136.99 | 2,585,407,534.25 |
| 3.360%, RMB 2 billion corporate bond | 2,066,826,666.69 | 2,033,040,000.00 |
| IPCA + 7.8164%, BRL 428 million corporate bond | 709,183,317.05 | 620,162,618.74 |
| 4.980%, RMB 400 million corporate bond | 409,386,958.89 | 401,200,657.53 |
| 3.520%, RMB 2 billion corporate bond | 2,014,658,630.13 | - |
| Total | 24,120,343,505.89 | 22,133,318,917.93 |
| Less: Bonds payable due within one year | 6,836,936,147.15 | 1,042,773,072.37 |
| Bonds payable due after one year | 17,283,407,358.74 | 21,090,545,845.56 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 92 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable - continued
(2) Changes of bonds payable
Unit: RMB
| Name of bonds | Face value | Date of issue | Term of the bond | Amount of issue | Opening balance | Amount issued in the current period | Interest accrued based on par value | Discount or premium amortization | Repayment in the current period | Effect of changes in foreign exchange | Closing balance |
| 5.000%, USD 500 million corporate bond | USD500,000,000.00 | 2012-5-4 | 10 years | USD500,000,000.00 | 3,280,606,167.04 | - | 80,620,573.99 | 1,098,021.91 | 80,900,808.50 | -19,183,919.38 | 3,262,240,035.06 |
| 4.750%, USD 500 million corporate bond | USD500,000,000.00 | 2015-8-3 | 10 years | USD500,000,000.00 | 3,314,305,348.22 | - | 76,627,305.36 | 3,294,819.56 | 76,855,768.08 | -23,801,070.65 | 3,293,570,634.41 |
| IPCA+7.8164%, BRL 428 million corporate bond | BRL428,047,000.00 | 2016-11-7 | 5 years / 6 years | BRL428,047,000.00 | 620,162,618.74 | - | 53,033,722.16 | 4,058,987.94 | - | 31,927,988.21 | 709,183,317.05 |
| 4.890%, RMB 2.5 billion corporate bond | RMB2,500,000,000.00 | 2017-4-21 | 5 years | RMB2,500,000,000.00 | 2,585,407,534.25 | - | 60,622,602.74 | - | 122,250,000.00 | - | 2,523,780,136.99 |
| 4.375%, USD 900 million corporate bond | USD900,000,000.00 | 2018-8-6 | 5 years | USD900,000,000.00 | 5,948,107,858.02 | - | 126,980,188.62 | 5,016,087.81 | 127,269,374.99 | -38,891,271.88 | 5,913,943,487.58 |
| 5.000%, USD 600 million corporate bond | USD600,000,000.00 | 2018-8-6 | 10 years | USD600,000,000.00 | 3,950,488,734.13 | - | 96,746,810.53 | 2,329,204.23 | 96,967,142.85 | -25,843,966.95 | 3,926,753,639.09 |
| 4.980%, RMB 400 million corporate bond | RMB400,000,000.00 | 2018-12-10 | 3 years | RMB400,000,000.00 | 401,200,657.53 | - | 8,186,301.36 | - | - | - | 409,386,958.89 |
| 3.360%, RMB 2 billion corporate bond | RMB2,000,000,000.00 | 2020-7-8 | 3 years | RMB2,000,000,000.00 | 2,033,040,000.00 | - | 33,786,666.69 | - | - | - | 2,066,826,666.69 |
| 3.520%, RMB 2 billion corporate bond | RMB2,000,000,000.00 | 2021-4-16 | 3 years | RMB2,000,000,000.00 | - | 2,000,000,000.00 | 14,658,630.13 | - | - | - | 2,014,658,630.13 |
| Total | 22,133,318,917.93 | 2,000,000,000.00 | 551,262,801.58 | 15,797,121.45 | 504,243,094.42 | -75,792,240.65 | 24,120,343,505.89 | ||||
| Less: Bonds payable due within one year | 1,042,773,072.37 | 6,836,936,147.15 | |||||||||
| Bonds payable due after one year | 21,090,545,845.56 | 17,283,407,358.74 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Lease liabilities
Unit: RMB
| Category | Closing balance | Opening balance (Restated) |
| Lease payment | 2,278,003,192.85 | 2,452,804,794.89 |
| Unrecognized financing cost | -756,754,556.46 | -802,003,552.44 |
| Total | 1,521,248,636.39 | 1,650,801,242.45 |
| Less: Lease liabilities due within one year | 299,138,901.13 | 322,950,258.37 |
| Lease liabilities due after one year | 1,222,109,735.26 | 1,327,850,984.08 |
39. Long-term payables
(1) Summary of long-term payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term payables | 1,246,617,547.37 | 1,192,028,415.01 |
| Special payables | 40,756,729.97 | 39,996,153.12 |
| Total | 1,287,374,277.34 | 1,232,024,568.13 |
| Less: Long-term payables due within one year | 69,078,497.48 | 3,562,994.44 |
| Long-term payables due after one year | 1,218,295,779.86 | 1,228,461,573.69 |
(2) Long-term payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Terminal management rights (Note 1) | 810,214,400.60 | 749,658,074.16 |
| Payable to minority shareholders of subsidiaries (Note 2) | 431,018,385.63 | 437,238,325.33 |
| Others | 5,384,761.14 | 5,132,015.52 |
| Total | 1,246,617,547.37 | 1,192,028,415.01 |
| Less: Long-term payables due within one year | 69,078,497.48 | 3,562,994.44 |
| Long-term payables due after one year | 1,177,539,049.89 | 1,188,465,420.57 |
Note 1: As at 12 August 2011, the Group reached a 35-year building, operation and transfer agreement
through the subsidiary CICT and the Sri Lanka Port Authority on the building, operation,management and development of the Colombo Port South Container Terminal (hereinafterreferred to as for "BOT"). The above-mentioned terminal operating rights purchase amount isdetermined by discounting the amount to be paid in the future using the prevailing market interestrate according to the BOT agreement. As at 30 June 2021, the amount is RMB 810,214,400.60.
Note 2: It is an unsecured loan from minority shareholder of Thesar Maritime Limited, a subsidiary
of the Company, with an annual interest rate of 4.65%.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Long-term payables - continued
(3) Special payables
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Reason |
| Refunds of Harbor Construction Fee | 34,271,558.30 | - | 619,171.22 | 33,652,387.08 | Note 1 |
| Employee housing fund | 3,852,825.60 | 319,748.07 | - | 4,172,573.67 | Note 2 |
| Special funds for scientific research | 1,871,769.22 | 1,060,000.00 | - | 2,931,769.22 | |
| Total | 39,996,153.12 | 1,379,748.07 | 619,171.22 | 40,756,729.97 |
Note 1: This represents the refund of the construction fee received by the Group from the Ministry
of Transport, Shenzhen Municipal Transportation Bureau. According to the "PortConstruction Fee Management Measures" promulgated by the Ministry of Finance, thispayment is dedicated to the construction of water transport infrastructure.
Note 2: This represent the repairing fund for public areas and public facilities and equipment
established after the Group's selling the public-owned house on the collectively allocatedland to employees. The fund is contributed by all the employees having ownership of thehouse according to the rules, and is specially managed and used for specific purpose.
40. Long-term employee benefits payable
(1) Long-term employee benefits payable
Unit: RMB
| Item | Closing balance | Opening balance (Restated) |
| Post-employment benefits - net liabilities of defined benefits plan | 427,481,498.24 | 429,830,989.42 |
| Termination benefits | 37,658,432.73 | 40,939,305.56 |
| Others (Note) | 62,471,559.55 | 73,756,355.48 |
| Total | 527,611,490.52 | 544,526,650.46 |
| Less: Long-term employee benefits payable due within one year | 36,811,951.00 | 36,811,951.00 |
| Long-term employee benefits payable due after one year | 490,799,539.52 | 507,714,699.46 |
Note: It is the employee resettlement cost related to land acquisition and reserve of Shantou Port,
a subsidiary of the Company.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Long-term employee benefits payable - continued
(2) Changes of defined benefits plan
Present value of defined benefits plan obligation:
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| I. Opening balance | 429,830,989.42 | 454,383,940.25 |
| II. Defined benefits cost included in profit or loss for the period | 12,698,930.72 | 12,830,961.87 |
| 1. Current service cost | 4,933,930.72 | 5,200,965.85 |
| 2. Interest adjustment | 7,765,000.00 | 7,629,996.02 |
| III. Defined benefits cost included in other comprehensive income | -200,890.65 | 84,448.42 |
| 1. Actuarial gains (losses) | - | - |
| 2. Effect of exchange rate changes | -200,890.65 | 84,448.42 |
| IV. Other changes | -14,847,531.25 | -13,651,880.90 |
| 1. Benefits paid | -14,847,531.25 | -13,651,880.90 |
| V. Closing balance | 427,481,498.24 | 453,647,469.64 |
The Company's subsidiaries provide the registered retirees and in-service staff with supplementarypost-employment benefit plans.
The Group hired a third-party actuary to estimate the present value of its above-mentionedretirement benefit plan obligations in an actuarial manner based on the expected cumulative welfareunit method. The Group recognizes the Group's liabilities based on the actuarial results. Therelevant actuarial gains or losses are included in other comprehensive income and cannot bereclassified into profit or loss in the future. Past service costs are recognized in profit or loss for theperiod in which the plan is revised. The net interest is determined by multiplying the defined benefitplan net debt or net assets by the appropriate discount rate.
41. Provisions
Unit: RMB
| Item | Closing balance | Opening balance | Reason |
| Estimated expenses on Shantou Port land acquisition and reservation | 66,138,336.08 | 66,138,336.08 | |
| Pending litigation (Note) | 22,497,381.33 | 17,277,583.26 | Note |
| Sales discount | 48,807,632.93 | 16,990,826.32 | |
| Total | 137,443,350.34 | 100,406,745.66 |
Note: This represents the estimated compensation amount that the Company's subsidiary TCP may
need to pay due to the pending litigation.
42. Deferred income
Unit: RMB
| Item | Opening balance (Restated) | Increase in the current period | Decrease in the current period | Closing balance |
| Government grants | 1,112,272,684.13 | - | 21,019,719.24 | 1,091,252,964.89 |
| Unrealized sale-and- leaseback income | 908,139.86 | - | 256,908.42 | 651,231.44 |
| Total | 1,113,180,823.99 | - | 21,276,627.66 | 1,091,904,196.33 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Deferred income - continued
Items involving government grants are as follows:
Unit: RMB
| Liabilities | Opening balance | Increase | Recognized in non-operating income | Recognized in Other comprehensive income | Closing balance | Related to assets /related to income |
| Refund from marine reclamation land | 355,820,652.47 | - | - | 9,674,583.96 | 346,146,068.51 | Related to assets |
| Channel widening project | 483,473,225.10 | - | - | 6,248,749.92 | 477,224,475.18 | Related to assets |
| Special subsidy for facilities and equipment | 240,227,572.98 | - | - | 2,730,463.56 | 237,497,109.42 | Related to assets |
| Intelligent system subsidy | 14,803,742.19 | - | - | 1,590,504.95 | 13,213,237.24 | Related to assets |
| Refund of land transfer charges | 6,568,666.65 | - | - | 133,600.02 | 6,435,066.63 | Related to assets |
| Others | 11,378,824.74 | - | - | 641,816.83 | 10,737,007.91 | Related to assets |
| Total | 1,112,272,684.13 | - | - | 21,019,719.24 | 1,091,252,964.89 |
43. Other non-current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| TCP operating rights liability (Note 1) | 3,438,158,858.69 | 2,888,395,641.53 |
| Actuarial expenses for pension treatment of staff in Public Security Bureau (Note 2) | 165,709,999.98 | 162,810,000.00 |
| Berth priority call right (Note 3) | 12,153,073.77 | 14,597,949.13 |
| Total | 3,616,021,932.44 | 3,065,803,590.66 |
| Less: Other non-current liabilities due within one year | 90,413,566.88 | 83,582,696.63 |
| Including: TCP operating rights liability | 74,103,566.88 | 67,272,696.63 |
| Actuarial expenses for pension treatment of staff in Public Security Bureau (Note 2) | 16,310,000.00 | 16,310,000.00 |
| Other non-current liabilities due after one year | 3,525,608,365.56 | 2,982,220,894.03 |
Note 1: As at 23 February 2018, CMPort, a subsidiary of the Company, acquired a 90% stake in
TCP and incorporate it into the consolidated financial statements of the Group. TCP hasoperation right the port of Paranagua up to 2048. At 30 June 2021, the payment to acquirethe port operation rights is calculated based on local comprehensive price index.
Note 2: It refer that in 2020, Zhanjiang Port, a subsidiary of the Company, was completely taken
over by Zhanjiang Public Security Bureau which was transferred to Zhanjiang MunicipalPeople's Government in accordance with the Notice on printing and distributing the plan ondeepening the management system reform of port and shipping public security organs(Zhong Yang Bian Ban Fa [2017] No. 327) and the notice on printing and distributing theimplementation plan on deepening the management system reform of port and shippingpublic security organs in Guangdong Province (Yue Ji Bian Ban Fa [2018] No. 221). Therelevant assets of the former Zhanjiang Port Public Security Bureau, totalingRMB 11,372,339.22, were transferred to Zhanjiang City. The on-the-job police weretransformed into civil servants in accordance with national regulations. The retired policewere included in the jurisdiction of pension insurance of Zhanjiang government organs andinstitutions. The difference between the original standard of pension treatment and theretirement treatment of Zhanjiang police (hereinafter referred to as "pension treatmentdifference") will be undertaken by Zhanjiang Port. Zhanjiang Port accrued relevantliabilities of RMB 165,709,999.98 according to the actuarial results.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
43. Other non-current liabilities - continued
Note 3: This represents the berth priority call right as agreed in the contract entered into with the
clients in 2003, with total amount of USD 14 million. The Group must give priority to theberthing requirements of the contracted customers during the contract period. The Groupamortized the berth priority right within 20 years using straight-line method. In the currentperiod, the amount included in operating income is RMB 2,444,875.35.
44. Share capital
Unit: RMB
| Item | Opening balance | Changes for the period | Closing balance | ||||
| New issue of share | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
| For the period from 1 January to 30 June 2021 | |||||||
| I. Restricted tradable shares | |||||||
| 1. State-owned shares | - | - | - | - | - | - | - |
| 2. State-owned legal person shares | - | - | - | - | - | - | - |
| 3. Other domestic shares | 9,496.00 | - | - | - | -2,130.00 | -2,130.00 | 7,366.00 |
| 4. Foreign shares | 1,148,648,648.00 | - | - | - | - | - | 1,148,648,648.00 |
| Total restricted tradable shares | 1,148,658,144.00 | - | - | - | -2,130.00 | -2,130.00 | 1,148,656,014.00 |
| II. Non-restricted tradable shares | |||||||
| 1. Ordinary shares denominated in RMB | 593,820,070.00 | - | - | - | - | - | 593,820,070.00 |
| 2. Foreign capital shares listed domestically | 179,886,910.00 | - | - | - | 2,130.00 | 2,130.00 | 179,889,040.00 |
| 3. Foreign capital shares listed overseas | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| Total non-restricted tradable shares | 773,706,980.00 | - | - | - | 2,130.00 | 2,130.00 | 773,709,110.00 |
| III. Total shares | 1,922,365,124.00 | - | - | - | - | - | 1,922,365,124.00 |
Unit: RMB
| Item | Opening balance | Changes for the period | Closing balance | ||||
| New issue of share | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
| For the year ended 31 December 2020 | |||||||
| I. Restricted tradable shares | |||||||
| 1. State-owned shares | - | - | - | - | - | - | - |
| 2. State-owned legal person shares | 128,952,746.00 | - | - | - | -128,952,746.00 | -128,952,746.00 | - |
| 3. Other domestic shares | 169,602.00 | - | - | - | -160,106.00 | -160,106.00 | 9,496.00 |
| 4. Foreign shares | 1,148,648,648.00 | - | - | - | - | - | 1,148,648,648.00 |
| Total restricted tradable shares | 1,277,770,996.00 | - | - | - | -129,112,852.00 | -129,112,852.00 | 1,148,658,144.00 |
| II. Non-restricted tradable shares | |||||||
| 1. Ordinary shares denominated in RMB | 464,858,324.00 | - | - | - | 128,961,746.00 | 128,961,746.00 | 593,820,070.00 |
| 2. Foreign capital shares listed domestically | 179,735,804.00 | - | - | - | 151,106.00 | 151,106.00 | 179,886,910.00 |
| 3. Foreign capital shares listed overseas | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| Total non-restricted tradable shares | 644,594,128.00 | - | - | - | 129,112,852.00 | 129,112,852.00 | 773,706,980.00 |
| III. Total shares | 1,922,365,124.00 | - | - | - | - | - | 1,922,365,124.00 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Capital reserve
Unit: RMB
| Item | Opening balance (Restated) | Increase | Decrease | Closing balance |
| For the period from 1 January to 30 June 2021 | ||||
| Capital premium | 22,730,949,021.44 | 1,114,458.90 | 38,392,129.42 | 22,693,671,350.92 |
| Including: Capital contributed by investors | 7,012,992,483.94 | - | - | 7,012,992,483.94 |
| Differences arising from business combination involving enterprises under common control | 13,345,628,834.48 | - | 38,392,129.42 | 13,307,236,705.06 |
| Differences arising from acquisition of minority interests | 714,658,981.71 | - | - | 714,658,981.71 |
| Others | 1,657,668,721.31 | 1,114,458.90 | - | 1,658,783,180.21 |
| Other capital reserve | 108,649,303.12 | 175,022,805.88 | 21,420,439.82 | 262,251,669.18 |
| Including: Transfer from capital reserve under the previous accounting system | -2,781,133.00 | - | - | -2,781,133.00 |
| Share based payment without exercise | 10,096,607.62 | 5,859,913.77 | - | 15,956,521.39 |
| Other changes of owners' equity of the investee under equity method other than changes in net profit orloss,profit distribution and other comprehensive income | 101,333,828.50 | 3,627,961.64 | 21,420,439.82 | 83,541,350.32 |
| Others(Note) | - | 165,534,930.47 | - | 165,534,930.47 |
| Total | 22,839,598,324.56 | 176,137,264.78 | 59,812,569.24 | 22,955,923,020.10 |
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| For the year ended 31 December 2020 | ||||
| Capital premium | 22,218,126,884.40 | 731,489,964.17 | 218,667,827.13 | 22,730,949,021.44 |
| Including: Capital contributed by investors | 7,012,992,483.94 | - | - | 7,012,992,483.94 |
| Differences arising from business combination involving enterprises under common control | 13,345,628,834.48 | - | - | 13,345,628,834.48 |
| Differences arising from acquisition of minority interests | 419,130,116.03 | 514,196,692.81 | 218,667,827.13 | 714,658,981.71 |
| Others (Note) | 1,440,375,449.95 | 217,293,271.36 | - | 1,657,668,721.31 |
| Other capital Reserve | 112,887,572.02 | 10,096,607.62 | 14,334,876.52 | 108,649,303.12 |
| Including: Transfer from capital reserve under the previous accounting system | -2,781,133.00 | - | - | -2,781,133.00 |
| Share based payment without exercise | - | 10,096,607.62 | - | 10,096,607.62 |
| Other changes of owners' equity of the investee under equity method other than changes in net, profit or loss profit distribution and other comprehensive income | 115,668,705.02 | - | 14,334,876.52 | 101,333,828.50 |
| Total | 22,331,014,456.42 | 741,586,571.79 | 233,002,703.65 | 22,839,598,324.56 |
Note: The increase in the current period was mainly due to the merger of Yingkou Port Co., Ltd.
