CHINA MERCHANTS PORT GROUP CO., LTD.
ANNUAL REPORT 2021
Date of disclosure: 31 March 2022
China Merchants Port Group Co., Ltd. Annual Report 2021
Chairman’s Statement
Dear shareholders,I hereby present to you the annual report of China Merchants Port Group Co., Ltd. and its subsidiaries(the “Company”) for the year ended 31 December 2021. On behalf of the Board, I would like toexpress my sincere gratitude to all of you for your long-term support to the Company.The Company is a crucial vehicle for CMG to implement the “Belt and Road” Initiative promoted byChina and the strategy of Guangdong-Hong Kong-Macao Greater Bay Area. Serving not only as thecore enterprise of China Merchants Group's port sector, the Company is also the capital operation andmanagement platform for the group's global port assets, hence playing a key role in the consolidationand synergistic development of CMG’s port assets. The Company has become a world-leading portinvestor, developer and operator.Looking ahead, by seizing the important opportunities arising from implementing major nationalstrategies, apply a new vision of development and implement high-quality development requirements,the Company will take actions and strive to become a world-class comprehensive port serviceprovider. While actively innovating the service model with a focus on core port businesses andpromoting the construction of “Intelligent Port” ecosystem under the guidance of technologyinnovation, it will proactively take part in international port investment, development and operation,so as to optimize the port network system on a continuous basis. By offering top-notch servicesolutions, it will become customers’ first choice of partner for cooperation, creating greater value forthe Company, enhancing return for shareholders and contributing to building a more stable, reliableand secure supply chain.Review for the yearIn 2021, COVID-19 situation around the world was complex and severe. Benefiting from theaccelerated vaccination process, loose monetary policy and continued active fiscal policy, the globaleconomy, especially of major economies, was generally showing a recovery trend. However, repeatedoutbreak of the pandemic and discrepancy in national policy response against the pandemic havecaused divergence in the economic recovery of different countries. Under the multiple impacts ofinflation, supply chain disruption, complicated geopolitics, and exchange rate fluctuations, along withother uncertainties, the Company's daily operation and management faced certain challenges.Confronted with a grave and complex external environment, the Company adhered to the strategicprinciple of “leveraging on its long-term strategy, tapping the current edges, driving throughtechnology and embracing changes”. Apart from coping with challenges proactively as the COVID-19 pandemic spread, it pursued various key construction projects in a steady manner, including thepandemic prevention and control, development of leading ports, innovative development, overseasexpansion and comprehensive development, and successfully accomplished its strategic goals andvarious operational objectives of the year.
China Merchants Port Group Co., Ltd. Annual Report 2021
In terms of port operation, the container port business delivered a container throughput totaled
136.394 million twenty-foot equivalent units (TEUs) in 2021, up 12.0% year-on-year. Looking intothe regional performance, container throughput handled by the Company’s ports in Mainland Chinatotaled 95.138 million TEUs, up 10.9% year-on-year. Ports in Hong Kong and Taiwan handled acombined container throughput of 7.684 million TEUs, up 7.4% year-on-year, while overseas portprojects handled a total container throughput of 33.572 million TEUs, up 16.3% year-on-year, mainlybecause the business volume of eight terminals which Terminal Link SAS(TL)newly acquired wasincluded in the statistics in April 2020 and the business growth of Lomé Container Terminal S.A.(LCT) in Togo and TCP Participa??es S.A. (TCP) in Brazil. In terms of bulk cargo volume, theCompany’s ports in Mainland China handled a total bulk cargo volume of 607 million tons, up 35.3%year-on-year, mainly due to the merger of Yingkou Port by the shareholding company Dalian Port,the whole changed to Liaoning Port Co., Ltd and the Company will include the business volume ofYingkou Port into the statistics since February 2021; the overseas port handled a total bulk cargovolume of 6.21 million tons, up 6.5% year-on-year, mainly due to the business increase of HIPG inSri Lanka. Among the major ports, container throughput handled in West Shenzhen Port Zone inChina was 12.834 million TEUs, up 8.4% year- on-year; bulk cargo volume handled by it increasedby 7.9% year-on-year to 19.504 million tons. SIPG handled a container throughput of 47.032 millionTEUs, representing a year-on-year increase of 8.1%; bulk cargo volume handled by it increased by
8.9% year-on-year to 82.388 million tons. For overseas projects, CICT in Sri Lanka delivered a year-on-year growth of 4.4% by handling a container throughput of 3.060 million TEUs; bulk cargovolume handled by HIPG in Sri Lanka increased by 25.6% year-on-year to 1.555 million tons. LCTin Togo handled a container throughput of 1.626 million TEUs, representing a growth of 19.2% year-on-year. Kumport in Turkey handled a container throughput of 1.248 million TEUs, representing anincrease of 2.5% year-on-year; bulk cargo volume handled by it increased by 62.1% year-on-year to
0.107 million tons. TCP in Brazil handled a container throughput of 1.101 million TEUs, representinga year-on-year increase of 12.0%. Terminal Link SAS (TL) handled a container throughput of 25.523million TEUs in the year, up 20.3% year-on-year.In terms of key priorities, firstly, the Company simultaneously focused on the prevention and controlof the pandemic as well as the production and operation. The Company adhered to "enhancing thesense of responsibility, guarding the gate for the country, and keeping the first line of defense forforeign input", worked to ensure constant vigilance against the pandemic, made unremitting effortsin prevention and control work and scientifically implemented ongoing targeted control. At the sametime, new achievements in production and operation have been achieved, the Company's operatingincome and recurrent operating profits both set a new record. Secondly, the development of leadingports has been advanced to a new stage. The West Shenzhen homebase port saw a net addition of 35new routes, the regionally leading ports Zhanjiang Port and Shantou Port have greatly improved theircapacity, and the business volumes of two overseas homebase ports in Sri Lanka have both madebreakthroughs. TCP in Brazil has entered the Million TEU Terminal Club in Brazil for the first time.Thirdly, new results in innovation and development have been achieved. The Company activelyexplored model innovation, built an innovation-driven development platform, and cooperated closelywith relevant entities to jointly build demonstration ports of international hydrogen energy industry;actively accelerated industrial digitization and established a smart port technology innovationlaboratory; continued to promote the construction of Mawan Intelligent Port which passed thecompletion acceptance and officially put into operation at the end of June 2021; the number of port
China Merchants Port Group Co., Ltd. Annual Report 2021
complex in the Guangdong-Hong Kong-Macao Greater Bay Area continued to increase, greatlyimproving the comprehensive competitiveness of the West Shenzhen Port Area in the Pearl RiverDelta region. Fourth, the Company continuously improved the quality of overseas ports andcomprehensive development business, strengthened the business coordination of various sites andenhanced the influence of various regions by taking advantage of the global port network layout. Atthe same time, the PPC comprehensive development model was further promoted, and the number ofenterprises entering the park from overseas continued to increase. Fifth, corporate governance andsocial responsibility performance were recognized. The Company stood out from 440 centralenterprises and was selected into the "Central Enterprise ESG Pioneer 50 Index (央企ESG·先鋒50指數)", ranking ninth on the index list, which fully reflected the SASAC's affirmation of theCompany's ESG work; the Company continued to be practical and meticulous in the governance ofthe board of directors and won the award of "Top 20 Board Governance of Listed Companies in theGreater Bay Area (2021大灣區上市公司董事會治理TOP20)" and the recognition from the industry.The Company's influence has continued to increase.OutlookLooking forward into 2022, the global economy will gradually return to normal from the impact ofthe pandemic and fiscal stimulus, and will present the main principle of recovery in general. However,the recurrence of the COVID-19 pandemic has led to uncertainties about the recovery prospects ofthe global economy. 2022 is the year of deepening China's implementation of the "14th Five-YearPlan". China will adhere to the general guideline of economic work of seeking progress whilemaintaining stability, continue to implement new development concepts, accelerate the constructionof a new development pattern, adhere to innovation-driven development, and promote high-qualitydevelopment, adhere to the supply-side structural reform as the main line, and focus on stabilizingthe macroeconomic market. It is expected that the Chinese economy will resume trend growth in2022, and the growth rate will be slower than that in 2021, but the economic structure will continueto be optimized. Policies such as supporting technological innovation-driven development, deepeningthe reform of the logistics supply chain system, and promoting green new infrastructure are expectedto be successively introduced and implemented, which will continue to bring new developmentopportunities for the development of the industry. The Company will firmly grasp the general thrustof "seeking progress while maintaining stability", practice new development concepts, adhere to thetwo development paths of "endogenous growth + innovation and transformation", take active actionsand respond scientifically, focus on key areas, and overcome difficulties. Through reform andinnovation, we will continuously improve the quality of customer service, continue to enhance thecompetitiveness of the global market, and become a world-class leading integrated port serviceprovider with high-quality development, and strive to achieve greater value for the Company andmore returns for shareholders.In 2022, the Company will continue to grasp the general thrust of the work of seeking progress whilemaintaining stability, stand on the new stage of development, implement new development concepts,and build new development pattern. The Company will continue to make breakthroughs in homebaseport construction, pandemic prevention and control, technological innovation, market expansion,operation management, capital operation, comprehensive development, etc., and make every effort topromote the Company's overall high-quality development.
China Merchants Port Group Co., Ltd. Annual Report 2021
In terms of homebase port construction, the West Shenzhen homebase port will continue to closelyfollow the Guangdong-Hong Kong-Macao Greater Bay Area construction strategy, continuouslyimprove customer service levels, and further enhance comprehensive capabilities. Meanwhile, theCompany will focus on building its overseas homebase ports in Sri Lanka, CICT and HIPG into aninternational container hub port and a regional comprehensive port, respectively. The Companycontinue to promote the construction of the international shipping center in South Asia, and continueto improve the integrated operation and management of the two ports.In terms of pandemic prevention and control, the Company will continue to build a normalizedpandemic prevention and control system, continuously improve emergency plans and operationalnorms, adhere to the “human” and “material” prevention and control, and maintain the defense lineto ensure the safety and stability of the pandemic prevention and control situation.In respect of technology innovation, the Company will focus on industrial transformation, upgradedriven by innovation and technology empowerment and realize sustainable and stable growth of thecompany. The Company will develop the ecosystem for technology and innovation, and generateinnovative solutions with technology for ports to build the integrated platform for industry, educationand research. With the “CM Chip” platform, the Company will develop three major leading productsfor the industry, strive to intelligentize the production and operation within the terminals. With the“CM ePort” platform, the Company will innovate the service models by improving the informationservice system and adopting the “Port + Internet” approach for the port, so as to explore and developan open platform for intelligent ports.In terms of market expansion, the Company will deepen the concept with the focus on customers,continue to strengthen the cooperation with major shipping companies, build a three dimensional,multi-dimensional and multi-business collaborative alliance chain circle around the coordinated portsmodel, with the West Shenzhen homebase ports as the core, to enhance the linkage with end customers.At the same time, the Company will construct a collaborative business platform, improve theconstruction of the market commerce system, and expand the coverage of the logistics supply chainendogenously and externally via shaping the integration, platform and digitalization.In terms of operation management, the Company will accelerate the development of an internationaloperation management and control system, build a management and control model that matchesbusiness development, continue to deepen the construction of smart operation management platformsystem, promote the building of a first class operation and management system highlighting“empowerment, professional and value”, strengthen the benchmarking between overseas companiesand world-class enterprises, and shape international competitive advantages on all fronts.In respect of capital operation, the Company constantly promote the optimization of asset structureand reduce investment risks. In line with the strategies of the company and the direction of “asset-heavy to asset-light” and “quantity to quality”, the company will promote the "asset management +capital operation" two-wheel drive and improve capital operation plans, asset allocation andendogenous growth in order to enhance shareholder returns.In respect of comprehensive development, the Company will closely adapt to the changes in theglobal trade environment, strive to become an important link in the internal and external economiccycle, and a cornerstone for the security and stability of the industrial supply chain. Apart fromimproving quality of services to existing customers and increasing customer stickiness, the Company
China Merchants Port Group Co., Ltd. Annual Report 2021
will enhance the capacity to nurture and support hinterland industries.AppreciationIn 2021, under the external environment of repeated pandemic and various risks, the Companyadhered to its strategic directives, took the initiative to embrace changes, and thus recorded positiveresults for various tasks and its operating performances have been growing significantly year-on-year.All of these could not be accomplished without the dedication from all of our staff and the supportfrom our shareholders, investors, business partners, and those in the society who have taken to heartthe Company’s interest. For this, I would like to extend my most sincere appreciation and deepestgratitude.
Deng Renjie
Chairman
China Merchants Port Group Co., Ltd. Annual 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 the person-in-charge of the accounting organ hereby guarantee that the financialstatements 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 andcountermeasures have been explained in “Part III Management Discussion and Analysis” herein,which investors are kindly reminded to pay attention to.Securities Times, China Securities Journal, Shanghai Securities News, Ta Kung Pao (HK) andwww.cninfo.com.cn have been designated by the Company for information disclosure. And allinformation about the Company shall be subject to what’s disclosed on the aforesaid media. Investorsare kindly reminded to pay attention to these media.The Board has approved a final dividend plan as follows: based on 1,922,365,124 shares, a cashdividend of RMB4.30 (tax inclusive) per 10 shares is to be distributed to shareholders, with no bonusissue from either profit or capital reserves.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 version shall prevail.
China Merchants Port Group Co., Ltd. Annual Report 2021
Table of Contents
Chairman’s Statement ...... 1
Part I Important Notes, Table of Contents and Definitions ...... 6
Part II Corporate Information and Key Financial Information ...... 11
Part III Management Discussion and Analysis ...... 18
Part IV Corporate Governance ...... 55
Part V Environmental and Social Responsibility ...... 95
Part VI Significant Events ...... 104
Part VII Share Changes and Shareholder Information ...... 143
Part VIII Preference Shares ...... 152
Part IX Bonds ...... 153
Part X Financial Statements ...... 166
China Merchants Port Group Co., Ltd. Annual Report 2021
Documents Available for ReferenceI. Financial Statements carrying the signatures and stamps of the Company Principal, the ChiefFinancial Officer and the person in charge of accounting firm;II. The 2021 Auditor's Report stamped by the accounting firm and signed and stamped byregistered accountants; andIII. Original copies of all documents and the announcements thereof disclosed in the ReportingPeriod on Securities Times, China Securities Journal, Shanghai Securities News, Ta Kung Pao(HK) and www.cninfo.com.cn.
China Merchants Port Group Co., Ltd. Annual Report 2021
Definitions
Term
| 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) |
| CMGD | China Merchants Gangtong Development (Shenzhen) Co., Ltd., a Broadford Global majority-owned subsidiary in Shenzhen |
| CND Group | China Nanshan Development (Group) Inc. |
| Chiwan Wharf | Shenzhen Chiwan Wharf Holdings Limited (stock name: Chiwan Wharf/ Chiwan Wharf-B; stock code: 000022/200022) |
| Malai Storage | Shenzhen Malai Storage Co., Ltd. |
| CMPID | China Merchants Port Investment Development Company Limited |
| The “Assets Purchase via Share Offering” | Chiwan Wharf’s purchase of 1,313,541,560 ordinary CMPort Holdings shares from CMPID via share offering |
| Broadford Global | Broadford Global Limited, a wholly-owned subsidiary of CMG Hong Kong |
| CSRC | China Securities Regulation Commission |
| CMIT/ CMHIT | China Merchants International Technology Co., Ltd., formerly known as China Merchants Holdings (International) Information Technology Co., Ltd. |
| 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. |
| 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 Terminal Ltd. |
| TCP | TCP Participa??es S.A |
| TEU | Twenty Foot Equivalent Unit |
| CM ePort | The wharf e-commerce platform, i.e. the unified customer service platform |
| 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 |
China Merchants Port Group Co., Ltd. Annual Report 2021
SASAC of the State Council
| 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 | Yantai Port Group Laizhou Port Co. LTD |
| Xiamen Port | Zhangzhou China Merchants Xiamen Port Affairs Co., Ltd. |
| Mawan Ganghang | Shenzhen Mawan Ganghang Co., Ltd. |
| CMPS | China Merchants Port Service (Shenzhen) Co., Ltd. |
| CMB | China Merchants Bank Co., Ltd. |
| Seaport Group | Zhejiang Provincial Seaport Investment & Operation Group Co. Ltd. |
| Ningbo Port | Ningbo Zhoushan Port Company Limited |
| Ningbo Zhoushan Port Group | Ningbo Zhoushan Port Group Co., Ltd. |
| China Merchants Venture | China Merchants Venture Capital Management Co., Ltd. |
| China Merchants Venture Fund | Shenzhen China Merchants Venture Capital Fund Center (Limited Partnership) |
| Broadford Shenzhen | Broadford (Shenzhen) Port Development Co., Ltd. |
| China Merchants Liaoning | China Merchants (Liaoning) Port Development Co., Ltd. |
| Liaoning Port Group | Liaoning Port Group Co., Ltd. |
| CMA | CMA CGM S.A. |
| The cninfo website | www.cninfo.com.cn |
| 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) |
Note: In this Report, certain total numbers may not be exactly equal to the summation of their sub-item numbers as a result of roundoff.
China Merchants Port Group Co., Ltd. Annual Report 2021
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name
| 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. | 招商港口 | ||
| Company name in English | China Merchants Port Group Co., Ltd. | ||
| Abbr. | CMPort | ||
| Legal representative | Wang Xiufeng | ||
| Registered address | 23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street, Nanshan, Shenzhen, PRC | ||
| Zip code | 518067 | ||
| Changes of registered address | On 14 December 2018, the Company completed the formalities with the competent industrial and commercial administration to change its registered address from “8/F, Chiwan Petroleum Plaza, Zhaoshang Street, Nanshan, Shenzhen, PRC” to “23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street, Nanshan, Shenzhen, PRC”. | ||
| Office address | 23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street, Nanshan, Shenzhen, PRC | ||
| Zip code | 518067 | ||
| Company website | http://www.cmp1872.com | ||
| Email address | Cmpir@cmhk.com | ||
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 Media for Information Disclosure and Place where this Report Is Lodged
| Stock exchange website where this Report is disclosed | http://www.szse.cn |
China Merchants Port Group Co., Ltd. Annual Report 2021
Media and website where this Report isdisclosed
| Media and website where this Report is disclosed | Securities Times, China Securities Journal, Shanghai Securities News, Ta Kung Pao (HK) and www.cninfo.com.cn |
| Place where this Report is lodged | Board Office |
IV Change to Company Registered Information
| Unified social credit code | 91440300618832968J |
| Change to principal activity of the Company since going public (if any) | On 14 December 2018, the Company changed its business scope registered with the industrial and commercial administration. The new business scope includes: construction, management and operation of ports and wharves; bonded warehousing of various goods for import and export; development, construction and operation of supporting parks in ports; loading, unloading, transshipment, warehousing and transportation of international and domestic goods and processing of goods; devanning and LCL operations, cleaning, repairing, manufacturing and leasing of containers; international freight forwarding; vehicle and ship leasing; the provision of ship and port services including the provision of fuels, supplies and daily necessities for ships; ship towing (no operation using foreign ships); leasing and repair services of port facilities, equipment and machinery; import and export of various goods and technologies on a self-operation or agency basis, excluding the goods and technologies restricted or forbidden for import and export by the state; port logistics and port information technology consulting services; technical development and services in respect of modern logistics information systems; supply chain management and related services; design of logistics plans; engineering project management; development, research and consulting services in respect of port engineering technologies. (In respect of any operations that require approval according to law, the approval must be obtained before operation). |
| Every change of controlling shareholder since incorporation (if any) | 1. On 8 June 2018, as the ownership of 209,687,067 Chiwan Wharf shares formerly held by CND Group and 161,190,933 Chiwan Wharf shares formerly held by Malai Storage was officially transferred to CMGD, CMGD, holding 57.52% of the Company’s outstanding share capital, became the controlling shareholder of the Company. Meanwhile, CMG remains the actual controller of the Company. 2. On 26 December 2018, the Company issued RMB-denominated ordinary shares (A-shares) at RMB21.46/share to CMPID for the acquisition of the 1,313,541,560 CMPort Holdings ordinary shares that it held. Upon the Acquisition, the Company’s total share capital has become 1,793,412,378 shares. Meanwhile, as Broadford Global controls an 87.81% aggregated voting right in the Company (direct interests and interests through CMPID and CMGD), it is the direct controlling shareholder of the Company. Meanwhile, CMG remains the actual controller of the Company. |
V Other InformationThe independent audit firm hired by the Company:
China Merchants Port Group Co., Ltd. Annual Report 2021
Name
| Name | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
| Office address | 30/F, 222 Yan An Road East, Huangpu District, Shanghai, P.R.C. |
| Accountants writing signatures | Xu Xiangzhao, Pi Dehan |
The independent sponsor hired by the Company to exercise constant supervision over the Companyin the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over theCompany in the Reporting Period:
□ Applicable √ Not applicable
VI 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, DPCD
China Merchants Port Group Co., Ltd. Annual Report 2021
and Yingkou Port Group 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 accountingprocessing 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.
| 2021 | 2020 | 2021-over- 2020 change | 2019 | |||
| Original | Restated | Restated | Original | Restated | ||
| Operating revenue (RMB) | 15,283,808,174.60 | 12,618,529,996.02 | 12,756,744,317.91 | 19.81% | 12,123,829,423.74 | 12,262,451,114.91 |
| Net profit attributable to the listed company’s shareholders (RMB) | 2,685,829,204.07 | 2,065,322,969.66 | 2,073,844,409.04 | 29.51% | 2,898,192,168.84 | 2,902,555,697.90 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 2,355,700,274.23 | 1,262,830,563.26 | 1,271,352,002.64 | 85.29% | 1,037,766,875.23 | 1,042,130,404.29 |
| Net cash generated from/used in operating activities (RMB) | 6,510,326,570.48 | 5,495,800,917.01 | 5,551,289,013.01 | 17.28% | 5,501,873,415.94 | 5,507,450,443.65 |
| Basic earnings per share (RMB/share) | 1.40 | 1.07 | 1.08 | 29.63% | 1.59 | 1.60 |
| Diluted earnings per share (RMB/share) | 1.40 | 1.07 | 1.08 | 29.63% | 1.59 | 1.60 |
| Weighted average return on equity (%) | 6.99% | 5.66% | 5.67% | 1.32% | 8.71% | 8.71% |
| 31 December 2021 | 31 December 2020 | Change of 31 December 2021 over 31 December 2020 (%) | 31 December 2019 | |||
| Original | Restated | Restated | Original | Restated | ||
| Total assets (RMB) | 175,984,101,168.66 | 168,543,611,777.21 | 168,728,326,345.77 | 4.30% | 156,696,917,845.87 | 156,849,330,783.53 |
| Equity attributable to the listed company’s shareholders (RMB) | 39,801,188,662.13 | 37,117,806,052.18 | 37,165,277,744.78 | 7.09% | 35,972,804,419.42 | 36,011,246,088.71 |
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s
China Merchants Port Group Co., Ltd. Annual Report 2021
shareholders before and after exceptional gains and losses was negative for the last three accountingyears, and the latest independent auditor’s report indicated that there was uncertainty about theCompany’s ability to continue as a going concern.
□ Yes √ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’sshareholders before and after exceptional gains and losses was negative.
□ Yes √ No
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 sessionbefore the disclosure of this Report (share)
| 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) | 1.3971 |
VII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards
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.
3. Reasons for Accounting Data Differences between Domestics and Foreign AccountingPrinciple
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
VIII Key Financial Information by Quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 3,574,128,378.48 | 3,765,814,483.78 | 4,047,333,525.94 | 3,896,531,786.40 |
| Net profit attributable to the listed company’s shareholders | 532,867,484.84 | 1,144,167,861.33 | 756,770,050.94 | 252,023,806.96 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 524,972,071.00 | 1,119,723,989.97 | 588,153,132.19 | 122,851,081.07 |
| Net cash generated from/used in operating activities | 880,940,193.44 | 2,054,020,214.52 | 1,824,880,606.88 | 1,750,485,555.64 |
Indicate by tick mark whether any of the quarterly financial data in the table above or theirsummations differs materially from what have been disclosed in the Company’s quarterly orsemiyearly reports.
□ Yes √ No
IX Exceptional Gains and Losses
Unit: RMB
| Item | 2021 | 2020 | 2019 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 233,551,553.79 | 1,480,572,929.90 | 4,794,562,782.79 | - |
| 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) | 314,172,152.25 | 238,216,977.76 | 162,587,042.38 | - |
| Capital occupation charges on non-financial enterprises that are charged to current profit or loss | 232,343,789.35 | 232,906,880.87 | 19,571,040.36 | - |
| 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 | 221,242,275.17 | -409,658,173.58 | 66,075,363.30 | - |
China Merchants Port Group Co., Ltd. Annual Report 2021
financial assets and liabilities& income from disposal ofheld-for-trading financialassets and liabilities andavailable-for-sale financialassets (exclusive of theeffective portion of hedgesthat arise in the Company’sordinary course of business)
| financial assets and liabilities & income from disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | ||||
| Reversed portions of impairment allowances for receivables which are tested individually for impairment | 93,196.96 | 46,709,066.77 | - | - |
| Custodian fees earned from entrusted operation | 1,663,396.22 | 1,886,792.45 | - | - |
| Non-operating income and expense other than the above | -4,065,501.22 | -42,615,710.20 | 482,165,418.73 | - |
| Other gains and losses that meet the definition of exceptional gain/loss | - | 753,988,749.80 | 732,644,357.06 | - |
| Less: Income tax effects | 181,130,994.22 | 241,651,237.66 | 1,504,203,995.96 | - |
| Non-controlling interests effects (net of tax) | 484,485,147.96 | 1,257,863,869.71 | 2,892,976,715.05 | - |
| Total | 330,128,929.84 | 802,492,406.40 | 1,860,425,293.61 | -- |
Particulars about other gains and losses that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies recurrent gain/loss as an exceptional gain/loss itemlisted in the Explanatory Announcement No. 1 on Information Disclosure for Companies OfferingTheir Securities to the Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
China Merchants Port Group Co., Ltd. Annual Report 2021
Part III Management Discussion and Analysis
I Situation of the Industry in which the Company Operates During the Reporting Period
1. External Environment Analysis
(1) Macroeconomic environment
In 2021, global COVID-19 pandemic situation was complex and severe, economy recovery of eachcountry suffered diversion due to repeated outbreaks of pandemic and their different preferences onpandemic prevention policies. Although global economy, especially of major economies, showed akeynote of recovery in overall, the uncertainty of economy recovery increased. According to the“World Economy Outlook” report published by International Monetary Fund (IMF) in January 2022,it is projected that the growth rate of global economy was 5.9% in 2021, among which the economicgrowth rate of developed economies and emerging economies were 5.0% and 6.5%, respectively. Inthe first half of 2021, European and American pandemic was alleviated thanks to the acceleration ofvaccination process, driving the recovery of global trade and consumption. In the second half of 2021,however, the occurrence of novel coronavirus variants resulted in repeated outbreaks of pandemicand brought severe challenges to the global economy recovery. Facing the complicated externalenvironment, China organized and promoted pandemic prevention and control along with economicand social development, which effectively facilitated the restoration of normal production andeveryday life. In 2021, China recorded an annual GDP growth of 8.1%, with a total amount of overRMB100 trillion for two consecutive years. In the second half of 2021, China recorded better-than-expected growth in foreign trade driven by regional trade and cooperation. Consumption demandgradually picked up and the economy showed positive signs of recovery. Overall, China’s economymaintained its upward trend in the long-run. To achieve high-quality economic growth, China willintensify the supply-side restructuring and pay attention to demand-side management in the meantime.According to the statistics published by the General Administration of Customs, China’s total importand export value amounted to RMB39.1 trillion in 2021, representing an increase of 21.4% year-on-year compared to that of 2020. Among which, the export value was RMB21.73 trillion, representingan increase of 21.2%, while the import value was RMB17.37 trillion, representing an increase of
21.5%. Trade surplus amounted to RMB4.37 trillion, representing an increase of 20.2%.
(2) Market environment of the port and shipping industry
In 2021, the acceleration of global vaccination process promoted the further normalization of globaleconomy. As such, the global economy was under an overall recovery and growth stage. Themerchandise trade realized recovery growth, driving the demand for global seaborne freight trade ofcontainers. However, while the export demand kept increasing, the slowdown of repositioning ofEuropean and American ports due to impacts of pandemic and shortage of manpower, together withvarious “black swan events” such as blocking of the Suez Canal and Yantian Port pandemic, led toproblems of ship postponement, port congestion and route adjustment from time to time, therebycausing partial unbalance of container distribution, decreasing supply of effective seaborne freight
China Merchants Port Group Co., Ltd. Annual Report 2021
capability, constant high level of seaborne freight price in international market and frequentcongestion in supply chain of global seaborne freight logistics. On the other hand, however, newopportunities for industry also appeared continuously. The new trends such as digitalization, carbonneutrality and new infrastructure will add constant new impetus on industry transformation anddevelopment.Under the general situation of global economy recovery, the global port container throughputrecorded a significant increase in 2021. According to the latest report of Drewry, a global shippingconsultancy institution, the global container port throughput recorded an increase of 6.5% year-on-year in 2021. The shortage of global supply and demand facilitated China’s export growth, whichresulted in rapid growth trend in container throughput of domestic major ports. According to thestatistics of national port throughput published by the Ministry of Transport in January 2022, in 2021,national ports handled a container throughput of 283 million TEUs, representing an increase of 7.0%year-on-year, while the national port cargo throughput was 15.55 billion tons, representing anincrease of 6.8% year-on-year.
(3) The Company’s industry position
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, Mediterranean, Oceania, South America and NorthAmerica. By its proactive, sound and efficient operating style, the Company capitalizes on its globalport portfolio, professional management experience, the self-developed state-of-the-art terminaloperation system and integrated logistics management platform for exports and imports, therebyproviding its customers with timely and efficient port and maritime logistics services along withcomprehensive and modern integrated logistics solutions. In addition, the Company also invests inbonded logistics operation and launches integrated park development business, facilitates thetransformation and upgrade of port industry, develops supporting port industry, striving to improveindustry efficiency and create greater value through the synergies of the existing terminal network.II Principal Activity of the Company in the Reporting PeriodThe 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 24container berths and 18 bulk cargo berths in the ports in West Shenzhen and Dongguan Machong, 6container berths, 3 bulk cargo berths, and 1 coal-handling specific berth in Shantou Port, 2 containerberths and 34 bulk cargo berths in Zhanjiang Port, 4 multi-purpose berths in Shunde New Port, 2container berths and 6 bulk cargo berths in Zhangzhou Port, 4 container berths in Ningbo Daxie, 4container berths in CICT, Sri Lanka, 4 multi-purpose berths, 2 oil berths and 4 container berths inHIPG, Sri Lanka, 3 container berths in LCT, Togo, and 4 container berths in TCP, Brazil. Moreover,the Company invests in container hubs in Shanghai and Tianjin and expands its layout to ports inAsia, Africa, Europe, Oceania, South America and North America.The major business segments of China Merchants Port Group Co., Ltd. are as follows:
China Merchants Port Group Co., Ltd. Annual Report 2021
Business Segments
| 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. |
III Core competitiveness analysis
1. Sound shareholder background and recourse integration capability
Established in 1872, which is 150 years ago, CMG, the effective controller of the Company, hasbecome an exemplary model for Chinese enterprises and developed strong brand power. It is also akey state-owned enterprise under the direct administration of the PRC central government.Headquartered in Hong Kong, CMG is an integrated enterprise with diversified businesses and oneof the four major Chinese enterprises in Hong Kong. At present, it mainly focuses on three coreindustries: comprehensive transportation, featured finance, and holistic development and operationof residential communities and industrial parks. It has also been engaging in the transformation fromthese three primary industries to the three platforms of industrial management, financial services, andinvestment and capital operation. CMG has been rated as a Grade A enterprise in the OperatingResults Assessment of the State-owned Assets Supervision and Administration Commission of theState Council for 17 consecutive years and is a central state-owned enterprise that owns two Fortune500 companies.Being a crucial player and facilitator of the national “Belt and Road” initiative, CMG hasaccelerated its international development and preliminarily formed a relatively complete network ofoverseas ports, logistics, finance, and park business. The sound shareholder background and ampledomestic and overseas resources integration capability of CMG have provided strong support toCMPort for constructing a global port investment and operation platform with international visionand global expansion capabilities and distinguishing from others in the fierce global competition.
2. Well-balanced national port network distribution capability
China Merchants Port Group Co., Ltd. Annual Report 2021
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 development pattern of the global trade and industryand seized the significant policy opportunities arising from the key “Belt and Road” initiative and theconstruction of key areas of the Guangdong-Hong Kong-Macao Greater Bay Area and integration ofthe Yangtze River Delta to actively build a global port network and arrange for the investment andallocation of global recourses.
In recent years, through mergers, acquisitions, restructuration, renovation of old ports, andbuilding of new ports, the Company has been consistently optimizing its modern port network withglobal coverage, enhancing the value of the port industry, and pushing forward balanced regionaldevelopment. After years of overseas development, CMPort has formed a global business layout. Itsport network comprises 50 ports which are located in 25 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. Consistently optimized supply chain comprehensive service capability
The Company is striving to become a world-class comprehensive port service provider and keepoptimizing supply chain comprehensive service capability from various aspects. First, in respect ofthe advanced comprehensive development capability, taking port business as the core and leveragingthe synergy of different port zones as well as city-industry integration, the Company is activelyexploring and facilitating the comprehensive port development model of “Port-Park-City”. Based onthe traditional loading and discharging and ancillary services at ports, it established thecomprehensive development model that offered high value-added services to enterprises. Currently,the Company has participated in promoting the port-oriented regional comprehensive developmentand construction in various overseas regions and has achieved phased progresses and helped fosternew profit growth points for the Company. Secondly, in respect of perfecting comprehensive logisticsservice capability, the Company aims at increasing its global presence with shipping routes acrossfive continents. As both the shipping and port sectors gradually shifted to form alliances, theCompany is actively integrating its domestic and overseas supply chain recourse, to provide morecomprehensive and effective integrated logistics service solutions for the global supply chain tosatisfy customer needs, forming its unique competitive strength. Based on the West Shenzhenhomebase port and the Shunde New Port, it built the first complex port in the Greater Bay Area andexpanded to Zhu Kong River Terminal to meet the unsatisfied customer needs, promoting thedevelopment of the Guangdong-Hong Kong-Macao Greater Bay Area. The Company safeguards thesecurity of international supply chain and supply for people’s livelihood in the country throughserving domestic and overseas trade business, thereby accelerating the formation of China’s newdevelopment pattern, with the domestic economic cycle as the mainstay and the domestic andinternational economic cycles boosting each other.
China Merchants Port Group Co., Ltd. Annual Report 2021
4. Self-innovative intelligent port construction capability
To seize the development opportunity in the wave of new technologies, the Company proactivelysupported the construction of intelligent ports, and promoted the digitalization transformation andintelligent upgrade of ports through “CM Chip” and “CM ePort”. “CM Chip” is a port core operationsystem self-developed and constructed by the Company, including CTOS (Container TerminalOperation System), BTOS (Bulk Cargo Terminal Operation System), and LPOS (Logistic ParkOperation System). Currently, series products of “CM Chip” self-developed by the Company havebeen basically applied in domestic and overseas terminals that the Company mainly controls, whichlays a solid foundation for the Company’s intelligent port construction. Based on the Company’sglobal port network, “CM ePort” is a digitalized comprehensive service ecology platform facing thewhole port shipping logistics industry and integrating port, shipping, logistics and third-party e-commerce platform. It provides services such as intelligent logistics, intelligent port as well asintelligent finance and business, promoting construction of intelligent port ecology circle.
Based on the pilot transformation project of Haixing Harbor, the Company successfullyconstructed “Mawan Intelligent Port” around nine major intelligent elements, namely “CM Chip, CMePort, automation, intelligent ports, 5G network application, blockchain, Beidou system, artificialintelligence, and green and low-carbon development”. Mawan Intelligent Port has been completedand opened for duly operation in the end of June 2021. It is the first automation port upgraded andtransformed from traditional port in China, forming intelligent port comprehensive solutions with“CM Characteristics”.
5. Sound and efficient port management capability
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 professionalmanagement experience accumulated for years, its self-developed global leading terminal operatingsystem and integrated logistics management platform for import and export, its extensive maritimelogistics support system with all-rounded modern integrated logistics solutions, and its high-qualityengineering management and reliable service offerings.IV Core Business Analysis
1. Port Business Review
(1) Overview of port business
China Merchants Port Group Co., Ltd. Annual Report 2021
In 2021, the Company’s ports handled a total container throughput of 136.394 million TEUs, upby 12.0% year-on-year. Bulk cargo volume handled by the Company’s ports increased by 35.0%year-on-year to 613 million tons. During the Reporting Period, operating revenue of the Companyamounted to RMB15.28 billion, representing a year-on-year increase of 19.8%.
Table 3-1 Throughput of the Company and changes in 2021
Item
| Item | 2021 | 2020 | Changes |
Container throughput (’0,000TEU)
| Container throughput (’0,000 TEU) | 13,639.4 | 12,171.0 | 12.0% |
| Among which: Mainland China | 9,513.8 | 8,576.0 | 10.9% |
Hong Kong and Taiwan
| Hong Kong and Taiwan | 768.4 | 716.0 | 7.4% |
| Overseas | 3,357.2 | 2,878.0 | 16.3% |
Bulk cargo throughput (’0,000tons)
| Bulk cargo throughput (’0,000 tons) | 61,308.5 | 45,429.5 | 35.0% |
| Among which: Mainland China | 60,687.5 | 44,846.3 | 35.3% |
Overseas
| Overseas | 621.0 | 583.2 | 6.5% |
Note: 1. The statistics represented the total throughput of the holding subsidiaries, associates and jointventures of the Company; 2. Dalian Port Co., Ltd., the joint stock company, was generally changedto Liaoning Port Co., Ltd due to the merger of Yingkou Port Co., Ltd. by it through conversion andabsorption. As such, the Company has been including the business volume of Yingkou Port Co., Ltdsince February 2021.
For container business, the Company’s ports in Mainland China handled a container throughputof 95.138 million TEUs, representing a year-on-year increase of 10.9%. Ports in Hong Kong andTaiwan regions contributed a total container throughput of 7.684 million TEUs, indicating an increaseof 7.4% year-on-year. The total container throughput handled by the Company’s overseas ports grewby 16.3% year-on-year to 33.572 million TEUs, mainly benefiting from the inclusion of the eightterminals acquired by TL and the business growth of LCT in Togo and TCP in Brazil. In terms ofbulk cargo business, the Company’s ports in Mainland China handled a bulk cargo volume of 607million tons, up by 35.3% year-on-year, mainly benefiting from the inclusion of the business volumeof Yingkou Port Co., Ltd by the Company since February 2021 because the Dalian Port Co., Ltd., thejoint stock company, was generally changed to Liaoning Port Co., Ltd. as a result of the merger ofYingkou Port Co., Ltd. by it through conversion and absorption. Overseas ports handled a bulk cargovolume of 6.21 million tons, up by 6.5% year-on-year, mainly benefiting from the business growthof HIPG in Sri Lanka.
(2) Operation condition of port business by region
Table 3-2 Container throughput of the Company and changes in 2021 (in ’0,000 TEU)
| Region and port company | 2021 | 2020 | Changes | ||
| Pearl River Delta | Holding company | West Shenzhen Port Zone | 1,283.4 | 1,184.0 | 8.4% |
| Shunde New Port | 45.8 | 42.5 | 7.8% | ||
| Joint stock company | Chu Kong River Trade Terminal | 102.8 | 105.5 | -2.6% | |
China Merchants Port Group Co., Ltd. Annual Report 2021
Yangtze RiverDelta
| Yangtze River Delta | Joint stock company | SIPG Group | 4,703.2 | 4,350.3 | 8.1% |
| Holding company | Ningbo Daxie | 340.7 | 332.0 | 2.6% |
Bohai Rim
| Bohai Rim | Joint stock company | Tianjin Port Container Terminal | 864.2 | 786.6 | 9.9% |
| QQCTU | 854.3 | 809.7 | 5.5% | ||
| Liaoning Port Co., Ltd. | 990.6 | 653.5 | 51.6% | ||
| South-East region of Mainland China | Holding company | Zhangzhou Port | 26.7 | 31.5 | -15.2% |
| Shantou Port | 180.0 | 158.8 | 13.4% | ||
| South-West region of Mainland China | Holding company | Zhanjiang Port | 122.2 | 122.0 | 0.2% |
| Hong Kong and Taiwan | Holding company /Joint stock company | CMCS/Modern Terminals | 565.4 | 555.7 | 1.7% |
| Joint stock company | Taiwan Kao Ming Container | 202.9 | 159.9 | 26.9% | |
| Overseas | |||||
| Holding company | CICT | 306.0 | 293.0 | 4.4% | |
| TCP | 110.1 | 98.3 | 12.0% | ||
| LCT | 162.6 | 136.4 | 19.2% | ||
| Joint stock company | |||||
| TL | 2,552.3 | 2,113.4 | 20.3% | ||
| Kumport | 124.8 | 121.7 | 2.5% | ||
| PDSA | 69.2 | 85.9 | -19.4% | ||
| TICT | 32.0 | 30.3 | 5.6% |
Total
| Total | 13,639.4 | 12,171.0 | 12.0% |
Note: 1. Since April 2020, the Company has newly included the business volume of eight newterminals acquired by TL, a joint stock company of the Company; 2. Dalian Port Co., Ltd., the jointstock company, was generally changed to Liaoning Port Co., Ltd due to the merger of Yingkou PortCo., Ltd. by it through conversion and absorption. As such, the Company has been including thebusiness volume of Yingkou Port Co., Ltd since February 2021.
Table 3-3 Bulk cargo volume handled by the Company and changes in 2021 (in ’0,000 tonnes)
| Region and port company | 2021 | 2020 | Changes |
Pearl RiverDelta
| Pearl River Delta | Holding company | West Shenzhen Port Zone | 1,950.4 | 1,807.1 | 7.9% |
| Dongguan Machong | 1,609.7 | 1,548.3 | 4.0% | ||
| Shunde New Port | 518.8 | 394.9 | 31.4% |
China Merchants Port Group Co., Ltd. Annual Report 2021
Jointstockcompany
| Joint stock company | Chu Kong River Trade Terminal | 317.2 | 307.7 | 3.1% | |
| Yangtze River Delta | Joint stock company | SIPG Group | 8,238.8 | 7,564.9 | 8.9% |
Bohai Rim
| Bohai Rim | Joint stock company | QQTU | 1,765.1 | 1,629.2 | 8.3% |
| Qingdao Port Dongjiakou | 6,559.4 | 6,314.7 | 3.9% | ||
| Liaoning Port Co., Ltd. | 26,256.2 | 13,124.0 | 100.1% | ||
| Laizhou Harbour Affairs | 2,138.7 | 2,055.9 | 4.0% | ||
| South-East region of Mainland China | Holding company | Zhangzhou Port | 868.2 | 633.0 | 37.2% |
| Xia Men Bay Terminals | 564.8 | 64.9 | 770.3% | ||
| Shantou Port | 346.1 | 314.2 | 10.2% | ||
| South-West region of Mainland China | Holding company | Zhanjiang Port | 9,554.1 | 9,087.4 | 5.1% |
Overseas
| Overseas | Holding company | HIPG | 155.5 | 123.8 | 25.6% |
| Joint stock company | Kumport | 10.7 | 6.6 | 62.1% | |
| PDSA | 454.8 | 452.9 | 0.4% | ||
| Total | 61,308.5 | 45,429.5 | 35.0% | ||
Note: 1. HIPG has included liquid bulk cargo in the statistics of its business volume since 2020; 2.Dalian Port Co., Ltd., the joint stock company, was generally changed to Liaoning Port Co., Ltd dueto the merger of Yingkou Port Co., Ltd. by it through conversion and absorption. As such, theCompany has been including the business volume of Yingkou Port Co., Ltd. since February 2021.Pearl River Delta region
The Company’s terminals in West Shenzhen Port Zone handled a total container throughput of
12.834 million TEUs, up by 8.4% year-on-year, mainly benefiting from entering of production ofMawan Intelligent Port and increase in its routes. Bulk cargo volume handled amounted to 19.504million tons, up by 7.9% year-on-year, mainly due to the significant increase in import food. ChuKong River Trade Terminal handled a total container throughput of 1.028 million TEUs, down by
2.6% year-on-year, and a bulk cargo volume of 3.172 million tons, up by 3.1% year-on-yearrespectively. Dongguan Machong handled bulk cargo volume of 16.097 million tons, up by 4.0%year-on-year. Shunde New Port handled a container throughput of 0.458 million TEUs, up by 7.8%year-on-year, mainly benefiting from cooperation with large customers and promotion of businessmodel of complex port. It also handled a bulk cargo volume of 5.188 million tons, up by 31.4% year-on-year, mainly due to active expansion of new cargo sources for steel.
China Merchants Port Group Co., Ltd. Annual Report 2021
Yangtze River Delta regionSIPG handled a container throughput of 47.032 million TEUs, up by 8.1% year-on-year. Bulkcargo volume handled increased by 8.9% year-on-year to 82.388 million tons. Ningbo Daxie handleda container throughput of 3.407 million TEUs, representing an increase of 2.6% year-on-year.Bohai Rim regionQQCTU handled a container throughput of 8.543 million TEUs, representing an increase of 5.5%year-on-year. QQTU handled a bulk cargo volume of 17.651 million tons, representing an increaseof 8.3% year-on-year, mainly due to breakthrough in emerging cargo types. Qingdao Port Dongjiakouhandled a bulk cargo volume of 65.594 million tons, indicating an increase of 3.9% year-on-year.Liaoning Port Co., Ltd. handled a container throughput of 9.906 million TEUs, representing anincrease of 51.6% year-on-year, and a bulk cargo volume of 263 million tons, representing an increaseof 100.1% year-on-year, mainly benefiting from the inclusion of the business volume of YingkouPort Co., Ltd. by the Company since February 2021 because the Dalian Port Co., Ltd., the joint stockcompany, was generally changed to Liaoning Port Co., Ltd. as a result of the merger of Yingkou PortCo., Ltd. by it through conversion and absorption. Laizhou Harbour Affairs handled a bulk cargovolume of 21.387 million tons, representing a year-on-year increase of 4.0%. Tianjin Port ContainerTerminal contributed a container throughput of 8.642 million TEUs, representing a year-on-yearincrease of 9.9%, mainly due to the increase in domestic trade throughput driven by deepercooperation with large customers.South-East region of Mainland ChinaZhangzhou Port handled a container throughput of 267 thousand TEUs, representing a decreaseof 15.2% year-on-year, mainly impacted by the structural adjustment of regional container business,and a bulk cargo volume of 8.682 million tons, representing an increase of 37.2% year-on-year,mainly benefiting from the growth of bulk grain business in south and north. Xia Men Bay Terminalshandled a bulk cargo volume of 5.648 million tons, representing an increase of 770.3% year-on-year,mainly benefiting from the significant growth of sandstone business and the further release ofproduction capacity. Shantou Port handled a container throughput of 1.80 million TEUs, representingan increase of 13.4% year-on-year, mainly due to the growth of domestic trade container business,and a bulk cargo volume of 3.461 million tons, representing an increase of 10.2% year-on-year.South-West region of Mainland ChinaZhanjiang Port handled a container throughput of 1.222 million TEUs, remain relatively stableyear-on-year. It also handled a bulk cargo volume of 95.541 million tons, up by 5.1% year-on-year.Hong Kong and Taiwan regionsModern Terminals and China Merchants Container in Hong Kong delivered an aggregatecontainer throughput of 5.654 million TEUs, up by 1.7% year-on-year. Kao Ming Container inTaiwan handled a total container throughput of 2.029 million TEUs, up by 26.9% year-on-year,
China Merchants Port Group Co., Ltd. Annual Report 2021
mainly caused by regional ports congestion due to the pandemic, and part of containers had to betransported to KMCT.Overseas operationIn Sri Lanka, CICT handled a container throughput of 3.060 million TEUs, up by 4.4% year-on-year; HIPG handled a bulk cargo volume of 1.555 million tons, up by 25.6% year-on-year, mainlydue to the significant growth in cement business; RO-RO volume handled by HIPG was 0.536 millionvehicles, up by 38.0% year-on-year, mainly due to the significant growth in vehicles transshipmentbusiness. LCT in Togo handled a container throughput of 1.626 million TEUs, up by 19.2% year-on-year, mainly attributable to the stable growth in container volume from major customers. TICT inNigeria handled a container throughput of 0.320 million TEUs, up by 5.6% year-on-year. Port deDjibouti S.A. (PDSA) in Djibouti handled a container throughput of 0.692 million TEUs, down 19.4%year-on-year, which was mainly affected by unstable regional political and economic; its bulk cargovolume of 4.548 million TEUs, up by 0.4% year-on-year. TL handled a container throughput of
25.523 million TEUs, up by 20.3% year-on-year, mainly due to the operation of 8 ports newlyacquired has accounted since April 2020, of which the terminals located in European countriesrecorded a business growth. In turkey, Kumport handled a container throughput of 1.248 millionTEUs, up by 2.5% year-on-year; its bulk cargo volume of 0.107 million tons, up by 62.1% year-on-year. TCP in Brazil handled a container throughput of 1.101 million TEUs, up by 12.0% year-on-year, mainly benefitted from the increase in local imported container volume driven by the resumptionof work and production of the enterprises in Brazil in the first half of the year.
2. Implementation of business plan during the reporting period
During the Reporting Period, the Company grasped the bottom line to safeguard China underthe severe and complex situation of pandemic. We maintained a high standard for the daily pandemicprevention and control and overcame the challenges brought by the pandemic so as to achieve a solidstart of the 14th Five-Year Plan. By embarking on a new development stage, being committed to anew development philosophy, building a new pattern of development and growing in all businesses,the Company captured the rebound of port industry, beat the general trends and better than peers.
(1) Business volume recorded high again. In 2021, the Company's business achieved rapidgrowth, and the port project completed a total container throughput of 136.394 million TEUs, up by
12.0% year-on-year. Among them, container throughput in Mainland China increased 10.9% year onyear, outperforming the overall domestic level. Overseas container throughput increased 16.3% yearon year. In the bulk cargo business, its bulk cargo volume of 613 million tons, up by 35% year-on-year. Thanks to Dalian Port Co., Ltd., the joint stock company, was generally changed to LiaoningPort Co., Ltd due to the merger of Yingkou Port Co., Ltd. by it through conversion and absorption.As such, the Company has been including the business volume of Yingkou Port Co., Ltd. sinceFebruary 2021. Benefited from the reasons above, bulk cargo volume significant increased to furtherimprove domestic ports presence and enhance the comprehensive competitiveness of the Company.
(2) Focus on pandemic prevention and control as always. In 2021, the Company insisted onthe principle of “Strengthening the sense of responsibility, guarding the gate for the country, andguarding the first line of defense for foreign defense input”, actively carried out pandemic prevention
China Merchants Port Group Co., Ltd. Annual Report 2021
and control, successfully disposed a number of ships involved in pandemic and tested by variousoutbreaks. The Company strived to promote the construction of service station in Hong Kong,implemented closed-loop management for the key personnel at frontline and achieved "infection-free" among domestic employees. The safety of overseas employees attached great importance to theCompany, vaccinated for them and other measures were actively taken in order to keep them safe. Inthe meantime, we are sticking to daily prevention and control in the way of scientific and accurate,continuing to improve prevention and control mechanism and well-preparing for anti-epidemic in along term, which all play important role in safeguarding supply chains in domestic ports.
(3) A new advance for the development of leading ports. As market opportunities that “MainLine Ports” were outperformed met under the pandemic, there were 35 Liner Services added in WestShenzhen homebase port during the year. In terms of the domestic reginal leading ports, it has showednew advantages on facilities and management. The expansion of 0.3 million tons route and upgradeon 0.4 million tons ironstone wharf in Zhanjiang port as well as the 0.15 million tons general seaberths in Xiashan has completed and production capacity has significant improved. The annual designcapacity of Guang’ao Port Zone was increased from 0.43 million TEUs to 1.90 million TEUs as PhaseII of Guang’ao Port Zone of Shantou Port successfully completed and received acceptance. In termsof the port business overseas, it recorded an up-trend due to pandemic eased and shipping routesadjustment. The container throughput of TCP in Brazil hit from 1.00 million TEUs to 1.10 millionTEUs for the first time, up 12.4% year-on-year. From this, it joined the “million TEUs port Club”.CICT, a homebased port in overseas, took the initiative to adjust the structure of shipping routes tobe as qualified TEUs routes in local. Its container throughput first hit 3 million TEUs, up by 4.4%year-on-year. The corporation between HIPG and Ro-Ro shipping companies were further tightened,over 0.5 million vehicles was achieved throughout the year, and the bulk cargo business initiallyexceeded 1 million tons.
(4) Great progresses from innovation and development. According to the requirements andtrend of industrial and technology development, the Company continued to revised and improveddigitalization plan, promoted the construction of “CMCore” platform, “CM ePort” platform andintelligent management platform SMP to perfect relevant implementation plan and improve level ofindustrial digitalization; it kept promoting the construction of Mawan Smart Port that completed andreceived acceptance at the end of June 2021 and putted into operation. Since its operation, commentsfor such project from media and with industry are all in a good way, and it also won a number ofawards, including the Gold of the 4th “Blossom Cup” 5G Application Benchmarking Contest hostedby MIIT (工信部第四届“绽放杯”5G应用大赛标杆赛金奖), 2021 IAPH Sustained DevelopmentAward (2021年世界港口协会可持续发展奖) and etc.. The project was also obtained 17 patents, 16software copyrights and participated in 2 industry standard setting. The operation prosperity ofMawan Smart Port has further enhanced the West Shenzhen homebased port’s competitiveness andinfluence in regional market and accelerated to be as “World-class leading port”. When in the courseof digital transformation, the Company actively explored model innovation and cooperated closelywith relevant partners to jointly build an international hydrogen energy industry demonstration portand established a smart port technology innovation laboratory; continued to expand the coordinatedports in the Guangdong-Hong Kong-Macao Greater Bay Area and promoted such model to 14 branchports of Greater Bay Area such as Shunde, Beijiao and etc. This promotion is enhancing the
China Merchants Port Group Co., Ltd. Annual Report 2021
trade facilitation in Greater Bay Area; CSRC has successfully integrated and opened, awarded thenational "Small Giant" enterprise recognition, and will become an important platform for theCompany's innovation-driven development in the future.
(5) Deepening the comprehensively development. In 2021, Bonded logistics operation indomestic kept pushing business innovation, introducing new projects, ascending scale, optimizingstructure of self-operated business and improving core goods. With respect of overseas logistic parks,the logistic park in Hambantota, Sri Lanka has a total of 35 enterprises with aiming at introducingindustrial clients which covered finance, logistics, maritime services, auto support, government one-stop service institutions, etc.; the logistic park in Djibouti has a total of 196 enterprises, servingdomestic production capacity and connecting to overseas markets through trade and logistics.
3. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
| 2021 | 2020 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 15,283,808,174.60 | 100% | 12,756,744,317.91 | 100% | 19.81% |
| By operating division | |||||
| Port operations | 14,635,410,073.74 | 95.76% | 12,185,938,824.48 | 95.53% | 20.10% |
| Bonded logistics service | 464,573,743.50 | 3.04% | 417,391,441.86 | 3.27% | 11.30% |
| Property development and investment | 183,824,357.36 | 1.20% | 153,414,051.57 | 1.20% | 19.82% |
| By operating segment | |||||
| Mainland China, Hong Kong and Taiwan | 11,550,563,244.63 | 75.57% | 9,255,785,222.67 | 72.56% | 24.79% |
| Other countries and regions | 3,733,244,929.97 | 24.43% | 3,500,959,095.24 | 27.44% | 6.65% |
(2) Operating Division, Product Category, Operating Segment or Distribution ModelContributing over 10% of Operating Revenue 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 | ||||||
China Merchants Port Group Co., Ltd. Annual Report 2021
Portoperations
| Port operations | 14,635,410,073.74 | 8,570,124,838.35 | 41.44% | 20.10% | 14.34% | 2.95% |
| By operating segment | ||||||
| Mainland China, Hong Kong and Taiwan | 11,550,563,244.63 | 7,337,866,237.73 | 36.47% | 24.79% | 3.44% | 13.11% |
| Other countries and regions | 3,733,244,929.97 | 1,708,969,944.76 | 54.22% | 6.65% | 96.80% | -20.97% |
Core business data of the prior year restated according to the changed statistical caliber for theReporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
□ Yes √ No
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB
| Operating division | Item | 2021 | 2020 | Change (%) | ||
| Cost of sales | As % of total cost of sales (%) | Cost of sales | As % of total cost of sales (%) | |||
| Port operations | Loading and unloading services | 8,570,124,838.35 | 94.73% | 7,495,318,817.92 | 94.14% | 14.34% |
| Bonded logistics service | Logistics service | 257,835,741.37 | 2.85% | 245,350,697.54 | 3.08% | 5.09% |
| Other | Properties | 218,875,602.77 | 2.42% | 221,269,319.94 | 2.78% | -1.08% |
| Total | - | 9,046,836,182.49 | 100% | 7,961,938,835.40 | 100% | 13.63% |
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
On 9 February 2021, Jifa Logistics and DPCD increased the capital of CMIT with their 29.40% and
49.63% shares of DPN respectively, and Yingkou Port Group increased the capital of CMIT with their
China Merchants Port Group Co., Ltd. Annual Report 2021
100% shares of YPIT. After the capital increase, the Company, CMPort Holdings, Jifa Logistics,DPCD and Yingkou Port Group hold 13.18%, 43.74%, 13.26%, 22.38% and 7.44% of the equity ofCMIT respectively. According to the Accounting Standards for Business Enterprises, the Companyincludes DPN and YPIT into its consolidated financial statements.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB)
| Total sales to top five customers (RMB) | 3,741,849,003.95 |
| Total sales to top five customers as % of total sales of the Reporting Period (%) | 24.48% |
| Total sales to related parties among top five customers as % of total sales of the Reporting Period (%) | 1.81% |
Top five customers:
| No. | Customer | Sales revenue contributed for the Reporting Period (RMB) | As % of total sales revenue (%) |
| 1 | Customer A | 1,760,264,413.65 | 11.52% |
| 2 | Customer B | 673,815,843.60 | 4.41% |
| 3 | Customer C | 655,201,872.32 | 4.29% |
| 4 | Customer D | 339,039,011.08 | 2.22% |
| 5 | Customer E | 313,527,863.30 | 2.05% |
| Total | -- | 3,741,849,003.95 | 24.48% |
Other information about major customers:
Fu Gangfeng, the former chairman of the Company, resigned as the chairman of the Company onJanuary 31, 2020 and became the director and general manager of China Cosco Shipping Group Co.,LTD less than 12 months after his departure. Therefore, the association between the Company andChina Cosco Shipping Group Co., Ltd. lasts from January 31, 2020 to January 31, 2021.Major suppliers:
| Total purchases from top five suppliers (RMB) | 732,261,894.52 |
| Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) | 12.44% |
China Merchants Port Group Co., Ltd. Annual Report 2021
Total purchases from related parties among top five suppliersas % of total purchases of the Reporting Period (%)
| Total purchases from related parties among top five suppliers as % of total purchases of the Reporting Period (%) | 0.00% |
Top five suppliers:
| No. | Supplier | Purchase in the Reporting Period (RMB) | As % of total purchases (%) |
| 1 | Supplier A | 215,150,602.00 | 3.65% |
| 2 | Supplier B | 164,766,102.94 | 2.80% |
| 3 | Supplier C | 143,642,576.62 | 2.44% |
| 4 | Supplier D | 113,949,812.78 | 1.94% |
| 5 | Supplier E | 94,752,800.18 | 1.61% |
| Total | -- | 732,261,894.52 | 12.44% |
Other information about major suppliers:
□ Applicable √ Not applicable
4. Expense
Unit: RMB
| 2021 | 2020 | Change (%) | Reason for any significant change | |
| Administrative expense | 1,729,160,558.50 | 1,605,655,465.25 | 7.69% | - |
| Finance costs | 1,545,338,597.29 | 1,231,930,503.70 | 25.44% | - |
| R&D expense | 217,905,635.67 | 168,787,774.86 | 29.10% | - |
5. R&D Investments
| Main R&D project | Project purpose | Project progress | Objective to be achieved | Expected impact on the Company |
| Information system project for Mawan Intelligent Port | It aims to upgrade and transform the former Shenzhen Haixing Harbor into the first 5G green and low-carbon smart port in the Guangdong-Hong Kong-Macao Greater Bay Area. | Mawan Intelligent Port has been officially opened in June 2021. | Its objective is to upgrade the traditional port into Mawan Intelligent Port by using a number of cutting-edge technologies based on the independently developed “CM Chip” Port Intelligent Operation and Management System, and eventually form a solution for traditional container wharf upgrade. | It has realized the automatic and intelligent routine production and operation of Mawan Intelligent Port, and formed a solution for traditional container wharf upgrade that can be replicated and promoted in the entire region, at all time and under all working conditions and multiple elements. |
| The R&D and implementation project for the | It aims to create a multi-functional port digital | It is now under development. | Its objective is to complete the construction of "Two | It will improve quality and efficiency of ports. In addition, the digital |
China Merchants Port Group Co., Ltd. Annual Report 2021
"CM Chip"Cloud SmartPlatform V1.0(for bulk cargos)
| "CM Chip" Cloud Smart Platform V1.0 (for bulk cargos) | production and management platform for a wide range of cargo types and operation processes by adopting cloud computing, artificial intelligence, Internet of Things (IoT) and other modern logistics technologies. | Platforms and One Station" function based on the cloud micro-service architecture, and gradually promote and implement the platform as a multi-purpose port for bulk cargos of CM Port Group. | production management platform will support rapid iterative replication and promotion outside the Group. | |
| Customs clearance project for the Greater Bay Area Blockchain | It aims to connect all customs offices in the Greater Bay Area, achieve mutual connectivity, mutual trust and mutual recognition among customs areas, and realize dynamic and real-time monitoring of goods declaration, release, inspection and arrival and departure at hub ports. | The first phase of the project was accepted in April 2021. | Its objective is to establish core port logistics data standards and platforms with blockchain network technology as the basis of scientific and technological innovation to simplify the cargo clearance procedures, enhance the comprehensive competitive strength of ports, and realize the innovation of supervision technology and mode. | It will facilitate the expansion of waterway transport transfer business in the Guangdong-Hong Kong-Macao Greater Bay Area, improve the dominant role and core competitiveness of Shenzhen Western Port Area in the market, innovate the technology application of smart port scenarios, extend and expand intelligent financial services, and contribute to the sustainable and healthy development of intelligent port new ecology. |
| Unmanned container truck system | It aims to cooperate with professional manufacturers to carry out R&D of unmanned container trucks at wharves, build the automatic system of wharf horizontal transportation, and realize the systematic and normal operation of unmanned container trucks replacing manned container trucks at wharves. | It is now under joint debugging test. | Its objective is to replace manned container trucks with unmanned container trucks to carry out systematic and normal operation at wharves. | The large-scale application of unmanned container trucks for operation can effectively improve the efficiency and safety of port transportation and alleviate the recruitment difficulties of container truck drivers. |
| Intelligent storage yard R&D plan | It aims to use intelligent algorithm technology to optimize the storage | It is now under development. | Its objective is to use intelligent algorithm technology to optimize the storage yard R&D plan. | It will improve operation efficiency and save corresponding cost. |
China Merchants Port Group Co., Ltd. Annual Report 2021
yard R&D plan tomeet therequirements ofautomatic storageyard plan forwharves.
| yard R&D plan to meet the requirements of automatic storage yard plan for wharves. | ||||
| Research and of intelligent gate entry system | It aims to develop a new gate entry unmanned plan to improve the recognition rate and automation rate with dual identification engine mode, and to replace manual inspection, supporting vehicles and personnel intelligent security and other functions with intelligent inspection algorithm. The finial purpose is to make gate entry intelligent and unmanned. | It was launched in Mawan Intelligent Port in August 2021. | Its objective is to realize intelligent and unmanned gate entry. | It has improved gate entry passing efficiency and reduced manual operation. |
| Development and application of automatic control systems for heavy oil, diesel, gasoline and methanol process | It aims to realize automatic operation of four major process systems for heavy oil, diesel, gasoline, methanol process at Zhanjiang Port, and improve their safety and applicability. | The project was completed in July 2021. | Its objective is to realize automatic operation of four major process systems at Zhanjiang Port. | It has improved the automation level of Zhanjiang Port and laid a foundation for building a digital petrochemical wharf. |
| Technical service project for transformation of automatic intelligent bucket-wheel stacker reclaimer | It aims to adopt automatic intelligent system to realize unmanned operation and connection with the existing intelligent bucket-wheel stacker reclaimer operating system at intelligent bulk cargo wharves. | It was completed in May 2021. | Its objective is to realize unmanned operation and connection with the existing intelligent bucket-wheel stacker reclaimer operating system at intelligent bulk cargo wharves. | It has improved quality and efficiency, and reduced manual operation. |
Details about R&D personnel:
| 2021 | 2020 | Change (%) | |
| Number of R&D personnel | 1091 | 984 | 10.87% |
China Merchants Port Group Co., Ltd. Annual Report 2021
R&D personnel as %of total employees
| R&D personnel as % of total employees | 7.24% | 6.68% | 0.56% |
| Education background | —— | —— | —— |
| Bachelor’s degree | 634 | 581 | 9.12% |
| Master’s degree | 61 | 52 | 17.31% |
| Doctoral degree | 1 | 0 | 100% |
| Age structure | —— | —— | —— |
| Below 30 | 148 | 165 | -10.30% |
| 30~40 | 433 | 401 | 7.98% |
Details about R&D investments:
| 2021 | 2020 | Change (%) | |
| R&D investments (RMB) | 266,564,896.92 | 222,260,092.16 | 19.93% |
| R&D investments as % of operating revenue | 1.74% | 1.74% | 0.00% |
| Capitalized R&D investments (RMB) | 48,659,261.25 | 53,472,317.30 | -9.00% |
| Capitalized R&D investments as % of total R&D investments | 18.25% | 24.06% | -5.81% |
Reasons for any significant change to the composition of the R&D personnel and the impact:
□ Applicable √ Not applicable
Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:
□ Applicable √ Not applicable
6. Cash Flows
Unit: RMB
| Item | 2021 | 2020 | Change (%) |
| Subtotal of cash generated from operating activities | 16,732,952,290.22 | 13,833,729,117.44 | 20.96% |
| Subtotal of cash used in operating activities | 10,222,625,719.74 | 8,282,440,104.43 | 23.43% |
| Net cash generated from/used in operating activities | 6,510,326,570.48 | 5,551,289,013.01 | 17.28% |
| Subtotal of cash generated from investing activities | 20,517,516,799.74 | 12,533,055,176.10 | 63.71% |
China Merchants Port Group Co., Ltd. Annual Report 2021
Subtotal of cash used ininvesting activities
| Subtotal of cash used in investing activities | 25,089,524,501.76 | 19,426,844,075.10 | 29.15% |
| Net cash generated from/used in investing activities | -4,572,007,702.02 | -6,893,788,899.00 | 33.68% |
| Subtotal of cash generated from financing activities | 26,888,597,909.66 | 37,578,675,786.12 | -28.45% |
| Subtotal of cash used in financing activities | 27,838,280,286.14 | 32,185,533,323.64 | -13.51% |
| Net cash generated from/used in financing activities | -949,682,376.48 | 5,393,142,462.48 | -117.61% |
| Net increase in cash and cash equivalents | 828,736,911.07 | 4,110,947,600.84 | -79.84% |
Explanation of why any of the data above varies significantly on a year-on-year basis:
Subtotal of cash generated from investing activities rose 63.71% year-on-year, primarily driven bythe increased principals received from structured deposits, and the receipt of dividend payout byTerminal Link, in the year.Net cash generated from investing activities rose 33.68% year-on-year, primarily driven by a fastergrowth in cash generated from investing activities than in cash used in investing activities.Net cash generated from financing activities declined 117.61% year-on-year, primarily driven by amuch larger decrease in cash generated from financing activities than in cash used in financingactivities.The net increase of cash and cash equivalents declined 79.84% year-on-year, primarily driven by thecomprehensive influence of each activity of cash flows.Explanation of why net cash generated from/used in operating activities varies significantly from netprofit of the Reporting Period:
□ Applicable √ Not applicable
V Analysis of Non-main Businesses
Unit: RMB
| Amount | As % of total profit | Main source/reason | Recurrent or not | |
| Investment income | 6,636,949,510.91 | 73.06% | Share of the profit of joint ventures and associates, mainly Shanghai Port | Yes |
China Merchants Port Group Co., Ltd. Annual Report 2021
Change infair valuegain or loss
| Change in fair value gain or loss | 221,242,275.17 | 2.44% | - | Not |
| Asset impairment | -420,492,515.75 | -4.63% | Mainly for the provision of goodwill impairment this year | Not |
| Non-operating income | 43,467,537.50 | 0.48% | - | Not |
| Non-operating expense | 95,528,693.11 | 1.05% | - | Not |
| Other income | 363,245,161.08 | 4.00% | Mainly for government subsidies | Not |
| Gain/loss on disposal of assets | 35,576,459.42 | 0.39% | - | Not |
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 31 December 2021 | 1 January 2021 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Monetary assets | 12,772,349,406.77 | 7.26% | 11,918,423,758.71 | 7.06% | 0.20% | - |
| Accounts receivable | 1,320,577,577.81 | 0.75% | 1,393,349,417.02 | 0.83% | -0.08% | - |
| Inventory | 194,920,136.12 | 0.11% | 214,823,976.30 | 0.13% | -0.02% | - |
| Investment real estate | 5,298,238,414.88 | 3.01% | 5,558,755,275.21 | 3.29% | -0.28% | - |
| Long-term equity investment | 70,353,451,824.52 | 39.98% | 66,242,411,222.90 | 39.26% | 0.72% | - |
| Fixed assets | 31,710,513,230.29 | 18.02% | 29,479,755,159.21 | 17.47% | 0.55% | - |
| Projects under construction | 2,557,584,953.92 | 1.45% | 5,381,430,606.18 | 3.19% | -1.74% | Mainly for the starfish smart port project into fixed assets |
| Right assets | 8,743,077,542.19 | 4.97% | 9,087,741,812.94 | 5.39% | -0.42% | - |
| Short-term borrowings | 13,651,452,805.36 | 7.76% | 10,483,775,548.93 | 6.21% | 1.55% | The main reason is the increase in loans for supporting projects |
| Contract liability | 196,784,525.26 | 0.11% | 157,442,109.67 | 0.09% | 0.02% | - |
China Merchants Port Group Co., Ltd. Annual Report 2021
Long-termpayables
| Long-term payables | 7,144,839,870.89 | 4.06% | 7,406,322,693.81 | 4.39% | -0.33% | - |
| Lease liability | 1,055,194,906.09 | 0.60% | 1,327,850,984.08 | 0.79% | -0.19% | - |
| Held-for-trading financial assets | 6,921,831,502.55 | 3.93% | 850,165,448.59 | 0.50% | 3.43% | Mainly structural deposit increase |
| Other receivables | 696,276,595.87 | 0.40% | 3,561,292,313.98 | 2.11% | -1.71% | Mainly land acquisition and storage funds reclassified to long-term receivables |
| Long-term receivables | 6,162,713,861.02 | 3.50% | 3,887,949,993.10 | 2.30% | 1.20% | Mainly land acquisition and storage funds reclassified to long-term receivables |
| Non-current liabilities that mature within one year | 8,268,209,284.17 | 4.70% | 3,564,587,701.07 | 2.11% | 2.59% | Mainly due to an increase in bonds payable due within one year |
| Long-term payables | 3,422,179,366.40 | 1.94% | 1,228,461,573.69 | 0.73% | 1.21% | Mainly franchise liabilities reclassified to long-term payables |
| Other non-current liabilities | 163,065,578.53 | 0.09% | 2,982,220,894.03 | 1.77% | -1.68% | Mainly franchise liabilities reclassified to long-term payables |
Indicate whether overseas assets account for a high proportion of total assets.
√ Applicable □ Not applicable
| 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 | 14,236,545.65 | Hong Kong | Port investment and operations | Appointing director, supervisor and senior management /According to the | 732,484.00 | 88.96% | No |
China Merchants Port Group Co., Ltd. Annual Report 2021
political,economicand legalenvironment ofdifferentcountriesand regions,establish atargetedinternalcontrolsystem andearlywarningsystem.
| political, economic and legal environment of different countries and regions, establish a targeted internal control system and early warning system. | |||
| Other information | N/A | ||
2. 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 (exclusive of derivative financial assets) | 850,165,448.59 | 11,666,053.97 | - | - | - | - | 6,059,999,999.99 | 6,921,831,502.55 |
| Other non-current financial assets | 910,807,452.56 | -96,596,314.84 | - | - | - | - | -4,695,892.85 | 809,515,244.87 |
| Other equity instrument investment | 181,467,057.74 | - | -1,215,259.31 | - | - | - | - | 180,251,798.43 |
| Subtotal of financial assets | 1,942,439,958.89 | -84,930,260.87 | -1,215,259.31 | - | - | - | 6,055,304,107.14 | 7,911,598,545.85 |
| Receivables financing | 217,449,966.41 | - | - | - | - | - | 20,979,436.30 | 238,429,402.71 |
| Total of the above | 2,159,889,925.30 | -84,930,260.87 | -1,215,259.31 | - | - | - | 6,076,283,543.44 | 8,150,027,948.56 |
| Financial liabilities | 2,888,395,641.53 | 306,172,536.04 | - | - | - | - | -3,194,568,177.57 | 0.00 |
Details of other changes:
China Merchants Port Group Co., Ltd. Annual Report 2021
N/A
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
The restricted monetary assets were RMB12,830,212.33 of security deposits.The carrying value of fixed assets as collateral for bank loans was RMB278,015,952.68.The carrying value of construction in progress as collateral for bank loans was RMB12,388,924.87.The carrying value of intangible assets as collateral for bank loans was RMB212,232,642.30.The carrying value of equities and interests as collateral for bank loans was RMB2,438,275,555.16.VII Investments Made
1. Total Investment Amount
Investment Amount in 2021 (RMB)
| Investment Amount in 2021 (RMB) | Investment Amount in 2020 (RMB) | Change (%) |
| 2,444,270,974.39 | 8,434,929,741.98 | -71.02% |
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
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 | 632,110,920.11 | 2,176,337,736.71 | Self-funded and loan-funded | 88.21% | 0.00 | 0.00 | N/A |
China Merchants Port Group Co., Ltd. Annual Report 2021
HIPGcontainer andoil terminalsand tank zonerenovationproject
| HIPG container and oil terminals and tank zone renovation project | Self-built | Yes | Support activities for water transportation | 30,225,598.52 | 1,580,665,935.37 | Self-funded and loan-funded | 57.68% | 0.00 | 0.00 | N/A |
| Zhanjiang Port Baoman Area vanning and devanning services area phase I project | Self-built | Yes | Support activities for water transportation | 5,270,101.53 | 142,345,316.09 | Self-funded and loan-funded | 23.47% | 0.00 | 0.00 | N/A |
| Zhanjiang Port Baoman Area container terminal phase I expansion project | Self-built | Yes | Support activities for water transportation | 25,002,275.68 | 181,014,755.60 | Self-funded and loan-funded | 7.73% | 0.00 | 0.00 | N/A |
| General Cargo project of Zhanjiang Port Donghai Island | Self-built | Yes | Support activities for water transportation | 33,093,195.93 | 399,676,589.24 | Self-funded and loan-funded | 44.15% | 0.00 | 0.00 | N/A |
| Total | -- | -- | -- | 725,702,091.77 | 4,480,040,333.01 | -- | -- | 0.00 | 0.00 | -- |
4. Financial Investments
(1) Securities Investments
Unit: RMB
| Variety of securities | Code of securities | Name of securities | Initial investment cost | Accounting measurement model | Beginning carrying value | Gain/loss on fair value changes in the Reporting Period | Cumulative fair value changes recorded into equity | Purchased in the Reporting Period | Sold in the Reporting Period | Gain/loss in the Reporting Period | Ending carrying value | Accounting item | Capital resources |
| Stock | 06198 | Qingdao Port | 124,405,138.80 | Fair value method | 166,225,139.77 | -16,085,383.40 | - | - | - | 10,771,388.76 | 145,443,863.52 | Other non-current financial assets | Self-owned |
| Stock | 601298 | Qingdao Port | 331,404,250.30 | Fair value method | 720,160,000.00 | -82,880,000.00 | - | - | - | 29,366,400.00 | 637,280,000.00 | Other non-current financial assets | Self-owned |
China Merchants Port Group Co., Ltd. Annual Report 2021
Stock
| Stock | 600377 | Jiangsu Expressway | 1,120,000.00 | Fair value method | 10,786,800.00 | - | -1,625,100.00 | - | - | 460,000.00 | 8,620,000.00 | Other equity instrument investment | Self-owned |
| Stock | 400032 | Petrochemical A1 | 3,500,000.00 | Fair value method | 382,200.00 | - | - | - | - | - | 382,200.00 | Other equity instrument investment | Self-owned |
| Stock | 400009 | Guang Jian 1 | 27,500.00 | Fair value method | 17,000.00 | - | - | - | - | - | 17,000.00 | Other equity instrument investment | Self-owned |
| Stock | 600179 | Antong Holdings | 391,956.73 | Fair value method | 165,448.59 | -8,251.80 | - | - | - | - | 157,196.79 | Trading financial assets | Self-owned |
| Total | 460,848,845.83 | -- | 897,736,588.36 | -98,973,635.20 | -1,625,100.00 | 0 | 0 | 40,597,788.76 | 791,900,260.31 | -- | -- | ||
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
5. Use of Funds Raised
(1) Overall Usage of Funds Raised
Unit: RMB’0,000
| Year | Way of raising | Total funds raised | Total funds used in the Current Period | Accumulative fund used | Total funds with usage changed | Accumulative funds with usage changed | Proportion of accumulative funds with usage changed | Total unused funds | The usage and destination of unused funds | Amount of funds raised idle for over two years |
| 2019 | Private placement | 221,282.91 | 444,294.92 | 965,177.12 | 0 | 18,599.73 | 8.41% | 64,000.54 | Deposited in funds raising account | 0 |
| Total | -- | 221,282.91 | 444,294.92 | 965,177.12 | 0 | 18,599.73 | 8.41% | 64,000.54 | -- | 0 |
| Explanation of overall usage of funds raised | ||||||||||
| As approved in the document “ZJXK [2018] No. 1750” of CSRC, CMPort issued 128,952,746 RMB ordinary shares (A Share) at RMB 17.16 per share through private placement on Shenzhen Stock Exchange. The total fund raised was RMB2,212,829,121.36, and after deducting fees associated with the issuance of shares, the net fund raised was RMB2,185,997,340.15. As of 23 October 2019, the aforementioned fund was fully paid, which was verified by BDO China Shu Lun Pan Certified Public Accounts LLP with | ||||||||||
China Merchants Port Group Co., Ltd. Annual Report 2021
a capital verification report (XKSBZ [2019] No. ZI10673). As of 31 December 2021, a total of RMB9,651,771,153.86 in theCompany’s raised funds account had been used, including: (1) RMB582,722,414.48 for replacing the self-funding spent onfundraising investment projects in advance; (2) RMB1,012,216,958.17 as raised fund invested after the fund was paid, including aninvestment of RMB1,012,216,958.17 in the Haixing Harbor renovation project (Phase II) (2019: RMB324,533,139.29; 2020:
RMB424,734,590.46; 2021: RMB262,949,228.42); (3) RMB26,831,781.21 for paying issue fees; (4) RMB7,130,000,000.00 forpurchasing structured deposits (2019: RMB1,200,000,000.00; 2020: RMB2,650,000,000.00; 2021: RMB3,280,000,000.00); (5)RMB900,000,000.00 for purchasing seven days call deposits. As of 31 December 2021, the net amount of interest income generatedfrom the fund account is RMB2,452,004.93 after deducting surcharges (2019: RMB795,775.14; 2020: RMB1,142,652.22; 2021:
RMB513,577.57); the amount of structured deposits redeemed is RMB7,130,000,000.00 (2019: RMB100,000,000.00; 2020:
RMB2,950,000,000.00; 2021: RMB4,080,000,000.00); the amount of income from structured deposits is RMB41,738,931.50 (2019:
RMB302,465.75; 2020: RMB28,538,767.13; 2021: RMB12,897,698.62); the amount of seven days call deposits redeemed isRMB900,000,000.00 with an income of RMB4,756,502.08. As of 31 December 2021, the balance of the raised funds account isRMB640,005,406.01.
