CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2022
FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2022
CONTENTS PAGE(S)
AUDITOR'S REPORT 1 - 6
CONSOLIDATED BALANCE SHEET 7 - 8
BALANCE SHEET OF THE COMPANY 9
CONSOLIDATED INCOME STATEMENT 10
INCOME STATEMENT OF THE COMPANY 11
CONSOLIDATED CASH FLOW STATEMENT 12
CASH FLOW STATEMENT OF THE COMPANY 13
CONSOLIDATED STATEMENT OF CHANGES INSHAREHOLDERS' EQUITY 14 - 15
THE COMPANY'S STATEMENT OF CHANGES INSHAREHOLDERS' EQUITY 16 - 17
NOTES TO THE FINANCIAL STATEMENTS 18 - 179
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AUDITOR'S REPORT
De Shi Bao (Shen) Zi (23) No. P03194
(Page 1 of 6)
To all the shareholders of China Merchants Port Group Co., Ltd.,
I. Audit Opinion
We have audited the financial statements of China Merchants Port Group Co., Ltd. (hereinafterreferred to as "the Company"), which comprise the consolidated and Company's balance sheets as at31 December 2022, and the consolidated and Company's income statements, the consolidated andCompany's cash flow statements and the consolidated and Company's statements of changes inshareholders' equity for the year then ended, and the notes to the financial statements.
In our opinion, the accompanying financial statements of the Company are prepared and present fairly,in all material respects, the consolidated and Company's financial position as at 31 December 2022,and the consolidated and Company's results of operations and cash flows for the year then ended inaccordance with the Accounting Standards for Business Enterprises.
II. Basis for the Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities underthose standards are further described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with China Codeof Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities inaccordance with the Code. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
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, we do not providea separate opinion on these matters. We determine the followings are key audit matters that need to beaddressed in our report.
1. Subsequent measurement of long-term equity investments in associates
As disclosed in Note (VIII) 13 to the consolidated financial statements, as at 31 December 2022, thecarrying amount of the Company's long-term equity investments in associates amounts to RMB82,647,500,863.33, accounting for 64.44% of the total shareholder's equity. In 2022, the investmentincome from associates recognized under the equity method amounts to RMB 6,765,840,426.95,accounting for 82.19% of the consolidated net profit. Since the amount of income from investments inassociates recognized by the Company for the year is significant, and its correctness depends on thefinancial status and operating results of the investee, we determine the above-mentioned subsequentmeasurement of the long-term equity investments in associates as a key audit matter of theconsolidated financial statements.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(Page 2 of 6)
III. Key Audit Matters - continued
1. Subsequent measurement of long-term equity investments in associates - continued
Principal audit procedures we performed for the above key audit matter are as follows:
(1) Understood the certified public accountants of major associates and evaluated their
independence and professional competence;
(2) Identified and assessed the risk of material misstatement in the financial statements of the major
associates from the perspective of auditing the consolidated financial statements of theCompany by reading the financial statements of the major associates and discussing with themanagement about the financial performance of the major associates and the significantjudgments and estimates made in the preparation of the financial statements;
(3) Discussed with the component certified public accountants of the major associates about their
assessment of the component audit risk, the identification of key audit areas and theimplementation 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 major
associates were consistent with those of the Company. If not, checked whether the financialstatements of the major associates have been adjusted according to the accounting policies andaccounting periods of the Company, and recognized the amount of investment income underequity method on that basis.
2. Goodwill impairment
As disclosed in Note (VIII) 22 to the consolidated financial statements, as at 31 December 2022, thegoodwill presented in the consolidated financial statements of the Company is RMB 6,411,426,891.09.The management of the Company uses 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 value includekey assumptions, such as growth rate and discount rate. We determine goodwill impairment as a keyaudit matter of the consolidated financial statements due to the significant amount of goodwill and thatthe management needs to make significant judgments and estimates when conducting goodwillimpairment testing.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(Page 3 of 6)
III. Key Audit Matters - continued
2. Goodwill impairment - continued
Principal audit procedures we performed for the above key audit matter are as follows:
(1) Assessed the reasonableness of the division of asset group and combination of asset group made
by the management;
(2) Referred to the industry practice to assess whether the management's approach in cash flow
forecast was appropriate and whether the assumptions used were 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 reasonableness;
(5) Understood the basis adopted by the management to determine the growth rate of the business
in the subsequent forecast period and assessed its reasonableness;
(6) Assessed the reasonableness of the discount rate adopted by the management in combination
with market risk-free interest rates, risk factors, etc.;
(7) Used the work of internal evaluation experts to evaluate the appropriateness of the
management's method to assess the recoverable amount of the asset group, and evaluate thereasonableness of the discount rate used by the management in predicting the present value ofcash flows 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) Assessed whether the method used to determine the fair value less costs of disposal was
appropriate;
(10) Assessed the adequacy and appropriateness of the disclosure of goodwill impairment testing.
IV. Other Information
The management of the Company is responsible for the other information. The other informationcomprises the information included in the 2022 annual report, but does not include the consolidatedfinancial statements 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 (23) No. P03194
(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 that thepreparation of financial statements are free from material misstatement, whether due to fraud or error.
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 China Standards on Auditing will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with China Standards on Auditing, we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (23) No. P03194
(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 management' application of the going concern basis of
accounting. Based on audit evidence obtained, concluded on whether the material uncertainty ofevents or conditions that may cast significant doubt on the Company's ability to continue as agoing concern existed. If we concluded that a material uncertainty existed, we were required todraw attention in our auditor's report to the related disclosures in the financial statements or tomodify our opinion, if such disclosures were inadequate. Our conclusions were based on theaudit evidence obtained up to the date of our auditor's report. However, future events orconditions 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 regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identified during our 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 (23) No. P03194
(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
Li Weihua
Chinese Certified Public Accountant
Wang Hongmei
31 March 2023
The auditor's report and the accompanying financial statements are English translations of the Chinese auditor's reportand statutory financial statements prepared under accounting principles and practices generally accepted in the People'sRepublic of China. These financial statements are not intended to present the financial position and results of operationsand cash flows in accordance with accounting principles and practices generally accepted in other countries andjurisdictions. In case the English version does not conform to the Chinese version, the Chinese version prevails.
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AT 31 DECEMBER 2022
Consolidated Balance Sheet
RMB
Item | Notes | 31/12/2022 | 31/12/2021 |
Current Assets: | |||
Cash and bank balances | (VIII)1 | 13,615,928,739.40 | 12,772,349,406.77 |
Held-for-trading financial assets | (VIII)2 | 2,998,781,599.63 | 6,921,831,502.55 |
Notes receivable | (VIII)3 | 36,395,000.00 | 6,081,611.95 |
Accounts receivable | (VIII)4 | 1,276,149,689.44 | 1,320,577,577.81 |
Receivables financing | (VIII)5 | 163,766,913.10 | 238,429,402.71 |
Prepayments | (VIII)6 | 63,627,425.42 | 51,606,794.20 |
Other receivables | (VIII)7 | 948,842,094.30 | 696,276,595.87 |
Inventories | (VIII)8 | 225,122,821.48 | 194,920,136.12 |
Assets held-for-sale | (VIII)9 | - | 337,442,757.28 |
Non-current assets due within one year | (VIII)10 | 902,225,293.93 | 102,356,461.97 |
Other current assets | (VIII)11 | 185,903,140.53 | 339,684,297.41 |
Total current assets | 20,416,742,717.23 | 22,981,556,544.64 | |
Non-current Assets: | |||
Long-term receivables | (VIII)12 | 5,661,327,499.07 | 6,162,713,861.02 |
Long-term equity investments | (VIII)13 | 92,364,293,919.05 | 70,353,451,824.52 |
Investments in other equity instruments | (VIII)14 | 171,945,275.02 | 180,251,798.43 |