by the share swap of Liaoning Port Co., Ltd., an associate of the Group. Capital reserve wasincreased by RMB 165,534,930.47 due to the effect of the passive dilution of the Group'sshareholding in Liaoning Port Co., Ltd.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 99 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income
Unit: RMB
| Item | Opening balance | Amount incurred in the period | Less: Other comprehensive income transfer to capital reserve | Closing balance | ||||
| Pre-tax amount for the period | Less: Amount included in other comprehensive income in the prior periods transferred to profit or loss this period | Less: Income tax expense | Post-tax income attributable to the parent company owner | Post-tax income attributable to minority shareholders | ||||
| For the period from 1 January to 30 June 2021: | ||||||||
| I. Other comprehensive income that will not be reclassified subsequently to profit or loss | 81,416,891.26 | 109,893.35 | - | 137,500.00 | 228,315.37 | -255,922.02 | -43,860.69 | 81,689,067.32 |
| Including: Changes arising from remeasurement of defined benefits plan | 11,318,269.18 | - | - | - | - | - | - | 11,318,269.18 |
| Other comprehensive income that can't be transferred to profit or loss under equity method | -6,986,086.44 | -440,106.65 | - | - | -184,184.63 | -255,922.02 | -43,860.69 | -7,126,410.38 |
| Changes in fair value of other equity instruments | 77,084,708.52 | 550,000.00 | - | 137,500.00 | 412,500.00 | - | - | 77,497,208.52 |
| II. Other comprehensive income that will be reclassified subsequently to profit or loss | -908,114,194.32 | -314,158,757.54 | - | - | -89,835,615.53 | -224,323,142.01 | 537,780.33 | -998,487,590.18 |
| Including: Other comprehensive income that may be transferred to profit or loss under equity method | 31,725,280.52 | -55,277,714.61 | - | - | -23,133,723.56 | -32,143,991.05 | 537,780.33 | 8,053,776.63 |
| Translation differences of financial statements denominated in foreign currencies | -939,839,474.84 | -258,881,042.93 | - | - | -66,701,891.97 | -192,179,150.96 | - | -1,006,541,366.81 |
| Total other comprehensive income | -826,697,303.06 | -314,048,864.19 | - | 137,500.00 | -89,607,300.16 | -224,579,064.03 | 493,919.64 | -916,798,522.86 |
| For the year ended 31 December 2020: | ||||||||
| I. Other comprehensive income that will not be reclassified subsequently to profit or loss | 82,969,758.27 | 6,911,190.88 | - | -33,528.75 | -1,552,867.01 | 8,497,586.64 | - | 81,416,891.26 |
| Including: Changes arising from remeasurement of defined benefits plan | 1,069,722.83 | 35,016,155.14 | - | - | 10,248,546.35 | 24,767,608.79 | - | 11,318,269.18 |
| Other comprehensive income that can't be transferred to profit or loss under equity method | 4,830,921.62 | -28,307,578.26 | - | - | -11,817,008.06 | -16,490,570.20 | - | -6,986,086.44 |
| Changes in fair value of other equity instruments | 77,069,113.82 | 202,614.00 | - | -33,528.75 | 15,594.70 | 220,548.05 | - | 77,084,708.52 |
| II. Other comprehensive income that will be reclassified subsequently to profit or loss | -438,914,324.18 | -1,856,601,660.49 | - | - | -469,199,870.14 | -1,387,401,790.35 | - | -908,114,194.32 |
| Including: Other comprehensive income that may be transferred to profit or loss under equity method | -58,950,164.54 | 217,642,457.56 | - | - | 90,675,445.06 | 126,967,012.50 | - | 31,725,280.52 |
| Translation differences of financial statements denominated in foreign currencies | -379,964,159.64 | -2,074,244,118.05 | - | - | -559,875,315.20 | -1,514,368,802.85 | - | -939,839,474.84 |
| Total other comprehensive income | -355,944,565.91 | -1,849,690,469.61 | - | -33,528.75 | -470,752,737.15 | -1,378,904,203.71 | - | -826,697,303.06 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 100 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47. Special reserve
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| For the period from 1 January to 30 June 2021 | ||||
| Production safety reserve | 10,201,178.30 | 23,456,646.73 | 18,167,103.79 | 15,490,721.24 |
| For the year ended 31 December 2020 | ||||
| Production safety reserve | 12,386,734.70 | 57,538,524.86 | 59,724,081.26 | 10,201,178.30 |
48. Surplus reserve
Unit: RMB
| Item | Opening balance | Increase | Decrease | Closing balance |
| For the period from 1 January to 30 June 2021 | ||||
| Statutory surplus reserve | 890,690,322.28 | - | - | 890,690,322.28 |
| For the year ended 31 December 2020 | ||||
| Statutory surplus reserve | 630,345,307.43 | 260,345,014.85 | - | 890,690,322.28 |
49. Unappropriated profit
Unit: RMB
| Item | Amount | Proportion of appropriation or allocation |
| For the period from 1 January to 30 June 2021 | ||
| Unappropriated profit at the beginning of period before adjustment | 12,316,177,395.17 | |
| Add: Adjustment of unappropriated profit at the beginning of the period | 12,942,703.53 | |
| Including: Change in the scope of combination scope under the same control | 12,942,703.53 | |
| Unappropriated profit at the beginning of period after adjustment | 12,329,120,098.70 | |
| Add: Net profit attributable to shareholders of the Company for the period | 1,677,035,346.17 | |
| Less: Appropriation to statutory surplus reserve | - | |
| Appropriation to discretionary surplus reserve | - | |
| Appropriation to general risk reserve | - | |
| Ordinary shares' dividends payable | 730,498,747.12 | Note |
| Ordinary shares' dividends converted into share capital | - | |
| Unappropriated profit at the end of the period | 13,275,656,697.75 | |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Unappropriated profit - continued
Unit: RMB
| Item | Amount | Proportion of appropriation or allocation |
| For the year ended 31 December 2020 | ||
| Unappropriated profit at the end of prior year before adjustment | 11,467,166,351.85 | |
| Add: Adjustment of unappropriated profit at the beginning of the period | 4,421,264.15 | |
| Including: Changes in scope of consolidation of enterprises under common control | 4,421,264.15 | |
| Unappropriated profit at the beginning of the period after adjustment | 11,471,587,616.00 | |
| Add: Net profit attributable to shareholders of the Company for the period | 2,073,844,409.04 | |
| Pension treatment difference | -73,228,871.09 | |
| Others | 1,549,916.64 | |
| Less: Appropriation to statutory surplus reserve | 260,345,014.85 | |
| Appropriation to discretionary surplus reserve | - | |
| Appropriation to general risk reserve | - | |
| Ordinary shares' dividends payable | 884,287,957.04 | |
| Ordinary shares' dividends converted into share capital | - | |
| Unappropriated profit at the end of the period | 12,329,120,098.70 | |
Note: According to the resolution of shareholders meeting on 28 May 2021, the Company
distributed cash dividends of RMB 3.80 (inclusive of tax) for every 10 shares, totaling upto RMB 730,498,747.12 on the basis of the total shares of 1,922,365,124 shares at the endof 2020.
50. Operating income and operating costs
(1) Operating income and operating costs
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period | ||
| Income | Cost | Income | Cost | |
| Principal operating | 7,253,456,936.53 | 4,084,989,279.30 | 5,890,745,289.59 | 3,633,562,724.51 |
| Other operating | 86,485,925.73 | 113,461,884.97 | 71,752,427.37 | 109,627,779.63 |
| Total | 7,339,942,862.26 | 4,198,451,164.27 | 5,962,497,716.96 | 3,743,190,504.14 |
(2) Revenue from contracts
Unit: RMB
| Categories of contracts | Ports operation | Bonded logistics operation | Other operation | Total |
| Mainland China, Hong Kong and Taiwan area | 5,268,414,993.63 | 197,393,362.01 | 86,485,925.73 | 5,552,294,281.37 |
| - Pearl River Delta | 2,958,636,092.61 | 135,929,453.79 | 86,485,925.73 | 3,181,051,472.13 |
| - Yangtze River Delta | 445,352,534.85 | - | - | 445,352,534.85 |
| - Bohai Rim | 29,216,911.55 | 61,463,908.22 | - | 90,680,819.77 |
| - Other areas | 1,835,209,454.62 | - | - | 1,835,209,454.62 |
| Other countries | 1,780,044,983.01 | 7,603,597.88 | - | 1,787,648,580.89 |
| Total | 7,048,459,976.64 | 204,996,959.89 | 86,485,925.73 | 7,339,942,862.26 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 102 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Operating income and operating costs - continued
(3) Description of performance obligations
The Group provides wharf service, bonded logistics service and other services. Theseservices are obligations performed over a period of time. For wharf services, as the handlingtime for containers and bulk cargos is short, the management believes that it is not necessaryto recognize revenue according to the progress towards the completion of contract and it isan appropriate method to recognize the fulfillment of performance obligation and revenueupon the completion of the service. For bonded logistics service and other services, thecustomers evenly obtains and consumes the economic benefits from the Group'sperformance of contract, meanwhile the charging rules as agreed in the contract termsusually adopt daily/month/yearly basis. During the process of rendering services, the Grouprecognizes revenue using straight-line method. Part of the Group's handling contracts areestablished with discount terms, i.e. the customers whose business volume reaches agreedlevel, are granted with preferential charge rate or discount. At the end of the period, as thebusiness quantity finally realized within the contract period is uncertain, the contractconsideration is subject to variable factors. The management included this part of discountin provisions. Details are set out in Note (V) 41. The Group's revenue contract does not havesignificant financing components.
(4) At the end of the period, the variable consideration of RMB 48,807,632.93 (31 December
2020: RMB 16,990,826.32) arising from sales discount is not included in the transactionprice due to the restriction requirements relating to variable considerations.
51. Taxes and levies
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| Property tax | 34,695,044.14 | 32,845,791.16 |
| Land use tax | 18,759,104.16 | 14,571,417.76 |
| City construction and maintenance tax | 4,645,878.43 | 3,120,385.92 |
| Education surcharges and local education surcharges | 3,499,847.04 | 2,341,221.37 |
| Stamp duty | 1,588,858.62 | 4,376,444.35 |
| Others (Note) | 24,482,902.09 | 20,317,484.39 |
| Total | 87,671,634.48 | 77,572,744.95 |
Note: Others are mainly: (1) 2 taxes, the Program of Social Integration and Contribution for the
Financing of Social Security and Tax on Services, with total amount of BRL 16,701,615.20(equivalent to RMB 20,068,681.78) assumed by Company's subsidiary TCP in the currentperiod. The total amount is; and (2) the environmental protection tax of RMB 2,939,339.36assumed by Zhanjiang Port, a subsidiary of the company, in the current period.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
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V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
52. Administrative expenses
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| Employee's salary | 571,878,311.76 | 508,551,934.96 |
| Depreciation expenses | 36,293,887.29 | 43,742,178.23 |
| Amortization of intangible assets | 31,103,215.97 | 32,131,903.34 |
| Fees paid to agencies | 21,580,976.43 | 32,640,338.65 |
| Others | 105,513,581.92 | 128,655,610.27 |
| Total | 766,369,973.37 | 745,721,965.45 |
53. Financial expenses
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| Interest expenses | 894,059,966.10 | 977,499,521.99 |
| Less: Capitalized interest expenses | 43,265,921.33 | 29,853,904.73 |
| Less: Interest income | 183,191,011.93 | 142,692,352.77 |
| Interest expenses of lease liabilities | 41,716,504.99 | 50,320,245.21 |
| Handling fee | 8,429,111.68 | 8,751,569.28 |
| Exchange differences | 8,584,164.43 | -25,043,006.36 |
| Others | 3,776,199.94 | 2,426,563.56 |
| Total | 730,109,013.88 | 841,408,636.18 |
54. Other income
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| Subsidy for business development | 251,275,221.00 | 4,764,700.00 |
| Transferred from deferred income | 21,019,719.24 | 19,070,751.25 |
| Subsidy for job stabilization | 13,934,992.63 | 837,596.90 |
| Additional deduction of VAT | 12,256,071.53 | 7,085,364.75 |
| Subsidy for business operation | 2,158,465.47 | 1,995,842.60 |
| Refund of withholding tax | 1,751,374.91 | 2,254,175.78 |
| Special fund for innovation | 1,674,200.00 | 2,520,200.00 |
| Unemployment insurance reimbursement | - | 15,044,277.64 |
| Others | 1,912,213.84 | 2,544,257.44 |
| Total | 305,982,258.62 | 56,117,166.36 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 104 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
55. Investment income
(1) Details of investment income:
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| Long-term equity investments income under equity method | 3,557,359,417.25 | 1,393,872,651.34 |
| Including: Long-term equity investments income of associated enterprises under equity method | 3,462,322,244.32 | 1,217,778,295.61 |
| Including: Long-term equity investments income of joint venture under equity method | 95,037,172.93 | 176,094,355.73 |
| Investment income on held-for-trading financial assets | 7,908,358.90 | - |
| Investment income on other non-current financial assets | 40,188,401.29 | 72,554,362.03 |
| Dividend income on other equity instruments | 460,000.00 | 460,131.33 |
| Interest income on debt investments | 3,827,414.15 | 37,722,123.77 |
| Total | 3,609,743,591.59 | 1,504,609,268.47 |
There is no significant restriction on the remittance of the Group's investment income.
(2) Details of long-term equity investments income under equity method
Unit: RMB
| Investee | Amount incurred in the current period | Amount incurred in the prior period (Restated) | Reason for changes |
| Shanghai International Port (Group) Co., Ltd. | 2,327,928,232.22 | 1,022,649,024.58 | Changes in net profit of investee |
| Nanshan Group | 560,718,761.21 | -67,388,586.72 | Changes in net profit of investee |
| Terminal Link SAS | 182,473,114.97 | 108,374,645.14 | Changes in net profit of investee |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | 108,224,200.00 | 12,188,400.29 | Changes in net profit of investee |
| Liaoning Port Co., Ltd. | 91,600,129.01 | 88,081,029.71 | Changes in net profit of investee |
| Euro-Asia Oceangate S.à r.l. | 35,657,835.28 | 32,577,150.24 | Changes in net profit of investee |
| Modern Terminals Limited | 41,893,785.31 | 19,835,459.97 | Changes in net profit of investee |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 30,849,525.86 | 51,573,423.78 | Changes in net profit of investee |
| Others | 178,013,833.39 | 125,982,104.35 | Changes in net profit of investee |
| Total | 3,557,359,417.25 | 1,393,872,651.34 |
56. Gains on changes in fair value (loss is marked with "-")
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Held-for-trading financial assets | 7,839.21 | - |
| Other non-current financial assets | -45,536,366.63 | -138,571,248.16 |
| Including: Financial assets at fair value through profit or loss | -45,536,366.63 | -138,571,248.16 |
| Other non-current liabilities | -443,004,339.03 | -157,164,405.14 |
| Including: Financial liabilities at fair value through profit or loss | -443,004,339.03 | -157,164,405.14 |
| Total | -488,532,866.45 | -295,735,653.30 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 105 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
57. Gains on impairment of credit (loss is marked with "-")
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| I. Gains on impairment of credit of accounts receivable (loss is marked with "-") | -1,176,139.34 | 102,546.48 |
| II. Gains on impairment of credit of other receivables (loss is marked with "-") | -1,724,448.07 | -967,713.09 |
| III. Gains on impairment of credit of long-term receivables (loss is marked with "-") | 314,255.21 | -2,718,612.10 |
| Total | -2,586,332.20 | -3,583,778.71 |
58. Gains from impairment of assets (loss is marked with "-")
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Gains from decline in value of inventories | - | 947,693.77 |
| Total | - | 947,693.77 |
59. Gains on disposal of assets (loss is marked with "-")
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period | Amount included in non-recurring profit or loss for the current period |
| Gains on disposal of non-current assets | 9,432,717.92 | 560,256,383.38 | 9,432,717.92 |
| Including: Gains on disposal of fixed assets (Losses are indicated with "-") | 12,639,946.67 | -17,221,138.93 | 12,639,946.67 |
| Gains on disposal of intangible assets | -3,516,976.79 | 579,800,163.81 | -3,516,976.79 |
| Others | 309,748.04 | -2,322,641.50 | 309,748.04 |
60. Non-operating income
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period | Amount included in non-recurring profit or loss for the current period |
| Government grants | 358,210.35 | 16,416,962.22 | 358,210.35 |
| Insurance compensation received | 325,396.51 | 3,485,302.26 | 325,396.51 |
| Gains from scrapping of non-current assets | 2,379,435.54 | 2,026,187.96 | 2,379,435.54 |
| Compensation received for contracts violation | 924,253.93 | 864,126.63 | 924,253.93 |
| Exempted current accounts | 1,365,449.42 | - | 1,365,449.42 |
| Others | 23,634,923.98 | 4,952,786.32 | 23,634,923.98 |
| Total | 28,987,669.73 | 27,745,365.39 | 28,987,669.73 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 106 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
61. Non-operating expenses
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period | Amount included in non-recurring profit or loss for the current period |
| External donations | 526,437.28 | 433,214.18 | 526,437.28 |
| Losses on retirement of non-current assets | 7,080,879.70 | 4,646,632.04 | 7,080,879.70 |
| Compensation, liquidated damages and penalties | 553,684.53 | 9,383,479.78 | 553,684.53 |
| Litigation losses | 4,265,352.56 | 6,107,367.67 | 4,265,352.56 |
| Others | 1,897,510.20 | 2,539,628.84 | 1,897,510.20 |
| Total | 14,323,864.27 | 23,110,322.51 | 14,323,864.27 |
62. Income tax expenses
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Current tax expenses | 596,520,712.86 | 643,414,033.05 |
| Deferred tax expenses | 46,917,882.26 | -130,246,569.35 |
| Total | 643,438,595.12 | 513,167,463.70 |
Reconciliation of income tax expenses to the accounting profit is as follows:
Unit: RMB
| Item | Amount incurred in the current period |
| Accounting profit | 4,907,699,839.95 |
| Income tax expenses calculated at 25% | 1,226,924,959.99 |
| Effect of non-deductible cost, expenses and losses | 123,834,019.18 |
| Accrued income tax expenses | 393,501,986.67 |
| Effect of deductible temporary differences and deductible losses for which the deferred tax assets are not recognized in current year | 36,963,410.99 |
| Effect of tax-free income (Note) | -598,127,300.63 |
| Effect of tax incentives and changes of tax rate | -220,096,837.55 |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | -264,233,040.74 |
| Effect of utilizing deductible losses for which the deferred tax assets were not recognized in prior period | -27,840,036.94 |
| Effect of adjustments to prior-year income tax | -30,394,194.73 |
| Changes in the opening balance of deferred tax assets/ liabilities due to tax adjustments | - |
| Effect of unrecognized taxable temporary difference for the purpose of tax | -347,404.28 |
| Others | 3,253,033.16 |
| Income tax expenses | 643,438,595.12 |
Note: This mainly represents the tax effect on investment income from joint venture and associates.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 107 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
63. Assets with restricted ownership or use right
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash and bank balances (Note 1) | 12,259,378.15 | 11,528,570.90 |
| Equity investment in CICT (Note 2) | 1,820,922,384.09 | 1,626,554,439.58 |
| Equity investment in TML (Note 2) | 837,308,977.18 | 859,148,327.98 |
| Fixed assets (Note 3) | 341,262,588.64 | 341,931,071.09 |
| Intangible assets (Note 3) | 215,521,701.84 | 218,825,477.36 |
| Construction in progress (Note 3) | 39,017,486.19 | 43,751,101.60 |
| Total | 3,266,292,516.09 | 3,101,738,988.51 |
Note 1: Details of restricted cash and bank balances are set out in Note (V) 1.