(2) Commitment Projects of Fund Raised
Unit: RMB’0,000
a capital verification report (XKSBZ [2019] No. ZI10673). As of 31 December 2021, a total of RMB9,651,771,153.86 in theCompany’s raised funds account had been used, including: (1) RMB582,722,414.48 for replacing the self-funding spent onfundraising investment projects in advance; (2) RMB1,012,216,958.17 as raised fund invested after the fund was paid, including aninvestment of RMB1,012,216,958.17 in the Haixing Harbor renovation project (Phase II) (2019: RMB324,533,139.29; 2020:
RMB424,734,590.46; 2021: RMB262,949,228.42); (3) RMB26,831,781.21 for paying issue fees; (4) RMB7,130,000,000.00 forpurchasing structured deposits (2019: RMB1,200,000,000.00; 2020: RMB2,650,000,000.00; 2021: RMB3,280,000,000.00); (5)RMB900,000,000.00 for purchasing seven days call deposits. As of 31 December 2021, the net amount of interest income generatedfrom the fund account is RMB2,452,004.93 after deducting surcharges (2019: RMB795,775.14; 2020: RMB1,142,652.22; 2021:
RMB513,577.57); the amount of structured deposits redeemed is RMB7,130,000,000.00 (2019: RMB100,000,000.00; 2020:
RMB2,950,000,000.00; 2021: RMB4,080,000,000.00); the amount of income from structured deposits is RMB41,738,931.50 (2019:
RMB302,465.75; 2020: RMB28,538,767.13; 2021: RMB12,897,698.62); the amount of seven days call deposits redeemed isRMB900,000,000.00 with an income of RMB4,756,502.08. As of 31 December 2021, the balance of the raised funds account isRMB640,005,406.01.Committedinvestment projectand super raisefund arrangement
| Committed investment project and super raise fund arrangement | Changed or not (including partial changes) | Committed investment amount | Investment amount after adjustment (1) | Investment amount in the Reporting Period | Accumulative investment amount as of the period-end (2) | Investment schedule as the period-end (3)＝(2)/(1) | Date of reaching intended use of the project | Realized income in the Reporting Period | Whether reached anticipated income | Whether occurred significant changes in project feasibility |
| Committed investment project | ||||||||||
| Supporting transformation project of Han Port | Yes | 18,599.73 | - | - | - | - | - | N/A (Note 1) | N/A | N/A |
| Transformation project of Haixing Harbor (Phase II) | No | 200,000 | 218,599.73 | 26,294.92 | 159,493.94 | 72.96% | 28 June 2021 | -7,550.39 | No (Note 2) | No |
| Subtotal of committed investment project | -- | 218,599.73 | 218,599.73 | 26,294.92 | 159,493.94 | -- | -- | -7,550.39 | -- | -- |
| Super raise fund arrangement | ||||||||||
| N/A | ||||||||||
| Subtotal of super raise fund arrangement | -- | - | - | - | - | -- | -- | 0 | -- | -- |
| Total | -- | 218,599.73 | 218,599.73 | 26,294.92 | 159,493.94 | -- | -- | -7,550.39 | -- | -- |
| Condition and reason for not reaching the schedule and anticipated income (by specific items) | Note 1: Based on the estimated construction progress of supporting transformation project of Han Port, US$ 79 million and USD281 million were planned to be used to build an oil wharf and a tank area respectively in 2019 and 2020; USD12.48 million and 179.6 million were planned to be used to acquire quay cranes, yard cranes and other operating equipment respectively in 2019 and 2020. The funds were estimated to be fully spent by 2020. So far the project has been delayed. According to the Company’s overall development planning, in order to further optimize its internal resource allocation, increase the utilization efficiency of funds and safeguard shareholders’ rights and interests, the Company used RMB185,997,300 of the fund raised in transformation project of Haixing Harbor (Phase II). As of 31 December 2021, a total of RMB0 had been invested in supporting transformation project of Han Port. 2. Transformation project of Haixing Harbor (Phase II) is currently under construction and thus has not generated income. Note 2: The Transformation project of Haixing Harbor (Phase II) obtained the port operation license on 24 June 2021, passed the acceptance check by the competent port administration on 28 June 2021 and has been put into operation. As of 31 December 2021, the project cumulatively generated revenue of RMB-75.50 million. The revenue has not yet reached the estimated income since it has merely six months since the project was put into operation. | |||||||||
| Notes of condition of significant changes occurred in project feasibility | N/A | |||||||||
| Amount, usage and schedule of super raise fund | N/A | |||||||||
China Merchants Port Group Co., Ltd. Annual Report 2021
Changes inimplementationaddress ofinvestment project
| Changes in implementation address of investment project | N/A |
| Adjustment of implementation mode of investment project | N/A |
| Upfront investment and transfer of investment project | BDO China Shu Lun Pan Certified Public Accountants LLP verified the upfront investment with self-pooled funds in raised funds investment projects, and issued the XKSSBZ [2019] No. 10423 The Audit Report on the Upfront Investment with Self-Pooled Funds in raised Funds Investment Project of Shenzhen Haixing Harbor Development Co., Ltd. dated 12 November 2019. As of 31 October 2019, the upfront investment with self-pooled funds in raised funds investment projects amounted to RMB582.7224 million. In December 2019, pursuant to the Proposal on the Swap of Raised Funds and Upfront Investment of Self-Pooled Funds approved at the 11th Extraordinary Meeting of the 9th Board of Directors in 2019, the Company has completed the swap of the aforesaid funds. |
| Idle fund supplementing the current capital temporarily | N/A |
| Amount of surplus in project implementation and the reasons | N/A |
| Usage and destination of unused funds | Unused fund was deposited in the fund-raising account. |
| Problems incurred in fund using and disclosure or other condition | On 22 November 2019, the 11th Extraordinary Meeting of the 9th Board of Directors in 2019 reviewed and approved the Proposal on the Implementation of Cash Management by the Usage of Idle Raised Funds, which agreed the Company to carry out cash management by using idle funds of no more than RMB1.2 billion. The quota was valid within 12 months of the date when the said proposal was approved by the Board. And the cash management amount would be returned to the account of raised funds upon the expiry. On 30 November 2020, the Second Extraordinary Meeting of the 10th Board of Directors in 2020 and the Second Extraordinary Meeting of the 10th Supervisory Committee in 2020 reviewed and approved the Proposal on the Implementation of Cash Management by the Usage of Idle Raised Funds, which agreed the Company to carry out cash management by using idle funds of no more than RMB800 million. The quota was valid within 12 months of the date when the said proposal was approved by the Board. And the cash management amount would be returned to the account of raised funds upon the expiry. On 23 December 2021, the 13th Extraordinary Meeting of the 10th Board of Directors in 2021 and the 7th Extraordinary Meeting of the 10th Supervisory Committee in 2021 reviewed and approved the Proposal on the Implementation of Cash Management by the Usage of Idle Raised Funds, which agreed the Company to carry out cash management by using idle funds of no more than RMB600 million on a rolling basis within the validity as stated in the relevant resolution. As of 31 December 2021, the Company has purchased financial products of RMB7,130,000,000.00 in structured deposits and RMB900,000,000.00 in seven-day notice deposits (2019: RMB1,200,000,000.00 of structured deposits; 2020: RMB2,650,000,000.00 of structured deposits; 2021: RMB3,280,000,000.00 of structured deposits and RMB900,000,000.00 of seven days call deposits) at CMB Shenzhen New Times Sub-branch with some of its temporarily idle raised funds from the private placement. Income arising on structured deposits was RMB41,738,931.50 in total (2019: RMB302,465.75; 2020: RMB28,538,767.13; 2021: RMB12,897,698.62), while income from seven days call deposits was RMB4,756,502.08 in 2021. So far, the principals of all the financial products purchased with CMB Shenzhen New Times Sub-branch have been taken back upon maturity. |
(3) Changes in Items of Funds Raised
Unit: RMB’0,000
| Items after changes | Corresponding original committed items | Amount of planned funds invested after changes (1) | Actual investment amount in the Reporting Period | Accumulative investment amount as the period-end (2) | Investment schedule as the period-end (3)=(2)/(1) | Date of reaching intended use of the project | Realized income in the Reporting Period | Whether reached anticipated income | Whether occurred significant changes in project feasibility |
China Merchants Port Group Co., Ltd. Annual Report 2021
Transformationproject ofHaixingHarbor(Phase II)
| Transformation project of Haixing Harbor (Phase II) | Supporting transformation project of Han Port | 218,599.73 | 26,294.92 | 159,493.94 | 72.96% | 28 June 2021 | -7,550.39 | No | No |
| Total | -- | 218,599.73 | 26,294.92 | 159,493.94 | -- | -- | -7,550.39 | -- | -- |
| Notes of reasons for changes, decision-making procedures and information disclosure (by specific items) | The usage of unused fund of RMB185.9973 million in supporting transformation project of HIPG was changed to the construction of transformation project of Haixing Harbor (Phase II). The matters of partial changes in fund raised investment has been approved by the Proposal on Partial Changes in Usage of Fund Raised, which was reviewed and approved on the 11th Extraordinary Meeting of the 9th Board of Directors in 2019 on 22 November 2019. The Announcement of Partial Changes in Usage of Fund Raised (Announcement No. 2019-85) has been disclosed on website www.cninfo.com.cn on 26 November 2019. As of 31 December 2021, the amount with usage changed was RMB185.9973 million. | ||||||||
| Condition and reason for not reaching the schedule and anticipated income (by specific items) | Based on the estimated construction progress of supporting transformation project of Han Port, US$ 79 million and USD281 million were planned to be used to build an oil wharf and a tank area respectively in 2019 and 2020; USD12.48 million and 179.6 million were planned to be used to acquire quay cranes, yard cranes and other operating equipment respectively in 2019 and 2020. The funds were estimated to be fully spent by 2020. So far the project has been delayed. According to the Company’s overall development planning, in order to further optimize its internal resource allocation, increase the utilization efficiency of funds and safeguard shareholders’ rights and interests, the Company used RMB185,997,300 of the fund raised in transformation project of Haixing Harbor (Phase II). As of 31 December 2021, a total of RMB0 had been invested in supporting transformation project of Han Port. 2. Transformation project of Haixing Harbor (Phase II) is currently under construction and thus has not generated income. The Transformation project of Haixing Harbor (Phase II) obtained the port operation license on 24 June 2021, passed the acceptance check by the competent port administration on 28 June 2021 and has been put into operation. As of 31 December 2021, the project cumulatively generated revenue of RMB-75.50 million. The revenue has not yet reached the estimated income since it has merely six months since the project was put into operation. | ||||||||
| Notes of condition of significant changes occurred in project feasibility after changes | N/A | ||||||||
VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
IX Major SubsidiariesMajor fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10%effect on the Company’s net profit
Unit: RMB
Name
| Name | Relationship with the Company | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shanghai International Port (Group) Co., Ltd. | Joint stock company | Business related to port, container and terminal | 23,278,679,750.00 | 170,787,478,512.86 | 107,805,629,246.31 | 34,288,697,334.43 | 17,860,772,873.21 | 15,480,719,994.16 |
| China Merchants Port Holdings Company Limited | Subsidiary | Port business, bonded logistics and property investment | 44,016,586,625.24 (HKD) | 142,365,456,450.90 | 98,772,110,395.06 | 9,835,827,140.59 | 8,302,153,749.61 | 7,324,839,959.14 |
Subsidiaries obtained or disposed in the Reporting Period
| Subsidiary | How subsidiary was obtained or disposed in the Reporting Period | Effects on overall operations and operating performance |
| Sanya Merchants Port Development Co., Ltd. | Newly incorporated | No significant impact |
| Shantou Port Service Co., Ltd. | Liquidated and de-registered | No significant impact |
| Zhanjiang Port Bonded Service Co., Ltd., Guangdong | Liquidated and de-registered | No significant impact |
| 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 |
Notes of major holding companies and joint stock companiesThere is no information on major holding companies and joint stock companies for the Company todisclose during the Reporting Period.X. Structured Bodies Controlled by the Company? Applicable √ Not applicableXI Outlook for the Future Development of the Company
1. Layout and trends of the industry
China Merchants Port Group Co., Ltd. Annual Report 2021
Looking into 2022, the global economy shows a keynote of overall recovery, but the recoverywill stall, the economic growth will slow down and inflation will last for longer. The global economicdeeply links to COVID-19 pandemic, and the outlook of global economy recovery still faces withuncertainties. What’s more, the upgrade of tensions geopolitics may bring other global risks and theclimate change increased means a higher probability of severe natural disasters. In January 2022, theIMF predicted the global economy will slow down, representing a grow by 4.4% in 2021, down 1.5percentage point year-on-year. In particular, the developed economies will grow at 3.9%, down 1.1percentage point as compared to that of 2021; and the emerging markets and developing economieswill grow at 4.8%, up 1.7 percentage point as compared to that of 2021. Global trade volume(including goods and services) will grow by 6.0%, down 3.3 percentage points as compared to thatof 2021.2022 is the year of continuously deepening China's implementation of the "14th Five-Year Plan"and the Long-Range Objectives Through the Year of 2035. China will always act on the generalprinciple of " prioritizing stability while pursuing progress", continue to improve people's livelihoodthrough "ensuring stability on the six fronts and security in the six areas"(“六穩” 、 “六保”),safeguard macroeconomic stability, keep major economic indicators within an appropriate range byaccelerating the progress of optimizing and upgrade economic structure and other policies. Accordingto the latest IMF’s report, China's economic growth forecast for 2022 has been lowered to 4.8%, 0.8%points lower than the forecast on October 2021.
In 2022, although the global shipping routes, capacity and supply of containers may benormalized gradually, and the supply and demand imbalance of global container shipping market willmitigate, the container shortage still exists, rendering port congestion difficult to ease in a short term.Drewry, a global shipping consultancy, predicted that the port and shipping industry will still maintainthe current situation including high demand, high freight rates, supply chain disruption and the likethroughout 2022.
Looking ahead to 2021, China will continue to consolidate the economic foundations, enhancethe abilities of scientific and technological innovation and adhere to multilateralism. It also urgedmaking proactive efforts to align with the high-standard international economic and trade rules, domore to attract foreign investment while contributing to the stable and smooth functioning ofindustrial and supply chains, deepen reform via high-level opening-up and boost high-qualitydevelopment. It is foreseeable that with the implementation of various trade agreements, the level oftrade and investment facilitation will be further improved, and the ties of cooperation between Chinaand trading partners will be further enhanced, thereby strengthening the growth driver of merchandiseimport and export, which will benefit the port industry for sure. In addition, ongoing progress in theconstruction of intelligent ports and green ports will also rejuvenate the development of the portindustry.
2. Development strategy
The company is committed to becoming a world-class comprehensive port service provider,base itself in a new stage of development, implement the new development philosophy fully andfaithfully, and serve and integrate itself into the new development paradigm. In pursuit of high-quality growth, it will accelerate technological leadership and innovation-driven development,
China Merchants Port Group Co., Ltd. Annual Report 2021
achieve global scientific layout and balanced development, provide first-class comprehensiveservice professional solutions, seek more returns for shareholders, support local economic andindustrial development, and contribute to the development of the port industry.Firstly, in respect of domestic strategies, the Company will seize the opportunity arising fromthe supply-side reform and based on the goal of “regional consolidation and enhancement of synergy”,seek for opportunities for consolidation and cooperation on an ongoing basis across the five maincoastal regions with a view to further expanding and improving the ports network layout within China.The Group will lead a new direction for the consolidation of regional ports with a key focus onconstantly improving the quality of port development with its best efforts.
Secondly, in respect of overseas strategies, the Company will continue to capitalize on theopportunities arising from the “Belt and Road” initiative promoted by China and the internationalindustrial transfers, at the same time adapting to the trend of deploying mega-vessels and formingshipping alliances. Emphasis will be placed on the development of global major hub ports andgateway ports as well as areas with high market potential, fast-growing economy and promisingdevelopment prospect. The Company will grasp opportunities in port, logistics and relatedinfrastructures investment for the on-going enhancement of its global port network.Thirdly, in respect of innovation strategies, the Company will adhere to the principle of “drivingthrough technology and embracing changes”, under which the Company could support the future portdevelopment through increasing the investment in innovation and holding the technology high ground.By means of technological innovation and innovative management, it will significantly enhance theefficiency and effectiveness of port operation and become a leading enterprise in the intelligenttransformation of traditional ports. It will also enrich the comprehensive port services throughbusiness model innovation.
3. Business plans for 2022
In 2022, the company will continue to uphold the underlying principle of pursuing progresswhile ensuring stability, base itself in a new stage of development, implement the new developmentphilosophy fully and faithfully, and build a new development model. In the pursuit of furtherbreakthroughs in aspects such as the construction of homebase ports, prevention and control of thepandemic, technological innovation, market expansion, operation management, capital operation,comprehensive development, the company will actively promote the company's overall high-qualitydevelopment.
As for the construction of homebase ports, in line with the development strategy of theGuangdong-Hong Kong-Macao Greater Bay Area, the West Shenzhen homebase port willcontinuously continue to improve infrastructure construction, provide better customer service at ports,and boost the overall capabilities. Meanwhile, the company will take further actions to build theColombo International Container Terminals Limited (“CICT”) in Sri Lanka into an internationalcontainer hub port and Hambantota International Port Group (Private) Limited (“HIPG”) into aregional comprehensive port. Cooperation with shipping companies and other partners will bestrengthened to establish world-class shipping centers in South Asia and integrate the operation andmanagement of the two ports aforesaid, providing a new thinking of development.
China Merchants Port Group Co., Ltd. Annual Report 2021
In terms of pandemic prevention and control, the company continues to effectuatecountermeasures and risk elusion and coordinate development and security. In response to changingpandemic dynamics, the company will adopt regular prevention and control measures in a timelymanner, and continuously improve the emergency plan and operation norms. Adherence to that allpeople and items must be checked and holding the position in the fronts of the battle against thepandemic will maintain the security and stability in preventing and controlling the pandemic.On the issue of technological innovation, the Company will commit to innovation-drivendevelopment and promote industrial transformation and upgrade by innovation and technology.Therefore, the company can achieve stable and sustainable growth. On one hand, with closer attentionto its main businesses, the Company will achieve the growth of revenue and efficiency gains byactively promoting the innovation of science and technology and management. On the other hand,through implementing an innovative business model to promote the transformation and upgrade ofthe company and cultivate new growth drivers, the Company will constantly enhance its corecompetitiveness. the Company will develop the CMPort’s ecosystem for technology and innovation,and generate innovative solutions with technology for ports to build the integrated platform forindustry, education and research. Through “CMCore” platform, the Company will develop threemajor leading products for the industry, including CTOS (Container Terminal Operation System),BTOS (Bulk Cargo Terminal Operation System) and LPOS (Logistic Park Operation System),striving to realise intelligentised operation inside the terminals. “CM ePort” platform will innovatethe service models by improving the information service system of the port zones and using the “Port+ Internet” approach for the port, so as to explore and develop an open platform for intelligent ports.With regard to market expansion, the Company will continue to deepen the concept of customer-centricity, strengthen cooperation with major shipping companies, and build a collaborative alliancefeaturing multifaceted businesses with the West Shenzhen homebase port as core under thecoordinated port framework to strengthen interaction with end-customers. The Company will alsobuild a business collaboration platform characterized by integration, platform thinking anddigitalization, perfect the management mechanism for marketing and commerce, and expand thecoverage of the logistics supply chains endogenously and externally.Regarding operation management, the Company will speed up building an internationaloperation management and control system for sustainable value creation, which matches our businessdevelopment and helps strengthen overall planning. The intelligent operation management platformwill be continuously updated and promoted to facilitate a first-class operation management systemhighlighting “empowerment, professional and value”. With introducing improved supervision andmanagement mechanism, the Company will realize transformation to closed-loop businessmanagement. Increasing the benchmarking efforts of overseas subsidiaries to outstrip world-classenterprises is conducive to achieve international competitive advantage in an all-round manner.In respect of capital operation, the Company continues to promote the optimization of assetstructure and reduce investment risks. In line with the strategies of the company and the direction of“asset-heavy to asset-light” and “quantity to quality”, the company will promote the "assetmanagement + capital operation" dual -wheel drive and improve capital operation plans, assetallocation and endogenous growth in order to enhance shareholder returns.In terms of comprehensive development, the Company will actively adapt to the changes in theglobal trade environment and strive to become an important bond to domestic and foreign markets toboost each other and the cornerstone of the security and stability of the industrial chain supply chain.
China Merchants Port Group Co., Ltd. Annual Report 2021
The company will accelerate the creation of a complete model of " Port-Park-City" for comprehensivedevelopment business, such that realize long-term benefits from the "land economy" around ports.Apart from improving quality of services to existing customers and increasing customer stickiness,the Company will enhance the cultivation and support of the hinterland industry.Capital expenditure plans
In 2022, the Company will formulate capital expenditure plans according to businessdevelopment needs. Key investment projects include project for general cargo wharf in DonghaiIsland Harbour District of Zhanjiang Port, phase I project for the stuffing and destuffing service areaof Zhanjiang Port, expansion project for yard of Shantou Guang'ao Port Area, and the facilitiesprocurement for HIPG container terminal in Sri Lanka, etc.
4. Possible risks and counter measures
(1) Risk of macroeconomic fluctuations
Internationally, the global economic situation in 2022 will be still complex and severe withuncertainties and destabilizing factors in recovery, for which reason, various derivative risksstemming from the pandemic should not be overlooked. Another outbreak caused by Omicron variantof COVID-19 in major regions around the world at the end of 2021 increased uncertainty andunevenness of the global economic recovery. Against the backdrop of the repeated spread of thepandemic, the new round of easy monetary policies will increase global debt level and emergingmarkets will become more vulnerable. Traditional and non-traditional risks, such as natural disastersand geopolitical uncertainties, may aggregate volatility in the international financial market. Suchrisks of uncertainties will shock China’s foreign trade market, container shipping market, and bulkcommodity demand, and pose certain challenges to the Company’s overseas investment and layoutplanning.
Domestically, although the fundamentals of China’s economy are overall solid and consolidated,China's economic growth is still facing the triple pressure of demand contraction, supply shock andweakening expectations, and uncertainties as a result of the pandemic, the Sino-US friction，andother factors as well. In addition, the pandemic has accelerated the implementation of technologicalinnovation support policies in the national level and amplified the necessity and urgency of the digitaltransformation and upgrade in the shipping industry.
Facing the risk of macroeconomic fluctuations, especially the risks imposed on foreign trade andimport and export business by the COVID-19 pandemic and fluctuations in exchange, along withother factors, the Company will take the initiative to identify and respond to changes. Firstly, it willwork in full swing to support the national 14th Five-year Plan and follow the national “Belt and Road”initiative and the strategies on developing the Guangdong-Hong Kong-Macao Greater Bay Area, andrealizing the in development of Yangtze River Delta, so as to help construct the new national dualcirculation development pattern and achieve strategic goals of carbon emission peaking and carbonneutrality. Secondly, it will seize the opportunities arising from a new round of high-level openingup policies to improve the quality of port services continuously under the economic globalization
China Merchants Port Group Co., Ltd. Annual Report 2021
trend. Thirdly, it will enhance capacity building of risk identification, warning, and elimination, andcontinue to follow up on the development of the global industrial chain and trade movements to adjustbusiness operating strategies appropriately to effectively prevent, control, and reduce the effect ofexternal risks.
(2) Policy risks
The policy risks in the port industry can be either positive or negative. On the one hand, underthe new national dual circulation development pattern, policies such as encouraging the expansion ofimports are expected to bring new development opportunities to the growth of the industry, andnational strategies such as the “Belt and Road” initiative and the Guangdong-Hong Kong-MacaoGreater Bay Area will introduce favorable policies to the industrial development; on the other hand,policies and initiatives of the government for reducing costs and improving efficiency in logistics,anti-monopoly, and environmental protection may exert pressure on the profitability of the portindustry.
Facing the potential policy risks, on the one hand, the Company will improve policy research,proactively practice the key “Belt and Road” initiative and a series of national strategies to firmlyseize the opportunities arising from these policies; on the other hand, in response to the negative risks,the Company will improve its operation management capability by continuously enhancing qualityand efficiency and strengthening resource allocation. Besides, the company will constantly improveits profitability to effectively address and mitigate negative risks.
(3) Operation management risks
Amidst the favorable environment of domestic and overseas regional ports integration, theCompany has swiftly strengthened its main port business and successfully further optimized thelayout of the global port network. At the same time, the Company faces unfavorable conditions ofports in certain regions such as challenging operation management in certain regions, relatively lowinvestment returns, and etc. The risks specifically include: (1) investment decision-making on certainprojects will be riskier and more difficult under the complicating external environment;(2) since thebeginning of this year, the RMB exchange rate has generally strengthened slightly, but the largervolatility reflects that floating exchange rate regime becomes more flexible. The company will furtherimprove the exchange rate risk management mechanism and adjust the response strategy in a timelymanner according to the exchange rate fluctuations, aiming to reduce the impact of exchange ratefluctuations on the company's performance as much as possible; (3) the Company’s internationalizedoperation management system still needs to be improved and the Company shall strengthen thebenefits of integration through management output and other ways to accommodate with its ownrapid development and expansion; (4) the risk control system of the company shall be consistentlyestablished and optimized to constantly 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 on internal control, ensuring effective riskidentification and control and consolidating the foundation of risk control; and (3) optimize risk
China Merchants Port Group Co., Ltd. Annual Report 2021
warning system to precisely keep abreast of the new developments with an aim to seize the primeopportunities for risk control.XII Communications with the Investment Community such as Researches, Inquiries andInterviews
1. During the Reporting Period
Date
| 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 | |
| 31 August 2021 | China Merchants Port Building | Teleconferencing | Institution | Changjiang Securities, Essence Securities, Ping An Asset Management, Haitong Securities, Kymco Capital, Minsen Investment, Golden Eagle, Hotland Innovation Asset Management, Greenwoods Asset Management, Zhaofeng |
China Merchants Port Group Co., Ltd. Annual Report 2021
Investment, CongrongInvestment, ForesightInvestment, SouthernRaytai FundManagement, TaipingFund Management
| Investment, Congrong Investment, Foresight Investment, Southern Raytai Fund Management, Taiping Fund Management | |||||
| 4 November 2021 | China Merchants Port Building | One-on-one meeting | Institution | Zheshang Securities | |
| 25 November 2021-26 November 2021 | China Merchants Port Building, Mawan Smart Port, Shunde New Port | One-on-one meeting | Institution | UBS Securities, Tianfeng Securities, Industrial Securities, Huatai Securities, Huaxi Securities, Zheshang Securities, Huachuang Securities, Shenwan Hongyuan Securities, Changjiang Securities, Eagle Investment, Shenzhen Beishan Research and Design Institute, One Shipping, CNFH, Fulida Asset Management, Kaiyin Fund Management, Guangdong Yixin Asset Management, China Merchants Capital, Shenzhen Qianhai The Way Investment, Rongtong Fund Management, Qianhai Alliance Asset Management, CCB Wealth Management, FORTUNE & ROYAL ASSET, Shanghai Pudong Development Bank | |
| 15 December 2021 | China Merchants Port Building | One-on-one meeting | Institution | CICC, Greenwoods Asset Management, Win&Fun, First Beijing | |
| 1 January 2021-31 December 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 |
| Times of communications | 116 | ||||
| Number of institutions communicated with | 64 | ||||
China Merchants Port Group Co., Ltd. Annual Report 2021
Number of individuals communicated with
| Number of individuals communicated with | 109 |
| 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 |
| 1 January 2022 to 30 March 2022 | 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 |
| Times of communications | 20 | ||||
| Number of institutions communicated with | 0 | ||||
| Number of individuals communicated with | 20 | ||||
| Number of other communication parties | 0 | ||||
| Tip-offs or leakages of substantial supposedly-confidential information during communications | No | ||||
China Merchants Port Group Co., Ltd. Annual Report 2021
Part IV Corporate GovernanceI General Information of Corporate GovernanceEver since its establishment, the Company has been in strict compliance with the Company Law andSecurities Law, as well as relevant laws and regulations issued by CSRC. And it has timely formulatedand amended its relevant management rules according to the Code of Corporate Governance forListed Companies, which are conscientiously and carefully executed. An effective system of internalcontrol has thus taken shape in the Company. Details about corporate governance are set out as below:
1. Between the beginning of the Reporting Period and the date of disclosure of this report, theCompany revised two systems and created one new system.
(1) The Management System on Inside Information and Insiders was revisedIn order to implement the new Securities Law which further regulates the registration and submissionof insider information of listed companies, and strengthens the comprehensive prevention and controlof insider trading, the Company revised the Management System on Inside Information and Insiderson 28 April 2021. This revision covers supplement and update to the definition, scope and personnelinvolved of inside information as well as the requirements for filling the Registration Form of InsiderInformation.
(2) The Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument wasrevisedSince 1 May 2021, the People's Bank of China, together with the National Development and ReformCommission and the China Securities Regulatory Commission, officially implemented the Measuresfor the Administration of Information Disclosure Concerning Corporate Debentures (hereinafterreferred to as the "Measures"), which provides the unified requirements on information disclosurerules of corporate debentures. On 27 April 2021, National Association of Financial MarketInstitutional Investors clarified part of the requirements for the application of the Measures to theprojects of inter-bank debt financing instruments in the form of business questions and answers,issued the Q&A Compilation on the Registration and Issuance of Debt Financing Instruments of Non-financial Enterprises (hereinafter referred to as the Q&A Compilation) and formulated the System of
China Merchants Port Group Co., Ltd. Annual Report 2021
Information Disclosure Forms for the Duration of Debt Financing Instruments of Non-financialEnterprises in the Inter-bank Bond Market in accordance with the relevant self-regulatory rules.Considering that the Company's Information Disclosure Management Rules for the Inter-bank DebtFinancing Instrument should comply with the relevant provisions of the Measures and Q&ACompilation, the Company revised on 30 June 2021 the Information Disclosure Management Rulesfor the Inter-bank Debt Financing Instrument, supplementing and updating the contents including butnot limited to information disclosure obligations of the Company and all its directors, supervisors,senior management members, issuance documents, announcement time requirements, definitions ofsignificant events, and notes for information disclosure.
(3) The Management System on the Authorization of the Board of Directors was newly establishedIn order to further strengthen the construction of the Board of Directors of the Company, furtherimprove the Company's scientific and standardized decision-making mechanism, improve theefficiency of operating decisions, enhance the vitality of enterprise reform and development, andprotect the legitimate rights and interests of shareholders, the Company and creditors, the Proposalon the Establishment of the Management System on the Authorization of the Board of Directors(Announcement No. 2022-005, refer to website www.cninfo.com.cn for details) was deliberated andapproved in accordance with the Company Law of the People’s Republic of China , the Articles ofAssociation and other laws, regulations and policies on the 1st Extraordinary Meeting of the 10thBoard of Directors in 2022 on 28 January 2022, and the establishment of the Management System onthe Authorization of the Board of Directors was approved.Details are as follows:
Mechanism
| Mechanism | Deliberation | Disclosure |
| Revised | ||
| The Management System on Inside Information and Insiders | The revised policy was deliberated and approved by the 3rd Extraordinary Meeting of the 10th Board of Directors in 2021 held on 28 April 2021. | It has been timely disclosed on the website www.cninfo.com.cn. |
| The Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument | ||
The revised policy wasdeliberated and approved by the5th Extraordinary Meeting of the10th Board of Directors in 2021held on 30 June 2021.
China Merchants Port Group Co., Ltd. Annual Report 2021
New
| New | ||
| The Management System on the Authorization of the Board of Directors | The new policy was deliberated and approved by the 1st Extraordinary Meeting of the 10th Board of Directors in 2022 held on 28 January 2022. | It has been timely disclosed on the website www.cninfo.com.cn. |
2. In order to implement the Opinions of State Council on Further Improving Quality of ListedCompanies (G.F. [2020] No. 14, hereinafter referred to as the "Opinions"), the Company implementedthe special action of "performing entity responsibilities, improving governance, and achieving qualitydevelopment" for further self-inspection, in conformity with the Notice of Shenzhen CSRC onPromoting Listed Companies Within Jurisdiction to Perform Entity Responsibilities, ImproveGovernance, and Achieve Quality Development (SH.ZH.J.G.S.Z. [2020] No. 128, hereinafterreferred to as the "Notice"), and formed the Special Self-Inspection List for Governance of ListedCompany (hereinafter referred to as the "Self-Inspection List").According to the self-inspection, no major defects were identified in the Company's internal control.All responsible departments and subordinate units have made remediation plans for the defects ininternal control identified and implemented remediation in time according to the Company's internalcontrol management requirements. The Company has established a relatively perfect internal controlmanagement mechanism, and adopted measures such as incompatible job separation control,authorization and approval control, accounting system control, property protection control and budgetcontrol to prevent major internal control defects. The Company submitted the Self-Inspection List toShenzhen CSRC in April 2021.
3. On 23 December 2021, the 13th Extraordinary Meeting of the 10th Board of Directors in 2021deliberated and passed the Proposal on the Implementation of the Functions and Powers of the Boardof Directors (Announcement No. 2021-116, see website www.cninfo.com.cn for details). Accordingto the plan, on the basis of the existing standardized operation of the Board of Directors, the Companywill further promote the implementation of various functions and powers of the Board of Directors,continue to manage enterprise according to law, align authority with corresponding responsibility,delegate power and strengthen supervision, earnestly protect the exercise of various rights inaccordance with the law by the Board of Directors, improve the operation mechanism, and strengthenresponsibility supervision; further standardize the operation of the Board of Directors, improve its
China Merchants Port Group Co., Ltd. Annual Report 2021
ability to perform duties, continuously enhance the authority, effectiveness and overall function ofthe Board of Directors, and continuously improve the Company's independent operation; furtherimprove the corporate governance structure, give full play to the role of the Board of Directors in"formulating strategies, making decisions and preventing risks", strengthen the Company's positionas an independent market player, effectively stimulate the endogenous impetus and vitality of theCompany, and speed up efforts to realize high-quality development.
4. Shareholders and shareholders’ general meeting: the Company ensures that all the shareholders,especially minority shareholders, are equal and could enjoy their full rights. The Company called andheld shareholders’ general meeting strictly in compliance with the Rules for Shareholders’ GeneralMeeting.
5. Relationship between the controlling shareholder and the Company: controlling shareholder of theCompany acted in line with rules during the reporting period, did not intervened the decisions,productions or operations of the Company directly or indirectly in exceeding the authority of theshareholders’ general meeting, and did not occupy any funds of the Company.
6. Directors and the Board of Directors: the Company elected directors in strict accordance with theArticles of Association. Number and composition of members of the Board were in compliance withrelevant laws and regulations; all Directors attend Board meetings and shareholders’ general meetingin a serious and responsible manner and participated enthusiastically relevant training so as to knowbetter about laws and regulations as well as the rights, obligations and liabilities of Directors. TheCompany set up the Audit Committee as approved by the 1
st
Extraordinary General Meeting of 2004and the Nomination, Remuneration and Evaluation Committee and Strategy Committee as approvedby the 2005 Annual General Meeting, with a view to ensuring the efficient operation and scientificdecision-making of the Board of Directors.
7. Supervisors and the Supervisory Committee: number and composition of the members of theSupervisory Committee were in compliance with the requirements of laws and regulations. Thesupervisors diligently and seriously performed their duties and obligations, took responsible attitudesto all shareholders and supervised the financial affair as well as the performance by the Company’sDirectors, managers and other senior executives of their duties in compliance with the laws andregulations.
China Merchants Port Group Co., Ltd. Annual Report 2021
8. Stakeholders: the Company fully respected and safeguarded the legal rights and interests of thebanks and other creditors, staff, clients and other stakeholders so as to develop the Company in aconsistent and healthy way.
9. Information disclosure and transparency: As the department for the management of informationdisclosure, the Board of Directors of the Company is responsible for managing the informationdisclosure matters of the Company. Chairman of the Board assumes a central role in managing theinformation disclosure matters of the Company while the Board Secretary is responsible fororganizing and coordinating such matters. The Board Secretary of the Company is responsible for themanagement of investor relationships. Unless expressly authorized and trained, other directors,supervisors, senior management members and staff members of the Company should avoid speakingon behalf of the Company in investor relationship activities. The Company disclosed relevantinformation in a true, accurate, complete and timely way in strict accordance with the requirementsof laws, regulations and the Articles of Association, formulated the Management Rules onInformation Disclosure, the Management System on Inside Information and Insiders and the Ruleson the Management of Investors Relations, and designated Securities Times, China Securities Journal,Shanghai Securities News, Ta Kung Pao and http://www.cninfo.com.cn as its newspaper and websitefor information disclosure, so as to ensure all shareholders have equal opportunity to obtain theinformation.
10. Corporate governance mechanisms and rules that the Company has already established:
Articles of Association of the Company, Rules of Procedure for General Meetings, Working Articlesof Audit Committee of the Board of Directors, Working Rules of Annual Report for Audit Committeeof the Board of Directors, Working Articles for Nomination, Remuneration and EvaluationCommittee of the Board of Directors; Working Articles of Strategy Committee of the Board ofDirectors, Working System for Independent Directors, Working Rules of Annual Report forIndependent Directors, Rules of Procedure for Supervisory Board, Working Articles of ChiefExecutive Officer, Management System for Company Shares held by Directors, Supervisors andSenior Executives and Its Changes, Management System of Foreign Investment, ManagementSystem of Related Transactions, Management System of Fund-raising, Management Rules onInformation Disclosure, Rules of Accountability for Significant Mistakes in Annual Report
China Merchants Port Group Co., Ltd. Annual Report 2021
Information Disclosure, Management System on Inside Information and Insiders, Internal AuditSystem, Management System of Investors’ Relations, Specific System for Engaging Accountants,Management Method of Financial Tools, Management System on Person in Charge of Finance andCFO, Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument,Management System of External Guarantees, Working Articles of Board Secretary, ManagementSystem of Securities Investments, Management System of Subsidiaries, Management Method ofDonations, Rules of Procedures for Office Meeting, Management System on the Authorization of theBoard of Directors, etc. There isn’t difference between the actual circumstances of the Company andall established systems.Since the foundation, the Company was consistently in strict accordance with Company Law andrelevant laws and regulations to make a standard operation, continued business-running in line withrelevant requirements of Corporate Governance Principle for Listed Companies and earnestly madeeffort to protect profit and interests of shareholders and stakeholders.Indicate by tick market whether there is any material incompliance with the regulatory documentsissued by the CSRC governing the governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.II The Company’s Independence from Its Controlling Shareholder and Actual Controller inAsset, Personnel, Financial Affairs, Organization and BusinessThe Company is absolutely independent in business, personnel, assets, finance and organization fromits controlling shareholder and actual controller. Details are set out as follows.Separation in business: The Company has its own assets, personnel, qualifications and ability to carryout operating activities and is able to operate independently in the market. Separation in personnel:
The Company has basically separated its staff from its controlling shareholder. No senior managementstaff of the Company holds positions at controlling shareholder of the Company. Separation in assets:
The Company possesses its own self-governed assets and domicile. Separation in organization: TheCompany has established and improved the corporate governance structure according to law and hasan independent and complete organizational structure. Separation in finance: The Company has setup its own financial department as well as normative accounting system and the financialmanagement system on its subsidiaries. The Company has its own bank accounts and does not share
China Merchants Port Group Co., Ltd. Annual Report 2021
the same bank account with its controlling shareholder. The Company has been paying tax inaccordance with the laws and regulations on its own behalf.III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Meeting
| 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 | For the resolution announcement (No. 2021-047), see http://www.cninfo.com.cn |
| The 1st Extraordinary General Meeting of 2021 | Extraordinary General Meeting | 88.87% | 27 September 2021 | 28 September 2021 | For the resolution announcement (No. 2021-087), see http://www.cninfo.com.cn |
2. Special General Meetings Convened at the Request of Preferred Shareholders with ResumedVoting Rights
□ Applicable √ Not applicable
V Directors, Supervisors and Senior Management
1. General Information
| Name | Office title | Incumbent/Former | Gender | Age | Start of tenure | End of tenure | Beginning shareholding (share) | Share option | Restricted shares granted (share) | Increase in the Reporting Period (share) | Decrease in the Reporting Period (share) | Other increase/decrease (share) | Ending shareholding (share) | Reason for share change |
| Deng Renjie | Chairman of the Board | Incumbent | Male | 52 | December 2018 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
China Merchants Port Group Co., Ltd. Annual Report 2021
WangXiufeng
| Wang Xiufeng | Vice Chairman of the Board and CEO | Incumbent | Male | 51 | August 2021 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Liu Weiwu | Director | Incumbent | Male | 57 | May 2021 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Song Dexing | Director | Incumbent | Male | 59 | December 2018 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Gao Ping | Independent director | Incumbent | Male | 66 | May 2020 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Li Qi | Independent director | Incumbent | Female | 51 | May 2020 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Zheng Yongkuan | Independent director | Incumbent | Male | 44 | May 2021 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Yang Yuntao | Chairman of the Supervisory Committee | Incumbent | Male | 55 | December 2018 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Gong Man | Supervisor | Incumbent | Female | 33 | May 2020 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Xu Jia | Supervisor | Incumbent | Male | 40 | May 2020 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Yan Gang | COO and GM | Incumbent | Male | 49 | November 2021 | May 2023 | 0 | 102,000 | 0 | 0 | 0 | 0 | 0 | N/A |
| Tu Xiaoping | CFO | Incumbent | Male | 56 | May 2021 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Lu Yongxin | Vice GM | Incumbent | Male | 52 | December 2018 | May 2023 | 0 | 144,000 | 0 | 0 | 0 | 0 | 0 | N/A |
| Li Yubin | Vice GM and Secretary of the Board | Incumbent | Male | 50 | December 2018 | May 2023 | 0 | 144,000 | 0 | 0 | 0 | 0 | 0 | N/A |
| Zhang Yiming | Vice GM | Incumbent | Male | 58 | May 2021 | May 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Xu Song | Vice GM | Incumbent | Male | 50 | October 2020 | May 2023 | 0 | 240,000 | 0 | 0 | 0 | 0 | 0 | N/A |
| Liu Libing | General Counsel | Incumbent | Male | 48 | August 2020 | May 2023 | 0 | 50,000 | 0 | 0 | 0 | 0 | 0 | N/A |
| Bai Jingtao | Former Vice Chairman of the Board and CEO | Former | Male | 56 | September 2017 | August 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Yan Shuai | Former Director | Former | Male | 49 | December 2018 | February 2022 | 0 | 252,000 | 0 | 0 | 0 | 0 | 0 | N/A |
| Su Jian | Former Director | Former | Male | 50 | December 2018 | March 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Zhang Yi | Former Director, COO and GM | Former | Male | 51 | December 2018 | August 2021 | 0 | 210,000 | 0 | 0 | 0 | 0 | 0 | N/A |
| Wang Zhenmin | Former Independent director | Former | Male | 55 | May 2020 | May 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Liu Yingjie | Former Chairman of the Supervisory Committee | Former | Male | 50 | December 2018 | August 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Hu Qin | Former Supervisor | Former | Female | 55 | December 2018 | February 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
China Merchants Port Group Co., Ltd. Annual Report 2021
ZhengShaoping
| Zheng Shaoping | Former Vice GM | Former | Male | 59 | December 2018 | August 2021 | 9,821 | 210,000 | 0 | 0 | 0 | 0 | 9,821 | N/A |
| Huang Chuanjing | Former Vice GM and Secretary of the Board | Former | Male | 39 | December 2018 | January 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | N/A |
| Total | -- | -- | -- | -- | -- | -- | 9,821 | 1,352,000 | 0 | 0 | 0 | 0 | 9,821 | -- |
Note: On 14 February 2022, upon the review and confirmation of Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited, the Company completed the cancellation of some stock options in the StockOption Incentive Plan (Phase I). The column of stock options in the above table shows the number of stock optionsheld by the directors, supervisors and senior management of the Company as of the date of disclosure.Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged duringthe Reporting Period
√ Yes □ No
During the Reporting Period, the reasons for the departure of directors, supervisors and senior management of theCompany are mainly job change, retirement or personal reasons. For details, please see the change of directors,supervisors and senior management of the Company below.Change of Directors, Supervisors and Senior Management
| Name | Office title | Type of change | Date of change | Reason for change |
| Huang Chuanjing | Vice GM and 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 | Engagement |
| Tu Xiaoping | CFO | Engaged | 17 May 2021 | Engagement |
| Zhang Yiming | Vice GM | Engaged | 17 May 2021 | Engagement |
| Liu Weiwu | Director | Elected | 28 May 2021 | Election |
| Zheng Yongkuan | Independent director | Elected | 28 May 2021 | Election |
| 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 |
China Merchants Port Group Co., Ltd. Annual Report 2021
Bai Jingtao
| Bai Jingtao | Vice Chairman of the Board and CEO | Left | 20 August 2021 | Job change |
| Zhang Yi | Director, COO and GM | Left | 20 August 2021 | Job change |
| Wang Xiufeng | CEO | Engaged | 23 August 2021 | Engagement |
| Wang Xiufeng | Vice Chairman of the Board | Elected | 27 September 2021 | Election |
| Yang Yuntao | Chairman of the Supervisory Committee | Elected | 18 October 2021 | Election |
| Yan Gang | COO and GM | Engaged | 3 November 2021 | Engagement |
| Yan Shuai | Director | Left | 25 February 2022 | Job change |
| Hu Qin | Supervisor | Left | 25 February 2022 | Retirement |
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of theincumbent directors, supervisors and senior management:
Deng Renjie, Chairman of the Board, graduated from Beijing Electronic Science&TechnologyInstitute, majoring in computing, and obtained a bachelor degree, later graduated from DalianMaritime University, majoring in international economic law, and obtained master’s degree. DengRenjie now holds the post of the Vice GM of China Merchants Group Company Limited, Presidentof Liaoning Port Group Co., Ltd., the Company’s Chairman of the Board, Vice President of the 8
th
Council of China Highway and Transportation Society & Vice President of the 7
thCouncil of ChinaTransportation Association. Deng Renjie has successively held the posts of Researcher of GeneralOffice of Ministry of Communications, Deputy Director of General Office of Hunan Provincial PartyCommittee, Deputy Secretary General of Hunan Provincial Party Committee, Deputy SecretaryGeneral of Party Committee of Xinjiang Autonomous Region, Assistant President of ChinaMerchants Group Company Limited, Director of General Manager’s Office, and Chairman of theBoard of China Merchants Expressway Network & Technology Holdings Co., Ltd. Deng Renjie hasbeen being the Vice Chairman of the Board of the Company from December 2018 to January 2020,and has been being the Chairman of the Board of the Company since February 2020.Wang Xiufeng, Vice Chairman of the Board, CEO, senior accountant, and senior engineer,graduated from Northeast University with a bachelor's degree in industrial accounting, and obtained
China Merchants Port Group Co., Ltd. Annual Report 2021
master's degree in business administration from Tsinghua University. He previously served as theGeneral Manager of China 22MCC Group Corporation Ltd., Chairman and Party Secretary of MCCJingtang Construction Ltd., Vice President and Standing Member of CPC Committee of ChinaMetallurgical Group Corporation, Director of Anhui Wantong Expressway Company Limited, adirector of Henan Zhongyuan Expressway Co., Ltd., Vice Chairman of Shandong Hi-Speed CompanyLimited, Director of Xingyun Shuju (Beijing) Technology Co., Ltd., CFO of CMG HuajianExpressway Investment Co., Ltd., and Chairman and General Manager of China MerchantsExpressway Network & Technology Holdings Co., Ltd. Mr. Wang has been CEO of the Companyfrom August 2021 to present and Vice Chairman of the Company from September 2021 to present.Liu Weiwu, Director and intermediate accountant, graduated from the Economics Department ofXi'an Highway Institute with a bachelor's degree in engineering, and obtained a master's degree inbusiness administration from Macau University of Science and Technology. He is currently the Headof the Finance Department (Property Rights Department) of China Merchants Group Limited. Hepreviously served as the Head of Treasury Division of Financial Department of Guangzhou OceanShipping Company, the Manager of Financial Department of Hong Kong Ming Wah ShippingCompany Limited, the Deputy General Manager of the Finance Department of China MerchantsGroup Limited, and the Chief Financial Officer, the Deputy General Manager and a director of ChinaMerchants Energy Shipping Co., Ltd. He has served as a director of the Company since May 2021.Song Dexing, Director, Senior Engineer, graduated from Department of Mechanics of WuhanUniversity of Technology (former name is Wuhan Institute of Water Transportation Engineering),and obtained bachelor’s degree in engineering. Later Song Dexing obtained master’s degree,majoring in transportation planning at Wuhan University of Technology and doctor’s degree inmanagement, majoring in administrative management at Huazhong University of Science andTechnology. Song Dexing now holds the posts of Business Director of Transportation & Logistics,Minister of Transportation & Logistics Department/Beijing Headquarters of China Merchants GroupCompany Limited, GM, Secretary of Party Committee of SINOTRANS&CSC. Song Dexing hassuccessively held the posts of Secretary of Youth League Committee, Engineer of Water TransportPlanning & Design Institute of Ministry of Communications, Principal Staff of Division of Transportof Ministry of Communications, Deputy Director, Director of Container Office of Division of Water
China Merchants Port Group Co., Ltd. Annual Report 2021
Transport of Ministry of Communications, Deputy Mayor of Luoyang Municipal People’sGovernment (temporary post), Deputy Director of China Waterborne Transport Research Institute,Deputy Director, Director of Yangtze Three Gorges Navigation Administration, Deputy Director,Director of Division of Water Transport of Ministry of Communications, Director of Bureau of WaterTransport of Ministry of Transport (Director of Taiwanese Affairs Office of the ministry), ViceChairman of the Board, Member of Party Committee, Deputy Secretary of Party Committee,Secretary of Committee for Discipline Inspection of SINOTRANS&CSC, General Manager ofSINOTRANS&CSC, Director of Department of Comprehensive Logistics Business of ChinaMerchants Group Company Limited. Song Dexing has been being the Director of the Company sinceDecember 2018.Gao Ping, Independent Director, obtained Executive Master of Business Administration from theUniversity of International Business and Economics (UIBE). He is also a senior engineer and seniorpolitical worker. His former titles included first mate, Management Section Chief, and HR Managerat Shanghai Ocean Shipping Co., Ltd., HR General Manager at COSCO Container Lines Co., Ltd.,General Manager at the Crew Department of COSCO (H.K.) Shipping Co., Ltd., Deputy GeneralManager at COSCO (H.K.) Shipping Co., Ltd., Deputy General Manager at Shenzhen OceanShipping Co., Ltd. under COSCO (H.K.) Shipping Co., Ltd., General Manager at the OrganizationDepartment/HR Department of China COSCO SHIPPING Corporation Limited (COSCO SHIPPINGGroup), Secretary of the Party Committee and Deputy General Manager at COSCO Shipping LinesCo., Ltd., member of 11th and 12th Shanghai Committees of the Chinese People's PoliticalConsultative Conference (CPPCC), and Deputy Director of the Committee for Economic Affairs ofthe Shanghai Committee of the CPPCC.Li Qi, Independent Director, graduated from Guanghua School of Management, Peking University,and majored in Business Management. Currently, she is an associate professor at the Department ofAccounting of the Guanghua School of Management, Peking University. She worked as a teachingassistant and lecturer at the Department of Accounting and Assistant to the Dean and DeputySecretary of the Party Committee of the Guanghua School of Management, Peking University. Shehas been an independent director of the Company since May 2020.Zheng Yongkuan, Independent Director, graduated from China University of Political Science andLaw with bachelor's degree in law, a master's degree in civil and commercial law and doctor degree
China Merchants Port Group Co., Ltd. Annual Report 2021
in civil and commercial law. He is now a professor of Law School, Head of Civil and CommercialLaw Teaching and Research Section and Director of Tort Law Research Center in Xiamen University.He is also a director of Civil Law Research Institute of China Law Society, Vice President of Civiland Commercial Law Research Institute of Fujian Law Society, arbitrator of Xiamen ArbitrationCommission, arbitrator of Quanzhou Arbitration Commission and a lawyer of Fidelity Law Firm. Hehas been an assistant professor and associate professor in Law School, Xiamen University. He hasserved as an independent director of the Company since May 2021.Yang Yuntao, Chairman of the Supervisory Committee, graduated from Jilin University, majoringin international law, and obtained bachelor’s degree in law. Later Yang Yuntao studied at School ofLaw, University of International Business and Economics, and obtained doctor’s degree in law. He isnow Head of the Risk Management Department/Legal Compliance Department/Audit Department ofCMG and Chairman of the Board of Supervisors of China Yangtze Shipping Group Co., Ltd. YangYuntao has successively held the posts of Deputy General Manager of Port Business Department ofSino-Trans China National Foreign Trade Transportation Corporation, General Manager of LawDepartment, Director, Deputy President (principal person) of SINOTRANS (Hong Kong) GroupCompany Limited, Non-Executive Director of SINOTRANS Limited, General Manager of LawDepartment of Sino-Trans China Foreign Trade Transportation (Group) Corporation, GeneralManager, Deputy General Counsel, General Counsel and General Manager of Law Department ofSINOTRANS & CSC, Deputy Director of Transportation & Logistics Business Department/BeijingHeadquarters of China Merchants Group Company Limited., Deputy Director of Shipping BusinessManagement Preparatory Office of China Merchants Group, Deputy General Manager and GeneralCounsel of China Merchants Energy Shipping Co., Ltd.,. Yang Yuntao has been being the Supervisorof the Company since December 2018 and the Chairman of the Supervisory Committee of theCompany since October 2021.Gong Man, Supervisor, obtained her master's degree in accounting from the Dongbei University ofFinance & Economics, was non-practicing member of Chinese Institute of Certified PublicAccountants. She serves as the Senior Manager at the Financial Management Department of ChinaMerchants Port Group Co., Ltd. and accountant at the Financial Department of Shekou ContainerTerminal Co., Ltd. She has been a supervisor of the Company since May 2020.
China Merchants Port Group Co., Ltd. Annual Report 2021
Xu Jia, Supervisor, graduated from the Wuhan University of Technology and obtained a master'sdegree in Control Theory and Control Engineering. He is the Senior Manager at the OperationsManagement Department of China Merchants Port Group Co., Ltd. He worked as a Senior SystemPlanning Engineer and Project Planning Director at the Engineering Technology Department ofShekou Container Terminal Co., Ltd. He has been a supervisor of the Company since May 2020.Yan Gang, Chief Operating Officer and GM, graduated from Xiamen University with a bachelor'sdegree in international trade, and completed an MBA program co-created by the Maastricht Schoolof Management (Maastricht, the Netherlands) and Shanghai Maritime University. He previouslyserved as Commissioner in the Transportation Department of Neptune Orient Lines of Singapore,Shipping Manager of Swire Shipping Office in Beijing, Trainee Manager of Hong Kong Tug &Salvage Limited appointed by Swire Group, Assistant General Manager of Shekou ContainerTerminals Limited appointed by Swire Group, General Manager of Pearl River Delta Logistics atHong Kong Air Cargo Terminal appointed by Swire Group, Deputy General Manager and GeneralManager of Shekou Container Terminals Limited, Chief Business Officer of China MerchantsHoldings (International) Company Limited, Vice General Manager and Chief Business Officer ofChina Merchants Port Holdings Company Limited, Vice General Manager of China Merchants PortGroup Co., Ltd., General Manager of China-Belarus Industrial Park Development Company, theChief Representative of the Representative Office of China Merchants Group Limited in Central Asiaand the Baltic Sea and the Chief Representative of Representative Office of China Merchants GroupLimited in the Republic of Belarus. He has served as the Chief Operating Officer and GeneralManager of the Company since November 2021.Tu Xiaoping, Chief Financial Officer, senior accountant, graduated from Shanghai MaritimeUniversity with a bachelor's degree in economics, majoring in financial accounting, and a master'sdegree in management from Zhongnan University of Economics and Law, majoring in administrationmanagement. He currently serves as the Chief Financial Officer of the Company. He worked asaccountant in Finance Division of Anhui Jianghai Transportation Company, Deputy Head of FinanceDivision of Anhui Ocean Shipping Co., Ltd., a clerk in the Finance Department of Hong Kong MingWah Shipping Company Limited, Deputy Manager of the Finance Department of China MerchantsGroup Cangma Transportation Co., Ltd., Manager of Finance Department and Chief Financial Officer
China Merchants Port Group Co., Ltd. Annual Report 2021
of China Merchants Real Estate Co., Ltd., Manager of Finance Department of China Merchants RealEstate Group Co., Ltd., Chief Financial Officer and Deputy General Manager of Shenzhen MerchantsVenture Co., Ltd., General Manager of Finance Department, China Merchants Shekou IndustrialZone Co., Ltd., CFO, Deputy General Manager and Party Secretary of China Merchants LogisticsGroup Co., Ltd., General Manager and Deputy Party Secretary of China Yangtze Shipping GroupCo., Ltd. He has served as the Chief Financial Officer of the Company since May 2021.Lu Yongxin, Vice GM, graduated from Dalian University of Technology, and obtained bachelor’sdegree in English for science and technology. Later Lu Yongxin graduated from Curtin Universityand obtained master’s degree in project management. Lu Yongxin now holds the post of Deputy GMof the Company, Deputy General Manager of China Merchants Port Holdings Company Limited (CMPort Holdings). Lu Yongxin has successively held the posts of Assistant General Manager of ZhenhuaConstruction Co. Ltd., Deputy Director of CHEC (Beijing) Head Office, Deputy General Manager ofResearch & Development Department of China Merchants Port Holdings Company Limited (CMPort Holdings), General Manager of Overseas Business Department, Assistant General Manager. LuYongxin has been dispatched to Terminal Link in France to act as CFO and Senior Vice President. LuYongxin has been as the Deputy GM of the Company since December 2018.Li Yubin, Vice GM and Secretary of the Board, graduated from Tianjin University, majoring inHarbor and Cannel Engineering with the bachelor of engineering degree, Tianjin University, majoringin engineering management, and obtained master’s degree. Later Li Yubin graduated from TheUniversity of Hong Kong and obtained doctor’s degree in real estate and construction. Li Yubin nowholds the post of Deputy GM, Secretary of the Board and Chief Digital Officer of the Company andDeputy General Manager of China Merchants Port Holdings Company Limited (CM Port Holdings).Li Yubin has successively held the posts of Deputy General Manager of Road and Bridge Project ofChina Harbor Company in Bangladeshi Office, Project Director of Overseas Business Department ofCHEC, Assistant General Manager of Planning and Commerce Department, R&D Department andOverseas Branches Department of China Merchants Holdings (International) Company Limited,General Manager, Deputy General Economist of Strategy and Operation Management Department ofChina Merchants Port Holdings Company Limited (CM Port Holdings) &General Manager andChairman of the Board of China Merchants Bonded Logistics Co., Ltd. and the Chief Representative
China Merchants Port Group Co., Ltd. Annual Report 2021
of Representative Office of China Merchants Group in Djibouti. Li Yubin has been acting the ViceGM of the Company since December 2018 and the Secretary of the Board of the Company sinceApril 2021.Zhang Yiming, Vice GM, senior engineer, graduated from Tianjin University with a bachelor'sdegree in inorganic non-metallic materials engineering and a master's degree in engineering, andsubsequently obtained a doctorate degree in management from system analysis and management atDalian University of Technology. He is now a Vice General Manager of the Company. He previouslyserved as the Deputy Director of the Dalian Electric Porcelain Factory, Director's Assistant of theDalian Mechanical & Industrial Department of the Electric Equipment Industrial ManagementBureau, the Director's Assistant and Deputy Director of the Dalian Economic and Trade Committeeof the Dalian Municipal Government, the Deputy Secretary-general of the People's Government ofDalian Municipality, Deputy Secretary of the Party Committee of Pulandian City, Liaoning Province,the Mayor of the Liaoning Pulandian Municipal People's Government, the Deputy Secretary of theParty Working Committee, the Deputy Director of the Committee's Management Board of DalianPuwan New Area, the Director (Secretary) and Party Secretary of the Dalian Economic andInformation Technology Committee (Dalian Municipal Small and Medium Enterprises Bureau),Chairman of the Board of Director of Dalian Port (PDA) Company Limited, Chairman of the Boardof Director and Party Secretary of Dalian Port Group Corporation Limited, Deputy General Managerand Party committee member of Liaoning Port Group Co., Ltd. He has been a Vice General Managerof the Company since May 2021.Xu Song, Vice GM, holds a bachelor's degree in Material Management of the Huazhong Universityof Science and Technology, Master of Business Administration (MBA) of the Dongbei University ofFinance & Economics, Master of International Business (MIB) of the Coventry University, and Ph.D.in Transportation Planning and Management of the Dalian Maritime University. He is also a SeniorEconomist. He used to work as Deputy General Manager at Dalian Port Container Co., Ltd.; DeputyGeneral Manager and General Manager at Dalian Port Jifa Logistics Co., Ltd.; Secretary of the PartyCommittee and General Manager at Dalian Port Container Co., Ltd.; General Manager at Dalian PortNorthern Huanghai Sea Port Cooperative Management Company; General Manager at Dalian Port(PDA) Company Limited; Deputy General Manager, director, and General Manager and Deputy
China Merchants Port Group Co., Ltd. Annual Report 2021
Secretary of the Party Committee of Dalian Port; and Deputy General Manager and member of theParty Committee of Liaoning Port Group Co., Ltd. He has been Deputy General Manager of theCompany since October 2020.Liu Libing, General Counsel, graduated from the Department of Philosophy, School of Philosophy,Wuhan University with a Bachelor in Philosophy. Later, he pursued further study at Sun Yat-senUniversity School of Law and obtained a Master of Laws. He worked as Publicity Secretary of thePolitical Work Department of China Construction Third Engineering Bureau, Deputy Secretary ofParty Branch (deputy section level) and Deputy Director of Party Committee Office of ShenzhenDecoration Design Engineering Co., Ltd. of China Construction Third Bureau, Production Supervisorof Shenzhen Foxconn (Group) Company, lawyer assistant and full-time lawyer at Shenzhen Officeof Shanghai City Development Law Firm, and full-time lawyer at Guangdong Sun LawFirm.Manager at the Legal Affairs Department and Senior Manager of China Merchants PropertyDevelopment Co., Ltd., Manager at the Legal Affairs Department of China Merchants Group Co.,Limited, Senior Manager at the Risk Management Department of China Merchants Group Co.,Limited, and Senior Manager of the General Office and head of the Secretariat of the Board ofDirectors at China Merchants Group Co., Limited. He has been the General Counsel of the Companysince August 2020.Offices held concurrently in shareholding entities:
□ Applicable √ Not applicable
Offices held concurrently in other entities:
Name
| Name | Other entity | Office held in the entity | Start of tenure | End of tenure | Remuneration or allowance from the entity |
| Deng Renjie | China Merchants Group Co., Limited | Vice GM | March 2015 | Yes | |
| Deng Renjie | China Merchants Group (H.K.) Limited | Director | December 2015 | No | |
| Deng Renjie | Liaoning Port Group | Chairman of the Board | November 2018 | No | |
| Deng Renjie | The 7th Council of China Transportation Association. | Vice President | December 2018 | No | |
| Deng Renjie | China Merchants Steamship Co., Ltd. | Director | March 2020 | No | |
| Deng Renjie | China Merchants Inspection and Certification Co. Ltd. | Executive director & GM | October 2020 | No |
China Merchants Port Group Co., Ltd. Annual Report 2021
DengRenjie
| Deng Renjie | The 9th Council of China Highway and Transportation Society | Vice President | September 2021 | No | |
| Deng Renjie | China Merchants Testing Technology Holdings Ltd. | Chairman of the Board | December 2021 | No | |
| Wang Xiufeng | Liaoning Port Group | Director | October 2021 | No | |
| Wang Xiufeng | China Merchants Taiping Bay Development Investment Co., Ltd. | Director | February 2022 | No | |
| Wang Xiufeng | China Merchants Northeast Asia Development Investment Co., Ltd. | Director | February 2022 | No | |
| Liu Weiwu | China Merchants Group Co., Limited | Minister of Financial Management Department (Property Right Department) | December 2020 | Yes | |
| Liu Weiwu | China Aerospace Science and Technology Corporation | Independent non-executive director | June 2018 | Yes | |
| Liu Weiwu | Liaoning Port Group | Director | March 2021 | No | |
| Liu Weiwu | China Merchants Chongqing Communications Technology Research & Design Institute Co., Ltd. | Director | March 2021 | No | |
| Liu Weiwu | China Merchants Taiping Bay Development Investment Co., Ltd. | Director | March 2021 | No | |
| Liu Weiwu | China Merchants International Finance Co., Ltd. | Director | March 2021 | No | |
| Liu Weiwu | China Merchants Industry Holdings Co., Ltd. | Director | March 2021 | No | |
| Liu Weiwu | China Merchants Group Finance Co., Ltd. | Director | March 2021 | No | |
| Liu Weiwu | China Merchants Zhangzhou Development Zone Co., Ltd. | Director | March 2021 | No | |
| Liu Weiwu | China Merchants Expressway Network & Technology Holdings Co., Ltd. | Director | April 2021 | No | |
| Liu Weiwu | China Merchants Shared Service Co. Ltd. | Executive director | April 2021 | No | |
| Liu Weiwu | China Merchants Securities Co., Ltd. | Director | June 2021 | No | |
| Liu Weiwu | China Merchants Life Insurance Company Limited | Non-executive director | June 2021 | No | |
| Liu Weiwu | Sinotrans Limited | Director | June 2021 | No | |
| Liu Weiwu | China Merchants Port Investment Development Company Limited | Director | June 2021 | No | |
| Liu Weiwu | China Merchants Union(BVI)Limited | Director | October 2021 | No | |
| Liu Weiwu | China Merchants Testing Technology Holdings Ltd. | Director | November 2021 | No |
China Merchants Port Group Co., Ltd. Annual Report 2021
SongDexing
| Song Dexing | China Merchants Group Co., Limited | Minister of Transportation & Logistics Division/ Minister of the Headquarters of the Group in Beijing | August 2018 | No | |
| Song Dexing | China Merchants Group Co., Limited | Director of Transportation & Logistics Business | May 2019 | No | |
| Song Dexing | SINOTRANS&CSC | GM | June 2016 | Yes | |
| Song Dexing | SINOTRANS&CSC | Executive director | September 2016 | Yes | |
| Song Dexing | Sinotrans Limited | Executive director | December 2016 | No | |
| Song Dexing | Sinotrans Limited | Vice Chairman of the Board | June 2018 | No | |
| Song Dexing | China Merchants Energy Shipping Co., Ltd. | Vice Chairman of the Board | August 2018 | No | |
| Song Dexing | Liaoning Port Group | Director | September 2019 | No | |
| Yang Yuntao | China Merchants Group Co., Limited | Minister of Risk Management Department/Legal Compliance Department/Audit Department | September 2021 | No | |
| Yang Yuntao | China Yangtze Shipping Group Co., Ltd. | Chairman of the Supervisory Committee | October 2021 | No | |
| Yang Yuntao | China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Supervisor | March 2022 | No | |
| Yang Yuntao | China Merchants Expressway Network & Technology Holdings Co., Ltd. | Chairman of the Supervisory Committee | March 2022 | No | |
| Yan Gang | Terminal Link S.A.S. | Director | November 2021 | No | |
| Lu Yongxin | Tin-can Island Container Terminal Ltd | Vice Chairman of the Board | July 2019 | No | |
| Lu Yongxin | LOME CONTAINER TERMINAL S.A. | Chairman of the Board | November 2019 | No | |
| Lu Yongxin | Kumport Liman Hizmetleri ve Lojistik San. ve Tic. A.?. | Chairman of the Board | December 2019 | No |
China Merchants Port Group Co., Ltd. Annual Report 2021
LuYongxin
| Lu Yongxin | Terminal Link S.A.S. | Director | March 2020 | No | |
| Li Yubin | Silk Road Yishang Information Technology Co., Ltd. | Chairman of the Board | January 2019 | No | |
| Li Yubin | Shenzhen Gangteng Internet Technology Co., Ltd. | Chairman of the Board | January 2022 | No | |
| Zhang Yiming | Dalian Port Group Corporation Limited | Director | April 2019 | No | |
| Zhang Yiming | Tianjin Port Container Terminal Co., Ltd. | Director | September 2021 | No | |
| Zhang Yiming | Ningbo Zhoushan Port Company Limited | Director | September 2021 | No | |
| Xu Song | Liaoning Port Co., Ltd. | Director | November 2021 | No | |
| Note | Offices of directors, supervisor, and senior management held concurrently in other entities exclude offices held in the Company and subsidiaries within the consolidation scope. | ||||
Punishments imposed in the recent three years by the securities regulator on the incumbent directors,supervisors and senior management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior ManagementDecision-making procedure, determination basis and actual payments of remuneration for directors,supervisors and senior management:
Decision-making procedure for the remuneration of directors, supervisors and senior management:
Remunerations for the Company’s directors, supervisors and senior management shall be nominatedby the Board of Directors and determined upon review of the Remuneration and Appraisal Committee.Allowance for the 10
th
Independent Directors is RMB150,000/year (tax included), which has beenapproved at the 2019 Annual General Meeting.Determining basis for the remuneration of directors, supervisors and senior management: The modesand amounts of the remuneration for directors, supervisors and senior management are determinedaccording to the market levels with the post value, responsibilities, etc. taken into account.Actual payment for the remuneration of directors, supervisors and senior management: Salaries andindependent director allowances were paid to directors, supervisors and senior executives on amonthly basis. And the other bonuses were paid all at one time according to the performance of eachof them.Remuneration of directors, supervisors and senior management for the Reporting Period
China Merchants Port Group Co., Ltd. Annual Report 2021
Note: the above total remuneration has been rounded off.
Name
| Name | Office title | Gender | Age | Incumbent/Former | Total before-tax remuneration from the Company ( RMB’0,000) | Any remuneration from related party |
| Deng Renjie | Chairman of the Board | Male | 52 | Incumbent | 0 | Yes |
| Wang Xiufeng | Vice Chairman of the Board and CEO | Male | 51 | Incumbent | 69 | No |
| Liu Weiwu | Director | Male | 57 | Incumbent | 0 | Yes |
| Song Dexing | Director | Male | 59 | Incumbent | 0 | Yes |
| Gao Ping | Independent director | Male | 66 | Incumbent | 15 | No |
| Li Qi | Independent director | Female | 51 | Incumbent | 15 | No |
| Zheng Yongkuan | Independent director | Male | 44 | Incumbent | 9 | No |
| Yang Yuntao | Chairman of the Supervisory Committee | Male | 55 | Incumbent | 0 | Yes |
| Gong Man | Supervisor | Female | 33 | Incumbent | 58 | No |
| Xu Jia | Supervisor | Male | 40 | Incumbent | 58 | No |
| Yan Gang | COO and GM | Male | 49 | Incumbent | 21 | No |
| Tu Xiaoping | CFO | Male | 56 | Incumbent | 101 | No |
| Lu Yongxin | Vice GM | Male | 52 | Incumbent | 175 | No |
| Li Yubin | Vice GM and Secretary of the Board | Male | 50 | Incumbent | 199 | No |
| Zhang Yiming | Vice GM | Male | 58 | Incumbent | 91 | No |
| Xu Song | Vice GM | Male | 50 | Incumbent | 137 | No |
| Liu Libing | General Counsel | Male | 48 | Incumbent | 127 | No |
| Bai Jingtao | Former Vice Chairman of the Board and CEO | Male | 56 | Former | 165 | No |
| Yan Shuai | Former Director | Male | 49 | Former | 0 | Yes |
| Su Jian | Former Director | Male | 50 | Former | 0 | Yes |
| Zhang Yi | Former Director, COO and GM | Male | 51 | Former | 131 | No |
| Wang Zhenmin | Former Independent director | Male | 55 | Former | 6 | No |
| Liu Yingjie | Former Chairman of the Supervisory Committee | Male | 50 | Former | 0 | Yes |
| Hu Qin | Former Supervisor | Female | 55 | Former | 0 | Yes |
| Zheng Shaoping | Former Vice GM | Male | 59 | Former | 96 | No |
| Huang Chuanjing | Former Vice GM and Secretary of the Board | Male | 39 | Former | 7 | No |
| Total | -- | -- | -- | -- | 1,480 | -- |
China Merchants Port Group Co., Ltd. Annual Report 2021
VI Performance of Duty by Directors in the Reporting Period
1. Board Meeting Convened during the Reporting Period
Meeting
| Meeting | Date of the meeting | Disclosure date | Meeting resolutions |
| The 1st Extraordinary Meeting of the 10th Board of Directors in 2021 | 29 January 2021 | 30 January 2021 | The meeting deliberated and passed: 1. Proposal on Adjusting the Exercise Price of the First Grant under the Stock Option Incentive Plan (Phase I); 2. Proposal on the Grant of Stock Option (the Reserved) to Incentive Objects of the Stock Option Incentive Plan (Phase I) |
| The 3rd Meeting of the 10th Board of Directors | 29 March 2021 | 31 March 2021 | The meeting deliberated and passed: 1. Proposal on the 2020 Report on the Work of the Board of Directors; 2. Proposal on the 2020 Report on Business Operations; 3. Proposal on the 2020 Report on Financial Accounts; 4. Proposal on the 2020 Profit Distribution and Dividend Payout Plan; 5. Proposal on the Annual Report 2020 and Abstract; 6. Proposal on the 2020 Corporate Social Responsibility Report; 7. Proposal on the 2020 Annual Internal Control Evaluation Report; 8. Proposal on the 2020 Summary Report on Legal and Compliance Work; 9. Proposal on 2021 Fixed Assets Investment Plan; 10. Proposal on the Confirmation of the Continuing Related-Party Transactions in 2020 and the Estimation of Such Transactions in 2021; 11. Proposal on the Related-Party Transactions Regarding Making Deposits in and Obtaining Loans from China Merchants Bank in 2021; 12. Proposal on Confirming External Guarantee Progress of the Company in 2020 and the Expected New External Guarantee Line in the Next 12 Months; 13. Proposal on Bank Credit Line and Financing Plan for Financial Institutions in 2021; 14. Proposal on Reviewing the General Authorization of the Company to Issue Bond Products; 15. Proposal on the Risk Assessment Report of China Merchants Group Finance Co., Ltd. Dated 31 December 2020; 16. Proposal on the Special Audit Report of the 41.85% Shareholder's Equity Impairment Test of China Merchants Port Holdings Company Limited on 31 December 2020; 17. Proposal on the Special Report on Deposit and Usage of Raised Fund in 2020; 18. Proposal on Renewal of Appointment of Accounting Firm for 2021; 19. Proposal on the By-election of Director; 20. Proposal on the Renewal of Liability Insurance for Directors, Supervisors and Senior Management; |
| The 2nd Extraordinary Meeting of the 10th Board of Directors in 2021 | 13 April 2021 | 14 April 2021 | The meeting deliberated and passed: Proposal on the Appointment of Secretary of the Board |
| The 3rd Extraordinary Meeting of the 10th Board of Directors in 2021 | 28 April 2021 | 30 April 2021 | The meeting deliberated and passed: 1. Proposal on the First Quarter Report 2021; 2. Proposal on Related-Party Transaction regarding Conducting Entrusted Wealth Management with Self-Owned Idle Funds; 3. Proposal on Adjustment of Providing Financial Aid by Majority-owned Subsidiaries; 4. Proposal on the Revisions to the Management System on Inside Information |
China Merchants Port Group Co., Ltd. Annual Report 2021
and Insiders;
5. Proposal on the Schedule and Agenda of the 2020 Annual General Meeting
| and Insiders; 5. Proposal on the Schedule and Agenda of the 2020 Annual General Meeting | |||
| The 4th Extraordinary Meeting of the 10th Board of Directors in 2021 | 17 May 2021 | 18 May 2021 | The meeting deliberated and passed: 1. Proposal on the Appointment of Chief Financial Officer and Vice General Manager; 2. Proposal on the By-election of Independent Director |
| The 5th Extraordinary Meeting of the 10th Board of Directors in 2021 | 30 June 2021 | 1 July 2021 | The meeting deliberated and passed: Proposal on the Revisions to the Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument |
| The 6th Extraordinary Meeting of the 10th Board of Directors in 2021 | 13 July 2021 | 14 July 2021 | The meeting deliberated and passed: 1. Proposal on the Company Meeting the Conditions for Non-public Offering of A-Shares; 2. Proposal on the Company's Non-public Offering of A-Shares; 3. Proposal on the Plan for the Company's Non-public Offering of A-Shares; 4. Proposal on the Signing of Conditional Share Subscription Agreement and Related-Party Transaction between the Company and Specified Objects; 5. Proposal on the Introduction of Strategic Investor and the Signing of a Conditional Strategic Cooperation Framework Agreement; 6. Proposal on Related-Party Transactions regarding the Company's Non-public Offering of A-Shares; 7. Proposal on the Feasibility Analysis Report on the Usage of Funds Raised by the Company's Non-public Offering of A-Shares; 8. Proposal on the Report on the Use of the Fund Raised by the Company in the Previous Round; 9. Proposal on Risk Warning and Mitigation Measures for Diluted Immediate Returns from the Company's Non-public Offering of A-Shares; 10. Proposal on the Company's Shareholder Return Plan for the Next Three Years (2021-2023); 11. Proposal on Requesting the General Meeting of the Company to Authorize the Board of Directors and relevant Authorized Persons of the Board of Directors to Handle all Matters related to the Non-public Offering of A-Shares; 12. Proposal on the Company as a Strategic Investor Subscribing to the Non-public Offering of Shares of Ningbo Zhoushan Port Company Limited and Related-Party Transaction; 13. Proposal on Holding a General Meeting at a Later Date of the Company |
| The 7th Extraordinary Meeting of the 10th Board of Directors in 2021 | 23 August 2021 | 24 August 2021 | The meeting deliberated and passed: 1. Proposal on the By-election of Mr. Wang Xiufeng as a Director; 2. Proposal on the Appointment of Chief Executive Officer |
| The 4th Meeting of the 10th Board of Directors | 30 August 2021 | 31 August 2021 | The meeting deliberated and passed: 1. The Proposal on the Semi-Annual Report 2021 and Abstract; 2. Proposal on the Risk Assessment Report of China Merchants Group Finance Co., Ltd. Dated 30 June 2021; 3. Proposal on the Special Report on Deposit and Usage of Raised Fund in H1 2020; 4. Proposal on Establishment of a New Wholly-owned Subsidiary in Hong Kong and Adjustment of the Shareholding Structure of the Subsidiary; 5. Proposal on Adjustment of the Amount of Deposits and Loans in China Merchants Bank and Related-Party Transaction; |
China Merchants Port Group Co., Ltd. Annual Report 2021
6. Proposal on Convening the Company's 1st Extraordinary General Meeting
in 2021
| 6. Proposal on Convening the Company's 1st Extraordinary General Meeting in 2021 | |||
| The 8th Extraordinary Meeting of the 10th Board of Directors in 2021 | 8 September 2021 | 9 September 2021 | The meeting deliberated and passed: 1. Proposal on the Report on the Use of the Fund Raised by the Company in the Previous Round; 2. Proposal on Supplementary Agreement for the Majority-owned Subsidiary to Enter into Franchise Lease Agreement |
| The 9th Extraordinary Meeting of the 10th Board of Directors in 2021 | 27 September 2021 | 28 September 2021 | The meeting deliberated and passed: Proposal on the Election of Mr. Wang Xiufeng as the Vice Chairman of the 10th Board of Directors |
| The 10th Extraordinary Meeting of the 10th Board of Directors in 2021 | 28 October 2021 | - | The meeting deliberated and passed: Proposal on the Third Quarter Report 2021 |
| The 11th Extraordinary Meeting of the 10th Board of Directors in 2021 | 3 November 2021 | 4 November 2021 | The meeting deliberated and passed: 1. Proposal on the By-election of Mr. Yim Kong as a Director; 2. Proposal on the Appointment of Chief Operating Officer and General Manager 3. Proposal on Convening the Company's 2nd Extraordinary General Meeting in 2021 |
| The 12th Extraordinary Meeting of the 10th Board of Directors in 2021 | 3 December 2021 | 4 December 2021 | The meeting deliberated and passed: Proposal on Transferring 49% Equity of the Joint Stock Company Zhanjiang Merchants Port City Investment Co., Ltd. to a Related Party and Related Party Transaction |
| The 13th Extraordinary Meeting of the 10th Board of Directors in 2021 | 23 December 2021 | 25 December 2021 | The meeting deliberated and passed: 1. Proposal on the Implementation of the Functions and Powers of the Board of Directors; 2. Proposal on the Use of Idle Raised Funds for Cash Management |
2. Attendance of Directors at Board Meetings and General Meetings
| Attendance of directors at board meetings and general meetings | |||||||
| Director | Total number of board meetings the director was eligible to attend | Board meetings attended on site | Board meetings attended by telecommunication | Board meetings attended through a proxy | Board meetings the director failed to attend | The director failed to attend two consecutive board meetings (yes/no) | General meetings attended |
| Deng Renjie | 15 | 2 | 13 | 0 | 0 | No | 2 |
| Wang Xiufeng | 5 | 0 | 5 | 0 | 0 | No | 1 |
| Liu Weiwu | 10 | 1 | 9 | 0 | 0 | No | 2 |
| Song Dexing | 15 | 2 | 13 | 0 | 0 | No | 2 |
China Merchants Port Group Co., Ltd. Annual Report 2021
Gao Ping
| Gao Ping | 15 | 2 | 13 | 0 | 0 | No | 2 |
| Li Qi | 15 | 2 | 13 | 0 | 0 | No | 2 |
| Zheng Yongkuan | 10 | 1 | 9 | 0 | 0 | No | 2 |
| Bai Jingtao | 7 | 1 | 6 | 0 | 0 | No | 1 |
| Yan Shuai | 15 | 2 | 13 | 0 | 0 | No | 2 |
| Su Jian | 1 | 0 | 1 | 0 | 0 | No | 0 |
| Zhang Yi | 7 | 1 | 6 | 0 | 0 | No | 1 |
| Wang Zhenmin | 5 | 1 | 4 | 0 | 0 | No | 1 |
Why any director failed to attend two consecutive board meetings:
None
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by DirectorsIndicate by tick mark whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Specification of whether suggestions from directors are adopted or not adopted by the CompanyDuring the Reporting Period, all the directors of the Company carried out their work conscientiouslyand responsibly in strict accordance with the Company Law, Securities Law, Listed CompanyGovernance Standards, Self-Regulatory Guidelines No. 1 for Companies Listed on Shenzhen StockExchange - Standard Operation of Listed Companies on the Main Board, Articles of Association andRules of Procedure of the Board of Directors. Based on the Company's reality, they put forwardrelevant opinions on the Company's major governance and operation decisions, and reachedconsensus through full communication and discussion. They resolutely supervised and promoted theimplementation of the resolutions of the Board of Directors to ensure scientific, timely and efficientdecision-making and fully safeguard the legitimate rights and interests of the Company and allshareholders.VII Performance of Duty by Specialized Committees under the Board in the Reporting Period
| Profile of Specialized Committee under the Board as at the end of the period | |||
| No. | Specialized Committee | Member | Convener |
| 1 | Strategy Committee | Deng Renjie, Wang Xiufeng, Yan Shuai, Song Dexing, Gao Ping, Li Qi | Deng Renjie |
| 2 | Audit Committee | Li Qi, Liu Weiwu, Zheng Yongkuan | Li Qi |
China Merchants Port Group Co., Ltd. Annual Report 2021
Committee
| Committee | Member | Number of meetings convened | Date of the meeting | Meeting | Contents | Other information about the performance of duty | Details about matters with objections (if any) |
| Strategy Committee of the Board of Directors | Deng Renjie, Bai Jingtao, Yan Shuai, Song Dexing, Zhang Yi, Gao Ping, Li Qi | 2 | 29 March 2021 | The 1st Meeting of the Strategy Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on Report on the Performance of Duty by the Strategy Committee of the Board of Directors in 2020; 2. Proposal on the Company's Five-year Strategic Plan for 2021-2025 | Unanimous vote | None |
| 13 July 2021 | The 1st Meeting of the Strategy Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on the Introduction of Strategic Investor and the Signing of a Conditional Strategic Cooperation Framework Agreement; 2. Proposal on the Company as a Strategic Investor Subscribing to the Non-public Offering of Shares of Ningbo Zhoushan Port Company Limited and Related-Party Transaction; | Unanimous vote | None | |||
| Audit Committee of the Board of Directors | Li Qi, Wang Zhenmin | 5 | 29 March 2021 | The 1st Meeting of the Audit Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on the Report on Performance of Duty by the Audit Committee of the Board of Directors in 2020; 2. Proposal on Work Report of Accounting Firm for 2020; 3. Proposal on the Financial Report of 2020; 4. Proposal on Renewal of Appointment of Accounting Firm for 2021; 5. Proposal on Anti-fraud Risk Assessment Report for 2020; 6. Proposal on Internal Auditing Report for 2020; 7. Proposal on Internal Auditing Plan for 2021; 8. Proposal on | Unanimous vote | None |
| 3 | Nomination, Remuneration and Evaluation Committee | Gao Ping, Deng Renjie, Zheng Yongkuan | Gao Ping |
China Merchants Port Group Co., Ltd. Annual Report 2021
Inspection Report on theDeposit and Usage of RaisedFund in 2020; 9. Proposal onthe 2020 Legal ComplianceWork Report
| Inspection Report on the Deposit and Usage of Raised Fund in 2020; 9. Proposal on the 2020 Legal Compliance Work Report | |||||||
| 28 April 2021 | The 2nd Meeting of the Audit Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on Internal Audit Report for the First Quarter of 2021; 2. Proposal on Inspection Report on the Deposit and Usage of Raised Fund in the First Quarter of 2021; | Unanimous vote | None | |||
| Li Qi, Liu Weiwu, Zheng Yongkuan | 27 August 2021 | The 3rd Meeting of the Audit Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on Financial Report for H1 2021; 2. Proposal on Internal Audit Report for the Second Quarter of 2021; 3. Proposal on Inspection Report on the Deposit and Usage of Raised Fund in H1 2021; 4. Proposal on Inspection Report on the Provision of Guarantees, Related-Party Transactions, Securities Investment and Derivatives Transactions and the Provision of Financial Assistance | Unanimous vote | None | ||
| 28 October 2021 | The 4th Meeting of the Audit Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on Internal Audit Report for the Third Quarter of 2021; 2. Proposal on Inspection Report for the Deposit and Usage of Raised Fund for the Third Quarter of 2021 | Unanimous vote | None | |||
| 29 December 2021 | The 5th Meeting of the Audit Committee of the 10th Board of Directors for 2021 | Meet with accountants to negotiate the schedule for the audit of the 2021 Annual Financial Report | Meeting and communication with accountants | None | |||
| Nomination, Remuneration and Evaluation Committee of the | Gao Ping, Deng Renjie, Wang Zhenmin | 5 | 29 March 2021 | The 1st Meeting of the Nomination, Remuneration and Evaluation Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on Performance of Duty by the Nomination, Remuneration and Evaluation Committee of the Board of Directors in 2020; Proposal on the Remuneration of the | Unanimous vote | None |
China Merchants Port Group Co., Ltd. Annual Report 2021
Board ofDirectors
| Board of Directors | Directors, Supervisors and Senior Management in 2020; 3. Proposal on the Inspection of Director Candidates | ||||||
| 13 April 2021 | The 2nd Meeting of the Nomination, Remuneration and Evaluation Committee of the 10th Board of Directors for 2021 | The meeting reviewed: Proposal on the Appointment of Secretary of the Board | Unanimous vote | None | |||
| 17 May 2021 | The 3rd Meeting of the Nomination, Remuneration and Evaluation Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on the Appointment of Chief Financial Officer and Vice General Manager; 2. Proposal on the Inspection of Candidates for Independent Director | Unanimous vote | None | |||
| Gao Ping, Deng Renjie, Zheng Yongkuan | 23 August 2021 | The 4th Meeting of the Nomination, Remuneration and Evaluation Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on the Inspection of Director Candidates; 2. Proposal on the Appointment of Chief Executive Officer | Unanimous vote | None | ||
| 3 November 2021 | The 5th Meeting of the Nomination, Remuneration and Evaluation Committee of the 10th Board of Directors for 2021 | The meeting reviewed: 1. Proposal on the Inspection of Director Candidates; 2. Proposal on the Appointment of Chief Operating Officer and General Manager | Unanimous vote | None |
VIII Performance of Duty by the Supervisory CommitteeIndicate by tick mark whether the Supervisory Committee found any risk to the Company during itssupervision in the Reporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.IX Employees
1. Number, Functions and Educational Backgrounds of Employees
| Number of in-service employees of the Company as the parent as at the end of the period | 328 |
| Number of in-service employees of major subsidiaries as at the end of the period | 15564 |
| Total number of in-service employees | 15892 |
| Total number of paid employees in the Reporting Period | 15892 |
China Merchants Port Group Co., Ltd. Annual Report 2021
Number of retirees to whom the Company as theparent or its major subsidiaries need to payretirement pensions
| Number of retirees to whom the Company as the parent or its major subsidiaries need to pay retirement pensions | 9528 |
| Functions | |
| Function | Employees |
| Production | 8515 |
| Sales | 602 |
| Technical | 3543 |
| Financial | 563 |
| Administrative | 2669 |
| Total | 15892 |
| Educational backgrounds | |
| Educational background | Employees |
| Master’s degree and above | 577 |
| Bachelor’s degree | 4115 |
| Junior college | 4098 |
| Technical secondary school and below | 7102 |
| Total | 15892 |
2. Employee Remuneration Policy
The Company followed the principle of efficiency first, consideration of impartiality, and sustainabledevelopment in its remuneration management. It continued to pay attention to the global economictrend, and implemented dynamic compensation management strategy based on market trends andcorporate efficiency factors to ensure its market competitiveness in employee remuneration. In 2021,the Company continued to promote the development of incentive mechanism by combining short-term incentive with medium - and long-term incentive, and adopting complementary cash incentiveand equity incentive. On the basis of the promotion and application of HR-MAX intelligent personnelmanagement platform, the Company improved the evaluation and incentive mechanism, strengthenedthe connection with evaluation, applied evaluation results scientifically, adhered to the performance-oriented market-oriented income distribution concept, stimulated employees' potential and creativity,and further improved the efficiency of resource allocation. Employee remuneration adjustment andbonus distribution are connected with company benefit and individual performance to improve theeffectiveness and accuracy of remuneration incentives and promote the continuous improvement inorganizational performance. In 2021, the Company introduced a performance-related remunerationscheme for strategic assessment, whereby deferred bonuses for senior management and middlemanagement were paid based on the results of strategic assessment. This aimed to guide theCompany's medium - and long-term development and support the achievement of its strategic goals.Efforts were made to promote the phased implementation of equity incentive scheme, and explorethe development of an incentive mechanism for scientific and technological innovation talent. A
China Merchants Port Group Co., Ltd. Annual Report 2021
mechanism for sharing of profits and risks among the Company and its shareholders and employeeswas created.In 2021, the COVID-19 reoccurred from time to time, and the pandemic control situation remainedgrim. The Company coordinated the regular pandemic prevention and control and its operation anddevelopment. While striving to achieve the production and operation goals, it truly gave meticulouscare for employees and fulfilled corporate social responsibility to minimize the impact of thepandemic. Online and offline professional medical teams offered consulting services. The Companycared for the physical and mental health of front-line COVID-19 prevention and control staff in anall-round manner through multiple channels. The special credit line was used to subsidize overtimework and other related work, and a plan was made to subsidize pandemic prevention and control forexpatriate employees who were fighting against the pandemic overseas on the front line. Moreincentives were granted to front-line staff engaging in pandemic prevention and control. Advancedmodels in pandemic prevention and control were commended. In 2021, the Company also launchedthe construction of overseas employees' health management platform. Through systematicmanagement, online consultation, evaluation reminder, file storage, data query and other functionswere realized to comprehensively guarantee the physical and mental health of overseas employees.