Other non-current financial assets | (VIII)15 | 1,745,740,896.41 | 809,515,244.87 |
Investment properties | (VIII)16 | 5,123,690,119.56 | 5,298,238,414.88 |
Fixed assets | (VIII)17 | 32,033,326,083.50 | 31,710,513,230.29 |
Construction in progress | (VIII)18 | 2,413,844,407.64 | 2,557,584,953.92 |
Right-of-use assets | (VIII)19 | 9,342,642,222.33 | 8,743,077,542.19 |
Intangible assets | (VIII)20 | 19,277,065,115.61 | 18,475,412,380.93 |
Development expenditure | (VIII)21 | 17,412,196.16 | 82,391,225.85 |
Goodwill | (VIII)22 | 6,411,426,891.09 | 6,024,160,942.07 |
Long-term prepaid expenses | (VIII)23 | 986,356,904.90 | 975,994,541.52 |
Deferred tax assets | (VIII)24 | 372,927,261.40 | 398,145,710.84 |
Other non-current assets | (VIII)25 | 1,186,789,378.79 | 1,231,092,952.69 |
Total non-current assets | 177,108,788,170.53 | 153,002,544,624.02 | |
TOTAL ASSETS | 197,525,530,887.76 | 175,984,101,168.66 |
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AT 31 DECEMBER 2022
Consolidated Balance Sheet - continued
RMB
Item | Notes | 31/12/2022 | 31/12/2021 |
Current liabilities: | |||
Short-term borrowings | (VIII)26 | 7,164,338,366.18 | 13,651,452,805.36 |
Notes payable | (VIII)27 | - | 1,895,987.17 |
Accounts payable | (VIII)28 | 811,149,397.66 | 843,820,438.51 |
Receipts in advance | (VIII)29 | 9,886,531.59 | 9,313,166.01 |
Contract liabilities | (VIII)30 | 141,899,551.03 | 196,784,525.26 |
Employee benefits payable | (VIII)31 | 936,834,718.13 | 820,416,415.47 |
Taxes payable | (VIII)32 | 917,933,169.09 | 2,162,719,251.68 |
Other payables | (VIII)33 | 1,755,885,258.26 | 2,140,108,341.08 |
Non-current liabilities due within one year | (VIII)34 | 11,641,223,688.95 | 8,268,209,284.17 |
Other current liabilities | (VIII)35 | 3,161,147,525.96 | 2,158,497,775.85 |
Total current liabilities | 26,540,298,206.85 | 30,253,217,990.56 | |
Non-current Liabilities: | |||
Long-term borrowings | (VIII)36 | 12,390,099,177.85 | 7,144,839,870.89 |
Bonds payable | (VIII)37 | 19,088,293,099.02 | 16,670,872,414.14 |
Including: Preferred shares | - | - | |
Perpetual bonds | - | - | |
Lease liabilities | (VIII)38 | 948,350,914.04 | 1,055,194,906.09 |
Long-term payables | (VIII)39 | 3,551,315,590.31 | 3,422,179,366.40 |
Long-term employee benefits payable | (VIII)40 | 639,095,931.43 | 588,681,492.63 |
Provisions | (VIII)41 | 35,365,156.43 | 24,247,302.42 |
Deferred income | (VIII)42 | 1,031,273,189.74 | 1,075,957,884.91 |
Deferred tax liabilities | (VIII)24 | 4,853,271,307.86 | 4,550,417,470.61 |
Other non-current liabilities | (VIII)43 | 186,383,117.00 | 163,065,578.53 |
Total non-current liabilities | 42,723,447,483.68 | 34,695,456,286.62 | |
TOTAL LIABILITIES | 69,263,745,690.53 | 64,948,674,277.18 | |
Shareholders' equity: | |||
Share capital | (VIII)44 | 2,499,074,661.00 | 1,922,365,124.00 |
Capital reserve | (VIII)45 | 34,751,640,835.25 | 23,592,702,758.70 |
Other comprehensive income | (VIII)46 | -691,536,248.44 | -890,125,318.18 |
Special reserve | (VIII)47 | 26,358,259.97 | 9,184,429.12 |
Surplus reserve | (VIII)48 | 1,001,917,449.15 | 961,182,562.00 |
Unappropriated profit | (VIII)49 | 16,679,688,347.09 | 14,205,879,106.49 |
Total equity attributable to shareholders of the Company | 54,267,143,304.02 | 39,801,188,662.13 | |
Minority interests | 73,994,641,893.21 | 71,234,238,229.35 | |
TOTAL SHAREHOLDERS' EQUITY | 128,261,785,197.23 | 111,035,426,891.48 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 197,525,530,887.76 | 175,984,101,168.66 |
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Wang Xiufeng Tu Xiaoping Huang ShengchaoLegal Representative Chief Financial Officer Head of Accounting Department
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AT 31 DECEMBER 2022
Balance Sheet of the Company
RMB
Item | Notes | 31/12/2022 | 31/12/2021 |
Current Assets: | |||
Cash and bank balances | 3,333,936,587.44 | 2,913,761,567.31 | |
Held-for-trading financial assets | 1,502,601,369.86 | 4,355,978,026.30 | |
Other receivables | (XVIII) 1 | 2,749,637,755.23 | 1,256,742,971.01 |
Other current assets | 7,774,206.30 | 3,799,849.79 | |
Total current assets | 7,593,949,918.83 | 8,530,282,414.41 | |
Non-current Assets: | |||
Long-term receivables | 9,240,200.34 | 8,447,395.74 | |
Long-term equity investments | (XVIII) 2 | 53,433,613,471.49 | 38,632,541,293.73 |
Investments in other equity instruments | 144,700,378.28 | 154,017,984.69 | |
Other non-current financial assets | 950,321,309.06 | - | |
Fixed assets | 28,826,135.19 | 1,684,450.22 | |
Construction in progress | 15,435,512.32 | 8,714,886.98 | |
Intangible assets | 50,303,126.12 | 53,886,017.45 | |
Development expenditure | 6,219,670.14 | - | |
Long-term prepaid expenses | 873,700.49 | 1,223,180.69 | |
Deferred tax assets | 928,465.21 | 1,846,793.34 | |
Total non-current assets | 54,640,461,968.64 | 38,862,362,002.84 | |
TOTAL ASSETS | 62,234,411,887.47 | 47,392,644,417.25 | |
Current Liabilities: | |||
Short-term borrowings | - | 6,606,500,555.58 | |
Employee benefits payable | 38,763,907.88 | 36,196,999.78 | |
Taxes payable | 1,251,923.17 | 166,072,684.93 | |
Other payables | 373,569,651.65 | 1,136,030,015.25 | |
Non-current liabilities due within one year | 2,146,233,151.54 | 82,735,342.45 | |
Other current liabilities | 3,017,713,424.64 | 2,007,042,725.30 | |
Total current liabilities | 5,577,532,058.88 | 10,034,578,323.29 | |
Non-current Liabilities: | |||
Long-term borrowings | 4,988,000,000.00 | - | |
Bonds payable | 8,000,000,000.00 | 4,000,000,000.00 | |
Provisions | - | 1,003,584.24 | |
Deferred tax liabilities | 41,622,256.05 | 44,515,821.76 | |
Total non-current liabilities | 13,029,622,256.05 | 4,045,519,406.00 | |
TOTAL LIABILITIES | 18,607,154,314.93 | 14,080,097,729.29 | |
SHAREHOLDERS' EQUITY | |||
Share capital | 2,499,074,661.00 | 1,922,365,124.00 | |
Capital reserve | 37,749,723,642.07 | 27,594,079,596.13 | |
Other comprehensive income | 99,525,686.03 | 105,412,294.52 | |
Surplus reserve | 1,001,917,449.15 | 961,182,562.00 | |
Unappropriated profit | 2,277,016,134.29 | 2,729,507,111.31 | |
TOTAL SHAREHOLDERS' EQUITY | 43,627,257,572.54 | 33,312,546,687.96 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 62,234,411,887.47 | 47,392,644,417.25 |
The accompanying notes form part of the financial statements.
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FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Income Statement
RMB
Item | Notes | 2022 | 2021 |
I. Operating income | (VIII)50 | 16,230,489,127.55 | 15,283,808,174.60 |
Less: Operating costs | (VIII)50 | 9,650,461,712.94 | 9,046,836,182.49 |
Taxes and surcharges | (VIII)51 | 282,249,473.46 | 191,974,244.31 |
Administrative expenses | (VIII)52 | 1,765,094,736.51 | 1,729,160,558.50 |
Research and development expenses | 287,706,178.70 | 217,905,635.67 | |
Financial expenses | (VIII)53 | 2,258,713,672.42 | 1,545,338,597.29 |
Including: Interest expenses | 2,225,162,805.79 | 1,909,848,615.00 | |
Interest income | 469,834,098.05 | 377,563,874.49 | |
Add: Other income | (VIII)54 | 241,648,070.42 | 363,245,161.08 |
Investment income | (VIII)55 | 7,377,655,506.33 | 6,636,949,510.91 |
Including: Income from investments in associates and joint ventures | (VIII)55 | 7,185,182,148.75 | 6,290,957,480.59 |
Gains (Losses) from changes in fair value | (VIII)56 | -129,033,650.11 | 221,242,275.17 |
Gains (Losses) from impairment of credit | (VIII)57 | -223,473,576.55 | -252,953,617.50 |
Gains (Losses) from impairment of assets | (VIII)58 | -22,159,020.20 | -420,492,515.75 |
Gains on disposal of assets | (VIII)59 | 55,130,095.52 | 35,576,459.42 |
II. Operating profit | 9,286,030,778.93 | 9,136,160,229.67 | |
Add: Non-operating income | (VIII)60 | 279,274,452.77 | 43,467,537.50 |
Less: Non-operating expenses | (VIII)61 | 220,442,254.68 | 95,528,693.11 |
III. Gross profit | 9,344,862,977.02 | 9,084,099,074.06 | |
Less: Income tax expenses | (VIII)62 | 1,113,179,679.35 | 1,429,093,084.31 |
IV. Net profit | 8,231,683,297.67 | 7,655,005,989.75 | |
(I) Categorized by continuity of operation | |||
1. Net profit from continuing operation | 8,231,683,297.67 | 7,655,005,989.75 | |
2. Net profit from discontinued operation | |||
(II) Categorized by attribution of ownership | |||
1. Net profit attributable to shareholders of the Company | 3,337,446,222.82 | 2,685,829,204.07 | |
2. Profit or loss attributable to minority shareholders | 4,894,237,074.85 | 4,969,176,785.68 | |
V. Other comprehensive income, net of tax | (VIII) 64 | 1,623,526,873.00 | -711,791,683.91 |
Other comprehensive income attributable to shareholders of the Company, net of tax | 206,102,739.65 | -61,106,763.50 | |
(I) Other comprehensive income that will not be reclassified to profit or loss | -22,706,023.29 | -316,112.17 | |
1. Changes from remeasurement of the defined benefit plan | -12,793,128.73 | -8,714,853.33 | |
2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | -11,550,762.02 | 9,495,957.95 | |
3. Changes in fair value of investments in other equity instruments | 1,637,867.46 | -1,097,216.79 | |
(II) Other comprehensive income that will be reclassified subsequently to profit or loss | 228,808,762.94 | -60,790,651.33 | |
1. Other comprehensive income that can be reclassified to profit or loss under the equity method | -110,193,707.53 | 20,160,707.37 | |
2. Translation differences of financial statements denominated in foreign currencies | 339,002,470.47 | -80,951,358.70 | |
Other comprehensive income attributable to minority interests, net of tax | 1,417,424,133.35 | -650,684,920.41 | |
VI. Total comprehensive income attributable to: | 9,855,210,170.67 | 6,943,214,305.84 | |
Shareholders of the Company | 3,543,548,962.47 | 2,624,722,440.57 | |
Minority shareholders | 6,311,661,208.20 | 4,318,491,865.27 | |
VII. Earnings per share | |||
(I) Basic earnings per share | 1.61 | 1.40 | |
(II) Diluted earnings per share | 1.61 | 1.40 |
The accompanying notes form part of the financial statements.