Note 2: Details of mortgaged equity and interests are set out in Note (V) 36.
Note 3: Yide Port mortgaged its land with property right, fixed assets and construction in progress
to obtain bank borrowings; Shenzhen Haixing Harbor Development Co., Ltd. mortgaged itsland with property right to obtain bank borrowings; Dongguan Chiwan Warf Co., Ltd.mortgaged its sea area use right with property right to obtain bank borrowings. Details ofmortgage borrowings are set out in Note (V) 36.
64. Other comprehensive income
Details are set out in Note (V) 46.
65. Items in cash flow statement
(1) Other cash receipts relating to operating activities:
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| Government grants | 271,313,303.29 | 45,331,564.62 |
| Interest income | 75,974,603.30 | 89,851,546.27 |
| Guarantees and deposits | 20,852,450.76 | 44,309,278.23 |
| Rentals | 4,157,219.40 | 3,840,803.19 |
| Insurance compensation | 1,932,522.06 | 6,093,294.49 |
| Harbor construction fee and service charge refund | 124,986.79 | 161,267.76 |
| Others | 229,171,279.38 | 237,394,967.82 |
| Total | 603,526,364.98 | 426,982,722.38 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 108 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(2) Other cash payments relating to operating activities
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| Advance payment | 127,724,052.53 | 125,126,233.17 |
| Operating expenses such as operating costs and administration expense etc. | 76,583,283.18 | 107,164,204.34 |
| Guarantees and deposits | 17,586,204.25 | 20,785,228.07 |
| Harbour dues on cargo | 6,404,202.74 | - |
| Rentals | 5,187,155.54 | 9,242,133.46 |
| Port charges | 4,837,252.74 | 2,933,172.39 |
| Port construction fee | 252,673.92 | 6,631,496.50 |
| Others | 169,468,219.41 | 101,421,481.51 |
| Total | 408,043,044.31 | 373,303,949.44 |
(3) Other cash receipts relating to investing activities
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the priorperiod |
| Recovery of project advance principal | 179,352,864.40 | 363,580,000.00 |
| Receipt of project advance interest | 81,714,623.32 | - |
| Recovery of loans | 9,462,511.39 | 43,282,119.52 |
| Compensation received from Zhanjiang Port in transition period | - | 3,803,477.07 |
| Others | 85,123,172.47 | 99,121,590.00 |
| Total | 355,653,171.58 | 509,787,186.59 |
(4) Other cash receipts relating to investing activities
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the priorperiod |
| Staff resettlement costs related to land acquisition and reserve in Shantou Port | 11,284,795.93 | - |
| Related party borrowings | - | 3,009,744,121.38 |
| Others | 104.00 | 25,948.75 |
| Total | 11,284,899.93 | 3,009,770,070.13 |
(5) Other cash payments relating to financing activities
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Acquisition of minority shareholders' equity by Dalian Port Logistics Network Co., Ltd. ("DPN") | 8,748,637.26 | - |
| SINOSURE premium in CDB loans | 1,748,638.84 | - |
| Acquisition of minority shareholders' equity by CMPort | - | 755,986,916.38 |
| Others | 999,231.79 | 585,881.79 |
| Total | 11,496,507.89 | 756,572,798.17 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 109 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
| Supplementary information | Amount incurred in the current period | Amount incurred in the prior period |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 4,264,261,244.83 | 1,796,694,443.47 |
| Add: Provision for impairment losses of assets | - | -947,693.77 |
| Provision for impairment losses of credit | 2,586,332.20 | 3,583,778.71 |
| Depreciation of fixed assets | 914,300,614.45 | 943,286,583.19 |
| Depreciation of investment property | 94,835,428.40 | 94,989,539.23 |
| Depreciation of right-of-use assets | 166,527,483.26 | 154,716,139.25 |
| Amortization of intangible assets | 303,613,191.00 | 311,615,155.36 |
| Amortization of long-term prepaid expenses | 23,468,890.89 | 20,891,672.06 |
| Losses (gains) on disposal of fixed assets, intangible assets and other long-term assets | -9,432,717.92 | -560,256,383.38 |
| Losses on retirement of fixed assets, intangible assets and other long-term assets | 4,701,444.16 | 2,620,444.08 |
| Losses (gains) on changes in fair value | 488,532,866.45 | 295,735,653.30 |
| Financial expenses | 799,077,760.88 | 972,922,856.11 |
| Investment loss (income) | -3,609,743,591.59 | -1,504,609,268.47 |
| Decrease (increase) in deferred tax assets | -69,535,313.14 | -16,215,090.44 |
| Increase (decrease) in deferred tax liabilities | 116,453,195.40 | -114,085,052.68 |
| Decrease (increase) in inventories | 4,815,029.15 | -25,863,281.38 |
| Decrease (increase) in operating receivables | -1,125,312,552.90 | -1,414,945,081.25 |
| Increase in operating payables | 565,811,102.44 | 1,097,606,789.69 |
| Net cash flows from operating activities | 2,934,960,407.96 | 2,057,741,203.08 |
| 2. Significant investing and financing activities that do not involve cash receipts and payments: | ||
| Conversion of debt into capital | - | - |
| Convertible bonds due within one year | - | - |
| Fixed assets under finance lease | - | - |
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 9,347,523,070.31 | 7,300,058,483.14 |
| Less: Opening balance of cash | 11,898,618,327.29 | 7,787,660,214.80 |
| Add: Closing balance of cash equivalents | - | - |
| Less: Opening balance of cash equivalents | - | - |
| Net increase (decrease) in cash and cash equivalents | -2,551,095,256.98 | -487,601,731.66 |
(2) Cash and cash equivalents
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 9,347,523,070.31 | 11,898,618,327.29 |
| Including: Cash on hand | 363,642.53 | 575,797.26 |
| Bank deposits | 8,996,915,786.39 | 11,545,752,102.19 |
| Other monetary funds | 350,243,641.39 | 352,290,427.84 |
| II. Cash equivalents | - | - |
| III. Closing balance of cash and cash equivalents | 9,347,523,070.31 | 11,898,618,327.29 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 110 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Foreign currency monetary items
| Item | Closing balance of original currency | Exchange rate | Closing amount in RMB |
| Cash and bank balances | 1,057,715,232.68 | ||
| Including: HKD | 141,739,185.69 | 0.8348 | 118,323,872.21 |
| USD | 21,388,326.29 | 6.4824 | 138,647,686.34 |
| EUR | 71,636,730.96 | 7.7326 | 553,938,185.82 |
| RMB | 246,805,488.31 | 1.0000 | 246,805,488.31 |
| Accounts receivable | 203,201,673.27 | ||
| Including: HKD | 2,449,551.71 | 0.8348 | 2,044,885.77 |
| USD | 3,481,663.19 | 6.4824 | 22,569,533.46 |
| EUR | 23,095,369.48 | 7.7326 | 178,587,254.04 |
| Other receivables | 571,706,948.69 | ||
| Including: HKD | 91,891,940.77 | 0.8348 | 76,711,392.15 |
| USD | 4,722,413.28 | 6.4824 | 30,612,571.85 |
| EUR | 32,697,154.49 | 7.7326 | 252,834,016.81 |
| RMB | 211,548,967.88 | 1.0000 | 211,548,967.88 |
| Other non-current assets | 30,060,781.71 | ||
| Including: EUR | 3,887,538.70 | 7.7326 | 30,060,781.71 |
| Short-term borrowings | 995,081,600.00 | ||
| Including: HKD | 1,192,000,000.00 | 0.8348 | 995,081,600.00 |
| Accounts payable | 77,510,713.84 | ||
| Including: HKD | 4,537,349.76 | 0.8348 | 3,787,779.58 |
| USD | 31,136.44 | 6.4824 | 201,838.86 |
| EUR | 9,048,429.47 | 7.7326 | 69,967,885.72 |
| RMB | 3,553,209.68 | 1.0000 | 3,553,209.68 |
| Other payables | 323,748,828.95 | ||
| Including: HKD | 190,686,125.70 | 0.8348 | 159,184,777.73 |
| USD | 23,834,969.36 | 6.4824 | 154,507,805.38 |
| EUR | 1,300,499.94 | 7.7326 | 10,056,245.84 |
| Non-current liabilities due within one year | 5,759,290,903.74 | ||
| Including: USD | 499,122,356.96 | 6.4824 | 3,235,510,766.75 |
| RMB | 2,523,780,136.99 | 1.0000 | 2,523,780,136.99 |
| Long-term borrowings | 2,937,510,647.50 | ||
| Including: USD | 222,800,000.00 | 6.4824 | 1,444,278,720.00 |
| EUR | 106,462,500.00 | 7.7326 | 823,231,927.50 |
| RMB | 670,000,000.00 | 1.0000 | 670,000,000.00 |
| Bonds payable | 13,160,997,029.39 | ||
| Including: USD | 2,030,266,109.68 | 6.4824 | 13,160,997,029.39 |
| Long-term payables | 1,975,705.16 | ||
| Including: HKD | 2,366,680.83 | 0.8348 | 1,975,705.16 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 111 -
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Government grants
Unit: RMB
| Type | Amount | Item | Account | Amount included in profit or loss for the period |
| Related to income | 251,275,221.00 | Subsidy for business development | Other income | 251,275,221.00 |
| Related to income | 13,934,992.63 | Subsidy for job stabilization | Other income | 13,934,992.63 |
| Related to income | 2,158,465.47 | Subsidy for business operation | Other income | 2,158,465.47 |
| Related to income | 1,674,200.00 | Special fund for innovation | Other income | 1,674,200.00 |
| Related to income | 1,912,213.84 | Others | Other income | 1,912,213.84 |
| Related to income | 358,210.35 | Others | Non-operating income | 358,210.35 |
| Total | 271,313,303.29 | 271,313,303.29 |
69. Lease
Undiscounted lease receipts subsequent to the balance sheet date are as follows:
Unit: RMB
| Maturity analysis of undiscounted lease receipts | Closing balance |
| 1st year subsequent to the balance sheet date | 219,249,796.09 |
| 2nd year subsequent to the balance sheet date | 136,317,870.06 |
| 3rd year subsequent to the balance sheet date | 102,450,753.00 |
| 4th year subsequent to the balance sheet date | 85,838,451.42 |
| 5th year subsequent to the balance sheet date | 81,548,526.40 |
| Subsequent years | 302,616,011.07 |
| Total | 928,021,408.04 |
Note 1: The operating leases where the Group as the lessor are related to port and terminal facilities,
machinery equipment, vehicles, land and buildings, with lease terms ranging from 1 monthto 50 years and option to renew the lease of port and terminal facilities, machineryequipment, land and buildings. The Group considers that as the leased assets are properlyused, the unguaranteed balance of such assets does not constitutes material risk of the Group.
Note 2: For the period from 1 January to 30 June 2021, the revenue relating to operating lease
amounts to RMB 210,384,381.50; there is no revenue relating to variable lease payment thatis not included in lease receipts.
VI. CHANGES IN SCOPE OF CONSOLIDATION
1. Business combination not involving enterprises under common control
The Group has no business combination not involving enterprises under common control in thecurrent period.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 112 -
VI. CHANGES IN SCOPE OF CONSOLIDATION - continued
2. Business combination involving enterprises under common control
(1) Composition of the Group
Unit: RMB
| Name of combined party | Proportion of equity obtained in business combination (%) | Basis for business combination under the same control | Combination date | Basis of combination date | Income of the combined party from the beginning of the current period to the combination date | Net profit of the combined party from the beginning of the current period to the combination date | Income of the combined party during the comparison period | Net profit of the combined party during the comparison period |
| DPN | 79.03 | Controlled by the same party before and after the combination, and the control is not temporary | 9 February 2021 | Transfer of actual control | 6,730,476.41 | -1,670,529.39 | 38,453,860.40 | -356,424.02 |
| Yingkou Gangxin Technology Co., Ltd. ("GangXinKeJi") | 100.00 | Controlled by the same party before and after the combination, and the control is not temporary | 9 February 2021 | Transfer of actual control | - | -1,585,261.11 | 1,546,698.08 | -643,614.91 |
(2) Combination cost
Unit: RMB
| Combination cost | DPN | GangXinKeJi |
| Cash | - | - |
| Face value of equity securities issued | 66,576,790.71 | 13,918,166.22 |
| Total combination costs | 66,576,790.71 | 13,918,166.22 |
(3) Book value of assets and liabilities of the combined party on the combination date
Unit: RMB
| Item | DPN | GangXinKeJi | ||
| Combination date | Opening balance | Combination date | Opening balance | |
| Assets: | ||||
| Current assets | 131,465,942.76 | 140,838,127.92 | 18,138,156.41 | 18,319,351.22 |
| Long term equity investment | 10,246,299.45 | 10,487,799.45 | - | - |
| Fixed assets | 8,102,180.97 | 8,136,170.96 | 34,046.16 | 35,363.69 |
| Right-of-use assets | 517,511.87 | 526,095.34 | - | - |
| Intangible assets | 5,994,866.71 | 6,088,378.29 | - | - |
| Long term deferred expenses | 131,052.72 | 157,263.23 | - | - |
| Deferred tax assets | 126,018.46 | 126,018.46 | - | - |
| Liabilities: | ||||
| Current liabilities | 84,299,499.68 | 56,894,215.88 | 2,096,139.03 | 2,410,894.10 |
| Deferred income | 278,444.67 | 293,140.09 | - | - |
| Lease liabilities | 444,186.06 | 427,236.03 | - | - |
| Net assets | 71,561,742.53 | 108,745,261.65 | 16,076,063.54 | 15,943,820.81 |
| Less: Minority interests | - | 20,332,141.71 | - | - |
| Net assets acquired | 71,561,742.53 | 88,413,119.94 | 16,076,063.54 | 15,943,820.81 |
3. Reverse purchase
The Group has no reverse purchase in the current period.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 113 -
VI. CHANGES IN SCOPE OF CONSOLIDATION - continued
4. Disposal of subsidiary
There is no loss of control over the disposal of subsidiary investment in the Group in thecurrent period.
5. Scope of consolidation change for other reasons
The Group has no scope of consolidation change for other reasons in the current period.