3. Employee Training Plans
Focusing on its talent development strategy and business development needs, the Company isdedicated to creating a platform for the development and promotion of global port professionals,provides domestic and foreign employees with learning opportunities, opens channels for globalcareer development and helps employees to keep improving themselves with the development of theCompany. Meanwhile, it provides its peers with opportunities of coming to China for exchange toshare knowledge and values.In 2021, the Company overcame the impact of the reoccurring COVID-19 to carry out talent trainingmainly in online way with offline training as a supporting way. It conducted various training programsby combining online live streaming, online courses and offline intensive training to speed up theconstruction of the Company's talent at four major levels. Major projects include 2021 Young CadreClass Project (Phase IV), Phrase III Maritime Silk Road Elite Training Program, Financial EliteTalent Training Plan, Internal Trainer Training and others. These projects vigorously promoted theCompany's construction of management talent, overseas talent, professional talent echelon, enhancedthe brand value, strengthened and improved the Company's internal training system construction.
China Merchants Port Group Co., Ltd. Annual Report 2021
In 2021, the Company also made great progress in exploring more talent development opportunitiesin deepening college-enterprise cooperation. CM Port Group and Shenzhen Polytechnic continued tostrengthen cooperation. By introducing training programs and signing management consultingcontracts, they provided practical training services for the college's trainees in the port industry. Inthe future, with the help of the platform of China Merchants Port International Exchange College, in-depth exploration will be made in personnel training, industry-education integration and other aspects.In 2021, the Company gathered strong transportation schools, professional teachers and internationalyoung talent in transportation for the first time, and successfully held the 9th "China Merchants C-Blue Training Program". It provided a sustainable development learning platform for outstandinginternational students and outstanding youth in the field of transportation in China, promoted thecommon aspiration of the people, economic development and social progress of countries along theBelt and Road, and expanded the brand influence and circle of friends for investment, which laid thefoundation for integrated and win-win development.Meanwhile, the online platform was fully applied to the training for the Company and its subsidiaries.All members utilized the online platform to produce livestreaming and online courses and developinternal quality courses. As a result, the coverage of training during the pandemic was expanded.Companies deepened collaboration in training. Internal training across the Group was stronglypromoted.
4. Labor Outsourcing
Total man-hours (hour)
| Total man-hours (hour) | N/A |
| Total remuneration paid (RMB) | 1,399,573,359.28 |
X Final Dividend Plan of the Company for the Reporting Period
1. Formulation, execution or adjustments of profit distribution policy for shareholders,especially cash dividend policy, in Reporting PeriodPursuant to the CSRC Guideline for Listed Companies No.3-Cash Dividends of Listed Companiesand the Notice of CSRC on Further Implementing Matters Related to Cash Dividends of ListedCompanies, the Articles of Association clarifies the specific profit distribution policy, decision-making procedures and mechanism, adjustment of profit distribution policy, implementation of profitdistribution plan, and profit distribution for foreign shares. During the Reporting Period, the Companyexecuted the profit distribution policy in strict compliance with the Articles of Association.
| Special statement about the cash dividend policy | |
| In compliance with the Company’s Articles of Association and resolution of general meeting | Yes |
China Merchants Port Group Co., Ltd. Annual Report 2021
Specific and clear dividend standard and ratio
| Specific and clear dividend standard and ratio | Yes |
| Complete decision-making procedure and mechanism | Yes |
| Independent directors faithfully performed their duties and played their due role | Yes |
| Non-controlling interests are able to fully express their opinion and desire and their legal rights and interests are fully protected | Yes |
| In case of adjusting or changing the cash dividend policy, the conditions and procedures involved are in compliance with applicable regulations and transparent | Not applicable |
2. The Company was profitable in the Reporting period and the positive profits of the Companyas the parent attributable to shareholders while the distribution plan of cash dividend forshareholders was not proposed.? Applicable √ Not applicable
3. Final Dividend Plan for the Reporting Period
| Bonus shares/10shares (share) | 0 |
| Cash dividend/10 shares (RMB) (tax inclusive) | 4.3 |
| Bonus issue from capital reserves (share/10 shares) | 0 |
| Share base (share) | 1,922,365,124 |
| Total cash dividends (RMB) (tax inclusive) | 826,617,003.32 |
| Cash dividends in other forms (such as share repurchase) (RMB) | 0.00 |
| Total cash dividends (including other forms) (RMB) | 826,617,003.32 |
| Distributable profits (RMB) | 2,729,507,111.31 |
| Cash dividends (including other forms) as % of total profits to be distributed (%) | 100% |
| Details of the cash dividends | |
| As the Company is in the mature stage of development with significant capital expenditures arrangement, when distributing profits, the proportion of cash dividends in this profit distribution shall be 40% at least. | |
| Details of final dividend plan for the Reporting Period | |
| As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net profit attributable to the Company as the parent for 2021 stood at RMB2,685,829,204.07 and the net profit of the Company as the parent at RMB1,087,072,210.89. (1) According to the Company Law and the Articles of Association of the Company, when distributing the current year's after-tax profits, the company shall draw 10% of the profits for the company's statutory reserve fund. If the cumulative amount of the company's statutory reserve fund is more than 50% of the company's registered capital, it may not be withdrawn. After this withdrawal, the cumulative amount of legal surplus reserve has reached 50% of the registered capital, and the company will not continue to withdraw legal surplus reserve. The accumulative distributable profit of the Company as the parent at the end of 2021 was RMB2,729,507,111.31. (2) Base on the total 1,922,365,124 shares as at the end of 2021, a cash dividend of RMB4.30 (tax included) is to be distributed for every 10 shares, totaling RMB826,617,003.32. After the above-mentioned distribution, the retained earnings of the Company as the parent will be RMB1,902,890,107.99. The above profit distribution plan still needs to be submitted to the 2021 Annual General Meeting for approval. | |
China Merchants Port Group Co., Ltd. Annual Report 2021
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees
1. The 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.
2. Equity Incentives for Directors, Supervisors and Senior Management in the Reporting Period:
On 3 February 2020, the Company held the 1
stExtraordinary General Meeting of 2020, at which thefollowing matters were reviewed and approved: Stock Options Incentive Plan (Draft) and its Abstract,Stock Options Incentive Plan (Phase I) (Revised Draft) and its Abstract, Management Method forStock Options Incentive Plan, Examination Method for Implementation of Stock Options IncentivePlan and Proposal on Authorization to the Board to Handle Matters in Relation to Stock Options
China Merchants Port Group Co., Ltd. Annual Report 2021
Incentive. The details about the stock options granted to directors and senior management of theCompany in the incentive plan are as follows:
No.
| No. | Name | Office title | Share options granted (’0,000 shares) | As % of total granted | As % of total share capital |
| 1 | Lu Yongxin | Vice GM | 24.0 | 1.35% | 0.012% |
| 2 | Li Yubin | Vice GM and Secretary of the Board | 24.0 | 1.35% | 0.012% |
At the 1
st
Extraordinary Meeting of the 10
th Board of Directors in 2021 and the 1
stExtraordinaryMeeting of the 10
th
Supervisory Committee in 2021 held on 29 January 2021, Proposal on the Grantof Stock Option (the Reserved) to Incentive Objects of the Stock Option Incentive Plan (Phase I) ofthe Company was considered and approved respectively. The stock options granted to directors andsenior management of the Company for the incentive plan are as follows:
| No. | Name | Office title | Share options granted (’0,000 shares) | As % of total granted | As % of total share capital |
| 1 | Xu Song | Vice GM | 24.0 | 1.35% | 0.012% |
| 2 | Liu Libing | General Counsel | 5.0 | 0.29% | 0.003% |
3. Appraisal of and Incentive for Senior Management
In 2021, the Company took the tenure system and contractual management as an opportunity torealize comprehensive coverage, and strengthened the assessment for rigid remuneration realization.The Company has a mature assessment mechanism and system covering all senior managementpersonnel. The annual comprehensive assessment combines qualitative and quantitative methods withthe dimensions including performance, competence, self-discipline, etc. The assessment results ofsenior management serve as an important basis for appointment and motivation. The Companyadjusts and determines the post salary of senior managers based on the factors including operationstatus, position served and assessment results, and determines the performance bonus of managersthrough the factors including annual comprehensive ability assessment, annual key performanceindicators appraisal and three-year strategic appraisal results.The Company strives to be "superior to the market average and peers" regarding as the assessmentand distribution of performance bonuses for senior executives. Senior executives are expected tocompare with themselves chronologically and with their peers horizontally. Short-term KPI
China Merchants Port Group Co., Ltd. Annual Report 2021
assessment and long-term strategy assessment complement each other. The comprehensiveassessment results of corporate performance are linked with the performance bonuses of seniorexecutives so as to give full play to the incentive and guiding effects of remuneration. Accordingly,senior executives pay attention to the short-term performance in the current period or year and themid- and long-term development of the Company.
4. Employee Stock Ownership Plans
□ Applicable √ Not applicable
5. Other Incentive Measures for Employees
□ Applicable √ Not applicable
XII Establishment and Implementation of Internal Control System in the Reporting Period
1. Establishment and Implementation of Internal Control System
(1) Establishment of internal control system
One unit was newly included as one of the ninth batch of units in 2021. As of 31 December 2021, atotal of 25 units have been included in the risk control system to evaluate, covering all enterprisescontrolled by the Company. Based on the personnel changes of the Company and its subsidiaries, thelist of members of the leading group and working group for risk management and internal controlself-assessment was adjusted.
(2) Further Improvement in coverage of internal control evaluation processIn 2021, 22 subsidiaries included in the Company’s internal control system to self-evaluate as thefirst to eighth batch of units have completed the sorting out of all 12 business processes so as to makethe internal control evaluation cover the core business of the Company; Ningbo Daxie ChinaMerchants International Container Terminal Co., Ltd., newly added as one of the ninth batch ofsubordinate units, the combing of 8 core processes (production management, sales and marketing,outsourcing management, contract management, procurement management, capital management,information system and project management) and preparing of the process manual have beencompleted to make the internal control process compliant.
China Merchants Port Group Co., Ltd. Annual Report 2021
(3) Carrying out the establishment and evaluation of internal control system on a regular basisAs of 31 December 2021, all units have renewed their internal control self-evaluation working papersin accordance with the annual internal control evaluation plan and changes in business process andcarried out the internal control self-evaluation work on a quarterly basis. The internal control workinggroup of the Company has reviewed the internal control working papers submitted by each unit andnotified the problems existing in the self-evaluation of each unit.
(4) Completing the internal control as planned
The Company has prepared the Report of China Merchants Port Group Co., Ltd. on Internal ControlSystem Evaluation of 2021. At the same time, it has cooperated with the external internal controlaudit project team to complete the internal control audit and obtained the internal control audit reporton time. The Company worked out the “Three-year Full Coverage” work plan for supervising andinspecting internal control systems for all subsidiaries incorporated into the Company’s internalcontrol system and intended to conduct the supervision and inspection of eight units of them in 2021.As of 31 December 2021, the supervision and inspection on the internal control system of ninesubsidiaries have been completed with the internal control evaluation defect lists.
2. Material Internal Control Weaknesses Identified for the Reporting Period? Yes √ NoXIII Management and Control over Subsidiaries for the Reporting PeriodThe Company, guided by “empowerment, professionalism and value”, established an operationmanagement system with sustainable value creation, gradually formulated standards for all functionalmodules, and managed to build a world-class value-oriented headquarters. Taking into account thestrategic positioning of its subsidiaries, the Company, adhering to the principles of differentiation andcontrollable risks and pushing forward full-cycle asset management, procurement management, andperformance evaluation mechanism, continuously promoted the healthy development of itssubsidiaries. Besides, focusing on execution quality, the Company intensified the tasks on quality andefficiency improvement and strived to implement related measures to achieve in-depth integrationbetween quality and efficiency improvement and strategic objectives.
China Merchants Port Group Co., Ltd. Annual Report 2021
XIV Internal Control Self-Evaluation Report and Independent Auditor’s Report on InternalControl
Disclosure date of the internal control self-evaluation report
| Disclosure date of the internal control self-evaluation report | 31 March 2022 | |||
| Index to the disclosed internal control self-evaluation report | For details, see www.cninfo.com.cn | |||
| Evaluated entities’ combined assets as % of consolidated total assets | 97.73% | |||
| Evaluated entities’ combined operating revenue as % of consolidated operating revenue | 99.44% | |||
| Identification standards for internal control weaknesses | ||||
| Type | Weaknesses in internal control over financial reporting | Weaknesses in internal control not related to financial reporting | ||
| Nature standard | If a defect or defect group give rise to the following events which cannot be prevented or found and made rectification, the defect or defect group are recognized as significant defects: (1) Malpractices of directors, supervisors and senior management: (2) The Company make correction to the financial report issued; (3) Certified Public Accountant find that there is a significant error in the financial report, however, the internal control did not discover it when conducting internal control; (4) The Audit Committee under the Board and Internal Audit Service's supervision to the internal control is invalid. | Great defect | Significant defect | Common defect |
| Development direction substantially deviates from the strategic goals, investment direction, and business structure, commercial modeled. which completely unable to support the realization of strategic goals | Development direction partly deviates from the strategic goals, investment direction, and business structure, commercial modeled. which unable to support the realization of strategic goals at a larger extent | Development direction slightly deviates from the strategic goals, investment direction, and business structure, commercial modeled. which completely can't fully support the realization of strategic goals | ||
| Strategy implementation is blocked, almost all indicators of strategy implementation cannot completed as planned | Strategy implementation is blocked, most of indicators of strategy implementation cannot completed as planned | Strategy implementation is blocked, part of indicators of strategy implementation cannot completed as planned | ||
| Lead to break off of common business/service or it takes half year or above to recover the break off of common business/service | ||||
Lead to break off ofcommonbusiness/service or ittakes three months orhalf year below torecover the break off ofcommonbusiness/service
| Some daily business is influenced, lead to break off of common business/service or it takes three months below to recover the break off of common business/service | ||
| Badly damage the working enthusiasm of all the employees, will give rise to large scale group events or heavy damage to enterprises culture and enterprises cohesion | In a large extent, damage the working enthusiasm of all the employees, reduce work efficiency, have greatly adverse effect to enterprises culture and enterprises cohesion | damage the working enthusiasm of all the employees, reduce work efficiency, have some adverse effect to enterprises culture and enterprises cohesion |
| The employee's ability and professional skills universally cannot meet the enterprise development needs by a large margin | The employee's ability and professional skills in some significant fields cannot meet the enterprise development needs | The employee's ability and professional skills in some fields cannot meet the enterprise development |
China Merchants Port Group Co., Ltd. Annual Report 2021
Negative news spread inthe field of the entirebusiness (includingextending to industrychain),or was paidattention by the nationalmedia or public media,the recovery ofreputation will take morethan six months
| Negative news spread in the field of the entire business (including extending to industry chain),or was paid attention by the national media or public media, the recovery of reputation will take more than six months | Negative news spread in the field of the entire business, or was paid attention or reported by the local media the recovery of reputation will take three to six months | Negative news spread in the field of the entire business, have small damage to the reputation of the enterprise, the recovery of reputation will take three months below |
| The enterprise's internal confidential information leakage which badly affect the enterprise's competitive capacity in the market, or affect the competitive capacity in management |
The enterprise's internalconfidential informationleakage which affect theenterprise's competitivecapacity in the market,or affect the competitivecapacity in managementin a large extent
| The enterprise's internal confidential information leakage which affect the enterprise's competitive capacity in the market, or affect the competitive capacity in management in a general extent | ||||
| Quantitative standard | The judging standard was the net profits attributable to the parent Company's shareholders in the consolidated financial statements audited in last year. Misstatement amount ≥ 5% above of judging standard was great defect; 5% judging standard ＞1% misstatement amount was significant defect; misstatement amount ＜1% below of judging standard was general standard. | The judging standard was the net profits attributable to the parent Company's shareholders in the consolidated financial statements audited in last year. | ||
| Great defect | Significant defect | Common defect | ||
| Have a significant adverse impact on the asset turnover ability, which lead to total asset turnover rate lowed 20% above (Including 20％） | Have a greater adverse impact on the asset turnover ability, which lead to total asset turnover rate lowed10% to 20% (Including 10%） | Have an adverse impact on the asset turnover ability, which lead to total asset turnover rate lowed10% below | ||
| Had significant adverse impact to the annual operation profits or cause decrease of annual operation profits when at 5% (including 5%) above of judging standard | Had larger adverse impact to the annual operation profits or cause decrease of annual operation profits when at 1% (including 1%) to 5% judging standard | Had adverse impact to the annual operation profits or cause decrease of annual operation profits when at 1% below of judging standard | ||
| Had significant adverse impact to decrease of inflow of total cash flow or increase of outflow total cash flow when at 10% (including 10%) above of judging standard | Had larger adverse impact to decrease of inflow of total cash flow or increase of outflow total cash flow when at 5% (including 5%) to 10% above of judging standard | Had adverse impact to decrease of inflow of total cash flow or increase of outflow total cash flow when at 5% below of judging standard | ||
| Great investment mistake incurred which cause direct economy losses when at 5% (including 5%) above of judging standard or the return on investment more than 40% lower than expected | Larger investment mistake incurred which cause direct economy losses when at 1% (including 1%)to 5% of judging standard or the return on investment less than 30%(including 30% to 40%) lower than expected | Great investment mistake incurred which cause direct economy losses when at 1% below of judging standard or the return on investment less than 30% lower than expected | ||
China Merchants Port Group Co., Ltd. Annual Report 2021
10 death or above , or 50people serious injury, ordirect economy losseswhen at 5% (including5%) above of judgingstandard
| 10 death or above , or 50 people serious injury, or direct economy losses when at 5% (including 5%) above of judging standard | 3 deaths above to 10 deaths below , or more than 10 people but less than 50 people serious injury, or direct economy losses when at 1% (including 1%) to 5% of judging standard | less than 3 deaths or above , or less than 10 people serious injury, or direct economy losses when at 1% below of judging standard | |
| Asset integrity cannot be ensured, when assets losses at 5% (including 5%) above of judging standard | Asset integrity cannot be ensured, when assets losses at 1% (including 1%)to 5% of judging standard | Asset integrity cannot be ensured, when assets losses at 1% below of judging standard | |
| A large number of great commercial disputes, civil lawsuits and negative influences can't eliminate in a short period of time, may pay compensation at 5% (including 5%) above of judging standard | Several commercial disputes, civil lawsuits, and had obviously influence in a certain area and period, may pay compensation at 1% (including 1%) to 5% of judging standard | Irreconcilable commercial disputes, civil lawsuits happened sometimes, cause a certain influences in local, may pay compensation at 1% below of judging standard | |
| A serious violation of laws and regulations, investigated by government department and legal department, cause prosecution and class action, may pay compensation at 2% (including 2%) above of judging standard | A serious violation of laws and regulations, investigated by government department and legal department, may pay compensation at 0.5% (including 0.5%) to 2% of judging standard | Violation of laws and regulations, investigated by government department and legal department, may pay compensation at 0.5% below of judging standard | |
| Number of material weaknesses in internal control over financial reporting | 0 | ||
| Number of material weaknesses in internal control not related to financial reporting | 0 | ||
| Number of serious weaknesses in internal control over financial reporting | 0 | ||
| Number of serious weaknesses in internal control not related to financial reporting | 0 | ||
Note: The percentages of evaluated entities’ combined assets and operating revenue to consolidatedtotal assets and operating revenue have been deducted the corresponding financial data of the mergedcompany.
| Opinion paragraph in the independent auditor’s report on internal control | |
| We believe that China Merchants Port Group Co., Ltd. has maintained effective internal control over financial reporting in all material respects as of 31 December 2021 as per the Basic Rules for Enterprise Internal Control and relevant regulations. | |
| Independent auditor’s report on internal control disclosed or not | Disclosed |
| Disclosure date | 31 March 2022 |
| Index to such report disclosed | For details, see www.cninfo.com.cn |
China Merchants Port Group Co., Ltd. Annual Report 2021
Type of the auditor’s opinion
| Type of the auditor’s opinion | Unmodified unqualified opinion |
| Material weaknesses in internal control not related to financial reporting | None |
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s reporton the Company’s internal control.? Yes √ NoIndicate by tick mark whether the independent auditor’s report on the Company’s internal control isconsistent with the internal control self-evaluation report issued by the Company’s Board.
√ Yes ? No
XV Rectifications of Problems Identified by Self-inspection in the Special Action for ListedCompany GovernanceDuring the Reporting Period, the Company organized relevant departments to conduct self-inspectionon corporate governance issues and completed the Special Self-Inspection List in accordance withthe requirements of the Announcement on Launching a Special Campaign to Improve the Governanceof Listed Companies issued by the CSRC. The self-inspection results showed that the overallcorporate governance met the requirements, and no major problems that needed to be remedied wereidentified.The Company identified a total of 69 internal control defects in 2019 and 66 internal control defectsin 2020, all of which are general defects. All responsible departments and subordinate units havemade remediation plans for the defects in internal control identified and implemented remediation intime according to the Company's internal control management requirements. The above-mentionedinternal control defects have been remedied on time, and all defects have been remedied before 30June 2021. The Company has established a relatively perfect internal control management mechanism,and adopted measures such as incompatible job separation control, authorization and approval control,accounting system control, property protection control and budget control to prevent major internalcontrol defects.
China Merchants Port Group Co., Ltd. Annual Report 2021
Part V Environmental and Social Responsibility
I Major Environmental Issues
1. Pollution Discharge
Nameof thecompany orsubsidiarycompany
| 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 | 0.055mg/m3 | Discharge Limits of Air Pollutants (DB44/27-2001) | -- | -- | No excessive discharge |
| SO2 | Unorganized | -- | Plant boundary | 0.008mg/m3 | -- | -- | No excessive discharge | ||
| Oxynitride | Unorganized | -- | Plant boundary | 0.007mg/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 | -- | -- | 6mg/L | -- | -- | No excessive discharge | ||
| Chemical oxygen demand (COD) | No efflux | -- | -- | 8mg/L | -- | -- | No excessive discharge | ||
| Five-day biochemical oxygen demand (BOD5) | No efflux | -- | -- | 2.6mg/L | -- | -- | No excessive discharge | ||
| Ammonia-nitrogen | No efflux | -- | -- | 0.108mg/L | -- | -- | No excessive discharge | ||
| Petroleum | No efflux | -- | -- | 0.06mg/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 | 0.094mg/m3 | Discharge Limits of Air Pollutants (DB44/27-2001) | -- | -- | No excessive discharge |
| SO2 | Unorganized | -- | Plant boundary | 0.007mg/m3 | -- | -- | No excessive discharge | ||
| Oxynitride | Unorganized | -- | Plant boundary | 0.017mg/m3 | -- | -- | No excessive discharge | ||
| PH | No efflux | -- | -- | 7.38 | -- | -- | No excessive discharge | ||
| Suspended substances | No efflux | -- | -- | 56mg/L | -- | -- | No excessive discharge | ||
| Chemical oxygen demand (COD) | No efflux | -- | -- | 89mg/L | -- | -- | No excessive discharge |
China Merchants Port Group Co., Ltd. Annual Report 2021
Ammonia-nitrogen
| Ammonia-nitrogen | No efflux | -- | -- | 3.9mg/L | -- | -- | No excessive discharge | ||
| Petroleum | No efflux | -- | -- | 0.07mg/L | -- | -- | No excessive discharge | ||
| Phosphate | No efflux | -- | -- | 0.45mg/L | -- | -- | No excessive discharge | ||
| Noise (plant boundary) | Unorganized | -- | Plant boundary | Daytime: (55.8-59) db Nighttime: (46.7-48.8) db | Level-1 standards for the 2nd time interval of Discharge Limits of Water Pollutants (DB44/26-2001) | -- | -- | No excessive discharge | |
| Zhanjiang Port Petrochemical Terminal Co., Ltd. | Volatile organic compounds (plant boundary) | Unorganized | -- | Plant boundary | 0.31-0.74mg/m3 | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008) | -- | -- | No excessive discharge |
| Volatile organic compounds | Organized and discontinuous discharge | 2 | Two exhaust outlets, one for vehicle loading, another for train loading | (4.55- 21.6)g/m3 | Discharge Limits of Air Pollutants (DB44/27-2001) | 1.2550 tons | 235.25468 tons (total approved amount for one year) | No excessive discharge | |
| Volatile organic compounds | Unorganized | -- | Volatilization of storage tank (33 storage tank) | -- | Emission Standard of Air Pollutant for Bulk Petroleum Terminals (GB20950-2020) | 168.352 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) | 4.2443 tons | No excessive discharge | ||
| Noise (plant boundary) | Plant boundary | -- | Plant boundary | Daytime: (60.4- 62.3) db Nighttime: (50.5- 52.6) db | Discharge Limits of Air Pollutants (DB44/27-2001) | -- | -- | No excessive discharge | |
| Chemical oxygen demand (COD) | Discontinuous discharge | 2 | Wastewater outlet, Rainwater outlet | Industrial wastewater: 43-63mg/L Rainwater: | Emission Standard for Noise of | -- | -- | No excessive discharge |
China Merchants Port Group Co., Ltd. Annual Report 2021
6-45mg/L
| 6-45mg/L | Industrial Enterprises at Boundary (GB12348-2008) | |||||||
| Ammonia-nitrogen (NH3-N) | Discontinuous discharge | 2 | Wastewater outlet, Rainwater outlet | Industrial wastewater: (0.23- 0.325)mg/L Rainwater: (0.106-0.677)mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| Petroleum | Discontinuous discharge | 2 | Wastewater outlet, Rainwater outlet | Industrial wastewater: (0.06- 0.45)mg/L Rainwater: (0.06- 0.44)mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| PH | Discontinuous discharge | 1 | Wastewater outlet | 7.0-7.79 | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| Suspended substances | Discontinuous discharge | 1 | Wastewater outlet | 6-7mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| Total organic carbon (TOC) | Discontinuous discharge | 1 | Wastewater outlet | 5.7-13.8mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| Volatile phenols | Discontinuous discharge | 1 | Wastewater outlet | 0.01-0.284 mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
| Total cyanide | Discontinuous discharge | 1 | Wastewater outlet | 0.004-0.005mg/L | Discharge Limits of Water Pollutants (DB44/26-2001) of Guangdong Province | -- | -- | No excessive discharge |
China Merchants Port Group Co., Ltd. Annual Report 2021
2. Construction and operation of pollution control facilities
(1) Wastewater treatment
①The first branch of Zhanjiang Port (Group) Co., Ltd. has a set of temporary rainwater collectionand treatment facilities, and the rainwater is collected and transferred to the second branch fortreatment. The domestic sewage in the port area is assigned to a qualified third party for treatment incompliance with relevant standards, and the equipment and facilities are in normal operation. Thesewage collection and treatment system of Xiashan Port Area is under construction.
②The third branch of Zhanjiang Port (Group) Co., Ltd. has a set of temporary rainwater collectionfacilities, and the rainwater is collected for watering and dust control in the port area after treatment;while domestic sewage in the port area is assigned to a qualified third party for treatment incompliance with relevant standards. The equipment and facilities are in normal operation. The sewagecollection and treatment system of Tiaoshun Port Area is under construction.
③Zhanjiang Port Petrochemical Terminal Co., Ltd. has two sets of wastewater treatment facilities,and the production wastewater and initial rainwater are discharged into the sea after being treated bywastewater treatment facilities.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. The wind and dust suppression wall of 350 meters has beennewly built.
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 Current
China Merchants Port Group Co., Ltd. Annual Report 2021
Environmental 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(Group) Co., Ltd. prepares Contingency Plan for Environmental Emergencies of Zhanjiang Port(Group) Co., Ltd. and has completed the filing of this document (Filing No.440803-2020-0036-H).The first branch of it separately prepares Contingency Plan for Environmental Emergencies of theFirst Branch of Zhanjiang Port (Group) Co., Ltd. and has completed the filing of this document(Filing No.440803-2021-0025-M). The third branch of it also prepares its contingency plan and isgoing through the filing process. Zhanjiang Port Petrochemical Terminal Co., Ltd. prepares theContingency Plan for Environmental Emergencies of Zhanjiang Port Petrochemical Terminal Co.,Ltd. and has completed the filing of this document (Filing No. 440803-2021-0040-H).
5. Environmental self-monitoring program
The first and third branch 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 ofthecompanyorsubsidiarycompany
| 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 Ganghang Co., Ltd. | Administrative penalties for environmental protection problems | The lessees of Shenzhen Mawan Ganghang 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 Ganghang Co., Ltd. talked with the two lessees and established a rectification period. The Operations Department of Shenzhen Mawan Ganghang 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 Ganghang Co., Ltd. |
| Shenzhen Chiwan Port Development Co., Ltd. | Administrative penalties for environmental protection problems | The leasee of Shenzhen Chiwan Port Development Co., Ltd. did not take insufficient dust prevention measures in sand and | A fine of RMB50,000 | No significance influence | Shenzhen Chiwan Port Development Co., Ltd. has timely talked with the lessee as required and set the remediation deadline. Measures are as follows: replan the sand and gravel storage yard functional area; comprehensively cover the unworking sand and gravel storage yard; add sprinkling facilities and sprinklers around the yard; add dust net at the top of storage yard operation area; ensure that the spraying equipment is in the open state during the operation to maintain uninterrupted spray dust; arrange the sprinklers to water the road surface to reduce dust during the operation. |
China Merchants Port Group Co., Ltd. Annual Report 2021
graveloperation
| gravel operation | |||||
| Shenzhen Chiwan Port Development Co., Ltd. | Administrative penalties for environmental protection problems | Two forklift trucks exceeded the standard in exhaust test | A fine of RMB5,000 | No significance influence | The two devices have been installed with particle traps and passed the verification of Shenzhen Academy of Metrology & Quality Inspection. They also passed the reinspection. |
7. Other environmental information that should be disclosed
□ Applicable √ Not applicable
8. Measures taken to decrease carbon emission in the Reporting Period and correspondingeffects
□ Applicable √ Not applicable
9. Other information related to environmental protection
The Company adhered to the concept of "lucid waters and lush mountains are invaluable assets", andstrictly implemented the state's decisions and arrangements on energy conservation andenvironmental protection. It strengthened the bottom-line thinking and red-line awareness, did wellin climate risk prevision and total energy consumption and intensity control, consolidated thefoundation, strengthened weak links, and solved prominent problems of environmental pollution. Ithas made contribution to the stability of energy conservation and environmental protection.Regarding response to climate change, the Company actively responded to the state's low-carbonenergy conservation policy, constantly improved its energy conservation and emission reduction andenvironmental management system, and increased investment in environmental protection year byyear. It has strengthened efforts to identify and respond to climate risks, continued to promote cleanand low-carbon development, and spread advanced concepts of green and environmental protectionto contribute to the goal of "carbon peaking and carbon neutrality". Great efforts were made toidentify climate risks. The Company adhered to the guiding ideology of "prevention first, peopleorientation, scientific and technological improvement, comprehensive management". It promoted theconstruction of an emergency command platform, and made use of the meteorological system andinformation exchange mechanism established by the weather early warning system and localmeteorological departments to improve the early warning and prevention capabilities of suddenclimate risks. Clean and low-carbon development was the focus. The Company endeavored topromote the use of clean energy and low-carbon technology development, and continued to promotedistributed photovoltaic power generation, energy-saving lighting transformation, change from oilinto electricity and other new energy-saving technologies and products. It has contributed wisdomand experience to green water transport, and interpreted the concept of green, energy conservationand environmental protection with practical actions to promote the development of green shipping.
China Merchants Port Group Co., Ltd. Annual Report 2021
Regarding adherence to green operation, the Company continued to strengthen pollution preventionand control in production and operation, promoted recycling and reuse of resources, and strengthenedthe protection of biodiversity. It made active efforts to create a new ecology of green industry, andbuild a green ecological port. Attention was paid to pollution control. The Company strictly observedthe Law of the People's Republic of China on the Prevention and Control of Environmental Pollutionby solid Waste and other environmental laws and regulations. It has carried out environmentalprotection work centering on the goal that "total discharge of major pollutants continues to decrease,environmental risks are effectively controlled, and the environmental protection and energyconservation continue to improve". More efforts were made to promote innovation in environmentalprotection technology and monitoring methods to improve the overall pollution prevention andcontrol. Actions were taken to save resources. The Company actively responded to the state's call tobuild a resource-saving enterprise, encouraged employees to save water and electricity and gopaperless, and integrated the concept of green office into its daily operation. Chiwan Port hasdeveloped the recycling of sewage from its vehicle cleaning yard to continuously improve theutilization of water resources and protect natural resources. Efforts were made to protect biologicaldiversity. The Company attached great importance to the harmonious symbiotic relationship betweenthe enterprise and the local ecological environment system. The "Human-Elephant Peace Fund" wasestablished to provide a solid guarantee for green and circular development in Sri Lanka. TheCompany continued to carry out ecological compensation activities for breeding and releasing water,monitor and protect whales, turtles and grass banks. The site selection and environmental impact ofnew projects were assessed strictly in accordance with relevant requirements to minimize the impacton the surrounding environment and promote the sustainable development of marine undertakings.Regarding the transmission of green value, port is an important channel for a city to connect with theworld. Developing green ports and transmitting green value is an inevitable way to achievesustainable development of ports. The Company actively carried out a variety of green charitableactivities, passing on the concept of green environmental protection. This aims to make thesustainable development concept of green, low-carbon and environmental protection deeply rootedin people's hearts.II Corporate Social Responsibility (CSR)Always upholding the principle of sustainable development and performing its social responsibilitiesproactively, the Company promotes its sustainable development with efforts in continuouslystrengthening environment governance, safeguarding the rights and interests of its employees,
China Merchants Port Group Co., Ltd. Annual Report 2021
attaching importance to occupational health, participating in charitable activities, and responding totargeted poverty alleviation.The Company is always committed to take on historical missions and has a strong sense of socialresponsibilities. During our journey of growth and development, we never steer away from theoriginal goal. We take the lead to address social problems, continue to seek for the matching pointfor mutual development with the society and explore appropriate models for conducting charitablebusiness that meets the needs of the current generation. By leveraging our core strengths to launchprofessional charitable activities, support regional development and preserve fine cultures, we willincorporate social development needs into our daily operation activities and join hands with evenmore partners to create a harmonious society and promote social progress.In 2021, the Company continued to build the "Shaping Blue Dreams Together (C-Blue)" charity brandand to carry out C-Blue Training Program and provide care for left-behind children and alleviatepoverty for rural areas. In terms of activities in China, with the support of the team of "C-Blue"volunteers, the Company hosted CM Port Group's "Caring for You, Standing by You" developmentcamp for students in Weining, Guizhou. This camp was a six-day, five-night camp for 100 teachersand students in Weining County, Guizhou Province and provided them with a platform to enrichthemselves and develop their dreams. Through this program, CM Port Group showed its love andcare for students as well as expressed a wish to stand by them. The 9th China Merchants "C-BlueTraining Program" was held successfully, and 80 C-Blue Talent Program students from 34 countrieson 5 continents completed all courses. The second C-Blue Children's Growth Camp of "C-BlueVolunteers Care for You" in 2021 was upgraded and expanded again in Qiling Town, Wuhua County,Guangdong Province. As for overseas activities, CICT has completed the construction of "LoveVillage" community center in Kalutara District, Sri Lanka. In April, CICT and HIPG jointly launchedthe second "Love Village" project in Sri Lanka and conducted research and initial preparation for thisproject in a village of Hambantota District.Please refer to Corporate Social Responsibility Report of China Merchants Port Group Co., Ltd. in2021 for the fulfillment of social responsibilities in the Reporting Period for details.III Consolidation and Expansion of Poverty Alleviation Outcomes, and Rural RevitalizationIn 2021, after completing the last round of poverty alleviation work, Zhanjiang Port subordinate tothe Company adhered to the concept of poverty alleviation, enthusiasm in charitable activities andharmonious development of CMG. Carrying forward its tradition of "serving the society withsincerity and responsibility", Zhanjiang Port assumed its social responsibility, continued to devote
China Merchants Port Group Co., Ltd. Annual Report 2021
itself to rural revitalization, and quickly started relevant work. For Macheng Village, Hai'an Town,Xuwen County, Zhanjiang, the main area to be supported, Zhanjiang Port selected two Party memberswho are enthusiastic about charity and have strong sense of responsibility to be team membersstationed in the town to support the rural revitalization work. They actively provided assistance, paidvisits and carried out volunteer service activities to express greetings and care."Education is the fundamental driving force of rural revitalization." In 2021, through the charitymodel of rural education revitalization of "Small Cut, Big World" of C-Blue Children's Growth Camp,the Company continued to promote rural revitalization with charitable acts, and to upgrade, innovateand expand rural revitalization in Qiling Town, Wuhua County, Guangdong Province. By carryingout C-Blue Reading Corner, C-Blue Growth Classroom, C-Blue Children's Playground and C-BlueCourses and other activities, it brought C-Blue education assistance and spiritual care to more than5,000 local teachers and students and more than 20,000 rural children's families, which aroused strongresponse and played a demonstration and leading role in the education and care for local left-behindchildren. In the future, with Qiling Town in Wuhua as the starting point and original point, the projectwill continue to deepen and expand the C-Blue Children's Growth Camp from vertical reinforcementand horizontal expansion. Through this project, the Company will continuously strengthen andexpand the care and support for rural children in China.
China Merchants Port Group Co., Ltd. Annual Report 2021
Part VI Significant EventsI Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties, andAcquirers, as well as the Company Itself and other Entities Fulfilled in the Reporting Period orOngoing at the Period-end
Commitment
| Commitment | Promisor | Type of commitment | Details of commitment | Date of commitment making | Term of commitment | Fulfillment |
| Commitments made in acquisition documents or shareholding alteration documents | CMGD and Broadford Global | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment on safeguarding independence of CMPort made by CMGD and its person acting in concert Broadford Global: to safeguard the independence of finance, institutions, business and personnel of CMPort as well as independence and integrity of assets of CMPort. | 15 March 2018 | The commitment on safeguarding independence of CMPort is effective for a long time; the commitment on regulating related-party transactions is effective during the period when CMGD and its persons acting in concert possess control power over the Company | Ongoing |
| CMGD and Broadford Global | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment on regulating related-party transaction made by CMGD and corresponding persons acting in concert- Broadford Global: 1. CMGD/Broadford Global will make a great effort to reduce related-party transaction between CMGD/Broadford Global and its related parties as well as CMPort. Inevitable business dealings or transactions shall be conducted as per marketization principle and fair price and the obligation of information disclosure shall be fulfilled pursuant to provisions; 2. CMGD/Broadford Global and its related parties ensure they will strictly observe related stipulations of laws, regulations, normative documents and Articles of Association of CMPort and equally execute shareholders' rights and fulfill shareholders' obligations together with other shareholders in line with legal program as well as won't seek improper interest with actual controller's status or damage legitimate interest of CMPort and other shareholders; 3. The above commitment is continuously effective during the period when CMGD/Broadford Global has the right to control CMPort. In | 15 March 2018 | The commitment on safeguarding independence of CMPort is effective for a long time; the commitment on regulating related-party transactions is | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
case of losses incurred by CMGD/Broadford Global failing tofulfill the above commitment to CMPort, CMGD will bearcorresponding compensation responsibility.
| case of losses incurred by CMGD/Broadford Global failing to fulfill the above commitment to CMPort, CMGD will bear corresponding compensation responsibility. | effective during the period when CMGD and its persons acting in concert possess control power over the Company | |||||
| CMG | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment on regulating related-party transaction: 1. China Merchants Group will try its best to reduce related-party transaction between it and its related parties and CMPort. Inevitable business dealings or transactions shall be conducted as per marketization principle and fair price and the obligation of information disclosure shall be fulfilled pursuant to provisions; 2. China Merchants Group ensure they will strictly observe related stipulations of laws, regulations, normative documents and Articles of Association of CMPort and equally execute shareholders' rights and fulfill shareholders' obligations together with other shareholders in line with legal program as well as won't seek improper interest with actual controller's status or damage legitimate interest of CMPort and other shareholders; 3. The above commitment is continuously effective during the period when China Merchants Group has the right to control CMPort. In case of losses incurred by China Merchants Group failing to fulfill the above commitment to CMPort, China Merchants Group will bear corresponding compensation responsibility. | 15 March 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing | |
| Commitments made in time of asset restructuring | CMPID | Commitment on restriction on share trading | 1. CMPort shares obtained by purchasing assets with shares issued this time are forbidden to be transferred or transacted in the market before the latter one between the date arising 36 months after the date when CMPort shares gained by CMPID based on this transaction are registered under the name of CMPID and the date when fulfillment of compensation obligations set forth in the Impairment Compensation Agreement for Issuing Shares To Purchase Assets signed by and between CMPID and CMPort, separately and its supplementary agreement (if any) is over (except for repurchasing or presenting shares pursuant to Impairment Compensation Agreement for Issuing Shares To Purchase Assets and its supplementary agreement (if any)); 2. In case of closing price of CMPort stocks being lower than issue price for consecutive 20 transaction days within 6 months after completion of the transaction or such closing price being lower than issue price at the end of the 6th month after completion of the transaction, the lockup period of CMPort stocks held by CMPID will be automatically lengthened for at least 6 months; 3. CMPort shares which derive from consideration shares obtained by CMPID based on the transaction during the lockup period due to CMPort distributing stock dividend and capital reserve converted into increased capital shall be subject to the commitment regarding the above restricted stock trade period; 4. In case that the transaction is placed on file for investigation and prosecution by judiciary authorities as well as registered and investigated by CSRC because false record, misleading statement or important omission happens to provided or disclosed information, CMPID won't transfer its shares with rights and interests at CMPort before case investigation conclusion is drawn; 5. In case that lockup period set forth in the commitment is inconsistent with regulatory opinions from securities market supervision department or lockup period | 26 December 2018 | 25 June 2022 | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
required by related provisions, CMPID shall adjust the abovelockup period pursuant to regulatory opinions from relevantsecurities market supervision department and relatedprovisions. 6. After the above lockup period expires, CMPIDshall observe provisions of laws and regulations, related rulesof Shenzhen Stock Exchange as well as Articles of Associationof CMPort in case of reducing shares held by it.
| required by related provisions, CMPID shall adjust the above lockup period pursuant to regulatory opinions from relevant securities market supervision department and related provisions. 6. After the above lockup period expires, CMPID shall observe provisions of laws and regulations, related rules of Shenzhen Stock Exchange as well as Articles of Association of CMPort in case of reducing shares held by it. | |||||
| CMPID | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment on avoiding horizontal competition: 1. CMPID and other enterprise controlled by CMPID fail to engage in or participate in business or activity which is similar with and constitutes or likely constitutes competitive relation with main business conducted by CMPort and the enterprise controlled by it now; 2. CMPID will try its best to promote CMPID and other enterprise controlled by CMPID not to directly or indirectly engage in or participate in or assist to engage in or participate in any business or activity which constitutes or likely constitutes competitive relation with main business conducted by CMPort and the enterprise controlled by it now and in the future independently or together with others; 3. In case of discovering any new business opportunity which constitutes or likely constitutes direct or indirect competitive relation with main business of CMPort or the enterprise controlled by it, CMPID or CMPID and other enterprise controlled by it will immediately notify CMPort in written as well as make a great effort to promote such business opportunity to be provided to CMPort or the enterprise controlled by it firstly according to reasonable and fair terms and conditions; 4. In case of CMPort or the enterprise controlled by it waiving such competitive new business opportunity and CMPID or/and other enterprise controlled by it engaging in such competitive business, CMPort or the enterprise controlled by it will have the right to purchase any stock rights, assets or other rights and interests in the above competitive business from CMPID or/and other enterprise controlled by it once or several times at any moment, or CMPort will select entrusted operation, leasing or contract operation of assets or businesses of CMPID or/and other enterprise controlled by it in the above competitive business as per the mode permitted by national laws and regulations; 5. When CMPID and other enterprise controlled by it plans to transfer, sell, rent out, conduct licensed use of or transfer or allow to use assets and businesses which constitutes or likely constitutes direct or indirect competitive relationship with main business of CMPort or the enterprise controlled by it in other way, CMPID and other enterprise controlled by it will provide the right of priority assignment to CMPort or the enterprise controlled by it and promise to make a great effort to promote other enterprise controlled by CMPID provide CMPort or the enterprise controlled by it with the right of priority assignment under the above situation; 6. As of the date when the commitment letter is provided, CMPID promises to compensate all actual losses, damages and expenses arising from violation of any clause in the commitment letter by CMPID or the enterprise controlled by it to CMPort or the enterprise controlled by it. | 26 July 2018 | Effective until no-longer to be the largest shareholder of the Company | Ongoing |
| CMPID | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment on regulating related-party transaction: 1. CMPID and other enterprise controlled by it will make a great effort to avoid and reduce related-party transaction between CMPort and economic entity controlled by it; 2. CMPID and other enterprise controlled by it will exercise stockholder's rights in accordance with related provisions of relevant laws and regulations as well as Articles of Association of CMPort and fulfill the obligation of vote avoidance at the moment of voting for related-party transactions involved by CMPID and other enterprise controlled by it at the stockholders' meeting; 3. As for related-party transaction which is inevitable or occurs due to reasonable reason, CMPID will carry out transaction pursuant | 26 July 2018 | Effective until no-longer to be the largest shareholder of the Company | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
to the principle of openness, fairness and justice for markettransaction and based on fair and reasonable market price,perform related-party transaction decision-making process andlegally fulfill information disclosure obligation to safeguardbenefits of CMPort and other shareholders of CMPort in linewith provisions of laws, regulations, normative documents andArticles of Association of CMPort; 4. It's ensured that nolegitimate interest of CMPort and other shareholders of CMPortis damaged by related-party transaction based on status andinfluence of CMPort; 5. CMPID will promote other enterprisecontrolled by it to observe the commitment of Subparagraph 1-4; 6. In case of CMPID and other enterprise controlled by itviolating the above commitment, causing rights and interests ofCMPort and its shareholders are damaged, CMPID will takecorresponding compensation responsibility according to law.
| to the principle of openness, fairness and justice for market transaction and based on fair and reasonable market price, perform related-party transaction decision-making process and legally fulfill information disclosure obligation to safeguard benefits of CMPort and other shareholders of CMPort in line with provisions of laws, regulations, normative documents and Articles of Association of CMPort; 4. It's ensured that no legitimate interest of CMPort and other shareholders of CMPort is damaged by related-party transaction based on status and influence of CMPort; 5. CMPID will promote other enterprise controlled by it to observe the commitment of Subparagraph 1-4; 6. In case of CMPID and other enterprise controlled by it violating the above commitment, causing rights and interests of CMPort and its shareholders are damaged, CMPID will take corresponding compensation responsibility according to law. | |||||
| CMPID | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment about keeping independence of CMPort: 1. After the transaction is completed, CMPID will strictly observe related provisions regarding independence of listed Companies from CSRC and won't violate standard operating procedures of CMPort based on the first majority shareholder, conduct excessive intervention of operation and management activities of CMPort and its subsidiary, embezzle benefits of CMPort and its subsidiary or damage legitimate interest of CMPort and other shareholders; 2. CMPID will ensure CMPort is independent from CMPID and related parties in the aspects of business, asset, finance, personnel and institution; 3. CMPID ensures independence of CMPort, CMPID and other enterprise controlled by it fail to occupy capitals and resources of CMPort based on violation in any way and will strictly observe provisions of rules and regulations for avoiding occupation of related party funds from CMPort as well as related laws, regulations and normative documents; 4. The commitment letter takes effect as of the signature date of CMPID as well as is legally binding upon CMPID. CMPID ensures it will strictly fulfill various commitments in the commitment letter and will take corresponding legal responsibility for losses incurred to CMPort due to violation of related commitment. | 26 July 2018 | Effective until no-longer to be the largest shareholder of the Company | Ongoing |
| CMG | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment on avoiding horizontal competition: 1. China Merchants Group and the enterprise controlled by it (excluding CMPort Holdings and the enterprise controlled it) fail to engage in or participate in any business or activity which is similar with and constitutes or likely constitute direct or indirect competitive relationship with main business conducted by CMPort and the enterprise controlled by it now; 2. China Merchants Group will try its best to promote enterprises controlled by it(except for CMPort and the enterprise controlled by it) not to directly or indirectly engage in or participate in or assist to engage in or participate in any business or activity which constitutes or likely constitutes competitive relation with main business conducted by CMPort and the enterprise controlled by it now and in the future independently or together with others; 3. In case of discovering any new business opportunity which constitutes and likely constitutes direct or indirect competitive relation with main business of CMPort or the enterprise controlled by it, China Merchants Group or enterprise controlled by it(except for CMPort and the enterprise controlled by it) will immediately notify CMPort in written as well as make a great effort to promote such business opportunity to be provided to CMPort or the enterprise controlled by it firstly according to reasonable and fair terms and conditions; 4. In case of CMPort or the enterprise controlled by it waives such competitive new business opportunity and China Merchants Group or the enterprise controlled by it (except for CMPort and the enterprise controlled by it) engaging in such competitive business, CMPort or the enterprise controlled by it will be entitled to | 26 July 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
purchase any equities, assets and other rights and interests inthe above competitive business from China Merchants Groupor the enterprise controlled by it (except for CMPort and theenterprise controlled by it) once or several times at any momentor CMPort will select entrusted operation, leasing or contractoperation of assets or businesses of China Merchants Group orthe enterprise controlled by it (except for CMPort and theenterprise controlled by it) in the above competitive businessaccording to the mode permitted by national laws andregulations; 5. When China Merchants Group and the enterprisecontrolled by it (except for CMPort and the enterprisecontrolled by it) plans to transfer, sell, lease, allow to use ortransfer or allow to use asset and business which constitutes orlikely constitutes direct or indirect competitive relationshipwith main business of CMPort or the enterprise controlled by itin other way, China Merchants Group and the enterprisecontrolled by it (except for CMPort and the enterprisecontrolled by it) will provide the right of priority assignmentfor CMPort or the enterprise controlled by it and promise tomake a great effort to promote the enterprise controlled byChina Merchants Group to provide the of priority assignmentfor CMPort or the enterprise controlled by it under the abovesituation; 6. As of the date when the commitment letter isprovided, China Merchants Group promises to compensate allactual losses, damages and expenses arising from violation ofany clause in the commitment letter by China Merchants Groupor the enterprise controlled by it to CMPort or the enterprisecontrolled by it.
| purchase any equities, assets and other rights and interests in the above competitive business from China Merchants Group or the enterprise controlled by it (except for CMPort and the enterprise controlled by it) once or several times at any moment or CMPort will select entrusted operation, leasing or contract operation of assets or businesses of China Merchants Group or the enterprise controlled by it (except for CMPort and the enterprise controlled by it) in the above competitive business according to the mode permitted by national laws and regulations; 5. When China Merchants Group and the enterprise controlled by it (except for CMPort and the enterprise controlled by it) plans to transfer, sell, lease, allow to use or transfer or allow to use asset and business which constitutes or likely constitutes direct or indirect competitive relationship with main business of CMPort or the enterprise controlled by it in other way, China Merchants Group and the enterprise controlled by it (except for CMPort and the enterprise controlled by it) will provide the right of priority assignment for CMPort or the enterprise controlled by it and promise to make a great effort to promote the enterprise controlled by China Merchants Group to provide the of priority assignment for CMPort or the enterprise controlled by it under the above situation; 6. As of the date when the commitment letter is provided, China Merchants Group promises to compensate all actual losses, damages and expenses arising from violation of any clause in the commitment letter by China Merchants Group or the enterprise controlled by it to CMPort or the enterprise controlled by it. | |||||
| CMG | Commitments on horizontal competition, related-party transaction and capital occupation | Commitment on regulating related-party transaction: 1. China Merchants Group and other enterprise controlled by it will make a great effort to avoid and reduce related-party transaction between CMPort and economic entity controlled by it; 2. China Merchants Group and other enterprise controlled by it will exercise stockholder's rights in accordance with related provisions of relevant laws and regulations as well as Articles of Association of CMPort and fulfill the obligation of vote avoidance at the moment of voting for related-party transactions involved by China Merchants Group and other enterprise controlled by it at the stockholders' meeting; 3. As for related transaction which is inevitable or occurs due to reasonable reason, China Merchants Group will carry out transaction pursuant to the principle of openness, fairness and justice for market transaction and based on fair and reasonable market price, perform related-party transaction decision-making process and legally fulfill information disclosure obligation to safeguard benefits of CMPort and other shareholders of CMPort in line with provisions of laws, regulations, normative documents and Articles of Association of CMPort; 4. It's ensured that no legitimate interest of CMPort and other shareholders of CMPort is damaged by related-party transaction based on status and influence of CMPort; 5. China Merchants Group promotes other enterprise controlled by it to observe the commitment set forth in Subparagraph 1-4 above; 6. In case of China Merchants Group and other enterprise controlled by it violating the above commitment, causing rights and interests of CMPort and its shareholders are damaged, China Merchants Group will take corresponding compensation responsibility according to law. | 26 July 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing |
| CMG | Commitments on horizontal competition, related-party transaction and capital | Commitment about keeping independence of CMPort: 1. After the transaction is completed, China Merchants Group will strictly observe related provisions regarding independence of listed companies from CSRC and won't violate standard operating procedures of CMPort based on actual controller's status, conduct excessive intervention of operation and management activities of CMPort and its subsidiary, embezzle benefits of CMPort and its subsidiary or damage legitimate | 26 July 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
occupation
| occupation | interest of CMPort and other shareholders; 2. China Merchants Group will ensure CMPort is independent from China Merchants Group and related parties in the aspects of business, asset, finance, personnel and institution; 3. China Merchants Group ensures independence of CMPort, China Merchants Group and other enterprise controlled by it fail to occupy capitals and resources of CMPort based on violation in any way and will strictly observe provisions of rules and regulations for avoiding occupation of related party funds from CMPort as well as related laws, regulations and normative documents; 4. The commitment letter takes effect as of the signature date of China Merchants Group as well is legally binding upon China Merchants Group. China Merchants Group ensures it will strictly fulfill various commitments in the commitment letter and will take corresponding legal responsibility for losses incurred to listed Company due to violation of related commitment. | ||||
| CMG | Other commitment | Commitment letter about perfecting the property ownership certificate for land and house property of CMPort Holdings and the enterprise subordinate to it: 1. China Merchants Group will spare no effort to assist, promote and drive CMPort Holdings and the enterprise subordinate to it to standardize, perfect and solve ownership defects of properties such as land and house property; 2. The following situations happen to CMPort Holdings and the enterprise subordinate to it before completion of the transaction: (1) Land use right of ownership certificate which is being handled, the house property failing to be timely handled (except for results incurred by force majeure, law, policy, government administration behavior and change in planned use of the land instead of CMPort Holdings and the enterprise subordinate to it); Or (2) Land use right of ownership certificate, the property ownership certificate failing to be handled (except for results incurred by force majeure, law, policy, government administration behavior and change in planned use of the land of CMPort Holdings and the enterprise subordinate to it); Or (3) In case of nonstandard other land use right and house property (except for results incurred by force majeure, law, policy, government administration behavior and change in planned use of the land instead of CMPort Holdings and the enterprise subordinate to it) and encountering actual losses (including but not limited to compensation, fine, expenditure and benefit lost), China Merchants Group will timely and fully compensate CMPort. | 26 July 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing |
| CMG | Other commitment | Commitment letter about real estate leased by CMPort Holdings and the enterprise subordinate to it: In case of nonstandard situation of the leased property significantly influencing use of CMPort Holdings and the Company subordinate to it to engage in operation of normal business, China Merchants Group will actively take effective measures (including but not limited to arranging to provide the property with identical or similar conditions to be used for operation of related Company) to promote business operation of related Company to be conducted normally and alleviate or eliminate adverse effect; In case of nonstandard of the leased property causing CMPort Holdings and the enterprise subordinate to it produce actual additional expenditures or losses (such as third-party compensation), China Merchants Group will actively coordinate and negotiate with other related party to support normal operation of CMPort Holdings and the enterprise subordinate to it to the great extent and avoid or control continuous enlargement of the damage; At the same time, China Merchants Group agrees compensate CMPort Holdings and the enterprise subordinate to it in cash for actual losses incurred to CMPort Holdings and the enterprise subordinate to it for this reason to relieve or eliminate adverse effect. | 26 July 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
CMG
| CMG | Other commitment | Commitment letter about allotted land of the enterprise subordinate to China Merchants Port Holdings Company Limited from China Merchants Group: In case that the above allotted land is withdrawn or needs to be translated into assignment land due to policy adjustment in the future after the transaction is completed, China Merchants Group will actively coordinate with CMPort and related companies such as China Merchants Group International Port (Qingdao) Co., Ltd. and Shantou CMPort Group Co., Ltd. to handle the transfer procedure or take other feasible countermeasures. In case of any actual loss (excluding land-transferring fees or rent, fees paid for taking rural land, ownership registration fees, taxes and dues and other related expenses to be paid by Chiwan Wharf or above-mentioned related companies according to provisions of laws and regulations) incurred to CMPort or above-mentioned related companies for this reason, China Merchants Group will timely and fully compensate actual loss incurred to CMPort or above-mentioned related companies. | 26 July 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing |
| CMG | Other commitment | Commitment letter about undertaking the accreditation fees of property ownership certificate for the perfection of the land and house property of CMPort Holdings and the enterprise subordinate to it: In case of defective land use right and house property involved by the Company subordinate to CMPort Holdings on account of operation (namely land use right and house property of the Company subordinate to CMPort Holdings without complete ownership certificate existing before the transaction is completed), incurring registration fees such as taxes and dues, compensation and fine in the process of perfecting legal procedures of defective land use right and house property by the subordinate to CMPort Holdings, China Merchants Group will timely and fully compensate to the Company subordinate to CMPort Holdings for undertaking. | 14 September 2018 | Effective until no-longer to be the actual controller of the Company | Ongoing |
| CMG | Other commitment | Commitment letter about related matters of CMPort after the transaction is completed: After the transaction is completed, Chiwan Wharf will become port business asset management headquarters and domestic capital operation platform of China Merchants Group, deeply participate in integration of domestic regional port assets and enlarge the scale of domestic listed assets to make net profit of CMPort Holdings (00144.HK) enjoyed as per the rights and interests in the consolidated statement of listed Company in recent one fiscal year fail to exceed 50% net profit of consolidated statement of the listed Company and net asset of CMPort Holdings (00144.HK) enjoyed in light of rights and interests in the consolidated statement of listed Company in recent one fiscal year fail to exceed 30% net asset in the consolidated statement of the listed Company within 3-5 years after the transaction is completed. | 30 September 2018 | Three to five years and CMG is the actual controller of the Company | Ongoing |
| CMG | Other commitment | China Merchants Group and all its directors, supervisors and administrative officers ensure the transaction report, its abstract, other information provided for the transaction and application document are true, accurate and complete without false record, misleading statement or important omission as well as take individual and joint legal liability for false record, misleading statement or important omission. If the information provided or disclosed by this transaction is suspected of false records, misleading statements or major omissions, and is investigated by the judicial authorities or investigated by the China Securities Regulatory Commission (CSRC), the directors, supervisors or senior managers of China Merchants Group do not transfer the shares that have interests in listed Company, and submit the written application and stock account of the suspension of the transfer to the Board of Directors of the CMPort within two trading days after receiving the filing inspection notice, and the Board of Directors shall apply for lock-up on behalf of the CMG Hong Kong to the Stock | 26 July 2018 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
Exchange and Registration and Settlement Company. In caseof failing to file a locking application within two transactiondays and after the Board of Directors is authorized forverification, identity information and account information ondirectors, supervisors or administrative officers of ChinaMerchants Group will be directly submitted to Stock Exchangeand Registration and Settlement Company with lockingapplied; In case of Board of Directors failing to submit identityinformation and account information on directors, supervisorsor administrative officers of China Merchants Group to StockExchange and Registration and Settlement Company, StockExchange and Registration and Settlement Company will beauthorized to directly lock related shares. In case that thesituation of violating laws and rules is found upon investigationconclusion, directors, supervisors or administrative officers ofChina Merchants Group promise locked shares are voluntarilyused for compensating related investors.
| Exchange and Registration and Settlement Company. In case of failing to file a locking application within two transaction days and after the Board of Directors is authorized for verification, identity information and account information on directors, supervisors or administrative officers of China Merchants Group will be directly submitted to Stock Exchange and Registration and Settlement Company with locking applied; In case of Board of Directors failing to submit identity information and account information on directors, supervisors or administrative officers of China Merchants Group to Stock Exchange and Registration and Settlement Company, Stock Exchange and Registration and Settlement Company will be authorized to directly lock related shares. In case that the situation of violating laws and rules is found upon investigation conclusion, directors, supervisors or administrative officers of China Merchants Group promise locked shares are voluntarily used for compensating related investors. | |||||
| CMG Hong Kong | Other commitment | 1. CMG Hong Kong ensures related information provided for the transaction is true, accurate and complete without false record, misleading statement or important omission; 2. CMG Hong Kong ensures the data provided to CMPort and all intermediary organs participating in the transaction is true, accurate and complete original written data or data copy. Data copy is consistent with original data and signature and seal of all the documents are true. The signatory of such documents is legally authorized and effectively signs such documents without any false record, misleading statement or important omission; 3. CMG Hong Kong ensures descriptions and confirmations issued for the transaction is true, accurate and complete without false record, misleading statement or important omission; 4. CMG Hong Kong ensures that statutory disclosure and report obligation has been performed, and no contracts, agreements, arrangements or miscellaneous that should have been disclosed exists; 5. The CMG Hong Kong made the commitment that if the information provided or disclosed by this transaction is suspected of false records, misleading statements or major omissions, and is investigated by the judicial authorities or investigated by the China Securities Regulatory Commission (CSRC), it does not transfer the shares that have interests in listed Company, and submit the written application and stock account of the suspension of the transfer to the Board of Directors of the CMPort within two trading days after receiving the filing inspection notice, and the Board of Directors shall apply for lock-up on behalf of the CMG Hong Kong to the Stock Exchange and Registration and Settlement Company. In case of failing to file a locking application within two transaction days and after the Board of Directors is authorized for verification, identity information and account information on CMG Hong Kong will be directly submitted to Stock Exchange and Registration and Settlement Company with locking applied; In case of Board of Directors failing to submit identity information and account information on CMG Hong Kong to Stock Exchange and Registration and Settlement Company, Stock Exchange and Registration and Settlement Company will be authorized to directly lock related shares. If the investigation finds that there is a violation of the law, CMG Hong Kong committed to lock the shares voluntarily for the relevant investor compensation; 6. If CMG Hong Kong promises to related document, data and information provided in the reorganization process aren't true, accurate or complete or are with false record, misleading statement or important omission, CMG Hong Kong is willing to legally bear corresponding legal responsibility; 7. In case of CMG Hong Kong violating the above promise, incurring losses to CMPort, CMG Hong Kong will take corresponding compensation responsibility. | 26 July 2018 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
CMPID
| CMPID | Other commitment | 1. CMPID ensures related information provided for the transaction is true, accurate and complete without false record, misleading statement or important omission; 2. CMPID ensures the data provided to CMPort and all intermediary organs participating in the transaction is true, accurate and complete original written data or data copy. Data copy is consistent with original data and signature and seal of all the documents are true. The signatory of such documents is legally authorized and effectively signs such documents without any false record, misleading statement or important omission; 3. CMPID ensures description and confirmation provided for the transaction are true, accurate and complete without any false record, misleading statement or important omission; 4. CMPID ensures that statutory disclosure and report obligation has been performed, and no contracts, agreements, arrangements or miscellaneous that should have been disclosed exists; 5. The CMPID made the commitment that if the information provided or disclosed by this transaction is suspected of false records, misleading statements or major omissions, and is investigated by the judicial authorities or investigated by the China Securities Regulatory Commission (CSRC), it does not transfer the shares that have interests in CMPort, and submit the written application and stock account of the suspension of the transfer to the Board of Directors of the CMPort within two trading days after receiving the filing inspection notice, and the Board of Directors shall apply for lock-up on behalf of the CMG Hong Kong to the Stock Exchange and Registration and Settlement Company. If the application for lock-up is not submitted within two transaction days, the Board of Directors is authorized to verify and submit the identity information and account information of CMPID directly to the Stock Exchange and Registration and Settlement Company and apply for lock-up; If the Board of Directors fails to submit the identity information and account information of the CMPID to the Stock Exchange and Registration and Settlement Company, then the Stock Exchange and Registration and Settlement Company shall be authorized to directly lock the relevant shares. If the investigation finds that there is a violation of the law, CMPID committed to lock the shares voluntarily for the relevant investor compensation; 6. If CMPID promises to related document, data and information provided in the reorganization process aren't true, accurate or complete or are with false record, misleading statement or important omission, CMPID is willing to legally bear corresponding legal responsibility; 7. In case of CMPID violating the above commitment, incurring losses to CMPort, CMPID will take corresponding compensation responsibility. | 26 July 2018 | Effective continuously | Ongoing |
| CMPort Holdings | Other commitment | 1. CMPort Holdings ensures related information provided for the transaction is true, accurate and complete without false record, misleading statement or important omission; 2. CMPort Holdings ensures the data provided to CMPort and all intermediary organs participating in the transaction is true, accurate and complete original written data or data copy. Data copy is consistent with original data and signature and seal of all the documents are true. The signatory of such documents is legally authorized and effectively signs such documents without any false record, misleading statement or important omission; 3. CMPort Holdings ensures description and confirmation provided for the transaction are true, accurate and complete without any false record, misleading statement or important omission; 4. CMPort Holdings ensures that statutory disclosure and report obligation has been performed, and no contracts, agreements, arrangements or miscellaneous that should have been disclosed exists; 5. CMPort Holdings made the commitment that if the information provided or disclosed by this transaction is suspected of false records, misleading | 26 July 2018 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
statements or major omissions, and is investigated by thejudicial authorities or investigated by the China SecuritiesRegulatory Commission (CSRC); CMPort Holdings committedthat if CMPort Holdings violated the above promise, incurringlosses to CMPort, CMPort Holdings will take correspondingcompensation responsibility.
| statements or major omissions, and is investigated by the judicial authorities or investigated by the China Securities Regulatory Commission (CSRC); CMPort Holdings committed that if CMPort Holdings violated the above promise, incurring losses to CMPort, CMPort Holdings will take corresponding compensation responsibility. | |||||
| CMG | Other commitment | 1. China Merchants Group ensures related information provided for the transaction is true, accurate and complete without false record, misleading statement or important omission; 2. China Merchants Group ensures the data provided to CMPort and all intermediary organs participating in the transaction is true, accurate and complete original written data or data copy. Data copy is consistent with original data and signature and seal of all the documents are true. The signatory of such documents is legally authorized and effectively signs such documents without any false record, misleading statement or important omission; 3. China Merchants Group ensures descriptions and confirmations issued for the transaction is true, accurate and complete without false record, misleading statement or important omission; 4. China Merchants Group ensures that statutory disclosure and report obligation has been performed, and no contracts, agreements, arrangements or miscellaneous that should have been disclosed exists; 5. China Merchants Group made the commitment that if the information provided or disclosed by this transaction is suspected of false records, misleading statements or major omissions, and is investigated by the judicial authorities or investigated by the China Securities Regulatory Commission (CSRC), it does not transfer the shares that have interests in CMPort, and submit the written application and stock account of the suspension of the transfer to the Board of Directors of the CMPort within two trading days after receiving the filing inspection notice, and the Board of Directors shall apply for lock-up on behalf of China Merchants Group to the Stock Exchange and Registration and Settlement Company. In case of failing to file a locking application within two transaction days and after the Board of Directors is authorized for verification, identity information and account information of China Merchants Group will be directly submitted to Stock Exchange and Registration and Settlement Company with locking applied; In case of Board of Directors failing to submit identity information and account information of China Merchants Group to Stock Exchange and Registration and Settlement Company, Stock Exchange and Registration and Settlement Company will be authorized to directly lock related shares. If the investigation finds that there is a violation of the law, China Merchants Group committed to lock the shares voluntarily for the relevant investor compensation; 6. If China Merchants Group promises to related document, data and information provided in the reorganization process aren't true, accurate or complete or are with false record, misleading statement or important omission, China Merchants Group is willing to legally bear corresponding legal responsibility; In case of China Merchants Group violating the above promise, incurring losses to CMPort, China Merchants Group will take corresponding compensation responsibility. | 26 July 2018 | Effective continuously | Ongoing |
| Chiwan Wharf and all directors, supervisors and senior management | Other commitment | Chiwan Wharf and all its directors, supervisors and administrative officers ensure the transaction report, its abstract, other information provided for the transaction and application document are true, accurate and complete without false record, misleading statement or important omission as well as take individual and joint legal liability for false record, misleading statement or important omission. If the information provided or disclosed by this transaction is suspected of false records, misleading statements or major omissions, and is investigated by the judicial authorities or investigated by the China Securities Regulatory Commission (CSRC), the | 26 July 2018 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
directors, supervisors, or senior managers of Chiwan Wharf donot transfer the shares that have interests in CMPort, andsubmit the written application and stock account of thesuspension of the transfer to the Board of Directors of theCMPort within two trading days after receiving the filinginspection notice, and the Board of Directors shall apply forlock-up on behalf of them to the Stock Exchange andRegistration and Settlement Company. In case of failing to filea locking application within two transaction days and after theBoard of Directors is authorized for verification, identityinformation and account information on directors, supervisorsor administrative officers of Chiwan Wharf will be directlysubmitted to Stock Exchange and Registration and SettlementCompany with locking applied; In case of Board of Directorsfailing to submit identity information and account informationon directors, supervisors or administrative officers of ChiwanWharf to Stock Exchange and Registration and SettlementCompany, Stock Exchange and Registration and SettlementCompany will be authorized to directly lock related shares. Incase that the situation of violating laws and rules is found uponinvestigation conclusion, directors, supervisors oradministrative officers of Chiwan Wharf promise locked sharesare voluntarily used for compensating related investors.
| directors, supervisors, or senior managers of Chiwan Wharf do not transfer the shares that have interests in CMPort, and submit the written application and stock account of the suspension of the transfer to the Board of Directors of the CMPort within two trading days after receiving the filing inspection notice, and the Board of Directors shall apply for lock-up on behalf of them to the Stock Exchange and Registration and Settlement Company. In case of failing to file a locking application within two transaction days and after the Board of Directors is authorized for verification, identity information and account information on directors, supervisors or administrative officers of Chiwan Wharf will be directly submitted to Stock Exchange and Registration and Settlement Company with locking applied; In case of Board of Directors failing to submit identity information and account information on directors, supervisors or administrative officers of Chiwan Wharf to Stock Exchange and Registration and Settlement Company, Stock Exchange and Registration and Settlement Company will be authorized to directly lock related shares. In case that the situation of violating laws and rules is found upon investigation conclusion, directors, supervisors or administrative officers of Chiwan Wharf promise locked shares are voluntarily used for compensating related investors. | ||||||
| Other commitments made to minority shareholders | China Nanshan Development (Group) Inc. | Other commitment | CND Group will irrevocably and unconditionally agrees it will ensure transferee of such land use right and its successor and assignee will be fully exempted from responsibility for the above matters in case of CMPort encountering losses, needing to bear expenses and liabilities, undergoing claim for compensation or needing to file a lawsuit due to any actual or potential illegal and unenforceable issues incurred by land use agreement and relevant documents signed and to be signed by it. | 20 March 2001; 18 June 2003; 29 September 2004 | Effective continuously | Ongoing |
| China Nanshan Development (Group) Inc. | Other commitment | In order to properly solve the issue regarding the ownership of the land of 270,692 square meters transferred to CMPort by CND Group as a contribution, CND Group hereby irrevocably undertakes as follows: 1. CND Group affirms the historical fact that it contributed to the restructuring and listing of Chiwan Wharf with the right to use 270,692 square meters of land in 1993. Besides, it affirms that the 270,692 square meters of land has been transferred to CMPort (formerly known as Chiwan Wharf) and the right to use the land is owned by CMPort. 2. CND Group will continue keeping the original undertaking and ensure that the signing of the relevant agreement will not damage CMPort's rights and interests of 148,119 square meters of land transferred in 1993 to CMPort (formerly, Chiwan Wharf) as a contribution. 3. CND Group will continue giving full play to its advantages to fully support land-related authorities in Shenzhen City to secure CMPort's right to use the 270,692 square meters of land. Moreover, CND Group will continue to actively assist CMPort in going through the corresponding procedures for the change of ownership of property rights and perfect legal procedures related to the right to use the land (e.g., defining the boundary line of land, land surveying, and claiming for the certificate of land). In addition, CND Group undertakes to cover all costs incurred accordingly (including the land premium). 4. All consequent losses to CMPort shall be borne by CND Group, should the latter break the above undertaking. Furthermore, CND Group will shoulder all liabilities for damage, if the asset integrity of the listed company, CMPort, is damaged. | 2 July 2020 | Effective continuously | Ongoing | |
| CMG | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised in this non-public offering is RMB10,917,111,500. In order to ensure that the compensation measures for the dilution of immediate returns in this non-public offering can be | 13 July 2021 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
effectively implemented, in accordance with the Opinions ofthe General Office of the State Council on FurtherStrengthening the Work of Protection of the Legitimate Rightsand Interests of Minority Investors in the Capital Markets(G.B.F. [2013 No. 110), the Guiding Opinions on Mattersconcerning the Dilution of Immediate Return in Initial PublicOffering, Refinancing and Material Asset Restructuring(Announcement of the China Securities RegulatoryCommission [2015] No. 31) and other laws, regulations andnormative documents, as the controlling shareholder and actualcontroller of the issuer of the non-public offering, I herebymake a commitment as follows concerning the dilution ofimmediate returns and compensation measures in connectionwith the non-public offering:
1. I will not interfere in the operation and management
activities of the Company beyond its authority and will notencroach on its interests.
2. From the date of issuance of this commitment to the
completion of the non-public offering of the Company, if theregulatory authority has other requirements on the measures tocompensate the returns and the relevant provisions of thecommitment, and the commitment cannot meet the relevantrequirements of the regulatory authority, I will make asupplementary commitment in accordance with relevantregulations.
| effectively implemented, in accordance with the Opinions of the General Office of the State Council on Further Strengthening the Work of Protection of the Legitimate Rights and Interests of Minority Investors in the Capital Markets (G.B.F. [2013 No. 110), the Guiding Opinions on Matters concerning the Dilution of Immediate Return in Initial Public Offering, Refinancing and Material Asset Restructuring (Announcement of the China Securities Regulatory Commission [2015] No. 31) and other laws, regulations and normative documents, as the controlling shareholder and actual controller of the issuer of the non-public offering, I hereby make a commitment as follows concerning the dilution of immediate returns and compensation measures in connection with the non-public offering: 1. I will not interfere in the operation and management activities of the Company beyond its authority and will not encroach on its interests. 2. From the date of issuance of this commitment to the completion of the non-public offering of the Company, if the regulatory authority has other requirements on the measures to compensate the returns and the relevant provisions of the commitment, and the commitment cannot meet the relevant requirements of the regulatory authority, I will make a supplementary commitment in accordance with relevant regulations. | |||||
| CMG | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised by this non-public offering is RMB10,917,111,500, which will be subscribed by Seaport Group in a lump sum in cash. As the actual controller of CMPort, the company hereby make a commitment as follows: In connection with this non-public offering, the company does not provide financial assistance, compensation, promise of benefits or other similar arrangements to Seaport Group, directly or through its stakeholders. | 16 November 2021 | Effective continuously | Ongoing |
| Broadford Global | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised in this non-public offering is RMB10,917,111,500. In order to ensure that the compensation measures for the dilution of immediate returns in this non-public offering can be effectively implemented, in accordance with the Opinions of the General Office of the State Council on Further Strengthening the Work of Protection of the Legitimate Rights and Interests of Minority Investors in the Capital Markets (G.B.F. [2013 No. 110), the Guiding Opinions on Matters concerning the Dilution of Immediate Return in Initial Public Offering, Refinancing and Material Asset Restructuring (Announcement of the China Securities Regulatory Commission [2015] No. 31) and other laws, regulations and normative documents, as the controlling shareholder and actual controller of the issuer of the non-public offering, I hereby make a commitment as follows concerning the dilution of immediate returns and compensation measures in connection with the non-public offering: 1. I will not interfere in the operation and management activities of the Company beyond its authority and will not encroach on its interests. 2. From the date of issuance of this commitment to the completion of the non-public offering of the Company, if the regulatory authority has other requirements on the measures to compensate the returns and the relevant provisions of the commitment, and the commitment cannot meet the relevant requirements of the regulatory authority, I will make a supplementary commitment in accordance with relevant regulations. | 13 July 2021 | Effective continuously | Ongoing |
| Broadford Global | Other commitme | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund | 16 November 2021 | Effective | Ongoi |
China Merchants Port Group Co., Ltd. Annual Report 2021
nt
| nt | raised by this non-public offering is RMB10,917,111,500, which will be subscribed by Seaport Group in a lump sum in cash. As the controlling shareholder of CMPort, the company hereby make a commitment as follows: In connection with this non-public offering, the company does not provide financial assistance, compensation, promise of benefits or other similar arrangements to Seaport Group, directly or through its stakeholders. | continuously | ng | ||
| Directors and senior management of CMPort | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised in this non-public offering is RMB10,917,111,500. In order to ensure that the compensation measures for the dilution of immediate returns in this non-public offering can be effectively implemented, in accordance with the Opinions of the General Office of the State Council on Further Strengthening the Work of Protection of the Legitimate Rights and Interests of Minority Investors in the Capital Markets (G.B.F. [2013 No. 110), the Guiding Opinions on Matters concerning the Dilution of Immediate Return in Initial Public Offering, Refinancing and Material Asset Restructuring (Announcement of the China Securities Regulatory Commission [2015] No. 31) and other laws, regulations and normative documents, as a director and senior management member of the issuer of the non-public offering, I hereby make a commitment as follows concerning the dilution of immediate returns and compensation measures in connection with the non-public offering: 1. I will not transfer benefits to other units or individuals for free or under unfair conditions, nor will I damage the interests of the Company in other ways. 2. I will regulate my personal business consumption behavior. 3. I will not use the Company's assets to engage in investment and consumption activities unrelated to the performance of my duties. 4. The salary system formulated by the board of directors or the remuneration committee is linked to the implementation of the Company's return compensation measures. 5. If the Company intends to implement equity incentives, the exercise conditions of such equity incentive are linked to the implementation of the Company's return compensation measures. 6. From the date of issuance of this commitment to the completion of the non-public offering of the Company, if the regulatory authority has other requirements on the measures to compensate the returns and the relevant provisions of the commitment, and the commitment cannot meet the relevant requirements of the regulatory authority, I will make supplementary commitments in accordance with relevant regulations. | 13 July 2021 | Effective continuously | Ongoing |
| CMPort | Other commitment | Ningbo Port intends to issue A shares to CMPort in a non-public manner. As the subscription target of Ningbo Port's 2021 non-public offering of A-shares, CMPort irrevocably makes the following statements and commitments: Ningbo Port's 2021 non-public offering of A-shares is Ningbo Port's non-public offering of A-shares to CMPort. After the completion of Ningbo Port's non-public offering of A-shares to CMPort, the business relationship and management relationship between Ningbo Zhoushan Port Group, Seaport Group and the subordinate enterprises controlled by them and Ningbo Port will not change substantially, and it will not lead to new or potential competition in the same industry between Ningbo Port and Ningbo Zhoushan Port Group, Seaport Group and the subordinate enterprises controlled by them. Assuming that 3,646,971,029 shares are issued (i.e., 23.07% of the total share capital prior to issuance), after the completion of Ningbo Port's non-public offering of A-shares to CMPort, CMPort holds 20.98% shares of Ningbo Port and 2.10% shares of Ningbo Port | 13 July 2021 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
through China Merchants Ningbo. Thus, CMPort holds 23.08%shares of Ningbo Port in total. It will not lead to changes in thecontrolling shareholder and actual controller of Ningbo Port, soit will not lead to new or potential competition between NingboPort and CMPort and its controlling shareholder and actualcontroller.CMPort warrants that it has the right to enter into this Letter ofStatements and Commitments, and once this Letter ofStatements and Commitments is entered into by CMPort, it willconstitute an effective, legal and binding responsibility uponthe CMPort, and this Letter of Statements and Commitmentswill remain valid and irrevocable during the period whenCMPort is as a shareholder of Ningbo Port. CMPort warrantsthat it will strictly fulfill all commitments in this Letter ofStatements and Commitments. In case of any loss caused toNingbo Port due to its violation of this Letter of Statements andCommitments, CMPort will bear relevant legal responsibilities.
| through China Merchants Ningbo. Thus, CMPort holds 23.08% shares of Ningbo Port in total. It will not lead to changes in the controlling shareholder and actual controller of Ningbo Port, so it will not lead to new or potential competition between Ningbo Port and CMPort and its controlling shareholder and actual controller. CMPort warrants that it has the right to enter into this Letter of Statements and Commitments, and once this Letter of Statements and Commitments is entered into by CMPort, it will constitute an effective, legal and binding responsibility upon the CMPort, and this Letter of Statements and Commitments will remain valid and irrevocable during the period when CMPort is as a shareholder of Ningbo Port. CMPort warrants that it will strictly fulfill all commitments in this Letter of Statements and Commitments. In case of any loss caused to Ningbo Port due to its violation of this Letter of Statements and Commitments, CMPort will bear relevant legal responsibilities. | |||||
| CMPort | Other commitment | CMPort intends to fully subscribe the shares issued through non-public offering by Ningbo Port with cash. It is expected that after the issuance, CMPort and its subsidiary China Merchants Ningbo will hold about 23.08% of shares of Ningbo Port in total. CMPort and Ningbo Port continue to be independent from each other in assets, personnel, finance, organization and business. The A-shares issued by Ningbo Port to CMPort through non-public offering will not affect the independent operation ability of Ningbo Port. The statements on the independent operation of Ningbo Port after the completion of its non-public offering of A-shares to CMPort are as follows: i. Independent assets After the non-public offering of A-shares by Ningbo Port to CMPort, Ningbo Port still has complete and independent ownership of all its assets, which are strictly separated from the assets of CMPort and completely operated independently. There is no mixed operation, unclear assets, or fund or assets occupied by CMPort. ii. Independent personnel After the non-public offering of A-shares by Ningbo Port to CMPort, Ningbo Port will continue to have an independent and complete labor and personnel management system, which is completely independent from CMPort. The selection of directors, supervisors, managers and other senior management personnel recommended by CMPort to Ningbo Port shall be carried out through legal procedures. CMPort shall not interfere with the personnel appointment and removal decisions made by the board of directors and the general meeting of Ningbo Port. iii. Independent finance After the non-public offering of A-shares by Ningbo Port to CMPort, Ningbo Port will continue to maintain an independent financial accounting department, operate an independent accounting system and independent a financial management system. It will keep its independent bank account and will not share the bank account with CMPort. It will pay taxes independently and make independent financial decisions, and CMPort will not interfere in the use of funds of Ningbo Port. CMPort will not interfere with the use of funds of Ningbo Port in any illegal or rule-violating way, and Ningbo Port will not provide guarantee for other enterprises controlled by CMPort. No Ningbo Port's financial employee will work part-time in CMPort. iv. Independent organizations Ningbo Port will continue to maintain a sound corporate governance structure of joint-stock company. It has an independent and complete organizational structure. Its general meeting, board of directors, independent directors, board of supervisors and senior management exercise their functions and powers independently in accordance with laws, regulations and | 13 July 2021 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
articles of association. It is in no subordinate or controllingrelationship with the functional departments of other enterprisescontrolled by CMPort.v. Independent businessNingbo Port has an independent management system, assets,personnel, venues and brands to carry out businessindependently, and the ability to operate independently andcontinuously in the market. CMPort will not intervene inNingbo Port's business activities other than the exercise of itsrights as a shareholder.
| articles of association. It is in no subordinate or controlling relationship with the functional departments of other enterprises controlled by CMPort. v. Independent business Ningbo Port has an independent management system, assets, personnel, venues and brands to carry out business independently, and the ability to operate independently and continuously in the market. CMPort will not intervene in Ningbo Port's business activities other than the exercise of its rights as a shareholder. | |||||
| CMPort | Other commitment | Ningbo Port intends to issue A-shares to CMPort in a non-public manner. As the subscription target of Ningbo Port's 2021 non-public offering of A-shares, CMPort makes the following commitments: The fund used by CMPort to subscribe for the 2021 non-public offering of A-shares by Ningbo Port in accordance with the Share Subscription Agreement between Ningbo Zhoushan Port Company Limited and China Merchants Port Group Co., Ltd. is self-owned fund or self-raised fund. There is no external fund raising, proxy holding, structural arrangement or direct or indirect use of funds of Ningbo Zhoushan Port Company Limited and its related parties for this subscription. There is no financial support, compensation, promise of income or other arrangements by Ningbo Zhoushan Port Company Limited or its controlling shareholder or actual controller to CMPort directly or through its stakeholders. | 13 July 2021 | Effective continuously | Ongoing |
| CMPort | Other commitment | CMPort intends to fully subscribe the shares issued through non-public offering by Ningbo Port with cash. It is expected that after the issuance, CMPort and its subsidiary China Merchants Ningbo will hold about 23.08% of shares of Ningbo Port in total. CMPort's statements on non-transfer within 36 months after completion of subscription are as follows: The shares non-publicly offered by Ningbo Port that CMPort subscribes shall not be transferred within 36 months from the date of the end of the non-public offering of A-shares by Ningbo Port to CMPort. The shares derived from the company's distribution of stock dividends and the conversion of capital reserve fund into equity regarding the shares subscribed for by CMPort through this non-public offering shall also comply with the above lock-in arrangement. | 13 July 2021 | Effective continuously | Ongoing |
| CMPort | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, the fund raised in this non-public offering is RMB10,917,111,500. In order to further ensure the use of the funds raised in this non-public offering, the Company makes statements as follows: 1. The Company intends to use the proceeds of this non-public share offering to supplement working capital and repay debts, and it does not involve real estate development projects. 2. The fund raised by the Company in this non-public offering shall not be used for real estate development or in a disguised form. | 29 September 2021 | Effective continuously | Ongoing |
| CMPort | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised by this non-public offering is RMB10,917,111,500, which will be subscribed by Seaport Group in a lump sum in cash. The Company hereby makes commitments as follows: In connection with this non-public offering, the Company does not make a commitment on guarantee income or disguised guarantee income to Seaport Group, nor does it provide financial assistance, compensation, promise of benefits or other similar arrangements to Seaport Group, directly or through its stakeholders. | 29 September 2021 | Effective continuously | Ongoing |
| CMPort | Other commitment |
CMPort makes the following commitments regarding thereduction of shares involved in the 2021 non-public offering ofA-shares by Ningbo Port:
| 18 November 2021 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
1. CMPort, its persons acting in concert and related parties
controlled by CMPort have not reduced their holdings of sharesof Ningbo Port from the six months prior to benchmark pricingdate of Ningbo Port's 2021 non-public offering of A-shares tothe date of issuance of this Letter of Commitment.