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FOR THE YEAR ENDED 31 DECEMBER 2022
Income Statement of the Company
RMB
Item | Notes | 2022 | 2021 |
I. Operating income | (XVIII) 3 | 3,669,891.36 | 2,642,001.75 |
Less: Operating costs | (XVIII) 3 | 2,276,202.60 | 2,265,959.45 |
Taxes and surcharges | 1,126,365.82 | 844,763.45 | |
Administrative expenses | 154,023,617.71 | 149,779,423.73 | |
Research and development expenses | 15,151,413.80 | - | |
Financial expenses | 361,633,510.16 | 197,780,513.57 | |
Including: Interest expenses | 491,933,634.55 | 247,594,446.06 | |
Interest income | 144,120,475.54 | 58,523,130.29 | |
Add: Other income | 499,438.35 | 129,405.22 | |
Investment income | (XVIII) 4 | 1,053,614,451.09 | 1,596,809,225.29 |
Including: Income from investments in associates and joint ventures | (XVIII) 4 | 384,257,363.02 | 226,225,111.65 |
Gains (Losses) from changes in fair value | -125,383,212.19 | 5,978,026.30 | |
Gains from disposal of assets | 237,727.99 | - | |
II. Operating profit | 398,427,186.51 | 1,254,887,998.36 | |
Add: Non-operating income | 545,089.04 | 430,740.39 | |
Less: Non-operating expenses | 18.84 | ||
III. Gross profit | 398,972,256.71 | 1,255,318,738.75 | |
Less: Income tax expenses | -8,376,614.77 | 168,246,527.86 | |
IV. Net profit | 407,348,871.48 | 1,087,072,210.89 | |
V. Other comprehensive income, net of tax | 1,625,433.48 | -123,927.98 | |
(I) Other comprehensive income that cannot be reclassified to profit or loss | 1,391,486.75 | -2,225,208.98 | |
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 | 27,649.59 | -1,030,575.00 | |
3. Changes in fair value of investments in other equity instruments | 1,363,837.16 | -1,194,633.98 | |
(II) Other comprehensive income that will be reclassified to profit or loss | 233,946.73 | 2,101,281.00 | |
1. Other comprehensive income that can be reclassified to profit or loss under the equity method | 233,946.73 | 2,101,281.00 | |
2. Translation differences of financial statements denominated in foreign currencies | - | - | |
VI. Total comprehensive income | 408,974,304.96 | 1,086,948,282.91 |
The accompanying notes form part of the financial statements.
- 12 -
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Cash Flow Statement
RMB
Item | Notes | 2022 | 2021 |
I. Cash Flows from Operating Activities: | |||
Cash receipts from sales of goods and rendering of services | 16,547,850,742.82 | 15,567,101,995.95 | |
Receipts of tax refunds | 239,426,543.45 | 142,122,022.96 | |
Other cash receipts relating to operating activities | (VIII) 65(1) | 1,141,794,925.33 | 1,023,728,271.31 |
Sub-total of cash inflows | 17,929,072,211.60 | 16,732,952,290.22 | |
Cash payments for goods purchased and services received | 4,790,513,865.61 | 4,395,758,133.61 | |
Cash payments to and on behalf of employees | 3,612,535,626.78 | 3,313,989,844.94 | |
Payments of various types of taxes | 1,579,320,175.46 | 1,637,763,934.22 | |
Other cash payments relating to operating activities | (VIII) 65(2) | 1,026,325,153.40 | 875,113,806.97 |
Sub-total of cash outflows | 11,008,694,821.25 | 10,222,625,719.74 | |
Net Cash Flows from Operating Activities | (VIII) 66(1) | 6,920,377,390.35 | 6,510,326,570.48 |
II. Cash Flows from Investing Activities: | |||
Cash receipts from disposal and recovery of investments | 40,894,899,081.53 | 17,047,342,468.86 | |
Cash receipts from investments income | 2,429,981,136.20 | 2,956,256,663.23 | |
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 13,812,483.21 | 76,761,096.56 | |
Other cash receipts relating to investing activities | (VIII) 65(3) | 295,064,509.34 | 437,156,571.09 |
Sub-total of cash inflows | 43,633,757,210.28 | 20,517,516,799.74 | |
Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 2,133,837,244.47 | 2,235,972,958.53 | |
Cash payments to acquire investments | 54,509,066,114.35 | 22,831,319,242.28 | |
Other cash payments relating to investing activities | (VIII) 65(5) | 954,802,482.30 | 22,232,300.95 |
Sub-total of cash outflows | 57,597,705,841.12 | 25,089,524,501.76 | |
Net Cash Flows from Investing Activities | -13,963,948,630.84 | -4,572,007,702.02 | |
III. Cash Flows from Financing Activities: | |||
Cash receipts from capital contributions | 10,642,126,434.50 | 1,960,000.00 | |
Including: Cash receipts from capital contributions from minority shareholders of subsidiaries | - | 1,960,000.00 | |
Cash receipts from borrowings | 29,859,438,534.05 | 17,088,797,909.66 | |
Cash receipts from issue of bonds | 19,248,308,650.00 | 9,797,840,000.00 | |
Other cash receipts relating to financing activities | (VIII) 65(6) | 56,303,169.80 | - |
Sub-total of cash inflows | 59,806,176,788.35 | 26,888,597,909.66 | |
Cash repayments of borrowings | 46,432,911,425.29 | 23,334,671,577.97 | |
Cash payments for distribution of dividends or profits or settlement of interest expenses | 4,732,910,153.42 | 4,000,078,191.43 | |
Including: Payments for distribution of dividends or profits to minority shareholders of subsidiaries | 1,900,086,012.38 | 1,600,821,550.56 | |
Other cash payments relating to financing activities | (VIII) 65(7) | 1,124,116,740.35 | 503,530,516.74 |
Sub-total of cash outflows | 52,289,938,319.06 | 27,838,280,286.14 | |
Net Cash Flows from Financing Activities | 7,516,238,469.29 | -949,682,376.48 | |
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | 367,287,004.46 | -159,899,580.91 | |
V. Net Increase in Cash and Cash Equivalents | 839,954,233.26 | 828,736,911.07 | |
Add: Opening balance of cash and cash equivalents | (VIII) 66(2) | 12,727,355,238.36 | 11,898,618,327.29 |
VI. Closing Balance of Cash and Cash Equivalents | (VIII) 66(2) | 13,567,309,471.62 | 12,727,355,238.36 |
The accompanying notes form part of the financial statements.