VII. EQUITY IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group
| Name of the subsidiary | Principal place of business | Place of incorporation | Nature of business | Registered capital (RMB'0000, unless otherwise specified) | Proportion of ownership interest (%) | Acquisition method | |
| Direct | Indirect | ||||||
| Shenzhen Chiwan International Freight Agency Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Logistics support services | 550 | 100.00 | - | Investment establishment |
| Chiwan Wharf (Hong Kong) Co., Ltd. ("Chiwan Wharf (Hong Kong) ") | Hong Kong, PRC | Hong Kong, PRC | Investment holding | HKD1,000,000 | 100.00 | - | Investment establishment |
| Dongguan Chiwan Warf Co., Ltd. | Dongguan, PRC | Dongguan, PRC | Logistics support services | 45,000.00 | 85.00 | - | Investment establishment |
| Dongguan Chiwan Terminal Co., Ltd. | Dongguan, PRC | Dongguan, PRC | Logistics support services | 40,000.00 | 100.00 | - | Investment establishment |
| Shenzhen Chiwan Harbor Container Co. Ltd. | Shenzhen, PRC | Shenzhen, PRC | Logistics support services | 28,820.00 | 100.00 | - | Business combination involving enterprises under common control |
| Shenzhen Chiwan Port Development Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Logistics support services | 1,500.00 | 100.00 | - | Business combination involving enterprises under common control |
| Chiwan Container Terminal Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Logistics support services | USD95,300,000 | 55.00 | 20.00 | Business combination involving enterprises under common control |
| Shenzhen Chiwan Tugboat Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Logistics support services | 2,400.00 | 100.00 | - | Business combination involving enterprises under common control |
| Chiwan Shipping (Hong Kong) Limited | Hong Kong, PRC | Hong Kong, PRC | Logistics support services | HKD800,000 | 100.00 | - | Business combination involving enterprises under common control |
| China Merchants Port (Zhoushan) RoRo Logistics Co., Ltd | PRC | PRC | Logistics support services | 17,307.86 | 51.00 | - | Assets acquisition |
| CMPort | Hong Kong, PRC | Hong Kong, PRC | Investment holding | HKD 42,521,339,900.00 | 41.85 | Business combination involving enterprises under common control | |
| China Merchants Container Services Limited | Hong Kong | Hong Kong | Logistics support services | HKD500,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International (China) Investment Co., Ltd. | PRC | PRC | Investment holding | USD30,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| Qingdao Port Merchants International Container Terminal Co., Ltd. | PRC | PRC | Logistics support services | USD206,300,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International Terminal (Qingdao) Co., Ltd. | PRC | PRC | Logistics support services | USD44,000,000 | - | 90.10 | Business combination involving enterprises under common control |
| China Merchants Bonded Logistics Co., Ltd. | PRC | PRC | Logistics support services | 70,000.00 | 40.00 | 60.00 | Business combination involving enterprises under common control |
| China Merchants Port Services (Shenzhen) Co., Ltd. | PRC | PRC | Logistics support services | 55,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shekou Container Terminals Ltd. | PRC | PRC | Logistics support services | HKD618,201,200 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Lianyunjie Container Terminals Co., Ltd | PRC | PRC | Logistics support services | 60,854.90 | - | 100.00 | Business combination involving enterprises under common control |
| Anxunjie Container Terminals (Shenzhen) Co., Ltd. | PRC | PRC | Logistics support services | 127,600.00 | - | 100.00 | Business combination involving enterprises under common control |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 114 -
VII. EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
| Name of the subsidiary | Principal place of business | Place of incorporation | Nature of business | Registered capital (RMB'0000, unless otherwise specified) | Proportion of ownership interest (%) | Acquisition method | |
| Direct | Indirect | ||||||
| Shenzhen Haiqin Engineering Management Co., Ltd | PRC | PRC | Engineering supervision services | 300.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Haixing Harbor Development Co., Ltd | PRC | PRC | Logistics support services | 53,072.92 | - | 67.00 | Business combination involving enterprises under common control |
| Magang Cangma | PRC | PRC | Logistics support services | 33,500.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Mawan Ganghang Co., Ltd. | PRC | PRC | Logistics support services | 20,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Zhongzhi Investment Co., Ltd. | PRC | PRC | Investment consulting | 4,000.00 | - | 75.00 | Business combination involving enterprises under common control |
| Shenzhen Haixing Logistics Development Co., Ltd. | PRC | PRC | Logistics support services | 7,066.79 | - | 67.00 | Business combination involving enterprises under common control |
| Shenzhen Lianyongtong Terminal Co., Ltd. | PRC | PRC | Logistics support services | USD7,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Lianda Tugboat Co., Ltd. | PRC | PRC | Logistics support services | 200.00 | - | 60.29 | Business combination involving enterprises under common control |
| Zhangzhou Zhongli Outer Wheel Tally Co., Ltd. | PRC | PRC | Logistics support services | 200.00 | - | 84.00 | Business combination involving enterprises under common control |
| Xiamenwan Port Affairs (note 2) | PRC | PRC | Logistics support services | 44,450.00 | - | 31.00 | Business combination involving enterprises under common control |
| Zhangzhou China Merchants Port Co., Ltd. | PRC | PRC | Logistics support services | 100,000.00 | - | 60.00 | Business combination involving enterprises under common control |
| Zhangzhou China Merchants Tugboat Company Limited | PRC | PRC | Logistics support services | 1,500.00 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International Technology Company Limited ("CMIT") | PRC | PRC | IT services | 8,784.82 | 13.18 | 43.74 | Business combination involving enterprises under common control |
| DPN (Note 3) | PRC | PRC | IT services | 3,200.00 | - | 79.03 | Business combination involving enterprises under common control |
| Yingkou Gangxin (Note 3) | PRC | PRC | IT services | 800.00 | - | 100.00 | Business combination involving enterprises under common control |
| ATJ | PRC | PRC | Preparation for warehousing projects | HKD100,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| ASJ | PRC | PRC | Preparation for warehousing projects | HKD100,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| Anyunjie Port Warehousing Service (Shenzhen) Co., Ltd. | PRC | PRC | Preparation for warehousing projects | 6,060.00 | - | 100.00 | Business combination involving enterprises under common control |
| Yide Port | PRC | PRC | Logistics support services | 21,600.00 | - | 51.00 | Business combination involving enterprises under common control |
| Mega Shekou Container Terminals Limited | British Virgin Islands | British Virgin Islands | Investment holding | USD120.00 | - | 80.00 | Business combination involving enterprises under common control |
| TML | Cyprus | Cyprus | Investment holding | EUR5,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| CICT | Sri Lanka | Sri Lanka | Logistics support services | USD150,000,100 | - | 85.00 | Business combination involving enterprises under common control |
| Lome Container Terminal S.A. | Government of Republic of Togo | Government of Republic of Togo | Logistics support services | FCFA200,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| Gainpro | British Virgin Islands | British Virgin Islands | Investment holding | USD1.00 | - | 76.47 | Business combination involving enterprises under common control |
| Shenzhen Jinyu Rongtai Investment Development Co., Ltd. | PRC | PRC | Lease of property etc. | 80,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Merchants Qianhaiwan Real Estate Co., Ltd. | PRC | PRC | Lease of property etc. | 20,000.00 | - | 100.00 | Business combination involving enterprises under common control |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 115 -
VII. EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
| Name of the subsidiary | Principal place of business | Place of incorporation | Nature of business | Registered capital (RMB'0000, unless otherwise specified) | Proportion of ownership interest (%) | Acquisition method | |
| Direct | Indirect | ||||||
| Shantou Port | PRC | PRC | Logistics support services | 12,500.00 | - | 60.00 | Business combination involving enterprises under common control |
| Hambantota International Port Group (Private) Limited | Sri Lanka | Sri Lanka | Logistics support services | USD794,000,000 | - | 85.00 | Business combination involving enterprises under common control |
| China Merchants Holdings (Djibouti) FZE | Djibouti | Djibouti | Logistics support services | USD38,140,000 | - | 100.00 | Business combination involving enterprises under common control |
| Xinda Resources Limited ("Xinda") | British Virgin Islands | British Virgin Islands | Investment holding | USD107,620,000 | - | 77.45 | Business combination involving enterprises under common control |
| Kong Rise Development Limited | Hong Kong, PRC | Hong Kong, PRC | Investment holding | USD107,620,000 | - | 100.00 | Business combination involving enterprises under common control |
| TCP | Brazil | Brazil | Logistics support services | BRL68,851,600 | - | 100.00 | Business combination not involving enterprises under common control |
| Zhanjiang Port | PRC | PRC | Logistics support services | 587,420.91 | 30.78 | 27.58 | Business combination not involving enterprises under common control |
| Zhanjiang Port International Container Terminal Co., Ltd | PRC | PRC | Logistics support services | 60,000.00 | - | 80.00 | Business combination not involving enterprises under common control |
| Zhanjiang Port Petrochemical Terminal Co., Ltd. | PRC | PRC | Logistics support services | 18,000.00 | - | 50.00 | Business combination not involving enterprises under common control |
| China Ocean Shipping Tally Co., Ltd., Zhanjiang | PRC | PRC | Logistics support services | 300.00 | - | 84.00 | Business combination not involving enterprises under common control |
| Zhanjiang Port Donghaidao Bulk Cargo Terminal Co., Ltd. | PRC | PRC | Logistics support services | 5,000.00 | - | 100.00 | Business combination not involving enterprises under common control |
| Zhanjiang Port Bonded Service Co., Ltd., Guangdong | PRC | PRC | Logistics support services | 300.00 | 100.00 | Business combination not involving enterprises under common control | |
| Guangdong Zhanjiang Port Logistics Co., Ltd. | Shantou, PRC | Shantou, PRC | Logistics support services | 10,000.00 | 100.00 | Business combination not involving enterprises under common control | |
| Zhanjiang Port Haichuan Trading Co., Ltd. | Hong Kong, PRC | Hong Kong, PRC | Logistics support services | 200.00 | 100.00 | Business combination not involving enterprises under common control | |
| Ningbo Daxie | PRC | PRC | Logistics support services | 1,20,909.00 | - | 45.00 | Business combination not involving enterprises under common control |
| Shantou Seaport Tugboat Service Co. LTD | PRC | PRC | Logistics support services | 1,000.00 | - | 100.00 | Investment establishment |
| Guangdong Zhanjiang Port Longteng Shipping Co. LTD | PRC | PRC | Logistics support services | 9,000.00 | - | 70.00 | Business combination not involving enterprises under common control |
Note 1: On 19 June 2018, the Company and China Merchants Group (Hong Kong) Co., Ltd.
("CMHK") entered into "Agreement of Concerted Action on China Merchants PortHoldings Company Limited". According to the agreement, CMHK unconditionally keepsconsistent with the Company when voting for the matters discussed at the generalshareholders meeting of CMPort in respect of its voting power of CMPort as entrusted, andperforms the voting as per the Company's opinion.
In July and October 2020, CMPort respectively distributed 2019 dividends and 2020 interimdividends to shareholders. The shareholders may select to receive all dividends in cash, alldividends in lieu of shares, or part cash and part new shares. The Company select to receiveall its share of dividends from the shareholding in CMPort in the form of scrip dividends.Upon the completion of above distribution of CMPort, the Company's share in CMPortincreased from 1,411,014,033 shares to 1,532,248,957 shares, accounting for 41.85%(previously 40.91%) of the total issued shares of CMPort. The proportion of shares held byCMHK changed from 21.86% to 22.36%. Therefore, the Company has total 64.21% votingpower of CMPort and has control over CMPort.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 116 -
VII. EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Note 2: The Group and China Merchants Zhangzhou Development Zone Co., Ltd. entered into
"Equity Custody Agreement", according to which China Merchants ZhangzhouDevelopment Zone Co., Ltd. entrusted its 29% equity of ZCMG to the Group for operationand management. Therefore, the Group has 60% voting power of ZCMG and includes it inthe scope of consolidated financial statements.
Note 3: On 18 December 2020, The Company has signed the Agreement on Equity Subscription
and Capital Increase with the company's subsidiaries, China Merchants Bureau Port, CMIT,Centralized Logistics, Dagang Jike and Yingkou Port Group Co., LTD. (hereinafter referredto as "Yingkou Port Group"). Pursuant to the Equity Subscription and Capital IncreaseAgreement, Centralized Logistics and Dalian Port Container increased the capital of ChinaMerchants International Information with their 29.40% and 49.63% shares of DPNrespectively, and Yingkou Port Group increased the capital of CMIT with their 100% sharesof Gangxin Technology. Before and after the merger, CMIT, DPN and Gangxin Technologyare finally controlled by China Merchants Group, the actual controller of the Company, andthe control is not temporary. The above capital increase was completed on 9 February 2021.After the capital increase, the Company, China Merchants Port, Centralized Logistics,Dalian Port Container and Yingkou Port Group will hold 13.18%, 43.74%, 13.26%, 22.38%and 7.44% of the equity of CMIT respectively. CMIT is still the holding subsidiary of theCompany. CMIT holds 79.03% of the equity of DPN and 100% of the equity of GangxinTechnology respectively, having control over DPN and Gangxin Technology. Therefore,from 9 February 2021, the Company incorporated DPN and Gangxin Technology into theconsolidation scope of the Company's consolidated financial statements with reference tothe accounting treatment method of business combination under the same control from thecommencement of the comparative financial statements.
(2) Material non-wholly-owned subsidiaries
Unit: RMB
| Name of the subsidiary | Proportion of ownership interest held by the minority shareholders (%) | Profit or loss attributable to minority shareholders in the current period | Dividends distributed to minority shareholders in the current period | Balance of minority interests at the end of the period |
| CMPort | 58.15 | 2,476,386,276.83 | 37,396,166.19 | 64,514,311,015.53 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 117 -
VII. EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Significant financial information of material non-wholly-owned subsidiaries
Unit: RMB
| Name of the subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| CMPort | 13,768,207,634.06 | 126,273,716,131.40 | 140,041,923,765.46 | 16,191,755,983.64 | 28,652,722,348.85 | 44,844,478,332.49 | 14,625,774,694.50 | 125,425,081,030.94 | 140,050,855,725.44 | 13,055,907,214.63 | 34,087,468,137.34 | 47,143,375,351.97 |
Unit: RMB
| Name of the subsidiary | Amount incurred in the current period | Amount incurred in the prior period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | |
| CMPort | 4,722,661,879.99 | 3,924,079,558.91 | 3,595,625,905.94 | 2,188,410,312.61 | 3,692,963,958.88 | 1,592,920,984.37 | 515,475,406.96 | 1,499,234,240.53 |
2. Transactions resulting in changes in ownership interests in subsidiaries without losing control over the subsidiaries
(1) Description of changes in ownership interests in subsidiaries
See Note VII 1 (1) for details.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 118 -
VII. EQUITY IN OTHER ENTITIES - continued
2. Transactions resulting in changes in ownership interests in subsidiaries without losing
control over the subsidiaries - continued
(2) Effect of transaction on minority interests and owner's equity attributable to the parent
company
Unit: RMB
| ITEM | CMIT |
| Purchase cost | |
| - Cash | - |
| - Non-cash assets | 21,722,727.15 |
| Total purchase cost | 21,722,727.15 |
| Less: Share of net assets of subsidiaries calculated according to the proportion of equity acquired | 22,868,105.53 |
| Difference | 1,145,378.38 |
| Including: Adjusted capital reserve | -1,145,378.38 |
| Adjusted surplus reserve | - |
| Adjusted undistributed profit | - |
3. Interests in joint ventures and associates
(1) Material joint ventures or associates
Unit: RMB
| Investee | Principal place of business | Place of registration | Nature of business | Proportion of ownership interests held by the Group (%) | Accounting method of investments in associates | |
| Direct | Indirect | |||||
| Associates | ||||||
| Shanghai International Port (Group) Co., Ltd. | Shanghai, PRC | Shanghai, PRC | Port and container terminal business | - | 26.77 | Equity method |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 119 -
VII. EQUITY IN OTHER ENTITIES - continued
4. Key financial information of material associates
Unit: RMB
| Item | Shanghai International Port (Group) Co., Ltd. | |
| Closing balance/Amount incurred in the current period | Opening balance/Amount incurred in the prior period | |
| Current assets | 50,383,167,725.32 | 43,653,716,114.59 |
| Including: Cash and cash equivalents | 27,069,666,009.09 | 20,689,734,592.59 |
| Non-current assets | 115,544,815,823.74 | 112,271,033,861.93 |
| Total assets | 165,927,983,549.06 | 155,924,749,976.52 |
| Current liabilities | 28,832,997,784.13 | 22,405,787,626.17 |
| Non-current liabilities | 35,421,996,922.32 | 37,539,362,699.55 |
| Total liabilities | 64,254,994,706.45 | 59,945,150,325.72 |
| Minority interests | 8,617,160,541.88 | 8,461,734,212.94 |
| Equity attributable to shareholders of the parent company | 93,055,828,300.73 | 87,517,865,437.86 |
| Share of net assets calculated based on the proportion of ownership interests | 24,911,045,236.11 | 23,428,532,577.72 |
| Adjustments | - | - |
| -Goodwill | 2,076,585,747.12 | 2,076,585,747.12 |
| -Others | -149,563,344.83 | -143,335,143.43 |
| Carrying amounts of equity investments in associates | 26,838,067,638.40 | 25,361,783,181.41 |
| Fair value of publicly quoted equity investments in associates | 29,586,221,627.22 | 28,345,709,190.02 |
| Operating income | 17,362,678,537.04 | 12,038,672,650.45 |
| Net profit | 9,168,282,128.06 | 4,328,854,036.44 |
| Other comprehensive income | -8,803,490.60 | 195,337,471.93 |
| Total comprehensive income | 9,159,478,637.46 | 4,524,191,508.37 |
| Dividends received from associates in the current year | 793,927,959.22 | 899,371,516.97 |
5. Summarized financial information of immaterial associates and joint ventures
Unit: RMB
| Closing balance / Amount incurred in the current period | Opening balance/ Amount incurred in the prior period | |
| Joint ventures: | ||
| Total carrying amount of investments | 8,855,932,238.43 | 8,866,327,205.84 |
| Aggregate of following items calculated based on the proportion of ownership interest | - | - |
| - Net profit | 95,037,172.93 | 177,436,875.24 |
| - Other comprehensive income | - | - |
| - Total comprehensive income | 95,037,172.93 | 177,436,875.24 |
| Associates: | ||
| Total carrying amount of investments | 31,735,276,355.12 | 32,014,300,835.65 |
| Aggregate of following items calculated based on the proportion of ownership interest | - | - |
| - Net profit | 1,134,394,012.10 | 194,518,871.83 |
| - Other comprehensive income | -53,669,400.39 | -23,400,026.46 |
| - Total comprehensive income | 1,080,724,611.71 | 171,118,845.37 |
6. The investees where the Group holds long-term equity investments are not restricted
to transfer funds to the Group.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 120 -
VIII. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
The Group's major financial instruments include cash and bank balances, notes receivable, accountreceivables, other receivables, long-term receivables, other equity instrument investments, othernon-current financial assets, short-term borrowings, notes payable, accounts payable, otherpayables, long-term borrowings, bonds payable, long-term payables etc. Details of these financialinstruments are disclosed in Notes (V). The risks associated with these financial instruments andthe policies on how to mitigate these risks are set out below. Management manages and monitorsthese exposures to ensure the risks are monitored at a certain level.
The Group adopts sensitivity analysis techniques to analyze how the entity's profit or loss and forthe period and shareholders' equity would have been affected by changes in the relevant riskvariables that were reasonably possible. As it is unlikely that risk variables will change in an isolatedmanner, and the interdependence between risk variables will have significant effect on the amountultimately influenced by the changes in a single risk variable, the following items are based on theassumption that each risk variable has changes on a stand-alone basis.
1. Risk management objectives and policies
The Group's risk management objectives are to achieve proper balance between risks and yield,minimize the adverse impacts of risks on the Group's operation performance, and maximize thebenefits of the shareholders and other equity investors. Based on these risk management objectives,the Group's basic risk management strategy is to identify and analyze the industry's exposure tovarious risks, establish appropriate bottom line for risk tolerance, implement risk management, andmonitors these exposures to ensure the risks are monitored at a certain level.
1.1 Market risk
1.1.1 Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. TheGroup's exposure to the currency risk is primarily associated with HKD, USD and EUR. Except forpart of the purchases and sales, the Group's other principal activities are denominated and settled inRMB. As at 30 June 2021, the balance of the Group's assets and liabilities are both denominated infunctional currency, except that the assets and liabilities set out below are recorded using foreigncurrency. Currency risk arising from the foreign currency balance of assets and liabilities may haveimpact on the Group's performance.
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash and bank balances | 430,937,716.00 | 1,214,901,554.08 |
| Accounts receivable | 24,614,419.21 | 34,261,643.29 |
| Other receivables | 512,277,923.68 | 1,004,843,484.23 |
| Short-term borrowings | 995,081,600.00 | 668,320,000.00 |
| Accounts payable | 7,542,828.12 | 4,286,809.14 |
| Other payables | 133,239,925.15 | 201,395,071.52 |
| Non-current liabilities due within one year | 2,523,780,136.99 | 382,131,909.25 |
| Long-term borrowings | 670,000,000.00 | 670,000,000.00 |
| Bonds payable | - | 2,500,000,000.00 |
| Long-term payables | 1,975,705.16 | 440,659,667.97 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 121 -
VIII. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.1 Currency risk - continued
The Group closely monitors the effects of changes in the foreign exchange rates on the Group'scurrency risk exposures. According to the current risk exposure and judgment of the exchange ratemovements, management considers it is unlikely that the exchange rate changes in the future oneyear will result in significant loss to the Group.
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges andhedges of a net investment in a foreign operation are highly effective. On the basis of the aboveassumption, where all other variables are held constant, the reasonably possible changes in theforeign exchange rate may have the following pre-tax effect on the profit or loss for the period andshareholders' equity:
Unit: RMB
| Item | Changes in exchange rate | The current period | The prior period | ||
| Effect on profits | Effect on shareholders' equity | Effect on profits | Effect on shareholders' equity | ||
| All foreign currencies | 5% increase against RMB | -37,283,559.46 | -37,283,559.46 | -21,788,739.77 | -21,788,739.77 |
| All foreign currencies | 5% decrease against RMB | 37,283,559.46 | 37,283,559.46 | 21,788,739.77 | 21,788,739.77 |
| All foreign currencies | 5% increase against USD | 1,204,140.69 | 1,204,140.69 | 1,832,900.68 | 1,832,900.68 |
| All foreign currencies | 5% decrease against USD | -1,204,140.69 | -1,204,140.69 | -1,832,900.68 | -1,832,900.68 |
| All foreign currencies | 5% increase against HKD | -161,772,050.17 | -161,772,050.17 | -247,590,042.34 | -247,590,042.34 |
| All foreign currencies | 5% decrease against HKD | -161,772,050.17 | -161,772,050.17 | 247,590,042.34 | 247,590,042.34 |
| All foreign currencies | 5% increase against FCFA | 29,661,962.11 | 29,661,962.11 | -59,525,285.86 | -59,525,285.86 |
| All foreign currencies | 5% decrease against FCFA | -29,661,962.11 | -29,661,962.11 | 59,525,285.86 | 59,525,285.86 |
1.1.2 Interest rate risk - changes in cash flows
Risk of changes in cash flows of financial instruments arising from interest rate changes is mainlyrelated to bank loans with floating interest rate. (See Note (V) 26 and Note (V) 36). The Groupcontinuously and closely monitors the impact of interest rate changes on the Group's interest raterisk. The Group's policy is to maintain these borrowings at floating rates. Presently, the Group hasno arrangement such as interest rate swaps etc.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 122 -
VIII. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.2 Interest rate risk - changes in cash flows - continued
Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the following assumptions:
? Fluctuations of market interest rate can affect the interest income or expense of a financialinstrument with floating interest rate;? For a financial instrument at fair value with fixed interest rate, the fluctuations of market interest ratecan only affect its interest income or expense;? For a derivative financial instrument designated as hedging instrument, the fluctuations of market
interest rate affects its fair value, and all interest rate hedging are expected to be highly effective;? The changes in fair value of derivative financial instruments and other financial assets and liabilitiesare calculated using cash flow discounting method by applying the market interest rate at balancesheet date.