2. CMPort, its persons acting in concert and related parties
controlled by CMPort will not have the plan to reduce theirholdings of shares of Ningbo Port from the date of issuance ofthis Letter of Commitment to the six months after thecompletion of Ningbo Port's 2021 non-public offering of A-shares.
3. CMPort, its persons acting in concert and related parties
controlled by CMPort will not violate Article 44 of theSecurities Law of the People's Republic of China.
4. In case of any violation of the above commitments, the
income from the reduction in holdings of shares of Ningbo Portobtained by CMPort, its persons acting in concert and relatedparties controlled by CMPort will all be owned by Ningbo Port,and they bear the legal liabilities arising therefrom according tolaw.
| 1. CMPort, its persons acting in concert and related parties controlled by CMPort have not reduced their holdings of shares of Ningbo Port from the six months prior to benchmark pricing date of Ningbo Port's 2021 non-public offering of A-shares to the date of issuance of this Letter of Commitment. 2. CMPort, its persons acting in concert and related parties controlled by CMPort will not have the plan to reduce their holdings of shares of Ningbo Port from the date of issuance of this Letter of Commitment to the six months after the completion of Ningbo Port's 2021 non-public offering of A-shares. 3. CMPort, its persons acting in concert and related parties controlled by CMPort will not violate Article 44 of the Securities Law of the People's Republic of China. 4. In case of any violation of the above commitments, the income from the reduction in holdings of shares of Ningbo Port obtained by CMPort, its persons acting in concert and related parties controlled by CMPort will all be owned by Ningbo Port, and they bear the legal liabilities arising therefrom according to law. | |||||
| CMPort | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised by this non-public offering is RMB10,917,111,500. The Company hereby makes the following commitments regarding the Qualification Certificate of Real Estate Development Enterprise of the People's Republic of China (Number: SH.F.K.Z. (2017) No. 879) obtained by Shenzhen Jinyu Rongtai Investment Development Co., Ltd (hereinafter referred to as "Jinyu Rongtai"), a wholly-owned subsidiary of the Company: The Company will actively coordinate Jinyu Rongtai to handle the cancellation of the aforesaid real estate development qualification certificate. Within 30 days after approval of relevant laws and regulations, regulatory regulations and competent housing authorities, Jinyu Rongtai will apply to the competent housing department for the cancellation of real estate development qualification registration. Before the cancellation or expiration of the qualification, the Company and Jinyu Rongtai will not use the qualification to engage in real estate development and operation and other related businesses. After qualification cancellation or invalidity, qualification renewal or new real estate development qualification will not be handled. | 19 November 2021 | Effective continuously | Ongoing |
| CMPort | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised by this non-public offering is RMB10,917,111,500, which will be subscribed by Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. in a lump sum in cash. The Company makes commitments in connection with the fund raised in this non-public offering as follows: The proceeds from this non-public offering of shares will not flow into China Nanshan Development (Group) Co., Ltd. through any direct or indirect means. | 16 December 2021 | Effective continuously | Ongoing |
| CMPort | Other commitment | CMPort intends to issue 576,709,537 RMB ordinary shares (A shares) to specific targets in a non-public manner, and the fund raised by this non-public offering is RMB10,917,111,500, which will be subscribed by Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. in a lump sum in cash. The Company hereby makes commitments as follows: Prior to the completion of the use of the fund raised in this non-public offering or within 36 months after the fund is raised, no additional investment (including capital increase, loan, guarantee and capital investment in other forms) shall be made in industrial funds and M&A funds that do not conform to the Company's upstream and downstream industrial chain or the Company's main business and strategic development direction. | 7 January 2022 | Effective continuously | Ongoing |
China Merchants Port Group Co., Ltd. Annual Report 2021
Whetherfulfilledon time
| Whether fulfilled on time | Yes |
| Specific reasons for failing to fulfill commitments on time and plans for next step (if any) | N/A |
2. Where there Had Been an Earnings Forecast for an Asset or Project and the ReportingPeriod Was still within the Forecast Period, Explain why the Forecast Has Been Reached forthe Reporting Period.? Applicable √ Not applicableII Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Partiesfor Non-Operating Purposes? Applicable √ Not applicableDuring the Reporting Period, the controlling shareholder or its related parties did not occupy capitalor repay for non-operating purposes. Deloitte Touche Tohmatsu Certified Public Accountants LLPissued the Special Report on Occupation of the Company’s Capital by the Controlling Shareholderand Other Related Parties, and refer to www.cninfo.com.cn for detailsIII Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.IV Explanations Given by the Board of Directors Regarding the Independent Auditor’s“Modified Opinion” on the Financial Statements of the Latest Period? Applicable √ Not applicableV Explanations Given by the Board of Directors, the Supervisory Committee and IndependentDirectors (if any) Regarding the Independent Auditor’s “Modified Opinion” on the FinancialStatements of the Reporting Period? Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
VI YoY Changes to Accounting Policies, Estimates or Correction of Material AccountingErrors
□ Applicable √ Not applicable
No such cases in the Reporting Period.VII YoY Changes to the Scope of the Consolidated Financial StatementsOn 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 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 accountingprocessing 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.VIII Engagement and Disengagement of Independent AuditorCurrent independent auditor
Name of the domestic independent auditor
| Name of the domestic independent auditor | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
China Merchants Port Group Co., Ltd. Annual Report 2021
The Company’s payment to the domesticindependent auditor (RMB’0,000)
| The Company’s payment to the domestic independent auditor (RMB’0,000) | 703.71 |
| How many consecutive years the domestic independent auditor has provided audit service for the Company | 10 |
| Names of the certified public accountants from the domestic independent auditor writing signatures on the auditor’s report | Xu Xiangzhao, Pi Dehan |
| How many consecutive years the certified public accountants have provided audit service for the Company | 1 |
| Name of the overseas independent auditor (if any) | Deloitte Touche Tohmatsu |
| The Company’s payment to the overseas independent auditor (RMB’0,000) (if any) | 359.08 |
| How many consecutive years the overseas independent auditor has provided audit service for the Company (if any) | 10 |
| Names of the certified public accountants from the overseas independent auditor writing signatures on the auditor’s report (if any) | Hu Jinghua |
| How many consecutive years the certified public accountants have provided audit service for the Company (if any) | 1 |
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.? Yes √ NoIndependent auditor, financial advisor or sponsor engaged for the audit of internal controls:
Approved by the 3
rd Meeting of the 10
th
Board of Directors in 2021 and 2020 Annual General Meetingof the Company, the Company was allowed to continuously engage Deloitte Touche TohmatsuCertified Public Accountants LLP as the 2021 independent auditor for the audit of annual financialstatements and internal control in the 2021. The audit price for 2021 annual financial statements wasRMB10.1939 million and the price for internal control was RMB0.434 million. The total expense onaforesaid two audit work was RMB10.6279 million.IX Possibility of Delisting after Disclosure of this Report? Applicable √ Not applicableX Insolvency and Reorganization? Applicable √ Not applicableNo such cases in the Reporting Period.XI Major Legal Matters? Applicable √ Not applicableNo such cases in the Reporting Period.Other legal matters
| Basic situation of | Lawsuit | Whether | Process of lawsuit | Trial results and | Situation of | Disclo | Disclo |
China Merchants Port Group Co., Ltd. Annual Report 2021
lawsuit (arbitration)
| lawsuit (arbitration) | amount (RMB ‘0,000) | form into estimated liabilities | (arbitration) | influences of lawsuit (arbitration) | execution of judgment of lawsuit (arbitration) | sure date | sure index |
| Summary of Brazil TCP Case (note) | 2,0780.79 | Partly | In progress | Relatively low risk | - | - | - |
| Summary of other matters not meeting the disclosure standards for major lawsuits (arbitrations) | 21,024.00 | Partly | In progress | Relatively low risk | - | - | - |
Note: This represents the significant contingent liabilities arising from the litigations between TCP and itssubsidiaries and local tax authority, employee or former employee of TCP and its subsidiaries in Brazil at as theyear end. According to the latest estimates of the Company’s management, the possible compensation isRMB207,807,928.33 but it is not likely to cause outflow of economic benefits from the Company. Therefore, thecontingent liabilities arising from the above pending litigations are not recognized as provisions. The counter-bonification where the Company as the beneficiary will be executed by the former TCP shareholder that disposedthe shares. According to the counter-bonification agreement, the former TCP shareholder need to make counter-bonification to the Company in respect of the above contingent liabilities, with the compensation amount notexceeding pre-determined amount and specified period.XII Punishments and Rectifications? Applicable √ Not applicableNo such cases in the Reporting Period.XIII Credit Quality of the Company as well as Its Controlling Shareholder and ActualController? Applicable √ Not applicableXIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
| Related party | Relationship with the Company | Type of transaction | Specific transaction | Pricing principle | Transaction price (RMB’0,000) | 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 (RMB’0,000) | Disclosure date | Index to disclosed information |
China Merchants Port Group Co., Ltd. Annual Report 2021
LiaoningPortGroupCo., Ltd.and itssubsidiaries
| 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 from related party | Lease, labor cost, information service income, etc. | Market price | 19,087.72 | 19,087.72 | 20.66% | 29,728.29 | No | Settled monthly | 19,087.72 | 31 March 2021 | www.cninfo.com.cn (Announcement No. 2021-021) |
| 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 | 14,925.75 | 14,925.75 | 19.24% | 13,522.24 | Yes | Settled monthly | 14,925.75 | 31 March 2021 | www.cninfo.com.cn (Announcement No. 2021-021) |
| 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 | 16,285.64 | 16,285.64 | 18.85% | 14,637.11 | Yes | Settled monthly | 16,285.64 | 31 March 2021 | www.cninfo.com.cn (Announcement No. 2021-021) |
| 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 | 9,123.15 | 9,123.15 | 10.24% | 9,506.17 | No | Settled monthly | 9,123.15 | 31 March 2021 | www.cninfo.com.cn (Announcement No. 2021-021) |
| Total | -- | -- | 59,422.26 | -- | 67,393.81 | -- | -- | -- | -- | -- | |||
| Large-amount sales return in detail | None | ||||||||||||
China Merchants Port Group Co., Ltd. Annual Report 2021
Give the actual situation in theReporting Period (if any) where anestimate had been made for the totalvalue of continuing related-partytransactions by type to occur in theReporting Period
| 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. The actual occurrence of the company's daily related transactions in 2021 is significantly different from the expected event, which is due to the company's actual market demand and business development needs, and is a normal business adjustment of the company, which does not have a significant impact on the company's daily operations and performance. The transaction price is based on market principles It is determined that the pricing is fair, fair and just, and there is no situation that damages the interests of the company and minority shareholders. |
| 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
Whether there are credits and liabilities with non-operating related parties
√ Yes ? No
Credits receivable with related parties
| 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 deposit | No | 275,114.92 | 6,577,235.92 | 6,505,918.26 | 1.65%- 3.16% | 3,293.16 | 346,432.58 |
| 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 | The ultimate | Borrowing | 10,903.32 | 9,096.68 | 0 | 3.41% | 730.92 | 20,022.73 |
China Merchants Port Group Co., Ltd. Annual Report 2021
MerchantsBank
| Merchants Bank | controlling shareholder has major influence on it | |
| 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
Deposit business
| Related party | Related relationship | Daily maximum limits (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount | Ending balance (RMB’0,000) | |
| Total deposited amount (RMB’0,000) | Total withdrawn amount (RMB’0,000) | ||||||
| China Merchants Group Finance Co., Ltd. | Other company under the same control of controlling shareholder | 500,000.00 | 1.495%-2.1% | 168,575.51 | 1,668,091.74 | 1,618,844.16 | 217,823.09 |
Loan business
| Related party | Related relationship | Loan limit (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount | Ending balance (RMB’0,000) | |
| Total loan amount (RMB’0,000) | Total repaid amount (RMB’0,000) | ||||||
| China Merchants Group Finance Co., Ltd. | Other company under the same control of controlling shareholder | 1,000,000.00 | 1.2%-5.5125% | 312,437.74 | 486,882.23 | 402,898.27 | 396,421.70 |
Credit or other finance business
| Related party | Related relationship | Type of business | Total amount (RMB’0,000) | Actual amount (RMB’0,000) |
| China Merchants Group Finance Co., Ltd. | Other company under the same control of controlling shareholder | Credit | 1,000,000.00 | 396,421.70 |
The Company did not make deposits in, receive loans or credit from and was not involved in anyother finance business with any related finance company or any other related parties.
6. Transactions with Related Parties by Finance Company Controlled by the Company? Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
7. Other Major Related-Party Transactions
(1) The Company held the third meeting of the Tenth Board of Directors on 29 March 2021, andreviewed and approved the Proposal on the Related-Party Transactions Regarding Making Depositsin and Obtaining Loans from China Merchants Bank in 2021, which was submitted to the 2020Annual General Meeting of the Company for deliberation. The Company held the 2020 AnnualGeneral Meeting on 28 May 2021, and deliberated and approved the Proposal on the Related-PartyTransactions Regarding Making Deposits in and Obtaining Loans from China Merchants Bank in2021, agreeing the Company and its subsidiaries to open bank accounts with China Merchants Bank.In 2021, the maximum deposit balance of the Company and its subsidiaries with China MerchantsBank shall not exceed RMB5 billion, and the maximum loan balance shall not exceed RMB10 billion.For details, please refer to the Announcement on the Related-Party Transactions Regarding MakingDeposits in and Obtaining Loans from China Merchants Bank in 2021 (Announcement No. 2021-022) disclosed by the Company on 31 March 2021, the Announcement on the Resolution of the 2020General Meeting of Shareholders (Announcement No. 2021-047) disclosed by the Company on 29May 2021 and other relevant announcements.According to the business development needs and capital management requirements, the Companyheld the fourth meeting of the Tenth Board of Directors on 30 August 2021, and reviewed andapproved the Proposal on Adjustment of the Amount of Deposits and Loans in China Merchants Bankand Related-Party Transaction, which was submitted to the 2021 First Extraordinary GeneralMeeting of Shareholders for deliberation. The Company held the 2021 First Extraordinary GeneralMeeting of Shareholders on 27 September 2021, deliberated and approved the Proposal onAdjustment of the Amount of Deposits and Loans in China Merchants Bank and Related-PartyTransaction, agreeing to adjust the deposit and loan amount of the Company with China MerchantsBank, with the adjusted maximum deposit balance not exceeding RMB15 billion and maximum creditbalance not exceeding RMB20 billion. For details, please refer to the Announcement on theAdjustment of the Amount of Deposits and Loans in China Merchants Bank and Related-PartyTransaction (Announcement No. 2021-076) disclosed by the Company on 31 August 2021, theAnnouncement on the Resolution of 2021 First Extraordinary General Meeting of Shareholders(Announcement No. 2021-087) disclosed by the Company on 28 September 2021 and other relevantannouncements.
(2) The Company held the 3rd Extraordinary Meeting of the 10th Board of Directors in 2021 on 28April 2021, and reviewed and approved the Proposal on Related-Party Transaction regardingConducting Entrusted Wealth Management with Self-Owned Idle Funds, agreeing that the Company
China Merchants Port Group Co., Ltd. Annual Report 2021
may use self-owned idle funds to entrust wealth management through financial institutions approvedand regulated by the China Banking and Insurance Regulatory Commission (CBIRC) (including butnot limited to the related party China Merchants Bank) on the premise of not affecting the fundsrequired for the Company's daily business and effective control of investment risks. The entities usingthe quota include the Company and its subsidiaries within the consolidated scope, and the totalamount shall not exceed RMB3 billion. For details, please refer to the Announcement on Related-Party Transaction regarding Conducting Entrusted Wealth Management with Self-Owned Idle Funds(Announcement No. 2021-038) disclosed by the Company on 30 April 2021.
(3) The Company held the 6th Extraordinary Meeting of the 10th Board of Directors in 2021 and theThird Extraordinary Meeting of the 10th Board of Directors in 2021 on 13 July 2021, and reviewedand unanimously approved the Proposal on the Company's Non-public Offering of A-Shares, theProposal on the Company as a Strategic Investor Subscribing to the Non-public Offering of Sharesof Ningbo Zhoushan Port Company Limited and Related-Party Transaction and other proposals,agreeing the Company to introduce the Seaport Group as a strategic investor and non-publicly offeredA shares of RMB577 million (accounting for 30% of the total share capital of the Company beforethe offering) to Seaport Group to raise RMB10,917 million, and agreeing the Company to participatein the subscription of non-publicly offered 3,646,971,029 A shares of Ningbo Port in 2021 in cash asa strategic investor. For details, please refer to the Announcement on the Signing of ShareSubscription Agreement with Specific Target with Conditions in Force and Related-Party Transaction(Announcement No. 2021-038) disclosed by the Company on 14 July 2021, the Announcement onthe Company as a Strategic Investor Subscribing to the Non-public Offering of Shares of NingboZhoushan Port Company Limited and Related-Party Transaction and other relevant announcements.
(4) The Company held the 2nd Extraordinary Meeting of the 10th Board of Directors in 2020 on 30November 2020, and reviewed and approved the Proposal on the Establishment of Investment Fundunder the Joint Capital Investment with Related Parties and Related-Party Transaction, agreeing thatthe Company and its related party, China Merchants Venture and its managed China MerchantsVenture Fund, jointly invest in the establishment of CMPort (Shenzhen) Industrial Innovation PrivateEquity Investment Fund Partnership (Limited Partnership) (hereinafter referred to as the "Fund").On 26 October 2021, the Fund has completed the first phase of fund raising of RMB200.04 million,of which, China Merchants Venture Fund has contributed RMB100 million (accounting for 49.99%),CMPort has contributed RMB100 million (accounting for 49.99%) and China Merchants Venture hascontributed RMB40,000 (0.02%). All relevant parties have signed the Fund Partnership Agreement,the Fund Industry Investment Advisory Agreement and other relevant agreements. The Fund has
China Merchants Port Group Co., Ltd. Annual Report 2021
performed the business registration procedures, completed the filing with the Asset ManagementAssociation of China on 22 October 2021, and obtained the Certificate of Filing of Private InvestmentFunds. For details, please refer to the Announcement on the Establishment of Investment Fund underthe Joint Capital Investment with Related Party and Related-Party Transaction (Announcement No.2021-095) disclosed by the Company on 26 October 2021.In January 2022, in view of the fact that the Fund had not commenced actual investment activities,and based on the overall planning of the Company's capital operation, the Company, China MerchantsVenture and China Merchants Venture Fund unanimously agreed to dissolve the Fund and go throughthe corresponding liquidation and cancellation procedures in accordance with the provisions of thePartnership Law of the People's Republic of China and other relevant laws and regulations and thepartnership agreement related to the Fund. For details, please refer to the Announcement on the Exitof Investment Fund (Announcement No. 2022-001) disclosed by the Company on 8 January 2022.
(5) The Company held the 12th Extraordinary Meeting of the 10th Board of Directors in 2021 on 3December 2021, and reviewed and approved the Proposal on Transferring 49% Equity of the JointStock Company Zhanjiang Merchants Port City Investment Co., Ltd. to a Related Party and RelatedParty Transaction, agreeing Broadford Shenzhen, a related party of the Company, to acquire 49%equity interest in Zhanjiang Merchants Port City Investment Co., Ltd. held by Zhanjiang Port, aholding subsidiary of the Company, through an open listing on the Shanghai United Assets and EquityExchange(SUAEE). For details, please refer to the Announcement on Transferring 49% Equity of theJoint Stock Company Zhanjiang Merchants Port City Investment Co., Ltd. to a Related Party andRelated Party Transaction (Announcement No. 2021-109) disclosed by the Company on 4 December2021.Information on the disclosure website for current announcements on significant related-partytransactions:
Name of provisional reports
| Name of provisional reports | Disclosure date | Website |
| Announcement on Deposit and Loan of Related-party Transaction in 2021 at China Merchants Bank | 31 March 2021 | www.cninfo.com.cn (Announcement No. 2021-022) |
| Announcement on Related-Party Transaction regarding Conducting Entrusted Wealth Management with Self-Owned Idle Funds | 30 April 2021 | www.cninfo.com.cn (Announcement No. 2021-038) |
| Announcement on Signing Conditionally Effective Share Subscription Agreement with Certain Entities & Related-party Transaction | 14 July 2021 | www.cninfo.com.cn (Announcement No. 2021-055) |
| Announcement on Subscription by the Company as a Strategic Investor of Shares in a Private Placement of Ningbo Zhoushan Port Company Limited & Related-party Transaction | 14 July 2021 | www.cninfo.com.cn (Announcement No. 2021-057) |
China Merchants Port Group Co., Ltd. Annual Report 2021
Announcement on Adjustments to the Deposit andLoan Limits with China Merchants Bank &Related-party Transaction
| Announcement on Adjustments to the Deposit and Loan Limits with China Merchants Bank & Related-party Transaction | 31 August 2021 | www.cninfo.com.cn (Announcement No. 2021-076) |
| Announcement on Progress of Establishing an Investment Fund and Related-party Transaction jointly with Related Parties through Investments | 26 October 2021 | www.cninfo.com.cn (Announcement No. 2021-095) |
| Announcement on Transfer of 49% of Equity Interest in Joint Stock Company Zhanjiang Merchants Port City Investment Co., Ltd. to Related Parties & Related-party Transaction | 4 December 2021 | www.cninfo.com.cn (Announcement No. 2021-109) |
| Announcement on the Exit of Investment Fund | 8 January 2022 | www.cninfo.com.cn (Announcement No. 2022-001) |
XV Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
Details of entrustmentOn 13 December 2018, the Company held the 10th Extraordinary Meeting in 2018 of the 9th Boardof Directors, 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 to theCompany for management (hereinafter referred to as the “Entrustment”).On 30 December 2021, the Company signed with China Merchants (Liaoning) Port Development Co.,Ltd. the Termination Agreement between China Merchants Port Group Co., Ltd. and China Merchants(Liaoning) Port Development Co., Ltd. on the Share Custody Agreement of Liaoning Port Group Co.,Ltd., in which the two sides agreed to terminate the custody, and to end the custody agreement since1 January 2022. The Company will no longer be entrusted to manage Liaoning Port Group. For details,please refer to the Notice on Termination of Custody disclosed by the Company on 31 December2021 (Notice No.: 2021-120).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.
China Merchants Port Group Co., Ltd. Annual Report 2021
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major guarantees
(1) Guarantees
Unit: RMB’0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those
for subsidiaries)
| Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries) | ||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Terminal Link S.A.S. | N/A | 6,512.24 | 11 June 2013 | 6,512.24 | General guarantee | About 20 years | Not | Yes |
| KHOR AMBADO FZCO | 30 March 2019 | 18,338.11 | 24 May 2019 | 11,039.47 | 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 balance of such guarantees in the Reporting Period (A2) | - | |||||
| Total approved line for such guarantees at the end of the Reporting Period (A3) | 31,850.35 | Total actual balance of such guarantees at the end of the Reporting Period (A4) | 17,551.71 | |||||
| Guarantee between the Company to its subsidiaries | ||||||||
| Obligor | Disclosure date of the | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a |
China Merchants Port Group Co., Ltd. Annual Report 2021
guarantee lineannouncement
| guarantee line announcement | 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 | Yes | Not |
| Chiwan Wharf Holdings (Hong Kong) Limited | 31 March 2021 | 150,000.00 | 120,000.00 | Joint-liability | About 1 year | Not | Not | |
| Zhanjiang Port (Group) Co., Ltd. | 16 April 2020 | 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) | 120,000.00 | |||||
| Total approved line for such guarantees at the end of the Reporting Period (B3) | 350,000.00 | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 120,000.00 | |||||
| Guarantees provided between subsidiaries | ||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | 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 | 59,010.00.00 | 1 Jan 2021 | 7,000.00 | Joint and several liability guarantee | About 2 Years | Not | Not |
| Shenzhen Jinyu Rongtai Investment development Co., LTD | Not Applicable | 80,000.00 | 12 Jan 2017 | 64,000.00 | Joint and several liability guarantee | About 10 Years | Not | Not |
| China Merchants International (China) Investment Co., LTD | Not Applicable | 2,500.00 | 30 Jun 2016 | 2,500.00 | Joint and several liability guarantee | About 10 Years | Not | Not |
| China Merchants Finance Company Limited | 4 May 2012 | 318,370.00 | 4 May 2012 | 318,370.00 | General guarantee | About 10 Years | Not | Not |
| China Merchants Finance Company Limited | 3 Aug 2015 | 318,370.00 | 3 Aug 2015 | 318,370.00 | General guarantee | About 10 Years | Not | Not |
China Merchants Port Group Co., Ltd. Annual Report 2021
CMHI Finance (BVI)Co., Ltd
| CMHI Finance (BVI) Co., Ltd | 6 Aug 2018 | 573,066.00 | 6 Aug 2018 | 573,066.00 | General guarantee | About 5 Years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 6 Aug 2018 | 382,044.00 | 6 Aug 2018 | 382,044.00 | General guarantee | About 10 Years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 26 Sept 2020 | 509,392.00 | 9 Oct 2020 | 382,044.00 | General guarantee | About 3 Years | Not | Not |
| 127,348.00 | General guarantee | About 5 Years | Not | Not | ||||
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | Not Applicable | 14,340.02 | 16 Sept 2012 | 14,340.02 | General guarantee | About 13 Years | Not | Not |
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | Not Applicable | 9,551.10 | 16 Sept 2012 | 9,551.10 | General guarantee | Infinite | Not | Not |
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | Not Applicable | 15,918.50 | 16 Sept 2012 | 15,918.50 | General guarantee | Infinite | Not | Not |
| Lome Container Terminals Co., Ltd | Not Applicable | 2,528.47 | 1 Jun 2015 | 872.32 | General guarantee | About 9 Years | Not | Not |
| Lome Container Terminals Co., Ltd | Not Applicable | 2,528.47 | 1 Jun 2015 | 872.32 | General guarantee | About 9 Years | Not | Not |
| Lome Container Terminals Co., Ltd | Not Applicable | 2,528.47 | 1 Jun 2015 | 872.32 | General guarantee | About 9 Years | Not | Not |
| China Merchants Port Development (Shenzhen) Co., LTD | Not Applicable | 320,000.00 | 31 Jul2017 | 15,334.00 | Joint and several liability guarantee | About 5 Years | Yes | Not |
| TCP - TERMINAL DE CONTElNERES DE PARANAGUA S/A. | Not Applicable | 26,578.52 | 19 April 2018 | 15,947.11 | General guarantee | About 6 Years | Not | Not |
| TCP - TERMINAL DE CONTElNERES DE PARANAGUA S/A. | Not Applicable | 48,964.30 | 7 Nov 2016 | 34,274.68 | General guarantee | About 6 Years | Not | Not |
| Shenzhen Haixin Port Development Co., LTD | 30 March 2019 | 219,090.00 | 26 Jun 2019 | 18,830.08 | Joint and several liability guarantee | About 18 Years | Not | Not |
| Zhanjiang Port (Group) Co., LTD | 31 March 2019 | 80,000.00 | 9 Oct 2021 | 20,000.00 | Joint and several liability guarantee | About 3 Years | Not | Not |
| China Merchants International Terminal (Qingdao) Co., LTD | 31 March 2019 | 60,000.00 | - | - | - | - | - | - |
| Hambantota International Port Group Co. LTD | 31 March 2019 | 100,000.00 | - | - | - | - | - | - |
| CMHI Finance (BVI) Co., Ltd | 31 March 2019 | 800,000.00 | - | - | - | - | - | - |
| TCP - TERMINAL DE CONTElNERES DE PARANAGUA S/A. | 31 March 2019 | 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 | 27,000.00 | |||||
China Merchants Port Group Co., Ltd. Annual Report 2021
the Reporting Period(C2)
| the Reporting Period (C2) | |||
| Total approved line for such guarantees at the end of the Reporting Period (C3) | 3,634,779.84 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 2,306,220.46 |
| 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) | 147,000.00 |
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 4,016,630.19 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 2,443,772.17 |
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 61.40% | ||
| Of which: | |||
| Balance of guarantees provided for shareholders, actual controller and their related parties (D) | 17,551.71 | ||
| Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) | 2,303,833.34 | ||
| Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) | 453,712.73 | ||
| Total of the three amounts above (D+E+F) | 2,775,097.78 | ||
| Joint responsibilities possibly borne in the Reporting Period for undue guarantees (if any) | None | ||
| Provision of external guarantees in breach of the prescribed procedures (if any) | None | ||
Particulars of guarantees adopting complex methods
□ Applicable √ Not applicable
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Annual Report 2021
(2) Entrusted Loans
Overview of entrusted loans in the Reporting Period
Unit: RMB’0,000
Amount
| Amount | Capital resources | Undue balance | Overdue amount |
| 3,430.00 | Self-owned funds | 3,430.00 | 0 |
Particulars of entrusted loans with single significant amount or low security, bad liquidity, and nocapital preservation
□ Applicable √ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case whichmay cause impairment for entrusted loans
□ Applicable √ Not applicable
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.XVI Other Significant Events(I) Private Placement of A-shares and Subscription of Shares in Ningbo PortOn 13 July 2021, the Proposal on the Plan for Private Placement of A-shares, the Proposal onSubscription by the Company as a Strategic Investor of Shares in a Private Placement of NingboZhoushan Port Company Limited & Related-party Transaction, and other relevant proposals wereapproved unanimously at the 6th Extraordinary Meeting of the Company’s 10th Board of Directorsin 2021, and the 3rd Extraordinary Meeting of the Company’s 10th Supervisory Committee in 2021,respectively. As such, the Company was agreed to introduce Zhejiang Provincial Seaport Investment& Operation Group Co. Ltd. (Seaport Group) as a strategic investor by carrying out a privateplacement of 577,000,000 A-shares (or 30% of the Company’s total share capital before the issue) toSeaport Group to raise RMB10.917 billion. Meanwhile, the Company was agreed to subscribe for incash, as a strategic investor, 3,646,971,029 A-shares in the 2021 private placement of NingboZhoushan Port Company Limited (Ningbo Port). For further information, see Announcement No.2021-053 on the Resolutions of the 6th Extraordinary Meeting of the 10th Board of Directors in 2021,Announcement No. 2021-054 on the Resolutions of the 3rd Extraordinary Meeting of the 10thSupervisory Committee in 2021, Announcement No. 2021-057 on Subscription by the Company asa Strategic Investor of Shares in a Private Placement of Ningbo Zhoushan Port Company Limited &Related-party Transaction, and other relevant announcements disclosed by the Company dated 14July 2021.On 26 August 2021, the Company disclosed that it had received the Reply on the Private Placementof A-shares of China Merchants Port Group Co., Ltd. (Guo Zi Chan Quan [2021] No. 457) issued bythe State-owned Assets Supervision and Administration Commission of the State Council, which in
China Merchants Port Group Co., Ltd. Annual Report 2021
principle consented to the plan of the Company for a private placement of no more than 576,709,537A-shares to Zhejiang Provincial Seaport Investment & Operation Group Co. Ltd. (SS). For furtherinformation, see Announcement No. 2021-070 on Approval of Private Placement of A-shares bySASAC of the State Council disclosed by the Company dated 27 August 2021.On 27 September 2021, the proposals in relation to the private placement of A-shares were approvedat the 1st Extraordinary General Meeting of the Company in 2021. For further information, seeAnnouncement No. 2021-087 on Announcement on Resolutions of the 1st Extraordinary GeneralMeeting of 2021 disclosed by the Company dated 28 September 2021.On 15 October 2021, the Company received the Acceptance Form for Administrative LicenseApplication from the China Securities Regulatory Commission (Acceptance Number: 212745),which tells that the China Securities Regulatory Commission has examined the application materialssubmitted by the Company for Approval of Non-public Offering of Shares by Listed Company (A-Share Main Board of Shanghai Stock Exchange and Shenzhen Stock Exchange and B Shares) anddecided to accept the application for an administrative license.On 26 October 2021, the Company received the Announcement on Receiving the Notice of Feedbackon the Examination of Administrative License Project (No. 212745) issued by the China SecuritiesRegulatory Commission (hereinafter referred to as the "Feedback"), which tells that the ChinaSecurities Regulatory Commission has examined the application materials for an administrativelicense of Approval on Non-Public Offering of Shares (A-Share Main Board of Shanghai StockExchange and Shenzhen Stock Exchange and B Shares) by Listed Company of China Merchants PortGroup Co., Ltd. submitted by the Company, and required the Company to make written descriptionsand explanations on relevant issues, and submit a written reply to the administrative licenseacceptance department of the China Securities Regulatory Commission within 30 days.On 20 November 2021, the Company and relevant intermediaries carefully checked and implementedthe issues listed in the Feedback In accordance with the requirements of China Securities RegulatoryCommission, and formed the Reply to the Feedback on the Application Document for the 2021 Non-Public Offering of A-Shares of China Merchants Port Group Co., Ltd. (hereinafter referred to as the"Reply to the Feedback") and disclosed it. For details, please refer to the Reply to the Feedback onthe Application Document for the 2021 Non-Public Offering of A-Shares of China Merchants PortGroup Co., Ltd. published on the website www.cninfo.com.cn on the same day. The Company hassubmitted the Reply to the Feedback and other relevant materials to CSRC within two working daysafter its disclosure.
2. 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.
| 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 |
China Merchants Port Group Co., Ltd. Annual Report 2021
Board
| 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 |
| 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 |
China Merchants Port Group Co., Ltd. Annual Report 2021
2021-029
| 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 |
| 2021-051 | 1 July 2021 | Announcement on the Resolutions of the 5th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-052 | 1 July 2021 | Announcement on 2021 Interest Payment for 2020 Public Offering of Corporate Bonds (Tranche 1) to Qualified Investors |
| 2021-053 | 14 July 2021 | Announcement on the Resolutions of the 6th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-054 | 14 July 2021 | Announcement on the Resolutions of the 3rd Extraordinary Meeting of the 10th Supervisory Committee in 2021 |
| 2021-055 | 14 July 2021 | Announcement on Signing Conditionally Effective Share Subscription Agreement with Certain Entities & Related-party Transaction |
| 2021-056 | 14 July 2021 | Announcement on Signing Strategic Cooperation Framework Agreement with Zhejiang Provincial Seaport Investment & Operation Group Co. Ltd. |
China Merchants Port Group Co., Ltd. Annual Report 2021
2021-057
| 2021-057 | 14 July 2021 | Announcement on Subscription by the Company as a Strategic Investor of Shares in a Private Placement of Ningbo Zhoushan Port Company Limited & Related-party Transaction |
| 2021-058 | 14 July 2021 | Announcement on No Punishments or Other Regulatory Measures from the Securities Regulator or the Stock Exchange in the Past 5 Years |
| 2021-059 | 14 July 2021 | Reminder on Changes in Shareholders’ Equity in a Private Placement |
| 2021-060 | 15 July 2021 | Announcement on Estimated Increase in 2021 Interim Earnings |
| 2021-061 | 15 July 2021 | Announcement on Voluntary Disclosure of the Business Volume Data of June 2021 |
| 2021-062 | 15 July 2021 | Announcement on Payout of 2020 Final Dividends |
| 2021-063 | 17 July 2021 | Reminder on the 4th Issue of SCP in 2021 |
| 2021-064 | 21 July 2021 | Announcement on Results of the 4th Issue of SCP in 2021 |
| 2021-065 | 7 August 2021 | Announcement on Resignation of Deputy General Manager Mr. Zheng Shaoping |
| 2021-066 | 14 August 2021 | Announcement on Voluntary Disclosure of the Business Volume Data of July 2021 |
| 2021-067 | 14 August 2021 | Announcement on Resignation of Chairman of the Supervisory Committee |
| 2021-068 | 24 August 2021 | Announcement on the Resolutions of the 7th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-069 | 24 August 2021 | Announcement on Resignation of Director and Senior Management & Re-election of Director and Appointment of CEO |
| 2021-070 | 28 August 2021 | Announcement on Approval of Private Placement of A-shares by SASAC of the State Council |
| 2021-071 | 31 August 2021 | Announcement on the Resolutions of the 4th Meeting of the 10th Board of Directors |
| 2021-072 | 31 August 2021 | Announcement on the Resolutions of the 4th Meeting of the 10th Supervisory Committee |
| 2021-073 | 31 August 2021 | Interim Report 2021 (Summary) (Chinese and English Version) |
| 2021-074 | 31 August 2021 | Special Report of the Deposit and Use of Raised Funds for H1 2021 |
| 2021-075 | 31 August 2021 | Announcement on Incorporation of HK Wholly-owned Subsidiary and Adjustment to Ownership Structure of the Subsidiary |
| 2021-076 | 31 August 2021 | Announcement on Adjustments to the Deposit and Loan Limits with China Merchants Bank & Related-party Transaction |
| 2021-077 | 31 August 2021 | Announcement on Release of 2021 Interim Results by Majority-owned Subsidiary |
| 2021-078 | 31 August 2021 | Announcement on Online Investor Meeting on 2021 Interim Results |
| 2021-079 | 9 September 2021 | Announcement on the Resolutions of the 8th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-080 | 9 September 2021 | Announcement on the Resolutions of the 4th Extraordinary Meeting of the 10th Supervisory Committee in 2021 |
| 2021-081 | 9 September 2021 | Announcement on Majority-owned Subsidiary Signing Supplementary Agreement to Lease Agreement Regarding Concessions |
| 2021-082 | 9 September 2021 | Notice of the 1st Extraordinary General Meeting of 2021 |
| 2021-083 | 14 September 2021 | Announcement on Alteration of Registered Information with Industry and Commerce Administration |
| 2021-084 | 15 September 2021 | Announcement on Voluntary Disclosure of the Business Volume Data of August 2021 |
China Merchants Port Group Co., Ltd. Annual Report 2021
2021-085
| 2021-085 | 23 September 2021 | Announcement on Redemption of the 2nd Issue of SCP in 2021 upon Maturity |
2021-086
| 2021-086 | 25 September 2021 | Reminder on the 5th Issue of SCP in 2021 |
| 2021-087 | 28 September 2021 | Announcement on Resolutions of the 1st Extraordinary General Meeting of 2021 |
| 2021-088 | 28 September 2021 | Announcement on the Resolutions of the 9th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-089 | 29 September 2021 | Announcement on Results of the 5th Issue of SCP in 2021 |
| 2021-090 | 15 October 2021 | Announcement on Performance Forecast for the First Three Quarters in 2021 |
| 2021-091 | 15 October 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of September 2021 |
| 2021-092 | 19 October 2021 | Announcement on Resolutions of the 5th Special Meeting of the 10th Board of Supervisors in 2021 |
| 2021-093 | 19 October 2021 | Announcement on the Election of the Chairman of the Board of Supervisors |
| 2021-094 | 19 October 2021 | Announcement on the Due Payment of 2021 Phase IV Super & Short-term Commercial Paper |
| 2021-095 | 26 October 2021 | Announcement on the Establishment of Investment Fund under the Joint Capital Investment with Related Party and Related-Party Transaction |
| 2021-096 | 27 October 2021 | Announcement on Receiving the Acceptance Form of Administrative License Application from the CSRC |
| 2021-097 | 28 October 2021 | Announcement on Receiving the Notice of Feedback on the First Examination of Administrative License Project from the CSRC |
| 2021-098 | 30 October 2021 | The Third Quarter Report 2021 (Chinese and English Versions) |
| 2021-099 | 30 October 2021 | Reminder of the Issuance of 2021 Phase VI Super & Short-term Commercial Paper |
| 2021-100 | 3 November 2021 | Announcement on Issue Results of 2021 Phase VI Super & Short-term Commercial Paper |
| 2021-101 | 4 November 2021 | Announcement on Resolutions of the 11th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-102 | 4 November 2021 | Announcement on the By-election of Director and Appointment of Chief Operating Officer and General Manager |
| 2021-103 | 5 November 2021 | Announcement on the Progress of Replacement Land for Dachan Bay Port Area by Qianhai Land Preparation, a Wholly-owned Subsidiary of the Holding Subsidiary |
| 2021-104 | 15 November 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of October 2021 |
| 2021-105 | 20 November 2021 | Announcement on the Reply to the Feedback on the Application Document for the Non-Public Offering of A-Shares |
| 2021-106 | 23 November 2021 | Announcement on Approval for Registration of Debt Financing Instruments |
| 2021-107 | 25 November 2021 | Announcement on Participating in the Online Collective Reception Day Activity of Investors of Listed Companies in 2021 "Communicating and Transferring Value, Communicating and Creating Good Ecology" of Shenzhen Municipality |
| 2021-108 | 4 December 2021 | Announcement on Resolutions of the 12th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-109 | 4 December 2021 | Announcement on Transferring 49% Equity of the Joint Stock Company Zhanjiang Merchants Port City Investment Co., Ltd. to a Related Party and Related-Party Transaction |
| 2021-110 | 7 December 2021 | Announcement on the Due Payment of 2021 Phase III Super & Short-term Commercial Paper |
China Merchants Port Group Co., Ltd. Annual Report 2021
2021-111
| 2021-111 | 10 December 2021 | Reminder of the Issuance of 2021 Phase VII Super & Short-term Commercial Paper |
2021-112
| 2021-112 | 14 December 2021 | Announcement on the Change of Audit Project Partner and Signing CPA |
| 2021-113 | 15 December 2021 | Announcement on Voluntary Information Disclosure of Business Volume Data of November 2021 |
| 2021-114 | 16 December 2021 | Announcement on Issue Results of 2021 Phase VII Super & Short-term Commercial Paper |
| 2021-115 | 18 December 2021 | Announcement on the Due Payment of 2021 Phase VI Super & Short-term Commercial Paper |
| 2021-116 | 25 December 2021 | Announcement on Resolutions of the 13th Extraordinary Meeting of the 10th Board of Directors in 2021 |
| 2021-117 | 25 December 2021 | Announcement on Resolutions of the 7th Special Meeting of the 10th Board of Supervisors in 2021 |
| 2021-118 | 25 December 2021 | Announcement on the Use of Idle Raised Funds for Cash Management |
| 2021-119 | 28 December 2021 | Announcement on the Due Payment of 2021 Phase V Super & Short-term Commercial Paper |
2021-120
| 2021-120 | 31 December 2021 | Announcement on the Termination of Custody |
| 2021-121 | 31 December 2021 | Announcement on New Media for Information Disclosure |
XVII Significant Events of SubsidiariesOn 25 November 2019, CMPort Holdings signed a memorandum of agreement with CMA, accordingto which, CMA intended to transfer the equity assets of 10 ports it held to Terminal Link S.A.S. (TL).To complete the transfer, CMPort Holdings would provide TL with a financing of no more thanUS$968 million, including guaranteed long-term loans of no more than US$500 million with a termof eight years and mandatory convertible securities of no more than US$468 million for thesubscription of TL. At the maturity of the long-term loans, CMA would provide the cash required forrepaying the loans by injecting capital in TL and all the convertible securities held by CMPortHoldings would be converted into TL’s equity mandatorily. On 26 March 2020, CMPort Holdingscompleted the acquisition of Phase I eight target ports, with the subscription of mandatory convertiblesecurities and prepayment of the loans amounting to approximately US$815 million. CMPortHoldings and CMA agreed to extend the delivery deadline for the remaining terminals to 30September 2021, but due to the pandemic and geopolitical factors, the delivery of the remainingterminals failed to be approved by relevant government authorities. Therefore, as of 30 September2021, CMA confirmed that the delivery of the remaining Gemalink Terminal in Vietnam and MundraTerminal in India could not be finalized. In accordance with the Share Purchase Agreement (SPA)signed by both parties, CMPort Holdings will not pay the US$20.73 million withheld during thedelivery of the first tranche of assets, accounting for 5% of the consideration for the first tranche of
China Merchants Port Group Co., Ltd. Annual Report 2021
assets delivered. The acquisition ended up with the acquisition of eight of CMA's terminals byCMPort Holdings.
China Merchants Port Group Co., Ltd. Annual Report 2021
Part VII Share Changes and Shareholder Information
I 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 | 59.7523% | 0 | 0 | 0 | 325 | 325 | 1,148,658,469 | 59.7524% |
| 1. Shares held by state | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| 2. Shares held by state-owned legal person | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| 3. Shares held by other domestic investors | 9,496 | 0.0005% | 0 | 0 | 0 | 325 | 325 | 9,821 | 0.0005% |
| Including: Shares held by domestic legal person | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| Shares held by domestic natural person | 9,496 | 0.0005% | 0 | 0 | 0 | 325 | 325 | 9,821 | 0.0005% |
| 4. Shares held by foreign investors | 1,148,648,648 | 59.7518% | 0 | 0 | 0 | 0 | 0 | 1,148,648,648 | 59.7518% |
| Including: Shares held by foreign legal person | 1,148,648,648 | 59.7518% | 0 | 0 | 0 | 0 | 0 | 1,148,648,648 | 59.7518% |
| Shares held by foreign natural person | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| II. Unrestricted shares | 773,706,980 | 40.2477% | 0 | 0 | 0 | -325 | -325 | 773,706,655 | 40.2476% |
| 1. RMB ordinary shares | 593,820,070 | 30.8901% | 0 | 0 | 0 | 0 | 0 | 593,820,070 | 30.8901% |
| 2. Domestically listed foreign shares | 179,886,910 | 9.3576% | 0 | 0 | 0 | -325 | -325 | 179,886,585 | 9.3576% |
| 3. Overseas listed foreign shares | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| 4. Other | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| III. Total shares | 1,922,365,124 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,922,365,124 | 100.00% |
Reasons for 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
China Merchants Port Group Co., Ltd. Annual Report 2021
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 ofshareholders
| Name of shareholders | Number of restricted shares at the period-begin | Number of increased restricted shares | Number of released 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 | 325 | 0 | 9,821 | According to the Articles of Association and the relevant laws and regulations | November 2023 |
| Total | 1,148,658,144 | 325 | 0 | 1,148,658,469 | -- | -- |
II Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number ofordinaryshareholders atthe period-end
| Number of ordinary shareholders at the period-end | 31,102 (19,769 A-shareholders and 11,333 B-shareholders） | Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 31,367 (19,854 A-shareholders and 11,513 B-shareholders) | Number of preferred shareholders with resumed voting rights at the period-end (if any) | 0 | Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report (if any) | 0 | ||||||
| 5% or greater shareholders or top 10 shareholders | |||||||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held at the period-end | Increase/decrease in the Reporting Period | Restricted shares held | Unrestricted shares held | Shares in pledge 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) | Fund and wealth management products | 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 | 0.31% | 6,045,069 | 3,337,168 | 0 | 6,045,069 | Unknown | ||||||
| ZHU HUI | Domestic natural person | 0.15% | 2,958,003 | 2,958,003 | 0 | 2,958,003 | Unknown | ||||||
| CHINA MERCHANTS SECURITIES (HK) CO., LTD. | State-owned legal person | 0.13% | 2,563,555 | -42,800 | 0 | 2,563,555 | Unknown | ||||||
China Merchants Port Group Co., Ltd. Annual Report 2021
JIN XING
| JIN XING | Domestic natural person | 0.12% | 2,245,196 | 2,245,196 | 0 | 2,245,196 | Unknown | |
| ARROWSTREET EMERGING MARKET ALPHA EXTENSION TRUST FUND | Foreign legal person | 0.11% | 2,192,691 | 1,273,101 | 0 | 2,192,691 | 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 10) | None | |||||||
| Top 10 unrestricted shareholders | ||||||||
| Name of shareholder | Unrestricted 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. | 6,045,069 | RMB ordinary share | 6,045,069 | |||||
| ZHU HUI | 2,958,003 | RMB ordinary share | 2,958,003 | |||||
| CHINA MERCHANTS SECURITIES (HK) CO., LTD. | 2,563,555 | Domestically listed foreign share | 2,563,555 | |||||
| JIN XING | 2,245,196 | Domestically listed foreign share | 2,245,196 | |||||
| ARROWSTREET EMERGING MARKET ALPHA EXTENSION TRUST FUND | 2,192,691 | Domestically listed foreign share | 2,192,691 | |||||
China Merchants Port Group Co., Ltd. Annual Report 2021
MAI SHUQING
| MAI SHUQING | 2,129,247 | RMB ordinary share | 2,129,247 |
| Related or acting-in-concert parties among top 10 unrestricted public shareholders, as well as between top 10 unrestricted public shareholders and top 10 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 unrestrictedordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a central state-owned legal personType of the controlling shareholder: legal person
| Name of controlling shareholder | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| BROADFORD GLOBAL LIMITED | Li Jianhui, Sun Ligan, Zheng Peihui | 27 November 2017 | 68550019-000-11-21-9 | Port services, bonded logistic and cold chain services, property development and investment |
| Shareholdings of the controlling shareholder in other listed companies at home or abroad in this Reporting Period | N/A | |||
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Central institution for state-owned assets managementType of the actual controller: legal person
| Name of actual controller | Legal representative/person in charge | Date of establishment | Unified social credit code | Principal activity |
| China Merchants Group | Miao Jianmin | 14 October 1986 | 10000522-0 | Lease and agency of water/land passenger-cargo transportation, water/land conveyance and facilities; investment and management of port and storage business; salvage, refloatation and tugboat; industrial production; construction, repairing, checking and marketing of shipping, offshore petroleum drilling equipment; repairing and |
China Merchants Port Group Co., Ltd. Annual Report 2021
checking of drilling platform and drilling container;overall contracting of water/land constructionprojects and the related offshore petroleumdevelopment projects, and their constructionorganization and logistic services; procurement,supply and sale of water/land communication andtransportation equipment; export and importbusiness of transportation; investment andmanagement of finance, insurance, trust, securities,futures business; investment and management oftourism, hotels, catering services and relevantservice; real estate development, management andconsultancy of property; investment andmanagement of petroleum and chemical industry;investment and operation of infrastructure ofcommunication; overseas assets management.Development and management of Shenzhen ShekouIndustrial Zone and Fujian Zhangzhou DevelopmentZone. (The market body shall independently choosebusiness items and carry out business activitiesaccording to law. For items requiring approvalaccording to law, the market body must obtainapproval from related authorities before carrying outthe business activities. The market body shall notengage in business activities that are banned andrestricted in the national and municipal industrialpolicies.)
| checking of drilling platform and drilling container; overall contracting of water/land construction projects and the related offshore petroleum development projects, and their construction organization and logistic services; procurement, supply and sale of water/land communication and transportation equipment; export and import business of transportation; investment and management of finance, insurance, trust, securities, futures business; investment and management of tourism, hotels, catering services and relevant service; real estate development, management and consultancy of property; investment and management of petroleum and chemical industry; investment and operation of infrastructure of communication; overseas assets management. Development and management of Shenzhen Shekou Industrial Zone and Fujian Zhangzhou Development Zone. (The market body shall independently choose business items and carry out business activities according to law. For items requiring approval according to law, the market body must obtain approval from related authorities before carrying out the business activities. The market body shall not engage in business activities that are banned and restricted in the national and municipal industrial policies.) | ||
| Shareholdings of the actual controller in other listed companies at home or abroad in this Reporting Period | China Merchants Group holds: 74.35% shares of China Merchants Land Limited; 69.15% shares of Liaoning Port Co., Ltd.; 68.72% shares of China Merchants Expressway Network &Technology Holdings Co., Ltd; 65.69% shares of China Merchants Port Holdings Company Limited; 63.57% shares of China Merchants Shekou Industrial Zone Holdings Co., Ltd.; 57.64% shares of Sinotrans Limited; 54.26% shares of China Merchants Energy Shipping Co., Ltd; 51.16% shares of China Merchants Property Operation & Service Co., Ltd.; 44.17% shares of China Merchants Securities Co. Ltd.; 35.50% shares of China Merchants Commercial Real Estate Investment Trust; 32.00% shares of Bosera China Merchants Shekou Industrial Park Closed-end Infrastructure Securities Investment Fund; 29.97% shares of China Merchants Bank Co., Ltd; 29.94% shares of Anhui Expressway Company Limited; 27.97% shares of Nanjing Tanker Corporation; 27.59% shares of China Merchants China Direct Investments Limited; 26.64% shares of Shanghai International Port (Group) Co., Ltd; 24.88% shares of Sichuan Expressway Company Limited; 24.49% shares of China International Marine Containers (Group) Ltd; 19.08% shares of Jinzhou Port Co., Ltd.; 17.75% shares of Fujian Expressway Development Co., Ltd; 16.52% shares of Heilongjiang Transport Development Co., Ltd; 16.32% shares of Hubei Chutian Smart Communication Co., Ltd.; 16.29% shares of Shandong Hi-speed Co., Ltd; 15.43% shares of Henan Zhongyuan Expressway Co., Ltd; 14.04% shares of Jilin Expressway Co., Ltd; 13.86% shares of Guangxi Wuzhou Communications Co., Ltd; 12.36% shares of China Great Wall Securities Co., Ltd.; 11.69% shares of Jiangsu Expressway Company Limited; | |
China Merchants Port Group Co., Ltd. Annual Report 2021
9.59% shares of Shanxi Road&Bridge Co.,Ltd.;
8.70% shares of Qilu Expressway Company Limited;
8.12% shares of Shenzhen Expressway Co., Ltd;
8.04% shares of Xiandai Investment Co., Ltd;
6.03% shares of S.F. Holding Co., Ltd.;
6.00% shares of Pangang Group Vanadium Titanium & Resources Co., Ltd.;
5.33% shares of Ningbo Zhoushan Port Company Limited;
2.43% shares of Linklogis Inc.;
2.36% shares of Qingdao Port International Co., Ltd;
2.10% shares of International Business Settlement Holdings Limited;
1.66% shares of Zhejiang Expressway Co., Ltd.;
1.20% shares of Oriental Times Media Co., Ltd;
1.02% shares of Sinotrans & CSC Phoenix Co., Ltd.;
0.62% shares of JD Logistics, Inc.;
0.53% shares of China Shipbuilding Industry Company Limited;
0.16% shares of CMMB Vision Holdings Limited;
0.11% shares of Haitong Securities Co., Ltd.;
0.10% shares of Sinopec Engineering (Group) Co., Ltd.;
0.02% shares of Bank of Tianjin Co., Ltd.;
0.01% shares of Bank of China Co., Ltd.
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of
China Merchants Port Group Co., Ltd. Annual Report 2021
asset management.
□ Applicable √ Not applicable
4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholderor the Largest Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of allshares of the Company held by Them
□ Applicable √ Not applicable
5. Other 10% or Greater Corporate Shareholders
Name ofcorporateshareholders
| Name of corporate shareholders | Legal representative/person in charge | Date of establishment | Registered capital | Business scope or management activities |
| China Merchants Port Investment Development Company Limited | Li Jianhui, Sun Ligan, Zheng Peihui | 15 November 2013 | HKD28,287,989,241 | Investment management of equities and others |
China Merchants Port Group Co., Ltd. Annual Report 2021
ChinaMerchantsGangtongDevelopment(Shenzhen)Co., Ltd.
| China Merchants Gangtong Development (Shenzhen) Co., Ltd. | Li Jianhui | 16 January 2018 | RMB13,495,525,700 | Provision of management services for ports (without involving special administrative measures on the access of foreign investment); port information inquiries, economic information consultation, economic information consultation, corporate management consultation, business information consultation, brand management consultation and logistics information consultation (excluding restricted items in each case); technical development and sales of ship machinery and equipment; technical services in respect of port loading and unloading equipment; supporting businesses in respect of the design, sales, import and export of loading and unloading tools, mechanical and electrical products and non-ferrous metal products (excluding precious metals) (Commodities that involve state trading, quota, license and special administrative regulations shall be operated through the application pursuant to related state regulations); technical development and technical services in respect of modern logistics information systems; supply chain management and related supporting services; design of logistics plans; planning of corporate image; planning of cultural exchange activities (without involving special administrative measures on the access of foreign investment); marketing planning; and planning of brand image. (In each case, any item forbidden by laws, administrative regulations and the State Council shall be excluded and restricted items shall be operated upon the attainment of the permission), licensed business item: none |
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, ActualController, Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
IV Specific Implementation of Share Repurchases in the Reporting PeriodProgress on any share repurchases:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
China Merchants Port Group Co., Ltd. Annual 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
Unit: RMB
Name
| Name | Abbr. | Code | Date of issuance | Value date | Maturity | Bonds balance | 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 | 8 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 | None | ||||||||
Overdue bonds
China Merchants Port Group Co., Ltd. Annual Report 2021
□ Applicable √ Not applicable
2. The Trigger and Execution of the Option Clause of the Issuers or Investors and the InvestorProtection Clause
□ Applicable √ Not applicable
3. Intermediary
Bond
| Bond | Intermediary | Office address | Signature accountant | Contact person of intermediary | Contact number |
| 2020 Public Offering of Corporate Bonds of China Merchants Port Group Co., Ltd. (for qualified investors) (Phase I) | CITIC Securities Co., Ltd. | 18F CITIC Securities Tower, No.8 Zhongxin 3rd Road, Futian District, Shenzhen | Not applicable | Chen Tianya and Feng Yuan | 0755-23835062 |
Indicate by tick mark whether above intermediary changed in the Reporting Period
□ Yes √ No
4. List of the Usage of the Raised Funds
Unit: RMB
| Bonds | Total amount | Amount spent | Unused amount | Operation of special account for raised funds (if any) | Rectification of raised funds for violation operation (if any) | Whether is consistent with the usage, using plan and other agreements stipulated in the raising specification |
| 2020 Public Offering of Corporate Bonds of China Merchants Port Group Co., Ltd. (for qualified investors) (Phase I) | 2,000,000,000.00 | 2,000,000,000.00 | 0.00 | None | None | Yes |
The raised funds were used for project construction
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
The Company changed the usage of above funds raised from bonds during the Reporting Period.
□ Applicable √ Not applicable
5. Adjustment of Credit Rating Results during the Reporting Period
□ Applicable √ Not applicable
6. 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
Unit: RMB
Name
| Name | Abbr. | Code | Date of issuance | Value date | Maturity | Bonds balance | Interest rate | Way of redemption | Trading place |
| 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 |
| 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 I 2021) | 21 CMPort SCP001 | 012100333.IB | 21 January 2021 | 22 January 2021 | 22 April 2021 | 0 | 2.3% | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Super-short-term Commercial | 21 CMPort SCP002 | 012101135.IB | 19 March 2021 | 22 March 2021 | 18 September 2021 | 0 | 2.73% | Principals and interest | Interbank bon |
China Merchants Port Group Co., Ltd. Annual Report 2021
Papers ofChinaMerchantsPort GroupCo., Ltd.(Phase II2021)
| Papers of China Merchants Port Group Co., Ltd. (Phase II 2021) | paid in lump sum at maturity | d 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 | 2,000,000,000.00 | 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 III 2021) | 21 CMPort SCP003 | 012102083.IB | 4 June 2021 | 7 June 2021 | 4 December 2021 | 0 | 2.55% | 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 IV 2021) | 21 CMPort SCP004 | 012102633.IB | 19 July 2021 | 20 July 2021 | 18 October 2021 | 0 | 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 V 2021) | 21 CMPort SCP005 | 012103568.IB | 26 September 2021 | 27 September 2021 | 27 December 2021 | 0 | 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 VI 2021) | 21 CMPort SCP006 | 012103993.IB | 1 November 2021 | 2 November 2021 | 27 December 2021 | 0 | 2.3% | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Super-short-term Commercial Papers of China Merchants Port Group | 21 CMPort SCP007 | 012105379.IB | 10 December 2021 to 13 Dece | 14 December 2021 | 14 March 2021 | 0 | 2.45% | Principals and interest paid in lump sum at | Interbank bond market |
China Merchants Port Group Co., Ltd. Annual Report 2021
Co., Ltd.(Phase VII2021)
| Co., Ltd. (Phase VII 2021) | mber 2021 | maturity | |||
| 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. Intermediary
| Bond | Intermediary | Office address | Signature accountant | Contact person of intermediary | Contact number |
| Medium-term Notes of China Merchants Port Group Co., Ltd. (Phase I 2021) | Lead Underwriter: China Merchants Bank Co., Ltd. | China Merchants Bank Shenzhen Branch Building, No. 2016 Shennan Avenue, Shenzhen | Uninvolved | Luo Yingying, Gan Yawen | 0755-88023712 |
| Joint lead underwriter: CITIC Securities Co., Ltd. | 22nd Floor, CITIC Securities Building, No. 48 Liangmaqiao Road, Chaoyang District, Beijing | Wang Hongfeng, Chen Tianya, Feng Yuan, Qiu Chengfei | 0755-2383 5888 | ||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources Building, No. 8 Jianguomen North Street, Dongcheng District, Beijing | Liu Yongzhao, Chen Shanshan | 010-8519 1300 |
China Merchants Port Group Co., Ltd. Annual Report 2021
Credit ratingagency: ChinaChengxinInternationalCredit RatingCo., Ltd.
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 | ||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase I 2021) | Lead Underwriter: China Merchants Bank Co., Ltd. | China Merchants Bank Shenzhen Branch Building, No. 2016 Shennan Avenue, Shenzhen | Uninvolved | Luo Yingying, Gan Yawen | 0755-88023712 |
| Co-lead underwriter: Shanghai Pudong Development Bank Co., Ltd. | No. 12, Zhongshan East Road, Shanghai | Lin Jie | 021-61616388 | ||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources Building, No. 8 Jianguomen North Street, Dongcheng District, Beijing | Liu Yongzhao, Chen Shanshan | 010-8519 1300 | ||
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 | ||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase II 2021) | Lead Underwriter: Bank of China Limited | No. 1 Fuxingmen Inner Street, Xicheng District, Beijing, China | Uninvolved | Xie Zhijian | 010-66592416 |
| Joint lead underwriter: China CITIC Bank Corporation Limited | Building 1, Yard 10, Guanghua Road, Chaoyang District, Beijing | Song Yu | 010-66635905 | ||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources Building, No. 8 Jianguomen North Street,Dongche | Liu Yongzhao, Chen Shanshan | 010-8519 1300 |
China Merchants Port Group Co., Ltd. Annual Report 2021
ng District,Beijing
| ng District, Beijing | |||||
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 | ||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase III 2021) | Lead Underwriter: Bank of China Limited | No. 1 Fuxingmen Inner Street, Xicheng District, Beijing, China | Uninvolved | Xie Zhijian | 010-66592416 |
| Joint lead underwriter: Industrial Bank Co., Ltd. | 15th Floor, Xingye Building, No. 20 Chaoyangmen North Street, Chaoyang District, Beijing | Yang Jingtan | 010-89926629 | ||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources Building, No. 8 Jianguomen North Street, Dongcheng District, Beijing | Liu Yongzhao, Chen Shanshan | 010-8519 1300 | ||
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 | ||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase IV 2021) | Lead Underwriter: China Construction Bank Corporation | Building 1, Dean An Xingrong Center, No. 1 Naoshikou Street, Xicheng District, Beijing | Uninvolved | Zhou Peng, Xie Yuqian | 010-67596478、0755-81683042 |
| Co-lead underwriter: Agricultural Bank of China Co., Ltd. | No. 69, Jianguomen Inner Street, Dongcheng District, Beijing | An Liwei | 010-85109045 | ||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources | Liu Yongzhao, Chen Shanshan | 010-8519 1300 |
China Merchants Port Group Co., Ltd. Annual Report 2021
Building, No. 8JianguomenNorth Street,DongchengDistrict,Beijing
| Building, No. 8 Jianguomen North Street, Dongcheng District, Beijing | |||||
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 | ||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase V 2021) | Lead Underwriter: China Merchants Bank Co., Ltd. | China Merchants Bank Shenzhen Branch Building, No. 2016 Shennan Avenue, Shenzhen | Uninvolved | Luo Yingying, Gan Yawen | 0755-88023712 |
| Joint lead underwriter: Industrial Bank Co., Ltd. | 15th Floor, Xingye Building, No. 20 Chaoyangmen North Street, Chaoyang District, Beijing | Yang Jingtan | 010-89926629 | ||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources Building, No. 8 Jianguomen North Street, Dongcheng District, Beijing | Liu Yongzhao, Chen Shanshan | 010-8519 1300 | ||
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 | ||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase VI 2021) | Lead Underwriter: China Merchants Bank Co., Ltd. | China Merchants Bank Shenzhen Branch Building, No. 2016 Shennan Avenue, Shenzhen | Uninvolved | Luo Yingying, Gan Yawen | 0755-88023712 |
| Joint lead underwriter: China CITIC | Building 1, Yard 10, Guanghua | Song Yu | 010-66635905 |
China Merchants Port Group Co., Ltd. Annual Report 2021
BankCorporationLimited
| Bank Corporation Limited | Road, Chaoyang District, Beijing | ||||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources Building, No. 8 Jianguomen North Street, Dongcheng District, Beijing | Liu Yongzhao, Chen Shanshan | 010-8519 1300 | ||
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 | ||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase VII 2021) | Lead Underwriter: Agricultural Bank of China Co., Ltd. | No. 69, Jianguomen Inner Street, Dongcheng District, Beijing | Uninvolved | Luo Yingying, Gan Yawen | 0755-88023712 |
| Joint lead underwriter: Bank of China Limited | No. 1 Fuxingmen Inner Street, Xicheng District, Beijing, China | An Liwei | 010-85109045 | ||
| Law firm: Beijing Junhe Law Firm | 20th Floor, China Resources Building, No. 8 Jianguomen North Street, Dongcheng District, Beijing | Liu Yongzhao, Chen Shanshan | 010-8519 1300 | ||
| Credit rating agency: China Chengxin International Credit Rating Co., Ltd. | Room 60101, Building 1, No. 2 Nanzhugan Hutong, Dongcheng District, Beijing | Lu Jingyi | 010-66428877-533 |
Indicate by tick mark whether above intermediary changed in the Reporting Period
□ Yes √ No
4. List of the Usage of the Raised Funds
Unit: RMB
China Merchants Port Group Co., Ltd. Annual Report 2021
Bonds
| Bonds | Total amount | Amount spent | Unused amount | Operation of special account for raised funds (if any) | Rectification of raised funds for violation operation (if any) | Whether is consistent with the usage, using plan and other agreements stipulated in the raising specification |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase III 2020) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | None | None | Yes |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase IV 2020) | 1,200,000,000.00 | 1,200,000,000.00 | 0.00 | None | None | Yes |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase I 2021) | 800,000,000.00 | 800,000,000.00 | 0.00 | None | None | Yes |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase II 2021) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | None | None | Yes |
| Medium-term Notes of China Merchants Port Group Co., Ltd. (Phase I 2021) | 2,000,000,000.00 | 2,000,000,000.00 | 0.00 | None | None | Yes |
China Merchants Port Group Co., Ltd. Annual Report 2021
Super-short-termCommercialPapers ofChinaMerchantsPort GroupCo., Ltd.(Phase III2021)
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase III 2021) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | None | None | Yes |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase IV 2021) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | None | None | Yes |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase V 2021) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | None | None | Yes |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase VI 2021) | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | None | None | Yes |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase VII 2021) | 2,000,000,000.00 | 2,000,000,000.00 | 0.00 | None | None | Yes |
The raised funds were used for project construction
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Annual Report 2021
The Company changed the usage of above funds raised from bonds during the Reporting Period.
□ Applicable √ Not applicable
5. Adjustment of Credit Rating Results during the Reporting Period
□ Applicable √ Not applicable
6. 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
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 Matured Interest-bearing Debt excluding Bonds up the Period-end
□ Applicable √ Not applicable
VII Whether there was any Violation of Rules and Regulations during the Reporting Period
□ Yes √ No
VIII The Major Accounting Data and the Financial Indicators of the Recent 2 Years of theCompany up the Period-end
Unit: RMB’0,000
Item
| Item | 31 December 2021 | 31 December 2020 | Increase/decrease |
| Current ratio | 75.96% | 83.48% | -9.01% |
| Debt/asset ratio | 36.91% | 37.29% | -0.38% |
| Quick ratio | 75.32% | 82.54% | -8.75% |
| 2021 | 2020 | Increase/decrease | |
| Net profit after deducting non-recurring profit or loss | 235,570.03 | 127,135.20 | 85.29% |
| Debt/EBITDA ratio | 21.65% | 18.74% | 2.91% |
| Interest cover (times) | 4.62 | 3.39 | 36.28% |
China Merchants Port Group Co., Ltd. Annual Report 2021
Cash-to-interest cover(times)
| Cash-to-interest cover (times) | 5.02 | 4.16 | 20.67% |
| EBITDA-to-interest cover (times) | 7.16 | 5.85 | 22.39% |
| Loan repayment rate | 100.00% | 100.00% | - |
| Interest coverage | 100.00% | 100.00% | - |
China Merchants Port Group Co., Ltd. Annual Report 2021
Part X Financial StatementsI Independent Auditor’s Report
Type of the independent auditor’s opinion
| Type of the independent auditor’s opinion | Standard and unqualified auditor's report |
| Date of signing this report | 30 March 2022 |
| Name of the independent auditor | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
| Reference number of Audit Report | De Shi Bao (Shen) Zi (22) No. [P02569] |
| Name of the certified public accountants | Xu Xiangzhao, Pi Dehan |
II Financial StatementsSee attached.
For and on behalf of the BoardWang XiufengLegal representative of
China Merchants Port Group Co., Ltd. Dated 31 March 2022
China Merchants Port Group Co., Ltd. Annual Report 2021
CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2021
FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2021
CONTENTS Pages
AUDITOR'S REPORT 1 - 6
THE CONSOLIDATED AND COMPANY'S BALANCE SHEETS 7 - 9
THE CONSOLIDATED AND COMPANY'S INCOME STATEMENTS 10 - 11
THE CONSOLIDATED AND COMPANY'S CASH FLOW STATEMENTS 12 - 13
THE CONSOLIDATED AND COMPANY'S STATEMENTS OF CHANGES INSHAREHOLDERS' EQUITY 14 - 17
NOTES TO ITEMS OF THE FINANCIAL STATEMENTS 18 - 181
- 1 -
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (22) No. P02569
(Page 1 of 6)
To all the shareholders of China Merchants Port Group Co., Ltd.,
I. Audit Opinion
We have audited the accompanying financial statements of China Merchants Port Group Co., Ltd.(hereinafter referred to as "the Company"), which comprise the consolidated and company balancesheets as at 31 December 2021, and the consolidated and company's income statements, theconsolidated and company's cash flow statements and the consolidated and company's statements ofchanges in shareholders' equity for the year then ended, and the notes to the financial statements.
In our opinion, the accompanying financial statements of the Company present fairly, in all materialrespects, the consolidated and company's financial position as of 31 December 2021, the consolidatedand company's results of operations and cash flows for the year then ended in accordance with theAccounting Standards for Business Enterprises.
II. Basis for the Opinion
We conducted our audit in accordance with the Auditing Standards for the Chinese Certified PublicAccountants. Our responsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We are independent ofthe Company in accordance with the Auditing Standards for the Chinese Certified Public Accountants,and we have fulfilled our other ethical responsibilities in accordance with the standards. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance inour audit of the financial statements of the current year. These matters were addressed in the context ofour audit of the financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters. We determine the followings are key audit matters thatneed to be addressed in our report.
1. Subsequent measurement of long-term equity investment in associates and joint ventures
As disclosed in Notes (VIII) 13 to the consolidated financial statements, on 31 December 2021, thebook value of China Merchants Port Group's long-term equity investment in associates amounted toRMB 61,813,448,065.88, accounting for 55.67% of the total shareholder's equity. In 2021, theinvestment income from associates recognized by the equity method amounts to RMB6,048,315,587.10, accounting for 79.01% of the consolidated net profit. Since the amount ofinvestment income recognized by China Merchants Port Group for associates this year is significant,and its correctness depends on the financial status and operating results of the investee, we determinethe above-mentioned subsequent measurement of the long-term equity investment in associates as amerger key audit matters of financial statements.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (22) No. P02569
(Page 2 of 6)
III. Key Audit Matters - continued
1. Subsequent measurement of long-term equity investment in associates and joint ventures -
continued
Principal audit procedures we performed for key audit matters are as follows:
(1) Understood the certified public accountants of major associates/joint ventures and evaluated
their independence and professional competence;
(2) Identified and assessed the risk of material misstatement in the financial statements of the major
associates/joint ventures from the perspective of auditing the consolidated financial statementsof the Company by reading the financial statements of the major associates/joint ventures anddiscussing with the management the financial performance of the major associates/jointventures and the significant judgments and estimates made in the preparation of the financialstatements;
(3) Discussed with the component certified public accountants of the major associates/joint
ventures their assessment of the component audit risk, the identification of key audit areas andthe implementation of the corresponding audit procedures to evaluate whether the audit of thecomponent certified public accountants was appropriate;
(4) Verified whether the accounting policies and accounting periods adopted by the associates/joint
ventures were consistent with the Company's. If not, checked whether the financial statementsof the associates/joint ventures have been adjusted according to the accounting policies andaccounting period of the Company, and recognized the amount of investment income underequity method on that basis.
2. Goodwill impairment
As disclosed in Notes (VIII) 22 to the consolidated financial statements, as at 31 December 2021, thegoodwill in the consolidated financial statements of the Company was RMB 6,024,160,942.07. Themanagement of the Company used the net amount of fair value less costs of disposal or the presentvalue of the estimated future cash flows to determine the recoverable amount of the relevant assetgroup when testing the goodwill for impairment, of which the fair value assessment is based on themarket approach, and the forecast of future cash flows and the calculation of the present valueincluded key assumptions, such as income growth rate, gross profit margin, discount rate, etc. Weidentified the goodwill impairment as a key audit matter of the consolidated financial statements dueto the significant amount of goodwill and that the management needs to make significant judgmentsand estimates when conducting goodwill impairment testing.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (22) No. P02569
(Page 3 of 6)
III. Key Audit Matters - continued
2. Goodwill impairment - continued
Principal audit procedures we performed for key audit matters are as follows:
(1) Assessed reasonability of division of asset group and combination of asset group management
made by management;
(2) Referred to industry practice to assess whether the management's approach in cash flows
forecast is appropriate and whether the assumptions used are reasonable;
(3) Compared the data used in cash flow forecast with historical data and budget data approved by
the management, and assessed the reasonableness of the data used;
(4) Compared the growth rate of the business volume in the forecast period with the growth rate of
the historical business volume and evaluated its appropriateness.
(5) Understood the basis for management to determine the growth rate of the business in the
subsequent forecast period and assessed its appropriateness;
(6) Assessed the appropriateness of the discount rate adopted by the management in combination
with market risk-free interest rates, risk factors, etc.;
(7) Use the work of internal evaluation experts to evaluate the appropriateness of management's
assessment method of the recoverable amount of the asset group, and evaluate thereasonableness of the discount rate used by the management in predicting the present value ofthe cash flow and the growth rate of the subsequent forecast period.
(8) Reviewed whether the calculation of the present value of future cash flows was correct.
(9) Reviewed whether the method used to assess the fair value less costs of disposal was
appropriate.
(10) Assess the adequacy and appropriateness of the disclosure of the goodwill impairment test.
IV. Other Information
The Company is responsible for the other information. The other information comprises theinformation included in the 2021 annual report, but does not include the consolidated financialstatements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (22) No. P02569
(Page 4 of 6)
IV. Other Information - continued
In combination with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
If, based on the audit work performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the
Financial Statements
The management of the Company is responsible for the preparation of the financial statements thatgive a true and fair view in accordance with Accounting Standards for Business Enterprises, and forthe design, performance and maintenance of such internal control that is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud orerror.
In preparing the financial statements, the management is responsible for assessing the Company'sability to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless the management either intends to liquidate theCompany or to cease operations, or has no realistic alternative but to do so.
These charged with governance are responsible for overseeing the Company's financial reportingprocess.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor's report that includes anaudit opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an auditconducted in accordance with Auditing Standards for the Chinese Certified Public Accountants willalways detect a material misstatement when it exists. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate, they could expected influence theeconomic decisions taken based on these financial statements by reasonable users.
As part of an audit in accordance with Auditing Standards for the Chinese Certified PublicAccountants, we exercise professional judgment and maintain professional skepticism throughout theaudit. We also:
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (22) No. P02569
(Page 5 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
(1) Identified and assessed the risks of material misstatement of the financial statements, whether
due to fraud or error, designed and performed audit procedures responsive to those risks, andobtained audit evidence that was sufficient and appropriate to form our opinion. The risk of notdetecting a material misstatement resulting from fraud was higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
(2) Understood audit-related internal control in order to design audit procedures that were
appropriate in the circumstances.
(3) Evaluated the appropriateness of accounting policies applied and the reasonableness of
accounting estimates and related disclosures made by the management.
(4) Concluded on the appropriateness of the directors' application of the going concern basis of
accounting. Based on audit evidence obtained, concluded on whether the material uncertainty ofevents or conditions that may cause cast significant doubt on the Company's ability to continueas a going concern existed. If we concluded that a material uncertainty existed, we wererequired to draw attention in our auditor's report to the related disclosures in the financialstatements or to modify our opinion, if such disclosures were inadequate. Our conclusions werebased on the audit evidence obtained up to the date of our auditor's report. However, futureevents or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluated the overall presentation (including the disclosures), structure and content of the
financial statements, and whether the financial statements represented the underlyingtransactions and events in a manner that achieved fair presentation.
(6) Obtained sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Company to express an opinion on the financial statements. Wewere responsible for the direction, supervision and performance of the group audit. Weremained solely responsible for our audit opinion.
We communicated with those charged with governance over audit scope, time arrangement andsignificant audit findings, including any significant deficiencies of internal control that we identifiedthrough audit.
We also provided those charged with governance with a statement that we had complied with relevantethical requirements of independence, and communicated with those charged with governance over allrelationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (22) No. P02569
(Page 6 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
From the matters communicated with those charged with governance, we determined those mattersthat were of most significance in the audit of the financial statements of the current year and weretherefore the key audit matters. We described these matters in our auditor's report unless law orregulation precluded public disclosure about the matter or when, in extremely rare circumstances, wedetermined that a matter should not be addressed in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Deloitte Touche Tohmatsu CPA LLP Chinese Certified Public Accountant(Engagement Partner)Shanghai, China
Xu Xiangzhao
Chinese Certified Public Accountant
Pi Dehan
30 March 2022
The auditor's report and the accompanying financial statements are English translations of the Chinese auditor'sreport and statutory financial statements prepared under accounting principles and practices generally accepted inthe People's Republic of China. These financial statements are not intended to present the financial position andresults of operations and cash flows in accordance with accounting principles and practices generally accepted inother countries and jurisdictions. In case the English version does not conform to the Chinese version, the Chineseversion prevails.