- 13 -
FOR THE YEAR ENDED 31 DECEMBER 2022
Cash Flow Statement of the Company
RMB
Item | Notes | 2022 | 2021 |
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 | 108,295,282.75 | 235,966,260.63 | |
Sub-total of cash inflows | 108,295,282.75 | 236,945,958.68 | |
Cash payments for goods purchased and services received | 86,280.54 | 40,000.00 | |
Cash payments to and on behalf of employees | 102,305,409.21 | 97,250,483.46 | |
Payments of various types of taxes | 162,077,694.07 | 210,087,464.31 | |
Other cash payments relating to operating activities | 64,738,420.24 | 258,672,489.54 | |
Sub-total of cash outflows | 329,207,804.06 | 566,050,437.31 | |
Net Cash Flows from Operating Activities | -220,912,521.31 | -329,104,478.63 | |
II. Cash Flows from Investing Activities: | |||
Cash receipts from disposal and recovery of investments | 33,317,450,238.74 | 10,580,000,000.00 | |
Cash receipts from investment income | 770,719,728.64 | 617,411,256.40 | |
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 1,002,668.00 | - | |
Other cash receipts relating to investing activities | 50,285,632.68 | 340,000,000.00 | |
Sub-total of cash inflows | 34,139,458,268.06 | 11,537,411,256.40 | |
Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 42,642,426.69 | 7,311,253.87 | |
Cash payments to acquire investments | 45,942,721,212.13 | 14,416,331,314.09 | |
Other cash payments relating to investing activities | 1,523,809,248.36 | 588,583,691.07 | |
Sub-total of cash outflows | 47,509,172,887.18 | 15,012,226,259.03 | |
Net Cash Flows from Investing Activities | -13,369,714,619.12 | -3,474,815,002.63 | |
III. Cash Flows from Financing Activities: | |||
Cash receipts from capital contributions | 10,642,126,434.50 | - | |
Cash receipts from borrowings | 9,171,668,674.85 | 7,600,000,000.00 | |
Cash receipts from issue of bonds | 16,000,000,000.00 | 9,797,840,000.00 | |
Other cash receipts relating to financing activities | 6,303,169.80 | 915,000,000.00 | |
Sub-total of cash inflows | 35,820,098,279.15 | 18,312,840,000.00 | |
Cash repayments of borrowings | 20,529,408,504.85 | 11,381,742,457.36 | |
Cash payments for distribution of dividends or profits or settlement of interest expenses | 1,257,422,374.13 | 965,552,501.17 | |
Other cash payments relating to financing activities | 23,179,821.90 | 1,274,938.84 | |
Sub-total of cash outflows | 21,810,010,700.88 | 12,348,569,897.37 | |
Net Cash Flows from Financing Activities | 14,010,087,578.27 | 5,964,270,102.63 | |
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | 714,582.29 | -179,610.83 | |
V. Net Increase in Cash and Cash Equivalents | 420,175,020.13 | 2,160,171,010.54 | |
Add: Opening balance of cash and cash equivalents | 2,913,761,567.31 | 753,590,556.77 | |
VI. Closing Balance of Cash and Cash Equivalents | 3,333,936,587.44 | 2,913,761,567.31 |
The accompanying notes form part of the financial statement
- 14 -
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Statement of Changes in Shareholders' Equity
RMB
Item | 2022 | |||||||
Equity attributable to shareholders of the Company | 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 | 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 |
Add: Changes in accounting policies | - | - | - | - | - | - | - | - |
Corrections of prior period errors | - | - | - | - | - | - | - | - |
Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
Others | - | - | - | - | - | - | - | - |
II. Opening 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 |
III. Changes for the year | 576,709,537.00 | 11,158,938,076.55 | 198,589,069.74 | 17,173,830.85 | 40,734,887.15 | 2,473,809,240.60 | 2,760,403,663.86 | 17,226,358,305.75 |
(I) Total comprehensive income | - | - | 206,102,739.65 | - | - | 3,337,446,222.82 | 6,311,661,208.20 | 9,855,210,170.67 |
(II) Owners' contributions and reduction in capital | 576,709,537.00 | 11,158,938,076.55 | - | - | - | - | -683,588,937.26 | 11,052,058,676.29 |
1. Ordinary shares contributed by shareholders | 576,709,537.00 | 10,055,823,793.40 | - | - | - | - | 971,135,730.31 | 11,603,669,060.71 |
2. Capital contribution from holders of other equity instruments | - | - | - | - | - | - | - | |
3. Share-based payment recognized in shareholders' equity | - | -4,365,536.60 | - | - | - | - | -3,266,354.51 | -7,631,891.11 |
4. Others | - | 1,107,479,819.75 | - | - | - | - | -1,651,458,313.06 | -543,978,493.31 |
(III) Profit distribution | - | - | - | - | 40,734,887.15 | -871,150,652.13 | -2,897,141,819.77 | -3,727,557,584.75 |
1. Transfer to surplus reserve | - | - | - | - | 40,734,887.15 | -40,734,887.15 | - | - |
2. Transfer to general risk reserve | - | - | - | - | - | - | - | - |
3. Distribution to shareholders | - | - | - | - | - | -826,617,003.32 | -2,698,588,539.77 | -3,525,205,543.09 |
4. Others | - | - | - | - | - | -3,798,761.66 | -198,553,280.00 | -202,352,041.66 |
(IV) Transfers within shareholders' equity | - | - | -7,513,669.91 | - | - | 7,513,669.91 | - | - |
1. Capitalization of capital reserve | - | - | - | - | - | - | - | - |
2. Capitalization of surplus reserve | - | - | - | - | - | - | - | - |
3. Loss offset by surplus reserve | - | - | - | - | - | - | - | - |
4. Retained earnings carried forward from other comprehensive income | - | - | -7,513,669.91 | - | - | 7,513,669.91 | - | - |
5. Others | - | - | - | - | - | - | - | - |
(V) Special reserve | - | - | - | 17,173,830.85 | - | - | 29,473,212.69 | 46,647,043.54 |
1. Transfer to special reserve in the year | - | - | - | 62,696,039.72 | - | - | 86,478,912.67 | 149,174,952.39 |
2. Amount utilized in the year | - | - | - | -45,522,208.87 | - | - | -57,005,699.98 | -102,527,908.85 |
(VI) Others | - | - | - | - | - | - | - | - |
IV. Closing balance of the year | 2,499,074,661.00 | 34,751,640,835.25 | -691,536,248.44 | 26,358,259.97 | 1,001,917,449.15 | 16,679,688,347.09 | 73,994,641,893.21 | 128,261,785,197.23 |
- 15 -
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Statement of Changes in Shareholders' Equity - continued
RMB
Item | 2021 | |||||||
Equity attributable to shareholders of the Company | 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. Distribution 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 year | - | - | - | 48,296,277.57 | - | - | 52,595,662.54 | 100,891,940.11 |
2. Amount utilized in the year | - | - | - | -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 |
The accompanying notes form part of the financial statements.
- 16 -
FOR THE YEAR ENDED 31 DECEMBER 2022
The Company's Statement of Changes in Shareholders' Equity
RMB
Item | 2022 | ||||||
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 | 27,594,079,596.13 | 105,412,294.52 | - | 961,182,562.00 | 2,729,507,111.31 | 33,312,546,687.96 |
Add: Changes in accounting policies | - | - | - | - | - | - | - |
Corrections of prior period errors | - | - | - | - | - | - | - |
Others | - | - | - | - | - | - | - |
II. Opening 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 |
III. Changes for the year | 576,709,537.00 | 10,155,644,045.94 | -5,886,608.49 | - | 40,734,887.15 | -452,490,977.02 | 10,314,710,884.58 |
(I) Total comprehensive income | - | - | 1,625,433.48 | - | - | 407,348,871.48 | 408,974,304.96 |
(II) Owners' contributions and reduction in capital | 576,709,537.00 | 10,155,644,045.94 | - | - | - | - | 10,732,353,582.94 |
1. Ordinary shares contributed by shareholders | 576,709,537.00 | 10,055,823,793.40 | - | - | - | - | 10,632,533,330.40 |
2. Share-based payment recognized in shareholders' equity | - | -6,388,558.75 | - | - | - | - | -6,388,558.75 |
3. Others | - | 106,208,811.29 | - | - | - | - | 106,208,811.29 |
(III) Profit distribution | - | - | - | - | 40,734,887.15 | -867,351,890.47 | -826,617,003.32 |
1. Transfer to surplus reserve | - | - | - | - | 40,734,887.15 | -40,734,887.15 | - |
2. Transfer to general risk reserve | - | - | - | - | - | - | - |
3. Distribution to shareholders | - | - | - | - | - | -826,617,003.32 | -826,617,003.32 |
4. Others | - | - | - | - | - | - | - |
(IV) Transfers within shareholders' equity | - | - | -7,512,041.97 | - | - | 7,512,041.97 | - |
1. Capitalization of capital reserve | - | - | - | - | - | - | - |
2. Capitalization of surplus reserve | - | - | - | - | - | - | - |
3. Loss offset by surplus reserve | - | - | - | - | - | - | - |
4. Retained earnings carried forward from other comprehensive income | - | - | -7,512,041.97 | - | - | 7,512,041.97 | - |
5. Others | - | - | - | - | - | - | - |
(V) Special reserve | - | - | - | - | - | - | - |
1. Transfer to special reserve in the year | - | - | - | - | - | - | - |
2. Amount utilized in the year | - | - | - | - | - | - | - |
(VI) Others | - | - | - | - | - | - | - |
IV. Closing balance of the year | 2,499,074,661.00 | 37,749,723,642.07 | 99,525,686.03 | - | 1,001,917,449.15 | 2,277,016,134.29 | 43,627,257,572.54 |
- 17 -
FOR THE YEAR ENDED 31 DECEMBER 2022
The Company's Statement of Changes in Shareholders' Equity - continued
RMB
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. Distribution 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 year | - | - | - | - | - | - | - |
2. Amount utilized in the year | - | - | - | - | - | - | - |
(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 |
The accompanying notes form part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 18 -
(I) GENERAL INFORMATION OF THE COMPANY
China Merchants Port Group Co., Ltd. (hereinafter referred to as the "Company") is a stocklimited 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 31 March 2023.