On the basis of above assumptions, where the other variables held constant, the pre-tax effect ofpossible and reasonable changes in interest rate on the profit or loss for the period and shareholders'equity are as follows:
Unit: RMB
| Item | Changes in interest rate | The current period | The prior period | ||
| Effect on profits | Effect on shareholders' equity | Effect on profits | Effect on shareholders' equity | ||
| Short-term borrowings and long-term borrowings | 1% increase | -103,396,518.44 | -103,396,518.44 | -145,999,335.58 | -145,999,335.58 |
| Short-term borrowings and long-term borrowings | 1% decrease | 103,396,518.44 | 103,396,518.44 | 145,999,335.58 | 145,999,335.58 |
1.1.3 Other price risk
The Group's price risk is mainly arising from held-for-trading equity instrument investments andother equity instrument investments. The Group reduces the price risk of equity instrumentinvestments by holding portfolio of multiple equity securities.
1.2 Credit risk
As at 30 June 2021, the Group's maximum exposure to credit risk which will cause a financial lossto the Group due to failure to discharge an obligation by the counterparties and financial guaranteesissued by the Group is arising from the carrying amount of the respective financial assets recognizedin the consolidated balance sheet. For financial instruments measured at fair value, the carryingamount reflects the exposure to risks but not the maximum exposure to risks; the maximumexposure to risks would vary according to the future changes in fair value.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 123 -
VIII. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives and policies - continued
1.2 Credit risk - continued
In order to minimize the credit risk, the Group has delegated a team responsible for determinationof credit limits, credit approvals and other monitoring procedures to ensure that follow-up action istaken to recover overdue debts. In addition, the Group reviews the recoverable amount of financialassets at each balance sheet date to ensure that adequate impairment losses are made forirrecoverable amounts. In this regard, the management of the Group considers that the Group'scredit risk is significantly reduced.
The credit risk on liquid funds is limited because they are deposited with banks with high creditratings.
The Group has adopted a policy to ensure that all sales customers have good credit records.
The Group's risk exposure spreads over a number of counterparties and customers, therefore theGroup has no significant concentration of credit risk. At 30 June 2021, the balance of accountsreceivable from top five entities is RMB 460,789,341.84 (31 December 2020:
RMB 446,519,920.68), accounting for 23.88% (31 December 2020: 30.40%) of the Group'saccounts receivable. In addition, the Group has no other significant credit risk exposureconcentrated on single financial asset or portfolio of financial assets with similar characteristics.
1.3 Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and cashequivalents deemed adequate by the management to finance the Group's operations and mitigatethe effects of fluctuations in cash flows. The management monitors the utilization of bankborrowings and ensures compliance with loan covenants.
For the period from 1 January to 30 June 2021, the Group had total current liabilities in excess oftotal current assets of RMB 4,988,808,531.03. As at 30 June 2021, the Group has availableunutilized loan facility of RMB 44,924,971,453.51which is more than current liabilities. Therefore,the Group's management believes that the Group has no significant liquidity risk.
The following is the maturity analysis for financial assets and financial liabilities held by the Groupwhich is based on undiscounted remaining contractual obligations:
Unit: RMB
| Item | Carrying amount | Gross amount | Within 1 year | 1 to 5 years | Over 5 years |
| Short-term borrowings | 4,918,709,603.87 | 4,962,866,633.77 | 4,962,866,633.77 | - | - |
| Notes payable | 10,456,401.57 | 10,456,401.57 | 10,456,401.57 | - | - |
| Accounts payable | 745,241,136.72 | 745,241,136.72 | 745,241,136.72 | - | - |
| Other payables | 3,866,179,811.31 | 3,866,179,811.31 | 3,866,179,811.31 | - | - |
| Non-current liabilities due within one year | 8,743,691,405.73 | 8,937,632,106.24 | 8,937,632,106.24 | - | - |
| Other current liabilities | 2,165,517,831.24 | 2,182,300,365.49 | 2,182,300,365.49 | - | - |
| Long-term borrowings | 7,334,778,282.88 | 8,305,161,723.96 | - | 6,424,712,248.76 | 1,880,449,475.20 |
| Bonds payable | 17,283,407,358.74 | 17,369,182,093.23 | - | 13,496,709,846.86 | 3,872,472,246.37 |
| Lease liabilities | 1,222,109,735.26 | 1,909,998,378.59 | - | 668,177,905.72 | 1,241,820,472.87 |
| Long-term payables | 1,177,539,049.89 | 1,274,621,660.09 | - | 26,880,639.26 | 1,247,741,020.83 |
| Other non-current liabilities | 3,364,055,291.80 | 3,364,055,291.80 | - | 258,175,401.59 | 3,105,879,890.21 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 124 -
IX. DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
Unit: RMB
| Item | Fair value at closing balance | |||
| Level 1 | Level 2 | Level 3 | Total | |
| Measurements at fair value continuously | ||||
| Held-for-trading financial assets | 173,287.80 | 1,000,000,000.00 | - | 1,000,173,287.80 |
| Accounts receivable financing | - | 272,889,319.83 | - | 272,889,319.83 |
| Other equity instrument investments | 11,336,800.00 | - | 170,680,257.74 | 182,017,057.74 |
| Other non-current financial assets | 839,486,772.90 | - | 24,422,312.79 | 863,909,085.69 |
| Total assets measured at fair value continuously | 850,996,860.70 | 1,272,889,319.83 | 195,102,570.53 | 2,318,988,751.06 |
| Other non-current liabilities | - | - | 3,438,158,858.69 | 3,438,158,858.69 |
| Total liabilities measured at fair value continuously | - | - | 3,438,158,858.69 | 3,438,158,858.69 |
2. Basis for determining the market price of items continuously measured at level 1 fair
value
The market prices of held-for-trading financial assets, other equity instrument investments and othernon-current financial assets are determined at the closing price of the equity instrument at ShanghaiStock Exchange and Hong Kong Stock Exchange at 30 June 2021.
3. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 2 fair value
Unit: RMB
| Item | Fair value at the end of the period | Valuation techniques | Inputs |
| Accounts receivable financing | 272,889,319.83 | Cash flow discounting | Discount rate |
| Held-for-trading financial assets | 1,000,000,000.00 | Cash flow discounting | Discount rate |
During the valuation, the Group needs to make estimates in respect of market volatility andrelevance etc., select appropriate discount rate and take into consideration of adjustment of discountand premium.
4. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 3 fair value
Unit: RMB
| Item | Fair value at the end of the period | Valuation techniques | Inputs |
| Other equity instrument investments | 170,680,257.74 | Net worth method | Carrying amount |
| Other non-current financial assets | 2,000,000.00 | Cash flow discounting | Discount rate |
| Other non-current financial assets | 667,822.80 | Net worth method | Carrying amount |
| Other non-current financial assets | 21,754,489.99 | Listed company comparison approach | Share price |
| Other non-current liabilities | 3,438,158,858.69 | Cash flow discounting | Discount rate |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 125 -
IX. DISCLOSURE OF FAIR VALUE - continued
4. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 3 fair value - continued
The fair value of non-listed equity instruments included in equity instruments at fair value throughprofit or loss or other comprehensive income is determined using the valuation techniques such ascash flow discounting method, net worth method, listed company comparison approach etc. Duringthe valuation, the Group needs to make estimates in respect of the future cash flows, credit risk,market volatility and relevance etc., select appropriate discount rate and take into consideration ofadjustment of discount and premium.
5. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and liabilities not measured at fair value mainly include: notes receivable,accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable,other payables, long-term borrowings, bonds payable and long-term payables etc.
The Group's management believes that the carrying amounts of financial assets and financialliabilities at amortized cost in the financial statements approximate their fair values.
The fair value of bonds payable traded in active market is determined at the quoted price in theactive market. The fair values of long-term borrowings, long-term payables and bonds payable nottraded in active market are determined at the present value of contractual future cash flowsdiscounted using the interest rate for providing nearly the same cash flows to entity with comparablecredit rating under the same conditions.
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
| Name of the parent | Related party relationship | Type of the entity | Place of registration | Director | Nature of business | Issued share capital | Proportion of the Company's ownership interests held by the parent (%) | Proportion of the Company's voting power held by the parent (%) |
| Broadford Global Limited | Parent company | Private limited company (share limited) | Hong Kong | Li Jianhui、Sun Ligan | Investment holding | HKD 21,120,986,262 | 2.88 | 81.92 （Note ) |
Note: Broadford Global Limited directly holds 2.88% equity of the Company, and indirectly holds
19.29% and 59.75% equity of the Company through the subsidiaries China MerchantsGangtong Development (Shenzhen) Co., Ltd. and China Merchants Port Investment andDevelopment Co., LTD. (formerly known as China Merchants Investment and DevelopmentCo., LTD.) respectively.
The ultimate controlling shareholder of the Company is China Merchants Group.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in Note (VII) 1.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 126 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
3. Associates and joint ventures of the Company
Details of the Company's significant joint ventures and associates are set out in Note (VII) 3.
Other joint ventures or joint ventures that occurred related party transactions and formed balanceswith the Group this year are as follows:
| Name of joint venture or associate | Relationship with the Company |
| Port of Newcastle and its subsidiaries | Joint venture |
| Guizhou East Land Port Operation Co., Ltd. | Joint venture |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Joint venture |
| Qingdao Qianwan New United Container Terminal Co., Ltd. | Joint venture |
| China Merchants Antong Logistics Management Co., LTD | Joint venture |
| China Zhanjiang ocean Shipping Agency Co. LTD | Joint venture |
| Yantai Port Group Laizhou Port Co. LTD | Joint venture |
| Zhanjiang Cosco Shipping Logistics Co. LTD | Joint venture |
| Qingdao Qianwan United Container Terminal Co. LTD | Joint venture |
| Great Horn Development Company FZCO | Associate |
| International Djibouti Industrial Parks Operation FZCO | Associate |
| Port De Djibouti S.A. | Associate |
| Terminal Link SAS | Associate |
| Tin-Can Island Container Terminal Ltd | Associate |
| Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. | Associate |
| Nanshan Group and its subsidiaries | Associate |
| Shanghai International Port (Group) Co., Ltd. | Associate |
| Shenzhen Baohong Technology Co., LTD | Associate |
| Tianjin Haitian Bonded Logistics Co., Ltd. | Associate |
| Zhanjiang Merchants Port City Investment Co., LTD | Associate |
| Zhanjiang Xiagang Joint Development Co., LTD | Associate |
| Pearl River Inland Cargo Terminal Co. LTD | Associate |
| Shantou Zhonglian tally Co., LTD | Associate |
| Shantou International Container Terminals Co. LTD | Associate |
| Shenzhen Wandian Industrial Co., LTD | Associate |
| Liaoning Port Co. LTD | Associate |
| Ningbo Zhoushan Port Co., LTD ("Ningbo Zhoushan") | Associate |
| Doraleh Multi-purpose Port | Associate |
| Shenzhen Chiwan Oriental Logistics Co., LTD | Associate |
4. Other related parties of the Company
| Name of other related parties | Relationship with the Company |
| Sri Lanka Ports Authority | Minority shareholders of subsidiaries |
| Zhanjiang Infrastructure | Minority shareholders of subsidiaries |
| Zhoushan Blue Sea Investment Co., LTD | Minority shareholders of subsidiaries |
| Antong Holdings and its subsidiaries (Note) | Connected person |
| China COSCO Shipping Group and its subsidiaries (Note) | Connected person |
| Guangdong Sinotrans shipping Agency Co. LTD | Controlled by the same ultimate controlling shareholder |
| Haitong (Shanghai) Trading Co., LTD | Controlled by the same ultimate controlling shareholder |
| South China Sinotrans Supply Chain Management Co., LTD | Controlled by the same ultimate controlling shareholder |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 127 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
| Name of other related parties | Relationship with the Company |
| Eurasia shipyard Enterprise Co., LTD | Controlled by the same ultimate controlling shareholder |
| Qingdao Bonded Logistics Park Sinotrans Storage logistics Co. LTD | Controlled by the same ultimate controlling shareholder |
| Qingdao Sinotrans Supply Chain Management Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Forwarder Storage Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Southern Oil (Group) Co. LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Qianhai Sinotrans Supply Chain Management Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen West Port Security Service Company | Controlled by the same ultimate controlling shareholder |
| Shenzhen Merchants International Shipping Agency Co. LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Merchants Real Estate Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Merchants roller transportation Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Merchant Investment Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Merchants Property Management Co., LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Sinotrans shipping Agency Co. LTD | Controlled by the same ultimate controlling shareholder |
| Youlian Shipyard (Shekou) Co., LTD | Controlled by the same ultimate controlling shareholder |
| Youlian shipyard Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Haida Insurance Consultant Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants International Cold Chain (Shenzhen) Co., LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Group Finance Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Port Investment and Development Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Renhe Life Insurance Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Finance leasing (Tianjin) Co., LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Food (China) Co., LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Trade Finance leasing Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Logistics Group Qingdao Co. LTD | Controlled by the same ultimate controlling shareholder |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 128 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
| Name of other related parties | Relationship with the Company |
| China Merchants Zhangzhou Development Zone Power Supply Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Communications Import and Export Co. LTD | Controlled by the same ultimate controlling shareholder |
| Guangdong Sinotrans Shipping Co. LTD | Controlled by the same ultimate controlling shareholder |
| Sinotrans Container Transportation Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Securities Co. LTD | Controlled by the same ultimate controlling shareholder |
| Yingkou Gangrong Big Data Co., LTD | Controlled by the same ultimate controlling shareholder |
| Sinotrans (Hong Kong) Shipping Company limited | Controlled by the same ultimate controlling shareholder |
| China Merchants Zhangzhou Development Zone Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Shenzhen Ocean Shipping Agency Co. LTD | Controlled by the same ultimate controlling shareholder |
| Ningbo Shipping Agency Co. LTD | Controlled by the same ultimate controlling shareholder |
| Haitong Kechuang (Shenzhen) Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Heavy Industries (Jiangsu) Co. LTD | Controlled by the same ultimate controlling shareholder |
| Sinotrans Container Transport (Hong Kong) Co., LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants (Liaoning) Port Development Co. LTD | Controlled by the same ultimate controlling shareholder |
| Yingkou Port Group | Controlled by the same ultimate controlling shareholder |
| Liaoning Port Group Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Yangtze River Steamship Co. LTD | Controlled by the same ultimate controlling shareholder |
| Shenzhen Forwarder International freight co., LTD | Controlled by the same ultimate controlling shareholder |
| Sinotrans South China Co. LTD | Controlled by the same ultimate controlling shareholder |
| China Merchants Gangtong Development (Shenzhen) Co., LTD | Controlled by the same ultimate controlling shareholder |
| Sinotrans Shipping Co. LTD | Controlled by the same ultimate controlling shareholder |
| Orienture Holdings Company Limited | Controlled by the same ultimate controlling shareholder |
| China Merchants Finance leasing (Shanghai) Co., LTD | Controlled by the same ultimate controlling shareholder |
| Khor Ambado FZCo | Where the ultimate controlling shareholder has significant influence |
| China Merchant Bank Co., Ltd. | Where the ultimate controlling shareholder has significant influence |
| China Merchants United Development Co. LTD | Where the ultimate controlling shareholder has significant influence |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 129 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
Note: The Company's former chairman Fu Gangfeng resigned as the chairman of the Company
on 31 January 2020, and became the director, general manager of China COSCO ShippingCorporation Limited within 12 months after his resign as the Company's chairman.According to the Rules Governing the Listing of Shares on Shenzhen Stock Exchange,China COSCO Shipping Corporation Limited is a related party of the Company; from 1January 2021 to 30 June 2021, the Company's deputy general manager Zheng Shaopingwork as the director of the Company and the chairman of Antong Holdings Co., Ltd.Therefore, the related party transactions and balances for the period and within 12 monthsafter the period in which the aforesaid two persons were the director, senior managementpersonnel of China COSCO Shipping Corporation Limited and Antong Holdings Co., Ltd.are disclosed.