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AT 31 DECEMBER 2021
Consolidated Balance Sheet
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Notes | Closing balance | Opening balance (Restated) |
| Current Assets: | |||
| Cash and bank balances | (VIII)1 | 12,772,349,406.77 | 11,918,423,758.71 |
| Held-for-trading financial assets | (VIII)2 | 6,921,831,502.55 | 850,165,448.59 |
| Notes receivable | (VIII)3 | 6,081,611.95 | 5,391,994.84 |
| Accounts receivable | (VIII)4 | 1,320,577,577.81 | 1,393,349,417.02 |
| Receivables financing | (VIII)5 | 238,429,402.71 | 217,449,966.41 |
| Prepayments | (VIII)6 | 51,606,794.20 | 51,217,870.43 |
| Other receivables | (VIII)7 | 696,276,595.87 | 3,561,292,313.98 |
| Inventories | (VIII)8 | 194,920,136.12 | 214,823,976.30 |
| Assets held for sale | (VIII)9 | 337,442,757.28 | 337,442,757.28 |
| Non-current assets due within one year | (VIII)10 | 102,356,461.97 | 67,692,473.44 |
| Other current assets | (VIII)11 | 339,684,297.41 | 434,074,085.16 |
| Total current assets | 22,981,556,544.64 | 19,051,324,062.16 | |
| Non-current Assets: | |||
| Long-term receivables | (VIII)12 | 6,162,713,861.02 | 3,887,949,993.10 |
| Long-term equity investments | (VIII)13 | 70,353,451,824.52 | 66,242,411,222.90 |
| Investments in other equity instruments | (VIII)14 | 180,251,798.43 | 181,467,057.74 |
| Other non-current financial assets | (VIII)15 | 809,515,244.87 | 910,807,452.56 |
| Investment properties | (VIII)16 | 5,298,238,414.88 | 5,558,755,275.21 |
| Fixed assets | (VIII)17 | 31,710,513,230.29 | 29,479,755,159.21 |
| Construction in progress | (VIII)18 | 2,557,584,953.92 | 5,381,430,606.18 |
| Right-of-use assets | (VIII)19 | 8,743,077,542.19 | 9,087,741,812.94 |
| Intangible assets | (VIII)20 | 18,475,412,380.93 | 18,772,180,542.10 |
| Development expenditure | (VIII)21 | 82,391,225.85 | 64,237,735.23 |
| Goodwill | (VIII)22 | 6,024,160,942.07 | 6,675,939,930.13 |
| Long-term prepaid expenses | (VIII)23 | 975,994,541.52 | 874,999,735.91 |
| Deferred tax assets | (VIII)24 | 398,145,710.84 | 420,857,076.76 |
| Other non-current assets | (VIII)25 | 1,231,092,952.69 | 2,138,468,683.64 |
| Total non-current assets | 153,002,544,624.02 | 149,677,002,283.61 | |
| TOTAL ASSETS | 175,984,101,168.66 | 168,728,326,345.77 |
- 8 -
AT 31 DECEMBER 2021
Consolidated Balance Sheet - continued
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Notes | Closing balance | Opening balance (Restated) |
| Current liabilities: | |||
| Short-term borrowings | (VIII)26 | 13,651,452,805.36 | 10,483,775,548.93 |
| Notes payable | (VIII)27 | 1,895,987.17 | 7,081,772.32 |
| Accounts payable | (VIII)28 | 843,820,438.51 | 607,972,699.59 |
| Receipts in advance | (VIII)29 | 9,313,166.01 | 39,510,127.90 |
| Contract liabilities | (VIII)30 | 196,784,525.26 | 157,442,109.67 |
| Employee benefits payable | (VIII)31 | 820,416,415.47 | 726,897,125.42 |
| Taxes payable | (VIII)32 | 2,162,719,251.68 | 2,370,258,689.99 |
| Other payables | (VIII)33 | 2,140,108,341.08 | 2,481,217,568.40 |
| Non-current liabilities due within one year | (VIII)34 | 8,268,209,284.17 | 3,564,587,701.07 |
| Other current liabilities | (VIII)35 | 2,158,497,775.85 | 2,383,668,985.94 |
| Total current liabilities | 30,253,217,990.56 | 22,822,412,329.23 | |
| Non-current Liabilities: | |||
| Long-term borrowings | (VIII)36 | 7,144,839,870.89 | 7,406,322,693.81 |
| Bonds payable | (VIII)37 | 16,670,872,414.14 | 21,090,545,845.56 |
| Including: Preferred shares | - | ||
| Perpetual bonds | - | ||
| Lease liabilities | (VIII)38 | 1,055,194,906.09 | 1,327,850,984.08 |
| Long-term payables | (VIII)39 | 3,422,179,366.40 | 1,228,461,573.69 |
| Long-term employee benefits payable | (VIII)40 | 588,681,492.63 | 507,714,699.46 |
| Provisions | (VIII)41 | 24,247,302.42 | 100,406,745.66 |
| Deferred income | (VIII)42 | 1,075,957,884.91 | 1,113,180,823.99 |
| Deferred tax liabilities | (VIII)24 | 4,550,417,470.61 | 4,347,553,142.73 |
| Other non-current liabilities | (VIII)43 | 163,065,578.53 | 2,982,220,894.03 |
| Total non-current liabilities | 34,695,456,286.62 | 40,104,257,403.01 | |
| TOTAL LIABILITIES | 64,948,674,277.18 | 62,926,669,732.24 | |
| Shareholders' equity: | |||
| Share capital | (VIII)44 | 1,922,365,124.00 | 1,922,365,124.00 |
| Capital reserve | (VIII)45 | 23,592,702,758.70 | 22,839,598,324.56 |
| Other comprehensive income | (VIII)46 | -890,125,318.18 | -826,697,303.06 |
| Special reserve | (VIII)47 | 9,184,429.12 | 10,201,178.30 |
| Surplus reserve | (VIII)48 | 961,182,562.00 | 890,690,322.28 |
| Unappropriated profit | (VIII)49 | 14,205,879,106.49 | 12,329,120,098.70 |
| Total shareholders' equity attributable to shareholders of the parent | 39,801,188,662.13 | 37,165,277,744.78 | |
| Minority interests | 71,234,238,229.35 | 68,636,378,868.75 | |
| TOTAL SHAREHOLDERS' EQUITY | 111,035,426,891.48 | 105,801,656,613.53 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 175,984,101,168.66 | 168,728,326,345.77 |
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Wang Xiufeng Tu Xiaoping Tu XiaopingLegal Representative Chief Financial Officer Head of Accounting Department
- 9 -
AT 31 DECEMBER 2021
Balance Sheet of the Company
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Notes | Closing balance | Opening balance |
| Current Assets: | |||
| Cash and bank balances | 2,913,761,567.31 | 753,590,556.77 | |
| Held-for-trading financial assets | 4,355,978,026.30 | 800,000,000.00 | |
| Prepayments | - | 32,236.27 | |
| Other receivables | (XVIII) 1 | 1,256,742,971.01 | 1,102,712,752.04 |
| Other current assets | 3,799,849.79 | 2,574,148.83 | |
| Total current assets | 8,530,282,414.41 | 2,658,909,693.91 | |
| Non-current Assets: | |||
| Long-term receivables | 8,447,395.74 | 8,667,950.38 | |
| Long-term equity investments | (XVIII) 2 | 38,632,541,293.73 | 37,236,798,123.55 |
| Investments in other equity instruments | 154,017,984.69 | 155,610,830.00 | |
| Fixed assets | 1,684,450.22 | 748,147.75 | |
| Construction in progress | 8,714,886.98 | 3,502,416.12 | |
| Intangible assets | 53,886,017.45 | 56,760,723.98 | |
| Long-term prepaid expenses | 1,223,180.69 | 1,572,660.89 | |
| Deferred tax assets | 1,846,793.34 | 1,846,793.34 | |
| Total non-current assets | 38,862,362,002.84 | 37,465,507,646.01 | |
| TOTAL ASSETS | 47,392,644,417.25 | 40,124,417,339.92 | |
| Current Liabilities: | |||
| Short-term borrowings | 6,606,500,555.58 | 2,174,486,432.93 | |
| Employee benefits payable | 36,196,999.78 | 27,085,844.52 | |
| Taxes payable | 166,072,684.93 | 208,459,425.46 | |
| Other payables | 1,136,030,015.25 | 460,457,238.16 | |
| Non-current liabilities due within one year | 82,735,342.45 | 33,040,000.00 | |
| Other current liabilities | 2,007,042,725.30 | 2,224,519,555.57 | |
| Total current liabilities | 10,034,578,323.29 | 5,128,048,496.64 | |
| Non-current Liabilities: | |||
| Bonds payable | 4,000,000,000.00 | 2,000,000,000.00 | |
| Provisions | 1,003,584.24 | - | |
| Deferred tax liabilities | 44,515,821.76 | 43,419,526.51 | |
| Total non-current liabilities | 4,045,519,406.00 | 2,043,419,526.51 | |
| TOTAL LIABILITIES | 14,080,097,729.29 | 7,171,468,023.15 | |
| SHAREHOLDERS' EQUITY | |||
| Share capital | 1,922,365,124.00 | 1,922,365,124.00 | |
| Capital reserve | 27,594,079,596.13 | 27,591,847,402.73 | |
| Other comprehensive income | 105,412,294.52 | 105,536,222.50 | |
| Surplus reserve | 961,182,562.00 | 890,690,322.28 | |
| Unappropriated profit | 2,729,507,111.31 | 2,442,510,245.26 | |
| TOTAL SHAREHOLDERS' EQUITY | 33,312,546,687.96 | 32,952,949,316.77 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 47,392,644,417.25 | 40,124,417,339.92 |
The accompanying notes form part of the financial statements.
- 10 -
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated Income Statement
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Notes | Amount incurred in the current period | Amount incurred in the prior period (Restated) |
| I. Operating income | (VIII)50 | 15,283,808,174.60 | 12,756,744,317.91 |
| Less: Operating costs | (VIII)50 | 9,046,836,182.49 | 7,961,938,835.40 |
| Taxes and surcharges | (VIII)51 | 191,974,244.31 | 151,930,002.18 |
| Administrative expenses | (VIII)52 | 1,729,160,558.50 | 1,605,655,465.25 |
| Research and development expenses | 217,905,635.67 | 168,787,774.86 | |
| Financial expenses | (VIII)53 | 1,545,338,597.29 | 1,231,930,503.70 |
| Including: Interest expense | 1,909,848,615.00 | 1,949,912,922.21 | |
| Interest income | 377,563,874.49 | 326,239,184.34 | |
| Add: Other income | (VIII)54 | 363,245,161.08 | 207,726,827.70 |
| Investment income | (VIII)55 | 6,636,949,510.91 | 4,909,830,592.83 |
| Including: Income from investments in associates and joint ventures | (VIII)55 | 6,290,957,480.59 | 3,992,772,117.69 |
| Gains from changes in fair value (Loss is marked with "-" ) | (VIII)56 | 221,242,275.17 | -411,508,773.58 |
| Gains from impairment of credit (Loss is marked with "-" ) | (VIII)57 | -252,953,617.50 | -457,301,295.35 |
| Gains from impairment of assets (Loss is marked with "-" ) | (VIII)58 | -420,492,515.75 | -551,370,042.53 |
| Gains on disposal of assets (Loss is marked with "-" ) | (VIII)59 | 35,576,459.42 | 1,489,206,502.32 |
| II. Operating profit | 9,136,160,229.67 | 6,823,085,547.91 | |
| Add: Non-operating income | (VIII)60 | 43,467,537.50 | 81,715,412.68 |
| Less: Non-operating expenses | (VIII)61 | 95,528,693.11 | 79,003,740.77 |
| III. Gross profit | 9,084,099,074.06 | 6,825,797,219.82 | |
| Less: Income tax expenses | (VIII)62 | 1,429,093,084.31 | 1,277,021,844.62 |
| IV. Net profit | 7,655,005,989.75 | 5,548,775,375.20 | |
| (I) Categorization by continuity of operation | |||
| 1. Net profit from continuing operation | 7,655,005,989.75 | 5,548,775,375.20 | |
| 2. Net profit from discontinued operation | - | ||
| (II) Categorization by attribution of ownership | |||
| 1. Net profit attributable to shareholders of the parent | 2,685,829,204.07 | 2,073,844,409.04 | |
| 2. Profit or loss attributable to minority shareholders | 4,969,176,785.68 | 3,474,930,966.16 | |
| V. Other comprehensive income, net of tax | (VIII) 64 | -711,791,683.91 | -1,849,656,940.86 |
| Other comprehensive income attributable to owners of the parent, net of tax | -61,106,763.50 | -470,752,737.15 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | -316,112.17 | -1,552,867.01 | |
| 1. Changes from remeasurement of the defined benefit plan | -8,714,853.33 | 10,248,546.35 | |
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | 9,495,957.95 | -11,817,008.06 | |
| 3. Fair value changes of investments in other equity instruments | -1,097,216.79 | 15,594.70 | |
| (II) Other comprehensive income that will be reclassified subsequently to profit or loss | -60,790,651.33 | -469,199,870.14 | |
| 1. Other comprehensive income that can be reclassified to profit or loss under the equity method | 20,160,707.37 | 90,675,445.06 | |
| 2. Translation differences of financial statements denominated in foreign currencies | -80,951,358.70 | -559,875,315.20 | |
| Other comprehensive income attributable to minority interests, net of tax | -650,684,920.41 | -1,378,904,203.71 | |
| VI. Total comprehensive income attributable to: | 6,943,214,305.84 | 3,699,118,434.34 | |
| Shareholders of the parent | 2,624,722,440.57 | 1,603,091,671.89 | |
| Minority shareholders | 4,318,491,865.27 | 2,096,026,762.45 | |
| VII. Earnings per share | |||
| (I) Basic earnings per share | 1.40 | 1.08 | |
| (II) Diluted earnings per share | 1.40 | 1.08 |
The accompanying notes form part of the financial statements.
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FOR THE YEAR ENDED 31 DECEMBER 2021
Income Statement of the Company
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Notes | Amount incurred in the current period | Amount incurred in the prior period |
| I. Operating income | (XVIII) 3 | 2,642,001.75 | 6,653,002.66 |
| Less: Operating costs | (XVIII) 3 | 2,265,959.45 | 2,265,959.64 |
| Taxes and surcharges | 844,763.45 | 2,520,271.63 | |
| Administrative expenses | 149,779,423.73 | 133,748,040.20 | |
| Financial expenses | 197,780,513.57 | 59,313,221.11 | |
| Including: Interest expense | 247,594,446.06 | 87,576,683.75 | |
| Interest income | 58,523,130.29 | 38,511,845.95 | |
| Add: Other income | 129,405.22 | 355,292.70 | |
| Investment income | (XVIII) 4 | 1,596,809,225.29 | 2,975,643,847.56 |
| Including: Income from investments in associates and joint ventures | (XVIII) 4 | 226,225,111.65 | 57,647,049.81 |
| Gains (losses) from changes in fair value | 5,978,026.30 | 33,096,476.05 | |
| II. Operating profit | 1,254,887,998.36 | 2,817,901,126.39 | |
| Add: Non-operating income | 430,740.39 | 5,001.83 | |
| III. Gross profit | 1,255,318,738.75 | 2,817,906,128.22 | |
| Less: Income tax expenses | 168,246,527.86 | 214,455,979.69 | |
| IV. Net profit | 1,087,072,210.89 | 2,603,450,148.53 | |
| V. Other comprehensive income, net of tax | -123,927.98 | -58,353.75 | |
| (I) Other comprehensive income that cannot be reclassified to profit or loss | -2,225,208.98 | -58,353.75 | |
| 1. Changes from remeasurement of the defined benefit plan | - | - | |
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | -1,030,575.00 | - | |
| 3. Fair value changes of investments in other equity instruments | -1,194,633.98 | -58,353.75 | |
| (II) Other comprehensive income that will be reclassified to profit or loss | 2,101,281.00 | - | |
| 1. Other comprehensive income that can be reclassified to profit or loss under the equity method | 2,101,281.00 | - | |
| 2. Translation differences of financial statements denominated in foreign currencies | - | - | |
| VI. Total comprehensive income | 1,086,948,282.91 | 2,603,391,794.78 |
The accompanying notes form part of the financial statements.
- 12 -
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated Cash Flow Statement
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Notes | Amount incurred in the current period | Amount incurred in the prior period |
| I. Cash Flows from Operating Activities: | |||
| Cash receipts from sales of goods and rendering of services | 15,567,101,995.95 | 12,878,256,705.27 | |
| Receipts of tax refunds | 142,122,022.96 | 43,190,041.64 | |
| Other cash receipts relating to operating activities | (VIII) 65(1) | 1,023,728,271.31 | 912,282,370.53 |
| Sub-total of cash inflows | 16,732,952,290.22 | 13,833,729,117.44 | |
| Cash payments for goods purchased and services received | 4,395,758,133.61 | 3,526,421,961.61 | |
| Cash payments to and on behalf of employees | 3,313,989,844.94 | 2,842,897,173.86 | |
| Payments of various types of taxes | 1,637,763,934.22 | 1,073,013,338.43 | |
| Other cash payments relating to operating activities | (VIII) 65(2) | 875,113,806.97 | 840,107,630.53 |
| Sub-total of cash outflows | 10,222,625,719.74 | 8,282,440,104.43 | |
| Net Cash Flows from Operating Activities | (VIII) 66(1) | 6,510,326,570.48 | 5,551,289,013.01 |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from disposals and recovery of investments | 17,047,342,468.86 | 9,137,020,345.82 | |
| Cash receipts from investments income | 2,956,256,663.23 | 1,552,583,683.37 | |
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 76,761,096.56 | 389,937,931.20 | |
| Other cash receipts relating to investing activities | (VIII) 65(3) | 437,156,571.09 | 1,453,513,215.71 |
| Sub-total of cash inflows | 20,517,516,799.74 | 12,533,055,176.10 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 2,235,972,958.53 | 2,730,742,008.88 | |
| Cash payments to acquire investments | 22,831,319,242.28 | 13,686,331,715.60 | |
| Other cash payments relating to investing activities | (VIII) 65(4) | 22,232,300.95 | 3,009,770,350.62 |
| Sub-total of cash outflows | 25,089,524,501.76 | 19,426,844,075.10 | |
| Net Cash Flows from Investing Activities | -4,572,007,702.02 | -6,893,788,899.00 | |
| III. Cash Flows from Financing Activities: | |||
| Cash receipts from capital contributions | 1,960,000.00 | 5,347,041,408.13 | |
| Including: Cash receipts from capital contributions from Minority shareholder of subsidiary | 1,960,000.00 | 5,347,041,408.13 | |
| Cash receipts from borrowings | 17,088,797,909.66 | 24,095,846,198.30 | |
| Cash receipts from issue of bonds | 9,797,840,000.00 | 6,197,833,243.33 | |
| Other cash receipts relating to financing activities | (VIII) 65(5) | - | 1,937,954,936.36 |
| Sub-total of cash inflows | 26,888,597,909.66 | 37,578,675,786.12 | |
| Cash repayments of borrowings | 23,334,671,577.97 | 26,544,628,012.33 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 4,000,078,191.43 | 4,326,228,539.60 | |
| Including: Payments for distribution of dividends or profits to Minority shareholder of subsidiary | 1,600,821,550.56 | 1,586,039,122.85 | |
| Other cash payments relating to financing activities | (VIII) 65(6) | 503,530,516.74 | 1,314,676,771.71 |
| Sub-total of cash outflows | 27,838,280,286.14 | 32,185,533,323.64 | |
| Net Cash Flows from Financing Activities | -949,682,376.48 | 5,393,142,462.48 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | -159,899,580.91 | 60,305,024.35 | |
| V. Net Increase in Cash and Cash Equivalents | 828,736,911.07 | 4,110,947,600.84 | |
| Add: Opening balance of Cash and Cash Equivalents | (VIII) 66(2) | 11,898,618,327.29 | 7,787,670,726.45 |
| VI. Closing Balance of Cash and Cash Equivalents | (VIII) 66(2) | 12,727,355,238.36 | 11,898,618,327.29 |
The accompanying notes form part of the financial statements.
- 13 -
FOR THE YEAR ENDED 31 DECEMBER 2021
Cash Flow Statement of the Company
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Notes | Amount incurred in the current period | Amount incurred in the prior period |
| I. Cash Flows from Operating Activities: | |||
| Cash receipts from sales of goods and rendering of services | 979,698.05 | - | |
| Other cash receipts relating to operating activities | 235,966,260.63 | 88,581,495.56 | |
| Sub-total of cash inflows | 236,945,958.68 | 88,581,495.56 | |
| Cash payments for goods purchased and services received | 40,000.00 | - | |
| Cash payments to and on behalf of employees | 97,250,483.46 | 56,294,477.30 | |
| Payments of various types of taxes | 210,087,464.31 | 211,434,912.21 | |
| Other cash payments relating to operating activities | 258,672,489.54 | 61,598,017.83 | |
| Sub-total of cash outflows | 566,050,437.31 | 329,327,407.34 | |
| Net Cash Flows from Operating Activities | -329,104,478.63 | -240,745,911.78 | |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from disposals and recovery of investments | 10,580,000,000.00 | 2,950,000,000.00 | |
| Cash receipts from investment income | 617,411,256.40 | 1,530,980,750.04 | |
| Other cash receipts relating to investing activities | 340,000,000.00 | 297,303,477.07 | |
| Sub-total of cash inflows | 11,537,411,256.40 | 4,778,284,227.11 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 7,311,253.87 | 1,526,872.01 | |
| Cash payments to acquire investments | 14,416,331,314.09 | 5,567,604,695.27 | |
| Net cash payments for acquisitions of subsidiaries and other business units | - | 3,006,793,109.07 | |
| Other cash payments relating to investing activities | 588,583,691.07 | 436,450,231.63 | |
| Sub-total of cash outflows | 15,012,226,259.03 | 9,012,374,907.98 | |
| Net Cash Flows from Investing Activities | -3,474,815,002.63 | -4,234,090,680.87 | |
| III. Cash Flows from Financing Activities: | |||
| Cash receipts from borrowings | 7,600,000,000.00 | 2,372,563,339.18 | |
| Cash receipts from issue of bonds | 9,797,840,000.00 | 6,197,833,243.33 | |
| Other cash receipts relating to financing activities | 915,000,000.00 | 544,400,000.00 | |
| Sub-total of cash inflows | 18,312,840,000.00 | 9,114,796,582.51 | |
| Cash repayments of borrowings | 11,381,742,457.36 | 3,233,786,000.00 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 965,552,501.17 | 905,286,543.64 | |
| Other cash payments relating to financing activities | 1,274,938.84 | 437,554,375.82 | |
| Sub-total of cash outflows | 12,348,569,897.37 | 4,576,626,919.46 | |
| Net Cash Flows from Financing Activities | 5,964,270,102.63 | 4,538,169,663.05 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | -179,610.83 | -427,725.05 | |
| V. Net Increase in Cash and Cash Equivalents | 2,160,171,010.54 | 62,905,345.35 | |
| Add: Opening Balance of Cash and Cash Equivalents | 753,590,556.77 | 690,685,211.42 | |
| VI. Closing Balance of Cash and Cash Equivalents | 2,913,761,567.31 | 753,590,556.77 |
The accompanying notes form part of the financial statements.
- 14 -
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated Statement of Changes in Shareholders' Equity
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 2021 | |||||||
| Equity 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 | - | 34,528,989.07 | - | - | - | 12,942,703.53 | 77,217,389.86 | 124,689,082.46 |
| Others | - | - | - | - | - | - | - | - |
| II. Opening balance of the year | 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 year | - | 753,104,434.14 | -63,428,015.12 | -1,016,749.18 | 70,492,239.72 | 1,876,759,007.79 | 2,597,859,360.60 | 5,233,770,277.95 |
| (I) Total comprehensive income | - | - | -61,106,763.50 | - | - | 2,685,829,204.07 | 4,318,491,865.27 | 6,943,214,305.84 |
| (II) Owners' contributions and reduction in capital | - | 753,104,434.14 | -1,033,518.86 | - | - | -1,588,932.52 | 143,222,332.57 | 893,704,315.33 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - | - |
| 2. Capital contribution from holders of other equity instruments | - | - | - | - | - | - | - | - |
| 3. Share-based payment recognized in shareholders' equity | - | -139,669.02 | - | - | - | - | -656,323.25 | -795,992.27 |
| 4. Others | - | 753,244,103.16 | -1,033,518.86 | - | - | -1,588,932.52 | 143,878,655.82 | 894,500,307.60 |
| (III) Profit distribution | - | - | - | - | 70,492,239.72 | -808,768,996.52 | -1,864,400,984.46 | -2,602,677,741.26 |
| 1. Transfer to surplus reserve | - | - | - | - | 70,492,239.72 | -70,492,239.72 | - | - |
| 2. Transfer to general risk reserve | - | - | - | - | - | - | - | - |
| 3. Distributions to shareholders | - | - | - | - | - | -730,498,747.12 | -1,678,821,128.83 | -2,409,319,875.95 |
| 4. Others | - | - | - | - | - | -7,778,009.68 | -185,579,855.63 | -193,357,865.31 |
| (IV) Transfers within shareholders' equity | - | - | -1,287,732.76 | - | - | 1,287,732.76 | - | - |
| 1. Capitalization of capital reserve | - | - | - | - | - | - | - | - |
| 2. Capitalization of surplus reserve | - | - | - | - | - | - | - | - |
| 3. Loss offset by surplus reserve | - | - | - | - | - | - | - | - |
| 4. Others | - | - | -1,287,732.76 | - | - | 1,287,732.76 | - | - |
| (V) Special reserve | - | - | - | -1,016,749.18 | - | - | 546,147.22 | -470,601.96 |
| 1. Transfer to special reserve in the period | - | - | - | 48,296,277.57 | - | - | 52,595,662.54 | 100,891,940.11 |
| 2. Amount utilized in the period | - | - | - | -49,313,026.75 | - | - | -52,049,515.32 | -101,362,542.07 |
| (VI) Others | - | - | - | - | - | - | - | - |
| IV. Closing balance of the year | 1,922,365,124.00 | 23,592,702,758.70 | -890,125,318.18 | 9,184,429.12 | 961,182,562.00 | 14,205,879,106.49 | 71,234,238,229.35 | 111,035,426,891.48 |
- 15 -
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated Statement of Changes in Shareholders' Equity - continued
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 2020(Restated) | |||||||
| Equity 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 | - | 34,528,989.07 | - | - | - | 4,421,264.15 | 62,531,504.60 | 101,481,757.82 |
| Others | - | - | - | - | - | - | - | - |
| II. Opening balance of the year | 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 year | - | 508,583,868.14 | -470,752,737.15 | -2,185,556.40 | 260,345,014.85 | 857,532,482.70 | 9,556,444,171.33 | 10,709,967,243.47 |
| (I) Total comprehensive income | - | - | -470,752,737.15 | - | - | 2,073,844,409.04 | 2,096,026,762.45 | 3,699,118,434.34 |
| (II) Owners' contributions and reduction in capital | - | 508,583,868.14 | - | - | - | - | 9,813,153,124.68 | 10,321,736,992.82 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - | - |
| 2. Capital contribution from holders of other equity instruments | - | - | - | - | - | - | 5,347,041,408.13 | 5,347,041,408.13 |
| 3. Share-based payment recognized in shareholders' equity | - | 10,096,607.62 | - | - | - | - | 9,116,783.96 | 19,213,391.58 |
| 4. Others | - | 498,487,260.52 | - | - | - | - | 4,456,994,932.59 | 4,955,482,193.11 |
| (III) Profit distribution | - | - | - | - | 260,345,014.85 | -1,217,861,842.98 | -2,342,313,102.40 | -3,299,829,930.53 |
| 1. Transfer to surplus reserve | - | - | - | - | 260,345,014.85 | -260,345,014.85 | - | - |
| 2. Transfer to general risk reserve | - | - | - | - | - | - | - | - |
| 3. Distributions to shareholders | - | - | - | - | - | -884,287,957.04 | -2,241,431,859.76 | -3,125,719,816.80 |
| 4. Others | - | - | - | - | - | -73,228,871.09 | -100,881,242.64 | -174,110,113.73 |
| (IV) Transfers within shareholders' equity | - | - | - | -1,549,916.64 | - | 1,549,916.64 | - | - |
| 1. Capitalization of capital reserve | - | - | - | - | - | - | - | - |
| 2. Capitalization of surplus reserve | - | - | - | - | - | - | - | - |
| 3. Loss offset by surplus reserve | - | - | - | - | - | - | - | - |
| 4. Others | - | - | - | -1,549,916.64 | - | 1,549,916.64 | - | - |
| (V) Special reserve | - | - | - | -635,639.76 | - | - | -10,422,613.40 | -11,058,253.16 |
| 1. Transfer to special reserve in the period | - | - | - | 57,538,524.86 | - | - | 49,446,114.15 | 106,984,639.01 |
| 2. Amount utilized in the period | - | - | - | -58,174,164.62 | - | - | -59,868,727.55 | -118,042,892.17 |
| (VI) Others | - | - | - | - | - | - | - | - |
| IV. Closing balance of the year | 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 |
The accompanying notes form part of the financial statements.
- 16 -
FOR THE YEAR ENDED 31 DECEMBER 2021
Statement of Changes in Shareholders' Equity of the Company
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 2021 | ||||||
| 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 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 |
| III. Changes for the year | - | 2,232,193.40 | -123,927.98 | - | 70,492,239.72 | 286,996,866.05 | 359,597,371.19 |
| (I) Total comprehensive income | - | - | -123,927.98 | - | - | 1,087,072,210.89 | 1,086,948,282.91 |
| (II) Owners' contributions and reduction in capital | - | 2,232,193.40 | - | - | - | 915,642.00 | 3,147,835.40 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - |
| 2. Share-based payment recognized in shareholders' equity | - | -581,972.50 | - | - | - | - | -581,972.50 |
| 3. Others | - | 2,814,165.90 | - | - | - | 915,642.00 | 3,729,807.90 |
| (III) Profit distribution | - | - | - | - | 70,492,239.72 | -800,990,986.84 | -730,498,747.12 |
| 1. Transfer to surplus reserve | - | - | - | - | 70,492,239.72 | -70,492,239.72 | - |
| 2. Transfer to general risk 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 offset by surplus reserve | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | - | - | - | - |
| 1. Transfer to special reserve in the period | - | - | - | - | - | - | - |
| 2. Amount utilized in the period | - | - | - | - | - | - | - |
| (VI) Others | - | - | - | - | - | - | - |
| IV. Closing balance of the year | 1,922,365,124.00 | 27,594,079,596.13 | 105,412,294.52 | - | 961,182,562.00 | 2,729,507,111.31 | 33,312,546,687.96 |
- 17 -
FOR THE YEAR ENDED 31 DECEMBER 2021
Statement of Changes in Shareholders' Equity of the Company - continued
RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 2020 | ||||||
| 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 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 |
| III. Changes for the year | - | 15,604,875.00 | -58,353.75 | - | 260,345,014.85 | 1,458,817,176.64 | 1,734,708,712.74 |
| (I) Total comprehensive income | - | - | -58,353.75 | - | - | 2,603,450,148.53 | 2,603,391,794.78 |
| (II) Owners' contributions and reduction in capital | - | 15,604,875.00 | - | - | - | - | 15,604,875.00 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - |
| 2. Share-based payment recognized in shareholders' equity | - | 15,604,875.00 | - | - | - | - | 15,604,875.00 |
| 3. Others | - | - | - | - | - | - | - |
| (III) Profit distribution | - | - | - | - | 260,345,014.85 | -1,144,632,971.89 | -884,287,957.04 |
| 1. Transfer to surplus reserve | - | - | - | - | 260,345,014.85 | -260,345,014.85 | - |
| 2. Transfer to general risk 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 offset by surplus reserve | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | - | - | - | - |
| 1. Transfer to special reserve in the period | - | - | - | - | - | - | - |
| 2. Amount utilized in the period | - | - | - | - | - | - | - |
| (VI) Others | - | - | - | - | - | - | - |
| IV. Closing balance of the 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 |
The accompanying notes form part of the financial statements.
- 18 -
(I) GENERAL INFORMATION OF THE COMPANY
China Merchants Port Group Company Limited (hereinafter referred to as the "Company") was astock limited company incorporated in Shenzhen, Guangdong Province, on 16 January 1993.
The headquarters of the Company is located in Shenzhen, Guangdong Province. The Companyand its subsidiaries (collectively the "Group") are principally engaged in the rendering of portservice, bonded logistics service and other businesses such as property development andinvestment.
The Company's and consolidated financial statements have been approved by the Board ofDirectors on 29 March 2022.
See Notes (X) "Equity in Other Entities" for details of the scope of consolidated financialstatements in the current year. See Note (IX) "Changes in Scope of Consolidation" for details ofchanges in the 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 bythe Ministry of Finance ("MoF"). In addition, the Group has disclosed relevant financialinformation in accordance with Information Disclosure and Presentation Rules for CompaniesOffering Securities to the Public No. 15 - General Provisions on Financial Reporting (Revised in2014).
Going concern
As at 31 December 2021, the Group had total current liabilities in excess of total current assets ofRMB 7,271,661,445.92. On 31 December 2021, the Group had available and unused line ofcredit amounting to RMB 54,220,580,229.33, which is greater than the balance of the net currentliabilities. 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.
(III) STATEMENT OF COMPLIANCE WITH THE ASBE
The financial statements of the Company have been prepared in accordance with ASBE, andpresent truly and completely, the Company's and consolidated financial position as of 31December 2021, and the Company's and consolidated results of operations and cash flows for theyear then ended.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
1. Accounting period
The Group has adopted the calendar year as its accounting year, e.g. from 1 January to 31December.
2. 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 businesses such asproperty development and investment with one year being an operating cycle.
3. 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 subsidiarieschoose RMB as their functional currency. The Company's subsidiaries choose their functionalcurrency on the basis of the primary economic environment in which they operate. The Companyadopts RMB to prepare its financial statements.
4. 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 therelevant requirements.
Where the historical cost is adopted as the measurement basis, assets are recorded at the amountof cash or cash equivalents paid or the fair value of the consideration given to acquire them at thetime of their acquisition. Liabilities are recorded at the amount of proceeds or assets received orthe contractual 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.
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 whetherthat price is directly observable or estimated using valuation technique. Fair value measurementand/or disclosure in the financial statements are determined according to the above basis.
A fair value measurement of a non-financial asset takes into account a market participant's abilityto generate economic benefits by using the assets in its highest and best use or by selling it toanother market participant that would use the asset in its highest and best use.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
4. Basis of accounting and principle of measurement - continued
For financial assets which are transferred at transaction price upon initial recognition and avaluation technique that unobservable input is to be used to measure fair value in subsequentperiods, the valuation technique is calibrated so that at initial recognition the results of thevaluation technique equals the transaction price.
Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which theinputs to the fair value measurements are observable and the significance of the inputs to the fairvalue measurement 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 areobservable for the asset or liability, either directly or indirectly; and? Level 3 inputs are unobservable inputs for the asset or liability.
5. Business combinations
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 businesscombination in which all of the combining enterprises are not ultimately controlled by the sameparty or parties before and after the combination.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Business combinations - continued
5.2 Business combinations not involving enterprises under common control and goodwill - continued
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 administrativeexpenses attributable to the business combination are recognized in profit or loss in the periodswhen they are incurred.
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 recognises 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 recognised and the amount originally recognised 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 identifiablenet assets, the acquirer recognizes the remaining difference immediately in profit or loss for thecurrent period.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Business combinations - continued
5.2 Business combinations not involving enterprises under common control and goodwill - continued
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 recognises andmeasures the combination using those provisional values. Any adjustments to those provisionalvalues within twelve months after the acquisition date are treated as if they had been recognisedand measured on the acquisition date.
Goodwill arising on a business combination is measured at cost less accumulated impairmentlosses, and is presented separately in the consolidated financial statements.
For the purpose of impairment testing, goodwill is considered together with the related assetsgroups, i.e., goodwill is reasonably allocated to the related assets groups or each of assets groupsexpected to benefit from the synergies of the combination. In testing an assets group withgoodwill for impairment, an impairment loss is recognized if the recoverable amount of the assetsgroup or sets of assets groups (including goodwill) is less than its carrying amount. Theimpairment loss is firstly allocated to reduce the carrying amount of any goodwill allocated tosuch assets group or sets of assets groups, and then to the other assets of the group pro-rata basison the basis of the carrying amount of each asset (other than goodwill) in the group.
Recoverable amount is the higher of the fair value of an asset less cost of disposal and the presentvalue of estimated future cash flows.
The impairment loss of goodwill is recognised in profit or loss for the period and does not reversein subsequent periods.
6. 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 overthe investee to affect its returns. The Group reassesses whether or not it controls an investee iffacts and circumstances indicate that there are changes of the above elements of the definition ofcontrol.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Consolidated financial statements - continued
For subsidiaries acquired through a business combination involving enterprises not undercommon control, the operating results and cash flows from the acquisition date (the date whencontrol is obtained) are included in the consolidated income statement and consolidated statementof cash flows, 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 and accounting periods adopted by subsidiaries are inconsistentwith those of the Company, appropriate adjustments are made to the subsidiaries' financialstatements in accordance with the accounting policies of the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the parent is treated as minorityinterests and presented as "minority interests" in the consolidated balance sheet undershareholders' equity. The portion of net profits or losses of subsidiaries for the period attributableto minority interests is presented as "minority interests" in the consolidated income statementunder the "net profit" line item. The portion of comprehensive income of subsidiaries for theperiod attributable to minority interests is presented as "total comprehensive income attributableto minority shareholders" under the "total comprehensive income" in the consolidated incomestatement.
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. Ifthe capital reserve is not sufficient to absorb the difference, the excess are adjusted againstretained earnings.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Consolidated financial statements - continued
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 fairvalue of acquirees' shares held before acquisition date will be revalued, and the differencebetween fair value and book value will be recognized in profit or loss of the current period; ifacquirees' shares held before acquisition date involve in changes of other comprehensive incomeand other equity of owners under equity method, this will be transferred to income of acquisitiondate.
When the Group loses control over a subsidiary due to disposal of equity investment or otherreasons, any retained interest is re-measured 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.
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)they form a complete transaction designed to achieve an overall commercial effect; (iii) theoccurrence of one transaction is dependent on the occurrence of at least one other transaction; (iv)one transaction alone is not economically justified, but it is economically justified whenconsidered together with other transactions. Where the transactions of disposal of equityinvestments in a subsidiary until the loss of control are assessed as a package deal, thesetransactions are accounted for as one transaction of disposal of a subsidiary with loss of control.Before losing control, the difference of consideration received on disposal and the share of netassets of the subsidiary continuously calculated from acquisition date is recognized as othercomprehensive income. When losing control, the cumulated other comprehensive income istransferred to profit or loss of the period of losing control. If the transactions of disposal of equityinvestments in a subsidiary are not assessed as a package deal, these transactions are accountedfor as unrelated transactions.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Joint arrangements
Joint arrangement refers to the arrangement jointly controlled by two or more than twoparticipants. The Group's joint arrangements have the following characteristics: (1) all theparticipants are restricted by the arrangement; (2) the arrangement is jointly controlled by two ormore than two participants. Any participant cannot control the arrangement separately and anyparticipant to the joint control of the arrangement can stop other participants or the group ofparticipants from the separate control over the arrangement.
Joint control refers to the joint control over an arrangement in accordance with relevantagreements and relevant activities of the arrangement shall be decided after the unanimousconsent by participants sharing the controlling rights.
There are two types of joint arrangements - joint operations and joint ventures. A joint operationis a joint arrangement whereby the parties that have joint control of the arrangement have rights tothe assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a jointarrangement whereby the parties that have joint control of the arrangement have rights to the netassets of the arrangement.
8. 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. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies
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 oninitial recognition or at the previous balance sheet date are recognized in profit or loss for theperiod, except that (1) exchange differences related to a specific-purpose borrowing denominatedin foreign currency that qualify for capitalization are capitalized as part of the cost of thequalifying asset during the capitalization period; (2) exchange differences related to hedginginstruments for the purpose of hedging against foreign currency risks are accounted for usinghedge accounting; (3) exchange differences arising from changes in the carrying amounts (otherthan the amortised cost) of monetary items at fair value through other comprehensive income arerecognised as other comprehensive income.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies - continued
9.1 Transactions denominated in foreign currencies - continued
When the consolidated financial statements include foreign operation(s), if there is foreigncurrency monetary item constituting a net investment in a foreign operation, exchange differencearising from changes in exchange rates are recognized as "exchange differences arising ontranslation of financial statements denominated in foreign currencies " in other comprehensiveincome, and in profit 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.Difference between the re-translated functional currency amount and the original functionalcurrency amount is treated as changes in fair value (including changes of exchange rate) and isrecognized in profit and loss or as other comprehensive income.
9.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of aforeign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at thebalance sheet date; shareholders' equity items except for unappropriated profit are translated at thespot exchange rates at the dates on which such items arose; all items in the income statement aswell as items reflecting the distribution of profits are translated at the average exchange rates ofthe accounting period of the consolidated financial statements; the opening balance ofunappropriated profit is the translated closing balance of the previous year's unappropriated profit;the closing balance of unappropriated profit is calculated and presented on the basis of eachtranslated income statement and profit distribution item. The difference between the translatedassets and the aggregate of liabilities and shareholders' equity items is recognized as othercomprehensive income and included in shareholders' equity.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreignsubsidiary are translated at average exchange rate during the accounting period of consolidatedfinancial statements. The effect of exchange rate changes on cash and cash equivalents is regardedas a reconciling item and presented separately in the cash flow statement as "effect of exchangerate changes 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies - continued
9.2 Translation of financial statements denominated in foreign currencies - continued
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 othercomprehensive income, to profit 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 interestpercentage in foreign operations but does not result in the Group losing control over a foreignoperation, the exchange differences arising from the translation of foreign currency statementsrelated to this disposed part are re-attributed to minority interests and are not recognized in profitand loss. For partial disposals of equity interests in foreign operations which are associates orjoint ventures, the proportionate share of the accumulated exchange differences arising ontranslation of statements of foreign operations is reclassified to profit or loss.
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 for the period, relevant transaction costsare directly recognized in profit or loss; transaction costs relating to other categories of financialassets and financial liabilities are included in the value initially recognized. For accountsreceivable and notes receivable recognized that do not contain a significant financing componentor a financing component included in the contracts less than one year which are not considered bythe Group, which are within the scope of Accounting Standard for Business Enterprises No.14 -Revenue (hereinafter referred to as "revenue standards"), transaction prices defined in thestandards shall be adopted on initial 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
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.
Financial assets that meet the following conditions are subsequently measured at fair valuethrough other comprehensive income ("FVTOCI"): the financial asset is held within a businessmodel whose objective is achieved by both collecting contractual cash flows and selling; and thecontractual 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. Financial assets atFVTOCI are presented as other debt investments.
Accounts receivable and notes receivable classified as FVTOCI at acquisition are presented asfinancing receivables, and those whose period within one year (inclusive) upon acquisition arepresented as other current assets. Those whose period over one year upon acquisition arepresented as other debt investment, those will fall due within one year (inclusive) since thebalance sheet date are presented as non-current assets due within one year
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets - continued
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 financialassets at 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 theGroup manages together and there is objective evidence that the Group has a recent actualpattern of short-term profit-taking; or? It is a derivative that is not a financial guarantee contract or designated and effective as ahedging instrument.
Financial assets measured at fair value through profit or loss ("FVTPL") include those classifiedas financial assets at FVTPL and those designated as financial assets at FVTPL.
? Any financial assets that does not qualify for amortized cost measurement or measurementat FVTOCI or designated at FVTOCI are classified into financial assets at FVTPL.? Upon initial recognition, in order to eliminate or significantly reduce accounting mismatch,
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 usingthe effective interest method. Gain or loss arising from impairment or derecognition is recognizedin profit or loss.
For financial assets measured at amortized cost, the Group recognizes interest income usingeffective interest method. The Group calculates and recognizes interest income through bookvalue of financial assets multiplying effective interest, except for the following circumstances:
? For purchased or originated credit-impaired financial assets with credit impairment, theGroup calculates and recognizes its interest income based on amortized cost of the financialasset and the effective interest through credit adjustment since initial recognition.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets - continued
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 financialasset is derecognized, the cumulative gains or losses previously recognized in othercomprehensive income shall be removed from other comprehensive income and recognized inprofit or loss.
Changes in fair value of non-trading equity instrument investments designated as financial assetsat FVTOCI 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 thenon-trading equity instruments, revenue from dividends is recognized in profit or loss for thecurrent period when (1) the Group has established the right of collecting dividends; (2) it isprobable that the associated economic benefits will flow to the Group; and (3) the amount ofdividends can be measured 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.
10.2 Impairment of financial instruments
The Group makes accounting treatment on impairment and recognizes loss allowance forexpected credit losses ("ECL") on financial assets measured at amortized cost, financial assetsclassified as at FVTOCI, lease receivables, contract assets, loan commitments that are notfinancial liabilities at FVTPL, financial liabilities not measured at FVTPL, financial guaranteecontracts arising from transfer of financial assets which does not satisfy derecognition criteria orcontinuing involvement of transferred financial assets.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
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 aswell as 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 significantlyincreased since initial recognition, the Group will make a loss allowance at an amount of expectedcredit loss during the whole life; if not, the Group will make a loss allowance for the financialinstrument at an amount in the future 12-month expected credit losses. Except for the financialassets classified as at FVTOCI, increase in or reversal of credit loss allowance is included in profitor loss as loss/gain on impairment. For the financial assets classified as at FVTOCI, the Grouprecognizes credit loss allowance in other comprehensive income and recognizes the loss/gain onimpairment in profit or loss, while the Group does not decrease the carrying amount of suchfinancial assets in the 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 afinancial instrument has not increased significantly since initial recognition; the Group willmeasure the loss allowance for that financial instrument at an amount in the future 12-monthexpected credit losses. Reversed amount of loss allowance arising from such circumstances shallbe included in profit or loss 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 withthe risk of a default occurring on the financial instrument as at the date of initial recognition. Forloan commitments and financial guarantee contracts, the date that the Group becomes a party tothe irrevocable commitment is considered to be the date of initial recognition in the application ofcriteria related to the financial instrument for impairment.
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(IV) 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
In particular, the following information is taken into account when assessing whether credit riskhas increased significantly:
(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 be
significantly 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 aborrower's debt 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
of third-party guarantees or credit enhancements, which are expected to reduce thedebtor's economic incentive to make scheduled contractual payments or to otherwise havean effect on the probability of a default occurring.
(11) Significant changes in circumstances expected to reduce the debtor's economic incentive
to make 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 ratestep-ups, requiring additional collateral or guarantees, or other changes to the contractualframework of the financial instrument.
(13) Significant changes in the expected performance and behaviour of the debtor.
(14) Changes in the entity's credit management approach in relation to the financial instrument.
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(IV) 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
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 alower risk of default, ii) the borrower has a strong capacity to meet its contractual cash flowobligations in the near term and iii) adverse changes in economic and business conditions in thelonger term may, but will not necessarily, reduce the ability of the borrower to fulfil itscontractual cash flow obligations.
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 thefollowing observable 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 principal
payments.
(3) The creditor, for economic or legal reasons relating to the debtor's financial difficulty,
granting a 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.
Based on the Group's management of the internal credit risk, when the information recommendedinternally or obtained externally indicates that the debtors of the financial instruments are unableto make the full reimbursement to the creditors including the Group (not considering anyguarantee obtained by the Group), the Group then considers there occurs the event of default.
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(IV) 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
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 borroweretc.
The Group determines expected credit losses of relevant financial instruments using the followingmethods:
? For a financial asset, a credit loss shall be the present value of the difference between thecontractual cash flows that are due to the Group under the contract and the cash flows thatthe Group expects to receive;? For a lease receivable, a credit loss shall be the present value of the difference between thecontractual cash flows that are due to the Group under the contract and the cash flows thatthe Group expects to receive;? For undrawn loan commitments (refer to Note IV, 10.4.1.3 for the detail of accountingpolicies), the ECL shall be the present value of the difference between the contractual cashflows that are due to the Group if the holder of the loan commitments draws down the loan,and the cash flows that the Group expects to receive if the loan is drawn down. The Group'sestimation of the ECL for loan commitments is consistent with its expectation of the loancommitments drawn down.? For a financial guarantee contract (refer to Note IV, 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 financialasset's original effective interest rate.
The factors reflected in methods of measurement of expected credit losses include an unbiasedand probability-weighted amount that is determined by evaluating a range of possible outcomes;time value of money; reasonable and supportable information about past events, currentconditions and forecasts on future economic status at balance sheet date without unnecessaryadditional costs or efforts.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.4 Write-down of financial assets
When the Group will no longer reasonably expect that the contractual cash flows of financialassets can be collected in aggregate or in part, the Group will directly write down the carryingamount of the 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.
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 relevantfinancial liabilities is the carrying amount of financial assets transferred with continuinginvolvement less fair value of the Group's retained rights (if the Group retains relevant rightsupon transfer of financial assets) with addition of fair value of obligations assumed by theGroup (if the Group assumes relevant obligations upon transfer of financial assets).Accordingly, the fair value of relevant rights and obligations shall be measured on anindividual basis.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.3 Transfer of financial assets - continued
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, thedifference between (1) the carrying amount of the financial asset transferred at the derecognitiondate and (2) the sum of the consideration received from the transfer of the financial asset and thederecognition amount corresponding to accumulated changes in fair value initially recorded inother comprehensive income is recognized in profit or loss. For the non-tradable equityinstrument designated as financial assets at FVTOCI, cumulative gain or loss that has beenrecognized in other comprehensive income should be removed from other comprehensive incomebut be recognized in retained earnings.
For a part of transfer of a financial asset that satisfies the derecognition criteria, the carryingamount of the transferred financial asset is allocated between the part that is derecognized and thepart that is continuously involved, based on the respective fair values of those parts on transferdate. The difference between (1) the sum of the consideration received for the part derecognizedand any cumulative gain or loss allocated to the part derecognized which has been previouslyrecognized in other comprehensive income; and (2) the carrying amount allocated to the partderecognized on derecognition date; is recognized in profit or loss. For the non-tradable equityinstrument designated as financial assets at FVTOCI, cumulative gain or loss that has beenrecognized in other comprehensive income should be removed from other comprehensive incomebut be recognized in retained 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 financial liability upon receipts.
10.4 Classification of financial liabilities and 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 andother financial liabilities.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
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 derivativefinancial liabilities presented separately, the financial liabilities at FVTPL are presented as held-for-trading financial 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 theGroup manages together and there is objective evidence that the Group has a recent actualpattern of short-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 thefollowing conditions is satisfied: (i) Such designation eliminates or significantly reducesaccounting mismatch; or (ii) The Group makes management and performance evaluation on a fairvalue basis, in accordance with the Group's formally documented risk management or investmentstrategy, and reports to key management personnel on that basis. (iii) The qualified hybridfinancial instrument combines financial asset with embedded derivatives.
Transaction financial liabilities are subsequently measured at fair value. Any gains or lossesarising from changes in the fair value and any dividend or interest expenses paid on the financialliabilities are recognized in profit or loss.
The amount of change in the fair value of the financial liability that is attributable to changes inthe credit risk of that liability shall be presented in other comprehensive income, other changes infair values are included in profit or loss for the current period. Upon the derecognition of suchliability, the accumulated amount of change in fair value that is attributable to changes in thecredit risk of that liability, which is recognized in other comprehensive income, is transferred toretained earnings. Any dividend or interest income earned on the financial liabilities arerecognized in profit or loss. If the impact of the change in credit risk of such financial liabilitydealt with in the above way would create or enlarge an accounting mismatch in profit or loss, theGroup shall present all gains or losses on that liability (including the effects of changes in thecredit risk of that liability) in profit or loss.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.1 Financial liabilities at FVTPL - continued
Financial liabilities are measured at FVTPL when the financial liabilities is arising fromcontingent consideration recognized by the Group as an acquirer in a business combination notinvolving enterprises 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 inchanges in contractual cash flows, the Group will recalculate the carrying amount of the financialliability, with relevant gain or loss recognized in profit or loss. The Group will determine carryingamount of the financial liability based on the present value of renegotiated or modified contractualcash flows discounted at the financial liability's original effective interest rate. For all costs orexpenses arising from modification or renegotiation of the contract, the Group will adjust themodified carrying amount of the financial liability and make amortization during the remainingterm of the modified financial liability.
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 offinancial assets that do not meet the derecognition criteria or those arising from continuinginvolvement in the transferred financial assets, and loan commitments to provide a loan at abelow-market interest rate, which are not designated at fair value through profit or loss, aremeasured at the higher of: (1) amount of loss provision; and (2) the amount initially recognizedless cumulative amortization amount determined based on the revenue standard.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
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 toreplace the original financial liability with a new financial liability with substantially differentterms is accounted for as an extinguishment of the original financial liability and the recognitionof a new financial liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the differencebetween the carrying amount of the financial liability (or part of the financial liability)derecognized and the consideration paid (including any non-cash assets transferred or newfinancial 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 ofequity instruments is not recognized by the Group. Transaction costs related to equity transactionsare deducted from equity.
The Group recognizes the distribution to holders of the equity instruments as distribution ofprofits, dividends paid do not affect total amount of shareholders' equity.
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 thederivative contracts are entered into and are subsequently re-measured at fair value.
Derivatives embedded in hybrid contracts with a financial asset host are not separated by theGroup. The hybrid contract shall apply to the relevant accounting standards regarding theclassification of financial assets as a whole.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.5 Derivatives and embedded derivatives - continued
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 to
those of the host contract;
(2) a separate instrument with the same terms as the embedded derivative would meet the
definition 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 abovecircumstances, financial assets and financial liabilities shall be presented separately in the balancesheet and shall not be offset.
10.7 Compound instrument
For convertible bonds issued by the Group that contain both liabilities and conversion option thatmay convert the liabilities to its own equity instrument, upon initial recognition, the bonds aresplitted into liabilities and conversion option which are separately recognized. Therein, theconversion option that exchanges a fixed amount of cash or other financial assets for a fixedamount of equity instruments is accounted for as an equity instrument.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.7 Compound instrument - continued
Upon initial recognition, the fair value of liability portion is determined based on the prevailingmarket price of the bonds containing no conversion option. The overall issue price of theconvertible bonds net of the fair value of the liability portion is considered as the value of theconversion option that enables the bonds holder to convert the bonds to equity instruments, and isincluded in other equity instruments.
The liability portion of the convertible bonds is subsequently measured at amortized cost usingeffective interest method; the value of the conversion option classified as equity instrumentremain in equity instrument. The expiry or conversion of convertible bonds will not result in lossor gain.
The transaction costs incurred for issuance of the convertible bonds are allocated between theliability portion and equity instrument portion in proportion to their respective fair value. Thetransaction cost relating to the equity instrument portion is directly included in equity instrument;while the transaction cost relating to the liability portion is included in the carrying amount of theliability, and amortized over the lifetime of the convertible bonds using effective interest method.
10.8 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.
The financial assets are reclassified by the Group and are accounted for prospectively since thedate of reclassification (i.e. the first date of the initial reporting period after the business model ofwhich the financial assets are reclassified by the enterprise is changed).
Where a financial asset at amortised 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 amortised cost is reclassified as a financial asset at fair value throughother comprehensive income ("FVTOCI") by the Group, such financial asset is measured at thefair value at the date of reclassification, and the difference between the original amount and thefair value is recognized in other comprehensive income.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.8 Reclassification of financial instruments - continued
Where a financial asset at FVTOCI is reclassified as a financial asset at amortised cost by theGroup, 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 amortised cost.
Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group,such financial asset continues to be accounted for at fair value. At the same time, the accumulatedgains or losses previously recognized in other comprehensive income are transferred to profit orloss for the period.
Where a financial asset at FVTPL is reclassified as a financial asset at amortised cost by theGroup, 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,such financial 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 ofnotes receivable, accounts receivable, other receivables and long-term receivables. Basis fordetermining ratings and the expected losses rates are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Internalcredit rating
| 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 default on payment of due amounts is 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 default on payment. | 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 |
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
12. Receivables financing
Notes receivable classified to hedging instruments for the purpose of hedging, should be listed asreceivables financing within one year (including one year). If the term above one year, it shouldbe listed as other investment on bonds. Related accounting policies refer to Note IV, 10.
13. Inventories
13.1 Categories of inventories
Inventories include raw materials, merchandise and others. Inventories are initially measured atcost. Cost of inventories comprises all costs of purchase, costs of conversion and otherexpenditures incurred 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 andfirst-in-first-out 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 of business less theestimated costs of completion, the estimated costs necessary to make the sale and relevant taxes.Net realizable value is determined on the basis of clear evidence obtained, after taking intoconsideration the purposes of inventories being held and effect of post balance sheet events.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
13. Inventories - continued
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 IV,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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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 theproposed investment disposal meets the requirements of being classified as available for saleassets in the holding company's individual statement, all assets and liabilities of the subsidiaryshould be classified 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 andthe net value of fair value less costs to sell. Once the book value is higher than the net value offair value less costs to sell, the book value should be adjusted to the net value and the excessshould be recognized as impairment losses and provision for held-for-sale assets impairmentshould be made. A gain and a reverse in the previous provision for held-for-sale assets impairmentcan be recognized for any increase in fair value less costs to sell at subsequent balance sheetdates, to the extent that it is not in excess of the cumulative impairment loss that has beenrecognized. Asset impairment losses recognized before such assets are classified as held for salewill 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,amortisation or impairment that would have been recognised had the asset or disposal group notbeen classified as held for sale; and (2) the recoverable amount at the date of the decision not tosell.
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.The financial statements for the held-for-sale period are adjusted accordingly.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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 activityrequire the 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 theinvestee (for example, warrants and convertible debts) held by the investing enterprises or otherparties that are currently exercisable or convertible shall be considered.
16.2 Determination of initial 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 ofcombination. The difference between the initial investment cost and the carrying amount of cashpaid, non-cash assets transferred and liabilities assumed shall be adjusted to capital reserve. If thebalance of capital reserve is not sufficient, any excess shall be adjusted to retained earnings. If theconsideration of the combination is satisfied by the issue of equity securities, the initialinvestment cost of the long-term equity investment shall be the share of party being absorbed ofthe owners' equity in the consolidated financial statements of the ultimate controlling party at thedate of combination. The aggregate face value of the shares issued shall be accounted for as sharecapital. The difference between the initial investment cost and the aggregate face value of theshares issued shall be adjusted to capital reserve. If the balance of capital reserve is not sufficient,any excess shall be adjusted to retained earnings. Where equity interests in an acquiree areacquired in stages through multiple transactions ultimately constituting a business combinationinvolving entities under common control, the acquirer shall determine if these transactions areconsidered to be a "package deal". If yes, these transactions are accounted for as a singletransaction where control is obtained. If no, the initial investment cost of the long-term equityinvestment is the share of book value of owners' equity of the acquired entity in the ultimatecontrolling party's consolidated financial statements at the date of combination. The differencebetween the initial investment cost and the sum of carrying amount of equity investmentspreviously held in the acquiree and the new investment cost is adjusted to capital reserve. If thebalance of capital reserve is not sufficient to absorb the difference, any excess is adjusted toretained earnings. Other comprehensive income recognized for the previously held equityinvestments by accounting treatment of equity method or available-for-sale financial assets is notsubject to accounting treatment temporarily.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.2 Determination of initial investment cost - continued
For a long-term equity investment acquired through business combination not involvingenterprises under common control, the investment cost of the long-term equity investmentacquired is the cost of acquisition.
The absorbing party's or purchaser's intermediary expenses (fees in respect of auditing, legalservices, valuation and consultancy services, etc.) and other administrative expenses attributableto the 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 isinitially measured at its cost. When the entity is able to exercise significant influence or jointcontrol (but not control) over an investee due to additional investment, the cost of long-termequity investments is the sum of the fair value of previously-held equity investments determinedin accordance with Accounting Standard for Business Enterprises No.22 - Financial Instruments:
Recognition and Measurement (ASBE No. 22) and the additional investment cost.
16.3 Subsequent measurement and recognition of profit or loss
16.3.1 Long-term equity investments 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 theGroup.
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 Long-term equity investments 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.3 Subsequent measurement and recognition of profit or loss - continued
16.3.2 Long-term equity investments accounted for using the equity method - continued
Under the equity method, where the initial investment cost of a long-term equity investmentexceeds the Group's share of the fair value of the investee's identifiable net assets at the time ofacquisition, no adjustment is made to the initial investment cost. Where the initial investment costis less than the Group's share of the fair value of the investee's identifiable net assets at the time ofacquisition, the difference is recognized in profit or loss for the period, and the cost of the long-term equity investment is adjusted accordingly.
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 orlosses, other comprehensive income and profit distribution), and include the correspondingadjustment in capital reserve. The Group recognizes its share of the investee's net profit or lossbased on the fair value of the investee's individually identifiable assets at the acquisition date aftermaking appropriate adjustments. Where the accounting policies and accounting period adopted bythe investee are different from those of the investing enterprise, the investing enterprise shalladjust the financial statements of the investee to conform to its own accounting policies andaccounting period, and recognize other comprehensive income and investment income or lossesbased on the adjusted financial statements. Unrealized profits or losses resulting from the Group'stransactions and assets invested or sold that are not recognized as business transactions with itsassociates and joint ventures are recognized as investment income or loss to the extent that thoseattributable to the Group's, equity interest are eliminated. However, unrealized losses resultingfrom the Group's transactions with its associates and joint ventures which represent impairmentlosses on the transferred assets are not eliminated.
The Group discontinues recognizing its share of net losses of the investee after the carryingamount of the long-term equity investment together with any long-term interests that in substanceform part of its net investment in the investee are reduced to zero. Except that if the Group hasincurred obligations to assume additional losses, a provision is recognized according to theobligation expected, and recorded in the investment loss for the period. Where net profits aresubsequently made by the investee, the Group resumes recognizing its share of those profits onlyafter its share of the profits exceeds the share of losses previously not recognized.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the proceeds actuallyreceived and receivable and the carrying amount is recognized in profit or loss for the period.
For long-term equity investments accounted for using the equity method, if the remaining interestafter disposal is still accounted for using the equity method, other comprehensive incomepreviously recognized for using the equity method is accounted for on the same basis as wouldhave been required if the investee had directly disposed of related assets or liabilities, andtransferred to profit or loss for the period on a pro rata basis; owners' equity recognized due tochanges in other owners' equity of the investee (other than net profit or loss, other comprehensiveincome and profit distribution) is transferred to profit or loss for the period on a pro rata basis.
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 recognitionand measurement of financial instruments before obtaining the control over the investee, isaccounted for on the same basis as would have been required if the investee had directly disposedof related assets or liabilities, and transferred to profit or loss for the period on a pro rata basis;changes in other owners' equity in the investee's net assets recognized under the equity method(other than net profit or loss, other comprehensive income and profit distribution) is transferred toprofit or loss for the period on a pro rata basis.
The Group loses control on investee due to disposal of part of shares, during preparing separatefinancial statement, remaining shares after disposal can make joint control or significant influenceon investee, are accounted under equity method, and adjusted as they are accounted under equitymethod since the acquisition date; If remaining shares after disposal cannot make joint control orsignificant influence on investee, they are accounted according to recognition and measurement offinancial instruments, and the difference between fair value on date of losing control and bookvalue is recognized in profit or loss of current period. Before the Group obtained controls over theinvestee, other comprehensive income recognized due to equity method or recognition andmeasurement of financial instruments, is accounted on the basis of related assets and liabilities,and recognized in profit or loss; changes of owners' equity except for net profit or loss, othercomprehensive income and profit distribution are recognized in profit or loss of current period.Remaining shares after disposal are accounted under equity method, other comprehensive incomeand other owners' equity are carried forward as proportion; remaining shares after disposal areaccounted due to recognition and measurement of financial instruments other comprehensiveincome and other owners' equity are all carried forward
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments - continued
For the Group loses joint control or significant influence on investee after part disposal of shares,remaining shares after disposal are accounted according to recognition and measurement offinancial instruments, the difference between fair value at the date of losing joint control orsignificant influence and book value is recognized in profit or loss of current period. Othercomprehensive income recognized under equity method, is accounted on the basis of relatedassets or liabilities when stop using equity method, change of owners' equity except for net profitor loss, other comprehensive income and profit distribution is recognized in investment income ofcurrent period.
The Group loses control on subsidiaries through step by step transactions of disposal, iftransactions are "package deal", all transactions are seemed as one transaction of disposalinvestment on subsidiaries, difference between amount of disposal and book value of long-termequity investment, is recognized as other comprehensive income, and recognized in income forthe period when losing control.
17. Investment properties
Investment property is property held by the Group to earn rentals or for capital appreciation orboth. It includes a land use right that is leased out; a land use right held for transfer upon capitalappreciation; and a building 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 thesubsequent expenditures can be measured reliably, other subsequent expenditures are recognizedin profit or loss 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
18. Fixed assets and depreciation
Fixed assets are tangible assets that are held for use in the production or supply of goods orservices, for rental to others, or for administrative purposes, and have useful lives of more thanone accounting 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, thefixed assets initially contributed by the state-owned shareholders are recognized based on thevaluation amounts confirmed by the state-owned assets administration department.
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 thereplaced part is derecognized. Other subsequent expenditures are recognized in profit or loss inthe period in which they are incurred.
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:
CHINA MERCHANTS PORT GROUP CO., LTD.
Category
| Category | Estimated useful lives | Estimated residual value (%) | Annual depreciation rate (%) |
| Port and terminal facilities | 5-50 years | 5.00 | 1.90-19.00 |
| Buildings and structures | 10-50 years | 5.00 | 1.90-9.50 |
| 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 wouldcurrently obtain from disposal of the asset, after deducting the estimated costs of disposal, if theasset were already of the age and in the condition expected at the end of its useful life.
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, retiredor damaged, the amount of any proceeds on disposal of the asset net of the carrying amount andrelated taxes 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 changeas a 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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 whenthe interruption is for a continuous period of more than 3 months. Capitalization is suspendeduntil the acquisition, 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 anyinvestment income on the temporary investment of those funds. Where funds are borrowed undergeneral-purpose borrowings, the Group determines the amount of interest to be capitalized onsuch borrowings by applying a capitalization rate to the weighted average of the excess ofcumulative expenditures on the asset over the amounts of specific-purpose borrowings. Thecapitalization rate is the weighted average of the interest rates applicable to the general-purposeborrowings. During the capitalization period, exchange differences related to a specific-purposeborrowing denominated in foreign currency are all capitalized. Exchange differences inconnection with general-purpose borrowings are recognized in profit or loss in the period inwhich they are incurred.
21. Intangible assets
21.1 Intangible assets
Intangible assets include land use rights, terminal operating rights and others.
An intangible asset is measured initially at cost. Upon being restructured into a stock company,the intangible assets initially contributed by the state-owned shareholders are recognized based onthe valuation amounts confirmed by the state-owned assets administration department. Except forport operation rights, when an intangible asset with a finite useful life is available for use, itsoriginal cost is amortized over its estimated useful life. The terminal operating rights under theoutput method are amortized through periods according to the ratio of the estimated minimumguaranteed throughput to the estimated minimum guaranteed total throughput during the operationperiod. When the estimated minimum guaranteed throughput cannot be measured reliably, thestraight-line method will be used for amortization. An intangible asset with uncertain useful lifewill not be amortized.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Intangible assets - continued
21.1 Intangible assets - continued
The amortization method, useful life and estimated net residual value of various intangible assetsare as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Category
| Category | Amortization Method | Useful Life (year) | Residual value (%) |
| Land use rights | Straight-line method | 40-50 | - |
| Terminal operating right | Output/Straight-line method | 30-50 | - |
| 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.
21.2 Research and development expenditure
Expenditure during the research phase is recognised 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 recognised as intangible asset. Expenditure during development phase that does not meetthe following conditions is recognised 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
or sale.
(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 economic
benefits, including the evidence of the existence of a market for the output of theintangible asset or the intangible asset itself or, if it is to be used internally, the usefulnessof the intangible asset.
(4) the availability of adequate technical, financial and other resources to complete the
development and the ability to use or sell the intangible asset.
(5) the expenditure attributable to the intangible asset during its development phase can be
reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase,the Group recognises all of them in profit or loss for the period. The costs of intangible assetsgenerated by the internal research only include the total expenditure incurred for the period fromthe time point of capitalization to the intangible assets are ready for intended use. For the identicalintangible asset, the expenditures recorded as expenses before they qualify for capitalizationduring the development process are not adjusted.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
22. Impairment of non-financial assets other than goodwill
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,fixed assets, right-of-use assets, intangible assets with a finite useful life and assets related tocontract costs may be impaired. If there is any indication that such assets may be impaired,recoverable amounts are estimated for such assets. Intangible assets with indefinite useful life andintangible assets not yet available for use are tested for impairment annually, irrespective ofwhether there is any indication that the assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate therecoverable amount of an individual asset, the recoverable amount of the asset group to which theasset belongs will be estimated. The recoverable amount of an asset is the higher of its fair valueless costs of disposal and the present value of the future cash flows expected to be derived fromthe asset.
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.
Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in anysubsequent period.
In determining the impairment losses of assets related to contract costs, the Group first determinesthe impairment losses of other assets related to contracts recognized in accordance with otherrelevant ASBEs; then, for assets related to contract costs, if the carrying amount of the assets ishigher than the difference between: (1) the remaining consideration that the Group expects toobtain for the transfer of the goods or services related to the asset; and (2) the estimated costs tobe incurred for the transfer of the related goods or services, any excess is provided for impairmentand recognized as impairment loss of assets.
Except for impairment loss of assets related to contract costs, the above impairment loss isrecognized, it cannot be reversed in the subsequent accounting periods. After the provision forimpairment of assets related to contract costs is made, if the factors of impairment in previousperiods change so that the difference between the above two is higher than the carrying amount ofthe asset, the original provision for impairment of the asset is reversed and recognized in profit orloss for the period, provided that the carrying amount of the asset after the reversal does notexceed the carrying amount of the asset at the date of reversal assuming no provision forimpairment was made.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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
Employee benefits are all forms of considerations given by the Group in exchange for servicesrendered by employees or for the termination of employment. Employee benefits include short-term benefits, post-employment benefits, termination benefits and other long-term employeebenefits.
25.1 Short-term employee benefits
Short-term benefits refer to the employee benefits that the Group is required to make the fullpayments to within the 12 months after the annual reporting period during which relevant servicesare provided by the employees is ended, except the post-employment benefits and terminationbenefits. Specifically, the short-term benefits include: employee salaries, bonuses, allowances andsubsidies, employee benefits, social insurance contributions such as the medical insurance, thework injury insurance and the maternity insurance, housing funds, trade union funds andemployee education funds, short-term paid absence, short-term profit sharing plan, non-monetarywelfare and other short-term benefits.
Short-term employee benefits payable are recognized as liabilities, with a corresponding charge tothe profit or loss for the period or in the costs of relevant assets in the accounting period in whichemployees provide services to the Group. Staff welfare expenses incurred by the Group arerecognized 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.2 Post-employment benefits
Post-employment benefits refer to the rewards and benefits of various forms provided by theGroup after the employees have been retired or terminated the labor relationship with theenterprises for the services rendered by the employees, except the short-term salaries and thetermination benefits. The post-employment benefits consist of the pension insurance, the annuity,the unemployment insurance and other post-employment benefits.
Post-employment benefit plans are classified by the Group into defined contribution plans anddefined benefit plans. The post-employment benefit plan refers to agreements the Group enteredinto with the employees on the post-employment benefits or the regulations or measuresestablished by the Group for provisions of the post-employee benefits, among which the definedcontribution plan refers to the post-employment benefits plan under which the Group shall nolonger undertake any obligations of payments after paying fixed expenses to independent funds;the defined benefit plans refer to the post-employment benefit plans other than the definedcontribution plans. During the accounting period when employees render services to the Group,the amounts payable calculated based on the defined contribution plan are recognized as liabilitiesand included to the profit or loss for the period or relevant costs of assets.
For defined benefit plans, the Group calculates defined benefit plan obligations using projectedunit credit method and the service cost resulting from employee service in the current period isrecorded in profit or loss or the cost of related assets. Defined benefit costs are categorized asfollows:
? Service cost (including current service cost, past service cost, as well as gains and losses on
settlements);? Net interest of net liabilities or assets of defined benefit plan (including interest income ofplanned assets, interest expenses of defined benefit plan liabilities and effect of assetceiling); 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 arerecognized in profit or loss of current period or costs of related assets. Remeasurement of the netdefined benefit liability (asset) (including actuarial gains and losses, the return on plan assets,excluding amounts included in net interest on the net defined benefit liability (asset), and anychange in the effect of the asset ceiling, excluding amounts included in net interest on the netdefined benefit liability (asset)) are recognized in other comprehensive income.
The deficit or surplus resulting from the present value of the defined benefit plan obligation lessthe fair value of the defined benefit plan assets is recognized as a net defined benefit plan liabilityor net asset.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.3 Termination benefits
Termination benefits refer to the compensations the Group pay to the employees for terminatingthe employment relationship with employees before the expiry of the employment contracts orencouraging employees to accept voluntary redundancy. When the Group provides terminationbenefits to employees, employee benefit liabilities are recognized for termination benefits, with acorresponding charge to the profit or loss for the period at the earlier of: (1) when the Groupcannot unilaterally withdraw the offer of termination benefits because of the termination plan or acurtailment proposal; and (2) when the Group recognizes costs or expenses related to restructuringthat involves the payment of termination benefits.
25.4 Other long-term employee benefits
Other long-term employee benefits refer to all employee benefits except for short-term benefits,post-employment benefits, and termination benefits.
Other long-term employee benefits that qualify as defined contribution plans are treated inaccordance with the relevant provisions of the defined contribution plans mentioned above, exceptthat the net liability or net asset for other long-term employee benefits is recognized and measuredin accordance with the relevant provisions of the defined benefit plans. At the end of the reportingperiod, employee compensation costs arising from other long-term employee benefits arerecognized as three components: service cost, net interest on the net liability or net asset for otherlong-term employee benefits, and changes resulting from the remeasurement of the net liability ornet asset for other long-term employee benefits. The total net amount of these items is included inprofit or loss for the period or in the cost of the related assets.
The Group provides internal retirement benefits to employees accepting the internal retirementarrangements. Internal retirement benefits refer to the payments of salaries and social securitycontributions for employees who reach at the retirement age regulated by the country and areapproved to quit the job voluntarily. For internal retirement benefits, the internal retirementbenefits the Group is expected to pay during the period from the date when employees stopproviding services to the date of normal retirement are recognized as liabilities at the presentvalue and included to the profit or loss for the period when relevant recognition requirements ofthe internal retirement benefits are met.
26. Provisions
Provisions are recognized when the Group has a present obligation related with contingencies, itis probable that the Group will be required to settle that obligation causing an outflow ofeconomic benefits, and a reliable estimate can be made of the amount of the obligation.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
26. Provisions - continued
The amount recognized as a provision is the best estimate of the consideration required to settlethe present obligation at balance sheet date, taking into account the risks, uncertainties and timevalue of money surrounding the obligation. When a provision is measured using the cash flowsestimated to settle the present obligation, its carrying amount is the present value of those cashflows where the 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 recognition
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 transferredby the Group to the customer. Transaction price refers to the consideration that the Group isexpected to charge due to the transfer of goods or services to the customer, but it does not includepayments received on behalf of third parties and amounts that the Group expects to return to thecustomer.
It is a performance obligation satisfied during a period of time if one of the following conditionsis met in accordance with New revenue standards: (i) the customer obtains and consumeseconomic benefits at the same time of the Company's performance; (ii) the customer is able tocontrol goods in progress during the Company's performance; (iii) goods or services generatedduring the Company's performance have irreplaceable utilization, and the Company is entitled tocollect amounts of cumulative performance part which have been done up to now. Otherwise, theCompany will recognize revenue at the point in time when the customer obtains control overrelative goods or services.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
Contract asset refers to the Company's right to consideration in exchange for goods or servicesthat the Company has transferred to a customer when that right is conditioned on something otherthan the passage of time. Accounting policies relating to contract asset are specified in Note IV,
10. The Company's unconditional (i.e., depending on the passage of time only) right to receiveconsideration from the customer is separately presented as receivables.
Contract liabilities refer to the Company's obligation to transfer goods or services to a customerfor which the Company has received consideration from the customer.
Contract assets and contract liabilities under the same contract are presented at net amount.
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 considerationis only related to one or more (not all) performance obligations in the contract, the Group shallallocate the contract discount or variable consideration to relevant one or more performanceobligations. The stand-alone selling price is the price at which the Group would sell a promisedgood or service separately to a customer. If a stand-alone selling price is not directly observable,the Group shall consider all information that is reasonably available to the Group and maximizethe use of observable 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. Thetransaction price that includes variable consideration is only to the extent that it is highly probablethat such an inclusion will not result in a significant revenue reversal in the future when theuncertainty is subsequently resolved. At the end of each reporting period, the Group reevaluatesthe variable consideration included in the transaction price.
For non-cash consideration from customer, the Group recognizes the transaction price based onthe fair value of the non-cash consideration. Where the fair value of the non-cash considerationcannot be reasonably estimated, the Group recognizes the transaction price indirectly by referenceto the stand-alone price of the promised goods or services promised transferred to the customer.
If the contract includes significant financing component, the Group determines the transactionprice based on the amount payable under the assumption that the customer pays that amountpayable in cash when "control" of the goods or services is obtained by the customer. Thedifference between the transaction price and the contract consideration shall be amortized withinthe contract period using effective interest rate. If the Group expects, at contract inception, that theperiod between when the Group transfers a promised good or service to a customer and when thecustomer pays for that good or service will be one year or less, the Group needs not to considerthe significant financing component.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
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 orservices to the customer. The Group is a principal if it controls the specified good or servicebefore that good or service is transferred to a customer, and the revenue shall be recognized basedon the total consideration received or receivable; otherwise, the Group is an agent, and therevenue shall be recognized based on the amount of commission or handling fee that is expectedto be charged, and such amount is determined based on the net amount of the total considerationreceived or receivable after deducting the prices payable to other related parties or according tothe established commission amount or proportion.
Where payment is received in advance, the advance payment received shall be recorded as aliability and recognized as revenue when the relevant performance obligation is satisfied. Theabove amount will be recognized as revenue proportionately in accordance with the model ofcontractual rights exercised by the customer if (1) the Group's advance payment does not need tobe returned, (2) the customer may waive all or part of its contractual rights, and (3) the Groupexpects to be entitled to the amount related to the contractual rights waived by the customer.Otherwise, the balance of the liabilities is recognized as revenue by the Group only when thepossibility of the customer requesting the satisfaction of the remaining performance obligations isextremely remote.
28. Contract costs
28.1 Costs of obtaining a contract
If the incremental costs (costs that will not occur if no contract obtained) incurred for obtainingthe contract are expected to be recovered, the Group recognizes it as an asset amortized on a basisthat is consistent with the transfer to the customer of the goods or services to which the assetrelates and recognized in profit or loss for the period. If the amortization period of the asset doesnot exceed one year, it is recognized in profit or loss for the period in which it occurs. Otherexpenses incurred by the Group for obtaining the contract are recognized in profit or loss for theperiod in which it occurs, except as expressly borne by the customer.
28.2 Costs to fulfil a contract
If the costs incurred in fulfilling a contract are not within the scope of other standard other thanthe revenue standard, the Group shall recognized an asset from the costs incurred to fulfil acontract only if those costs meet all of the following criteria: (1) the costs relate directly to acontract or to an anticipated contract that the Group can specifically identify; (2) the costsgenerate or enhance resources of the entity that will be used in satisfying performance obligationsin the future; and (3) the costs are expected to be recovered. The asset mentioned above shall beamortized on a basis that is consistent with the transfer to the customer of the goods or services towhich the asset relates and recognized in profit or loss for the period.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
29. Types and accounting treatments 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 cancomply with 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. If a government grant is in the form of a non-monetary asset, it ismeasured at fair value. If the fair value cannot be reliably determined, it is measured at a nominalamount. A government grant measured at a nominal amount is recognized immediately in profitor loss for the period.
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. A government grant measured at a nominalamount is recognized immediately in profit or loss in the current period. Where the relevant assetis sold, transferred, scrapped or damaged prior to the end of its useful life, the relatedundistributed deferred income is transferred to the profit or loss of the disposal period.
For a government grant related to income, if the grant is a compensation for related expenses orlosses to be incurred in subsequent periods, the grant is recognized as deferred income andrecognized in profit or loss over the periods in which the related costs or losses are recognized; Ifthe grant is a compensation for related expenses or losses already incurred, the grant is recognizedimmediately in profit or loss.
For government grants both related to asset and income, different parts should be distinguishedfor accounting treatment; if it is difficult to distinguish, it as a whole should be classified asgovernment grants related to income.
A government grant related to the Group's daily activities is recognized in other income based onthe nature of economic activities; a government grant is not related to the Group's daily activitiesis recognized in non-operating income.
30. Income tax
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 oftax laws.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
30. Deferred tax assets/ deferred tax liabilities - continued
30.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and theirtax base, or between the nil carrying amount of those items that are not recognized as assets orliabilities and their tax base that can be determined according to tax laws, deferred tax assets andliabilities are recognized using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferredtax assets 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 beutilized. However, for temporary differences associated with the initial recognition of goodwilland the initial recognition of an asset or liability arising from a transaction, which is not abusiness combination that affects neither the accounting profit nor taxable profits (or deductiblelosses) at the time of transaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets arerecognized to the extent that it is probable that future taxable profits will be available againstwhich the deductible 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 foreseeablefuture.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax ratesapplicable in the period in which the asset is realized or the liability is settled according to taxlaws.
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 inequity, and when they arise from business combinations, in which case they adjust the carryingamount of goodwill.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
30. Deferred tax assets/ deferred tax liabilities - continued
30.3 Income tax offsetting
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.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
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 underlyingasset, restoring the site on which it is located or restoring the underlying asset to thecondition required by the terms and conditions of the lease.
Right-of-use assets are depreciated by the Group in accordance with the ASBE No.4 FixedAssets. If the Group is reasonably certain, that the lease will transfer ownership of the underlyingasset to the 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-useassets are 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 ofthe lease payments that are not paid at that date. If the interest rate implicit in the lease cannot bereadily determined, the lessee shall use the lessee's incremental borrowing rate.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.3 Lease liabilities - continued
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 thatoption.? 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 indexor rate as at the commencement date. Variable lease payments not included in the measurement ofthe lease liabilities, are recognised in profit or loss, or in the cost of relevant assets, in the periodof those 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 and recognized in thecurrent profit and loss or the cost of the relevant assets.
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, orin 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.4 Short-term leases and leases for which the underlying asset is of low value
The Group elects not to recognise 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 lessthan RMB50,000 when it is new. For short-term leases and leases for which the underlying assetis of low value, the Group recognises the lease payments associated with those leases as anexpense or cost of relevant 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 moreunderlying assets.? the consideration for the lease increases by an amount commensurate with the stand-aloneprice for the increase in scope and any appropriate adjustments to that stand-alone priceaccording 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 thelease modification, the Group should allocate the consideration in the modified contract,determine the lease term of the modified lease and remeasure the lease liability by discounting therevised payments using a revised discount rate.
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 adjustmentis made to the carrying amount of the right-of-use asset.
31.2 The Group as Lessor
31.2.1 Separating components of a lease
Where the contract contains both the lease and non-lease parts, the Group shall apportion thecontract consideration in accordance with the provisions of the revenue standard on theapportionment of the transaction price, based on the separate prices of the lease part and the non-lease part.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
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 recognises lease payments from operating leases as income on a straight-line basis.The Group capitalises initial direct costs incurred in obtaining an operating lease and recognisesthose costs 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 arerecognized in 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 equalto the 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:
? 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, provided
that 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
lessee and the independent third party with the financial ability to perform the guarantee
obligation.
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(IV) 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
Variable payments receivable not included in the net investment in the lease are recognized inprofit or loss when they arise.
Interest income for each period over the lease term is recognized by the Group at the fixedperiodic rate.
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 moreunderlying assets; and? the consideration for the lease increases by an amount commensurate with the stand-aloneprice 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 Groupshould account for the modification as follows:
? If the lease would have been classified as an operating lease had the modification been effect
at the inception date, the Group should account for the lease modification as a new leasefrom the effective date of the modification, and measure the carrying amount of theunderlying asset as the net investment in the lease before the effective date of the leasemodification.? If the lease would have been classified as a finance lease if the modification had been in
effect at the inception date, the Group should apply the requirements of contractmodification and renegotiation under the ASBE No. 22 Financial Instruments: Recognitionand Measurement.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
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 ofan asset is accounted for as a sale of that asset. If the transfer of an asset does not constitute a sale,the Group should continue to recognize the transferred assets and should recognize a financialliability equal to the transfer proceeds applying ASBE No. 22 Financial Instruments: Recognitionand Measurement. If the transfer of an asset is a sale, the Group should measure the right-of-useasset arising from the leaseback at the proportion of the previous carrying amount of the asset thatrelates to the right of use, and recognize only the amount of any gain or loss that relates to therights transferred to the lessor.
31.2.5.2 The Group as the buyer-lessor
If the transfer of an asset in a sale and leaseback transaction does not constitutes a sale, the Groupdoes not recognize the transferred asset, but recognizes a financial liability equal to the transferproceeds in accordance with the ASBE No. 22 Financial Instruments: Recognition andMeasurement. If the transfer of an asset constitutes a sale, the Group accounts for the purchase ofthe asset in accordance with other applicable ASBEs and accounts for the lease of the asset.
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 valueof the assets received or surrendered can be measured reliably. The fair value of the assetssurrendered and relevant payable taxes shall be regarded as the transaction cost of the assetsreceived. For assets surrendered, the difference between the fair value and the carrying value ofthe asset surrendered shall be recorded into the profit or loss of the current period. If any exactevidence showing that the fair value of the assets received is more reliable, the cost of assetsreceived and surrendered shall be calculated as different way. For assets received, its cost shall becalculated based on fair value of assets received and relevant payable taxes. For the assetssurrendered, the difference between the fair value of the assets received and the carrying value ofthe asset surrendered shall be recorded into 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.
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(IV) 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 main
business 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. Share-based payments
A share-based payment is a transaction which the Group grants equity instruments, in return forservices rendered by employees or other parties. The Group's share-based payments includeequity-settled share-based payments.
Equity-settled share-based payments in exchange for services rendered by employees aremeasured at the fair value of the equity instruments granted to employees at the grant date. Suchamount is recognized as related costs or expenses on a straight-line basis over the vesting period,based on the best estimate of the number of equity instruments expected to vest; as related costs orexpenses at the grant date, if the equity instruments vest immediately, with a correspondingincrease in capital reserves.
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(V) 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 (IV), 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:
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 cashflows shall be estimated. Meantime, a pre-tax rate shall be determined that should reflect the timevalue of money on the current market and the specific interest risks.
Recognition of deferred income tax
The Group calculates and makes provision for deferred 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 beused to invest the company's daily operation and future development, no deferred tax liabilitiesare recognized. If the actually distributed profits in the future are more or less than thoseexpected, corresponding deferred tax liabilities will be recognized or reversed at the earlier ofprofits distribution 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 doesnot coincide with the amount currently expected, the deferred tax assets resulting will berecognized or reversed in the period when actually incurred, in profit or loss.
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(V) CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES - continued
Estimated useful lives and residual values of fixed assets and intangible assets
The Group assesses the estimated useful lives and residual values of its fixed assets and intangibleassets. Such assessment is made by reference to the historical experience of actual useful lives andresidual values of fixed assets and intangible assets of a similar nature and function, and maysubject to significant changes due to technical innovation and fierce industry competition. Wherethe estimated useful lives and residual values of fixed assets and intangible assets are less than theprevious estimates, the Group will increase the depreciation and amortisation, or write off oreliminate the technically obsolete fixed assets or intangible assets.
(VI) SIGNIFICANT CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES
1. Significant changes in accounting policies
1.1 Interpretation No.14 of the Accounting Standards for Business Enterprises
The Ministry of Finance issued the Interpretation No. 14 of the Accounting Standards forBusiness Enterprises (hereinafter referred to as the "Interpretation No.14") on 26 January 2021,which stipulates the accounting treatment for the changes in the basis for determining thecontractual cash flows as a result of contracts on PPP projects the benchmark interest rate reform.The Interpretation is effective from the date of issue.