See Note (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 year.
(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 2022, the Group had total current liabilities in excess of total current assets ofRMB 6,123,555,489.62. As at 31 December 2022, the Group had available and unused line ofcredit and bonds amounting to RMB 74,112,485,433.51, which is greater than the balance of thenet current liabilities. The Group can obtain financial support from the available line of credit andbonds when needed. Therefore, the financial statements have been prepared on a going concernbasis.
(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 at 31December 2022, and the Company's and consolidated results of operations and cash flows for theyear then ended.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
1. Accounting year
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 is 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 overseas subsidiaries choose theirfunctional currencies on the basis of the primary economic environment in which they operate.The Company adopts 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.
In the measurement of non-financial assets at fair value, market participants' ability to best utilizesuch assets to generate most economic benefits, or the ability to sell such assets to other marketparticipants who are able to best utilize the assets to generate economic benefits is taken intoaccount.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
4. Basis of accounting and principle of measurement - continued
For financial assets of which transaction prices are the fair value on initial recognition, and ofwhich valuation technique involving unobservable input is used in subsequent measurement, thevaluation technique in the course of valuation is adjusted to enable the result of initial recognitionbased on the valuation technique equal to 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 acquiree. 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 recognizes the contingentconsideration provided in the contract as an asset, as part of the consideration transferred in thebusiness combination, and includes it in the cost of business combination at the fair value at theacquisition date. Within 12 months after the acquisition, where the contingent consideration needsto be adjusted as new or further evidences are obtained in respect of the circumstances existed atthe acquisition date, the adjustment shall be recognized and the amount originally recognized ingoodwill or non-operating income shall be adjusted. A change in or adjustment to the contingentconsideration under other circumstances shall be accounted for in accordance with AccountingStandards for Business Enterprise No. 22 - Financial Instruments: Recognition and Measurementand Accounting Standards 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 recognizes 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 recognizedand measured on the acquisition date.
Goodwill arising from 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 on thebasis 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 recognized in profit or loss for the period and shall not bereversed in 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 in the above elements of the definition ofcontrol.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary 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 cash flow statement, as appropriate.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 cash flowstatement, 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 cash flow statement, 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 Company is treated as minorityinterests and presented as "minority interests" in the consolidated balance sheet under the lineitem of shareholders' equity. The portion of net profits or losses of subsidiaries for the periodattributable to minority interests is presented as "minority interests" in the consolidated incomestatement under the line item of "net profit". The portion of comprehensive income of subsidiariesfor the period attributable to minority interests is presented as "total comprehensive incomeattributable to minority shareholders" in the consolidated income statement under the line item of"total comprehensive income".
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 owners' equity of thesubsidiary, the excess amount is still allocated against minority interests.
Acquisition of minority interests or disposal of interests in a subsidiary that does not result in theloss of control over the subsidiary is accounted for as equity transactions. The carrying amountsof the Company's interests and minority interests are adjusted to reflect the changes in theirrelative interests in the subsidiary. The difference between the amount by which the minorityinterests are adjusted and the fair value of the consideration paid or received is adjusted to capitalreserve. If the capital reserve is not sufficient to absorb the difference, the excess is adjustedagainst retained earnings.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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, it shall be dealtwith based on whether it belongs to 'package deal': if it belongs to 'package deal', it will beaccounted for as a transactions to acquire control; if it does not belong to 'package deal', it will beaccounted for as a transaction to acquire control on acquisition date, and the fair value of acquiree'shares held before acquisition date will be revalued, and the difference between fair value andcarrying amount will be recognized in profit or loss of the current period; if acquiree' shares heldbefore acquisition date involve changes in other comprehensive income and other changes inowners' equity under equity method, it will be transferred to income of acquisition date.
When the Group loses control over a subsidiary due to disposal of equity investment or otherreasons, any retained interest is 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 amortized cost) of monetary items at fair value through other comprehensive income arerecognized as other comprehensive income.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 differencesarising from changes in exchange rates are recognized as "exchange differences arising fromtranslation of financial statements denominated in foreign currencies" in other comprehensiveincome, and in profit or 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 when 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 in exchange rate) and isrecognized in profit or 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 from 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 profitor loss. For partial disposals of equity interests in foreign operations which are associates or jointventures, the proportionate share of the accumulated exchange differences arising from translationof 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 the financial instrument.
For financial assets purchased or sold in regular ways, assets to be received and liabilities to beassumed are recognized on the transaction date or assets sold are derecognized on that date.
Financial assets and financial liabilities are initially measured at fair value. For financial assetsand financial liabilities at fair value through profit or loss, transaction costs are immediatelyrecognized in profit or loss. For other financial assets and financial liabilities, transaction costs areincluded in their initial recognized amounts. Upon initial recognition of contract assets, accountsreceivable and notes receivable that do not contain significant financing component or withoutconsidering the financing component included in the contract with a term not exceeding one yearunder the Accounting Standards for Business Enterprises No. 14 - Revenue ("RevenueStandards"), the Group adopts the transaction price as defined in the Revenue Standards for initialmeasurement.
The effective interest method is a method of calculating the amortized cost of a financial asset or afinancial liability and of allocating the interest income or interest expenses over the relevantaccounting periods.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 thefinancial asset or to the amortized cost of the financial liability. When calculating the effectiveinterest rate, the Group estimates future cash flows considering all contractual terms of thefinancial asset or financial liability (such as repayment in advance, extension, call option or othersimilar options etc.) (without considering 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 the contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding, and the financialasset is held within a business model whose objective is achieved by collecting contractual cashflows, the Group classifies such financial asset as financial assets at amortized cost, which includecash and bank balances, notes receivable, accounts receivable, other receivables, debtinvestments, and long-term receivables etc.
If the contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding, and the financialasset is held within a business model whose objective is achieved by both collecting contractualcash flows and selling the financial asset, the Group classifies such financial asset as financialassets at FVTOCI. The accounts receivable and notes receivable classified as at FVTOCI uponacquisition are presented under receivables financing, while the remaining items due within oneyear (inclusive) upon acquisition are presented under other current assets. Other financial assets ofsuch type are presented as other debt investments if they are due after one year since theacquisition, or presented under non-current assets due within one year if they are due within oneyear (inclusive) since the balance sheet date.
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 investments in other equity instruments.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
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.
? Financial assets not satisfying the criteria of classification as financial assets at amortized
cost and financial assets at FVTOCI are classified as financial assets at FVTPL.? Upon initial recognition, the Group may irrevocably designate the financial assets as atFVTPL if doing so eliminates or significantly reduces accounting mismatch.
Financial assets at FVTPL other than derivative financial assets are presented as financial assetsheld-for-trading. Financial assets with a maturity over one year since the balance sheet date (orwithout a fixed maturity) and expected to be held for over one year are presented under 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 grosscarrying amount of financial assets multiplying effective interest rate, except for the followingcircumstances:
? For purchased or originated credit-impaired financial assets, the Group calculates and
recognizes the interest income based on amortized cost of the financial asset and the
effective interest rate through credit adjustment since initial recognition.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
For financial assets classified as at FVTOCI, except for the impairment losses or gains and theinterest income and exchange losses or gains calculated using the effective interest method whichare included in profit or loss for the period, the changes in fair value are included in othercomprehensive income. The amounts included in profit or loss for each period are equivalent tothat as if the financial assets have been always measured at amortized cost. Upon derecognition,the accumulated gains or losses previously included in other comprehensive income aretransferred to profit or loss for the period.
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 value and dividends and interest related to the financial assets are recognized inprofit or loss.
10.2 Impairment of financial instruments
For financial assets at amortized cost, financial assets classified as at FVTOCI, lease receivables,contract assets, loan commitments that are not financial liabilities at FVTPL, financial liabilitiesthat are not at FVTPL and financial guarantee contracts that are not qualified for derecognitiondue to the transfer of financial assets or financial liabilities arising from continuing involvementof the transferred financial assets, the Group accounts for the impairment and recognizes theprovision for losses on the basis of expected credit loss ("ECL").
For all contract assets, accounts receivable and notes receivable arising from transactionsregulated by Revenue Standards, and lease receivables arising from transactions regulated by theAccounting Standards for Business Enterprises No. 21 - Leases, the Group recognizes theprovision for losses at an amount equivalent to lifetime ECL.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
For other financial instruments (other than purchased or originated credit-impaired financialassets), the Group assesses the changes in credit risk since initial recognition of relevant financialinstruments at each balance sheet date. If the credit risk has increased significantly since initialrecognition of the financial instruments, the Group recognizes the provision for losses at anamount equivalent to lifetime ECL; if the credit risk has not increased significantly since initialrecognition of the financial instruments, the Group recognizes the provision for losses at anamount equivalent to 12-month ECL. The increase or reversal of credit loss provision for financialassets other than those classified as at FVTOCI is recognized as impairment loss or gain andincluded in profit or loss for the period. For financial assets classified as at FVTOCI, the creditloss provision is recognized in other comprehensive income and the impairment loss or gain isincluded in profit or loss for the period without reducing the carrying amount of the financialassets in the balance sheet.