5. Related party transactions
(1) Rendering and receipt of service
Unit: RMB
| Related party | Content of transaction | Pricing method and decision procedures of related transactions | Amount incurred in the current period | Amount incurred in the prior period |
| Receipt of service: | ||||
| Shenzhen Wandian Industrial Co., Ltd. | Service expenditure | Negotiation | 23,540,775.37 | - |
| Hoi Tung (Shanghai) Company Limited | Service expenditure | Negotiation | 8,531,341.56 | 1,075,389.11 |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Service expenditure | Negotiation | 7,456,011.20 | 7,457,789.57 |
| Shenzhen West Port Security Service Company | Service expenditure | Negotiation | 4,195,429.30 | - |
| Yiu Lian Dockyards Limited | Service expenditure | Negotiation | 3,623,433.09 | 4,313,298.43 |
| Shenzhen China Merchants Property Management Co., Ltd. | Service expenditure | Negotiation | 2,679,300.52 | 3,753,910.42 |
| Shenzhen Chiwan Oriental Logistics Co., Ltd. | Service expenditure | Negotiation | 2,332,826.73 | - |
| China Nanshan Development (Group) Incorporation | Service expenditure | Negotiation | 2,229,485.70 | 21,754,790.42 |
| China Merchants Zhangzhou Development Zone Power Supply Co., Ltd. | Service expenditure | Negotiation | 2,166,324.95 | 1,902,146.11 |
| Yingkou Port Group Co., Ltd. | Service expenditure | Negotiation | 1,691,743.27 | - |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co., Ltd. | Service expenditure | Negotiation | 1,559,726.18 | - |
| Guangdong Sinotrans Shipping Co., Ltd. | Service expenditure | Negotiation | 1,542,016.89 | 764,449.65 |
| China Merchants Food (China) Co., Ltd. | Service expenditure | Negotiation | 1,201,759.76 | 50,676.00 |
| China Marine Shipping Agency Shenzhen Co. , Ltd. | Service expenditure | Negotiation | 1,022,766.82 | 1,095,062.50 |
| China Merchants Haida Insurance Consultant Co. LTD | Service expenditure | Negotiation | 243,438.98 | 2,351,146.06 |
| China Merchants Bureau Logistics Group Qingdao Co., Ltd | Service expenditure | Negotiation | 183,960.81 | 1,011,481.25 |
| Shenzhen West Port Security Service Company | Service expenditure | Negotiation | - | 2,140,188.70 |
| China Merchants Renhe Life Insurance Co. LTD | Service expenditure | Negotiation | - | 1,828,081.51 |
| Khor Ambado FZCo | Service expenditure | Negotiation | - | 1,334,921.77 |
| Other related party | Service expenditure | Negotiation | 7,203,788.85 | 4,255,513.74 |
| China Merchants Group Finance Co. LTD | Interest payments | Negotiation | 30,389,688.50 | 17,054,903.23 |
| China Merchants Bank Co. LTD | Interest payments | Negotiation | 3,268,813.97 | 1,510,507.99 |
| China Merchants Finance leasing (Tianjin) Co., LTD | Interest payments | Negotiation | - | 3,463,541.67 |
| Nanshan Group and its subsidiaries | Property utilities | Negotiation | 290,902.36 | 2,579,881.82 |
| Shenzhen Merchants Property Management Co., LTD | Property utilities | Negotiation | - | 4,649,769.22 |
| Other related party | Property utilities | Negotiation | - | 942,608.78 |
| Total | 105,353,534.81 | 85,290,057.95 | ||
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 130 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of service - continued
Unit: RMB
| Related party | Content of transaction | Pricing method and decision procedures of related transactions | Amount incurred in the current period | Amount incurred in the prior period |
| Rendering of service: | ||||
| Antong Holding Co., Ltd. and its subsidiaries | Service revenue | Negotiation | 98,541,945.59 | 61,740,139.88 |
| Zhanjiang Cosco Shipping Logistics Co. LTD | Service revenue | Negotiation | 88,294,684.14 | 65,809,923.78 |
| China COSCO Shipping Group and its subsidiaries | Service revenue | Negotiation | 67,594,546.16 | 191,399,439.67 |
| Guangdong Sinotrans shipping Agency Co. LTD | Service revenue | Negotiation | 38,552,309.99 | 19,894,702.69 |
| China Zhanjiang ocean Shipping Agency Co. LTD | Service revenue | Negotiation | 25,067,430.42 | 26,430,608.95 |
| Qingdao Qianwan United Container Terminal Co. LTD | Service revenue | Negotiation | 22,637,413.70 | 22,646,763.19 |
| Liaoning Port Co. LTD | Service revenue | Negotiation | 19,864,136.94 | - |
| Yingkou Port Group Co. LTD | Service revenue | Negotiation | 16,175,416.62 | - |
| Shenzhen Merchants International Shipping Agency Co. LTD | Service revenue | Negotiation | 9,322,068.75 | 2,941,424.71 |
| Youlian Shipyard (Shekou) Co., LTD | Service revenue | Negotiation | 7,465,890.54 | 2,412,855.54 |
| Liaoning Port Group Co. LTD | Service revenue | Negotiation | 6,851,108.81 | - |
| Ningbo Zhoushan | Service revenue | Negotiation | 6,777,410.02 | - |
| Shenzhen Baohong Technology Co., LTD | Service revenue | Negotiation | 5,643,062.05 | - |
| Shenzhen Qianhai Sinotrans Supply Chain Management Co., LTD | Service revenue | Negotiation | 3,679,093.79 | 2,382,499.13 |
| China Merchants International Cold Chain (Shenzhen) Co., LTD | Service revenue | Negotiation | 3,453,502.00 | 3,358,865.70 |
| Shenzhen Sinotrans shipping Agency Co. LTD | Service revenue | Negotiation | 2,818,483.03 | 2,259,799.79 |
| Yingkou Gangrong Big Data Co., LTD | Service revenue | Negotiation | 2,332,986.53 | 289,466.96 |
| Shantou International Container Terminals Co. LTD | Service revenue | Negotiation | 2,257,929.61 | 1,263,661.19 |
| China Yangtze River Steamship Co. LTD | Service revenue | Negotiation | 2,133,440.00 | - |
| China Shenzhen ocean shipping Agency Co. LTD | Service revenue | Negotiation | 2,099,723.96 | 10,190,194.09 |
| East Guizhou Land Port Operation Co. LTD | Service revenue | Negotiation | 2,046,879.50 | 1,643,215.08 |
| Shantou Zhonglian tally Co., LTD | Service revenue | Negotiation | 2,033,121.99 | 359,742.38 |
| Qingdao Qianwan West Port United Wharf Co., LTD | Service revenue | Negotiation | 1,724,078.14 | 1,612,607.38 |
| China Merchants Heavy Industries (Jiangsu) Co. LTD | Service revenue | Negotiation | 1,494,112.80 | 225,074.82 |
| Qingdao Qianwan New Union Container Terminal Co. LTD | Service revenue | Negotiation | 1,446,408.10 | 1,453,413.79 |
| Sinotrans (Hong Kong) Shipping Company limited | Service revenue | Negotiation | 1,391,042.72 | - |
| South China Sinotrans Supply Chain Management Co., LTD | Service revenue | Negotiation | 1,277,958.26 | 3,952,260.53 |
| Sinotrans container transport (Hong Kong) Co., LTD | Service revenue | Negotiation | 1,277,956.30 | 304,231.20 |
| Qingdao Bonded Logistics Park Sinotrans Storage logistics Co. LTD | Service revenue | Negotiation | 1,166,773.53 | 853,254.61 |
| Guangdong Sinotrans Shipping Co. LTD | Service revenue | Negotiation | 1,066,579.80 | 463,819.11 |
| Yantai Port Group Laizhou Port Co. LTD | Service revenue | Negotiation | 1,006,226.41 | - |
| Guizhou Qiandongnan Land Port Operation Co. LTD | Service revenue | Negotiation | 698,145.68 | 2,170,933.76 |
| China Merchants Port Investment development Co. LTD | Service revenue | Negotiation | 651,707.54 | 6,875,471.73 |
| Qingdao Sinotrans Supply Chain Management Co., LTD | Service revenue | Negotiation | 280,430.34 | 1,381,761.20 |
| Doraleh Multi-purpose Port | Service revenue | Negotiation | 241,063.92 | 1,007,325.33 |
| Sinotrans Container Transportation Co. LTD | Service revenue | Negotiation | 137,305.63 | 1,867,447.60 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 131 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of service - continued
Unit: RMB
| Related party | Content of transaction | Pricing method and decision procedures of related transactions | Amount incurred in the current period | Amount incurred in the prior period |
| Rendering of service: - continued | ||||
| Shenzhen Forwarder Storage Co., LTD | Service revenue | Negotiation | 122,507.33 | 3,271,684.66 |
| Shenzhen Baohong Technology Co., LTD | Service revenue | Negotiation | - | 4,043,370.07 |
| Shenzhen forwarder International freight Co., LTD | Service revenue | Negotiation | - | 3,093,622.85 |
| Ningbo Daxie | Service revenue | Negotiation | - | 1,467,170.05 |
| Other related party | Service revenue | Negotiation | 7,000,909.78 | 7,103,107.07 |
| Terminal Link SAS | Interest income | Negotiation | 83,985,071.35 | 47,175,076.70 |
| Port of Newcastle and its subsidiaries | Interest income | Negotiation | 32,103,266.39 | 29,765,975.26 |
| China Merchant Bank Co., Ltd. | Interest income | Negotiation | 27,709,063.52 | 14,161,811.40 |
| China Merchants Group Finance Company Limited | Interest income | Negotiation | 16,044,336.39 | 4,840,581.56 |
| China Merchants Harbor City | Interest income | Negotiation | 1,957,067.27 | 24,449,639.56 |
| China Merchants Antong Logistics Management Co., LTD | Interest income | Negotiation | - | 3,248,630.14 |
| Other related party | Interest income | Negotiation | 823,676.39 | 735,917.68 |
| Total | 619,248,271.73 | 580,547,490.79 |
(2) Leases with related parties
The Group as the lessor:
Unit: RMB
| Name of the lessee | Type of leased assets | Pricing method and decision procedures of related transactions | Lease income recognized in the current period | Lease income recognized in the prior period |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Port and wharf facilities | Negotiation | 4,815,722.20 | 4,663,926.38 |
| Qingdao Bonded Logistics Park Sino-foreign Transport Warehousing Logistics Co., Ltd. | Buildings | Negotiation | 2,825,722.88 | 2,616,103.75 |
| China Merchants Food (China) Co., Ltd. | Buildings | Negotiation | 2,641,029.00 | 2,338,264.98 |
| China Communications Import & Export Co., Ltd. | Buildings | Negotiation | 2,606,198.16 | 2,304,217.40 |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | Buildings | Negotiation | 1,947,099.43 | 1,030,172.01 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Buildings | Negotiation | 1,504,168.98 | - |
| China Merchants Securities Co., Ltd. | Buildings | Negotiation | 1,239,270.84 | 1,126,349.15 |
| Nanshan Group and its subsidiaries | Buildings | Negotiation | 1,205,711.40 | 1,221,353.05 |
| Yiu Lian Dockyards (Shekou) Limited | Buildings | Negotiation | 1,180,174.54 | 1,363,141.03 |
| Sinotrans South China Co., Ltd. | Buildings | Negotiation | 733,987.15 | - |
| Other related party | Buildings, land use rights | Negotiation | 2,954,403.60 | 2,533,033.88 |
| Total | 23,653,488.18 | 19,196,561.63 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 132 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Related party guarantees
The Group as the guarantor
Unit: RMB
| Secured party | Credit line | Guaranteed amount | Commencement date | Maturity date | The guarantee has been completed or not |
| For the period from 1 January to 30 June 2021 | |||||
| Terminal Link SAS (Note 1) | 67,144,809.51 | 67,144,809.51 | 1 June 2013 | 2033 | No |
| Khor Ambado FZCo(Note 2) | 186,692,802.05 | 112,388,291.40 | 24 May 2019 | 2032 | No |
| Total | 253,837,611.56 | 179,533,100.91 | |||
| For the period from 1 January to 30 June 2020 | |||||
| Terminal Link SAS (Note 1) | 80,622,102.91 | 80,622,102.91 | 1 June 2013 | 2033 | No |
| Khor Ambado FZCo (Note 2) | 203,198,400.00 | 122,324,592.81 | 24 May 2019 | 2032 | No |
| Total | 283,820,502.91 | 202,946,695.72 | |||
Note 1: CMA CGM S.A. is another shareholder of Terminal Link SAS, an associate of the Group.
The Group has made a commitment to CMA CGM S.A. that the Group will providesguarantee for its bank loan financing to the associate Terminal Link SAS and other liabilitiesto the extent of the Group's 49% ownership interest in the company. The actual guaranteedamount is RMB 67,144,809.51 on 30 June 2021. If any guarantee liability occurs, the Groupwill compensate CMA CGM S.A.
Note 2: Khor Ambado FZCo is a related company of the Group's common ultimate controlling
shareholder. The Group provides guarantee for its bank loans and other liabilities, withactual guaranteed amount of RMB 112,388,291.40 as at 30 June 2021.
(4) Borrowings and loans with related parties
Unit: RMB
| Related party | Amount | Commencement date | Maturity date | Description |
| For the period from 1 January to 30 June 2021 | ||||
| Borrowings | ||||
| China Merchants Group Finance Company Limited | 197,112,248.22 | 1 March 2021 | 21 June 2024 | Fixed interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 80,661,051.60 | 17 May 2021 | 12 March 2029 | Fixed interest rate of 4.5100% |
| China Merchants Group Finance Company Limited | 58,800,000.00 | 8 April 2021 | 31 October 2023 | Fixed interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 50,044,968.20 | 11 June 2021 | 10 June 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 47,050,263.90 | 9 April 2021 | 8 April 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 33,029,679.02 | 25 June 2021 | 24 June 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 30,030,917.00 | 10 May 2021 | 9 May 2022 | Fixed interest rate of 3.7100% |
| China Merchants Group Finance Company Limited | 20,021,388.90 | 19 April 2021 | 18 April 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 10,075,542.47 | 7 June 2021 | 4 December 2021 | Fixed interest rate of 2.5500% |
| China Merchants Group Finance Company Limited | 10,016,767.12 | 22 March 2021 | 18 September 2021 | Fixed interest rate of 2.7300% |
| Total | 536,842,826.43 | |||
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 133 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(4) Borrowings and loans with related parties - continued
Unit: RMB
| Related party | Amount | Commencement date | Maturity date | Description |
| For the period from 1 January to 30 June 2020 | ||||
| Borrowings | ||||
| China Merchants Group Finance Company Limited | 200,225,000.00 | 14 April 2020 | 13 April 2021 | Fixed interest rate of 4.0500% |
| China Merchants Group Finance Company Limited | 50,051,527.78 | 21 May 2020 | 20 May 2021 | Fixed interest rate of 3.7100% |
| China Merchants Group Finance Company Limited | 47,000,000.00 | 6 January 2020 | 7 October 2024 | Fixed interest rate of 4.5125% |
| China Merchants Group Finance Company Limited | 29,032,625.00 | 10 April 2020 | 24 December 2020 | Fixed interest rate of 4.0500% |
| China Merchants Group Finance Company Limited | 20,022,500.00 | 7 April 2020 | 6 April 2021 | Fixed interest rate of 4.0500% |
| China Merchants Group Finance Company Limited | 14,033,425.02 | 13 March 2020 | 12 March 2029 | Fixed interest rate of 4.5050% |
| China Merchants Group Finance Company Limited | 10,000,000.00 | 19 June 2020 | 31 October 2023 | Fixed interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 6,109,400.45 | 22 June 2020 | 21 June 2024 | Fixed interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 5,045,500.00 | 25 March 2020 | 12 March 2029 | Fixed interest rate of 4.5050% |
| China Merchants Group Finance Company Limited | 3,758,844.48 | 22 April 2020 | 12 March 2029 | Fixed interest rate of 4.5050% |
| China Merchants Group Finance Company Limited | 2,659,474.10 | 5 June 2020 | 12 March 2029 | Fixed interest rate of 4.5050% |
| Total | 387,938,296.83 | |||
| Lending | ||||
| Terminal Link SAS | 3,016,715,205.48 | 26 March 2020 | 26 March 2028 | Fixed interest rate of 6.0000% |
| Port of Newcastle and its subsidiaries | 811,518,975.10 | 30 May 2020 | 23 July 2023 | Fixed interest rate of 8.0000% |
| Tianjin Haitian Bonded Logistics Co., Ltd. | 34,300,000.00 | 3 January 2020 | 2 January 2023 | Fixed interest rate of 4.7500% |
| Total | 3,862,534,180.58 | |||
(5) Asset transfer with related parties
| Related Party | Content of transaction | Pricing method and decision procedures of related transactions | Amount incurred in the current period | Amount incurred in the prior period |
| Hoi Tung (Shanghai) Company Limited | Machinery and equipment | Negotiation | 1,371,681.42 | 8,202,477.87 |
| Hoi Tung Innotek (Shenzhen) Company Limited | Machinery and equipment | Negotiation | - | 1,946,000.00 |
| Other related party | General office equipment | Negotiation | - | 83,584.00 |
| Total | 1,371,681.42 | 10,232,061.87 |
(6) Compensation for key management personnel
Unit: RMB
| Item | Closing balance | Opening balance |
| Compensation for key management personnel | 8,523,459.60 | 12,350,017.98 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 134 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties
(1) Amounts due from related parties
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Cash and bank balances | China Merchant Bank Co., Ltd. | 2,691,250,944.82 | 1,901,262,575.44 |
| China Merchants Group Finance Company Limited | 905,012,170.44 | 1,568,924,175.58 | |
| Total | 3,596,263,115.26 | 3,470,186,751.02 | |
| Held-for-trading financial assets | China Merchant Bank Co., Ltd. | 1,000,000,000.00 | 850,000,000.00 |
| Accounts receivable | Zhanjiang Cosco Shipping Logistics Co. LTD | 19,342,270.90 | 4,326,223.02 |
| Liaoning Port Co. LTD | 16,493,768.48 | - | |
| Antong Holding Co., Ltd. and its subsidiaries | 15,653,452.72 | 10,508,254.42 | |
| Guangdong Sinotrans shipping Agency Co. LTD | 9,678,632.47 | 7,777,640.18 | |
| Qingdao Qianwan United Container Terminal Co. LTD | 6,905,264.80 | - | |
| Qingdao Qianwan West Port United Wharf Co., LTD | 4,772,120.07 | 2,007,669.18 | |
| Shenzhen Merchants International Shipping Agency Co. LTD | 3,543,875.73 | 590,901.89 | |
| Khor Ambado FZCo | 2,893,383.20 | 2,774,015.84 | |
| Youlian Shipyard (Shekou) Co., LTD | 1,837,823.70 | 725,330.10 | |
| Sinotrans Container Transportation Co. LTD | 1,781,312.75 | 1,148,569.75 | |
| Port De Djibouti S.A | 1,648,150.20 | 1,497,611.83 | |
| Ningbo Shipping Agency Co. LTD | 822,263.98 | 7,773,568.86 | |
| Shenzhen Baohong Technology Co., LTD | 641,391.13 | 2,641,391.12 | |
| Great Horn Development Company Fzco | 437,535.62 | 1,427,020.52 | |
| East Guizhou Land Port Operation Co. LTD | 44,900.00 | 3,612,221.02 | |
| South China Sinotrans Supply Chain Management Co., LTD | 40,116.00 | 1,035,675.13 | |
| Guizhou Qiandongnan Land Port Operation Co. LTD | 11,260.00 | 1,061,604.20 | |
| China Ocean Shipping Group Company Limited and its subsidiaries | - | 120,615,548.37 | |
| Other related party | 13,265,812.48 | 7,890,241.86 | |
| Total | 99,813,334.23 | 177,413,487.29 | |
| Other receivables | Shanghai International Port (Group) Co. LTD | 756,630,823.35 | - |
| Nanshan Group and its subsidiaries | 316,246,500.00 | 210,831,000.00 | |
| Liaoning Port Co. LTD | 74,242,730.44 | - | |
| Qingdao Port International Co., LTD | 39,116,713.02 | - | |
| Pearl River Inland Cargo Terminal Co. LTD | 33,692,528.00 | 57,607,520.00 | |
| Port De Djibouti S.A | 23,097,175.98 | 23,248,597.69 | |
| Tin-Can Island Container Terminal Ltd | 22,996,441.34 | 33,289,037.77 | |
| Zhanjiang Cosco Shipping Logistics Co. LTD | 13,378,666.52 | 13,378,666.52 | |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co., LTD | 6,000,000.00 | 4,000,000.00 | |
| Zhanjiang Infrastructure Construction investment Group Co. LTD | 4,907,365.06 | 31,513,558.60 | |
| Zhoushan Blue Sea Investment Co., LTD | 2,899,163.95 | 4,996,989.39 | |
| Shenzhen Merchants roller transportation Co., LTD | 2,899,163.95 | 2,899,163.95 | |
| China Merchants (Liaoning) Port Development Co. LTD | 2,500,000.00 | 2,000,000.00 | |
| Yingkou Port Group Co. LTD | 2,379,512.33 | - | |
| Eurasia shipyard Enterprise Co., LTD | 1,411,165.96 | 1,422,660.84 | |
| International Djibouti Industrial Parks Operation FZCo | 1,142,084.99 | 922,676.08 | |
| Shenzhen Merchant Investment Co., LTD | 1,132,846.40 | 1,068,658.39 | |
| Other related party | 53,398,607.28 | 3,258,884.44 | |
| Total | 1,358,071,488.57 | 390,437,413.67 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 135 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Advance payment | Other related party | 215,094.29 | 244,729.25 |
| Non-current assets due within one year | Terminal Link SAS | 43,195,959.11 | 51,286,674.10 |
| Port of Newcastle and its subsidiaries | 31,680,947.48 | 16,473,559.57 | |
| Total | 74,876,906.59 | 67,760,233.67 | |
| Long-term receivables | Terminal Link SAS | 2,728,165,833.95 | 2,746,067,386.31 |
| Port of Newcastle and its subsidiaries | 798,004,103.00 | 815,144,304.00 | |
| Tianjin Haitian Bonded Logistics Co., Ltd. | 34,300,000.00 | 34,300,000.00 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |
| Zhanjiang China Merchants Harbor City Investment Co., Ltd. | - | 286,330,144.62 | |
| Total | 3,570,469,936.95 | 3,891,841,834.93 |
(2) Amounts due to related parties
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Short-term borrowings | China Merchants Group Finance Company Limited | 360,460,315.17 | 2,707,459,283.70 |
| Other current liabilities | Nanshan Group and its subsidiaries | - | 60,606,027.37 |
| Accounts payable | Qingdao Qianwan West Port United Wharf Co., Ltd. | 5,766,560.89 | 6,381,033.57 |
| CHINA NANSHAN DEVELOPMENT (GROUP) INCORPORATION | 5,764,127.70 | 9,220,434.36 | |