Accounting Treatment for Public-Private-Partnership (PPP) Project Contracts
"Contracts on PPP projects" can be defined as the contracts concluded by and between the socialcapital and the government for collaborating in PPP projects in accordance with laws andregulations, which shall concurrently meet the following features: (1) The social capital uses thePPP project assets to provide public products and services on behalf of the government during theoperation period as agreed in the contract; (2) The social capital receives compensation for therendering of public products and services during the period as agreed in the contract. Contracts onPPP projects shall concurrently meet the following conditions: (1) The government controls orregulates the types, objects and prices of public products and services required to be provided bythe social capital in using the PPP project assets; (2) When a contract on PPP project isterminated, the government controls the significant residual equity of the PPP project assets byownership, usufruct or other forms.
In accordance with the Interpretation No. 14, the Group accounts for the new PPP projects for theperiod from 1 January 2021 to the effective date of the Interpretation No. 14 in accordance withthe provisions of Interpretation No. 14. For contracts on PPP projects that commenced before 31December 2020 and have not been completed by the effective date of the Interpretation No. 14,retroactive adjustments should be made. The Group assessed that the application of the provisionsdoes not have a material impact on the Group's financial statements.
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(VI) SIGNIFICANT CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
1. Significant changes in accounting policies - continued
1.1 Interpretation No.14 of the Accounting Standards for Business Enterprises - continued
Accounting treatment of changes in the basis for determining the contractual cash flows as a resultof interest rate benchmark reform
For changes in the basis for determining the contractual cash flows as a result of interest ratebenchmark reform, if and only if the basis for determining the contractual cash flows of afinancial asset or liability for which the interest income or expense is determined by using theeffective interest rate method changes as a direct consequence of the interest rate benchmarkreform, and the new basis for determining the contractual cash flows is economically equivalentto the previous basis, the effective interest rate is updated based on the revised future cash flowsonly resulted from the benchmark interest rate reform by reference to the accounting treatment offloating rate changes and makes accounting treatments on this basis subsequently.
In addition to the above changes, for other changes made to financial assets or financial liabilitiesfor which interest income or expense is determined by using the effective interest rate method, thechanges required by the interest rate benchmark reform in accordance with the aboverequirements are accounted for firstly, and then assesses whether the such other changes result inderecognition of the financial assets or financial liabilities in accordance with the requirements ofASBE No.22 - "Recognition and Measurement of Financial Instruments".
According to the Interpretation No.14, the new businesses related to the benchmark interest ratereform starting from 1 January 2021 to the effective date of the Interpretation No. 14 should betreated in accordance with the provisions of Interpretation No. 14. Businesses related to thebenchmark interest rate reform occurring before 31 December, 2020 shall be retroactivelyadjusted, except where retroactive adjustment is not practicable. The Group assessed that theadoption of such provisions does not have a material impact on the Group's financial statements.
1.2 Interpretation No.15 of the Accounting Standards for Business Enterprises
The Ministry of Finance issued the Interpretation No.15 of the Accounting Standards for BusinessEnterprises (hereinafter referred to as the "Interpretation No.15") on 30 December 2021, whichstipulates the presentation related to centralized management of funds. The Interpretation No. 15shall go into effect on the date of issue. The Group maintains consistency with the provisions ofInterpretation No. 15 for the presentation related to centralized management of funds before 30December 2020, and therefore, the Group considers that the adoption of such provisions does nothave a material impact on the Group's financial statements.
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(VII) TAXES
1. Major taxes and tax rates
CHINA MERCHANTS PORT GROUP CO., LTD.Taxes
| Taxes | Tax basis | Tax rate |
| Enterprise income tax | Taxable income | 15%-34% (Note 1) |
| Dividend income tax | 5%,10%,25% (Note 2) | |
| Value-added Tax ("VAT") (Note 3) | Income from sale of goods | 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% | |
| Social contribution tax (Note 4) | 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% |
| Land use tax | Land area actually occupied | RMB 2.4-12 per square meter |
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%, certain domestic subsidiaries are subject to the preferential tax ratefor high-tech enterprises or encouraged industrial enterprises in the region of 15%, andthe other overseas subsidiaries are subject to enterprise income tax rates 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 IncomeTax Law.
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(VII) TAXES - continued
1. Major taxes and tax rates - continued
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 taxrate stipulated in the relevant tax laws of China.
Note 4: The social contribution tax is the tax paid by the overseas subsidiary of the Group, TCP
Participa??es S.A.( hereinafter referred to as "TCP"), to the local government.
2. Tax preference
Some subsidiaries of the Group in China are recognized as high-tech enterprises or encouragedindustrial enterprises in the region and are subject to an enterprise income tax rate of 15%. TheGroup's subsidiaries outside China may be subject to enterprise income tax preference inaccordance with relevant local tax policies.
From 1 January 2020 to 31 December 2022, the urban land use tax for the Group's some domesticsubsidiaries on the land for bulk commodity storage facilities is levied at the reduced rate of 50%of the tax amount applicable to the grade of the land.
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (Restated) |
| Cash | 501,446.73 | 575,797.26 |
| RMB | 20,504.26 | 37,045.02 |
| USD | 105,169.96 | 146,078.94 |
| HKD | 23,918.14 | 24,653.41 |
| BRL | 5,600.44 | 5,997.01 |
| Others | 346,253.93 | 362,022.88 |
| Bank deposit (Note1) | 12,367,010,853.19 | 11,547,077,133.15 |
| RMB | 8,311,399,392.65 | 7,585,560,643.67 |
| USD | 1,481,370,545.88 | 817,495,062.65 |
| EUR | 708,753,319.34 | 770,193,517.95 |
| BRL | 273,845,734.48 | 273,701,827.77 |
| HKD | 1,567,048,304.98 | 2,076,664,153.73 |
| AUD | 3,805,872.65 | 557,797.36 |
| Others | 20,787,683.21 | 22,904,130.02 |
| Other cash and bank balances (Note 2) | 404,837,106.85 | 370,770,828.30 |
| RMB | 404,810,610.86 | 370,726,535.43 |
| HKD | 26,495.99 | 44,292.87 |
| Total | 12,772,349,406.77 | 11,918,423,758.71 |
| Including: The total amount of funds deposited overseas | 4,261,299,895.41 | 5,313,591,920.43 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
1. Cash and bank balances - continued
Note 1: The balance of interest receivable in bank deposits was RMB 13,906,450.61, and the
bank deposits of the Group deposited overseas and restricted for remittance to China atthe end of the year totalled nil.
Note 2: The balance of the securities margin account totalled RMB 23,749,389.05 in other cash
and bank balances at the end of the year, the principal of the time certificate of deposit inother cash and bank balances that can be readily withdrawn on demand at the end of theyear totalled RMB 350,000,000.00, the interest of the time certificate of deposit totalledRMB 18,257,505.47, the restricted deposit totalled RMB 12,818,212.33, and the frozenfunds of ETC card business totalled RMB 12,000.00.
2. Held-for-trading financial assets
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Closing balance | Opening balance |
| Financial assets at FVTPL | 6,921,831,502.55 | 850,165,448.59 |
| Including: Debt investment instruments | - | - |
| Equity investment instruments | 157,196.79 | 165,448.59 |
| Structural deposits | 6,921,674,305.76 | 850,000,000.00 |
| Total | 6,921,831,502.55 | 850,165,448.59 |
3. Notes receivable
(1) Category of notes receivable
| Category | Closing balance | Opening balance (Restated) |
| Bank acceptance | 6,081,611.95 | 2,245,000.16 |
| Commercial acceptance | - | 3,146,994.68 |
| Total | 6,081,611.95 | 5,391,994.84 |
| Less: Provision for credit losses (Note) | - | - |
| Carrying amount | 6,081,611.95 | 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 31 December 2021, there are no notes receivable pledged.
(3) As at 31 December 2021, there are no notes reclassified to accounts receivable due to the
drawers' inability to settle the note.
(4) The Group has no notes receivable written off in 2021.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Accounts receivable
(1) Accounts receivable disclosed by aging
CHINA MERCHANTS PORT GROUP CO., LTD.
Aging
| Aging | Closing balance | ||
| Accounts receivable | Provision for credit loss | Proportion (%) | |
| Within 1 year | 1,322,013,727.29 | 24,895,951.15 | 1.88 |
| More than 1 year but not exceeding 2 years | 31,413,062.01 | 14,678,423.40 | 46.73 |
| More than 2 years but not exceeding 3 years | 13,345,543.00 | 7,436,597.03 | 55.72 |
| More than 3 years | 40,455,237.18 | 39,639,020.09 | 97.98 |
| Total | 1,407,227,569.48 | 86,649,991.67 | |
(2) Disclosure of accounts receivable by categories
| 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 | 768,959,184.29 | 195,963.28 | 768,763,221.01 | 680,599,675.12 | 658,001.13 | 679,941,673.99 |
| B | 0.10-0.30 | 436,073,607.05 | 1,088,792.71 | 434,984,814.34 | 520,087,318.71 | 639,654.91 | 519,447,663.80 |
| C | 0.30-50.00 | 146,604,738.15 | 32,286,595.88 | 114,318,142.27 | 207,630,761.65 | 23,911,382.65 | 183,719,379.00 |
| D | 50.00-100.00 | 55,590,039.99 | 53,078,639.80 | 2,511,400.19 | 60,465,077.73 | 50,224,377.50 | 10,240,700.23 |
| Total | 1,407,227,569.48 | 86,649,991.67 | 1,320,577,577.81 | 1,468,782,833.21 | 75,433,416.19 | 1,393,349,417.02 | |
(3) Changes in provision for credit loss of accounts receivable
| Item | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | Total |
| At 1 January 2021(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 year | 9,124,422.59 | 5,507,719.66 | 14,632,142.25 |
| Reversal for the year | -133,502.86 | -823,698.12 | -957,200.98 |
| Transfer-out from derecognition of financial assets(including direct write-down) | - | -2,018,967.31 | -2,018,967.31 |
| Other changes | -628,606.55 | 189,208.07 | -439,398.48 |
| At 31 December 2021 | 33,571,351.87 | 53,078,639.80 | 86,649,991.67 |
(4) Accounts receivable written off in the year
| Item | Nature | Write-offs | Reasons for write-off | Performance performed | Arising from related party transactions? |
| Entity 1 | Handling charges | 1,109,799.16 | The company is in bankruptcy and liquidation | Yes | No |
| Entity 2 | Handling charges | 610,541.77 | The company was dissolved | Yes | No |
| Entity 3 | Handling charges | 159,580.12 | The company was dissolved | Yes | No |
| Entity 4 | Handling charges | 124,998.00 | The company was dissolved | Yes | No |
| Entity 5 | Stowage | 14,048.26 | The company has been liquidated and deregistered | Yes | Yes |
| Total | 2,018,967.31 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Accounts receivable - continued
(5) The top five balances of accounts receivable at the end of the year classified by debtor
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of entity
| Name of entity | Closing balance | Aging | Proportion of the amount to the total accounts receivable (%) | Closing balance of provision for credit loss |
| Client 1 | 203,845,734.90 | Within 1 year, more than 1 year but not exceeding 2 years, more than 2 years but not exceeding 3 years, more than 3 years | 14.49 | 203,845.73 |
| Client 2 | 92,424,169.37 | Within 1 year, more than 1 year but not exceeding 2 years | 6.57 | 29,501,794.87 |
| Client 3 | 65,068,263.10 | Within 1 year, mmore than 1 year but not exceeding 2 years | 4.62 | 224.00 |
| Client 4 | 54,244,407.04 | Within 1 year | 3.85 | - |
| Client 5 | 41,612,049.62 | Within 1 year | 2.96 | - |
| Total | 457,194,624.03 | 32.49 | 29,705,864.60 |
5. Receivables financing
(1) Classification of receivables financing
| Items | Closing balance | Opening balance |
| Bank acceptance measured by fair value | 238,429,402.71 | 217,449,966.41 |
(2) On 31 December 2021, the Group has no pledged receivables financing.
(3) On 31 December 2021, The Group has endorsed or discounted and has not yet matured the
financing of receivables on the balance sheet date.
| Item | Closing balance | Opening balance (Restated) | ||
| Derecognized | Recognized | Derecognized | Recognized | |
| Bank acceptance measured by fair value | 153,044,339.75 | - | 129,866,604.18 | - |
6. Prepayments
(1) Aging analysis of prepayment
| Aging | Closing balance | Opening balance (Restated) | ||||
| Amount | Proportion (%) | Provision for impairment | Amount | Proportion (%) | Impairment provision | |
| Within 1 year | 51,121,689.93 | 99.06 | - | 50,438,796.50 | 98.48 | - |
| More than 1 year but not exceeding 2 years | 351,693.15 | 0.68 | - | 585,435.07 | 1.14 | - |
| More than 2 years but not exceeding 3 years | 109,329.76 | 0.21 | - | - | - | - |
| More than 3 years | 24,081.36 | 0.05 | - | 193,638.86 | 0.38 | - |
| Total | 51,606,794.20 | 100.00 | - | 51,217,870.43 | 100.00 | - |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Prepayments - continued
(2) As at 31 December 2021, the Group has no significant prepayments aged more than one
year.
(3) The top five balances of prepayments at the end of the year classified by entities
CHINA MERCHANTS PORT GROUP CO., LTD.Name of entity
| Name of entity | Relationship with the Company | 31 December 2021 | Aging | Proportion of the closing balance to the total prepayments (%) | Why unsettled |
| Entity 1 | Non-related party | 12,347,416.16 | Within 1 year | 23.93 | Unsettled advance premium |
| Entity 2 | Non-related party | 2,801,656.00 | Within 1 year | 5.43 | Unsettled advance consulting fee |
| Entity 3 | Non-related party | 2,113,207.54 | Within 1 year | 4.09 | Unsettled prepaid communication expenses |
| Entity 4 | Non-related party | 1,632,676.43 | Within 1 year | 3.16 | Unsettled advance labour expenses |
| Entity 5 | Non-related party | 1,453,982.28 | Within 1 year | 2.82 | Unsettled prepayment for purchase of materials |
| Total | 20,348,938.41 | 39.43 |
7. Other receivables
7.1 Summary of other receivables
| Item | Closing balance | Opening balance (Restated) |
| Dividend receivable | 264,626,493.85 | 258,137,208.69 |
| Other receivables | 431,650,102.02 | 3,303,155,105.29 |
| Total | 696,276,595.87 | 3,561,292,313.98 |
7.2 Dividend receivable
(1) Presentation of dividend receivable
| Name of investee | Closing balance | Opening balance |
| China Nanshan Development (Group) Incorporation ("Nanshan Group") | 185,070,000.00 | 210,831,000.00 |
| Zhanjiang Merchants Port City Investment Co., Ltd. ("Merchants Port City") | 41,847,044.77 | - |
| Tin-Can Island Container Terminal Ltd | 19,076,909.00 | 33,289,037.77 |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 18,403,959.77 | 13,378,666.52 |
| Others | 493,472.09 | 896,900.00 |
| Total | 264,891,385.63 | 258,395,604.29 |
| Less: Provision for credit loss | 264,891.78 | 258,395.60 |
| Book value | 264,626,493.85 | 258,137,208.69 |
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(VIII) 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
CHINA MERCHANTS PORT GROUP CO., LTD.Name of investee
| Name of investee | Closing balance | Opening balance | Aging | Why unrecovered |
| Nanshan Group | 74,028,000.00 | 140,554,000.00 | More than 1 year but not exceeding 2 years | Undergoing relevant formalities, expected to be recovered by the end of 2022 |
(3) Changes in provision for credit loss of dividends receivable
| 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) | ||
| At 1 January 2021 | 258,395.60 | - | - | 258,395.60 |
| Carrying amount of dividends receivable at 1 January 2021 | ||||
| -- Transfer to Stage 2 | - | - | - | - |
| -- Transfer to Stage 3 | - | - | - | - |
| -- Reverse to Stage 2 | - | - | - | - |
| -- Reverse to Stage 1 | - | - | - | - |
| Provision for the year | 6,496.18 | - | - | 6,496.18 |
| Reversal for the year | - | - | - | - |
| Transfer-out on derecognition of financial assets( including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| At 31 December 2021 | 264,891.78 | - | - | 264,891.78 |
7.3 Other receivables
(1) Other receivables disclosed by aging
| Aging | Closing balance | ||
| Other receivables | Provision for credit loss | Proportion (%) | |
| Within 1 year | 328,141,878.41 | 5,068,631.24 | 1.54 |
| More than 1 year but not exceeding 2 years | 38,177,531.87 | 9,689,121.55 | 25.38 |
| More than 2 years but not exceeding 3 years | 465,330,513.59 | 463,694,669.80 | 99.65 |
| More than 3 years | 358,564,468.35 | 280,111,867.61 | 78.12 |
| Total | 1,190,214,392.22 | 758,564,290.20 | |
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(VIII) 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
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (Restated) |
| Operation compensation (Note 1) | 618,500,035.62 | 687,057,815.03 |
| Temporary payments | 260,222,250.12 | 159,559,495.82 |
| Land compensation (Note 2) | 89,630,000.00 | 2,742,032,000.00 |
| Deposits | 25,492,288.59 | 24,819,304.63 |
| Dedicated grants(Note 3) | 24,800,000.00 | - |
| Compensation for profit or loss on transition | 6,347,258.89 | 38,312,376.24 |
| Others | 165,222,559.00 | 173,665,086.98 |
| Total | 1,190,214,392.22 | 3,825,446,078.70 |
| Less: Provision for credit loss | 758,564,290.20 | 522,290,973.41 |
| Book value | 431,650,102.02 | 3,303,155,105.29 |
Note 1: As of 31 December 2021, it is the operation compensation amounting to RMB
618,500,035.62 that the subsidiaries of the Company should collect from the holdingcompanies of minority shareholders. The aforesaid amount has been overdue. Therefore,the Group made a corresponding provision for credit impairment losses of RMB190,775,500.00. As of 31 December 2021, these amount has been fully provided forcredit losses.
Note 2: On 9 October 2021, Zhanjiang Port (Group) Co., Ltd.,(hereinafter referred to as the "
Zhanjiang Port "), subsidiary of the Company, entered into the Agreement on Recoveryof State-owned Land Use Rights with the People's Government of Xiashan District,Zhanjiang Municipal. Pursuant to the Agreement, Zhanjiang Port shall return the landlocated in the Zhanjiang Comprehensive Bonded Zone on the east of the GangshuAvenue of approximately 195.68 mu, which is amounting to RMB 89,630,000.00. Theaforementioned land was then returned before 31 December 2021. The net book value ofthe land was RMB63,458,203.57, and the compensation gain recognized netting oftransaction costs was RMB26,126,981.43. As at 31 December 2021, the total landcompensation not recovered amounted to RMB89,630,000.00.
Note 3: This represents the special subsidy of RMB35,000,000.00 for public lighterage branch
line obtained by the Company's subsidiary Shantou CMPort Group Co., Ltd. ("ShantouPort") in 2021 according to the Notice of Shantou Transportation Bureau and Bureau ofCommerce of Shantou Municipality on Continuation of the Policy of Subsidy for HeavyContainer Imports by Voyage and Special Subsidy for Shantou Public Lighterage BranchLine. As of 31 December 2021, RMB24,800,000.00 is not yet received. This specialsubsidy is closely related with the business of Shantou Port, and is taken as a componentof the consideration for provision of public lighterage branch line business.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(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. Suchexpected average loss rates are based on actual historical impairments and taking into account thecurrent and future economic conditions.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(3) Provision for credit loss on other receivables - continued
As at 31 December 2021, the credit risk and expected credit loss of other receivables of each category of customers are presented as below:
CHINA MERCHANTS PORT GROUP CO., LTD.Credit rating
| 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 | 431,741,133.45 | - | - | 431,741,133.45 | 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 | - | - | 758,473,258.77 | 758,473,258.77 | - | - | 722,660,175.74 | 722,660,175.74 |
| Account balance | 431,741,133.45 | - | 758,473,258.77 | 1,190,214,392.22 | 3,102,785,902.96 | - | 722,660,175.74 | 3,825,446,078.70 | |
| Provision for credit loss | 106,031.43 | - | 758,458,258.77 | 758,564,290.20 | 308,222.19 | - | 521,982,751.22 | 522,290,973.41 | |
| Book value | 431,635,102.02 | - | 15,000.00 | 431,650,102.02 | 3,102,477,680.77 | - | 200,677,424.52 | 3,303,155,105.29 | |
Including: Significant other receivables for which the provision for credit loss is assessed individually at the end of the year( credit rating of D)
| Name | Carrying amount | Provision for credit loss | ECL rate(%) | Reasons for provision |
| Entity 1 | 618,500,035.62 | 618,500,035.62 | 100.00 | Expected to be unrecoverable(Note) |
| Entity 2 | 103,643,609.29 | 103,643,609.29 | 100.00 | Expected to be unrecoverable |
| Entity 3 | 14,000,000.00 | 14,000,000.00 | 100.00 | Expected to be unrecoverable |
| Total | 736,143,644.91 | 736,143,644.91 | - - | - - |
Note: Refer to Note (VIII), 7.3(2)Note 1 for details.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(4) Changes in provision, reversal and write-off for credit loss of other receivables
CHINA MERCHANTS PORT GROUP CO., LTD.Credit loss allowance
| Credit loss allowance | 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) | ||
| At 1 January 2021(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 | -161,287.99 | - | 161,287.99 | - |
| -- Reverse to Stage 2 | - | - | - | - |
| -- Reverse to Stage 1 | 293,405.18 | - | -293,405.18 | - |
| Provision for the year | 104,464.47 | - | 239,995,475.12 | 240,099,939.59 |
| Reversal for the year | -438,772.42 | - | -6,000.00 | -444,772.42 |
| Resold for the year | - | - | - | - |
| Write-off for the year | - | - | - | - |
| Other changes | - | - | -3,381,850.38 | -3,381,850.38 |
| At 31 December 2021 | 106,031.43 | - | 758,458,258.77 | 758,564,290.20 |
(5) Changes in the carrying amount of other receivables
| Carrying amount | 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) | ||
| At 1 January 2021 | 3,102,785,902.96 | - | 722,660,175.74 | 3,825,446,078.70 |
| Carrying amount of other receivables at 1 January 2021 | - - | - - | - - | - - |
| -- Transfer to Stage 2 | - | - | - | - |
| -- Transfer to Stage 3 | -43,728,163.84 | - | 43,728,163.84 | - |
| -- Reverse to Stage 2 | - | - | - | - |
| -- Reverse to Stage 1 | 355,828.50 | - | -355,828.50 | - |
| Increase for the year | 75,755,789.07 | - | 5,668,098.06 | 81,423,887.13 |
| Derecognition for the year | - | - | - | - |
| Other changes | -2,703,428,223.24 | - | -13,227,350.37 | -2,716,655,573.61 |
| At 31 December 2021 | 431,741,133.45 | - | 758,473,258.77 | 1,190,214,392.22 |
(6) In 2021, the Group has no other receivables written off.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(7) The top five balances of other receivables at the end of the year classified by debtor
CHINA MERCHANTS PORT GROUP CO., LTD.Name of entity
| Name of entity | Nature | Closing balance | Aging | Proportion of the amount to the other receivable (%) | Provision for credit loss at the end of the year |
| Entity 1 | Operation compensation | 618,500,035.62 | More than 2 years but not exceeding 3 years, more than 3 years | 51.97 | 618,500,035.62 |
| Entity 2 | Temporary payments | 103,643,609.29 | Within 3 year, more than 3 years | 8.71 | 103,643,609.29 |
| Entity 4 | Land compensation | 89,630,000.00 | Within 1 year | 7.53 | - |
| Entity 5 | Temporary payments | 77,858,169.40 | Within 1 year, more than 1 year but not exceeding 2 years | 6.54 | - |
| Entity 6 | Temporary payments | 32,953,940.00 | More than 3 years | 2.77 | - |
| Total | 922,585,754.31 | 77.52 | 722,143,644.91 |
8. Inventories
(1) Categories of inventories
| 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 | 174,693,225.25 | 730,054.35 | 173,963,170.90 | 168,411,323.61 | 884,061.15 | 167,527,262.46 |
| Finished goods | 6,576,244.72 | - | 6,576,244.72 | 34,780,194.84 | - | 34,780,194.84 |
| Others | 14,380,720.50 | - | 14,380,720.50 | 12,516,519.00 | - | 12,516,519.00 |
| Total | 195,650,190.47 | 730,054.35 | 194,920,136.12 | 215,708,037.45 | 884,061.15 | 214,823,976.30 |
(2) Provision for decline in value of inventories
| Item | 1 January 2021 | Provision | Decrease | 31 December 2021 | |
| Reversal | Write-off | ||||
| Raw materials | 884,061.15 | - | - | 154,006.80 | 730,054.35 |
(3) As at 31 December 2021, the Group has no capitalized borrowing cost in the balance of
inventories.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Assets held for sale
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Carrying amount at closing balance | Fair value at closing balance | Estimated disposal expenses | Schedule |
| Long-term assets held for sale(Note) | 337,442,757.28 | 1,380,876,000.00 | 31,475,777.36 | Expected to be vacated and relocated in 2022 |
| Less: Provision for impairment of assets held for sale | - | |||
| Carrying amount | 337,442,757.28 |
Note: Refer to Note (VIII).12(1) for details.
10. Non-current assets due within one year
| Item | Closing balance | Opening balance (Restated) |
| Long-term receivables due within one year | 102,458,920.89 | 67,760,233.67 |
| Less: Provision for credit loss | 102,458.92 | 67,760.23 |
| Carrying amount | 102,356,461.97 | 67,692,473.44 |
11. Other current assets
(1) Categories of other current assets
| Item | Closing balance | Opening balance |
| Structural deposits | - | 102,749,431.10 |
| Including: Principal | - | 100,000,000.00 |
| Interest receivable | - | 2,749,431.10 |
| Prepaid taxes | 64,390,050.80 | 47,556,756.97 |
| Input tax to be deducted and to be certified | 254,909,235.38 | 237,493,882.42 |
| Others | 20,385,011.23 | 46,274,014.67 |
| Total | 339,684,297.41 | 434,074,085.16 |
| Less: Provision for credit loss | - | - |
| Book value | 339,684,297.41 | 434,074,085.16 |
12. Long-term receivables
(1) Details of long-term receivables
| Item | Closing balance | Opening balance | Range of discount rate at the end of year | ||||
| Account balance | Provision for credit loss | Book value | Account balance | Provision for credit loss | Book value | ||
| Advances to shareholders (Note1) | 3,566,614,937.93 | 3,566,614.94 | 3,563,048,322.99 | 3,663,271,923.98 | 3,663,271.92 | 3,659,608,652.06 | 4.75%-8.00% |
| Land compensation receivable (Note 2) | 2,692,032,000.00 | - | 2,692,032,000.00 | - | - | - | - |
| 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 | - |
| Receivables for cooperation | - | - | - | 286,330,144.62 | 286,330.14 | 286,043,814.48 | - |
| Total | 6,268,646,937.93 | 3,576,614.94 | 6,265,070,322.99 | 3,959,602,068.60 | 3,959,602.06 | 3,955,642,466.54 | - |
| Less: Long-term receivables due within 1 year | 102,458,920.89 | 102,458.92 | 102,356,461.97 | 67,760,233.67 | 67,760.23 | 67,692,473.44 | - |
| Long-term receivables due over 1 year | 6,166,188,017.04 | 3,474,156.02 | 6,162,713,861.02 | 3,891,841,834.93 | 3,891,841.83 | 3,887,949,993.10 | - |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(1) Details of long-term receivables - continued
Note 1: It mainly represents the Company's receivable of aggregate principal and interest from
Terminal Link SAS, equivalent to RMB 2,722,198,784.01.
On 25 November 2019, the subsidiary of the Company, China Merchants Port HoldingsCompany ("CMPort") has signed the shareholders' agreement with the associate TerminalLink SAS and its shareholder CMA CGM S.A. According to this agreement, CMPortintends to subscribe for mandatory convertible bonds of USD468 million and grant a loanfacility of USD500 million to Terminal Link SAS in order to support Terminal Link SAS'acquisition plan of 10 target terminals. On 26 March 2020, the Company subscribedmandatory convertible bonds, equivalent to RMB2,746,841,398.03. Meanwhile, DirectAchieve Investments Limited, a subsidiary of the Company, provided a long-term loan toTerminal Link SAS for the terminal acquisition project and charged interest to TerminalLink SAS at an interest rate of 6%.
Note 2: On 5 November 2019, 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 370.96 mu located in ZhuchiDeepwater Port on the south of Zhongshan East Road of Shantou should be returned toShantou Land Reserve Center by Shantou Port, which is amounting toRMB1,558,032,000.00. Among them, 183.63 mu of land and attached buildings havebeen transferred in 2019, and the remaining 187.33 mu of land and attached buildings hasbeen transferred in 2020. As at 31 December 2021, the land compensation totallingRMB1,158,032,000.00 has not yet been recovered.
On 21 August 2020, Shantou Port entered into the Contract for the Acquisition of State-Owned Land Use Rights in Shantou with Land Reserve Center of Shantou HaojiangDistrict. Pursuant to the contract, the land and attached buildings of approximately 152.34mu located in Yutianwen, Queshi, Haojiang District, Shantou, should be returned to LandReserve Center of Shantou Haojiang District by Shantou Port, which is amounting toRMB250,000,000.00. The transfer of above-mentioned land and attached buildings wascompleted before 31 December 2021. As at 31 December 2021, the land compensationtotalling RMB200,000,000.00 has not yet been recovered.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(1) Details of long-term receivables - continued
Note 2: - continued
On 22 December 2020, Shantou Port entered into the Contract for the Acquisition ofState-Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant tothe contract, the land and attached buildings of approximately 648.78 mu located inZhuchi Deepwater Port of Shantou should be returned to Shantou Land Reserve Centerby Shantou Port, which is amounting to RMB2,724,876,000.00. Among them, 320 mu ofland and attached buildings were transferred by 31 December 2020, which is amountingto RMB1,344,000,000.00. As at 31 December 2021, the land compensation totallingRMB1,334,000,000.00 has not yet been recovered, and the remaining 328.78 mu of landand attached buildings have not been transferred. The intangible assets of the remaining
328.78 mu of land and attached buildings of RMB212,552,105.91, fixed assets ofRMB113,712,788.00 and investment properties of RM B11,177,863.37 are presented asassets held for sale by the Group.
In 2021, Shantou Municipal Government revised the "Detailed Control Planning ofShantou Zhugang New Town (Partial) - Zhuchigang Area", as the final plan has not yetbeen approved and announced, Shantou Land Reserve Center delayed the transfer of theabove 328.78 mu of land originally planned to be completed in 2021 to 2022.
(2) Provision for credit loss on long-term receivables
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| 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) | ||
| At 1 January 2021 | 3,959,602.06 | - | - | 3,959,602.06 |
| Carrying amount of other current assets at 1 January 2021 | ||||
| -- Transfer to Stage 2 | - | - | - | - |
| -- Transfer to Stage 3 | - | - | - | - |
| -- Reverse to Stage 2 | - | - | - | - |
| -- Reverse to Stage 1 | - | - | - | - |
| Provision for the year | 34,698.70 | - | - | 34,698.70 |
| Reversal for the year | -417,685.82 | - | - | -417,685.82 |
| Transfer-out on derecognition of financial assets( including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| At 31 December 2021 | 3,576,614.94 | - | - | 3,576,614.94 |
(3) As at 31 December 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 31 December 2021.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments
(1) Details of long-term equity investments
CHINA MERCHANTS PORT GROUP CO., LTD.
Investees
| Investees | Accounting method | 1 January 2021 (restated) | Changes for the year | 31 December 2021 | Including: Closing balance of provision for impairment | ||||||||
| Increase | Decrease | Investment profit 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 | - | - | 57,559,118.21 | - | - | -159,489,460.08 | - | - | -59,827,233.35 | 2,371,538,986.74 | - |
| Port of Newcastle | Equity method | 2,149,048,944.67 | - | - | 12,868,828.80 | 4,375,404.14 | - | -30,408,519.30 | - | - | -176,201,036.95 | 1,959,683,621.36 | - |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Equity method | 1,507,359,082.53 | - | - | 83,154,378.77 | - | - | -100,000,000.00 | - | - | - | 1,490,513,461.30 | - |
| Yantai Port Group Laizhou Port Co., Ltd. (formerly known as "China Overseas Harbour Affairs (Laizhou) Co., Ltd.") | Equity method | 782,832,086.50 | - | - | 33,327,096.27 | - | - | -24,643,441.33 | - | - | - | 791,515,741.44 | - |
| Others | Equity method | 1,893,790,530.18 | 1,021,291.12 | - | 55,732,471.44 | - | - | -21,350,308.29 | 1,003,584.24 | - | -3,445,620.89 | 1,926,751,947.80 | - |
| Subtotal | 8,866,327,205.84 | 1,021,291.12 | - | 242,641,893.49 | 4,375,404.14 | - | -335,891,729.00 | 1,003,584.24 | - | -239,473,891.19 | 8,540,003,758.64 | - | |
| II. Associates | |||||||||||||
| Shanghai International Port (Group) Co., Ltd.(hereinafter referred to as the "Shanghai Port Group") | Equity method | 25,361,783,181.41 | - | - | 4,190,349,799.99 | 152,749,411.32 | -68,880,822.92 | -793,927,959.22 | - | - | 1,733,773.11 | 28,843,807,383.69 | - |
| Nanshan Group | Equity method | 5,390,946,895.65 | - | - | 685,312,588.00 | 10,912,249.63 | 352,921,807.12 | -111,042,000.00 | - | - | - | 6,329,051,540.40 | - |
| Terminal Link SAS | Equity method | 6,803,553,044.91 | 2,108,106.13 | - | 476,262,839.86 | -137,113,127.55 | -230,782.28 | -1,389,503,418.41 | - | - | 282,916,394.46 | 6,037,993,057.12 | - |
| Liaoning Port Co., Ltd. (formerly known as "Dalian Port (PDA) Company Limited")("Liaoning Port")(Note) | Equity method | 3,455,964,513.62 | - | - | 177,413,349.12 | -1,739,501.18 | 133,473,710.98 | -76,829,166.42 | 265,572,515.61 | - | 18,545,210.30 | 3,972,400,632.03 | 337,700,959.79 |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | Equity method | 7,176,706,008.55 | - | - | 130,229,025.57 | - | - | - | - | - | - | 7,306,935,034.12 | - |
| Ningbo Zhoushan Port Company Limited ("Ningbo Zhoushan") | Equity method | 3,098,292,286.95 | 206,523,799.86 | - | 229,363,153.19 | 3,863,547.99 | 5,473,715.31 | -68,675,568.77 | - | - | - | 3,474,840,934.53 | - |
| China Merchants Northeast Asia Development & Investment Co., Ltd. | Equity method | 1,007,786,285.71 | - | - | 8,262,246.98 | - | - | - | - | - | - | 1,016,048,532.69 | - |
| Others | Equity method | 5,081,051,800.26 | 776,647.76 | -158,496,285.36 | 151,122,584.39 | 31,811,339.48 | 28,775,127.82 | -181,330,149.23 | - | -2,147,208.07 | -119,192,905.75 | 4,832,370,951.30 | 2,135,644.39 |
| Subtotal | 57,376,084,017.06 | 209,408,553.75 | -158,496,285.36 | 6,048,315,587.10 | 60,483,919.69 | 451,532,756.03 | -2,621,308,262.05 | 265,572,515.61 | -2,147,208.07 | 184,002,472.12 | 61,813,448,065.88 | 339,836,604.18 | |
| Total | 66,242,411,222.90 | 210,429,844.87 | -158,496,285.36 | 6,290,957,480.59 | 64,859,323.83 | 451,532,756.03 | -2,957,199,991.05 | 266,576,099.85 | -2,147,208.07 | -55,471,419.07 | 70,353,451,824.52 | 339,836,604.18 | |
Note : Other equity movements refer to Note (VIII) 45 for details.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments - continued
(2) Changes in provisions for impairment losses of long-term equity investments
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 1/1/2021 | Effect of consolidation scope change | Increase | Decrease | Effect of translation of foreign currency statements | 31/12/2021 | |
| Amount | Reason | ||||||
| Liaoning Port | 621,818,684.80 | - | - | 265,572,515.61 | Refer to Note(VIII)45 | -18,545,209.40 | 337,700,959.79 |
| HOA THUONG CORPORATION | - | - | 2,147,208.07 | - | N/A | -11,563.68 | 2,135,644.39 |
| Total | 621,818,684.80 | - | 2,147,208.07 | 265,572,515.61 | - - | -18,556,773.08 | 339,836,604.18 |
14. Investments in other equity instruments
(1) Details of investments in other equity instruments
| Investees | Closing balance | Opening balance |
| China Ocean Shipping Agency (Shenzhen) Co., Ltd. | 144,998,784.69 | 144,424,830.00 |
| Others | 35,253,013.74 | 37,042,227.74 |
| Total | 180,251,798.43 | 181,467,057.74 |
(2) Details of non-trading equity instruments
| 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. | 6,949,500.00 | 131,488,784.69 | - | The intention of holding is neither for sale nor profits in short-term | N/A |
| Others | 460,262.66 | 7,410,582.00 | - | The intention of holding is neither for sale nor profits in short-term | N/A |
| Total | 7,409,762.66 | 138,899,366.69 | - |
15. Other non-current financial assets
| Item | Closing balance | Opening balance |
| Financial assets at FVTPL | 809,515,244.87 | 910,807,452.56 |
| Including: Investments in equity instruments | 809,515,244.87 | 910,807,452.56 |
| Including: Qingdao Port International Co., Ltd. | 782,723,863.52 | 886,385,139.77 |
| Others | 26,791,381.35 | 24,422,312.79 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Investment properties
(1) Investment properties measured under cost method
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Land use rights | Buildings and structures | 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 for the year | 8,907,053.85 | 14,936,216.21 | 23,843,270.06 |
| (1) Purchase | - | 1,301,544.00 | 1,301,544.00 |
| (2) Transferred from fixed assets | - | 13,634,672.21 | 13,634,672.21 |
| (3) Transferred from intangible assets | 8,907,053.85 | - | 8,907,053.85 |
| 3. Decrease for the year | - | 111,653,314.50 | 111,653,314.50 |
| (1) Disposal | - | 1,868,892.31 | 1,868,892.31 |
| (2) Transfer to fixed assets | - | 109,784,422.19 | 109,784,422.19 |
| 4. Balance at 31 December 2021 | 114,634,546.67 | 6,181,503,172.76 | 6,296,137,719.43 |
| 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 for the year | 3,913,726.53 | 189,673,663.97 | 193,587,390.50 |
| (1) Provision for the year | 2,282,104.06 | 187,357,639.74 | 189,639,743.80 |
| (2) Transferred from fixed assets | - | 2,316,024.23 | 2,316,024.23 |
| (3) Transferred from intangible assets | 1,631,622.47 | - | 1,631,622.47 |
| 3. Decrease for the year | - | 20,880,574.61 | 20,880,574.61 |
| (1) Disposal | - | 1,775,447.69 | 1,775,447.69 |
| (2) Transfer to fixed assets | - | 19,105,126.92 | 19,105,126.92 |
| 4. Balance at 31 December 2021 | 37,448,342.77 | 960,450,961.78 | 997,899,304.55 |
| III. Impairment provision | |||
| 1. Balance at 1 January 2021 | - | - | - |
| 2. Increase for the year | - | - | - |
| 3. Decrease for the year | - | - | - |
| 4. Balance at 31 December 2021 | - | - | - |
| IV. Book value | |||
| 1. At 31 December 2021 | 77,186,203.90 | 5,221,052,210.98 | 5,298,238,414.88 |
| 2. At 1 January 2021 | 72,192,876.58 | 5,486,562,398.63 | 5,558,755,275.21 |
(2) Investment properties without ownership certificates
| Item | Closing balance | Opening balance | Reasons for certificate of title not completed | Expected time of completion |
| Buildings, structures, and land use rights | 17,610,186.51 | 19,256,400.05 | Some houses and buildings have not yet obtained certificates of land use rights | The certificate of title is underway |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets
17.1 Summary of fixed assets
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (restated) |
| Fixed assets | 31,710,355,613.32 | 29,478,004,411.21 |
| Disposal of fixed assets | 157,616.97 | 1,750,748.00 |
| Total | 31,710,513,230.29 | 29,479,755,159.21 |
17.2 Fixed assets
(1) Details of fixed assets
| Item | Port and terminal facilities | Buildings and structures | 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 year | 2,597,697,997.28 | 169,178,346.91 | 1,627,272,788.24 | 91,847,711.39 | 4,485,996,843.82 |
| (1) Purchase | 28,913,704.71 | 1,657,155.23 | 249,775,005.43 | 10,618,654.29 | 290,964,519.66 |
| (2) Transfer from development expenditure | 231,671.58 | - | 7,725,001.98 | - | 7,956,673.56 |
| (3) Transfer from construction in progress | 2,568,552,620.99 | 57,736,769.49 | 1,369,772,780.83 | 81,229,057.10 | 4,077,291,228.41 |
| (4) Transfer from investment properties | - | 109,784,422.19 | - | - | 109,784,422.19 |
| (5) Effect of changes in the scope of consolidation | - | - | - | - | - |
| 3. Decrease for the year | 106,048,643.07 | 20,384,736.21 | 239,086,033.64 | 31,951,977.37 | 397,471,390.29 |
| (1) Disposal or retirement | 98,938,297.47 | 6,750,064.00 | 239,086,033.64 | 31,951,977.37 | 376,726,372.48 |
| (2) Transfer to construction in progress | 3,206,649.81 | - | - | - | 3,206,649.81 |
| (3) Transfer to investment properties | - | 13,634,672.21 | - | - | 13,634,672.21 |
| (4) Adjustments to the amount carried forward | 3,903,695.79 | - | - | - | 3,903,695.79 |
| 4. Reclassification | 4,634,191.17 | -14,125,996.90 | 9,491,805.73 | - | - |
| 5. Effect of changes in foreign exchange | -217,233,587.45 | -4,510,309.88 | -199,637,336.47 | -17,911,473.16 | -439,292,706.96 |
| 6. Balance at 31 December 2021 | 32,137,263,023.73 | 1,977,485,549.10 | 16,457,340,117.72 | 2,175,153,444.46 | 52,747,242,135.01 |
| 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 year | 939,489,240.41 | 94,689,351.03 | 761,159,730.21 | 101,209,197.82 | 1,896,547,519.47 |
| (1) Provision | 939,489,240.41 | 75,584,224.11 | 761,159,730.21 | 101,209,197.82 | 1,877,442,392.55 |
| (2) Transfer from investment properties | - | 19,105,126.92 | - | - | 19,105,126.92 |
| (3) Effect of changes in the scope of consolidation | - | - | - | - | - |
| 3. Decrease for the year | 82,743,017.62 | 8,728,635.03 | 217,932,477.76 | 29,750,768.67 | 339,154,899.08 |
| (1) Disposal or retirement | 82,337,575.64 | 6,412,610.80 | 217,932,477.76 | 29,750,768.67 | 336,433,432.87 |
| (2) Transfer to construction in progress | 405,441.98 | - | - | - | 405,441.98 |
| (3) Transfer to investment properties | - | 2,316,024.23 | - | - | 2,316,024.23 |
| 4. Reclassification | 6,643,252.93 | -6,877,372.10 | 234,119.17 | - | - |
| 5. Effect of changes in foreign exchange | -45,495,621.18 | -1,080,004.31 | -88,954,302.21 | -4,979,822.72 | -140,509,750.42 |
| 6. Balance at 31 December 2021 | 9,650,764,730.66 | 546,215,006.96 | 9,774,172,565.39 | 1,008,208,125.97 | 20,979,360,428.98 |
| 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 year | - | - | - | - | - |
| 3. Disposal or retirement for the year | - | - | - | - | - |
| 4. Reclassified amount for the year | - | - | - | - | - |
| 5. Other decreases | - | - | 1,325.51 | - | 1,325.51 |
| 6. Balance at 31 December 2021 | 57,419,468.96 | 63,906.47 | 42,717.28 | - | 57,526,092.71 |
| IV. Book value | |||||
| 1. Balance at 31 December 2021 | 22,429,078,824.11 | 1,431,206,635.67 | 6,683,124,835.05 | 1,166,945,318.49 | 31,710,355,613.32 |
| 2. Balance 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 31 December 2021.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets - continued
17.2 Fixed assets - continued
(3) Fixed assets leased out under operating leases
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Book value at 31 December 2021 | Book value at 31 December 2020 |
| Buildings and structures | 174,489,188.90 | 296,325,159.35 |
| Port and terminal facilities | 38,957,300.62 | 79,578,478.13 |
| Machinery and equipment, furniture and fixture and other equipment | 4,770,103.50 | 8,646,797.33 |
| Total | 218,216,593.02 | 384,550,434.81 |
(4) Fixed assets without ownership certificates
| Item | Book value at 31 December 2021 | Book value at 31 December 2020 | Remarks |
| Buildings, structures, port and terminal facilities | 2,086,360,399.74 | 1,751,680,587.08 |
This is mainly due to the fact that certain buildingsand structures have not yet obtained the land userights of the land for such fixed assets and theapproval procedures have not yet been completed.
(5) Other issues
| Item | Amount | Remark |
| Cost of fixed assets fully depreciated but still in use at the end of the year | 4,067,219,016.28 | |
| Cost of fixed assets temporarily idle at the end of the year | - | |
| Fixed assets disposed and retired in the year: | ||
| Including: Cost of fixed assets disposed and retired in the year | 376,726,372.48 | |
| Net value of fixed assets disposed and retired in the year | 40,291,614.10 | |
| Loss on disposal or retirement of fixed assets in the year | 18,305,792.81 |
(6) As at 31 December 2021, the Group's fixed assets with restricted ownership refer to Note
(VIII) 63 for details.
17.3 Disposal of fixed assets
| Item | Closing balance | Opening balance |
| Machinery and equipment, furniture and fixture and other equipment | 78,950.02 | 1,216,187.48 |
| Motor vehicles and cargo ships | 78,666.95 | 17,000.05 |
| Port and terminal facilities | - | 517,560.47 |
| Total | 157,616.97 | 1,750,748.00 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress
(1) Summary of construction in progress
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Closing balance | Opening balance |
| Construction in progress | 2,543,631,289.59 | 5,366,181,331.72 |
| Materials for construction of fixed assets | 13,953,664.33 | 15,249,274.46 |
| Total | 2,557,584,953.92 | 5,381,430,606.18 |
(2) Details of construction in progress
| Item | Closing balance | Opening balance | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Port and terminal facilities | 2,177,670,930.47 | - | 2,177,670,930.47 | 4,662,213,617.98 | - | 4,662,213,617.98 |
| Berths and yards | 15,718,097.89 | - | 15,718,097.89 | 336,353,712.35 | - | 336,353,712.35 |
| Infrastructure | 220,531,192.85 | - | 220,531,192.85 | 197,699,601.64 | - | 197,699,601.64 |
| Ship under construction | - | - | - | 58,674,526.32 | - | 58,674,526.32 |
| Others | 129,711,068.38 | - | 129,711,068.38 | 111,239,873.43 | - | 111,239,873.43 |
| Total | 2,543,631,289.59 | - | 2,543,631,289.59 | 5,366,181,331.72 | - | 5,366,181,331.72 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
(3) The top ten balances of construction in progress
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Budget amount | 1 January 2021 | Increase for the year | Transfer to fixed assets | Other decreases for the year | Effect of changes in foreign exchange | 31 December 2021 | Proportion of accumulated construction investment in budget(%) | Construction progress (%) | Amount of accumulated capitalized interest | Including: capitalized interest for the year | Interest capitalization rate for the current year (%) | Capital source |
| Reconstruction project of HIPG container, oil terminal and tank area | 2,575,891,749.20 | 986,965,991.96 | 30,225,598.52 | 5,829,386.34 | 112,313,625.52 | -22,673,579.91 | 876,374,998.71 | 57.68 | 57.68 | 847,663.37 | 327,390.66 | 2.75 | Own funds and loans |
| General cargo terminal project at Donghai Island Port Area of Zhanjiang Port | 905,348,400.00 | 366,583,393.31 | 33,093,195.93 | - | - | - | 399,676,589.24 | 44.15 | 44.15 | 44,364,372.49 | 12,879,488.70 | 4.22 | Own funds and loans |
| Phase I expansion project for the container terminal at Baoman Port Area, Zhanjiang Port | 2,342,775,800.00 | 156,012,479.92 | 25,002,275.68 | - | 398,668.68 | - | 180,616,086.92 | 7.73 | 7.73 | 953,620.60 | -11,119.86 | 4.22 | Own funds and loans |
| Reconstruction project for Yard 16# of the bulk cargo terminal, Zhanjiang Port | 190,000,000.00 | 68,846,809.70 | 110,039,628.07 | - | - | - | 178,886,437.77 | 94.15 | 94.15 | 2,899,307.26 | 2,600,508.04 | 4.22 | Own funds and loans |
| Phase I project for the stuffing and destuffing service area of Baoman Port Area, Zhanjiang Port | 606,521,505.83 | 137,075,214.56 | 5,270,101.53 | - | 9,146,779.70 | - | 133,198,536.39 | 23.47 | 23.47 | 16,689,500.56 | - | - | Own funds and loans |
| Back land Reclamation Project on Haidagan Bulk Yard and Supporting Facilities and Liquid Bulk Berth | 59,300,000.00 | 58,274,286.20 | 837,110.40 | - | - | - | 59,111,396.60 | 99.68 | 99.68 | - | - | - | Own funds |
| Logistic Centre Project of Baoman Port Area, Zhanjiang Port | 608,535,600.00 | 55,668,801.93 | - | - | - | - | 55,668,801.93 | 9.15 | 9.15 | - | - | - | Own funds |
| Hydraulic structure engineering for the reconstruction project of Berth 1# - 4#, Haixing Terminal | 2,467,361,016.88 | 1,544,226,816.60 | 632,110,920.11 | 2,086,947,310.05 | 33,836,256.04 | - | 55,554,170.62 | 88.21 | 88.21 | 66,037,883.84 | 25,219,359.80 | 3.87 | Own funds and loans |
| Berth 3# project of Houshi Port area of Xiamen Port | 1,000,000,000.00 | 19,237,391.30 | 33,996,281.66 | - | - | - | 53,233,672.96 | 98.80 | 98.80 | - | - | - | Own funds and loans |
| 28# Warehouse Relocation Project | 67,670,000.00 | 41,299,327.20 | 6,178,297.33 | - | - | - | 47,477,624.53 | 70.16 | 70.16 | - | - | - | Own funds |
| Total | 10,823,404,071.91 | 3,434,190,512.68 | 876,753,409.23 | 2,092,776,696.39 | 155,695,329.94 | -22,673,579.91 | 2,039,798,315.67 | 131,792,348.12 | 41,015,627.34 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
(4) Materials for construction of fixed assets
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance(restated) | ||||
| Carrying amount | Provision for impairment | Book value | Carrying amount | Provision for impairment | Book value | |
| Materials for construction of fixed assets | 13,953,664.33 | - | 13,953,664.33 | 15,249,274.46 | - | 15,249,274.46 |
19. Right-of-use assets
(1) Details of right-of-use assets
| Item | Port and terminal facilities | Buildings and structures | Machinery and equipment, furniture and fixture and other equipment | Land use rights | Motor vehicles, cargo ships and others | Total |
| I. Cost | ||||||
| 1. Balance at 1 January 2021(restated) | 6,772,369,651.12 | 161,394,715.13 | 466,008,746.03 | 2,654,899,114.51 | 14,863,949.59 | 10,069,536,176.38 |
| 2. Increase for the year | 152,243,356.00 | 15,605,749.60 | 3,337,541.05 | 261,663.67 | 1,689,609.47 | 173,137,919.79 |
| (1) Purchase | 152,243,356.00 | 15,605,749.60 | 3,337,541.05 | 261,663.67 | 1,689,609.47 | 173,137,919.79 |
| 3. Decrease for the year | 175,632,891.39 | 4,347,735.56 | 7,460,829.68 | 16,634,314.87 | 7,244,123.48 | 211,319,894.98 |
| (1) Termination of lease | 175,632,891.39 | 4,347,735.56 | 7,460,829.68 | 16,634,314.87 | 7,244,123.48 | 211,319,894.98 |
| 4. Effect of changes in foreign exchange | -141,451,125.79 | -3,208,031.94 | -510,995.73 | -63,637,363.39 | - | -208,807,516.85 |
| 5. Balance at 31 December 2021 | 6,607,528,989.94 | 169,444,697.23 | 461,374,461.67 | 2,574,889,099.92 | 9,309,435.58 | 9,822,546,684.34 |
| II. Accumulated depreciation | ||||||
| 1. Balance at 1 January 2021(restated) | 588,760,107.94 | 30,621,557.69 | 109,303,923.22 | 242,317,665.43 | 10,791,109.16 | 981,794,363.44 |
| 2. Increase for the year | 239,697,224.28 | 18,304,628.95 | 28,402,668.30 | 40,834,819.42 | 2,363,800.88 | 329,603,141.83 |
| (1) Provision | 239,697,224.28 | 18,304,628.95 | 28,402,668.30 | 40,834,819.42 | 2,363,800.88 | 329,603,141.83 |
| 3. Decrease for the year | 175,622,826.43 | 4,325,539.34 | 7,460,829.68 | 16,634,314.87 | 7,244,123.48 | 211,287,633.80 |
| (1) Termination of lease | 175,622,826.43 | 4,325,539.34 | 7,460,829.68 | 16,634,314.87 | 7,244,123.48 | 211,287,633.80 |
| 4. Effect of changes in foreign exchange | -13,786,566.06 | -513,859.90 | -343,717.54 | -5,996,585.82 | - | -20,640,729.32 |
| 5. Balance at 31 December 2021 | 639,047,939.73 | 44,086,787.40 | 129,902,044.30 | 260,521,584.16 | 5,910,786.56 | 1,079,469,142.15 |
| III. Impairment provision | ||||||
| 1. Balance at 1 January 2021 | - | - | - | - | - | - |
| 2. Increase for the year | - | - | - | - | - | - |
| 3. Decrease for the year | - | - | - | - | - | - |
| 4. Balance at 31 December 2021 | - | - | - | - | - | - |
| IV. Book value | ||||||
| 1. Book value at 31 December 2021 | 5,968,481,050.21 | 125,357,909.83 | 331,472,417.37 | 2,314,367,515.76 | 3,398,649.02 | 8,743,077,542.19 |
| 2. Book value at 1 January 2021(restated) | 6,183,609,543.18 | 130,773,157.44 | 356,704,822.81 | 2,412,581,449.08 | 4,072,840.43 | 9,087,741,812.94 |
(2) Amount recognized in profit or loss
| Category | Amount incurred in the year |
| Depreciation expenses of right-of-use assets (Note 1) | 329,603,141.83 |
| Interest expenses on lease liabilities (Note 2) | 79,937,678.42 |
| Expenses for short-term leases | 57,066,803.15 |
| Expenses for leases of low value assets | 1,059.70 |
| Variable lease payments not included in the measurement of lease liabilities (Note 3) | - |
| Revenue from sublease of right-of-use assets | 21,274,985.98 |
Note 1: In 2021, no depreciation expenses of right-of-use assets is capitalized.
Note 2: In 2021, no interest expenses of lease liabilities are capitalized.
Note 3: In 2021, no variable lease payments were included in the measurement of lease liabilities.
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(VIII) 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 current year amount to RMB
435,267,676.74.
(4) The lease terms of the lease assets of the Group are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Category
| Category | Lease term |
| Port and terminal facilities | 1-99 years |
| Buildings and structures | 3 months-5 years |
| Machinery and equipment, furniture and fixture and other equipment | 1-6 years |
| Motor vehicles and cargo ships | 5 years |
| Others | 35 years |
20. Intangible assets
(1) Details of intangible assets
| Items | Land use rights | 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 | 809,185,563.97 | 23,673,686.37 | 266,870,311.55 | 1,099,729,561.89 |
| (1) Purchase | 324,710.39 | 23,673,686.37 | 94,887,589.91 | 118,885,986.67 |
| (2) Effect of changes in the scope of consolidation | - | - | - | - |
| (3) Other increase(Note 1) | 808,860,853.58 | - | 171,982,721.64 | 980,843,575.22 |
| 3. Decrease for the year | 94,747,493.09 | - | 40,590,156.23 | 135,337,649.32 |
| (1) Disposal | 85,840,439.24 | - | 1,870,786.22 | 87,711,225.46 |
| (2) Transfer to investment properties | 8,907,053.85 | - | - | 8,907,053.85 |
| (3) Other decrease | - | - | 38,719,370.01 | 38,719,370.01 |
| 4. Effect of changes in foreign exchange | -8,794,482.57 | -780,862,955.02 | -46,265,516.67 | -835,922,954.26 |
| 5. Balance at 31 December 2021 | 14,631,047,267.00 | 8,239,023,292.58 | 1,303,728,681.52 | 24,173,799,241.10 |
| II. Accumulated amortization | ||||
| 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 | 330,762,067.27 | 228,027,157.06 | 62,473,826.09 | 621,263,050.42 |
| (1) Provision | 325,611,018.07 | 228,027,157.06 | 62,469,243.88 | 616,107,419.01 |
| (2) Effect of changes in the scope of consolidation | - | - | - | - |
| (3) Other increase | 5,151,049.20 | - | 4,582.21 | 5,155,631.41 |
| 3. Decrease for the year | 18,117,752.79 | - | 8,761,767.63 | 26,879,520.42 |
| (1) Disposal | 16,486,130.32 | - | 3,510,718.43 | 19,996,848.75 |
| (2) Transfer to investment properties | 1,631,622.47 | - | - | 1,631,622.47 |
| (3) Other decrease | - | - | 5,251,049.20 | 5,251,049.20 |
| 4. Effect of changes in foreign exchange | -205,360.82 | -152,691,783.78 | -16,249,265.92 | -169,146,410.52 |
| 5. Balance at 31 December 2021 | 3,711,905,647.14 | 1,519,335,933.88 | 467,145,279.15 | 5,698,386,860.17 |
| III. Impairment provision | ||||
| 1. Balance at 1 January 2021 | - | - | - | - |
| 2. Increase for the year | - | - | - | - |
| 3. Decrease for the year | - | - | - | - |
| 4. Balance at 31 December 2021 | - | - | - | - |
| IV. Book value | ||||
| 1. Book value at 31 December 2021 | 10,919,141,619.86 | 6,719,687,358.70 | 836,583,402.37 | 18,475,412,380.93 |
| 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 |
Note 1: It is the lands located in Dachanwan Port Area Phase II acquired by the Company's
subsidiaries Ansujie Terminal Services (Shenzhen) Co., Ltd. ("ASJ"). Refer to Note(VIII) 25 for details.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets - continued
(2) Land use rights without ownership certificates on 31 December 2021:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Book value at this year end | Book value at last year end |
| Land use rights (Note) | 1,882,080,080.20 | 1,051,555,795.12 |
Note: At 31 December 2021, the land use rights without ownership certificates mainly represent
the land use rights for berth and storage yard within Chiwan Port area obtained by theGroup from Nanshan Group, with an area of 1,049,946.00 ㎡, and the land use rights forDachanwan Port area Phase II obtained by ASJ, of which the costs are RMB1,400,288,984.00 and RMB 914,968,043.27 respectively.
The Group land use rights for berth and storage yard within Chiwan Port area obtained bythe Group from Nanshan Group represent the capital contribution from Nanshan Group tothe Company upon restructuring of the Company, while the remaining land use rights areobtained from Nanshan Group by way of long-term lease. Up to date, as Nanshan Grouphas not yet obtained the land use rights in respect of the lands within Chiwan watershed,including aforementioned capital investment and land lease to the Group, therefore theGroup can not obtain the ownership certificate for relevant land and buildings on suchland. The Company's management understood that the Nanshan Group is negotiating withrelevant government departments regarding the historical issues, and the date when theGroup can obtain the ownership certificate of relevant land and buildings on such landcannot be estimated reliably.
21. Development expenses
| Item | 1/1/2021 | Increase in the current year | Decrease in the current year | Effect of translation of foreign currency statements | 31.12/2021 | |||
| Transfer to intangible assets | Transfer to construction in progress | Transfer to fixed assets | Transfer to profit or loss for the year | |||||
| CTOS upgrading | - | 62,596,122.69 | - | - | - | 62,596,122.69 | - | - |
| R&D project of port public information platform | - | 12,735,903.00 | - | - | - | 12,735,903.00 | - | - |
| Development of intelligent gate system | - | 11,621,699.80 | - | - | - | 11,621,699.80 | - | - |
| "China Merchants Chip" ICT integrated R&D for the smart container terminal | - | 9,812,731.04 | - | - | - | 9,812,731.04 | - | - |
| R&D of Anqiao auxiliary production monitoring | - | 9,022,425.42 | - | - | - | 9,022,425.42 | - | - |
| Customized development of block chain clearance project | - | 8,055,519.62 | - | - | - | 8,055,519.62 | - | - |
| Development and application of automatic control systems for heavy oil, diesel, gasoline, and methanol processes | 19,689,935.13 | 6,129,035.71 | - | - | - | - | - | 25,818,970.84 |
| Automatic intelligent bucket wheel stacker and transformation technology service procurement project | - | 6,043,141.79 | - | 6,043,141.79 | - | - | - | - |
| R&D of RTG remote automatic catch and release box system | - | 5,939,534.80 | - | - | - | 5,939,534.80 | - | - |
| Multifunctional Port BTOS Cloud Edge Fusion Platform Phase I R&D Project | - | 5,361,073.70 | - | - | - | 5,361,073.70 | - | - |
| R&D of crane remote monitoring and management system | - | 4,316,460.46 | - | - | - | 4,316,460.46 | - | - |
| Development of intelligent stock management system | - | 2,296,416.10 | - | - | - | 2,296,416.10 | - | - |
| Key technical research for the device used to load crude oil to a train | 20,656,125.15 | 1,218,823.23 | - | - | - | - | - | 21,874,948.38 |
| Others | 23,891,674.95 | 106,830,819.22 | 160,214.95 | 1,760,549.99 | 7,956,673.56 | 86,147,749.04 | - | 34,697,306.63 |
| Total | 64,237,735.23 | 251,979,706.58 | 160,214.95 | 7,803,691.78 | 7,956,673.56 | 217,905,635.67 | - | 82,391,225.85 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill
(1) Carrying amount of goodwill
CHINA MERCHANTS PORT GROUP CO., LTD.
Investee
| Investee | 1/1/2021 | Increase | Decrease | Amount of changes in foreign exchange | 31/12/2021 |
| TCP | 2,562,567,253.74 | - | - | -233,433,680.38 | 2,329,133,573.36 |
| Mega Shekou Container Terminals Limited | 1,815,509,322.42 | - | - | - | 1,815,509,322.42 |
| China Merchants Port Holdings | 993,992,000.00 | - | - | - | 993,992,000.00 |
| Shantou Port | 552,317,736.65 | - | - | - | 552,317,736.65 |
| 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 Co. Ltd. ("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 | - | - | -233,433,680.38 | 6,994,823,986.40 |
(2) Provisions for goodwill impairments
| Investee | 1/1/2021 | Increase | Decrease | Effect of changes in foreign exchange | 31/12/2021 |
| Zhanjiang Port | - | 418,345,307.68 | - | - | 418,345,307.68 |
| Shantou Port | 552,317,736.65 | - | - | - | 552,317,736.65 |
| Total | 552,317,736.65 | 418,345,307.68 | - | - | 970,663,044.33 |
(3) Information of assets group or portfolio of assets group to which the goodwill belongs
The Group takes the ability to independently generate cash inflows, manage the way ofproduction and operation activities (mainly by geographic areas) and unified decision on the useand disposal of the assets as the criteria to determine assets group or portfolio of assets group, andperforms impairment test of goodwill for the assets group or portfolio of assets group asdetermined. As at 31 December 2021, the assets group or portfolio of assets group determined bythe Group include: TCP; Mega Shekou Container Terminals Limited, including ShekouContainer Terminals Ltd., Shenzhen Lianyunjie Container Terminals Co., Ltd., AnxunjieContainer Terminals (Shenzhen) Co., Ltd.; CMPort; Shantou Port; Zhanjiang port; ShenzhenMawan Project, including Shenzhen Mawan Port Waterway Co., Ltd., Shenzhen MagangGodown & Wharf Co., Ltd. (hereinafter referred to as "Magang Godown & Wharf");
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill - continued
(4) Impairment test of goodwill and key parameters
When testing the goodwill for impairment, the Group compares the carrying amount of relatedassets group and portfolio of assets group (including goodwill) with the recoverable amount. If therecoverable amount is less than the carrying amount, the difference is included in profit or loss forthe period. The Group determines the recoverable amount of the assets group and portfolio ofassets group that generate goodwill at fair value less cost of disposal or at present value ofexpected future cash flows. The fair value is determined using market approach. The presentvalue of cash flows is estimated based on the forecast of cash flows for 5 years to 27 yearsdetailed forecast period and subsequent forecast period. The estimated future cash flows for thedetailed forecast period are based on the business plan established by the management; theexpected future cash flows for the subsequent forecast period are determined in conjunction withthe level of the final year of the detailed forecast period, combined with the Group's businessplans, industry trends and inflation rates. The growth rate adopted will not exceed the long-termaverage growth rate of the country where the assets group and portfolio of assets group arelocated. The key assumptions used by the Group in estimating the present value of future cashflows include growth rate and discount rate etc. The pre-tax discount rate and the growth rate forsubsequent forecasted period adopted in 2021 are around 10.75%-17.45% and 2.24%-3.00%respectively. The parameters of key assumptions determined by the Group's management are inline with the Group's historical experience or external source of information.
(5) Effect of impairment test of goodwill
During the year, the Group assessed the recoverable amount of the asset group or set of assetgroups which including the goodwill and determined that the provision for impairment of thegoodwill of Zhanjiang Port was RMB418,345,307.68.
23. Long-term prepaid expenses
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 1/1/2021 (restated) | Effect of changes in the scope of consolidation | Increase for the year | Amortization in the year | Other changes | 31/12/2021 | Reasons for other decreases |
| Tonggu channel widening project (note 1) | 491,846,986.99 | - | - | 18,635,856.00 | - | 473,211,130.99 | |
| West public channel widening project, West port area (note 2) | 249,214,515.10 | - | 9,985,504.85 | 6,440,250.17 | - | 252,759,769.78 | |
| Relocation project of Nanhai Rescue Bureau | 39,768,848.30 | - | - | 1,107,368.40 | - | 38,661,479.90 | |
| Expenditures for the improvement of leased fixed assets | 17,479,223.03 | - | 4,745,234.37 | 1,437,932.36 | - | 20,786,525.04 | |
| Dredging project | - | - | 79,544,232.97 | 2,952,365.74 | - | 76,591,867.23 | |
| Others | 76,690,162.49 | - | 60,198,056.01 | 22,904,449.92 | - | 113,983,768.58 | |
| Total | 874,999,735.91 | - | 154,473,028.20 | 53,478,222.59 | - | 975,994,541.52 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Long-term prepaid expenses - continued
Note 1: This represent the Group's actual expenses on the Shenzhen Western Port Area Tonggu
Channel 210-270 Meters Widening Project. According to relevant resolutions ofShenzhen Municipal Government, the expenses incurred for the 210-240M wideningproject are born by the enterprise and government on 60% to 40% principle, and theexpenses incurred for the 240-270M widening project are born by the enterprise andgovernment on 50% to 50% principle. The Company's subsidiary has included theexpenses on deepening the channel in the item of "long-term prepaid expenses", andamortized such expenses over the expected useful lives of two widening projects of 35and 40 years using straight-line method since the completion of each project in 2008 and2019, 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 andthird sections 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 income tax
(1) Deferred tax assets without offsetting
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (restated) | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Unrealized profit | 769,833,723.80 | 187,934,375.63 | 782,881,449.78 | 191,015,511.36 |
| Depreciation of fixed assets | 174,310,058.63 | 38,498,510.97 | 121,474,197.24 | 30,363,658.82 |
| Deductible losses | 243,923,028.71 | 77,871,713.03 | 375,133,696.59 | 121,834,055.80 |
| Provision for credit loss | 134,107,345.89 | 22,607,019.97 | 44,693,047.44 | 11,118,047.81 |
| Accrued and unpaid wages | 133,228,573.09 | 32,069,398.58 | 85,390,402.74 | 20,498,335.20 |
| Provisions | 23,243,718.18 | 7,902,864.18 | 83,415,919.34 | 22,408,962.33 |
| Deferred income | 37,320,614.70 | 8,908,126.11 | 40,760,480.40 | 9,289,713.04 |
| Amortization of computer software | 9,375,355.92 | 2,343,838.98 | 11,007,022.11 | 2,751,755.53 |
| Organization costs | 5,967,432.36 | 1,491,858.09 | 8,436,714.76 | 2,109,178.68 |
| Provision for impairment losses of assets | 3,858,354.37 | 964,588.59 | 884,061.15 | 221,015.29 |
| Others | 69,133,036.30 | 17,553,416.71 | 36,412,379.66 | 9,246,842.90 |
| Total | 1,604,301,241.95 | 398,145,710.84 | 1,590,489,371.21 | 420,857,076.76 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred income tax - continued
(2) Deferred tax liabilities without offsetting
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (restated) | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Withholding dividend income tax | 32,834,363,823.45 | 2,276,809,099.05 | 28,188,540,389.01 | 1,925,457,143.90 |
| Fair value adjustment of assets acquired by business combination | 7,922,514,263.15 | 1,794,717,729.81 | 8,566,522,113.13 | 1,925,197,755.69 |
| Depreciation of fixed assets | 855,120,746.48 | 226,223,855.58 | 826,231,081.71 | 217,461,491.73 |
| Changes in fair value of other non-current financial assets | 478,483,648.29 | 99,590,902.64 | 572,236,171.97 | 120,501,451.06 |
| Changes in fair value of investments in other equity instruments | 138,988,784.68 | 34,747,196.17 | 140,581,630.00 | 35,145,407.50 |
| Others (Note) | 1,101,926,283.77 | 118,328,687.36 | 1,140,966,796.27 | 123,789,892.85 |
| Total | 43,331,397,549.82 | 4,550,417,470.61 | 39,435,078,182.09 | 4,347,553,142.73 |
Note: This mainly represents the taxable temporary differences arising from the fair value
measurement of equity held by the Company's subsidiaries in Ningbo Zhoushan and thecorresponding deferred tax liabilities.
(3) Deferred tax assets or liabilities that are presented at the net amount after offsetting
| Item | Offset amount of deferred tax assets and liabilities at the end of the year | Balance of deferred tax assets or liabilities after offsetting at the end of this year | Offset amount of deferred tax assets and liabilities at the end of last year | Balance of deferred tax assets or liabilities after offsetting at the end of last year (restated) |
| Deferred tax assets | - | 398,145,710.84 | - | 420,857,076.76 |
| Deferred tax liabilities | - | 4,550,417,470.61 | - | 4,347,553,142.73 |
(4) Details of unrecognized deferred tax assets
| Item | Closing balance | Opening balance (restated) |
| Deductible temporary differences | 944,129,558.25 | 428,574,636.02 |
| Deductible losses | 2,197,937,158.38 | 2,536,136,831.19 |
| Total | 3,142,066,716.63 | 2,964,711,467.21 |
The Group recognizes deferred income tax assets to the extent of future taxable income that islikely to be obtained to offset the deductible temporary differences and deductible losses. For theexcess of deductible temporary differences and deductible losses over future taxable income, nodeferred tax assets is recognized.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred income tax - continued
(5) Deductible losses for unrecognized deferred tax assets will be expired in the following
years:
CHINA MERCHANTS PORT GROUP CO., LTD.
Year
| Year | Closing balance | Opening balance (restated) |
| 2021 | - | 244,394,853.17 |
| 2022 | 418,419,582.20 | 615,440,669.35 |
| 2023 | 568,545,269.63 | 753,395,413.47 |
| 2024 | 501,044,247.06 | 507,211,725.15 |
| 2025 | 385,310,677.29 | 392,332,675.29 |
| 2026 | 300,322,682.88 | 1,411,580.00 |
| Deductible losses due after 2027 | 24,294,699.32 | 21,949,914.76 |
| Total | 2,197,937,158.38 | 2,536,136,831.19 |
25. Other non-current assets
| Item | Closing balance | Opening balance |
| Dachanwan port area Phase II land replacement payment (Note 1) | - | 916,884,222.49 |
| Advances for the channel project (Note 2) | 965,997,076.71 | 940,472,488.75 |
| Prepayments for land use rights | 132,334,704.86 | 132,334,704.86 |
| Prepayments for fixed assets | 66,519,391.16 | 32,623,333.85 |
| Prepayments for terminal franchise | 28,084,523.57 | 31,113,113.10 |
| Others | 38,157,256.39 | 85,040,820.59 |
| Subtotal | 1,231,092,952.69 | 2,138,468,683.64 |
| Less: Impairment provision | - | - |
| Total | 1,231,092,952.69 | 2,138,468,683.64 |
Note 1: It is the lands located in Shenzhen Qianhaiwan Logistics Park which has been returned to
government in 2019 by the Company's subsidiaries Antongjie Terminal Services(Shenzhen) Co., Ltd. ("ATJ") and ASJ. Qianhai Administration replaces 55% land andcorresponding shoreline (with a land area of approximately 531,300 square meters)included in the total areas of T102-0166 and T102-0167 held by ATJ and ASJ toDachanwan Port Area Phase II.
In November 2021, ASJ signed a grant contract of land use right with the Planning andNatural Resources Bureau of Shenzhen Municipality Bao'an Administration (hereinafterreferred to as "Planning and Resources Bureau") for Dachanwan Port Area Phase II,clarifying that the land area of Dachanwan Port Area Phase II is approximately 523,000square meters with the period ready to use from 1 January 2015 to 31 December 2064.From the date of signing the contract, the land shall be deemed to be delivered by thePlanning and Resources Bureau to ASJ. Based on the relevant provisions of the abovecontract, ASJ transferred other non-current assets of RMB916,884,222.49 to intangibleassets for accounting treatment in the current period.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Other non-current assets - continued
Note 2: This represents that the Company's subsidiary Zhanjiang Port, upon its reorganization
into a joint stock company in 2007, signed the Channel Arrangement Agreement withState-owned Assets Supervision and Administration Commission of Zhanjiang("Zhanjiang SASAC") and China Merchants International Terminal (Zhanjiang) Co., Ltd.According to the agreement, the channel belongs to Zhanjiang SASAC, therefore theGroup included the advances of channel project that should be repaid by ZhanjiangSASAC in other non-current assets.
26. Short-term borrowings
(1) Classification of short-term borrowings
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Closing balance | Opening balance |
| Credit loan | 12,450,169,472.03 | 8,976,788,882.26 |
| Guaranteed loan (Note) | 1,201,283,333.33 | 1,506,986,666.67 |
| Total | 13,651,452,805.36 | 10,483,775,548.93 |
Note: The Company provided guarantee for the loan.
(2) At 31 December 2021, the Group has no short-term borrowings that were overdue.
27. Notes payable
| Category | Closing balance | Opening balance |
| Bank acceptance | - | 1,600,100.00 |
| Commercial acceptance | 1,895,987.17 | 5,481,672.32 |
| Total | 1,895,987.17 | 7,081,772.32 |
28. Accounts payable
| Item | Closing balance | Opening balance (restated) |
| Service fee | 279,969,574.04 | 146,212,519.71 |
| Construction fee | 189,852,525.62 | 117,439,992.70 |
| Material purchase | 147,895,793.90 | 144,294,086.08 |
| Equipment payments | 34,478,229.18 | 20,712,191.08 |
| Rental fee | 6,226,422.72 | 7,494,989.48 |
| Others | 185,397,893.05 | 171,818,920.54 |
| Total | 843,820,438.51 | 607,972,699.59 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28. Accounts payable - continued
(1) Details of accounts payable are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Aging
| Aging | Closing balance | Opening balance (restated) | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year(inclusive) | 751,095,352.31 | 89.01 | 552,340,561.28 | 90.84 |
| More than 1 year but not exceeding 2 years (inclusive) | 58,151,929.86 | 6.89 | 23,931,179.43 | 3.94 |
| More than 2 years but not exceeding 3 years (inclusive) | 8,515,047.38 | 1.01 | 4,247,892.21 | 0.70 |
| More than 3 years | 26,058,108.96 | 3.09 | 27,453,066.67 | 4.52 |
| Total | 843,820,438.51 | 100.00 | 607,972,699.59 | 100.00 |
(2) Significant accounts payable aged more than one year
| Name of entity | Closing balance | Aging | Reason for outstanding or carry-forward |
| Urban Planning, Land and Resources Commission of Shenzhen Municipality Nanshan Administration | 21,642,795.50 | More than 3 years | The government planning project has not been completed, and the ownership certificate is not handled |
29. Receipts in advance
| Item | Closing balance | Opening balance |
| Rental fee received in advance | 6,724,007.73 | 2,715,835.65 |
| Management fee received in advance | 2,163,886.70 | 10,350,161.96 |
| Equity transfer fee received in advance | - | 20,492,849.00 |
| Ship transfer fee received in advance | - | 3,450,560.00 |
| Others | 425,271.58 | 2,500,721.29 |
| Total | 9,313,166.01 | 39,510,127.90 |
(1) Summary of receipts in advance
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year(inclusive) | 9,283,472.35 | 99.68 | 39,324,346.50 | 99.53 |
| More than 1 year but not exceeding 2 years (inclusive) | 13,943.66 | 0.15 | 88,614.98 | 0.22 |
| More than 2 years but not exceeding 3 years (inclusive) | - | - | 73,979.82 | 0.19 |
| More than 3 years | 15,750.00 | 0.17 | 23,186.60 | 0.06 |
| Total | 9,313,166.01 | 100.00 | 39,510,127.90 | 100.00 |
(2) There is no significant receipts in advance aged more than one year at the end of the year.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Contract liabilities
(1) Summary of contract liabilities
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (restated) |
| Port charges received in advance | 122,718,356.71 | 78,789,466.29 |
| Service fee received in advance | 47,772,567.97 | 49,782,911.22 |
| Warehousing fee received in advance | 15,698,102.34 | 18,460,680.90 |
| Others | 10,595,498.24 | 10,409,051.26 |
| Total | 196,784,525.26 | 157,442,109.67 |
| Less: Contract liabilities recognised in other non-current liabilities | - | - |
| Net amount | 196,784,525.26 | 157,442,109.67 |
(2) There was no significant change in the book value of contract liabilities during the year.
(3) There is no significant contract liabilities aged more than one year at the end of the year.
(4) Qualitative and quantitative analysis of contract liabilities
The contract liability mainly represents the amount received by the Group to provide port servicesto customers. The payment is collected according to the contractual payment time. The Grouprecognizes contract revenue based on the progress of the contract. The contract liabilities will berecognized as income after the Group fulfils its performance obligations.
(5) Revenue recognized in the year and included in the carrying amount of contract liabilities
at the beginning of the year
An amount of RMB110,874,321.28 included in the book value of contract liabilities at thebeginning of 2021 has been recognized as revenue in the current year, including contractliabilities arising from settled but unfinished construction resulting from the contract of receipt ofport charges in advance amounting to RMB 78,457,768.90, contract liabilities arising from settledbut unfinished construction resulting from the contract of receipt of service fee in advanceamounting to RMB 20,788,635.77, contract liabilities arising from settled but unfinishedconstruction resulting from warehousing fee received in advance amounting to RMB10,227,216.33, and contract liabilities arising from settled but unfinished construction resultingfrom other contracts amounting to RMB1,400,700.28.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Employee benefits payable
(1) Employee benefits payable
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 1/1/2021 (restated) | Effect of changes in the scope of consolidation | Increase in the current year | Decrease in the current year | 31/12/2021 |
| 1. Short-term benefits | 721,298,746.97 | - | 3,131,465,175.59 | 3,043,850,608.07 | 808,913,314.49 |
| 2. Post-employment benefits - defined contribution plan | 6,217,684.84 | - | 309,865,408.84 | 309,957,194.10 | 6,125,899.58 |
| 3. Termination benefits | - | - | 13,464,366.62 | 7,564,366.62 | 5,900,000.00 |
| 4. Other benefits due within a year | - | - | 3,692,457.98 | 3,692,457.98 | - |
| 5. Others | -619,306.39 | - | 6,784,819.68 | 6,688,311.89 | -522,798.60 |
| Total | 726,897,125.42 | - | 3,465,272,228.71 | 3,371,752,938.66 | 820,416,415.47 |
(2) Short-term benefits
| Item | 1/1/2021 (restated) | Effect of changes in the scope of consolidation | Increase in the current year | Decrease in the current year | 31/12/2021 |
| I. Wages and salaries, bonuses, allowances and subsidies | 688,968,854.26 | - | 2,577,057,681.94 | 2,482,425,761.16 | 783,600,775.04 |
| II. Staff welfare | - | - | 146,948,953.57 | 146,948,953.57 | - |
| III. Social insurance charges | 16,094,126.74 | - | 160,388,934.58 | 167,424,890.08 | 9,058,171.24 |
| Including: Medical insurance | 14,865,150.41 | - | 139,326,638.36 | 146,512,932.69 | 7,678,856.08 |
| Work injury insurance | 6,258.14 | - | 12,725,217.54 | 12,684,226.73 | 47,248.95 |
| Others | 1,222,718.19 | - | 8,337,078.68 | 8,227,730.66 | 1,332,066.21 |
| IV. Housing funds | -490,321.89 | - | 183,746,103.16 | 183,330,528.51 | -74,747.24 |
| V. Labor union and employee education funds | 16,726,087.86 | - | 47,745,014.36 | 48,058,238.80 | 16,412,863.42 |
| VI. Other short-term benefits | - | - | 15,578,487.98 | 15,662,235.95 | -83,747.97 |
| Total | 721,298,746.97 | - | 3,131,465,175.59 | 3,043,850,608.07 | 808,913,314.49 |
(3) Defined benefit plans
| Item | 1/1/2021 (restated) | Effect of changes in the scope of consolidation | Increase in the current year | Decrease in the current year | 31/12/2021 |
| I. Basic pension | 6,112,958.64 | - | 233,373,793.05 | 233,691,260.29 | 5,795,491.40 |
| II. Unemployment insurance | 64,028.24 | - | 3,921,845.03 | 3,942,673.03 | 43,200.24 |
| III. Enterprise annuity | 40,697.96 | - | 72,569,770.76 | 72,323,260.78 | 287,207.94 |
| Total | 6,217,684.84 | - | 309,865,408.84 | 309,957,194.10 | 6,125,899.58 |
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. The Group hasestablished a corporate annuity system, and accrues and pays the corporate annuity according tothe corporate annuity system of the Company and its subsidiaries located in Mainland China. Inaddition to above contributions, the Group has no further payment obligations. The correspondingexpenses are included in profit and loss or the cost of related assets when incurred.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
32. Taxes payable
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (restated) |
| Enterprise income tax | 2,098,884,089.24 | 2,320,197,283.53 |
| VAT | 19,025,631.30 | 13,239,447.16 |
| Other taxes | 44,809,531.14 | 36,821,959.30 |
| Total | 2,162,719,251.68 | 2,370,258,689.99 |
33. Other payables
(1) Summary of other payables
| Item | Closing balance | Opening balance (restated) |
| Dividends payable | 48,803,019.31 | 70,388,849.49 |
| Other payables | 2,091,305,321.77 | 2,410,828,718.91 |
| Total | 2,140,108,341.08 | 2,481,217,568.40 |
(2) Dividends payable
| Item | Closing balance | Opening balance (restated) |
| Ordinary share dividends | 48,803,019.31 | 70,388,849.49 |
| Including: China Merchants Zhangzhou Development Zone Co., Ltd. (Note) | 20,000,000.00 | 20,000,000.00 |
| Dalian Port Container Development Co., Ltd. ("Dalian Port Container") (Note) | 18,349,264.69 | 12,160,517.31 |
| Dalian Port Jifa Logistics Co., Ltd. ("Jifa Logistics"), | 4,945,967.80 | 3,972,477.39 |
| Dalian City Investment Holding Group Co., Ltd. | 3,527,787.23 | - |
| Qingdao Qingbao Investment Holding Co., Ltd. | 1,979,999.59 | - |
| Sri Lanka Ports Authority | - | 34,255,854.79 |
Note: On 31 December 2021, the dividends payable over one year include RMB 20,000,000.00
due to China Merchants Zhangzhou Development Zone Co., Ltd. and RMB 10,000,000.00due to Dalian Port Container, which are dividends not yet received by the investors.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(3) Other payables
(a) Disclosure of other payables by nature
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (restated) |
| Amount payable for construction and quality warranty | 821,093,777.44 | 1,044,821,435.49 |
| Deposits | 446,198,541.16 | 360,604,022.08 |
| Prepaid expenses | 198,863,463.79 | 229,820,205.45 |
| Customer discount (Note) | 102,393,978.35 | 119,368,121.44 |
| Port construction and security fee | 59,026,576.51 | 55,085,280.96 |
| Balance of land use rights transfer | 11,295,700.00 | 11,295,700.00 |
| Others | 452,433,284.52 | 589,833,953.49 |
| Total | 2,091,305,321.77 | 2,410,828,718.91 |
Note 1: Refer to Note (VIII) 50 (3) for details.