Where the Group has measured the provision for losses at an amount equivalent to lifetime ECLof a financial instrument in prior accounting period, but the financial instrument no longersatisfies the criteria of significant increase in credit risk since initial recognition at the currentbalance sheet date, the Group recognizes the provision for losses of the financial instrument at anamount equivalent to 12-month ECL at the current balance sheet date, with any resulting reversalof provision for losses recognized as impairment gains in profit or loss for the period.
10.2.1 Significant increase of credit risk
The Group uses reasonable and supportable forward-looking information to assess whether thecredit risk has increased significantly since initial recognition by comparing the risk of a defaultoccurring on the financial instrument at the balance sheet date with the risk of a default occurringon the financial instrument at the date of initial recognition. For loan commitments and financialguarantee contracts, the date on which the Group becomes a party to the irrevocable commitmentis considered to be the date of initial recognition in the application of criteria related to thefinancial instrument for impairment.
In particular, the following information is taken into account when assessing whether credit riskhas increased significantly:
(1) Significant changes in internal price indicators resulting from changes in credit risk;
(2) Significant changes in the rates or other terms of an existing financial instrument if the
instrument was newly originated or issued at the balance sheet date (such as morestringent covenants, increased amounts of collateral or guarantees, or higher rate of return,etc.);
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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: - continued
(3) Significant changes in the external market indicators of credit risk of the same financial
instrument or similar financial instruments with the same expected duration. Theseindicators include: credit spreads, credit default swap prices against borrower, length oftime and extent to which the fair value of financial assets is less than their amortized cost,and other market information related to the borrower (such as the borrower's debtinstruments or changes in the price of equity instruments);
(4) An actual or expected significant change in the financial instrument's external credit
rating;
(5) An actual or expected decrease in the internal credit rating for the debtor;
(6) Adverse changes in business, financial or economic conditions that are expected to cause a
significant decrease 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 increase in credit risk of other financial instruments issued by the same debtor;
(9) Significant adverse changes in the regulatory, economic, or technological environment of
the debtor;
(10) Significant changes in the value of the collaterals or the quality of guarantees or credit
enhancements provided by third parties, which are expected to reduce the debtor'seconomic motives to repay within the time limit specified in contract or affect theprobability of default;
(11) Significant change in the debtor's economic motives to repay within the time limit
specified in contract;
(12) Expected changes to loan contract, including the exemption or revision of contractual
obligations, the granting of interest-free periods, the jump in interest rates, the requirementfor additional collateral or guarantees, or other changes in the contractual framework forfinancial instruments that may result from the breach of contract;
(13) Significant change in the expected performance and repayment of the debtor;
(14) Significant change in the method used by the Group to manage the credit of financial
instruments.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 an event or several events that are expected to have adverse impact on the future cash flowsof the financial assets have occurred, the financial assets become credit-impaired. The evidencesof credit impairment of financial assets include the following observable information:
(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 the financial asset because of financial
difficulties of the issuer or the debtor.
(6) Purchase or origination of a financial asset with a large scale of discount, which reflects
the fact of credit loss.
Based on the Group's internal credit risk management, the Group considers an event of defaultoccurs when information developed internally or obtained from external sources indicates that thedebtor is unlikely to pay its creditors, including the Group, in full (without taking into account anycollaterals held by the Group).
10.2.3 Determination of expected credit loss
The Group determines the credit losses on lease receivables on an individual asset basis, and onnotes receivable, accounts receivable, other receivables, contract assets, debt investments andother debt investments on a portfolio basis using an impairment matrix for related financialinstruments. The financial instruments are grouped based on common risk characteristics. Thecommon credit risk characteristics adopted by the Group include credit risk rating, initialrecognition date, remaining contractual term, industry of the debtor, geographical location of thedebtor, etc.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 - continued
The Group determines the ECL of relevant financial instruments using the following methods:
? For financial assets, the credit loss is the present value of the difference between the
contractual cash flows that are due to the Group under the contract and the cash flows thatthe Group expects to receive;? For lease receivables, the credit loss is 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 credit loss is 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 financial guarantee contracts (refer to Note IV, 10.4.1.3 for the detail of accountingpolicies), the credit loss is the present value of the expected payments to reimburse theholder for the credit loss incurred less any amounts that the Group expects to receive fromthe holder, the debtor or any other party.? For financial assets credit-impaired at the balance sheet date, but not purchased or originatedcredit-impaired, the credit loss is the difference between the gross carrying amount of thefinancial assets and the present value of estimated future cash flows discounted at theoriginal effective interest rate.
The factors reflected by the Group's measurement of ECL of financial instruments include:
unbiased probability weighted average amount recognized by assessing a series of possibleresults; time value of money; reasonable and supportable information related to historical events,current condition and forecast of future economic position that is available without undue cost oreffort at the balance sheet date.
10.2.4 Write-down of financial assets
When the Group no longer reasonably expects that the contractual cash flows of financial assetscan be collected in aggregate or in part, the Group will directly write down the gross carryingamount of the financial assets, which constitutes derecognition of relevant financial assets.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
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 relevantliabilities is the carrying amount of financial assets transferred with continuing involvementless fair value of the Group's retained rights (if the Group retains relevant rights upontransfer of financial assets) with addition of fair value of obligations assumed by the Group(if the Group assumes relevant obligations upon transfer of financial assets). Accordingly,the fair value of relevant rights and obligations shall be measured on an individual basis.
For the transfer of a financial asset in its entirety that satisfies the derecognition criteria, thedifference between (1) the carrying amount of the financial asset transferred and (2) the sum ofthe consideration received from the transfer and any cumulative gain or loss that has beenrecognized in other comprehensive income, is recognized in profit or loss. Where the transferredassets are non-trading equity instrument investments designated as at FVTOCI, cumulative gainsor losses previously recognized in other comprehensive income are transferred out and included inretained earnings.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.3 Transfer of financial assets - continued
If a part of the transferred financial asset qualifies for derecognition, the overall carrying amountof the financial asset prior to transfer is allocated between the part that continues to be recognizedand the part that is derecognized, based on the respective fair value of those parts at the date oftransfer. The difference between (1) the carrying amount allocated to the part derecognized on thedate of derecognition; and (2) the sum of the consideration received for the part derecognized andany cumulative gain or loss allocated to the part derecognized which has been previouslyrecognized in other comprehensive income, is recognized in profit or loss. Where the transferredassets are non-trading equity instrument investments designated as at FVTOCI, cumulative gainsor losses previously recognized in other comprehensive income are transferred out and included inretained earnings.
For a transfer of a financial asset in its entirety that does not satisfy the derecognition criteria, theGroup continues to recognize the transferred financial asset in its entirety. The considerationreceived from transfer of assets is recognized as a liability upon receipt.
10.4 Classification of financial liabilities and equity instruments
Financial instruments issued by the Group or their components are classified into financialliabilities or equity instruments on the basis of the substance of the contractual arrangements andthe economic nature not only the legal form, together with the definition of financial liability andequity instrument on initial 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.
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
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
A financial liability is classified as held for trading if one of the following conditions is satisfied: -continued
? 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.
Held-for-trading financial liabilities are subsequently measured at fair value. Any gains or lossesarising from changes in fair value and any dividends or interest expenses paid on the financialliabilities are recognized in profit or loss.
For a financial liability designated as at FVTPL, the amount of changes in fair value of thefinancial liability that are attributable to changes in the credit risk of that liability shall bepresented in other comprehensive income, while other changes in fair value are included in profitor loss for the current period. Upon the derecognition of such financial liability, the accumulatedamount of changes in fair value that are attributable to changes in the credit risk of that liability,which was recognized in other comprehensive income, is transferred to retained earnings. Anydividend or interest expense on the financial liabilities is recognized in profit or loss. If theaccounting treatment for the impact of the change in credit risk of such financial liability in theabove ways would create or enlarge an accounting mismatch in profit or loss, the Group shallpresent all gains or losses on that liability (including the effects of changes in the credit risk ofthat liability) in profit or loss for the period.
For financial liabilities arising from contingent consideration recognized by the Group as theacquirer in the business combination not involving enterprises under common control, the Groupmeasures such financial liabilities at fair value through profit or loss, and includes the changes inthe financial liabilities in profit or loss for the period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
10.4.1.2 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.
If the modification or renegotiation for the contract by the Group and its counterparties does notresult in derecognition of a financial liability subsequently measured at amortized cost but thechanges 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 thecarrying amount of the financial liability based on the present value of renegotiated or modifiedcontractual cash flows discounted at the original effective interest rate of the financial liability.For all costs or expenses arising from modification or renegotiation of the contract, the Group willadjust the modified carrying amount of the financial liability and make amortization during theremaining term 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 standards.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 - continued
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 in equity. Changes in fair value ofequity instruments are not recognized by the Group. Transaction costs related to equitytransactions are deducted from equity.
The Group recognizes the distribution to holders of the equity instruments as distribution ofprofits, and 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 measured at fair value.
Derivatives embedded in hybrid contracts with a financial asset host are not separated by theGroup. The hybrid contract shall apply the relevant accounting standards regarding theclassification of financial assets as a whole.