| Shenzhen Wandian Industrial Co., Ltd. | 5,474,619.51 | - | |
| EuroAsia Dockyard Enterprise and development Ltd. | 2,289,297.08 | 2,994,548.16 | |
| Yiu Lian Dockyards Limited | 1,497,917.12 | 2,271,520.48 | |
| Hoi Tung (Shanghai) Company Limited | 1,197,676.00 | 55,666.09 | |
| Shenzhen Nanyou (Holdings) Ltd. | 1,047,665.40 | - | |
| China Marine Shipping Agency Shenzhen Co. , Ltd. | 650,625.00 | 1,264,544.50 | |
| Other related party | 2,651,952.36 | 524,734.79 | |
| Total | 26,340,441.06 | 22,712,481.95 | |
| Receipts in advance | Port de Djibouti S.A. | - | 10,350,122.63 |
| Other related party | 710,488.75 | 606,631.45 | |
| Total | 710,488.75 | 10,956,754.08 | |
| Contract liabilities | COSCO Logistics (Zhanjiang) Co., Ltd. | 2,508,813.10 | 922,080.60 |
| Liaoning Port Group Co., Ltd. | 1,528,447.50 | - | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 1,504,168.97 | - | |
| Guangdong Sinotrans Shipping Agency Co., Ltd. | 763,011.94 | 2,304,015.01 | |
| Other related party | 4,193,080.78 | 9,116,598.19 | |
| Total | 10,497,522.29 | 12,342,693.80 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 136 -
X. RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
Unit: RMB
| Item | Related party | Closing balance | Opening balance |
| Other payables | China Merchants Port Investment Development Co., Ltd. | 436,486,486.24 | 26,418,918.90 |
| China Merchants Union Development Co., Ltd. | 348,500,295.23 | - | |
| PORT DE DJIBOUTI S.A | 259,498,179.18 | 175,497,252.70 | |
| China Merchants Gangtong Development (Shenzhen) Co., Ltd. | 140,933,640.00 | - | |
| Economic and trade crown de development Co., LTD | 75,608,046.12 | - | |
| Sri Lanka Ports Authority | 34,032,542.04 | 34,255,854.79 | |
| Liaoning Port Co., Ltd. | 29,428,227.19 | - | |
| Shenzhen Infrastructure Investment Fund Partnership Enterprise (limited partnership) | 24,643,069.16 | - | |
| Zhanjiang China Merchants Harbor City Investment Co., Ltd. | 24,500,000.00 | - | |
| Broadford Global Limited | 21,019,399.04 | - | |
| China Merchants Zhangzhou Development Zone Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | 14,305,122.78 | 14,305,122.78 | |
| Dalian Port Container Development Co. LTD | 12,160,517.31 | 12,160,517.31 | |
| Sinotrans Shipping Co., Ltd. | 10,049,355.79 | - | |
| Shenzhen Merchants Commercial Property Investment Co., Ltd. | 9,255,975.41 | 8,447,512.23 | |
| Terminal Link | 3,980,965.01 | 89,905,681.62 | |
| Centralized Logistics | 3,972,477.39 | 3,972,477.39 | |
| Shenzhen Qianhai Sinotrans Supply Chain Management Co., Ltd. | 1,565,999.68 | 1,013,738.40 | |
| Zhanjiang Xiagang United Development Co., Ltd. | 1,433,473.84 | 1,433,730.78 | |
| ORIENTURE HOLDINGS COMPANY LIMITED | 1,277,244.00 | - | |
| China Merchants Food (China) Co., Ltd. | 997,560.14 | 1,161,179.14 | |
| China Merchants Port Investment Development Co., Ltd. | 943,526.47 | 2,910,544.27 | |
| Shenzhen Baohong E-Commerce Integrated Services Co., Ltd. | 746,226.77 | 2,634,014.09 | |
| Shenzhen Penavico Warehousing Co., Ltd. | - | 1,127,339.68 | |
| Other related party | 5,720,463.79 | 2,819,966.38 | |
| Total | 1,481,058,792.58 | 398,063,850.46 | |
| Non-current liabilities due within one year | China Merchants Finance Lease (Shanghai) Co., Ltd. | 104,738,787.19 | - |
| China Merchants Tongshang Finance Lease Co., Ltd. | 59,482,964.07 | 58,348,704.99 | |
| Nanshan Group and its subsidiaries | 50,410,822.69 | 54,030,933.00 | |
| China Merchants Group Finance Company Limited | 48,469,321.15 | 51,423,306.47 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 33,034,721.43 | 138,409,402.75 | |
| Other related party | - | 53,267,076.87 | |
| Total | 296,136,616.53 | 355,479,424.08 | |
| Other non-current liabilities | Nanshan Group and its subsidiaries | 1,067,982.93 | 944,011.06 |
| Lease liabilities | China Merchants Finance Lease (Shanghai) Co., Ltd. | 228,333,546.47 | - |
| Nanshan Group and its subsidiaries | 86,656,750.22 | 114,304,842.23 | |
| China Merchants Tongshang Finance Lease Co., Ltd. | 75,010,061.94 | 104,616,135.92 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 63,333,403.31 | 358,333,616.46 | |
| Other related party | 4,304,459.38 | - | |
| Total | 457,638,221.32 | 577,254,594.61 | |
| Long-term borrowings | China Merchants Group Finance Company Limited | 514,157,284.53 | 426,100,835.53 |
| China Merchant Bank Co., Ltd. | 174,847,500.00 | 109,033,232.39 | |
| Total | 689,004,784.53 | 535,134,067.92 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 137 -
XI. SHARE-BASED PAYMENTS
1. Summary of share-based payments
| Total number of the Company's equity instruments granted during the period | 530,000 shares |
| Total number of the Company's equity instruments vested during the period | N/A |
| Total number of the Company's equity instruments lapsed during the period | N/A |
| Range of exercise prices and remaining contractual life of the Company's share options outstanding at the end of the period |
| Range of exercise prices and remaining contractual life of the Company's other equity instruments outstanding at the end of the period | N/A |
2. Equity-settled share-based payments
Unit: RMB
| The method of determining the fair value of equity instruments at the grant date | The Black-Scholes model is adopted to estimate the cost of granted stock options |
| The method of determining the best estimate of the number of equity instruments expected to be vested | On each asset and liability date in the waiting period, the best estimate is made and the number of equity instruments expected to be vested is revised based on the latest obtained follow-up information such as changes in the number of vested employees. |
| Reasons for the significant difference between the estimate in the current period and that in the prior period | N/A |
| Amounts of equity-settled share-based payments accumulated in capital reserve | 15,956,521.39 |
| Total expenses recognized arising from equity-settled share-based payments | 10,800,221.18 |
According to the "Approval on the Implementation of the Stock Option Incentive Plan of ChinaMerchants Port Group Co., Ltd." (Guo Zi Kao Fen [2019] No. 748) of the State-owned AssetsSupervision and Administration Commission of the State Council, approved by the Company's firstextraordinary general meeting of shareholders on 3 February 2020, the Company will implement astock option plan on 3 February 2020 (granting date), granting 17.198 million stock options to 238incentive objects at an exercise price of RMB 17.80 per share. The lockup period is 24 months sincethe date on which the option is granted. In the premise that vesting conditions are satisfied, theoptions may be exercised after 24 months since the granting date. The options are exercised in threetranches, including 40% exercisable after 24 months but before 36 months subsequent to thegranting date; 30% exercisable after 36 months but before 48 months subsequent to the grantingdate; and 30% exercisable after 48 months subsequent to the granting date. Each option representsthe rights to subscribe one ordinary share of the Company.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 138 -
XI. SHARE-BASED PAYMENTS - continued
2. Equity-settled share-based payments - continued
On January 29, 2021, approved by the tenth Board of Directors at the first extraordinary generalmeeting of shareholders of the year 2021, the Company implemented a stock option plan effectiveJanuary 29, 2021, granting 530,000 stock options to three incentive targets at the exercise price ofRMB 15.09 per share and the grant date of January 29, 2021. Stock options are locked up for 24months from the date of grant, and can be exercised after 24 months of grant, subject to thesatisfaction of exercise conditions. The exercise will be in two tranches, 50% of the first tranche(24 months from the grant date to 36 months from the grant date) and 50% of the second tranche(36 months to 72 months from the grant date); Each stock option gives the holder the right tosubscribe for one common stock of the company.
XII. COMMITMENTS AND CONTINGENCIES
1. Significant commitments
Unit: RMB
| Item | Closing balance | Opening balance |
| Commitments that have been entered into but have not been recognized in the financial statements | ||
| - Commitment to inject capital in investees | 16,600,000.00 | 11,500,000.00 |
| - Commitment to acquire long-term assets | 2,035,035,538.99 | 2,682,977,514.73 |
| - Commitment to invest port construction | 998,409,375.73 | 1,004,960,692.18 |
| -Others | - | 20,831,652.14 |
| Total | 3,050,044,914.72 | 3,720,269,859.05 |
2. Contingencies
Unit: RMB
| Item | Closing balance | Opening balance |
| Contingent liabilities arising from litigations (Note 1) | 223,604,924.98 | 213,109,668.45 |
| Guarantees for borrowings of associates (Note 2) | 179,533,100.91 | 184,129,723.74 |
| Total | 403,138,025.89 | 397,239,392.19 |
Note 1:This represents the significant contingent liabilities arising from the litigations between TCP
and its subsidiaries and local tax authority, employee or former employee of TCP and itssubsidiaries in Brazil at as the year end. According to the latest estimates of the Group'smanagement, the possible compensation is RMB223,604,924.98 but it is not likely to causeoutflow of economic benefits from the Group. Therefore, the contingent liabilities arisingfrom the above pending litigations are not recognized as provisions. The counter-bonification where the Group as the beneficiary will be executed by the former TCPshareholder that disposed the shares. According to the counter-bonification agreement, theformer TCP shareholder need to make counter-bonification to the Group in respect of theabove contingent liabilities, with the compensation amount not exceeding pre-determinedamount and specified period.
Note 2: As of 30 June 2021, the guarantees provided by the Group to related parties are set out in
Note X 5 (3).
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 139 -
XII. COMMITMENTS AND CONTINGENCIES - continued
2. Contingencies - continued
As of 30 June 2021, the Group's directors assessed the risk of default by related parties in respectof above loans and other liabilities. The directors believe that the risk is immaterial and there isminor possibility of loss due to the guarantee.
As of 30 June 2021, in addition to aforesaid contingencies, the Group had no other significantguarantee or contingencies that need to be explained.
XIII. OTHER SIGNIFICANT EVENTS
1. Segment reporting
(1) Basis for determining reporting segments and accounting policies
The key management team of the Company is regarded as the CODM, who reviews the Group'sinternal reports in order to assess performance, allocate resources and determine the operatingsegments.
The CODM manages the Group's operations by divisions from both business and geographicperspectives.
In respect of business segments, management assesses the performance of the Group's businessoperations including ports operation, bonded logistics operation and other operations.
Ports operation
Ports operation includes container terminal operation, bulk and general cargo terminal operationoperated by the Group and its associates and joint ventures. The Group's reportable segments ofthe ports operation are as follows:
(a) Mainland China, Hong Kong and Taiwan
? Pearl River Delta? Yangtze River Delta? Bohai Rim? Others
(b) Other locations outside of Mainland China, Hong Kong and Taiwan
Bonded logistics operation
Bonded logistics operation includes logistics park operation, ports transportation and airport cargohandling operated by the Group and its associates and joint ventures.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 140 -
XIII. OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
(b) Other locations outside of Mainland China, Hong Kong and Taiwan - continued
Other operations
Other operations mainly includes property development and investment and logistics business,property investment operated by the Group and corporate function.
Each of the segments under ports operation include the operations of a number of ports in variouslocations within one geographic location, each of which is considered as a separate operatingsegment by the CODM. For the purpose of segment reporting, these individual operating segmentshave been aggregated into reportable segments on geographic basis in order to present a moresystematic and structured segment information. To give details of each of the operating segments,in the opinion of the directors of the Company, would result in particulars of excessive length.
Bonded logistics operation and other operations include a number of different operations, each ofwhich is considered as a separate but insignificant operating segment by the CODM. For segmentreporting, these individual operating segments have been aggregated according to the natures oftheir operations to give rise to more meaningful presentation.
There are no material sales or other transactions between the segments.
As at 30 June 2021, around 74% of The Group's non-current assets other than financial instrumentsand deferred tax assets are located in Mainland China.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 141 -
XIII. OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information
Segment financial information for the period from 1 January to 30 June 2021 is as follows:
Unit: RMB
| Item | Ports operation | Bonded logistics operation | Others | Unallocated amount | Total | |||||
| Mainland China, Hong Kong and Taiwan | Other locations | Sub-total | ||||||||
| Pearl River Delta | Yangtze River Delta | Bohai Rim | Others | |||||||
| Operating income | 2,958,636,092.61 | 445,352,534.85 | 29,216,911.55 | 1,835,209,454.62 | 1,780,044,983.01 | 7,048,459,976.64 | 204,996,959.89 | 86,485,925.73 | - | 7,339,942,862.26 |
| Operating cost | 1,463,264,383.33 | 294,515,383.40 | 24,262,314.83 | 1,357,822,363.64 | 828,625,928.99 | 3,968,490,374.19 | 116,498,905.11 | 113,461,884.97 | - | 4,198,451,164.27 |
| Segment operating profit (loss) | 1,495,371,709.28 | 150,837,151.45 | 4,954,596.72 | 477,387,090.98 | 951,419,054.02 | 3,079,969,602.45 | 88,498,054.78 | -26,975,959.24 | - | 3,141,491,697.99 |
| Adjustments: | ||||||||||
| Taxes and levies | 14,236,877.98 | 4,434,038.81 | 804,172.44 | 22,100,637.68 | 21,478,264.65 | 63,053,991.56 | 12,585,134.87 | 11,962,498.86 | 70,009.19 | 87,671,634.48 |
| Administrative expense | 184,243,456.42 | 18,532,917.24 | 4,506,885.61 | 234,916,150.46 | 110,937,648.90 | 553,137,058.63 | 21,077,687.84 | 500,756.95 | 191,654,469.95 | 766,369,973.37 |
| R&D expenses | 78,300,758.52 | 17,746,269.79 | - | 2,297,382.94 | - | 98,344,411.25 | - | - | - | 98,344,411.25 |
| Financial expenses | 29,725,717.45 | 8,678,428.13 | -777,466.39 | 63,808,478.07 | 56,277,939.54 | 157,713,096.80 | 7,761,420.36 | 12,483,780.77 | 552,150,715.95 | 730,109,013.88 |
| Other income | 261,485,766.57 | 3,756,131.01 | 5,469.40 | 35,096,987.85 | - | 300,344,354.83 | 5,384,761.18 | 253,142.61 | - | 305,982,258.62 |
| Investment income (losses) | 160,123,605.49 | 2,359,088,694.76 | 166,101,087.00 | -125,284.28 | 232,031,348.91 | 2,917,219,451.88 | 5,357,126.04 | 685,388,257.49 | 1,778,756.18 | 3,609,743,591.59 |
| Gains (losses) from changes in fair value | - | - | -45,536,366.63 | 7,839.22 | -443,004,339.04 | -488,532,866.45 | - | - | - | -488,532,866.45 |
| Impairment gains (losses) of credit | -3,259,224.54 | - | - | 1,028,795.37 | -356,511.85 | -2,586,941.02 | 608.82 | - | - | -2,586,332.20 |
| Impairment gains of assets | - | - | - | - | - | - | - | - | - | - |
| Gains from disposal of assets | 3,341,383.58 | - | 6,676,633.08 | -1,025,646.41 | -7,563.09 | 8,984,807.16 | 474,861.45 | - | -26,950.69 | 9,432,717.92 |
| Operating profit (loss) | 1,610,556,430.01 | 2,464,290,323.25 | 127,667,827.91 | 189,247,133.58 | 551,388,135.86 | 4,943,149,850.61 | 58,291,169.20 | 633,718,404.28 | -742,123,389.60 | 4,893,036,034.49 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 142 -
XIII. OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for the period from 1 January to 30 June 2021 is as follows: - continued
Unit: RMB
| Item | Ports operation | Bonded logistics operation | Others | Unallocated amount | Total | |||||
| Mainland China, Hong Kong and Taiwan | Other locations | Sub-total | ||||||||
| Pearl River Delta | Yangtze River Delta | Bohai Rim | Others | |||||||
| Non-operating income | 5,880,047.84 | 222,001.00 | 117.74 | 5,665,939.99 | 14,120,880.19 | 25,888,986.76 | 16,057.97 | 7,500.52 | 3,075,124.48 | 28,987,669.73 |
| Non-operating expenses | 2,607,728.49 | 520,306.61 | - | 2,859,851.13 | 8,335,822.20 | 14,323,708.43 | - | - | 155.84 | 14,323,864.27 |
| Gross profit (loss) | 1,613,828,749.36 | 2,463,992,017.64 | 127,667,945.65 | 192,053,222.44 | 557,173,193.85 | 4,954,715,128.94 | 58,307,227.17 | 633,725,904.80 | -739,048,420.96 | 4,907,699,839.95 |
| Income tax expenses | 445,759,645.96 | 127,856,225.71 | 2,651,491.03 | 35,828,242.11 | -34,288,062.34 | 577,807,542.47 | 16,258,079.87 | 42,355,973.99 | 7,016,998.79 | 643,438,595.12 |
| Net profit (loss) | 1,168,069,103.40 | 2,336,135,791.93 | 125,016,454.62 | 156,224,980.33 | 591,461,256.19 | 4,376,907,586.47 | 42,049,147.30 | 591,369,930.81 | -746,065,419.75 | 4,264,261,244.83 |
| Segment assets | 31,419,667,673.20 | 37,048,877,827.99 | 7,821,876,057.03 | 25,610,960,074.80 | 43,304,350,785.30 | 145,205,732,418.32 | 3,127,111,154.80 | 18,920,556,283.34 | 1,447,933,155.60 | 168,701,333,012.06 |
| Total assets in the financial statements | 168,701,333,012.06 | |||||||||
| Segment liabilities | 15,881,739,330.71 | 1,604,929,487.56 | 168,535,261.21 | 7,085,779,290.05 | 9,789,776,859.51 | 34,530,760,229.04 | 512,242,308.80 | 1,367,896,065.98 | 24,014,187,743.26 | 60,425,086,347.08 |
| Total liabilities in the financial statements | 60,425,086,347.08 | |||||||||
| Supplementary information: | ||||||||||
| Depreciation and Amortization | 413,217,286.57 | 97,809,276.72 | 576,581.77 | 453,985,137.11 | 390,400,077.86 | 1,355,988,360.03 | 48,120,450.03 | 87,627,524.99 | 11,009,272.95 | 1,502,745,608.00 |
| Interest income | 58,372,755.01 | 1,901,649.27 | 203,076.80 | 16,018,660.30 | 120,871,526.13 | 197,367,667.51 | 551,704.45 | 1,250,580.78 | -15,978,940.81 | 183,191,011.93 |
| Interest expense | 34,508,206.53 | 4,866,262.52 | - | 79,738,998.15 | 153,574,206.66 | 272,687,673.86 | 8,253,482.58 | 15,433,783.96 | 596,135,609.36 | 892,510,549.76 |
| Investment income from long-term equity investment under equity method | 126,099,863.96 | 2,359,088,694.75 | 126,123,636.71 | 23,270,489.39 | 232,031,348.91 | 2,866,614,033.72 | 5,357,126.04 | 685,388,257.49 | - | 3,557,359,417.25 |
| Long-term equity investment under equity method | 4,221,992,878.44 | 30,182,199,522.01 | 6,729,096,972.51 | 594,343,756.26 | 11,747,365,977.54 | 53,474,999,106.76 | 702,501,030.64 | 13,251,776,094.55 | - | 67,429,276,231.95 |
| Non-current assets other than long-term equity investment | 21,560,411,415.88 | 4,161,624,530.36 | 15,156,855.04 | 19,227,483,637.89 | 24,803,854,837.76 | 69,768,531,276.93 | 2,181,301,447.05 | 5,158,578,410.79 | 419,769,686.44 | 77,528,180,821.21 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 143 -
XIII. OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
The Group's revenue by geographical areas of operations and information about its non-currentassets other than financial instruments and deferred tax assets presented based on the geographicalareas in which the assets are located as follows:
Unit: RMB
| Revenue from external transactions | Amount incurred in the current period | Amount incurred in the prior period |
| Mainland China, Hong Kong and Taiwan | 5,552,294,281.37 | 4,255,086,509.16 |
| Pearl River Delta | 3,181,051,472.13 | 2,616,336,283.54 |
| Yangtze River Delta | 445,352,534.85 | - |
| Bohai Rim | 90,680,819.77 | 86,840,044.42 |
| Others | 1,835,209,454.62 | 1,551,910,181.20 |
| Other locations | 1,787,648,580.89 | 1,707,411,207.80 |
| Total | 7,339,942,862.26 | 5,962,497,716.96 |
Unit: RMB
| Total non-current assets | Closing balance | Opening balance |
| Mainland China, Hong Kong and Taiwan | 107,559,680,059.35 | 105,111,642,513.71 |
| Pearl River Delta | 46,020,200,068.06 | 45,459,155,093.97 |
| Yangtze River Delta | 34,343,824,052.38 | 32,716,973,145.44 |
| Bohai Rim | 7,335,410,610.59 | 6,903,596,351.63 |
| Others | 19,860,245,328.32 | 20,031,917,922.67 |
| Other locations | 37,397,776,993.81 | 39,164,278,189.74 |
| Total | 144,957,457,053.16 | 144,275,920,703.45 |
(3) Degree of reliance on major customers
The total operating income derived from the top five clients of the Group is RMB 1,839,867,457.34,accounting for 25.07% of the Group's total operating income.