(b) Significant other payables with aging over 1 year
| Company name | Amount payable | Aging | Why\not paid |
| Transport Commission of Shenzhen Municipality | 53,104,140.85 | More than 1 year but not exceeding 2 years and more than 3 years | To be paid upon confirmation by both parties |
| Shanghai Zhenhua Heavy Industries Co., Ltd. | 32,612,813.26 | More than 3 years | To be paid upon confirmation by both parties |
| Shantou Transportation Bureau | 31,358,355.47 | More than 3 years | To be paid upon confirmation by both parties |
| China First Metallurgical Group Co., Ltd. | 28,760,291.25 | More than 1 year but not exceeding 2 years and more than 3 years | The contracted settlement condition has not been reached |
| Guangdong JIAYE Reserve Logistics Co., Ltd. | 25,000,000.00 | More than 2 years but not exceeding 3 years and more than 3 years | The contracted settlement condition has not been reached |
| Qingdao Maritime Bureau | 20,713,982.12 | More than 3 years | To be paid upon confirmation by both parties |
| Zhanjiang Transportation Bureau | 15,222,571.10 | More than 1 year but not exceeding 2 years | To be paid upon confirmation by both parties |
| Shenzhen Bulk Cement Office | 12,238,226.14 | More than 1 year but not exceeding 2 years, more than 3 years | To be paid upon confirmation by both parties |
| CCCC-FHDI Engineering Co.,Ltd. | 11,644,486.59 | More than 2 years but not exceeding 3 years | The contracted settlement condition has not been reached |
| Wuxi Huadong Heavy Machinery Co., Ltd. | 10,090,410.68 | More than 1 year but not exceeding 2 years | To be paid upon confirmation by both parties |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | 10,079,369.00 | More than 3 years | The contracted settlement condition has not been reached |
| Shantou Finance Bureau | 10,000,000.00 | More than 3 years | To be paid upon confirmation by both parties |
| Guangdong Hengtai Guotong Industrial Co., Ltd. | 10,000,000.00 | More than 3 years | To be paid upon confirmation by both parties |
| Shenzhen Penglilong Industrial Co., Ltd. | 8,156,000.00 | More than 1 year but not exceeding 2 years, more than 2 years but not exceeding 3 years and more than 3 years | To be paid upon confirmation by both parties |
| .Shenzhen Aohua Zhongmao Industry Co., Ltd. | 6,157,000.00 | More than 1 year but not exceeding 2 years and more than 3 years | To be paid upon confirmation by both parties |
| Harman Technology (Shenzhen) Co., Ltd. | 5,917,392.48 | More than 1 year but not exceeding 2 years and more than 3 years | The contracted settlement condition has not been reached |
| Total | 291,055,038.94 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
34. Non-current liabilities due within one year
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance (restated) |
| Long-term loans due within one year(Note VIII 36) | 1,187,781,073.61 | 2,074,906,728.26 |
| Including: Credit loan | 399,437,084.19 | 749,046,479.86 |
| Guaranteed loan | 158,812,554.95 | 739,805,701.02 |
| Mortgage and pledged loan | 629,531,434.47 | 586,054,547.38 |
| Bonds payable due within one year(Note VIII 37) | 6,554,177,357.66 | 1,042,773,072.37 |
| Lease liabilities due within one year(Note VIII 38) | 298,117,295.41 | 322,950,258.37 |
| Long-term payable due within one year(Note VIII 39) | 139,696,643.49 | 3,562,994.44 |
| Long-term employee benefits payable due within one year(Note VIII 40) | 64,306,914.00 | 36,811,951.00 |
| Other non-current liabilities due within one year(Note VIII 43) | 24,130,000.00 | 83,582,696.63 |
| Total | 8,268,209,284.17 | 3,564,587,701.07 |
35. Other current liabilities
| Item | Closing balance | Opening balance |
| Short-term bonds payable | 2,002,416,438.36 | 2,215,478,001.40 |
| Accrued professional agency fee | 128,664,439.94 | 138,158,158.51 |
| Others | 27,416,897.55 | 30,032,826.03 |
| Total | 2,158,497,775.85 | 2,383,668,985.94 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Other current liabilities - continued
Changes of short-term bonds payable:
CHINA MERCHANTS PORT GROUP CO., LTD.Name of bond
| Name of bond | Face value | Date of issue | Term of the bond | Amount of issue | 1/1/2021 | Amount issued in the current year | Interest accrued based on par value | Amortization of premiums or discounts | Repayment in the current year | 31/12/2021 |
| 1.99% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2020-6-3 | 270 days | 1,000,000,000.00 | 1,011,418,032.80 | - | 3,302,515.17 | - | 1,014,720,547.97 | - |
| 2.50% RMB 1.2 billion Super & Short-term Commercial Paper | 1,200,000,000.00 | 2020-11-12 | 180 days | 1,200,000,000.00 | 1,204,059,968.60 | - | 10,734,551.95 | - | 1,214,794,520.55 | - |
| 2.30% RMB 0.8 billion Super & Short-term Commercial Paper | 800,000,000.00 | 2021-1-21 | 90 days | 800,000,000.00 | - | 800,000,000.00 | 4,536,986.30 | - | 804,536,986.30 | - |
| 2.73% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2021-3-19 | 180 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 13,463,013.70 | - | 1,013,463,013.70 | - |
| 2.55% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2021-6-4 | 180 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 12,575,342.47 | - | 1,012,575,342.47 | - |
| 2.30% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2021-7-19 | 90 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 5,671,232.88 | - | 1,005,671,232.88 | - |
| 2.30% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2021-9-26 | 90 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 5,671,232.88 | - | 1,005,671,232.88 | - |
| 2.30% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2021-11-1 | 45 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 2,835,616.44 | - | 1,002,835,616.44 | - |
| 2.45% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2021-12-13 | 90 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 2,416,438.36 | - | - | 2,002,416,438.36 |
| Total | 10,000,000,000.00 | 10,000,000,000.00 | 2,215,478,001.40 | 7,800,000,000.00 | 61,206,930.15 | - | 8,074,268,493.19 | 2,002,416,438.36 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Long-term borrowings
(1) Classification of long-term borrowings
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance | Opening balance | Range of year-end interest rate(%) |
| Credit borrowings | 5,366,543,524.76 | 5,258,127,800.87 | 1.20%-4.79% |
| Guaranteed borrowings (Note 1) | 1,076,679,935.08 | 1,629,960,889.64 | 1.20%-4.75% |
| Mortgage and pledged borrowings (Note 2) | 1,889,397,484.66 | 2,593,140,731.56 | 2.51%-5.78% |
| Total | 8,332,620,944.50 | 9,481,229,422.07 | 1.20%-5.78% |
| Less: Long-term borrowings due within one year | 1,187,781,073.61 | 2,074,906,728.26 | — — |
| Including: Credit borrowings | 399,437,084.19 | 749,046,479.86 | — — |
| Guaranteed borrowings | 158,812,554.95 | 739,805,701.02 | — — |
| Mortgage and pledged borrowings | 629,531,434.47 | 586,054,547.38 | — — |
| Long-term borrowings due after one year | 7,144,839,870.89 | 7,406,322,693.81 | — — |
Note 1: The loan was guaranteed by Magang Godown & Wharf, China Merchants Port
(Shenzhen) Co., Ltd., CMPort and Guangdong Zhanjiang Logistics Co., Ltd.
Note 2: As at 31 December 2021, the Group obtained the long-term loan of
RMB1,889,397,484.66 (31 December 2020: RMB 2,593,140,731.56) with its entireequity in Colombo International Container Terminals Limited (hereinafter referred to as"CICT"), and the entire equity in Thesar Maritime Limited, (hereinafter referred to as"TML"), and the land with property right, fixed assets and construction in progress heldby Guangdong Yide Port Co., Ltd. (hereinafter referred to as "Yide Port"), the land withproperty right of Shenzhen Haixing Harbor Development Co., Ltd. (hereinafter referredto as "Shenzhen Haixing"), as well as the sea area use rights of Dongguan ShenchiwanPort Affairs Co., Ltd.(hereinafter referred to as "Shenchiwan Port Affairs"), mortgagedas collaterals.
Details of mortgage and pledged borrowings are as follows:
| Company name | Closing balance | Opening balance | Collateral and pledge |
| China Development Bank Corporation | 747,186,761.93 | 1,027,981,472.96 | The Group's entire equity in CICT |
| International Finance Corporation | 230,966,536.60 | 364,480,624.59 | The Group's entire equity in TML |
| African Development Bank | 106,074,913.93 | 167,372,490.13 | |
| Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. | 87,410,830.23 | 137,905,387.30 | |
| The OpecFund For International Development | 74,876,376.58 | 118,146,703.89 | |
| Societe de Promotion et de Participation pour la Cooperation Economique S.A. | 74,932,105.74 | 118,218,277.06 | |
| Deutsche Investitions-und Entwicklungsgesellschaft MBH | 62,397,008.21 | 98,452,963.64 | |
| Bank of China Qianhai Shekou Branch | 241,370,822.03 | 241,370,822.05 | Land use rights of Shenzhen Haixing |
| China Construction Bank Shunde Branch | 264,182,129.41 | 210,178,757.55 | Land use rights, fixed assets and construction in progress of Yide Port |
| China Merchants Bank Dongguan Branch | - | 109,033,232.39 | Sea area use rights of Shenchiwan Port Affairs |
| Total | 1,889,397,484.66 | 2,593,140,731.56 |
Note: See Note (VIII) 63 for the above mortgages and pledges.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable
(1) Bonds payable
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Closing balance | Opening balance |
| 4.375%, USD 900 million corporate bond | 5,814,296,318.30 | 5,948,107,858.02 |
| 5.000%, USD 600 million corporate bond | 3,859,622,116.07 | 3,950,488,734.13 |
| 4.750%, USD 500 million corporate bond | 3,236,350,690.37 | 3,314,305,348.22 |
| 5.000%, USD 500 million corporate bond | 3,207,848,098.69 | 3,280,606,167.04 |
| 4.890% RMB 2.5 billion corporate bond | 2,585,407,534.25 | 2,585,407,534.25 |
| 3.360% RMB 2 billion corporate bond | 2,032,587,397.26 | 2,033,040,000.00 |
| IPCA + 7.8164% BRL300 million (2020: BRL428 million) corporate bond | 438,789,671.67 | 620,162,618.74 |
| 4.980% RMB 400 million corporate bond | - | 401,200,657.53 |
| 3.520% RMB 2 billion corporate bond | 2,050,147,945.19 | - |
| Total | 23,225,049,771.80 | 22,133,318,917.93 |
| Less: Bonds payable due within one year | 6,554,177,357.66 | 1,042,773,072.37 |
| Bonds payable due after one year | 16,670,872,414.14 | 21,090,545,845.56 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable - continued
(2) Changes of bonds payable
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of bonds
| Name of bonds | Face value | Date of issue | Term of the bond | Amount of issue | 1/1/2021 | Amount issued in the current year | Interest accrued based on par value | Amortization of premiums or discounts | Repayment in the current year | Effect of changes in foreign exchange | 31/12/2021 |
| 4.375%, USD 900 million corporate bond | USD 900,000,000.00 | 2018-8-6 | 5 years | USD 900,000,000.00 | 5,948,107,858.02 | - | 126,386,325.16 | 10,139,641.03 | 126,674,159.06 | -143,663,346.85 | 5,814,296,318.30 |
| 5.000%, USD 600 million corporate bond | USD 600,000,000.00 | 2018-8-6 | 10 years | USD 600,000,000.00 | 3,950,488,734.13 | - | 96,294,343.13 | 4,715,401.10 | 96,513,645.00 | -95,362,717.29 | 3,859,622,116.07 |
| 4.750%, USD 500 million corporate bond | USD 500,000,000.00 | 2015-8-3 | 10 years | USD 500,000,000.00 | 3,314,305,348.22 | - | 153,231,176.19 | 2,213,804.54 | 153,231,176.25 | -80,168,462.33 | 3,236,350,690.37 |
| 5.000%, USD 500 million corporate bond | USD 500,000,000.00 | 2012-5-4 | 10 years | USD 500,000,000.00 | 3,280,606,167.04 | - | 161,295,975.00 | 6,649,208.29 | 161,295,975.00 | -79,407,276.64 | 3,207,848,098.69 |
| 4.890% RMB 2.5 billion corporate bond | RMB 2,500,000,000.00 | 2017-4-21 | 5 years | RMB 2,500,000,000.00 | 2,585,407,534.25 | - | 122,250,000.00 | - | 122,250,000.00 | - | 2,585,407,534.25 |
| 3.360% RMB2 billion corporate bond | RMB 2,000,000,000.00 | 2020-7-7 | 3 years | RMB 2,000,000,000.00 | 2,033,040,000.00 | - | 66,747,397.26 | - | 67,200,000.00 | - | 2,032,587,397.26 |
| IPCA + 7.8164% BRL300 million (2020: BRL428 million) corporate bond | BRL 299,632,900.00 (2020: BRL 428,047,000.00) | 2016-11-7 | 6 years | BRL 299,632,900.00 (2020: BRL 428,047,000.00) | 620,162,618.74 | - | 116,956,935.89 | - | 234,465,763.73 | -63,864,119.23 | 438,789,671.67 |
| 4.980% RMB 400 million corporate bond | RMB 400,000,000.00 | 2018-12-10 | 3 years | RMB 400,000,000.00 | 401,200,657.53 | - | 18,719,342.47 | - | 419,920,000.00 | - | - |
| 3.520% RMB 200 million corporate bond | RMB 2,000,000,000.00 | 2021-4-14 | 3 years | RMB 2,000,000,000.00 | - | 2,000,000,000.00 | 50,147,945.19 | - | - | - | 2,050,147,945.19 |
| Total | 22,133,318,917.93 | 2,000,000,000.00 | 912,029,440.29 | 23,718,054.96 | 1,381,550,719.04 | -462,465,922.34 | 23,225,049,771.80 | ||||
| Less: Bonds payable due within one year | 1,042,773,072.37 | 6,554,177,357.66 | |||||||||
| Bonds payable due after one year | 21,090,545,845.56 | 16,670,872,414.14 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Lease liabilities
(1) Lease liabilities
CHINA MERCHANTS PORT GROUP CO., LTD.
Category
| Category | Closing balance | Opening balance (restated) |
| Lease payment | 2,060,643,997.13 | 2,452,804,794.89 |
| Unrecognized financing cost | -707,331,795.63 | -802,003,552.44 |
| Total | 1,353,312,201.50 | 1,650,801,242.45 |
| Less: Lease liabilities due within one year | 298,117,295.41 | 322,950,258.37 |
| Lease liabilities due after one year | 1,055,194,906.09 | 1,327,850,984.08 |
(2) Maturity of lease liabilities
| Item | Closing balance |
| Minimum lease payments under non-cancellable leases: | |
| 1st year subsequent to the balance sheet date | 363,975,463.99 |
| 2nd year subsequent to the balance sheet date | 293,893,731.27 |
| 3rd year subsequent to the balance sheet date | 138,864,681.32 |
| Subsequent periods | 1,263,910,120.55 |
| Total | 2,060,643,997.13 |
The Group is not exposed to any significant liquidity risk associated with lease liabilities.
39. Long-term payables
(1) Summary of long-term payables
| Item | Closing balance | Opening balance |
| Long-term payables | 3,540,616,228.99 | 1,192,028,415.01 |
| Special payables | 21,259,780.90 | 39,996,153.12 |
| Total | 3,561,876,009.89 | 1,232,024,568.13 |
| Less: Long-term payables due within one year | 139,696,643.49 | 3,562,994.44 |
| Long-term payables due after one year | 3,422,179,366.40 | 1,228,461,573.69 |
(2) Long-term payables
| Item | Closing balance | Opening balance |
| Terminal management rights (Note 1) | 3,125,647,576.58 | 749,658,074.16 |
| Payable to Minority shareholder of subsidiary (Note 2) | 411,858,969.58 | 437,238,325.33 |
| Others | 3,109,682.83 | 5,132,015.52 |
| Total | 3,540,616,228.99 | 1,192,028,415.01 |
| Less: Long-term payables due within one year | 139,696,643.49 | 3,562,994.44 |
| Long-term payables due after one year | 3,400,919,585.50 | 1,188,465,420.57 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Long-term payables - continued
(2) Long-term payables - continued
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 marketinterest rate according to the BOT agreement. As of December 31, 2021, the amountpayable for the purchase of terminal operation rights is RMB 795,271,962.21.
TCP, a subsidiary of the Company entered into a franchise agreement on the Port ofParanaguá with the Administration of the Ports of Paranaguá and Antonina-APPA(hereinafter referred to the "APPA"). The agreement provides for an initial term of25 years for the concessions. In April 2016, TCP and APPA entered into the 10thSupplemental Agreement, which extends the period to 50 years and will be expired inOctober 2048.
On 9 September 2021, TCP, a subsidiary of the Company, entered into a supplementalagreement to the Lease Agreement with APPA for the concessions of the Ports ofParanaguá and Antonina. Pursuant to which, the base figure for the calculation ofroyalties for the Ports of Paranaguá and Antonina was adjusted from the Brazil IGP-MInflation Index("IGP-M index") to the Extended National Consumer Price Index("IPCAindex") of the Brazilian Institute of Geography and Statistics("IBGE"). In November2021, TCP will readjust the royalties using the IPCA index. As of December 31, 2021,the amount of royalty payable was RMB 2,330,375,614.37.
Note 2: It is an unsecured loan from minority shareholder of TML, a subsidiary of the Company,
with an annual interest rate of 4.65%.
(3) Special payables
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 1/1/2021 | Increase in the current year | Effect of changes in the scope of consolidation | Decrease in the current year | 31/12/2021 | Reason |
| Refunds of port construction fee | 34,271,558.30 | - | - | 21,596,055.78 | 12,675,502.52 | Note 1 |
| Employee housing fund | 3,852,825.60 | 833,853.37 | - | - | 4,686,678.97 | Note 2 |
| Innovation workshop for model workers | 1,871,769.22 | 2,075,000.00 | - | 49,169.81 | 3,897,599.41 | |
| Total | 39,996,153.12 | 2,908,853.37 | - | 21,645,225.59 | 21,259,780.90 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Long-term payables - continued
(3) Special payables - continued
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"Port Construction Fee Management Measures" promulgated by the Ministry of Finance,this payment is dedicated to the construction of water transport infrastructure andterminal construction.
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
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Closing balance | Opening balance |
| Post-employment benefits - net liabilities of defined benefits plan | 463,858,274.44 | 429,830,989.42 |
| Termination benefits | 71,467,335.47 | 40,939,305.56 |
| Others (Note) | 117,662,796.72 | 73,756,355.48 |
| Total | 652,988,406.63 | 544,526,650.46 |
| Less: Long-term employee benefits payable due within one year | 64,306,914.00 | 36,811,951.00 |
| Long-term employee benefits payable due after one year | 588,681,492.63 | 507,714,699.46 |
Note: It's the employee setting cost of the Company's subsidiary Shantou Port in connection with
land acquisition and reservation.
(2) Changes of defined benefits plan
Present value of defined benefits plan obligation:
| Item | 2021 | 2020 |
| I. Opening balance | 429,830,989.42 | 454,383,940.25 |
| II. Defined benefits cost included in profit or loss for the period | 26,633,751.24 | 35,512,520.40 |
| 1. Current service cost | 11,482,700.68 | 19,803,282.73 |
| 2. Past service cost | - | - |
| 3. Interest adjustment | 15,151,050.56 | 15,709,237.67 |
| III. Defined benefits cost included in other comprehensive income | 31,841,388.55 | -35,245,220.38 |
| 1. Actuarial gains | 32,665,927.62 | -35,016,155.14 |
| 2. Effect of exchange rate changes | -824,539.07 | -229,065.24 |
| IV. Other changes | -24,447,854.77 | -24,820,250.85 |
| 1. Benefits paid | -24,447,854.77 | -24,820,250.85 |
| 2. Changes in the scope of consolidation | - | - |
| V. Closing balance | 463,858,274.44 | 429,830,989.42 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Long-term employee benefits payable - continued
(2) Changes of defined benefits plan - continued
The Company's subsidiaries provide the registered retirees and in-service staff withsupplementary post-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 cumulativewelfare unit method. The Group recognizes the Group's liabilities based on the actuarial results.The relevant 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 forthe period in which the plan is revised. The net interest is determined by multiplying the definedbenefit plan net debt or net assets by the appropriate discount rate.
41. Provisions
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Opening balance | Increase for the year | Decrease for the year | Effect of changes in foreign exchange | Closing balance | Reason |
| Estimated expenses on land acquisition and reservation for Shangtou Port | 66,138,336.08 | - | 66,138,336.08 | - | - | |
| Pending litigation | 17,277,583.26 | 7,900,029.99 | - | -1,933,895.07 | 23,243,718.18 | Note |
| Sales discount | 16,990,826.32 | 209,482,403.12 | 226,473,229.44 | - | - | |
| Other | - | 1,003,584.24 | - | - | 1,003,584.24 | |
| Total | 100,406,745.66 | 218,386,017.35 | 292,611,565.52 | -1,933,895.07 | 24,247,302.42 |
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
| Item | 1/1/2021 (restated) | Increase in the current year | Decrease in the current year | 31/12/2021 |
| Government grants | 1,112,272,684.13 | 7,403,600.00 | 44,110,161.98 | 1,075,566,122.15 |
| Unrealized sale-and- leaseback income | 908,139.86 | - | 516,377.10 | 391,762.76 |
| Total | 1,113,180,823.99 | 7,403,600.00 | 44,626,539.08 | 1,075,957,884.91 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Deferred income - continued
Items involving government grants are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Liabilities
| Liabilities | 1/1/2021 (restated) | New subsidies | Recognized in other income | 31/12/2021 | Related to assets /related to income |
| Refund from marine reclamation land | 355,820,652.47 | - | 19,349,167.92 | 336,471,484.55 | Related to assets |
| Tonggu channel widening project(Note) | 269,372,073.24 | - | 7,057,783.56 | 262,314,289.68 | Related to assets |
| Special subsidies for facilities and equipment | 240,227,572.98 | - | 6,887,816.80 | 233,339,756.18 | Related to assets |
| Western port area western public channel widening project (Note) | 214,101,151.86 | - | 5,439,716.28 | 208,661,435.58 | Related to assets |
| Government subsidies for intelligent system | 14,803,742.19 | 1,604,600.00 | 2,936,668.73 | 13,471,673.46 | Related to assets |
| Refund of land transfer charges | 6,568,666.65 | - | 267,200.04 | 6,301,466.61 | Related to assets |
| Green low carbon port project | 561,560.02 | - | 421,170.00 | 140,390.02 | Related to assets |
| Others | 10,817,264.72 | 5,799,000.00 | 1,750,638.65 | 14,865,626.07 | Related to assets |
| Total | 1,112,272,684.13 | 7,403,600.00 | 44,110,161.98 | 1,075,566,122.15 |
Note: Refer to Note (VIII) 23 for details.
43. Other non-current liabilities
| Item | Closing balance | Opening balance |
| Actuarial cost for the calculation of pension benefits difference for the public security bureau staff (Note 1) | 176,939,999.96 | 162,810,000.00 |
| Berth priority call right (Note 2) | 9,595,454.89 | 14,597,949.13 |
| TCP operating right liabilities(Note 3) | - | 2,888,395,641.53 |
| Others | 660,123.68 | |
| Total | 187,195,578.53 | 3,065,803,590.66 |
| Less: Other non-current liabilities due within one year | 24,130,000. 00 | 83,582,696.63 |
| Including: TCP operating right liabilities | - | 67,272,696.63 |
| Actuarial cost for the calculation of pension benefits difference for the public security bureau staff (Note 2) | 24,130,000.00 | 16,310,000.00 |
| Other non-current liabilities due after one year | 163,065,578.53 | 2,982,220,894.03 |
Note 1: Refer to Note (VIII) 49 for details.
Note 2: This represents the berth priority call right as agreed in the contract entered into with the
clients in 2003, with total amount of USD14 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 2021, theamount included in operating income is RMB 5,002,494.24.
Note 3: Refer to Note (VIII) 39 for details.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Share capital
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Opening balance | Changes for the year | Closing balance | ||||
| New issue of share (note) | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
| 2021 | |||||||
| I. Restricted tradable shares | |||||||
| 1. State-owned shares | - | - | - | - | - | - | - |
| 2. State-owned legal person shares | - | - | - | - | - | - | - |
| 3. Other domestic shares | 9,496.00 | - | - | - | 325.00 | 325.00 | 9,821.00 |
| 4. Foreign shares | 1,148,648,648.00 | - | - | - | - | - | 1,148,648,648.00 |
| Total restricted tradable shares | 1,148,658,144.00 | - | - | - | 325.00 | 325.00 | 1,148,658,469.00 |
| 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 | - | - | - | -325.00 | -325.00 | 179,886,585.00 |
| 3. Foreign capital shares listed overseas | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| Total non-restricted tradable shares | 773,706,980.00 | - | - | - | -325.00 | -325.00 | 773,706,655.00 |
| III. Total shares | 1,922,365,124.00 | - | - | - | - | - | 1,922,365,124.00 |
| Item | Opening balance | Changes for the year | Closing balance | ||||
| New issue of share (note) | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
| 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 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Capital Reserve
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Opening balance(restated) | Increase | Decrease | Closing balance |
| 2021 | ||||
| Capital premium | 22,730,949,021.44 | 501,665,416.93 | 42,691,628.75 | 23,189,922,809.62 |
| 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 | - | 42,691,628.75 | 13,302,937,205.73 |
| Differences arising from acquisition of minority interests (Note 1) | 714,658,981.71 | 500,550,958.03 | - | 1,215,209,939.74 |
| Others | 1,657,668,721.31 | 1,114,458.90 | - | 1,658,783,180.21 |
| Other capital Reserve | 108,649,303.12 | 353,196,864.64 | 59,066,218.68 | 402,779,949.08 |
| Including: Transfer from capital reserve under the previous accounting system | -2,781,133.00 | - | - | -2,781,133.00 |
| Unexercised share-based payment(Note 2) | 10,096,607.62 | 11,870,209.58 | 12,009,878.60 | 9,956,938.60 |
| 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(Note 3) | 101,333,828.50 | 341,326,655.06 | 47,056,340.08 | 395,604,143.48 |
| Total | 22,839,598,324.56 | 854,862,281.57 | 101,757,847.43 | 23,592,702,758.70 |
| 2020(restated) | ||||
| 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 | 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 |
| Unexercised share-based payment | - | 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 1: The Company chose to acquire the dividends attributable to CMPort in lieu of shares,
which increased the capital reserve by RMB 438,184,583.31 in the current year. Refer toNote (X) 2 for details.
Note 2: Refer to Note (XIV) 2 for details.
Note 3: The changes for the year mainly represent the effect of passive dilution of the Group's
shareholding ratio in Liaoning Port, resulting in increase of RMB 170,052,644.70 incapital reserve; and the effect of passive dilution of the Group's shareholding ratio inSIPG, resulting in decrease of RMB 47,056,340.08 in capital reserve.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Opening balance | 2021 | Less: Other changes | Closing balance | ||||
| Pre-tax amount for the year | Less: Amount included in other comprehensive income in the prior periods transferred to profit or loss in this period | Less: Income tax expense | Post-tax income attributable to the parent company owner | Post-tax income attributable to minority shareholders | ||||
| 2021 | ||||||||
| I. Other comprehensive income that will not be reclassified subsequently to profit or loss | 81,416,891.26 | -11,657,252.55 | - | -398,211.33 | -316,112.17 | -10,942,929.05 | -133,217.17 | 81,233,996.26 |
| Including: Changes arising from remeasurement of defined benefits plan | 11,318,269.18 | -32,665,927.62 | - | - | -8,714,853.33 | -23,951,074.29 | - | 2,603,415.85 |
| Other comprehensive income that can't be transferred to profit or loss under equity method | -6,986,086.44 | 22,223,934.38 | - | - | 9,495,957.95 | 12,727,976.43 | -133,217.17 | 2,643,088.68 |
| Changes in fair value of other equity instruments | 77,084,708.52 | -1,215,259.31 | - | -398,211.33 | -1,097,216.79 | 280,168.81 | - | 75,987,491.73 |
| II. Other comprehensive income that will be reclassified subsequently to profit or loss | -908,114,194.32 | -700,532,642.69 | - | - | -60,790,651.33 | -639,741,991.36 | 2,454,468.79 | -971,359,314.44 |
| Including: Other comprehensive income that may be transferred to profit or loss under equity method | 31,725,280.52 | 42,635,389.45 | - | - | 20,160,707.37 | 22,474,682.08 | 2,454,468.79 | 49,431,519.10 |
| Translation differences of financial statements denominated in foreign currencies | -939,839,474.84 | -743,168,032.14 | - | - | -80,951,358.70 | -662,216,673.44 | - | -1,020,790,833.54 |
| Total other comprehensive income | -826,697,303.06 | -712,189,895.24 | - | -398,211.33 | -61,106,763.50 | -650,684,920.41 | 2,321,251.62 | -890,125,318.18 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Opening balance | 2020 | Less: Other comprehensive income carried forward to retained earnings | Closing balance | ||||
| Pre-tax amount for the year | Less: Amount included in other comprehensive income in the prior periods transferred to profit or loss in this period | Less: Income tax expense | Post-tax income attributable to the parent company owner | Post-tax income attributable to minority shareholders | ||||
| 2020(restated) | ||||||||
| 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 |
- 124 -
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47. Special reserve
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Opening balance | Increase | Decrease | Closing balance |
| Production safety reserve | 10,201,178.30 | 48,296,277.57 | 49,313,026.75 | 9,184,429.12 |
48. Surplus reserve
| Item | Opening balance | Increase | Decrease | Closing balance |
| Statutory surplus reserve | 890,690,322.28 | 70,492,239.72 | - | 961,182,562.00 |
49. Unappropriated profit
| Item | Amount | Proportion of appropriation or allocation |
| 2021 | ||
| Unappropriated profit at the beginning of the year before adjustment | 12,316,177,395.17 | |
| Add: Adjustment to unappropriated profit at beginning of the period | 12,942,703.53 | |
| Including: Effect of business combinations involving enterprises under common control | 12,942,703.53 | |
| Unappropriated profit at the beginning of the year after adjustment(restated) | 12,329,120,098.70 | |
| Add: Net profit of the year attributable to shareholders of the parent | 2,685,829,204.07 | |
| Less: Appropriation to statutory surplus reserve | 70,492,239.72 | |
| Appropriation to discretionary surplus reserve | - | |
| Appropriation to general risk reserve | - | |
| Ordinary shares' dividends payable | 730,498,747.12 | Note 1 |
| Ordinary shares' dividends converted into share capital | - | |
| Pension Benefits | 3,525,104.12 | Note 2 |
| Others | 4,554,105.32 | |
| Unappropriated profit at the end of the year | 14,205,879,106.49 |
| Item | Amount | Proportion of appropriation or allocation |
| 2020 | ||
| Unappropriated profit at the end of last year before adjustment | 11,467,166,351.85 | |
| Add: Adjustment to unappropriated profit at beginning of the period | 4,421,264.15 | |
| Including: Effect of business combinations involving enterprises under common control | 4,421,264.15 | |
| Unappropriated profit at the beginning of the year after adjustment(restated) | 11,471,587,616.00 | |
| Add: Net profit of the year attributable to shareholders of the parent | 2,073,844,409.04 | |
| 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 | - | |
| Pension Benefits | 73,228,871.09 | |
| Others | -1,549,916.64 | |
| Unappropriated profit at the end of the year | 12,329,120,098.70 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Unappropriated profit - continued
Note 1: According to the resolution of shareholders meeting on 28 May 2021, the Company
distributes cash dividends of RMB3.80 (inclusive of tax) for every 10 shares, totalling toRMB 730,498,747.12 on the basis of the total shares of 1,922,365,124 shares at the endof 2020.
Note 2: In accordance with the Notice on Issuing the Plan for Deeping Administration System
Reform of Port & Channel Public Security Authorities (No.327 [2017], StateCommission Office of Public Sectors Reform) and the Notice on Issuing theImplementation Plan for Deeping Administration System Reform of Port & ChannelPublic Security Authorities (No.221 [2018], Guangdong Commission Office of PublicSectors Reform), in 2020, Zhanjiang Port, a subsidiary of the Company, transferred theZhanjiang Port Public Security Bureau to Zhanjiang Municipal Government. The policein-service were transitioned to civil servants in accordance with national regulations, theretired police were included in the jurisdiction of the pension insurance of state organsand public institutions, and the difference between the original standard of pensionbenefits and the retirement benefits of the Zhanjiang municipal police (hereinafterreferred to as the "pension benefits difference") shall be borne by Zhanjiang Port.Zhanjiang Port engaged Towers Watson Consulting (Shenzhen) Co., Ltd. to estimate thepresent value of pension benefits difference in actuarial terms. Zhanjiang Port recognizedthe liabilities based on the actuarial results, and the relevant actuarial losses resulted in atotal elimination of RMB 8,330,000.00 from the unappropriated profit of Zhanjiang Portfor the year, and a corresponding elimination of RMB 3,525,104.12 from theunappropriated profit of the Company in proportion to the Company's equity interest inZhanjiang Port.
Note 3: Profit distribution after the balance sheet date
According to the profit distribution plan for 2021, approved by the 10
th
board of directorsat the 5
th
meeting on 29 March 2022, the Company, based on the total shares of1,922,365,124 at 31 December 2021, distributes cash dividends at RMB 4.30 for everyshares, totalling to RMB 826,617,003.32. The above profit distribution plan has yet beenapproved by shareholders meeting.
- 126 -
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Operating income and operating costs
(1) Operating income and operating costs
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) | ||
| Income | Cost | Income | Cost | |
| Principal operation | 15,099,983,817.24 | 8,827,960,579.72 | 12,603,330,266.34 | 7,740,669,515.46 |
| Other operations | 183,824,357.36 | 218,875,602.77 | 153,414,051.57 | 221,269,319.94 |
| Total | 15,283,808,174.60 | 9,046,836,182.49 | 12,756,744,317.91 | 7,961,938,835.40 |
(2) Revenue from contracts
| Categories of contracts | Ports operation | Bonded logistics operation | Other operations | Total |
| Mainland China, Hong Kong and Taiwan area | 10,940,195,610.05 | 426,543,277.22 | 183,824,357.36 | 11,550,563,244.63 |
| - Pearl River Delta | 6,169,011,494.33 | 293,602,126.57 | 183,824,357.36 | 6,646,437,978.26 |
| - Yangtze River Delta | 955,807,808.06 | - | - | 955,807,808.06 |
| - Bohai Rim | 69,178,976.05 | 132,941,150.65 | - | 202,120,126.70 |
| - Other areas | 3,746,197,331.61 | - | - | 3,746,197,331.61 |
| Other countries | 3,695,214,463.69 | 38,030,466.28 | - | 3,733,244,929.97 |
| Total | 14,635,410,073.74 | 464,573,743.50 | 183,824,357.36 | 15,283,808,174.60 |
(3) Description of performance obligations
The Group provides wharf service, bonded logistics service and other services. These services areobligations performed over a period of time. For wharf services, as the handling time forcontainers and bulk cargos is short, the management believes that it is not necessary to recognizerevenue according to the progress towards the completion of contract and it is an appropriatemethod to recognize the fulfilment of performance obligation and revenue upon the completion ofthe service. For bonded logistics service and other services, the customers evenly obtains andconsumes the economic benefits from the Group's performance of contract, meanwhile thecharging rules as agreed in the contract terms usually adopt daily/month/yearly basis. During theprocess of rendering services, the Group recognizes revenue using straight-line method.
Part of the Group's handling contracts are established with discount terms, i.e. the customerswhose business volume reaches agreed level, are granted with preferential charge rate or discount.At the end of the year, as the business quantity finally realized within the contract period isuncertain, the contract consideration is subject to variable factors. The management included thispart of discount in other payables and provisions. The variable considerations arising from salesdiscount are not included in the transaction. At the end of the year, the variable considerationsarising from sales discount are set out in Note (VIII) 33 (3) and Note (VIII) 41.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
51. Taxes and surcharges
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Property tax | 70,389,135.52 | 57,045,127.75 |
| Land use tax | 34,202,909.60 | 33,997,224.70 |
| City construction and maintenance tax | 9,898,436.53 | 7,349,880.46 |
| Education surcharges and local education surcharges | 7,369,925.21 | 5,477,134.10 |
| Stamp duty | 3,995,999.87 | 7,593,765.29 |
| Others (note) | 66,117,837.58 | 40,466,869.88 |
| Total | 191,974,244.31 | 151,930,002.18 |
Note: Others mainly represent (1) Program of Social Integration and Contribution for the
Financing of Social Security (social contribution tax on enterprise income) and Tax onServices (tax based on services rendered) borne by TCP, a subsidiary of the Company,totalled BRL49,540,163.48 (equivalent to RMB59,226,541.93) for the year.
52. Administrative expenses
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Employee's salary | 1,254,118,714.39 | 1,106,679,090.17 |
| Depreciation expenses | 71,427,267.44 | 83,244,180.56 |
| Fees paid to agencies | 67,169,001.82 | 73,421,741.00 |
| Amortization of intangible assets | 62,610,371.46 | 63,971,960.67 |
| Others | 273,835,203.39 | 278,338,492.85 |
| Total | 1,729,160,558.50 | 1,605,655,465.25 |
53. Financial expenses
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Interest expense | 1,885,088,577.54 | 1,915,963,616.06 |
| Less: Capitalized interest expenses | 55,177,640.96 | 65,255,075.44 |
| Less: Interest income | 377,563,874.49 | 326,239,184.34 |
| Interest expenses of lease liabilities | 79,937,678.42 | 99,204,381.59 |
| Handling fee | 14,643,061.91 | 19,315,161.95 |
| Exchange differences | -8,805,663.12 | -415,864,228.16 |
| Others | 7,216,457.99 | 4,805,832.04 |
| Total | 1,545,338,597.29 | 1,231,930,503.70 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
54. Other income
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Business development subsidy | 250,536,747.94 | 16,666,657.00 |
| Transferred from allocation of deferred income (Note VIII 42) | 44,110,161.98 | 39,538,414.33 |
| Additional deduction of VAT | 24,740,974.05 | 18,095,829.09 |
| Steady post subsidies | 15,167,723.22 | 4,590,624.84 |
| Special fund for operation | 9,947,660.80 | 4,530,545.00 |
| Cross-border trading e-commerce award | 3,940,000.00 | - |
| Innovation special fund | 3,601,300.00 | 13,359,768.44 |
| Refund of withholding taxes | 2,351,124.35 | 2,655,040.88 |
| Special fund for promoting high-quality development of economy | 2,000,000.00 | - |
| Value-added tax levied and immediately returned for software products | 1,856,439.18 | 1,438,961.78 |
| Anti-epidemic and epidemic prevention subsidy | 394,443.34 | 6,670,018.69 |
| Refund of unemployment insurance premium | 84,591.31 | 13,701,836.63 |
| Special fund for house renting | - | 73,356,900.00 |
| Environmental subsidy | - | 5,799,000.00 |
| Facility construction fund | - | 1,544,768.00 |
| Others | 4,513,994.91 | 5,778,463.02 |
| Total | 363,245,161.08 | 207,726,827.70 |
55. Investment income
(1) Details of investment income:
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Long-term equity investments income under equity method | 6,290,957,480.59 | 3,992,772,117.69 |
| Including: Long-term equity investments income of associates under equity model | 6,048,315,587.10 | 3,632,771,022.08 |
| Including: Long-term equity investments income of joint venture under equity model | 242,641,893.49 | 360,001,095.61 |
| Investment income from disposal of long-term equity investments (Note) | 225,846,183.50 | - |
| Gains from remeasurement of previously held equity at fair value upon obtaining the control | - | 753,988,749.80 |
| Investment income from held-for-trading financial assets | 72,438,700.63 | 10,181,238.09 |
| Investment income from other non-current financial assets | 40,297,383.53 | 83,138,043.43 |
| Investment income on disposal of other non-current financial assets | - | 1,850,600.00 |
| Dividend income from other equity instruments investments | 7,409,762.66 | 8,568,250.21 |
| Interest income from debt investments | - | 59,331,593.61 |
| Total | 6,636,949,510.91 | 4,909,830,592.83 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
55. Investment income - continued
(1) Details of investment income: - continued
Note: In December 2021, Zhanjiang Port, a subsidiary of the Company, transferred its 49%
equity interest in Merchants Port City to Broadford (Shenzhen) Port Development Co.,Ltd. for a transaction consideration of RMB 384,000,000.00 and recognized theinvestment income from the disposal of long-term equity investment of RMB225,832,476.54.
The Group's remittance of investment income is not subject to significant restriction.
(2) Details of long-term equity investments income under equity method
CHINA MERCHANTS PORT GROUP CO., LTD.
Investee
| Investee | Amount incurred in the current period | Amount incurred in the prior period (restated) | Reason for changes |
| SIPG | 4,190,349,799.99 | 2,234,593,249.98 | Changes in net profit of investee |
| Nanshan Group | 685,312,588.00 | 424,745,838.41 | Changes in net profit of investee |
| Terminal Link SAS | 476,262,839.86 | 312,427,210.29 | Changes in net profit of investee |
| Liaoning Port Co., Ltd. | 177,413,349.12 | 169,692,898.03 | Changes in net profit of investee |
| Ningbo Zhoushan | 229,363,153.19 | - | Changes in net profit of investee |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | 130,229,025.57 | 335,639,784.43 | Changes in net profit of investee |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 83,154,378.77 | 102,594,175.95 | Changes in net profit of investee |
| Euro-Asia Oceangate, S.a` r.l. | 57,559,118.21 | 71,938,690.26 | Changes in net profit of investee |
| Port of Newcastle | 12,868,828.80 | -7,767,864.73 | Changes in net profit of investee |
| Yantai Port Group Laizhou Port Co., Ltd | 33,327,096.27 | 24,750,032.44 | Changes in net profit of investee |
| China Merchants Northeast Asia development and Investment Co., Ltd | 8,262,246.98 | 7,786,285.71 | Changes in net profit of investee |
| Others | 206,855,055.83 | 316,371,816.92 | Changes in net profit of investee |
| Total | 6,290,957,480.59 | 3,992,772,117.69 |
56. Gains (losses) on changes in fair value
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Held-for-trading financial assets | 11,666,053.97 | -226,508.15 |
| Other non-current financial assets | -96,596,314.84 | 269,099,721.85 |
| Including: Financial assets at fair value through profit or loss | -96,596,314.84 | 269,099,721.85 |
| Other non-current liabilities | 306,172,536.04 | -680,381,987.28 |
| Including: Financial liabilities at fair value through profit or loss | 306,172,536.04 | -680,381,987.28 |
| Total | 221,242,275.17 | -411,508,773.58 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
57. Gains (losses) on impairment of credit
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| 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 "-") | -13,674,941.27 | 20,725,595.61 |
| II. Gains on impairment of credit of other receivables (loss is marked with "-") | -239,661,663.35 | -475,976,923.35 |
| III. Gains on impairment of credit of long-term receivables (loss is marked with "-") | 382,987.12 | -2,049,967.61 |
| Total | -252,953,617.50 | -457,301,295.35 |
58. Gains (losses) from impairment of assets
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Gains from decline in value of inventories | - | 947,694.12 |
| Impairment provision for long-term equity investments | -2,147,208.07 | - |
| Losses on goodwill impairments | -418,345,307.68 | -552,317,736.65 |
| Total | -420,492,515.75 | -551,370,042.53 |
59. Gains (losses) on disposal of assets
| Item | Amount incurred in the current period | Amount incurred in the prior period | Amount included in non-recurring profit or loss for the current year |
| Gains on disposal of non-current assets | 35,576,459.42 | 1,489,206,502.32 | 35,576,459.42 |
| Including: Gains on disposal of fixed assets (loss is marked with "-") | 9,374,568.54 | -50,184,379.22 | 9,374,568.54 |
| Gains on disposal of intangible assets | 30,064,375.22 | 1,480,715,445.14 | 30,064,375.22 |
| Gains on disposal of construction in progress | - | 59,164,336.00 | - |
| Others | -3,862,484.34 | -488,899.60 | -3,862,484.34 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
60. Non-operating income
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period | Amount included in non-recurring profit or loss for the current year |
| Profit form tax saving | 12,743,050.88 | 779,998.17 | 12,743,050.88 |
| Management service fee and directors' remuneration | 7,912,260.93 | 2,734,335.68 | 7,912,260.93 |
| Land rent deduction | 6,952,470.22 | 5,554,357.90 | 6,952,470.22 |
| Gains from the retirement of damaged non-current assets | 3,613,726.26 | 3,272,216.69 | 3,613,726.26 |
| Including: Gains from retirement of damaged fixed assets | 3,613,726.26 | 3,272,216.69 | 3,613,726.26 |
| Compensation received for contracts violation | 3,519,366.77 | 3,074,739.23 | 3,519,366.77 |
| Exempted account currents | 1,446,930.55 | 2,603,213.36 | 1,446,930.55 |
| Insurance claims | 886,184.77 | 3,548,709.63 | 886,184.77 |
| Government grants | 875,528.75 | 53,884,602.38 | 875,528.75 |
| Others | 5,518,018.37 | 6,263,239.64 | 5,518,018.37 |
| Total | 43,467,537.50 | 81,715,412.68 | 43,467,537.50 |
61. Non-operating expenses
| 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 |
| Loss on retirement of non-current assets | 31,484,815.39 | 11,905,789.11 | 31,484,815.39 |
| Including: Loss on retirement of damaged fixed assets | 31,294,087.61 | 11,905,789.11 | 31,294,087.61 |
| Litigation loss | 11,267,275.13 | 7,992,269.39 | 11,267,275.13 |
| Donations | 11,156,992.01 | 29,768,154.87 | 11,156,992.01 |
| Compensation, liquidated damages and penalties | 9,220,103.11 | 9,131,029.28 | 9,220,103.11 |
| Stability maintenance housing subsidy | - | 13,500,000.00 | - |
| Others | 32,399,507.47 | 6,706,498.12 | 32,399,507.47 |
| Total | 95,528,693.11 | 79,003,740.77 | 95,528,693.11 |
62. Income tax expenses
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Current income tax expenses | 1,162,076,514.07 | 1,305,083,876.52 |
| Deferred income tax expenses | 267,016,570.24 | -28,062,031.90 |
| Total | 1,429,093,084.31 | 1,277,021,844.62 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
62. Income tax expenses - continued
Reconciliation of income tax expenses to the accounting profit is as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period |
| Gross profit | 9,084,099,074.06 |
| Income tax expenses calculated at 25% | 2,271,024,768.52 |
| Effect of non-deductible cost, expenses and losses | 387,137,443.85 |
| Accrued income tax expenses | 691,032,360.67 |
| Effect of deductible temporary differences and deductible losses for which the deferred tax assets are not recognized in current period | 74,682,468.49 |
| Effect of tax-free income (Note) | -1,082,059,417.15 |
| Effect of tax incentives and changes of tax rate | -459,127,249.98 |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | -300,563,430.43 |
| Effect of utilizing deductible losses for which the deferred tax assets were not recognized in prior period | -129,618,579.95 |
| Effect of adjustments to prior-year income tax | -26,377,469.21 |
| Others | 2,962,189.50 |
| Income tax expenses | 1,429,093,084.31 |
Note: This mainly represents the tax effect on investment income from joint venture and
associates.
63. Assets with restricted ownership or use right
| Item | Closing balance | Opening balance |
| Cash and bank balances (Note 1) | 12,830,212.33 | 11,528,570.90 |
| Equity investment in CICT (Note 2) | 2,026,382,103.10 | 1,626,554,439.58 |
| Equity investment in TML (Note 2) | 411,893,452.06 | 859,148,327.98 |
| Fixed assets (Note 3) | 278,015,952.68 | 341,931,071.09 |
| Intangible assets (Note 3) | 212,232,642.30 | 218,825,477.36 |
| Construction in progress (Note 3) | 12,388,924.87 | 43,751,101.60 |
| Total | 2,953,743,287.34 | 3,101,738,988.51 |
Note 1: Details of restricted cash and bank balances are set out in Note (VIII) 1.
Note 2: Details of mortgaged equity and interests are set out in Note (VIII) 36.
Note 3: Details of mortgage borrowings are set out in Note (VIII) 36.
64. Other comprehensive income
Details are set out in Note (VIII) 46.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement
(1) Other cash receipts relating to operating activities:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Government grants | 300,310,363.33 | 204,171,774.90 |
| Interest income | 133,986,424.52 | 197,914,789.22 |
| Guarantees and deposits | 38,247,722.18 | 72,204,983.41 |
| Insurance indemnities | 7,390,248.30 | 11,043,593.46 |
| Rentals | 9,641,271.39 | 10,735,793.35 |
| Refund of port construction fee and service charges | 130,668.41 | 1,660,916.38 |
| Others | 534,021,573.18 | 414,550,519.81 |
| Total | 1,023,728,271.31 | 912,282,370.53 |
(2) Other cash payments relating to operating activities
| Item | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Advance payment | 275,907,895.42 | 171,218,230.90 |
| Operating expenses such as operating costs and administration expense etc. | 182,351,696.26 | 183,305,983.48 |
| Guarantees and deposits | 28,616,516.45 | 38,575,451.19 |
| Harbor dues on cargo | 15,776,034.06 | - |
| Rentals | 14,653,775.08 | 23,239,432.01 |
| Port construction fee | 12,001,158.90 | 11,661,727.63 |
| Port charges | 11,723,562.35 | 7,481,400.21 |
| Others | 334,083,168.45 | 404,625,405.11 |
| Total | 875,113,806.97 | 840,107,630.53 |
(3) Other cash receipts relating to investing activities
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Recovered principal for the advances of the project | 179,243,313.40 | 825,670,000.00 |
| Recovered interest for the advances of the project | 162,918,518.18 | 87,104,514.28 |
| Recovered lendings | 8,980,037.68 | 33,282,119.52 |
| Net cash receipts from acquisition of subsidiaries and other operating units | - | 317,470,188.12 |
| Zhanjiang Port Transition Compensation | - | 3,803,477.07 |
| Others | 86,014,701.83 | 186,182,916.72 |
| Total | 437,156,571.09 | 1,453,513,215.71 |
- 134 -
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(4) Other cash payments relating to investing activities
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Payment of staff relocation cost to Shantou Port in respect of the land purchasing and reserve | 22,231,894.84 | - |
| Related party borrowings | - | 3,009,744,121.38 |
| Others | 406.11 | 26,229.24 |
| Total | 22,232,300.95 | 3,009,770,350.62 |
(5) Other cash receipts relating to financing activities
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Proceeds of CMPort from disposal of part of equity of subsidiaries | - | 1,851,325,647.36 |
| Equity capital recovered from minority shareholders for Shantou Port | - | 82,129,289.00 |
| Recovered financing lease deposits | - | 4,500,000.00 |
| Total | - | 1,937,954,936.36 |
(6) Other cash payments relating to financing activities
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Payment for the Company's acquisition of minority interests of CMPort | 76,767,514.23 | - |
| Amount paid by Dalian Port Logistics Network Co., Ltd(formerly known as "DPN")for the acquisition of minority shareholders' equities | 8,748,637.26 | - |
| Amount paid by CMPort for the acquisition of minority shareholders' equities | - | 755,398,999.97 |
| Payments for the liquidation of Shantou Port's subsidiaries | - | 82,129,289.00 |
| Lease expenses paid | 412,013,733.57 | 472,115,301.75 |
| Others | 6,000,631.68 | 5,033,180.99 |
| Total | 503,530,516.74 | 1,314,676,771.71 |
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(VIII) 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
CHINA MERCHANTS PORT GROUP CO., LTD.
Supplementary information
| Supplementary information | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 7,655,005,989.75 | 5,548,775,375.20 |
| Add: Provision for impairment losses of assets | 420,492,515.75 | 551,370,042.53 |
| Provision for impairment losses of credit | 252,953,617.50 | 457,301,295.35 |
| Depreciation of fixed assets | 1,877,442,392.55 | 1,812,195,015.18 |
| Depreciation of investment property | 189,639,743.80 | 189,954,310.24 |
| Depreciation of right-of-use assets | 329,603,141.83 | 355,847,857.29 |
| Amortization of intangible assets | 616,107,419.01 | 610,778,742.12 |
| Amortization of long-term prepaid expenses | 53,478,222.59 | 46,028,917.79 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gain is marked with "-") | -35,576,459.42 | -1,489,206,502.32 |
| Losses on retirement of fixed assets, intangible assets and other long-term assets | 27,871,089.13 | 8,633,572.42 |
| Losses on changes in fair value (gain is marked with "-") | -221,242,275.17 | 411,508,773.58 |
| Financial expenses | 1,733,787,046.57 | 1,305,544,471.18 |
| Investment income | -6,636,949,510.91 | -4,909,830,592.83 |
| Decrease in deferred tax assets (increase is marked with "-") | 22,711,365.92 | -120,252,590.37 |
| Increase in deferred tax liabilities | 244,305,204.32 | 92,190,558.47 |
| Decrease in inventories (increase is marked with "-") | 20,057,846.98 | -34,628,371.06 |
| Decrease in operating receivables (increase is marked with "-") | -4,503,635.75 | -423,471,225.29 |
| Decrease in operating payables (increase is marked with "-") | -34,857,143.97 | 1,138,549,363.53 |
| Net cash flows from operating activities | 6,510,326,570.48 | 5,551,289,013.01 |
| 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 acquired under finance leases | - | - |
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 12,727,355,238.36 | 11,898,618,327.29 |
| Less: Opening balance of cash | 11,898,618,327.29 | 7,787,670,726.45 |
| Add: Closing balance of cash equivalents | - | - |
| Less: Opening balance of cash equivalents | - | - |
| Net increase in cash and cash equivalents | 828,736,911.07 | 4,110,947,600.84 |
(2) Cash and cash equivalents
| Item | Closing balance | Opening balance (restated) |
| I. Cash | 12,727,355,238.36 | 11,898,618,327.29 |
| Including: Cash on hand | 501,446.73 | 575,797.26 |
| Bank deposits available for payment at any time | 12,353,104,402.58 | 11,545,752,102.19 |
| Other monetary funds available for payment at any time | 373,749,389.05 | 352,290,427.84 |
| II. Cash equivalents | - | - |
| III. Balance of cash and cash equivalents at the end of the year | 12,727,355,238.36 | 11,898,618,327.29 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Foreign currency monetary items
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Closing balance of foreign currency | Exchange rate | Closing amount in RMB |
| Cash and bank balances | 1,605,201,076.66 | ||
| Including: HKD | 22,044,029.44 | 0.8165 | 17,998,950.04 |
| USD | 100,121,665.86 | 6.3674 | 637,514,695.20 |
| EUR | 97,757,986.79 | 7.2242 | 706,223,248.17 |
| RMB | 243,464,183.25 | 1.0000 | 243,464,183.25 |
| Accounts receivable | 209,762,995.27 | ||
| Including: HKD | 1,313,813.27 | 0.8165 | 1,072,728.53 |
| USD | 5,742,521.74 | 6.3674 | 36,564,932.93 |
| EUR | 23,826,213.81 | 7.2242 | 172,125,333.81 |
| Other receivables | 326,544,843.88 | ||
| Including: HKD | 97,298,692.24 | 0.8165 | 79,444,382.21 |
| USD | 5,977,025.63 | 6.3674 | 38,058,113.00 |
| EUR | 4,492,480.76 | 7.2242 | 32,454,579.51 |
| RMB | 176,587,769.16 | 1.0000 | 176,587,769.16 |
| Other Non-Current Assets | 28,084,411.98 | ||
| Including: EUR | 3,887,546.30 | 7.2242 | 28,084,411.98 |
| Short-term borrowings | 1,028,876,600.00 | ||
| Including: HKD | 800,000,000.00 | 0.8165 | 653,200,000.00 |
| USD | 59,000,000.00 | 6.3674 | 375,676,600.00 |
| Accounts payable | 41,862,294.84 | ||
| Including: HKD | 3,833,404.09 | 0.8165 | 3,129,974.44 |
| USD | 702.00 | 6.3674 | 4,469.91 |
| EUR | 5,305,480.26 | 7.2242 | 38,327,850.49 |
| RMB | 400,000.00 | 1.0000 | 400,000.00 |
| Other payables | 640,218,472.26 | ||
| Including: HKD | 40,893,776.95 | 0.8165 | 33,389,768.88 |
| USD | 76,211,211.07 | 6.3674 | 485,267,265.37 |
| EUR | 3,947,344.18 | 7.2242 | 28,516,403.83 |
| RMB | 93,045,034.18 | 1.0000 | 93,045,034.18 |
| Non-current liabilities due within one year | 6,032,652,343.52 | ||
| Including: USD | 541,389,705.26 | 6.3674 | 3,447,244,809.27 |
| RMB | 2,585,407,534.25 | 1.0000 | 2,585,407,534.25 |
| Long-term borrowings | 2,680,907,395.00 | ||
| Including: USD | 216,000,000.00 | 6.3674 | 1,375,358,400.00 |
| EUR | 87,975,000.00 | 7.2242 | 635,548,995.00 |
| RMB | 670,000,000.00 | 1.0000 | 670,000,000.00 |
| Bonds payable | 12,670,872,414.16 | ||
| Including: USD | 1,989,960,174.35 | 6.3674 | 12,670,872,414.16 |
| Long-term payables | 3,433,175,756.61 | ||
| Including: HKD | 4,204,746,793.15 | 0.8165 | 3,433,175,756.61 |
- 137 -
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Government grants
(1) New government grants for the year
CHINA MERCHANTS PORT GROUP CO., LTD.
Type
| Type | Amount | Item | Presentation account | Amount included in profit or loss for the period |
| Related to income | 250,536,747.94 | Business development subsidy | Other income | 250,536,747.94 |
| Related to income | 15,167,723.22 | Steady post subsidy | Other income | 15,167,723.22 |
| Related to income | 9,947,660.80 | Special operation subsidy | Other income | 9,947,660.80 |
| Related to assets | 5,799,000.00 | Energy conservation and emission reduction – ship shore power phase II | Deferred income | 918,175.00 |
| Related to income | 3,940,000.00 | Cross-border trading e-commerce award | Other income | 3,940,000.00 |
| Related to income | 3,601,300.00 | Innovation special funds | Other income | 3,601,300.00 |
| Related to income | 2,000,000.00 | Special fund for promoting high-quality development of economy | Other income | 2,000,000.00 |
| Related to assets | 1,604,600.00 | Intelligent system subsidy | Deferred income | 120,696.53 |
| Related to income | 394,443.34 | Anti-epidemic and epidemic prevention subsidy | Other income | 394,443.34 |
| Related to income | 84,591.31 | Refund of unemployment insurance premium | Other income | 84,591.31 |
| Related to income | 4,513,994.91 | Others | Other income | 4,513,994.91 |
| Related to income | 875,528.75 | Others | Non-operating income | 875,528.75 |
| Total | 298,465,590.27 | 292,100,861.80 |
69. Lease
(1) Lessor under operating lease
| Item | Amount |
| I. Revenue | - |
| Lease income | 393,858,973.55 |
| Including: Income related to variable lease payments that are not included in lease receipts | - |
| II. Undiscounted lease receipts received after the balance sheet date | |
| 1st year | 234,699,427.04 |
| 2nd year | 109,190,765.76 |
| 3rd year | 87,829,496.57 |
| 4th year | 71,167,299.90 |
| 5th year | 69,224,147.74 |
| Over 5 years | 256,980,112.03 |
Note: 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 rangingfrom 1 month to 50 years and option to renew the lease of port and terminal facilities,machinery equipment, land and buildings. The Group considers that as the leased assetsare properly used, the unguaranteed balance of such assets does not constitutes materialrisk of the Group
- 138 -
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
69. Lease - continued
(2) Lessee
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Amount |
| Interest expense on lease liabilities | 79,937,678.42 |
| Short-term lease expenses that are accounted for using simplified approach and included in cost of related assets or profit or loss for the period | 57,066,803.15 |
| Expenses on lease of low-value assets (exclusive of expenses on short-term lease of low-value assets) that are accounted for using simplified approach and included in cost of related assets or profit or loss for the period | 1,059.70 |
| Variable lease payments that are included in cost of related assets or profit or loss but not included in measurement of lease liabilities | - |
| Including: the portion arising from sale and leaseback transactions | - |
| Income from sub-lease of right-of-use assets | 21,274,985.98 |
| Total cash outflows relating to lease | 435,267,676.74 |
| Profit or loss arising from sale and leaseback transactions (loss is marked with "-") | -25,726,283.95 |
| Cash inflows from sale and leaseback transactions | - |
| Cash outflows from sale and leaseback transactions | 223,602,538.98 |
| Others | - |
(IX) CHANGES IN SCOPE OF CONSOLIDATION
1. Business combination involving enterprises under common control
(1) Composition of the Group
| Name of acquiree | Proportion of equity acquired(%) | Basis for determining the type of combination | Acquisition date | Basis for determining the acquisition date | Acquiree's revenue from the beginning of the period of the acquisition to the acquisition date | Acquiree's net profit from the beginning of the period of the acquisition to the acquisition date | Acquiree's revenue for the comparative period | Acquiree's net profit for the comparative period |
| DPN | 79.03 | Controlled by the same party both before and after the combination, and the control is not transitory | 9 February 2021 | Transfer of control | 6,730,476.41 | -1,670,529.39 | 132,127,167.98 | 16,915,758.32 |
| Yingkou Gangxin Technology Co., Ltd. ("Gangxin Technology") | 100.00 | Controlled by the same party both before and after the combination, and the control is not transitory | 9 February 2021 | Transfer of control | - | -1,585,261.11 | 6,087,153.91 | 2,036,064.66 |
- 139 -
(IX) CHANGES IN SCOPE OF CONSOLIDATION - continued
1. Business combination involving enterprises under common control - continued
(2) Acquisition cost
CHINA MERCHANTS PORT GROUP CO., LTD.Acquisition cost
| Acquisition cost | DPN | Gangxin Technology |
| Cash | - | - |
| Par value of equity securities issued | 66,576,790.71 | 13,918,166.22 |
| Total acquisition cost | 66,576,790.71 | 13,918,166.22 |
(3) Carrying amount of assets and liabilities of the acquiree at the acquisition date
| DPN | Gangxin Technology | |||
| Acquisition date | 1 January 2021 | Acquisition date | 1 January 2021 | |
| Assets: | ||||
| Current assets | 131,539,011.74 | 140,838,127.92 | 18,138,156.03 | 18,319,351.22 |
| Long-term equity investments | 10,246,299.45 | 10,487,799.45 | - | - |
| Fixed assets | 8,023,111.99 | 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 prepaid expenses | 131,052.72 | 157,263.23 | - | - |
| Deferred tax assets | 126,018.46 | 126,018.46 | - | - |
| Liabilities: | ||||
| Current liabilities | 88,544,510.18 | 56,894,215.88 | 2,096,138.65 | 2,410,894.10 |
| Deferred income | 278,444.67 | 293,140.09 | - | - |
| Lease liabilities | 444,186.06 | 427,236.03 | - | - |
| Net assets | 67,310,732.03 | 108,745,261.65 | 16,076,063.54 | 15,943,820.81 |
| Less: Minority interests | - | 20,332,141.71 | - | - |
| Net assets acquired | 67,310,732.03 | 88,413,119.94 | 16,076,063.54 | 15,943,820.81 |
(X) 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) | Shareholding ratio | Acquisition method | |
| Direct | Indirect | ||||||
| Shenzhen Chiwan International Freight Agency Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 550.00 | 100.00 | - | Established through investment |
| Chiwan Wharf Holdings (Hong Kong) Ltd. | HK China | HK China | Investment holding | HKD 100.00 | 100.00 | - | Established through investment |
| Shenchiwan Port Affairs | Dongguan China | Dongguan China | Logistics support services | 45,000.00 | 85.00 | - | Established through investment |
| Dongguan Shenchiwan Wharf Co., Ltd. | Dongguan China | Dongguan China | Logistics support services | 40,000.00 | 100.00 | - | Established through investment |
| Shenzhen Chiwan Harbor Container Co. Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 28,820.00 | 100.00 | - | Business combination involving enterprises under common control |
| Shenzhen Chiwan Port Development Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 1,500.00 | 100.00 | - | Business combination involving enterprises under common control |
| Chiwan Container Terminal Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | USD 95,300,000 | 55.00 | 20.00 | Business combination involving enterprises under common control |
| Shenzhen Chiwan Tugboat Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 2,400.00 | 100.00 | - | Business combination involving enterprises under common control |
| Chiwan Shipping (Hong Kong) Limited | HK China | HK China | Logistics support services | HKD 800,000 | 100.00 | - | Business combination involving enterprises under common control |
| CMPort (Note 1) | HK China | HK China | Investment holding | HKD 44,016,586,600 | 43.18 | - | Business combination involving enterprises under common control |
- 140 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the subsidiary
| Name of the subsidiary | Principal place of business | Place of incorporation | Nature of business | Registered capital (RMB'0000, unless otherwise specified) | Shareholding ratio | Acquisition method | |
| Direct | Indirect | ||||||
| China Merchants Bonded Logistics Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 70,000.00 | 40.00 | 60.00 | Business combination involving enterprises under common control |
| China Merchants Holdings (International) Information Technology Co., Ltd. ("CM International Tech") | Shenzhen China | Shenzhen China | IT service | 8,784.82 | 13.18 | 43.74 | Business combination involving enterprises under common control |
| DPN(Note 2) | Liaoning China | Liaoning China | IT service | 3,200.00 | - | 79.03 | Business combination involving enterprises under common control |
| Gangxin Technology | Liaoning China | Liaoning China | IT service | 800.00 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International (China) Investment Co., Ltd. | Shenzhen China | Shenzhen China | Investment holding | USD 30,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International Container Terminal (Qingdao) Co., Ltd. | Qingdao China | Qingdao China | Logistics support services | USD 206,300,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants Container Services Limited | HK China | HK China | Logistics support services | HKD 500,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants Port (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 55,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Haiqin Project Management Co., Ltd. | Shenzhen China | Shenzhen China | Engineering supervision service | 300.00 | - | 100.00 | Business combination involving enterprises under common control |
| ATJ | Shenzhen China | Shenzhen China | Preparation for the warehousing project | HKD 100,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| ASJ | Shenzhen China | Shenzhen China | Preparation for the warehousing project | HKD 100,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International Terminal (Qingdao) Co., Ltd. | Qingdao China | Qingdao China | Logistics support services | USD 44,000,000 | - | 90.10 | Business combination involving enterprises under common control |
| CICT | Sri Lanka | Sri Lanka | Logistics support services | USD 150,000,100 | - | 85.00 | Business combination involving enterprises under common control |
| Magang Godown & Wharf | Shenzhen China | Shenzhen China | Logistics support services | 33,500.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Mawan Port Services Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 20,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Zhangzhou China Merchants Tugboat Co., Ltd. | Zhangzhou China | Zhangzhou China | Logistics support services | 1,500.00 | - | 100.00 | Business combination involving enterprises under common control |
| Zhangzhou China Merchants Port Co., Ltd. | Zhangzhou China | Zhangzhou China | Logistics support services | 100,000.00 | - | 60.00 | Business combination involving enterprises under common control |
| Zhangzhou Investment Promotion Bureau Xiamenwan Port Affairs Co., Ltd. ("Xiamenwan Port Affairs") (Note 3) | Zhangzhou China | Zhangzhou China | Logistics support services | 44,450.00 | - | 31.00 | Business combination involving enterprises under common control |
| Shekou Container Terminals Ltd. | Shenzhen China | Shenzhen China | Logistics support services | HKD 618,201,200 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Lianyunjie Container Terminals Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 60,854.90 | - | 100.00 | Business combination involving enterprises under common control |
| Anxunjie Container Terminals (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 127,600.00 | - | 100.00 | Business combination involving enterprises under common control |
| Anyunjie Port Warehousing Service (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Preparation for the warehousing project | 6,060.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Haixing | Shenzhen China | Shenzhen China | Logistics support services | 53,072.92 | - | 67.00 | Business combination involving enterprises under common control |
| Shenzhen Lianyongtong Terminal Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | USD 7,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| Yide Port | Foshan China | Foshan China | Logistics support services | 21,600.00 | - | 51.00 | Business combination involving enterprises under common control |
| Mega Shekou Container Terminals Limited | BVI | BVI | Investment holding | USD 120.00 | - | 80.00 | Business combination involving enterprises under common control |
| TML | Cyprus | Cyprus | Investment holding | EUR 5,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Lome Container Terminal S.A. | Republic of Togo | Republic of Togo | Logistics support services | XOF 200,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| Gainpro Resources Limited | BVI | BVI | Investment holding | USD 1.00 | - | 76.47 | Business combination involving enterprises under common control |
| Hambantota International Port Group | Sri Lanka | Sri Lanka | Logistics support services | USD 794,000,000 | - | 85.00 | Business combination involving enterprises under common control |
| Shantou port | Shantou China | Shantou China | Logistics support services | 12,500.00 | - | 60.00 | Business combination involving enterprises under common control |
| Shenzhen Jinyu Rongtai Investment Development Co., Ltd. | Shenzhen China | Shenzhen China | Property lease, etc. | 80,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Merchants QianhaiWan Real Estate Co., Ltd | Shenzhen China | Shenzhen China | Property lease, etc. | 20,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Juzhongzhi Investment (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Investment consulting | 4,000.00 | - | 75.00 | Business combination involving enterprises under common control |
- 141 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the subsidiary
| Name of the subsidiary | Principal place of business | Place of incorporation | Nature of business | Registered capital (RMB'0000, unless otherwise specified) | Shareholding ratio | Acquisition method | |
| Direct | Indirect | ||||||
| Shenzhen Lianda Tugboat Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 200.00 | - | 60.29 | Business combination involving enterprises under common control |
| China Ocean Shipping Tally Zhangzhou Co., Ltd. | Zhangzhou China | Zhangzhou China | Logistics support services | 200.00 | - | 84.00 | Business combination involving enterprises under common control |
| China Merchants Holdings (Djibouti) FZE | Djibouti | Djibouti | Logistics support services | USD 38,140,000 | - | 100.00 | Business combination involving enterprises under common control |
| Xinda Resources Limited (hereinafter referred to as "Xinda") | BVI | BVI | Investment holding | USD 107,620,000 | - | 77.45 | Business combination involving enterprises under common control |
| Kong Rise Development Limited | HK China | HK China | Investment holding | USD 107,620,000 | - | 100.00 | Business combination involving enterprises under common control |
| TCP | Brazil | Brazil | Logistics support services | BRL 68,851,600 | - | 100.00 | Business combination not involving enterprises under common control |
| Direcet Achieve Investments Limited | HK China | HK China | Investment holding | USD 814,781,300 | - | 100.00 | Business combination involving enterprises under common control |
| CMPort (Zhoushan) RoRo Wharf Co., Ltd. | Zhoushan China | Zhoushan China | Logistics support services | 17,307.86 | 51.00 | - | Assets acquisition |
| Shenzhen Haixing Logistics Development Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 7,066.79 | - | 67.00 | Assets acquisition |
| Zhanjiang Port | Zhanjiang China | Zhanjiang China | Logistics support services | 587,420.91 | 3.42 | 54.93 | Business combination not involving enterprises under common control |
| Zhanjiang Port International Container Terminal Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 60,000.00 | - | 80.00 | Business combination not involving enterprises under common control |
| Zhanjiang Port Petrochemical Terminal Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 18,000.00 | - | 50.00 | Business combination not involving enterprises under common control |
| China Ocean Shipping Tally Co., Ltd., Zhanjiang | Zhanjiang China | Zhanjiang China | Logistics support services | 300.00 | - | 84.00 | Business combination not involving enterprises under common control |
| Zhanjiang Port Donghaidao Bulk Cargo Terminal Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 5,000.00 | - | 100.00 | Business combination not involving enterprises under common control |
| Guangdong Zhanjiang Port Logistics Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 10,000.00 | - | 100.00 | Business combination not involving enterprises under common control |
| Zhanjiang Port Haichuan Trading Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 200.00 | - | 100.00 | Business combination not involving enterprises under common control |
| Guangdong Zhanjiang Port Longteng Shipping Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 9,000.00 | - | 70.00 | Business combination not involving enterprises under common control |
| Ningbo Daxie(Note 4) | Nongbo China | Nongbo China | Logistics support services | 120,909.00 | - | 45.00 | Business combination not involving enterprises under common control |
| Shantou Harbor Towage Service Co., Ltd. | Shantou China | Shantou China | Logistics support services | 1,000.00 | - | 100.00 | Established through investment |
| Sanya Merchants Port Development Co., Ltd. | Sanya China | Sanya China | Logistics support services | 1,000.00 | 51.00 | - | Established through investment |
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,and performs the voting as per the Company's opinion.
In June and October 2020, CMPort respectively distributed 2020 dividends and 2021interim dividends to shareholders. The shareholders may select to receive the dividendsall in cash or shares, or receive the dividends part in cash and part in new shares. TheCompany and CMHK select to receive all its share of dividends from the shareholding inCMPort in the form of scrip dividends. Upon the completion of above distribution ofCMPort, the Company's share in CMPort increased from 1,532,248,957 shares to1,627,635,473 shares. In December 2021, the Company acquired 7,008,000 shares ofordinary share of CMPort from the secondary market. Upon completion of thetransaction, the proportion of the ordinary share of CMPort held by the Company to thetotal issued ordinary share of CMPort changed from 41.85% to 43.18%, while theproportion of the ordinary share of CMPort held by the CMHK to the total issuedordinary share of CMPort changed from 22.36% to 21.98%. Therefore, the Company hastotal 65.16% voting power of CMPort and has control over CMPort.
- 142 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Note 2: On 18 December 2020, the Company and its subsidiaries CMPort, CM International
Tech, Jifa Logistics, Dalian Port Container, Yingkou Port Group Co., Ltd. ("YingkouPort Group") signed the Equity Subscription and Capital Increase Agreement regardingCM International Tech. According to the agreement, Jifa Logistics and Dalian PortContainer respectively use their 29.40% and 49.63% equity in DPN, while the YingkouPort Group uses its 100% equity in Gangxin Technology to increase the capital of CMInternational Tech. The CM International Tech, DPN and Gangxin Technology arecontrolled by the Company's actual controller China Merchants Group both before andafter the combination, and the control is not transitory. The aforesaid capital increase hasbeen completed on 9 February 2021. Upon completion of the capital increase, theCompany CMPort, Jifa Logistics, Dalian Port Container and Yingkou Port Grouprespectively holds 13.18%, 43.74%, 13.26%, 22.38% and 7.44% equity in CMInternational Tech, which remain as the holding subsidiary of the Company. CMInternational Tech holds 79.03% and 100% equity in DPN and Gangxin Technologyrespectively, and has control over DPN and Gangxin Technology. Therefore, theCompany adopts the accounting treatment for business combination involving enterprisesunder common control and included DPN and Gangxin Technology in the scope ofconsolidation since 9 February 2021.
Note 3: 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 foroperation and management. Therefore, the Group has 60% voting power of ZCMG andincludes it in the scope of consolidation of the consolidated financial statements.
Note 4: Cyber Chic Company Limited, a subsidiary of the Company, entered into a cooperation
agreement with Ningbo Zhoushan. According to the cooperation agreement, Cyber ChicCompany Limited and Ningbo Zhoushan will negotiate and communicate to reach aunanimous action before exercising their shareholder rights. If the parties to theagreement fail to reach a consensus on matters such as the operation and management ofNingbo Daxie, the decision will be based on the opinion of Cyber Chic CompanyLimited. After the signing of the Cooperation Agreement, Cyber Chic Company Limitedand Ningbo Zhoushan together own more than 50% of the equity interest in NingboDaxie. As a result, the Group is able to exercise control over it and include it in the scopeof consolidation of the Group's consolidated financial statements.
(2) Material non-wholly-owned subsidiaries
CHINA MERCHANTS PORT GROUP CO., LTD.Name of the
subsidiary
| Name of the subsidiary | Proportion of ownership interest held by the minority shareholders (%) | Profit or loss attributable to minority shareholders in the current year | Dividends distributed to minority shareholders in the current year | Balance of minority interests at the end of the year |
| CMPort | 56.82 | 4,603,182,074.30 | 1,498,760,711.05 | 65,476,589,235.67 |
- 143 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Significant financial information of material non-wholly-owned subsidiaries
CHINA MERCHANTS PORT GROUP CO., LTD.Name of thesubsidiary
| 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 | 12,688,479,912.82 | 129,676,976,538.08 | 142,365,456,450.90 | 17,301,652,593.00 | 26,291,693,462.84 | 43,593,346,055.84 | 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 |
| Name of the subsidiary | 2021 | 2020 | ||||||
| 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 | 9,835,827,140.59 | 7,324,839,959.14 | 6,890,512,293.77 | 4,700,305,072.57 | 7,956,928,250.59 | 5,064,412,321.79 | 3,204,689,765.86 | 3,629,199,456.13 |
- 144 -
(X) EQUITY IN OTHER ENTITIES - continued
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
During the year, the Group's ownership interests in CMPort changed from 41.85% to 43.18%.Details are set out in Note (X) 1 (1).
(2) Effect of the transaction on minority interests and equity attributable to owners of the
Company
CHINA MERCHANTS PORT GROUP CO., LTD.
| CMPort | |
| Acquisition cost | |
| - Cash | 76,429,220.65 |
| - Fair value of non-cash assets | 942,037,747.91 |
| Total acquisition cost | 1,018,466,968.56 |
| Less: Share of net assets of subsidiaries calculated based on the proportion of equity acquired | 1,519,017,926.59 |
| Difference | -500,550,958.03 |
| Including: Adjustment to capital Reserve | 500,550,958.03 |
| Adjustment to surplus reserve | - |
| Adjustment to unappropriated profit | - |
3. Interests in joint ventures and associates
(1) Material joint ventures or associates
| 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 | ||||||
| SIPG | Shanghai, PRC | Shanghai, PRC | Port and container terminal business | - | 26.64 | Equity method |
- 145 -
(X) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of material associates
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | SIPG | |
| Closing balance / Amount incurred in the current period | Opening balance/ Amount incurred in the prior period | |
| Current assets | 50,550,358,636.59 | 43,653,716,114.59 |
| Including: Cash and cash equivalents | 28,494,577,716.81 | 20,689,734,592.59 |
| Non-current assets | 120,237,119,876.27 | 112,271,033,861.93 |
| Total assets | 170,787,478,512.86 | 155,924,749,976.52 |
| Current liabilities | 29,281,912,321.67 | 22,405,787,626.17 |
| Non-current liabilities | 33,699,936,944.88 | 37,539,362,699.55 |
| Total liabilities | 62,981,849,266.55 | 59,945,150,325.72 |
| Minority interests | 8,014,833,731.08 | 8,461,734,212.94 |
| Equity attributable to shareholders of the parent company | 99,790,795,515.23 | 87,517,865,437.86 |
| Share of net assets calculated based on the proportion of ownership interests | 26,584,267,925.26 | 23,428,532,577.72 |
| Adjustments | ||
| - Goodwill | 2,066,192,806.75 | 2,076,585,747.12 |
| - Others | 193,346,651.68 | -143,335,143.43 |
| Carrying amounts of equity investments in associates | 28,843,807,383.69 | 25,361,783,181.41 |
| Fair value of publicly quoted equity investments in associates | 33,990,040,779.28 | 28,345,709,190.02 |
| Operating income | 34,288,697,334.43 | 26,119,460,820.07 |
| Net profit | 15,480,719,994.16 | 9,183,403,328.66 |
| Other comprehensive income | 573,880,124.36 | 657,555,565.18 |
| Total comprehensive income | 16,054,600,118.52 | 9,840,958,893.84 |
| 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
| Item | Closing balance/Amount accumulated in the year | Opening balance/ Amount accumulated last year |
| Joint ventures: | ||
| Total carrying amount of investments | 8,540,003,758.64 | 8,866,327,205.84 |
| Aggregate of following items calculated based on the proportion of ownership interest | ||
| - Net profit | 242,641,893.49 | 362,452,573.20 |
| - Other comprehensive income | 4,375,404.14 | 25,430,763.35 |
| - Total comprehensive income | 247,017,297.63 | 387,883,336.55 |
| Associates: | ||
| Total carrying amount of investments | 32,969,640,682.19 | 32,014,300,835.65 |
| Aggregate of following items calculated based on the proportion of ownership interest | ||
| - Net profit | 1,857,965,787.11 | 1,405,583,978.08 |
| - Other comprehensive income | -92,265,491.63 | 21,687,463.52 |
| - Total comprehensive income | 1,765,700,295.48 | 1,427,271,441.60 |
- 146 -
(X) EQUITY IN OTHER ENTITIES - continued
6. The investees where the Group holds long-term equity investments are not restricted
to transfer funds to the Group.
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
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. Exceptfor part of the purchases and sales, the Group's other principal activities are denominated andsettled in RMB. As at 31 December 2021, the balance of the Group's assets and liabilities are bothdenominated in functional currency, except that the assets and liabilities set out below arerecorded using foreign currency. Currency risk arising from the foreign currency balance of assetsand liabilities may have impact on the Group's performance.
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Closing balance | Opening balance |
| Cash and bank balances | 304,226,402.75 | 1,214,901,554.08 |
| Accounts receivable | 37,640,821.94 | 34,261,643.29 |
| Other receivables | 292,001,737.01 | 1,004,843,484.23 |
| Short-term borrowings | 653,200,000.00 | 668,320,000.00 |
| Accounts payable | 3,534,444.32 | 4,286,809.14 |
| Other payables | 131,844,034.16 | 201,395,071.52 |
| Non-current liabilities due within one year | 2,585,407,534.25 | 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 | 3,433,175,756.61 | 440,659,667.97 |
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 exchangerate movements, management considers it is unlikely that the exchange rate changes in the futureone year will result in significant loss to the Group.
- 147 -
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Currency risk - continued
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 periodand shareholders' equity:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Changes in exchange rate | Closing balance | Opening balance | ||
| Effect on profits | Effect on shareholders' equity | Effect on profits | Effect on shareholders' equity | ||
| All foreign currencies | 5% increase against RMB | -146,440,030.80 | -146,440,030.80 | -577,260.66 | -577,260.66 |
| All foreign currencies | 5% decrease against RMB | 146,440,030.80 | 146,440,030.80 | 577,260.66 | 577,260.66 |
| All foreign currencies | 5% increase against USD | 5,092,313.03 | 5,092,313.03 | 1,578,468.63 | 1,578,468.63 |
| All foreign currencies | 5% decrease against USD | -5,092,313.03 | -5,092,313.03 | -1,578,468.63 | -1,578,468.63 |
| All foreign currencies | 5% increase against HKD | -201,218,971.96 | -201,218,971.96 | -131,469,479.65 | -131,469,186.05 |
| All foreign currencies | 5% decrease against HKD | 201,218,971.96 | 201,218,971.96 | 131,469,479.65 | 131,469,186.05 |
| All foreign currencies | 5% increase against EUR (including FCFA) | 402,049.34 | 402,049.34 | -171,067.13 | -171,067.13 |
| All foreign currencies | 5% decrease against FCFA(including FCFA) | -402,049.34 | -402,049.34 | 171,067.13 | 171,067.13 |
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 (VIII) 26 and Note (VIII) 36). TheGroup continuously and closely monitors the impact of interest rate changes on the Group'sinterest rate risk. The Group's policy is to maintain these borrowings at floating rates. Presently,the Group has no arrangement such as interest rate swaps etc.
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 interestrate can only affect its interest income or expense;? For a derivative financial instrument designated as hedging instrument, the fluctuations of marketinterest rate affect 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 andliabilities are calculated using cash flow discounting method by applying the market interest rate atbalance sheet date.
- 148 -
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
2. Interest rate risk - changes in cash flows - continued
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 andshareholders' equity are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Changes in interest rate | Closing balance | Opening balance | ||
| Effect on profits | Effect on shareholders' equity | Effect on profits | Effect on shareholders' equity | ||
| Short-term borrowings and long-term borrowings | 1% increase | -163,962,806.32 | -163,962,806.32 | -133,940,312.35 | -133,940,312.35 |
| Short-term borrowings and long-term borrowings | 1% decrease | 163,962,806.32 | 163,962,806.32 | 133,940,312.35 | 133,940,312.35 |
3. Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash andcash equivalents deemed adequate by the management to finance the Group's operations andmitigate the effects of fluctuations in cash flows. The management monitors the utilisation ofbank borrowings and ensures compliance with loan covenants.
As of 31 December 2021, the Group had total current liabilities in excess of total current assets ofRMB 7,271,661,445.92. As at 31 December 2021, the Group has available unutilized loan facilityof RMB 54,220,580,229.33 which is more than current liabilities, and may obtain funds within thecredit limit as necessary. Therefore, the Group's management believes that the Group has nosignificant liquidity risk.