Derivatives embedded in hybrid contracts with hosts that are not financial assets are separated andtreated as separate derivatives by the Group when they meet the following conditions:
(1) the economic characteristics and risks of the embedded derivative are not closely related 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.5 Derivatives and embedded derivatives - continued
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 it is 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 instruments
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.
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 instrument isremained in equity instrument. The expiry or conversion of convertible bonds will not result inloss or gain.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.7 Compound instruments - continued
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 values. 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 amortized cost is reclassified as a financial asset at fair value throughprofit or loss ("FVTPL") by the Group, such financial asset is measured at fair value at the date ofreclassification and the difference between the original carrying amount and the fair value isrecognized in profit or loss for the period.
Where a financial asset at amortized cost is reclassified as a financial asset at fair value throughother comprehensive income ("FVTOCI") by the Group, such financial asset is measured at fairvalue at the date of reclassification, and the difference between the original carrying amount andthe fair value is recognized in other comprehensive income.
Where a financial asset at FVTOCI is reclassified as a financial asset at amortized cost by theGroup, the accumulated gains or losses previously recognized in other comprehensive income aretransferred out and the fair value at the date of reclassification is adjusted. The adjusted fair valueis determined as the new carrying amount, as if the financial asset has been always measured atamortized cost. The reclassification of the financial asset shall not affect its effective interest rateor the measurement of ECL.
Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group,such financial asset continues to be measured 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 amortized cost by theGroup, the fair value at the date of reclassification is determined as the new gross carryingamount.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 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 loss rate of notesreceivable, accounts receivable, other receivables and long-term receivables. Basis fordetermining ratings and the expected loss rates are as follows:
Internal credit rating | Basis for determining portfolio | Expected average 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 customers may have overdue payment based on historical experience but they can make repayments. | 0.10-0.30 |
C | The evidence indicates that the overdue credit risks of the customers are significantly increased and there is probability of default on payment. | 0.30-50.00 |
D | The evidence indicates that the accounts receivable are impaired or the customers have significant financial difficulty. The amounts cannot be recovered in the foreseeable future. | 50.00-100.00 |
12. Receivables financing
Notes receivable classified as at FVTOCI should be listed as receivables financing within oneyear (including one year) from the date of acquisition. Those over one year should be listed asother debt investments. For related accounting policies, refer to Note (IV) 10.
13. Inventories
13.1 Category of inventories
The Group's inventories mainly include raw materials, merchandise and others. Inventories areinitially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversionand other expenditures incurred in bringing the inventories to their present location and condition.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
13. Inventories - continued
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 inventories is made based on the excess of cost of inventory overits net realizable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances thatpreviously caused inventories to be written down below cost no longer exist so that the netrealizable value of inventories is higher than their cost, the original provision for decline in valueis reversed and the reversal is included in profit or loss for the period.
13.4 Inventory count system
The perpetual inventory system is maintained for stock system.
13.5 Amortization method 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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 (i.e., depending on the passage of time only) right toreceive consideration from the customer is separately presented as receivables.
14.2 Determination and accounting treatment for expected credit loss ("ECL") of contract
assets
Refer to Note (IV) 10.2 "Impairment of financial instruments" for determination and accountingtreatment for expected credit loss of contract assets.
15. Assets held-for-sale
Non-current assets and disposal groups are classified as held-for-sale category when the Grouprecovers the carrying amount through a sale (including an exchange of nonmonetary assets thathas commercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held-for-sale are required to satisfy thefollowing conditions: (1) the asset or disposal group is available for immediate sale in its presentcondition subject only to terms that are usual and customary for sales of such asset or disposalgroup; (2) the sale is highly probable, i.e. the Group has made a resolution about selling plan andobtained a confirmed purchase commitment and the sale is expected to be completed within oneyear.
When there is loss of control over a subsidiary due to disposal of investments in the subsidiary,and the proposed disposal of investments in the subsidiary satisfies classification criteria of held-for-sale category, the investments in subsidiaries are classified as held-for-sale category as awhole in the Company's separate financial statements, and all assets and liabilities of subsidiariesare classified as held-for-sale category in the consolidated financial statements regardless ofwhether that part of the equity investments are remained after the sale.
The Group measures the non-current assets or disposal groups classified as held-for-sale at thelower of their carrying amount and fair value less costs to sell. Where the carrying amount ishigher than the net amount of fair value less costs to sell, carrying amount should be reduced tothe net amount of fair value less costs to sell, and such reduction is recognized in impairment lossof assets and included in profit or loss for the period. Meanwhile, provision for impairment ofheld-for-sale assets is made. When there is an increase in the net amount of fair value of non-current assets held-for-sale less costs to sell at the balance sheet date, the original deductionshould be reversed in impairment loss of assets recognized after the classification of held-for-salecategory, and the reversal amount is included in profit or loss for the period. The impairmentlosses recognized before such assets are classified as held-for-sale category shall not be reversed.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Assets held-for-sale - continued
Non-current assets classified as held-for-sale or non-current assets in disposal groups are notdepreciated or amortized, and interest and other costs of liabilities of disposal groups classified asheld-for-sale continue to be recognized.
All or part of equity investments in associates or joint ventures are classified as held-for-saleassets. For the part that is classified as held-for-sale, it is no longer accounted for using the equitymethod since the date of the classification.
If an asset or a disposal group has been classified as held-for-sale but the recognition criteria forheld-for-sale are no longer met, the Group shall cease to classify the asset or disposal group asheld-for-sale. It shall be measured at the lower of (1) the carrying amount before the asset ordisposal group was classified as held-for-sale, adjusted for any depreciation, amortization orimpairment that would have been recognized had the asset or disposal group not been classified asheld-for-sale; and (2) the recoverable amount at the date of the decision not to sell.
For equity investments in associates or joint ventures that are classified as held-for-sale but theclassification criteria for held-for-sale are no longer met, such investments are accounted forretrospectively using the equity method from the date when they are classified as held-for-sale.The financial statements for the period in which the held-for-sale assets are held are adjustedaccordingly.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
For a long-term equity investment acquired through business combination involving enterprisesunder common control, share of carrying amount of owners' equity of the acquiree in theconsolidated financial statements of ultimate controlling party is recognized as initial investmentcost of long-term equity investment at the date of combination. The difference between initialinvestment cost of long-term equity investment and cash paid, non-cash assets transferred andcarrying amount of liabilities assumed, is adjusted in capital reserve. If the balance of capitalreserve is not sufficient to absorb the difference, any excess is 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 is the share of carrying amount of owners'equity of the acquiree in the consolidated financial statements of ultimate controlling party at thedate of combination. The aggregate face value of the shares issued is accounted for as sharecapital. The difference between the initial investment cost and the aggregate face value of theshares issued is adjusted to capital reserve. If the balance of capital reserve is not sufficient toabsorb the difference, any excess is adjusted to retained earnings. Where equity interests in anacquiree are acquired in stages through multiple transactions ultimately constituting a businesscombination involving enterprises under common control, the acquirer shall determine if thesetransactions are considered to be a "package deal". If yes, these transactions are accounted for as asingle transaction where control is obtained. If no, the initial investment cost of the long-termequity investment is the share of carrying amount of owners' equity of the acquiree in theconsolidated financial statements of ultimate controlling party at the date of combination. Thedifference between the initial investment cost and the sum of carrying amount of equityinvestments previously held in the acquiree and the new investment cost is adjusted to capitalreserve. If the balance of capital reserve is not sufficient to absorb the difference, any excess isadjusted to retained earnings. Other comprehensive income recognized for the previously heldequity investments by accounting treatment of equity method or non-trading equity instrumentinvestments designated as at FVTOCI is not subject to accounting treatment temporarily.
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 expenses incurred by the acquirer in respect of auditing, legal services, valuation andconsultancy services and other associated administrative expenses attributable to the businesscombination are recognized in profit or loss when they are incurred.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
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 Standards 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. Whenadditional investment is made or the investment is recouped, the cost of the long-term equityinvestment is adjusted accordingly. Investment income is recognized in the period in accordancewith the attributable share of cash dividends or profit distributions declared by the investee.
16.3.2 Long-term equity investments accounted for using the equity method
Except for investments in associates and joint ventures classified as held-for-sale partly or wholly,the Group accounts for investment in associates and joint ventures using the equity method. Anassociate is an entity over which the Group has significant influence and a joint venture is a jointarrangement whereby the Group only has rights to the net assets of the arrangement.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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, the Group recognizes its share of the net profit or loss and othercomprehensive income of the investee for the period as investment income and othercomprehensive income for the period. Meanwhile, the carrying amount of long-term equityinvestment is adjusted; the carrying amount of long-term equity investment is decreased inaccordance with its share of the investee’s declared profit or cash dividends; other changes inowners’ equity of the investee other than net profit or loss and other comprehensive income arecorrespondingly adjusted to the carrying amount of the long-term equity investment, andrecognized in capital reserve. The Group recognizes its share of the investee’s net profit or lossbased on the fair value of the investee’s individual identifiable assets, etc. at the acquisition dateafter making appropriate adjustments. When the investee’s accounting policies and accountingperiod are inconsistent with those of the Group, the Group recognizes investment income andother comprehensive income after making appropriate adjustments to conform to the Group'saccounting policies and accounting period. However, unrealized gains or losses resulting from theGroup’s transactions with its associates and joint ventures, which do not constitute a business, areeliminated based on the proportion attributable to the Group and then investment gains or lossesare recognized. However, unrealized losses resulting from the Group's transactions with itsassociates and joint ventures which represent impairment losses on the transferred assets are noteliminated.