XIV. NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Other receivables
(1) Summary of other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividends receivable | 987,547,283.67 | 311,297,793.86 |
| Other receivables | 1,011,643,024.62 | 791,414,958.18 |
| Total | 1,999,190,308.29 | 1,102,712,752.04 |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 144 -
XIV. NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(2) Dividends receivable
(a) Disclosure of dividends receivable
Unit: RMB
| Company name | Closing balance | Opening balance |
| CMPort | 652,351,928.94 | - |
| Chiwan Wharf (Hong Kong) | 147,680,363.88 | 147,680,363.88 |
| Dongguan Chiwan Terminal Co., Ltd. | 135,254,038.80 | 147,233,909.98 |
| Ningbo Port Company Limited | 35,328,355.20 | - |
| China Merchants Bonded Logistics Co., Ltd. | 15,707,120.00 | 15,707,120.00 |
| Jiangsu Ninghu Expressway Co., LTD | 920,000.00 | 460,000.00 |
| Shenzhen Petrochemical Industry (Group) Co., Ltd. | 216,400.00 | 216,400.00 |
| Shenzhen Chiwan International Freight Agency Co., Ltd. | 89,076.85 | - |
| Total | 987,547,283.67 | 311,297,793.86 |
| Less: Provision for credit loss | - | - |
| Carrying amount | 987,547,283.67 | 311,297,793.86 |
(b) Significant dividends receivable aging over 1 year
Unit: RMB
| Item | Closing balance | Reason for outstanding | Impaired or not |
| Dongguan Chiwan Terminal Co., Ltd. | 135,254,038.80 | In processing and expected to be received in 2021 | No |
| China Merchants Bonded Logistics Co., Ltd. | 15,707,120.00 | In processing and expected to be received in 2021 | No |
| Total | 150,961,158.80 |
(3) Other receivables
(a) Disclosure of other receivables by aging
Unit: RMB
| Aging | Closing balance | ||
| Other receivables | Provision for credit loss | Proportion of provision (%) | |
| Within 1 year | 247,415,841.53 | - | - |
| 1 to 2 years | 763,898,867.62 | - | - |
| 2 to 3 years | - | - | - |
| Over 3 years | 711,772.07 | 383,456.60 | 53.87 |
| Total | 1,012,026,481.22 | 383,456.60 | |
(b) Provision for credit loss of other receivables
As part of the Company's credit risk management, the Company performs internal credit rating oncustomers, and determines the expected loss ratio of other receivables under each credit rating. Suchexpected average loss ratio is based on historical actual impairment and taking into considerationof current and expected future economic conditions.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 145 -
XIV. NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
1. Other receivables - continued
(3) Other receivables - continued
(b) Provision for credit loss of other receivables - continued
At 30 June 2021, the credit risk and expected credit loss of other receivables by categories of customers are as follows:
Unit: RMB
| Credit rating | Expected credit loss ratio (%) | Closing balance | Opening balance | ||||||
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | Total | 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | Total | ||
| A | 0.00-0.10 | 1,011,643,024.62 | - | - | 1,011,643,024.62 | 791,414,958.18 | - | - | 791,414,958.18 |
| B | 0.10-0.30 | - | - | - | - | - | - | - | - |
| C | 0.30-50.00 | - | - | - | - | - | - | - | - |
| D | 50.00-100.00 | - | - | 383,456.60 | 383,456.60 | - | - | 383,456.60 | 383,456.60 |
| Carrying amount | 1,011,643,024.62 | - | 383,456.60 | 1,012,026,481.22 | 791,414,958.18 | - | 383,456.60 | 791,798,414.78 | |
| Provision for credit loss | - | - | 383,456.60 | 383,456.60 | - | - | 383,456.60 | 383,456.60 | |
| Book value | 1,011,643,024.62 | - | - | 1,011,643,024.62 | 791,414,958.18 | - | - | 791,414,958.18 | |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 146 -
XIV. NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(3) Other receivables - continued
(c) Changes in provision for credit loss of other receivables
Unit: RMB
| Item | Stage I | Stage II | Stage III | Total |
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Balance at 1 January 2021 | - | - | 383,456.60 | 383,456.60 |
| Carrying amount of other receivables at 1 January 2021 | ||||
| -- transfer to stage II | - | - | - | - |
| -- transfer to stage III | - | - | - | - |
| -- transfer back to stage II | - | - | - | - |
| -- transfer back to stage I | - | - | - | - |
| Provision for the period | - | - | - | - |
| Reversal | - | - | - | - |
| Transfer out due to derecognition of financial assets (including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| Balance at 30 June 2021 | - | - | 383,456.60 | 383,456.60 |
(d) Other receivables by nature
Unit: RMB
| Item | Closing balance | Opening balance |
| Amounts due from related parties | 1,004,888,834.74 | 785,752,325.78 |
| Advances | 4,402,998.69 | 3,862,191.69 |
| Others | 2,734,647.79 | 2,183,897.31 |
| Total | 1,012,026,481.22 | 791,798,414.78 |
| Less: Provision for credit loss | 383,456.60 | 383,456.60 |
| Book value | 1,011,643,024.62 | 791,414,958.18 |
(e) There is no other receivables write-off during this period.
(f) The top three balances of other receivables classified by debtor
Unit: RMB
| Company name | Nature | Closing balance | Aging | Proportion of the amount to the total other receivable (%) | Closing balance of provision for credit loss |
| Shenzhen Haixing Harbor Development Co., Ltd. | Loan to related parties | 1,002,001,734.69 | Within 1 year, 2-3 years | 99.01 | - |
| China Merchants International Technology Company Limited | Loan to related parties | 2,887,100.05 | Within 1 year | 0.29 | - |
| China Merchants (Liaoning) Port Development Co., Ltd. | Advance payments for account current | 2,500,000.00 | Within 1 year , 1-2 years | 0.25 | - |
| Total | 1,007,388,834.74 | 99.55 | - |
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 147 -
XIV. NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
Unit: RMB
| Investee | 1/1/2021 | Changes for the period | 30/6/2021 | Closing balance of impairment provision | |||||||
| Increase | Decrease | Investment income under equity method | Reconciling items from other comprehensive income | Other equity movements | Announced distribution of cash dividends or profit | Impairment provision | Others | ||||
| I. Subsidiary | |||||||||||
| Shenzhen Chiwan International Freight Agency Co., Ltd. | 5,500,000.00 | - | - | - | - | - | - | - | - | 5,500,000.00 | - |
| Shenzhen Chiwan Harbor Container Co. Ltd. | 250,920,000.00 | - | - | - | - | - | - | - | - | 250,920,000.00 | - |
| Shenzhen Chiwan Port Development Co., Ltd. | 206,283,811.09 | - | - | - | - | - | - | - | - | 206,283,811.09 | - |
| Chiwan Wharf (Hong Kong) | 1,070,000.00 | - | - | - | - | - | - | - | - | 1,070,000.00 | - |
| Shenzhen Chiwan Tugboat Co., Ltd. | 24,000,000.00 | - | - | - | - | - | - | - | - | 24,000,000.00 | - |
| Chiwan Container Terminal Co., Ltd. | 421,023,199.85 | - | - | - | - | - | - | - | - | 421,023,199.85 | - |
| Dongguan Chiwan Warf Co., Ltd. | 186,525,000.00 | - | - | - | - | - | - | - | - | 186,525,000.00 | - |
| Dongguan Chiwan Terminal Co., Ltd. | 175,000,000.00 | - | - | - | - | - | - | - | - | 175,000,000.00 | - |
| Chiwan Shipping (Hong Kong) Limited | 1,051,789.43 | - | - | - | - | - | - | - | - | 1,051,789.43 | - |
| CMPort (Note 1) | 28,272,939,139.99 | 6,508,125.00 | - | - | - | - | - | - | - | 28,279,447,264.99 | - |
| China Merchants Port (Zhoushan) RoRo Logistics Co., Ltd. | 149,709,800.00 | - | - | - | - | - | - | - | - | 149,709,800.00 | - |
| Zhanjiang port (Note 2) | 3,381,825,528.52 | - | - | - | - | - | - | - | - | 3,381,825,528.52 | - |
| China Merchants International Information Technology Co., Ltd. | 23,451,570.97 | -2,890,495.95 | - | - | - | - | - | - | 20,561,075.02 | - | |
| Sub-total | 33,075,848,268.88 | 29,959,695.97 | -2,890,495.95 | - | - | - | - | - | - | 33,102,917,468.90 | - |
| II. Associate | |||||||||||
| China Merchants Northeast Asia Development Investment Co., Ltd. (Note 3) | 1,007,786,285.71 | - | - | 6,331,456.35 | - | - | - | - | - | 1,014,117,742.06 | - |
| China Merchants Bonded Logistics Co., Ltd. | 384,647,157.60 | - | - | 10,012,000.00 | 394,659,157.60 | ||||||
| International Information Technology Co., Ltd | 23,833,710.97 | - | -1,875,000.00 | -385,535.90 | -35,889,379.28 | - | 14,316,222.97 | - | -18.76 | - | - |
| Others | 1,500,464,520.87 | 206,523,799.86 | - | 52,613,117.10 | - | - | -35,328,355.20 | - | - | 1,724,273,082.63 | - |
| Sub-total | 2,916,731,675.15 | 206,523,799.86 | -1,875,000.00 | 68,571,037.55 | -35,889,379.28 | - | -21,012,132.23 | - | -18.76 | 3,133,049,982.29 | - |
| III. Joint venture | - | ||||||||||
| Yantai Port Group Laizhou Port Co., Ltd. | 782,832,086.50 | - | - | 16,309,101.16 | - | - | -24,643,441.33 | - | - | 774,497,746.33 | - |
| China Merchants Antong Logistics Management Company | 9,102,988.02 | - | - | 568,832.67 | - | - | - | - | - | 9,671,820.69 | - |
| Zhanhang Logistics (Note 3) | 452,283,105.00 | - | - | 933,240.00 | - | - | - | - | - | 453,216,345.00 | - |
| Sub-total | 1,244,218,179.52 | - | - | 17,811,173.83 | - | - | -24,643,441.33 | - | - | 1,237,385,912.02 | - |
| Total | 37,236,798,123.55 | 236,483,495.83 | -4,765,495.95 | 86,382,211.38 | -35,889,379.28 | - | -45,655,573.56 | - | -18.76 | 37,473,353,363.21 | - |
Note 1: See Note VII. 1 for details.
Note 2: See Note VII. 1 for details.
NOTES TO FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
- 148 -
XIV. NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
3. Operating income and operating costs
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Principal operating | - | 1,132,979.75 | - | 1,132,979.82 |
| Other operating | 471,974.86 | - | 94,339.62 | - |
| Total | 471,974.86 | 1,132,979.75 | 94,339.62 | 1,132,979.82 |
4. Investment income
(1) Details of investment income
Unit: RMB
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Income from long-term equity investments under cost method | 912,418,115.63 | 1,286,567,145.53 |
| Long-term equity investments income under equity method | 86,382,211.38 | 28,229,153.26 |
| Income from other equity instruments investments | 460,000.00 | 460,000.00 |
| Income from debt investments | 6,017,068.48 | 11,375,616.44 |
| Total | 1,005,277,395.49 | 1,326,631,915.23 |
(2) Income from long-term equity investments under cost method
Unit: RMB
| Investee | Amount incurred in the current period | Amount incurred in the prior period | Reason for changes comparing with prior period |
| CMPort | 652,351,928.94 | 745,060,561.87 | Changes in profit distribution of investee |
| Shenzhen Chiwan Harbor Container Co. Ltd. | 143,574,378.69 | 121,071,884.15 | Changes in profit distribution of investee |
| Dongguan Chiwan Terminal Co., Ltd. | 48,020,128.82 | 59,036,979.32 | Changes in profit distribution of investee |
| Shenzhen Chiwan Tugboat Co., Ltd. | 30,409,076.03 | 25,604,356.23 | Changes in profit distribution of investee |
| Zhanjiang Port (Group) Co., Ltd | 23,395,773.67 | - | Changes in profit distribution of investee |
| Shenzhen Chiwan Port Development Co., Ltd. | 14,577,752.63 | - | Changes in profit distribution of investee |
| Shenzhen Chiwan International Freight Agency Co., Ltd. | 89,076.85 | 245,148.61 | Changes in profit distribution of investee |
| Chiwan Container Terminal Co., Ltd. | - | 275,313,936.56 | Changes in profit distribution of investee |
| Dongguan Chiwan Warf Co., Ltd. | - | 60,234,278.79 | Changes in profit distribution of investee |
| Total | 912,418,115.63 | 1,286,567,145.53 |
SUPPLEMENTARY INFORMATIONFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
Unit: RMB
| Item | Amount | Remarks |
| Losses on disposal of non-current assets | 4,731,273.76 | |
| Tax refunds or reductions with ultra vires approval or without official approval documents | - | |
| Government grants recognized in profit or loss (except for grants that are closely related to the Company's business and are in amounts and quantities fixed in accordance with the national standard) | 292,333,022.53 | |
| Money lending income earned from non-financial institutions in profit or loss | 118,821,999.88 | |
| The excess of attributable fair value of identifiable net assets over the consideration paid for subsidiaries, associates and joint ventures | - | |
| Gains or losses on exchange of non-monetary assets | - | |
| Gains or losses on entrusted investments or assets management | - | |
| Provision of impairment losses for each asset due to force majeure, e.g. natural disasters | - | |
| Gains or losses on debt restructuring | - | |
| Business restructuring expenses, e.g., expenditure for layoff of employees, integration expenses, etc. | - | |
| Gains or losses relating to the unfair portion in transactions with unfair transaction price | - | |
| Net profit or loss of subsidiaries recognized as a result of business combination of enterprises under common control from the beginning of the period up to the business combination date | -3,255,790.50 | |
| Gains or losses arising from contingencies other than those related to normal operating business | - | |
| Gains from changes of fair value of held-for-trading financial assets, derivative financial assets, other non-current financial assets, held-for-trading financial liabilities, derivative financial liabilities other than effective hedging operation relating to the Company's normal operations, and the investment income from disposal of the above held-for-trading financial assets/financial liabilities and other debt investments | -488,532,866.45 | |
| Reversal of provision for accounts receivable that are tested for credit loss individually | 94,099.17 | |
| Gains or losses on entrusted loans | - | |
| Gains or losses on changes in the fair value of investment properties that are subsequently measured using the fair value model | - | |
| Effects on profit or loss of one-off adjustment to profit or loss for the period according to the requirements by tax laws and accounting laws and regulations | - | |
| Custodian fees earned from entrusted operation | 471,698.11 | |
| Other non-operating income or expenses other than above | 19,007,039.27 | |
| Other profit or loss that meets the definition of non-recurring profit or loss (Note) | - | |
| Tax effects | 74,697,555.98 | |
| Effects of minority interest (after tax) | 13,971,253.45 | |
| Total | 32,339,285.20 |
SUPPLEMENTARY INFORMATIONFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2021
2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS")
The return on net assets and EPS have been prepared by Shenzhen Chiwan Wharf Co., Ltd. in accordancewith Information Disclosure and Presentation Rules for Companies Making Public Offering No. 9 -Calculation and Disclosure of Return on Net Assets and Earnings per Share (revised in 2010) issued byChina Securities Regulatory Commission.
Unit: RMB
| Item | Weighted average return on net assets (%) | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 4.4252 | 0.8724 | 0.8724 |
| Net profit attributable to ordinary shareholders after deducting non-recurring profit or loss | 4.3383 | 0.8556 | 0.8556 |