The following is the maturity analysis for financial assets and financial liabilities held by theGroup which is based on undiscounted remaining contractual obligations:
| Item | Carrying amount | Gross amount | Within 1 year | 1 to 5 years | Over 5 years |
| Short-term borrowings | 13,651,452,805.36 | 13,759,806,524.21 | 13,759,806,524.21 | - | - |
| Notes payable | 1,895,987.17 | 1,895,987.17 | 1,895,987.17 | - | - |
| Accounts payable | 843,820,438.51 | 843,820,438.51 | 843,820,438.51 | - | - |
| Other payables | 2,140,108,341.08 | 2,140,108,341.08 | 2,140,108,341.08 | - | - |
| Non-current liabilities due within one year | 8,179,772,370.17 | 9,348,291,951.06 | 9,348,291,951.06 | - | - |
| Other current liabilities | 2,158,497,775.85 | 2,162,074,534.34 | 2,162,074,534.34 | - | - |
| Long-term borrowings | 7,144,839,870.89 | 7,904,794,817.93 | - | 6,179,083,715.29 | 1,725,711,102.64 |
| Bonds payable | 16,670,872,414.14 | 18,075,861,970.23 | - | 14,044,854,814.96 | 4,031,007,155.27 |
| Lease liabilities | 1,055,194,906.09 | 1,696,668,533.14 | - | 522,315,363.87 | 1,174,353,169.27 |
| Long-term payables | 3,400,919,585.50 | 3,491,619,776.83 | - | 232,234,584.52 | 3,259,385,192.31 |
- 149 -
(XII) DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Fair value at the end of the year | |||
| Level 1 | Level 2 | Level 3 | Total | |
| Measured at fair value | Measured at fair value | Measured at fair value | ||
| Measurements at fair value continuously | ||||
| Held-for-trading financial assets | 157,196.79 | 6,921,674,305.76 | - | 6,921,831,502.55 |
| Receivables financing | - | - | 238,429,402.71 | 238,429,402.71 |
| Other equity instrument investments | 8,620,000.00 | - | 171,631,798.43 | 180,251,798.43 |
| Other non-current financial assets | 782,723,863.52 | - | 26,791,381.35 | 809,515,244.87 |
| Total assets continuously measured at fair value | 791,501,060.31 | 6,921,674,305.76 | 436,852,582.49 | 8,150,027,948.56 |
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 andother non-current financial assets are determined at the closing price of the equity instrument atStock Exchange at 31 December 2021.
3. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 2 fair value
| Item | Fair value at the end of this year | Valuation techniques | Inputs |
| Held-for-trading financial assets | 6,921,674,305.76 | Cash flow discounting | Expected rate of return |
The fair value of debt instruments at fair value through profit or loss is determined using the cashflow discounting approach. During the valuation, the Group adopts the expected return as theinput.
4. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 3 fair value
| Item | Fair value at the end of this year | Valuation techniques | Inputs |
| Receivables financing | 238,429,402.71 | Cash flow discounting | Discount rate |
| Other equity instrument investments | 171,631,798.43 | Net worth method | Carrying amount |
| Other non-current financial assets | 2,000,000.00 | Cash flow discounting | Discount rate |
| Other non-current financial assets | 680,887.72 | Net worth method | Carrying amount |
| Other non-current financial assets | 24,110,493.63 | Listed company comparison approach | Share price |
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.During the valuation, the Group needs to make estimates in respect of the future cash flows, creditrisk, market volatility and relevance etc., select appropriate discount rate and take intoconsideration of adjustment of discount and premium.
- 150 -
(XII) DISCLOSURE OF FAIR VALUE - continued
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, lease liabilities 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.
- 151 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
CHINA MERCHANTS PORT GROUP CO., LTD.Name of the parent
| Name of the parent | Related party relationship | Type of the entity | Place of registration | 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 | 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 Merchants Gangtong Development (Shenzhen) Co., Ltd. and China Merchants Port Investment DevelopmentCompany Limited (formerly known as China Merchants Investment Development Co., Ltd.) respectively. The ultimate controllingshareholder of the Company is China Merchants Group.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in Note (X) 1.
- 152 -
(XIII) 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 (X) 3.
Other joint ventures or joint ventures that occurred related party transactions and formed balanceswith the Group this year are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Name of joint venture or associate
| 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 United Container Terminal Co., Ltd. | Joint venture |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Joint venture |
| Qingdao Qianwan New United Container Terminal Co., Ltd. | Joint venture |
| COSCO Logistics (Zhanjiang) Co., Ltd. | Joint venture |
| China Merchants Antong Logistics Management Company | Joint venture |
| China Ocean Shipping Agency (Zhanjiang) Co., Ltd | Joint venture |
| Yantai Port Group Laizhou Port Co., Ltd. | Joint venture |
| Qingdao Wutong Century Supply Chain Co., Ltd. | Joint venture |
| Antong Holdings Co., Ltd. and its subordinate companies (Note) | Subsidiary of joint venture |
| Doraleh Multi-purpose Port | Associate |
| 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 |
| SIPG | Associate |
| Liaoning Port Co., Ltd. and its subsidiaries | Associate, Controlled by the same ultimate controlling shareholder |
| Ningbo Zhoushan | Associate |
| Shenzhen Baohong Technology Co., Ltd. (formerly known as "Shenzhen Baohong E-Commerce Integrated Services Co., Ltd.") | Associate |
| Tianjin Haitian Bonded Logistics Co., Ltd. | Associate |
| Merchants Port City | Associate |
| Zhanjiang Xiagang United Development Co., Ltd. | Associate |
| Zhangzhou COSCO Shipping Agency Co., Ltd. | Associate |
| Chu Kong River Trade Terminal Co., Ltd. | Associate |
| Shantou Zhonglian Tally Co., Ltd | Associate |
| Shantou International Container Terminals Limited | Associate |
| Shenzhen Bay Electricity Industry Co., Ltd. | Associate |
Note: Antong Holdings Co., Ltd. is the subsidiary of Fujian Zhaohang Logistics Management
Partnership (Limited Partnership), which is a joint venture of the Company.
- 153 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of other related parties
| Name of other related parties | Relationship with the Company |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | Minority shareholder of subsidiary |
| Zhoushan Blue Ocean Investment Co., Ltd. | Minority shareholder of subsidiary |
| Sri Lanka Ports Authority | Minority shareholder of subsidiary |
| China COSCO Shipping Group and its subsidiaries (Note) | Same related natural person |
| Dalian Port Logistics Technology Co. Ltd. | Controlled by the same ultimate controlling shareholder |
| China Marine Shipping Agency Guangdong Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Hoi Tung (Shanghai) Company Limited | Controlled by the same ultimate controlling shareholder |
| Hoi Tung (Shenzhen) Company Limited | Controlled by the same ultimate controlling shareholder |
| South China Sinotrans Supply Chain Management Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| EuroAsia Dockyard Enterprise and Development Limited | Controlled by the same ultimate controlling shareholder |
| Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Penavico Shenzhen Warehousing Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Shenzhen Nanyou (Holdings) Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | Controlled by the same ultimate controlling shareholder |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants (Shenzhen) Power Supply., Ltd. | Controlled by the same ultimate controlling shareholder |
| Shenzhen Merchants to Home Technology Co. | Controlled by the same ultimate controlling shareholder |
| China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Property Management (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Marine Shipping Agency Shenzhen Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Yiu Lian Dockyards (Shekou) Limited | Controlled by the same ultimate controlling shareholder |
| Yiu Lian Dockyards Limited | Controlled by the same ultimate controlling shareholder |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Controlled by the same ultimate controlling shareholder |
| China Merchants Group Finance Company Limited | Controlled by the same ultimate controlling shareholder |
| Dalian Port Group Financial Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Port Investment Development Company Limited | Controlled by the same ultimate controlling shareholder |
| China Merchants Life Insurance Company Limited | Controlled by the same ultimate controlling shareholder |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchant Food (China) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Tongshang Finance Lease Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Logistics Group Qingdao Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Zhangzhou Development Zone Power Supply Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Securities Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Traffic Import and Export Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans Changhang Group Limited | Controlled by the same ultimate controlling shareholder |
| China Merchants Your Cellar (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Shenzhen Dehan Investment Development Co., Ltd. | Controlled by the same ultimate controlling shareholder |
- 154 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of other related parties
| Name of other related parties | Relationship with the Company |
| China Marine Shipping Agency Guangdong Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Healthcare (Qichun) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Ocean Shipping Tally Shenzhen Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans Central China Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans (HK) Shipping Limited | Controlled by the same ultimate controlling shareholder |
| Sinoway Shipping Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants (Liaoning) Port Development Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Heavy Industry (Jiangsu) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans Shantou Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Apartment Development (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants-Logistics Shenzhen Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Zhangzhou Development Zone Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Ocean Shipping Agency Shenzhen | Controlled by the same ultimate controlling shareholder |
| China Marine Shipping Agency Ningbo Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans Container Lines (Hong Kong) Company Limited | Controlled by the same ultimate controlling shareholder |
| Sinotrans Container Lines Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Hoi Tung Innotek (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Yingkou Port Group and its subsidiaries | Controlled by the same ultimate controlling shareholder |
| Panjin Port Group Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Broadford (Shenzhen) Port Development Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Liaoning Port Group Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Liaoning Electronic Port Co., Ltd | Controlled by the same ultimate controlling shareholder |
| CMPort Chuangrong (Shenzhen) Technology Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Yangtze River Shipping Co.,Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Gangrong Big Data Co., Ltd. (formerly known as "Yingkou Gangrong Big Data Co., Ltd.") | Controlled by the same ultimate controlling shareholder |
| Dalian Port Construction Supervision Consulting Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Dalian Port Group Corporation Limited | Controlled by the same ultimate controlling shareholder |
| Dalian Container Terminal Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Shenzhen Municipal Public Security Bureau Shekou Police Substation | Controlled by the same ultimate controlling shareholder |
| Shenzhen West Port Security Service Co., Ltd. (formerly known as "Shenzhen West Port Security Service Company") | Controlled by the same ultimate controlling shareholder |
| Sinotrans South China Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Dalian Port Container | Controlled by the same ultimate controlling shareholder |
| Jifa Logistics | Controlled by the same ultimate controlling shareholder |
| Datong Securities Co., Ltd | Significantly influenced by the ultimate controlling shareholder |
| Dalian Automobile Terminal Co., Ltd | Significantly influenced by the ultimate controlling shareholder |
| Dalian Port Design Research Institute Co., Ltd. | Significantly influenced by the ultimate controlling shareholder |
| Khor Ambado FZCo | Significantly influenced by the ultimate controlling shareholder |
| Djibouti International Hotel Company | Significantly influenced by the ultimate controlling shareholder |
| China Merchant Bank Co., Ltd. | Significantly influenced by the ultimate controlling shareholder |
Note: The Company's former Chairman Fu Gangfeng (resigned on 31 January 2020) worked as
the director and general manager of China COSCO Shipping Corporation Limited within12 months after his departure. Therefore, the related party transactions and balances forthe period in which the he was the senior management personnel of the Company andChina COSCO Shipping Corporation Limited and for the 12 months after such period aredisclosed.
- 155 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions
(1) Rendering and receipt of service
CHINA MERCHANTS PORT GROUP CO., LTD.
Related party
| 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 (restated) |
| Receipt of service: | ||||
| Shenzhen Bay Electricity Industry Co., Ltd. | Service expense | Negotiation | 52,118,359.34 | 29,148,667.42 |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Service expense | Negotiation | 17,429,281.52 | 16,335,069.80 |
| Shenzhen Merchants Electricity Supply Co., ltd | Service expense | Negotiation | 16,896,892.16 | 13,221,740.64 |
| Ningbo Zhoushan | Service expense | Negotiation | 14,902,071.93 | - |
| COSCO Logistics (Zhanjiang) Co., Ltd. | Service expense | Negotiation | 13,741,598.64 | 5,078,367.51 |
| Shenzhen Municipal Public Security Bureau Shekou Police Substation | Service expense | Negotiation | 13,215,162.92 | - |
| Nanshan Group and its subsidiaries | Service expense | Negotiation | 12,899,160.06 | 29,612,136.31 |
| China Merchants Property Management (Shenzhen) Co., Ltd. | Service expense | Negotiation | 11,411,320.65 | 844,512.39 |
| Hoi Tung (Shanghai) Company Limited | Service expense | Negotiation | 9,908,555.07 | 9,886,142.11 |
| Shenzhen West Port Security Service Co., Ltd. | Service expense | Negotiation | 8,628,090.47 | 4,159,456.50 |
| Yiu Lian Dockyards Limited | Service expense | Negotiation | 8,484,365.83 | 9,274,213.41 |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Service expense | Negotiation | 6,963,663.53 | 6,616,945.42 |
| China Merchants Zhangzhou Development Zone Power Supply Co., Ltd. | Service expense | Negotiation | 5,148,081.30 | 4,548,046.20 |
| China Marine Shipping Agency Guangdong Co., Ltd | Service expense | Negotiation | 5,128,165.14 | 1,994,707.90 |
| Yingkou Port Group and its subsidiaries | Service expense | Negotiation | 3,655,450.63 | 5,623,518.39 |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Service expense | Negotiation | 3,246,406.82 | - |
| China Marine Shipping Agency Shenzhen Co., Ltd. | Service expense | Negotiation | 2,886,771.98 | 2,403,262.96 |
| Shenzhen Merchants to Home Technology Co. | Service expense | Negotiation | 2,529,286.74 | 162,182.56 |
| China Merchants Port Investment Development Company Limited | Service expense | Negotiation | 2,511,488.39 | - |
| China Ocean Shipping Tally Shenzhen Co., Ltd. | Service expense | Negotiation | 2,367,078.52 | 1,208,224.86 |
| China Merchant Food (China) Co., Ltd. | Service expense | Negotiation | 2,010,522.22 | 1,790,459.66 |
| Liaoning Port Co., Ltd. and its subsidiaries | Service expense | Negotiation | 1,453,666.27 | 1,968,171.53 |
| Qingdao Wutong Century Supply Chain Co., Ltd. | Service expense | Negotiation | 1,412,347.77 | 34,202.46 |
| China Merchants Healthcare (Qichun) Co., Ltd. | Service expense | Negotiation | 874,591.30 | 1,473,607.08 |
| China Merchants Logistics Group Qingdao Co., Ltd. | Service expense | Negotiation | 278,746.88 | 1,506,882.06 |
| China Merchants Your Cellar (Shenzhen) Co., Ltd. | Service expense | Negotiation | 145,501.77 | 2,201,965.59 |
| Djibouti International Hotel Company | Service expense | Negotiation | - | 2,028,556.99 |
| China Merchants Life Insurance Company Limited | Service expense | Negotiation | - | 1,828,798.25 |
| Dalian Port Logistics Technology Co. Ltd. | Service expense | Negotiation | - | 1,068,592.04 |
| Other related parties | Service expense | Negotiation | 5,426,539.23 | 7,009,354.97 |
| Other related parties | Property utilities | Negotiation | 1,527,482.73 | 1,269,101.74 |
| China Merchants Property Management (Shenzhen) Co., Ltd. | Property utilities | Negotiation | - | 7,567,376.65 |
| China Merchant Bank Co., Ltd. | Purchase of structured deposits | Negotiation | 901,314,575.34 | 850,000,000.00 |
| China Merchants Group Finance Company Limited | Interest expense | Negotiation | 57,267,460.41 | 40,218,054.32 |
| China Merchant Bank Co., Ltd. | Interest expense | Negotiation | 7,309,189.97 | 2,820,905.00 |
| Total | 1,193,091,875.53 | 1,062,903,222.72 |
- 156 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of service - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Related party
| 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 (restated) |
| Rendering of service: | ||||
| Broadford (Shenzhen) Port Development Co., Ltd. | Service income | Negotiation | 233,023,495.03 | - |
| COSCO Logistics (Zhanjiang) Co., Ltd. | Service income | Negotiation | 172,689,315.75 | 138,294,236.96 |
| Antong Holdings Co., Ltd. and its subordinate companies | Service income | Negotiation | 149,257,485.43 | 127,713,616.40 |
| China Marine Shipping Agency Ningbo Co., Ltd. | Service income | Negotiation | 127,750,175.04 | - |
| Liaoning Port Co., Ltd. and its subsidiaries | Service income | Negotiation | 84,665,638.27 | 53,346,029.84 |
| China Marine Shipping Agency Guangdong Co., Ltd. | Service income | Negotiation | 78,136,291.87 | 61,942,724.25 |
| China COSCO Shipping Group and its subsidiaries | Service income | Negotiation | 67,594,546.16 | 473,089,186.47 |
| China Ocean Shipping Agency (Zhanjiang) Co., Ltd | Service income | Negotiation | 58,774,852.27 | 53,774,870.23 |
| Yingkou Port Group and its subsidiaries | Service income | Negotiation | 58,066,543.74 | 6,149,920.19 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Service income | Negotiation | 57,107,934.04 | 49,104,741.77 |
| Liaoning Port Group Co., Ltd. | Service income | Negotiation | 30,230,480.12 | 4,572,257.33 |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | Service income | Negotiation | 19,931,387.34 | 10,407,471.90 |
| Yiu Lian Dockyards (Shekou) Limited | Service income | Negotiation | 15,861,643.81 | 6,825,979.02 |
| Shenzhen Baohong Technology Co., Ltd. | Service income | Negotiation | 12,375,371.81 | 9,183,840.58 |
| Sinotrans Container Lines Co., Ltd. | Service income | Negotiation | 9,659,043.11 | 5,775,004.77 |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | Service income | Negotiation | 8,201,186.45 | 5,366,080.32 |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Service income | Negotiation | 6,932,874.90 | 6,781,159.20 |
| China Ocean Shipping Agency Shenzhen | Service income | Negotiation | 6,742,585.37 | 11,872,191.59 |
| China Merchants Port Investment Development Company Limited | Service income | Negotiation | 6,100,924.53 | 1,870,575.47 |
| China Marine Shipping Agency Shenzhen Co., Ltd. | Service income | Negotiation | 6,065,850.59 | 4,566,415.18 |
| CMPort Chuangrong (Shenzhen) Technology Co., Ltd. | Service income | Negotiation | 5,060,041.98 | - |
| China Yangtze River Shipping Co.,Ltd. | Service income | Negotiation | 4,015,942.03 | 276,427.36 |
| China Merchants Gangrong Big Data Co., Ltd. | 3,839,970.76 | 3,627,717.89 | ||
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Service income | Negotiation | 3,556,894.16 | 3,403,438.43 |
| South China Sinotrans Supply Chain Management Co., Ltd. | Service income | Negotiation | 3,315,529.59 | 5,730,351.44 |
| Shantou International Container Terminals Limited | Service income | Negotiation | 2,830,152.56 | 15,018,042.39 |
| China Merchants Heavy Industry (Jiangsu) Co., Ltd. | Service income | Negotiation | 2,788,745.68 | 1,771,945.79 |
| Qingdao Qianwan New United Container Terminal Co., Ltd. | Service income | Negotiation | 2,727,630.47 | 3,147,064.19 |
| Shantou Zhonglian Tally Co., Ltd | Service income | Negotiation | 2,688,839.07 | 1,720,385.71 |
| Sinotrans Container Lines (Hong Kong) Company Limited | Service income | Negotiation | 2,618,545.62 | 1,049,302.38 |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Service income | Negotiation | 2,379,478.59 | 908,372.64 |
| Guizhou East Land Port Operation Co., Ltd. | Service income | Negotiation | 2,379,122.83 | 1,854,382.19 |
| Sinoway Shipping Ltd. | Service income | Negotiation | 2,275,910.33 | 2,380,557.22 |
| Dalian Automobile Terminal Co., Ltd | Service income | Negotiation | 2,162,744.31 | - |
| Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Service income | Negotiation | 2,060,322.30 | 1,777,701.97 |
| Yantai Port Group Laizhou Port Co., Ltd. | Service income | Negotiation | 2,043,962.25 | 1,448,756.38 |
| Merchants Port City | Service income | Negotiation | 1,591,345.21 | 1,226,801.94 |
| Dalian Port Construction Supervision Consulting Co., Ltd. | Service income | Negotiation | 1,561,447.66 | 354,686.83 |
| Dalian Port Group Corporation Limited | Service income | Negotiation | 1,471,595.43 | 2,245,666.81 |
| Datong Securities Co., Ltd | Service income | Negotiation | 1,464,247.85 | - |
| SIPG | Service income | Negotiation | 1,430,583.02 | 1,631,054.72 |
| Sinotrans Shantou Co., Ltd. | Service income | Negotiation | 1,411,180.98 | 747,042.39 |
| Sinotrans & CSC Holdings Co., Ltd. | Service income | Negotiation | 1,349,056.61 | - |
| Sinotrans (HK) Shipping Limited | Service income | Negotiation | 1,270,858.60 | 3,516,284.75 |
| China Marine Shipping Agency Guangdong Co., Ltd. | Service income | Negotiation | 1,234,211.32 | 2,771,236.94 |
| Dalian Port Design Research Institute Co., Ltd. | Service income | Negotiation | 1,217,915.13 | - |
| Nanshan Group and its subsidiaries | Service income | Negotiation | 1,147,657.18 | 822,683.39 |
| Shenzhen Dehan Investment Development Co., Ltd. | Service income | Negotiation | 1,106,438.68 | 863,738.20 |
| Liaoning Electronic Port Co., Ltd | Service income | Negotiation | 1,007,547.18 | - |
| Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. | Service income | Negotiation | 975,890.37 | 2,006,774.37 |
| China Merchants (Liaoning) Port Development Co., Ltd. | Service income | Negotiation | 943,396.22 | 1,886,792.45 |
| Zhangzhou COSCO Shipping Agency Co., Ltd. | Service income | Negotiation | 820,987.04 | 1,171,144.27 |
| Doraleh Multi-purpose Port | Service income | Negotiation | 585,604.28 | 1,396,158.59 |
| International Djibouti Industrial Parks Operation FZCO | Service income | Negotiation | 502,024.39 | 1,219,559.23 |
- 157 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of service - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Related party
| 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 (restated) |
| Rendering of service: | ||||
| China Merchants-Logistics Shenzhen Co., Ltd. | Service income | Negotiation | 364,878.63 | 1,007,155.73 |
| Penavico Shenzhen Warehousing Co., Ltd. | Service income | Negotiation | 206,068.60 | 6,450,089.03 |
| Sinotrans Central China Co., Ltd. | Service income | Negotiation | 2,557.32 | 1,097,750.34 |
| Port de Djibouti S.A. | Service income | Negotiation | - | 10,943,478.47 |
| Ningbo Daxie | Service income | Negotiation | - | 4,212,324.06 |
| Terminal Link SAS | Service income | Negotiation | - | 1,203,144.53 |
| Other related parties | Service income | Negotiation | 16,978,944.05 | 10,351,714.06 |
| Terminal Link SAS | Interest income | Negotiation | 165,180,415.51 | 130,683,767.31 |
| Port of Newcastle and its subsidiaries | Interest income | Negotiation | 76,683,050.81 | 61,452,466.62 |
| China Merchant Bank Co., Ltd. | Interest income | Negotiation | 32,931,572.09 | 25,077,926.86 |
| China Merchants Group Finance Company Limited | Interest income | Negotiation | 24,994,228.38 | 17,374,507.16 |
| Dalian Port Group Financial Co., Ltd. | Interest income | Negotiation | - | 822,219.25 |
| Merchants Port City | Interest income | Negotiation | 1,957,067.27 | 34,310,102.60 |
| Tianjin Haitian Bonded Logistics Co., Ltd. | Interest income | Negotiation | 1,558,375.91 | 1,507,141.63 |
| Other related parties | Interest income | Negotiation | - | 39,343.77 |
| Total | 1,597,860,603.88 | 1,403,143,503.75 |
(2) Leases with related parties
The Group as the lessor:
| Name of the lessee | Type of leased assets | Pricing method and decision procedures of related transactions | Lease income recognized in the current year | Lease income recognized in the prior year |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Port and terminal facilities | Negotiation | 9,711,263.00 | 9,530,634.40 |
| Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Buildings and structures | Negotiation | 5,533,737.88 | 5,246,389.08 |
| China Merchant Food (China) Co., Ltd. | Buildings and structures | Negotiation | 5,414,148.96 | 4,979,293.98 |
| China Traffic Import and Export Co., Ltd. | Buildings and structures | Negotiation | 5,212,396.32 | 4,791,084.02 |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | Buildings and structures | Negotiation | 3,926,471.23 | 3,937,228.69 |
| Yiu Lian Dockyards (Shekou) Limited | Buildings and structures | Negotiation | 3,008,337.95 | 2,612,180.18 |
| Nanshan Group and its subsidiaries | Buildings and structures | Negotiation | 2,478,760.43 | 2,451,852.32 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Buildings and structures | Negotiation | 2,407,032.41 | 2,402,484.55 |
| China Merchants Securities Co., Ltd. | Buildings and structures | Negotiation | 2,265,123.10 | 2,364,578.34 |
| Sinotrans South China Co., Ltd. | Buildings and structures | Negotiation | 1,897,332.07 | - |
| Qingdao Wutong Century Supply Chain Co., Ltd. | Buildings and structures | Negotiation | 619,965.10 | 960,707.68 |
| Other related parties | Buildings and structures, land use rights | Negotiation | 7,650,774.22 | 6,612,178.37 |
| Total | 50,125,342.67 | 45,888,611.61 |
- 158 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as the lessee:
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the lessor
| Name of the lessor | Type of leased assets | Rental (year) | Lease term (disclose the period covered by contract) | Other significant lease terms |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | Port and terminal facilities | 58,302,270.50 | 2018.3.19-2024.3.15 | N/A |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | Machinery equipment, port and terminal facilities | 57,849,868.06 | 2018.11.30-2024.11.30 | N/A |
| Nanshan Group and its subsidiaries | Buildings and structures | 54,380,695.56 | 2019.1.1-2023.12.31 | N/A |
| China Merchants Tongshang Finance Lease Co., Ltd. | Machinery equipment | 46,381,918.54 | 2017.10.31-2023.10.27 | N/A |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | Port and terminal facilities | 35,733,649.64 | 2018.3.19-2024.3.15 | N/A |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Port and terminal facilities | 35,385,536.56 | 2020.1.1-2021.12.31 | N/A |
| China Merchants Tongshang Finance Lease Co., Ltd. | Machinery equipment | 17,717,147.04 | 2016.12.26-2022.11.15 | N/A |
| EuroAsia Dockyard Enterprise and Development Limited | Port and terminal facilities | 13,432,871.84 | 2022.1.1-2022.12.31 | N/A |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Others | 6,115,067.28 | 2020.1.1-2021.12.31 | N/A |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings and structures | 4,421,369.16 | 2021.1.1-2022.12.31 | N/A |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Buildings and structures | 3,373,361.28 | 2020.12.30-2021.12.31 | N/A |
| Nanshan Group and its subsidiaries | Others | 3,220,926.84 | 2016.1.1-2018.12.31 | Attached with renewal option |
| Nanshan Group and its subsidiaries | Buildings and structures | 3,083,925.40 | 2021.1.1-2021.12.31 | Attached with renewal option |
| Shenzhen Nanyou (Holdings) Ltd. | Others | 1,995,553.20 | 2021.1.1-2021.12.31 | N/A |
| Nanshan Group and its subsidiaries | Buildings and structures | 1,908,589.28 | 2016.1.1-2018.12.31 | Attached with renewal option |
| Nanshan Group and its subsidiaries | Buildings and structures | 1,468,461.12 | 2021.1.1-2021.3.31 | N/A |
| Nanshan Group and its subsidiaries | Buildings and structures | 1,468,461.12 | 2021.4.1-2021.12.31 | N/A |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings and structures | 1,241,376.00 | 2021.1.1-2022.12.31 | N/A |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Port and terminal facilities | 1,027,422.38 | 2018.5.1-2021.4.30、2021.5.1-2024.4.30 | N/A |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Buildings and structures | 840,000.00 | 2021.3.1-2022.2.28 | N/A |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Buildings and structures | 819,000.00 | 2020.3.22-2021.2.28 | N/A |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings and structures | 709,554.28 | 2021.1.1-2022.12.31 | With progressively increasing rent |
| Nanshan Group and its subsidiaries | Buildings and structures | 319,869.42 | 2019.1.1-2023.12.31 | Attached with renewal option |
| Nanshan Group and its subsidiaries | Others | 230,502.86 | 2021.1.1-2023.12.31 | Attached with renewal option |
| Nanshan Group and its subsidiaries | Others | 225,460.64 | 2017.1.1-2021.8.25 | N/A |
| Nanshan Group and its subsidiaries | Buildings and structures | 176,057.15 | 2021.1.1-2021.12.31 | N/A |
| China Merchants Apartment Development (Shenzhen) Co., Ltd. | Buildings and structures | 133,680.00 | 2021.1.1-2021.12.31 | N/A |
| Dalian Port Group Corporation Limited | Buildings and structures | 80,000.00 | 2021.1.1-2021.12.31 | N/A |
| Nanshan Group and its subsidiaries | Port and terminal facilities | 46,990.60 | 2019.1.1-2023.12.31 | Attached with renewal option |
| Total | 352,089,585.75 |
- 159 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Related party guarantees
The Group as the guarantor
CHINA MERCHANTS PORT GROUP CO., LTD.
Secured party
| Secured party | Credit Line | Guaranteed amount | Commencement date | Maturity | The guarantee has been completed or not |
| 2021 | |||||
| Terminal Link SAS (Note 1) | 65,122,443.30 | 65,122,443.30 | 1 June 2013 | 2033 | No |
| Khor Ambado FZCo (Note 2) | 253,381,120.00 | 110,394,672.56 | 24 May 2019 | 2032 | No |
| Total | 318,503,563.30 | 175,517,115.86 | |||
| 2020 | |||||
| Terminal Link SAS (Note 1) | 71,003,968.05 | 71,003,968.05 | 1 June 2013 | 2033 | No |
| Khor Ambado FZCo (Note 2) | 187,917,834.24 | 113,125,755.69 | 24 May 2019 | 2032 | No |
| Total | 258,921,802.29 | 184,129,723.74 |
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 willprovides guarantee for its bank loan financing to the associate Terminal Link SAS andother liabilities to the extent of the Group's 49% ownership interest in the company. Theactual guaranteed amount is RMB65,122,443.30 on 31
December 2021. If any guaranteeliability occurs, the Group will compensate CMA CGM S.A.
Note 2: Khor Ambado FZCo is a related company of the Group's ultimate controlling shareholder.
The Group provides guarantee for its bank loans and other liabilities, the actual amount ofwhich as at 31 December 2021 is RMB110,394,672.56. In March 2021, the Groupapproved a new guarantee line of RMB 70 million for Khor Ambado FZCo through a boardresolution, which had not been actually used as of December 31, 2021.
(4) Borrowings and loans with related parties
| Related party | Amount | Commencement date | Maturity date | Description |
| 2021 | ||||
| Borrowings | ||||
| China Merchants Group Finance Company Limited | 1,000,977,777.78 | 15 October 2021 | 14 October 2022 | Fixed interest rate of 3.2000% |
| China Merchants Group Finance Company Limited | 1,000,977,777.78 | 15 December 2021 | 13 January 2022 | Fixed interest rate of 3.2000% |
| China Merchants Group Finance Company Limited | 600,586,666.67 | 26 November 2021 | 22 November 2022 | Fixed interest rate of 3.2000% |
| China Merchants Group Finance Company Limited | 500,488,888.89 | 02 December 2021 | 01 December 2022 | Fixed interest rate of 3.2000% |
| China Merchants Group Finance Company Limited | 128,925,358.00 | 01 March 2021 | 21 June 2024 | Fixed interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 50,058,819.44 | 11 June 2021 | 10 June 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 50,022,458.33 | 05 July 2021 | 04 July 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 49,500,000.00 | 08 April 2021 | 31 October 2023 | Fixed interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 47,026,415.28 | 09 April 2021 | 08 April 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 40,042,777.78 | 01 December 2021 | 30 November 2022 | Fixed interest rate of 3.5000% |
| China Merchants Group Finance Company Limited | 33,017,111.09 | 25 June 2021 | 24 June 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 30,034,008.33 | 10 May 2021 | 09 May 2022 | Fixed interest rate of 3.7100% |
| China Merchants Group Finance Company Limited | 27,026,813.63 | 17 May 2021 | 12 March 2029 | Fixed interest rate of 4.5050% |
| China Merchants Group Finance Company Limited | 14,517,057.64 | 08 July 2021 | 07 July 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 10,023,527.78 | 08 December 2021 | 08 December 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 10,012,082.19 | 15 December 2021 | 14 March 2022 | Fixed interest rate of 2.4500% |
| China Merchants Group Finance Company Limited | 10,000,000.00 | 12 November 2021 | 12 November 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 5,593,095.16 | 19 April 2021 | 18 April 2022 | Fixed interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 5,000,000.00 | 07 June 2021 | 10 December 2028 | Fixed interest rate of 4.4100% |
| China Merchants Group Finance Company Limited | 4,000,000.00 | 26 April 2021 | 10 December 2028 | Fixed interest rate of 4.4100% |
| China Merchants Group Finance Company Limited | 2,250,000.00 | 23 November 2021 | 10 December 2028 | Fixed interest rate of 4.4100% |
| China Merchants Group Finance Company Limited | 2,100,000.00 | 01 February 2021 | 10 December 2028 | Fixed interest rate of 4.4100% |
- 160 -
CHINA MERCHANTS PORT GROUP CO., LTD.China Merchants Group Finance Company Limited
| China Merchants Group Finance Company Limited | 950,000.00 | 03 September 2021 | 10 December 2028 | Fixed interest rate of 4.4100% |
| Total | 3,623,130,635.77 |
- 161 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(4) Borrowings and loans with related parties - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Related party
| Related party | Amount | Commencement date | Maturity date | Description |
| 2020 | ||||
| Borrowings | ||||
| China Merchants Group Finance Company Limited | 1,301,430,000.00 | 22 October 2020 | 21 October 2021 | Fixed annual interest rate of 3.6000% |
| China Merchants Group Finance Company Limited | 672,821,155.13 | 28 December 2020 | 27 January 2021 | Fixed annual interest rate of 3.4500% |
| China Merchants Group Finance Company Limited | 200,235,277.84 | 14 April 2020 | 13 April 2021 | Fixed annual interest rate of 4.0500% |
| China Merchants Group Finance Company Limited | 200,235,277.78 | 25 September 2020 | 24 September 2021 | Fixed annual interest rate of 3.8500% |
| China Merchants Group Finance Company Limited | 192,039,573.34 | 30 December 2020 | 29 December 2021 | Fixed annual interest rate of 3.7100% |
| China Merchants Group Finance Company Limited | 76,929,960.60 | 25 March 2020 | 12 March 2029 | Fixed annual interest rate of 4.5050% |
| China Merchants Group Finance Company Limited | 70,086,890.22 | 22 June 2020 | 21 June 2024 | Fixed annual interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 50,606,027.37 | 05 June 2020 | 02 March 2021 | Fixed annual interest rate of 1.9900% |
| China Merchants Group Finance Company Limited | 50,056,680.56 | 21 May 2020 | 20 May 2021 | Fixed annual interest rate of 3.7100% |
| China Merchants Group Finance Company Limited | 40,000,000.00 | 20 December 2020 | 31 October 2023 | Fixed annual interest rate of 1.2000% |
| China Merchants Group Finance Company Limited | 47,000,000.00 | 06 January 2020 | 07 October 2024 | Fixed annual interest rate of 4.5125% |
| China Merchants Group Finance Company Limited | 30,035,291.66 | 04 December 2020 | 20 May 2021 | Fixed annual interest rate of 3.7100% |
| China Merchants Group Finance Company Limited | 10,000,000.00 | 13 November 2020 | 12 May 2021 | Fixed annual interest rate of 2.5000% |
| China Merchants Group Finance Company Limited | 1,500,000.00 | 17 December 2020 | 10 December 2028 | Fixed annual interest rate of 4.4100% |
| Total | 2,942,976,134.50 | |||
| Lendings | ||||
| Terminal Link SAS | 2,975,444,121.38 | 26 March 2020 | 26 March 2028 | Fixed annual interest rate of 6.0000% |
| Port of Newcastle and its subsidiaries | 815,144,304.00 | 30 May 2020 | 29 July 2023 | Fixed annual interest rate of 8.0000% |
| Tianjin Haitian Bonded Logistics Co., Ltd. | 34,300,000.00 | 03 January 2020 | 02 January 2023 | Fixed annual interest rate of 4.7500% |
| Total | 3,824,888,425.38 |
(5) Asset transfer from related parties
| Related party | Content of transaction | Pricing method and decision procedures of related transactions | Amount accumulated in the current period | Amount accumulated in the prior period |
| Broadford (Shenzhen) Port Development Co., Ltd. (Note) | Equity investment | Valuation | 384,000,000.00 | - |
| Hoi Tung (Shanghai) Company Limited | Machinery equipment | Negotiation | 4,115,044.26 | 8,202,477.87 |
| Hoi Tung (Shenzhen) Company Limited | Machinery equipment | Market price | 1,345,132.74 | - |
| Other related parties | Construction in progress | Negotiation | 485,704.85 | - |
| Hoi Tung Innotek (Shenzhen) Co., Ltd. | Machinery equipment | Negotiation | - | 1,946,000.00 |
| Other related parties | General office equipment | Negotiation | - | 83,584.00 |
| Total | 389,945,881.85 | 10,232,061.87 |
Note: Refer to Note(VIII) 55.
- 162 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(6) Compensation for key management personnel
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Compensation for key management personnel | 14,796,861.98 | 20,552,276.50 |
6. Amounts due from/to related parties
(1) Amounts due from related parties
| Item | Related party | Closing balance | Opening balance (restated) |
| Cash and bank balances | China Merchant Bank Co., Ltd. | 2,563,011,212.30 | 1,901,149,161.24 |
| China Merchants Group Finance Company Limited | 2,178,303,655.54 | 1,685,755,069.49 | |
| Total | 4,741,314,867.84 | 3,586,904,230.73 | |
| Held-for-trading financial assets | China Merchant Bank Co., Ltd. | 901,314,575.34 | 850,000,000.00 |
| Accounts receivable | Antong Holdings Co., Ltd. and its subordinate companies | 13,014,575.59 | 10,508,254.42 |
| China Marine Shipping Agency Ningbo Co., Ltd. | 6,502,287.89 | 7,773,568.86 | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 5,211,554.51 | 4,326,223.02 | |
| Yiu Lian Dockyards (Shekou) Limited | 4,414,431.20 | 725,330.10 | |
| Yingkou Port Group | 3,333,618.62 | 150,681.00 | |
| Khor Ambado FZCo | 2,842,053.59 | 2,774,015.84 | |
| Great Horn Development Company FZCo | 2,606,831.64 | 1,427,020.52 | |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | 2,315,131.88 | 2,007,669.18 | |
| China Marine Shipping Agency Guangdong Co., Ltd. | 1,970,902.79 | 7,777,640.18 | |
| Port de Djibouti S.A. | 1,618,911.45 | 1,497,611.83 | |
| Panjin Port Group | 1,467,000.00 | 239,339.83 | |
| Sinotrans Container Lines Co., Ltd. | 1,436,388.75 | 1,148,569.75 | |
| China Ocean Shipping Agency Shenzhen | 1,418,539.82 | 843,054.75 | |
| Liaoning Port Co., Ltd. | 1,414,964.00 | 1,248,825.00 | |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | 1,341,323.72 | 590,901.89 | |
| China Merchants International Cold Chain (Shenzhen) Company Limited | 1,215,660.73 | 614,839.90 | |
| Sinotrans (HK) Shipping Limited | 1,068,888.42 | 622,597.02 | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 1,049,999.99 | - | |
| South China Sinotrans Supply Chain Management Co., Ltd. | 475,477.60 | 1,035,675.13 | |
| Dalian Container Terminal Co., Ltd. | 330,000.60 | 1,580,275.50 | |
| Guizhou East Land Port Operation Co., Ltd. | 89,177.60 | 3,612,221.02 | |
| China COSCO Shipping Group and its subsidiaries | - | 120,615,548.37 | |
| Shenzhen Baohong Technology Co., Ltd. | - | 2,641,391.12 | |
| Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. | - | 1,061,604.20 | |
| Other related parties | 11,352,531.16 | 9,856,831.77 | |
| Total | 66,490,251.55 | 184,679,690.20 |
- 163 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Related party | Closing balance | Opening balance (restated) |
| Dividends receivables | Nanshan Group and its subsidiaries | 185,070,000.00 | 210,831,000.00 |
| Merchants Port City | 41,847,044.77 | - | |
| Tin-Can Island Container Terminal Ltd | 19,076,909.00 | 33,289,037.77 | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 18,403,959.77 | 13,378,666.52 | |
| Other related parties | 277,072.09 | 220,500.00 | |
| Total | 264,674,985.63 | 257,719,204.29 | |
| Other receivables | Chu Kong River Trade Terminal Co., Ltd. | 32,953,940.00 | 57,607,520.00 |
| Port de Djibouti S.A. | 22,681,372.48 | 23,248,597.69 | |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | 6,000,000.00 | 4,000,000.00 | |
| China Merchants Port Investment Development Company Limited | 5,000,000.00 | - | |
| Zhoushan Blue Ocean Investment Co., Ltd. | 4,996,989.39 | 4,996,989.39 | |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | 4,907,365.06 | 31,513,558.59 | |
| China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. | 2,899,163.95 | 2,899,163.95 | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 2,190,539.40 | - | |
| EuroAsia Dockyard Enterprise and Development Limited | 1,380,231.20 | 1,422,660.84 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 1,132,846.40 | 1,068,658.39 | |
| China Merchants (Liaoning) Port Development Co., Ltd. | - | 2,000,000.00 | |
| Other related parties | 6,717,646.33 | 5,752,296.58 | |
| Total | 90,860,094.21 | 134,509,445.43 | |
| Prepayments | China Traffic Import and Export Co., Ltd. | - | 244,729.25 |
| Non-current assets due within one year | Port of Newcastle and its subsidiaries | 60,029,243.30 | 16,473,559.57 |
| Terminal Link SAS | 42,429,677.59 | 51,286,674.10 | |
| Total | 102,458,920.89 | 67,760,233.67 | |
| Long-term receivables | Terminal Link SAS | 2,679,769,106.42 | 2,746,067,386.31 |
| Port of Newcastle and its subsidiaries | 750,086,910.62 | 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 | |
| Merchants Port City | - | 286,330,144.62 | |
| Total | 3,474,156,017.04 | 3,891,841,834.93 | |
| Other non-current assets | China Traffic Import and Export Co., Ltd. | 20,854,077.98 | - |
- 164 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Related party | Closing balance | Opening balance (restated) |
| Short-term borrowings | China Merchants Group Finance Company Limited | 3,393,366,381.96 | 2,646,853,256.33 |
| Other current liabilities | China Merchants Group Finance Company Limited | 10,012,082.19 | 60,606,027.37 |
| Accounts payable | Qingdao Qianwan West Port United Wharf Co., Ltd. | 6,742,200.79 | 6,381,033.57 |
| Shenzhen Bay Electricity Industry Co., Ltd. | 4,987,709.79 | - | |
| EuroAsia Dockyard Enterprise and Development Limited | 3,142,704.91 | 2,994,548.16 | |
| Nanshan Group and its subsidiaries | 3,154,427.56 | 9,220,434.36 | |
| Yiu Lian Dockyards Limited | 2,651,200.00 | 2,271,520.48 | |
| Ningbo Zhoushan | 1,159,307.43 | - | |
| China Marine Shipping Agency Shenzhen Co., Ltd. | 633,810.99 | 1,264,544.50 | |
| Other related parties | 3,102,320.77 | 694,721.19 | |
| Total | 25,573,682.24 | 22,826,802.26 | |
| Receipts in advance | Port de Djibouti S.A | - | 10,350,122.63 |
| Other related parties | 53,057.84 | 606,631.45 | |
| Total | 53,057.84 | 10,956,754.08 | |
| Contract liabilities | Dalian Container Terminal Co., Ltd. | 3,573,179.78 | - |
| Antong Holdings Co., Ltd. and its subordinate companies | 1,994,209.18 | 6,774,086.39 | |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | 1,578,302.00 | - | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 1,050,000.00 | - | |
| China Marine Shipping Agency Guangdong Co., Ltd. | - | 2,304,015.01 | |
| Other related parties | 2,897,061.68 | 3,264,592.40 | |
| Total | 11,092,752.64 | 12,342,693.80 | |
| Dividends Payable | China Merchants Zhangzhou Development Zone Co., Ltd. | 20,000,000.00 | 20,000,000.00 |
| Dalian Port Container | 18,349,264.69 | 12,160,517.31 | |
| Jifa Logistics | 4,945,967.80 | 3,972,477.39 | |
| Sri Lanka Ports Authority | - | 34,255,854.79 | |
| Total | 43,295,232.49 | 70,388,849.49 | |
| Other Payables | Port de Djibouti S.A. | 254,894,592.46 | 175,497,252.70 |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | 10,079,369.00 | 14,305,122.78 | |
| Antong Holdings Co., Ltd. and its subordinate companies | 8,077,252.00 | 35,160.00 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 7,839,816.47 | 8,447,512.23 | |
| China Merchants Port Investment Development Company Limited | 7,417,802.54 | 29,329,463.17 | |
| Terminal Link SAS | 3,910,337.39 | 89,905,681.62 | |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | 1,579,720.16 | 1,013,738.40 | |
| Zhanjiang Xiagang United Development Co., Ltd. | 1,433,473.84 | 1,433,730.78 | |
| China Merchant Food (China) Co., Ltd. | 1,069,017.00 | 1,161,179.14 | |
| Shenzhen Baohong Technology Co., Ltd. | - | 2,634,014.09 | |
| Penavico Shenzhen Warehousing Co., Ltd. | - | 1,127,339.68 | |
| Other related parties | 5,419,228.21 | 6,757,283.77 | |
| Total | 301,720,609.07 | 331,647,478.36 |
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(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Related party | Closing balance | Opening balance (restated) |
| Non-current liabilities due within one year | China Merchants Finance Lease (Shanghai) Co., Ltd. | 104,204,701.37 | - |
| China Merchants Tongshang Finance Lease Co., Ltd. | 60,639,407.07 | 58,348,704.99 | |
| Nanshan Group and its subsidiaries | 56,174,150.92 | 54,030,933.00 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 32,788,124.97 | 138,409,402.75 | |
| China Merchants Group Finance Company Limited | 27,106,533.22 | 51,423,306.47 | |
| EuroAsia Dockyard Enterprise and Development Limited | 13,030,256.95 | 13,406,128.42 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 6,029,278.06 | - | |
| China Merchant Bank Co., Ltd. | 4,227,333.34 | - | |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | - | 39,512,425.01 | |
| Other related parties | 961,513.13 | 433,329.00 | |
| Total | 305,161,299.03 | 355,564,229.64 | |
| Other non-current liabilities | Nanshan Group and its subsidiaries | 1,020,381.51 | 944,011.06 |
| Long-term borrowings | China Merchants Group Finance Company Limited | 543,744,022.45 | 426,100,835.53 |
| China Merchant Bank Co., Ltd. | 196,000,000.00 | 109,033,232.39 | |
| Total | 739,744,022.45 | 535,134,067.92 | |
| Lease liabilities | China Merchants Finance Lease (Shanghai) Co., Ltd. | 177,500,213.13 | 358,333,616.46 |
| Nanshan Group and its subsidiaries | 58,651,209.31 | 114,304,842.23 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 47,500,069.97 | - | |
| China Merchants Tongshang Finance Lease Co., Ltd. | 44,730,575.22 | 104,616,135.92 | |
| China Merchants International Cold Chain (Shenzhen) Company Limited | 1,353,404.41 | - | |
| Other related parties | 181,987.02 | 186,938.69 | |
| Total | 329,917,459.06 | 577,441,533.30 |
(XIV) SHARE-BASED PAYMENTS
1. Overall share-based payments
| Total equity instruments granted by the Company in the year | 530,000 shares |
| Total equity instruments exercised by the Company in the year | None |
| Total equity instruments of the Company that became invalid in the year | 7,628,000 shares |
| The range of the exercise price of the stock options externally issued by the Company at the end of the year and the remaining term of the contract | Exercise price: RMB15.09 to RMB17.34; The remaining term of the contract: 61 months |
| The range of the exercise price of the other equity instruments externally issued by the Company at the end of the year and the remaining term of the contract | None |
- 166 -
(XIV) SHARE-BASED PAYMENTS - continued
2. Share-based payments settled by equity
CHINA MERCHANTS PORT GROUP CO., LTD.
The method used to determine the fair value of equity instrumentson the day of granting
| The method used to determine the fair value of equity instruments on the day of granting | The cost of granted stock options was estimated using the Black Scholes Model. |
| The basis for determining the number of exercisable equity instruments | On each balance sheet date in the waiting period, the best estimate was made and the estimated number of exercisable equity instruments was modified according to the latest changes in the number of employees who can exercise the rights and other subsequent information. |
| Reasons for the significant difference between the estimates of this year and the estimates of last year | Criteria of exercising in vesting period of batch 1 are not satisfied |
| The aggregate amount of share-based payments settled by equity that is included in the capital reserve | 9,956,938.60 |
| Total expenses recognized for the share-based payments settled by equity in the year | -795,992.27 |
Pursuant to the Official Reply on the Implementation of the Stock Option Incentive Plan of ChinaMerchants Port Group Co., Ltd. by State-owned Assets Supervision and AdministrationCommission of the State Council, (No. 748 [2019], SASAC), and which was deliberated andapproved by the 1
stExtraordinary General Meeting of the Company in 2020 on 3 February 2020,the Company implemented a stock option plan with effect from 3 February 2020 to grant 238incentive recipients 17,198,000 stock options with an exercise price of RMB17.80 per share;subject to the fulfilment of the exercise conditions, 40% of the stock options will be exercisablefrom 24 months but within 36 months after the grant date, 30% will be exercisable from 36months but within 48 months after the grant date and 30% will be exercisable from 48 months butwithin 84 months after the grant date, and can be exercised to subscribe for shares of theCompany within one year, one year and three years from the exercise date, respectively; eachstock option entitles the holder to subscribe for one common share of the Company.
According to Article 32 of Stock Option Incentive Plan, since the grant date of the stock option, ifthe Company distributes dividends prior to the exercise of the option, the exercise price shall beadjusted accordingly. Therefore, the Company uniformly adjusted the exercise price fromRMB17.80 per share to 17.34 per share on 30 January 2021 in respect of the first batch of stockoption granted under stock option incentive plan (phase I).
On 5 March 2021, the granting of stock option (reserved portion) under stock option inventiveplan (phase I) was completed. The reserved portion of stock option targets to total 3 persons,granting 530,000 shares of stock option with exercise price of RMB15.09 per share. The grantingdate is 29 January 2021. With a lockup period of 24 months from the granting date, the shareoptions are exercisable upon expiry of the 24-month lockup period in the premise that the vestingconditions are satisfied. The share options are exercisable in two batches, specifically 50% for thefirst batch (after 24 months but within 36 months subsequent to the granting date), and theremaining 50% for the second batch (after 36 months but within 72 months subsequent to thegranting date); each share option represents the right to subscribe a share of ordinary share of theCompany.
- 167 -
(XIV) SHARE-BASED PAYMENTS - continued
2. Share-based payments settled by equity - continued
As at the reporting date, as the criteria of exercise in the first vesting period of the stock option(1
stbatch) under the stock option incentive plan (phase I) are not satisfied, the Company hascancelled the 6,380,000 shares of stock option corresponding to the first vesting period of thestock option (1
stbatch) under the stock option incentive plan (phase I). As 10of the incentivetargets have retired or no longer serve the Company, the corresponding 1,248,000 shares of stockoption have been cancelled.
(XV) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 31/12/2021 | 31/12/2020 |
| Commitments that have been entered into but have not been recognized in the financial statements | ||
| - Commitment to make contributions to the investees | 211,620,680.00 | 11,500,000.00 |
| - Commitment to acquire and construct long-term assets | 1,755,687,773.54 | 2,682,977,514.73 |
| - Commitment to invest port construction | 5,093,914.88 | 1,004,960,692.18 |
| - Others | - | 20,831,652.14 |
| Total | 1,972,402,368.42 | 3,720,269,859.05 |
2. Contingencies
| Item | 31/12/2021 | 31/12/2020 |
| Contingent liabilities brought by external litigations (Note 1) | 207,807,928.33 | 213,109,668.45 |
| Guarantee for borrowings of related parties (Note 2) | 175,517,115.86 | 184,129,723.74 |
| Total | 383,325,044.19 | 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 TCPand its subsidiaries in Brazil at as the year end. According to the latest estimates of theGroup's management, the possible compensation is RMB207,807,928.33 but it is notlikely to cause outflow of economic benefits from the Group. Therefore, the contingentliabilities arising from the above pending litigations are not recognized as provisions. Thecounter-bonification where the Group as the beneficiary will be executed by the formerTCP shareholder that disposed the shares. According to the counter-bonificationagreement, the former TCP shareholder need to make counter-bonification to the Groupin respect of the above contingent liabilities, with the compensation amount notexceeding pre-determined amount and specified period.
- 168 -
(XV) COMMITMENTS AND CONTINGENCIES - continued
2. Contingencies - continued
Note 2: Till 31 December 2021, the guarantees provided by the Group for related parties are
detailed in Note XIII 5(3).
On 31 December 2021, the directors of the Group evaluated the default risks of relatedcompanies on the above-mentioned loan financing and other liabilities, and believed thatthe risks were not significant and the possibility of guaranteed payments was very small.
Except for the above-mentioned contingencies, as of 31 December 2021, the Group hadno other major guarantees and other contingencies that need to be explained.
(XVI) EVENTS AFTER THE BALANCE SHEET
1. Retreating from CMPort (Shenzhen) Industry Innovation Private Equity Investment
Fund Partnership (LP) ("Investment Fund")
On 24 December 2020, the Company and its related party China Merchants InnovationInvestment Management Co., Ltd. ("China Merchants Innovation Investment") as well asShenzhen China Merchants Innovation Investment Fund Center (Limited Partnership) ("ChinaMerchants Innovation Fund") managed by China Merchants Innovation Investment jointlyestablished an investment fund. On 22 October 2021, the investment fund completed the filingwith Asset Management Association of China and obtained the Certificate of Filing of PrivateInvestment Fund. As at 31 December 2021, the Company has paid capital contribution ofRMB1,000,000.
Considering the investment fund has not yet carried out activities and taking into account theCompany's overall plan of capital operation, on 8 January 2022, the Company, China MerchantsInnovation Investment, China Merchants Innovation Fund unanimously agree to dissolve theinvestment fund and implement liquidation and cancellation procedures.
As at the date of the financial statements, the above liquidation and cancellation procedures arenot yet completed.
2. Issuing 2022 tranche 1, 2 and 3super short-term commercial paper ("SCP")
The Company's 2022 tranche 1 SCP was publicly offered at National Interbank Bond Market on17 January 2022, with issue amount of RMB 2 billion, a term of 90 days and par value of RMB
100. The lead underwriter and co-lead underwriter are China Merchants Bank Co., Ltd. and ChinaConstruction Bank Corporation respectively. The fund raised from this offering may be used torepay the Company's and its subsidiaries' borrowings from financial institutions.
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(XVI) EVENTS AFTER THE BALANCE SHEET - continued
2. Issuing 2022 tranche 1, 2 and 3 super short-term commercial paper ("SCP") -
continued
The Company's 2022 tranche 2 SCP was publicly offered at National Interbank Bond Market on 2March 2022, with issue amount of RMB 1 billion, a term of 180 days and par value of RMB 100.The lead underwriter and co-lead underwriter are China Merchants Bank Co., Ltd. and Industrialand Commercial Bank of China Limited respectively. The fund raised from this offering will beused to repay the Company's and its subsidiaries' working capital.
The Company's 2022 tranche 3 SCP was publicly offered at National Interbank Bond Market on28 March 2022, with issue amount of RMB 2 billion, a term of 180 days and par value of RMB
100. The lead underwriter and co-lead underwriter are China Merchants Bank Co., Ltd. andIndustrial and Bank of China Limited respectively. The fund raised from this offering will be usedto repay bonds at maturity.
(XVII) 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.
Individual operating segments for which discrete financial information is available are identifiedby the CODM and are operated by their respective management teams. These individualoperating segments are aggregated in arriving at the reporting segments of the Group.
From business and financial perspectives, management assesses the performance of the Group'sbusiness operations 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 ports operation are presented 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
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
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.
Other operations
Other operations mainly include property development and investment and construction ofmodular housing operated by the Group's associates, property investment operated by the Groupand 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 operatingsegments have been aggregated into reportable segments on geographic basis in order to present amore systematic and structured segment information. To give details of each of the operatingsegments, in the opinion of the directors of the Company, would result in particulars of excessivelength.
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.
The revenue from a major customer of ports operation amounts to RMB1,760,264,413.65,representing 11.52% (2020: 12.46%) of the Group's operating income for 2021.
- 171 -
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information
Segment financial information for 2021 is as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| 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 | 6,169,011,494.33 | 955,807,808.06 | 69,178,976.05 | 3,746,197,331.61 | 3,695,214,463.69 | 14,635,410,073.74 | 464,573,743.50 | 183,824,357.36 | - | 15,283,808,174.60 |
| Operating cost | 3,453,475,366.43 | 597,481,157.49 | 54,665,813.81 | 2,783,662,072.53 | 1,680,840,428.09 | 8,570,124,838.35 | 257,835,741.37 | 218,875,602.77 | - | 9,046,836,182.49 |
| Segment operating profit (loss is marked with "-") | 2,715,536,127.90 | 358,326,650.57 | 14,513,162.24 | 962,535,259.08 | 2,014,374,035.60 | 6,065,285,235.39 | 206,738,002.13 | -35,051,245.41 | - | 6,236,971,992.11 |
| Adjustments: | ||||||||||
| Taxes and surcharges | 33,618,026.16 | 1,740,839.69 | 1,145,292.35 | 46,827,778.00 | 59,226,541.93 | 142,558,478.13 | 25,369,242.73 | 23,905,217.75 | 141,305.70 | 191,974,244.31 |
| Administrative expense | 459,095,114.37 | 41,447,191.06 | 10,094,331.91 | 530,495,769.77 | 239,606,436.10 | 1,280,738,843.21 | 43,767,439.19 | 1,021,783.02 | 403,632,493.08 | 1,729,160,558.50 |
| R&D expenses | 162,845,174.00 | 38,114,947.70 | - | 16,945,513.97 | - | 217,905,635.67 | - | - | - | 217,905,635.67 |
| Financial expenses | 77,467,350.81 | 5,641,533.68 | -2,466,397.16 | 120,310,978.09 | 195,175,809.87 | 396,129,275.29 | 12,385,910.10 | 22,982,823.67 | 1,113,840,588.23 | 1,545,338,597.29 |
| Other income | 282,932,907.60 | 9,484,000.67 | 5,469.40 | 57,374,140.86 | - | 349,796,518.53 | 13,193,859.62 | 254,782.93 | - | 363,245,161.08 |
| Investment income | 440,035,665.04 | 4,238,562,309.59 | 277,273,943.74 | 345,017,458.52 | 468,204,189.40 | 5,769,093,566.29 | -12,031,120.80 | 856,291,297.44 | 23,595,767.98 | 6,636,949,510.91 |
| Gains from changes in fair value (loss is marked with "-") | 9,359,683.02 | - | -98,965,383.40 | 2,347,751.88 | 306,172,536.00 | 218,914,587.50 | - | - | 2,327,687.67 | 221,242,275.17 |
| Impairment gains of credit (loss is marked with "-") | -6,838,168.58 | 1,020,000.00 | - | -7,045,279.31 | -192,031,975.00 | -204,895,422.89 | -48,058,194.61 | - | - | -252,953,617.50 |
| Impairment gains of assets (loss is marked with "-") | - | - | - | -418,345,307.68 | -2,147,208.07 | -420,492,515.75 | - | - | - | -420,492,515.75 |
| Gains from disposal of assets (loss is marked with "-") | 2,962,025.35 | 13,209.72 | 6,430,654.08 | 25,740,511.52 | 266,566.00 | 35,412,966.67 | 212,611.41 | - | -49,118.66 | 35,576,459.42 |
| Operating profit (loss is marked with "-") | 2,710,962,574.99 | 4,520,461,658.42 | 190,484,618.96 | 253,044,495.04 | 2,100,829,356.03 | 9,775,782,703.44 | 78,532,565.73 | 773,585,010.52 | -1,491,740,050.02 | 9,136,160,229.67 |
- 172 -
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2021 is as follows: - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| 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 | 13,008,411.38 | 574,013.03 | 508,302.39 | 9,629,274.10 | 14,567,738.63 | 38,287,739.53 | 27,449.61 | 597,934.35 | 4,554,414.01 | 43,467,537.50 |
| Non-operating expenses | 6,917,726.39 | 2,166,481.95 | - | 53,226,742.91 | 24,897,586.02 | 87,208,537.27 | 20,000.00 | -0.01 | 8,300,155.85 | 95,528,693.11 |
| Gross profit (loss is marked with "-") | 2,717,053,259.98 | 4,518,869,189.50 | 190,992,921.35 | 209,447,026.23 | 2,090,499,508.64 | 9,726,861,905.70 | 78,540,015.34 | 774,182,944.88 | -1,495,485,791.86 | 9,084,099,074.06 |
| Income tax expenses | 524,164,148.32 | 221,408,593.92 | 7,548,598.15 | 61,714,339.27 | 307,146,501.14 | 1,121,982,180.80 | 11,538,241.85 | 53,526,346.43 | 242,046,315.23 | 1,429,093,084.31 |
| Net profit (loss is marked with "-") | 2,192,889,111.66 | 4,297,460,595.58 | 183,444,323.20 | 147,732,686.96 | 1,783,353,007.50 | 8,604,879,724.90 | 67,001,773.49 | 720,656,598.45 | -1,737,532,107.09 | 7,655,005,989.75 |
| Segment assets | 28,287,890,207.35 | 36,766,156,834.80 | 7,570,933,282.53 | 27,838,467,531.77 | 41,135,106,798.84 | 141,598,554,655.29 | 3,462,069,538.25 | 18,978,652,576.39 | 11,944,824,398.73 | 175,984,101,168.66 |
| Total assets in the financial statements | 175,984,101,168.66 | |||||||||
| Segment liabilities | 10,300,340,684.26 | 1,641,664,024.25 | 149,926,571.36 | 7,645,454,637.72 | 7,851,403,330.63 | 27,588,789,248.22 | 533,057,935.76 | 1,017,520,046.89 | 35,809,307,046.31 | 64,948,674,277.18 |
| Total liabilities in the financial statements | 64,948,674,277.18 | |||||||||
| Supplementary information: | ||||||||||
| Depreciation and Amortization | 889,758,581.06 | 197,464,949.23 | 1,093,508.89 | 917,975,691.54 | 766,865,123.91 | 2,773,157,854.63 | 72,861,519.89 | 175,029,480.65 | 45,222,064.61 | 3,066,270,919.78 |
| Interest income | 13,898,280.21 | 4,223,041.44 | 402,788.78 | 32,826,269.88 | 246,477,465.44 | 297,827,845.75 | 1,120,075.68 | 2,177,357.15 | 76,438,595.91 | 377,563,874.49 |
| Interest expense | 96,364,688.47 | 5,094,276.48 | - | 153,293,454.39 | 383,901,414.22 | 638,653,833.56 | 15,348,819.97 | 31,819,095.28 | 1,224,026,866.19 | 1,909,848,615.00 |
| Investment income from long-term equity investment under equity method | 361,451,468.54 | 4,238,562,309.59 | 236,693,226.55 | 141,786,109.87 | 468,204,189.40 | 5,446,697,303.95 | -12,031,120.80 | 856,291,297.44 | - | 6,290,957,480.59 |
| Long-term equity investment under equity method | 6,010,920,490.10 | 30,734,063,685.69 | 6,722,000,869.89 | 508,063,722.03 | 11,990,041,710.35 | 55,965,090,478.06 | 672,691,660.83 | 13,715,669,685.63 | - | 70,353,451,824.52 |
| Non-current assets other than long-term equity investment | 18,760,635,381.65 | 4,126,611,225.22 | 16,711,625.75 | 24,186,695,730.85 | 20,329,634,458.61 | 67,420,288,422.08 | 2,126,565,848.52 | 4,930,963,314.80 | 620,648,598.94 | 75,098,466,184.34 |
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2020 is as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| 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 | 5,241,233,142.55 | 73,413,401.10 | 62,661,236.23 | 3,333,716,950.72 | 3,474,914,093.88 | 12,185,938,824.48 | 417,391,441.86 | 153,414,051.57 | - | 12,756,744,317.91 |
| Operating cost | 2,956,793,312.13 | 40,965,225.12 | 48,645,796.45 | 2,681,846,267.01 | 1,767,068,217.21 | 7,495,318,817.92 | 245,350,697.54 | 221,269,319.94 | - | 7,961,938,835.40 |
| Segment operating profit (loss is marked with "-") | 2,284,439,830.42 | 32,448,175.98 | 14,015,439.78 | 651,870,683.71 | 1,707,845,876.67 | 4,690,620,006.56 | 172,040,744.32 | -67,855,268.37 | - | 4,794,805,482.51 |
| Adjustments: | ||||||||||
| Taxes and surcharges | 27,581,350.62 | 1,525,681.36 | 1,155,694.87 | 48,249,699.24 | 34,531,713.98 | 113,044,140.07 | 20,652,317.30 | 18,092,487.86 | 141,056.95 | 151,930,002.18 |
| Administrative expense | 500,990,070.71 | 14,189,057.25 | 9,379,082.71 | 473,751,196.10 | 249,846,408.69 | 1,248,155,815.46 | 42,007,434.87 | 1,093,821.55 | 314,398,393.37 | 1,605,655,465.25 |
| R&D expenses | 147,625,689.62 | 3,968,928.76 | - | 15,724,656.48 | - | 167,319,274.86 | - | - | 1,468,500.00 | 168,787,774.86 |
| Financial expenses | 143,731,948.26 | -14,347,282.70 | -9,466,114.16 | 133,937,742.90 | 44,368,823.84 | 298,225,118.14 | 16,272,850.96 | 19,152,258.84 | 898,280,275.76 | 1,231,930,503.70 |
| Other income | 70,819,504.36 | 1,752,751.59 | 33,397.31 | 51,406,035.35 | - | 124,011,688.61 | 10,173,062.64 | 73,365,149.56 | 176,926.89 | 207,726,827.70 |
| Investment income | 210,845,395.46 | 3,122,680,492.45 | 351,638,093.79 | 103,533,080.19 | 357,882,216.11 | 4,146,579,278.00 | 19,641,031.91 | 743,610,282.92 | - | 4,909,830,592.83 |
| Gains from changes in fair value (loss is marked with "-") | 33,063,464.71 | 150,747,337.90 | 77,018,544.18 | 8,043,866.90 | -680,381,987.27 | -411,508,773.58 | - | - | - | -411,508,773.58 |
| Impairment gains of credit (loss is marked with "-") | -5,687,600.55 | 1,020,000.00 | - | 28,130,653.65 | -477,897,709.00 | -454,434,655.90 | -2,866,639.45 | - | - | -457,301,295.35 |
| Impairment gains of assets (loss is marked with "-") | 947,694.12 | - | - | -552,317,736.65 | - | -551,370,042.53 | - | - | - | -551,370,042.53 |
| Gains from disposal of assets (loss is marked with "-") | 5,187,792.01 | 507,040.19 | -1,441.50 | 1,600,635,718.61 | 311,438.49 | 1,606,640,547.80 | 305,861.36 | -117,707,200.00 | -32,706.84 | 1,489,206,502.32 |
| Operating profit (loss is marked with "-") | 1,779,687,021.32 | 3,303,819,413.44 | 441,635,370.14 | 1,219,639,007.04 | 579,012,888.49 | 7,323,793,700.43 | 120,361,457.65 | 593,074,395.86 | -1,214,144,006.03 | 6,823,085,547.91 |
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2020 is as follows: - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| 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 | 43,331,436.81 | 43,196.21 | 440,831.36 | 31,641,529.53 | 1,889,443.67 | 77,346,437.58 | 198,116.16 | 1,391,661.99 | 2,779,196.95 | 81,715,412.68 |
| Non-operating expenses | 2,960,035.34 | 813,550.98 | 25,948.75 | 22,767,505.78 | 25,707,516.11 | 52,274,556.96 | 42,000.00 | - | 26,687,183.81 | 79,003,740.77 |
| Gross profit (loss is marked with "-") | 1,820,058,422.79 | 3,303,049,058.67 | 442,050,252.75 | 1,228,513,030.79 | 555,194,816.05 | 7,348,865,581.05 | 120,517,573.81 | 594,466,057.85 | -1,238,051,992.89 | 6,825,797,219.82 |
| Income tax expenses | 602,962,273.77 | 169,174,798.29 | 62,114,619.13 | 493,406,817.80 | -52,337,554.93 | 1,275,320,954.06 | 15,094,962.21 | 15,750,266.73 | -29,144,338.38 | 1,277,021,844.62 |
| Net profit (loss is marked with "-") | 1,217,096,149.02 | 3,133,874,260.38 | 379,935,633.62 | 735,106,212.99 | 607,532,370.98 | 6,073,544,626.99 | 105,422,611.60 | 578,715,791.12 | -1,208,907,654.51 | 5,548,775,375.20 |
| Segment assets | 29,821,611,467.10 | 34,720,797,014.91 | 7,246,173,514.37 | 26,212,201,328.99 | 44,448,666,487.24 | 142,449,449,812.61 | 3,315,494,460.32 | 18,342,294,850.36 | 4,621,087,222.48 | 168,728,326,345.77 |
| Total assets in the financial statements | 168,728,326,345.77 | |||||||||
| Segment liabilities | 14,922,681,608.31 | 1,603,641,824.41 | 143,181,803.40 | 8,095,524,461.24 | 9,659,518,990.29 | 34,424,548,687.65 | 583,644,968.76 | 1,372,383,302.75 | 26,546,092,773.08 | 62,926,669,732.24 |
| Total liabilities in the financial statements | 62,926,669,732.24 | |||||||||
| Supplementary information: | ||||||||||
| Depreciation and Amortization | 871,328,799.31 | 16,840,576.77 | 2,019,814.39 | 986,324,667.31 | 843,174,817.50 | 2,719,688,675.28 | 97,449,874.10 | 175,099,107.40 | 22,567,185.84 | 3,014,804,842.62 |
| Interest income | 40,895,256.73 | 2,611,662.90 | 2,863,089.15 | 61,729,133.61 | 203,403,087.34 | 311,502,229.73 | 1,372,300.78 | 1,105,725.59 | 12,258,928.24 | 326,239,184.34 |
| Interest expense | 205,101,200.19 | 2,716,578.54 | - | 194,085,313.44 | 312,694,424.90 | 714,597,517.07 | 20,355,642.89 | 34,988,377.32 | 1,179,971,384.93 | 1,949,912,922.21 |
| Investment income from long-term equity investment under equity method | 140,412,519.63 | 2,329,321,018.47 | 321,168,422.22 | 80,736,626.43 | 357,882,216.11 | 3,229,520,802.86 | 19,641,031.91 | 743,610,282.92 | - | 3,992,772,117.69 |
| Long-term equity investment under equity method | 4,152,223,455.22 | 28,460,075,468.21 | 6,275,998,231.07 | 604,585,694.21 | 13,303,915,012.11 | 52,796,797,860.82 | 736,196,163.40 | 12,709,417,198.68 | - | 66,242,411,222.90 |
| Non-current assets other than long-term equity investment | 21,731,261,369.66 | 4,256,897,677.23 | 24,886,574.80 | 19,427,332,228.33 | 24,705,573,985.43 | 70,145,951,835.45 | 2,226,903,590.34 | 5,238,035,244.36 | 422,618,810.40 | 78,033,509,480.55 |
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(XVII) 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:
CHINA MERCHANTS PORT GROUP CO., LTD.
Revenue from external transactions
| Revenue from external transactions | Amount incurred in the current period | Amount incurred in the prior period (restated) |
| Mainland China, Hong Kong and Taiwan | 11,550,563,244.63 | 9,255,785,222.67 |
| Pearl River Delta | 6,646,437,978.26 | 5,660,744,147.48 |
| Yangtze River Delta | 955,807,808.06 | 73,413,401.10 |
| Bohai Rim | 202,120,126.70 | 187,910,723.37 |
| Others | 3,746,197,331.61 | 3,333,716,950.72 |
| Other locations | 3,733,244,929.97 | 3,500,959,095.24 |
| Total | 15,283,808,174.60 | 12,756,744,317.91 |
| Total non-current assets | Closing balance | Opening balance (restated) |
| Mainland China, Hong Kong and Taiwan | 109,645,185,780.08 | 105,111,642,513.71 |
| Pearl River Delta | 45,414,657,732.10 | 45,459,155,093.97 |
| Yangtze River Delta | 34,860,356,989.30 | 32,716,973,145.44 |
| Bohai Rim | 7,318,137,784.88 | 6,903,596,351.63 |
| Others | 22,052,033,273.80 | 20,031,917,922.67 |
| Other locations | 35,806,732,228.78 | 39,164,278,189.74 |
| Total | 145,451,918,008.86 | 144,275,920,703.45 |
(3) Degree of reliance on major customers
The total operating income derived from the top five customers of the Group is RMB3,741,849,003.95, accounting for 24.48% of the Group's operating income.
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Other receivables
1.1 Summary of other receivables
| Item | Closing balance | Opening balance |
| Dividends receivable | 177,295,422.67 | 311,297,793.86 |
| Other receivables | 1,079,447,548.34 | 791,414,958.18 |
| Total | 1,256,742,971.01 | 1,102,712,752.04 |
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(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.2 Dividends receivable
(1) Disclosure of dividends receivable
CHINA MERCHANTS PORT GROUP CO., LTD.Investee
| Investee | Closing balance | Opening balance |
| Chiwan Wharf Holdings (Hong Kong) Ltd. | 147,680,363.88 | 147,680,363.88 |
| China Merchants Bonded Logistics Co., Ltd. | 15,707,120.00 | 15,707,120.00 |
| Dongguan Shenchiwan Wharf Co., Ltd. | 13,691,538.79 | 147,233,909.98 |
| Shenzhen Petrochemical Industry (Group) Co., Ltd. | 216,400.00 | 216,400.00 |
| Jiangsu Expressway Company Limited | - | 460,000.00 |
| Total | 177,295,422.67 | 311,297,793.86 |
| Less: Provision for credit loss | - | - |
| Carrying amount | 177,295,422.67 | 311,297,793.86 |
(2) Significant dividends receivable with aging over 1 year
| Item | Closing balance | Opening balance | Reason for outstanding | Impaired or not |
| Chiwan Wharf Holdings (Hong Kong) Ltd. | 147,680,363.88 | 147,680,363.88 | In processing and expected to be received in 2022 | No |
| China Merchants Bonded Logistics Co., Ltd. | 15,707,120.00 | 15,707,120.00 | In processing and expected to be received in 2022 | No. |
| Total | 163,387,483.88 | 163,387,483.88 |
1.3 Other receivables
(1) Disclosure of other receivables by aging
| Aging | Closing balance | ||
| Other receivables | Provision for credit loss | Proportion of provision (%) | |
| Within 1 year | 293,366,907.09 | - | - |
| 1 to 2 years | 458,303,409.30 | - | - |
| 2 to 3 years | 327,448,916.48 | - | - |
| Over 3 years | 711,772.07 | 383,456.60 | 53.87 |
| Total | 1,079,831,004.94 | 383,456.60 | |
(2) 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.Such expected average loss ratio is based on historical actual impairment and taking intoconsideration of current and expected future economic conditions.
- 177 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.3 Other receivables - continued
(2) Provision for credit loss of other receivables - continued
At 31 December 2021, the credit risk and expected credit loss of other receivables by categoriesof customers are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Credit rating
| 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 | 1,079,447,548.34 | - | - | 1,079,447,548.34 | 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 | 1,079,447,548.34 | - | 383,456.60 | 1,079,831,004.94 | 791,414,958.18 | - | 383,456.60 | 791,798,414.78 | |
| Credit loss allowance | - | - | 383,456.60 | 383,456.60 | - | - | 383,456.60 | 383,456.60 | |
| Book value | 1,079,447,548.34 | - | - | 1,079,447,548.34 | 791,414,958.18 | - | - | 791,414,958.18 | |
(3) Changes in credit loss allowance for other receivables
| 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 |
| Transfer in the current year | ||||
| -- transfer to stage II | - | - | - | |
| -- transfer to stage III | - | - | - | |
| -- transfer back to stage II | - | - | - | |
| -- transfer back to stage I | - | - | - | |
| Provision | - | - | - | |
| Reversal | - | - | - | |
| Transfer out due to derecognition of financial assets (including direct write-down) | - | - | - | |
| Other changes | - | - | - | |
| Balance at 31 December 2021 | - | 383,456.60 | 383,456.60 |
(4) Changes in carrying amount of other receivables
| Carrying amount | Stage I | Stage II | Stage III | Total |
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Balance at 1 January 2021 | 791,414,958.18 | - | 383,456.60 | 791,798,414.78 |
| Transfer in the current year: | ||||
| -- transfer to stage II | - | - | - | - |
| -- transfer to stage III | - | - | - | - |
| -- transfer back to stage II | - | - | - | - |
| -- transfer back to stage I | - | - | - | - |
| Increase | 288,032,590.16 | - | - | 288,032,590.16 |
| Derecognition | - | - | - | - |
| Other changes | - | - | - | - |
| Balance at 31 December 2021 | 1,079,447,548.34 | - | 383,456.60 | 1,079,831,004.94 |
- 178 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.3 Other receivables - continued
(5) The Company has no recovery or reversal of significant credit loss allowance in the
current year.
(6) Other receivables by nature
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Closing balance | Opening balance |
| Amounts due from related parties | 1,072,941,653.53 | 785,752,325.78 |
| Advances | 4,741,428.81 | 3,862,191.69 |
| Others | 2,147,922.60 | 2,183,897.31 |
| Total | 1,079,831,004.94 | 791,798,414.78 |
| Less: Provision for credit loss | 383,456.60 | 383,456.60 |
| Book value | 1,079,447,548.34 | 791,414,958.18 |
(7) There is no other receivables write-off during this year.
(8) The top four balances of other receivables classified by debtor
| Company name | Relationship with the Company | Nature | Closing balance | Aging | Proportion to total other receivables(%) | Closing balance of credit loss allowance |
| Shenzhen Haixing | Subsidiary | Loan to related parties | 1,072,941,653.53 | Within 3 years | 99.36 | - |
| CM International Tech | Subsidiary | Advances | 2,467,600.00 | Within 1 year | 0.23 | - |
| Social security contributions paid on behalf of employee and enterprise annuity | Third party | Advances | 2,273,828.81 | Within 1 year | 0.21 | - |
| Shenzhen Shekou Local Taxation Bureau | Third party | Others | 711,772.07 | Over 3 years | 0.07 | 383,456.60 |
| Total | 1,078,394,854.41 | 99.87 | 383,456.60 |
- 179 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
CHINA MERCHANTS PORT GROUP CO., LTD.
Investee
| Investee | 1/1/2021 | Changes for the year | 31/12/2021 | 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. Subsidiaries | |||||||||||
| 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 Holdings (Hong Kong) Ltd. | 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 | - |
| Shenchiwan Port Affairs | 186,525,000.00 | - | - | - | - | - | - | - | - | 186,525,000.00 | - |
| Dongguan Shenchiwan Wharf 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 | 1,017,342,017.46 | - | - | - | - | - | - | - | 29,290,281,157.45 | - |
| CMPort (Zhoushan) RoRo Logistics Co., Ltd. | 149,709,800.00 | - | - | - | - | - | - | - | - | 149,709,800.00 | - |
| Zhanjiang Port | 3,381,825,528.52 | - | - | - | - | - | - | - | - | 3,381,825,528.52 | - |
| CM International Tech (Note 2) | - | 23,451,570.97 | 2,890,495.95 | - | - | - | - | - | - | 20,561,075.02 | - |
| Sanya Merchants Port Development Co., Ltd. (Note 3) | - | 2,040,000.00 | - | - | - | - | - | - | - | 2,040,000.00 | - |
| Sub-total | 33,075,848,268.88 | 1,042,833,588.43 | 2,890,495.95 | - | - | - | - | - | - | 34,115,791,361.36 | - |
| II. Associates | |||||||||||
| CM International Tech | 23,833,710.97 | - | 1,875,000.00 | -385,535.90 | - | -35,889,398.04 | 14,316,222.97 | - | - | - | |
| China Merchants Bonded Logistics Co., Ltd. | 384,647,157.60 | - | - | 10,601,954.40 | - | - | - | - | - | 395,249,112.00 | - |
| China Merchants Northeast Asia Development & Investment Co., Ltd. | 1,007,786,285.71 | - | - | 8,262,246.98 | - | - | - | - | - | 1,016,048,532.69 | - |
| Ningbo Zhoushan | 1,500,464,520.87 | 206,523,799.86 | - | 116,870,715.60 | 1,070,706.00 | 3,729,807.90 | -35,661,315.55 | - | - | 1,792,998,234.68 | - |
| Sub-total | 2,916,731,675.15 | 206,523,799.86 | 1,875,000.00 | 135,349,381.08 | 1,070,706.00 | -32,159,590.14 | -21,345,092.58 | - | - | 3,204,295,879.37 | - |
| III. Joint ventures | |||||||||||
| Yantai Port Group Laizhou Port Co., Ltd. | 782,832,086.50 | - | - | 33,327,096.27 | - | - | -24,643,441.33 | - | - | 791,515,741.44 | - |
| China Merchants Antong Logistics Management Company | 9,102,988.02 | - | - | 624,890.92 | - | - | - | - | - | 9,727,878.94 | - |
| Fujian Zhaohang Logistics Management Partnership (Limited Partnership) | 452,283,105.00 | - | - | 58,927,327.62 | - | - | - | - | - | 511,210,432.62 | - |
| Investment Fund (Note 4) | - | 1,000,000.00 | - | -2,003,584.24 | - | - | - | - | 1,003,584.24 | - | - |
| Sub-total | 1,244,218,179.52 | 1,000,000.00 | - | 90,875,730.57 | - | - | -24,643,441.33 | - | 1,003,584.24 | 1,312,454,053.00 | - |
| Total | 37,236,798,123.55 | 1,250,357,388.29 | 4,765,495.95 | 226,225,111.65 | 1,070,706.00 | -32,159,590.14 | -45,988,533.91 | - | 1,003,584.24 | 38,632,541,293.73 | - |
- 180 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
2. Long-term equity investments - continued
Note 1: Details are set out in Note (X) 1.
Note 2: Details are set out in Note (X) 1. (1).
Note 3: Sanya Merchants Port Development Co., Ltd. is a limited company jointly established by
the Company and Sanya Port Group Co., Ltd. on 16 July 2021, with registered capital ofRMB 10 million.
Note 4: According to the Partnership Agreement, the loss of investment fund is shared in
proportion to the paid-in capital. For the current period, Investment Fund Partnership(LP) has excess loss of RMB 1,003,584.24 included in provisions.
3. Operating income and operating costs
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount incurred in the current period | Amount incurred in the prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Principal operating | - | - | - | - |
| Other operating | 2,642,001.75 | 2,265,959.45 | 6,653,002.66 | 2,265,959.64 |
| Total | 2,642,001.75 | 2,265,959.45 | 6,653,002.66 | 2,265,959.64 |
4. Investment income
(1) Details of investment income
| Item | Amount incurred in the current period | Amount incurred in the prior period |
| Income from long-term equity investments under cost method | 1,324,423,832.08 | 2,871,566,529.89 |
| Long-term equity investments income under equity method | 226,225,111.65 | 57,647,049.81 |
| Income from held-for-trading financial assets | 38,750,781.56 | 13,161,408.95 |
| Income from other equity instruments investments | 7,409,500.00 | 8,567,900.00 |
| Income from debt investments | - | 24,700,958.91 |
| Total | 1,596,809,225.29 | 2,975,643,847.56 |
- 181 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
4. Investment income - continued
(2) Income from long-term equity investments under cost method
CHINA MERCHANTS PORT GROUP CO., LTD.
Investee
| Investee | Amount incurred in the current period | Amount incurred in the prior period | Reason for changes comparing with prior year |
| CMPort | 946,405,578.84 | 982,379,582.35 | 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 |
| Chiwan Container Terminal Co., Ltd. | 115,287,847.14 | 275,313,936.56 | Changes in profit distribution of investee |
| Dongguan Shenchiwan Wharf 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 |
| Shenchiwan Port Affairs | 2,664,219.41 | 60,234,278.79 | 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 Wharf Holdings (Hong Kong) Ltd. | - | 1,347,680,363.88 | Changes in profit distribution of investee |
| Total | 1,324,423,832.08 | 2,871,566,529.89 |
NOTES TO FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount | Remarks |
| Losses on disposal of non-current assets | 233,551,553.79 | |
| 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) | 314,172,152.25 | |
| Money lending income earned from non-financial institutions in profit or loss | 232,343,789.35 | |
| 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 | 221,242,275.17 | |
| Reversal of provision for accounts receivable that are tested for credit loss individually | 93,196.96 | |
| 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 | 1,663,396.22 | |
| Other non-operating income or expenses other than above | -4,065,501.22 | |
| Other profit or loss that meets the definition of non-recurring profit or loss | ||
| Tax effects | -181,130,994.22 | |
| Effects of minority interest (after tax) | -484,485,147.96 | |
| Total | 330,128,929.84 |
NOTES TO FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS")
The return on net assets and EPS have been prepared by the Company in accordance withInformation 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 by China Securities Regulatory Commission.
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Weighted average return on net assets (%) | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 6.9903 | 1.3971 | 1.3968 |
| Net profit attributable to ordinary shareholders after deducting non-recurring profit or loss | 6.1311 | 1.2254 | 1.2251 |