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. In addition, 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.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 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 using the equity method is accounted for on the same basis as would havebeen required if the investee had directly disposed of related assets or liabilities, and transferred toprofit or loss for the period on a pro rata basis; owners' equity recognized due to other changes inowners' equity of the investee (other than net profit or loss, other comprehensive income andprofit distribution) is transferred to profit or loss for the period on a pro rata basis. For long-termequity investments accounted for using the cost method, if the remaining interest after disposal isstill accounted for using the cost method, other comprehensive income previously recognizedusing the equity method or in accordance with the standards for the recognition and measurementof financial instruments before obtaining the control over the investee, is accounted for on thesame basis as would have been required if the investee had directly disposed of related assets orliabilities, and transferred to profit or loss for the period on a pro rata basis; other changes inowners' equity in the investee's net assets recognized under the equity method (other than netprofit or loss, other comprehensive income and profit distribution) is transferred to profit or lossfor the period on a pro rata basis.
Where the Group loses control over the investee due to disposal of part of shares, and in preparingthe separate financial statements, remaining shares after disposal can have joint control orsignificant influence over the investee, the equity method shall be adopted to adjust the remainingshares as they are accounted for under equity method since the acquisition date. If remainingshares after disposal cannot have joint control or significant influence over the investee, they areaccounted for in accordance with the standards for recognition and measurement of financialinstruments, and the difference between fair value on date of losing control and carrying amountis recognized in profit or loss for the period. Other comprehensive income recognized using theequity method or in accordance with the standards for the recognition and measurement offinancial instruments before losing control over the investee, is accounted for on the same basis aswould have been required if the investee had directly disposed of related assets or liabilities whenthe control over the investee is lost; other changes in owners' equity in the investee's net assetsrecognized under the equity method (other than net profit or loss, other comprehensive incomeand profit distribution) is transferred to profit or loss for the period on a pro rata basis. Whereremaining shares after disposal are accounted for under equity method, other comprehensiveincome and other owners' equity are transferred on a pro rata basis. Where remaining shares afterdisposal are accounted for in accordance with the standards for recognition and measurement offinancial instruments, other comprehensive income and other owners' equity are all transferred.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Where the Group loses joint control or significant influence over the investee after part disposal ofshares, remaining shares after disposal are accounted for in accordance with the standards forrecognition and measurement of financial instruments, and the difference between fair value at thedate of losing joint control or significant influence and carrying amount is recognized in profit orloss for the period. Other comprehensive income previously recognized under the equity method,is accounted for on the same basis as would have been required if the investee had directlydisposed of related assets or liabilities when the equity method is not adopted, and other changesin owners' equity other than net profit or loss, other comprehensive income and profit distributionare transferred to investment income for the period when the equity method is not adopted.
The Group disposes of its equity investment in subsidiaries through multiple transactions step bystep until it loses control over the subsidiaries. If these transactions belong to "package deal", alltransactions are deemed as one transaction on disposal of equity investment in subsidiaries, andthe difference between the amount of disposal and carrying amount of long-term equityinvestment is recognized as other comprehensive income, and transferred to profit or loss for theperiod when the control is lost.
17. Investment properties
Investment property is the property held by the Group to earn rentals or for capital appreciation orboth. It includes a land use right that is leased out 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 the investment property will flow to the Group and thesubsequent expenditures can be measured reliably. Other subsequent expenditures are recognizedin profit or loss for 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 withdrawn 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 if itis 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 forthe 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:
Category | Useful life | Estimated net residual value rate (%) | Annual depreciation rate (%) |
Port and terminal facilities | 5-50 years | 5.00 | 1.90-19.00 |
Buildings and structures | 5-50 years | 5.00 | 1.90-19.00 |
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 accounts for any changeas a change in accounting estimates.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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.
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 for the period inwhich they are incurred.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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 forterminal operating 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 over 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 indefinite useful lifewill not be amortized.
The amortization method, useful life and estimated net residual value of various intangible assetsare as follows:
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 recognized in profit or loss for the period in which it isincurred.
Expenditure during the development phase that meets all of the following conditions at the sametime is recognized as intangible asset. Expenditure during development phase that does not meetthe following conditions is recognized in profit or loss for the period.
(1) it is technically feasible to complete the intangible asset so that it will be available for use
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Intangible assets - continued
21.2 Research and development expenditure - continued
(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 recognizes all of them in profit or loss for the year. 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 time point when the intangible assets are ready for intendeduse. For the identical intangible asset, the expenditures recorded as expenses before they qualifyfor capitalization during the development process are not adjusted.
22. Impairment of non-financial assets other than goodwill
The Group assesses at the balance sheet date whether there is any indication that long-term equityinvestments, investment properties measured at cost method, fixed assets, construction inprogress, right-of-use assets, intangible assets with a finite useful life and assets related to contractcosts may be impaired. If there is any indication that such assets may be impaired, recoverableamounts are estimated for such assets. Intangible assets with indefinite useful life and intangibleassets not yet available for use are tested for impairment annually, irrespective of whether there isany indication that the assets may be impaired.
Recoverable amount is estimated on an 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 assets is recognized, it shall not be reversed in anysubsequent period.
23. Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized overthe current and subsequent periods (together of more than one year). Long-term prepaid expensesare amortized using the straight-line method over the expected periods in which benefits arederived.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
24. Contract liabilities
Contract liabilities refer to the Group's obligation to transfer goods or services to a customer forconsideration received or receivable from the customer. The contract assets and contract liabilitiesunder the same contract are 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 fullpayments within 12 months after the annual reporting period during which relevant services areprovided by the employees, except the post-employment benefits and termination benefits.Specifically, the short-term benefits include: employee salaries, bonuses, allowances andsubsidies, employee benefits, social insurance contributions such as the medical insurance and thework injury insurance, housing funds, trade union funds and employee education funds, short-term paid absence, short-term profit sharing plan, non-monetary welfare and other short-termbenefits.
Short-term employee benefits payable are recognized as liabilities, with a corresponding charge toprofit 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 they actually occurred. Non-monetary staff welfare expenses aremeasured at 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 profit or loss for the period or the costs of relevant assets in theaccounting period in which employees provide services.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 retired or terminated the labor relationship with the enterprise forthe services rendered by the employees, except the short-term benefits and the terminationbenefits. The post-employment benefits consist of the pension insurance, the annuity, theunemployment 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 the agreements the Groupentered into 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 plans refer to the post-employment benefit 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 in which employees render services to theGroup, the amounts payable calculated based on the defined contribution plans are recognized asliabilities and included in profit or loss for the period or costs of related assets.
For defined benefit plans, the Group attributes the welfare obligations arising from the definedbenefit plans to the period in which employees provide services to the Group according to theformula determined based on the projected cumulative benefit unit method, and includes them inprofit or loss for the period or costs 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 plans (including interest income of
planned assets, interest expenses of defined benefit plan liabilities and effect of asset
ceiling); and? Changes arising from remeasurement of net liabilities or net assets of defined benefit plans.
Service costs and net interest of net liabilities and net assets of defined benefit plans arerecognized in profit or loss for the period or costs of related assets. Remeasurement of the netdefined benefit liabilities (assets) (including actuarial gains and losses, the return on plannedassets, excluding amounts included in net interest on net defined benefit liabilities (assets), andany changes in the effect of the asset ceiling, excluding amounts included in net interest on netdefined benefit liabilities (assets)) are recognized in other comprehensive income.
The deficit or surplus resulting from the present value of the defined benefit plan obligations lessthe fair value of the defined benefit plan assets is recognized as a net defined benefit plan liabilityor net asset.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 profit or loss for the period at the earlier of: (1) when the Group cannotunilaterally 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 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 costs of 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 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 in profit or loss for the period when relevant recognition requirements of theinternal retirement benefits are met.
26. Provisions
Provisions are recognized when the Group has a present obligation related to a contingency, it isprobable that an outflow of economic benefits will be required to settle the obligation, and theamount of the obligation can be measured reliably.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 the balance sheet date, taking into account factors pertaining to acontingency such as the risks, uncertainties and time value of money. Where the effect of the timevalue of money is material, the amount of the provision is determined by discounting the relatedfuture cash outflows.
Where all or some of the expenditure required to settle a provision is expected to be reimbursedby a third party, the reimbursement is recognized as a separate asset only when it is virtuallycertain that reimbursement will be received, and the amount of reimbursement recognized doesnot exceed the carrying amount of the provision.
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 the performanceobligation when the Group satisfies a performance obligation in the contract, namely, when thecustomer obtains control over relevant goods or services. A performance obligation is acommitment that the Group transfers a distinct goods or service to a customer in the contract. Thetransaction price is the amount of consideration to which the Group expects to be entitled inexchange for transferring promised goods or services to a customer, excluding amounts collectedon behalf of third parties and amounts expected to be refunded to a customer.
It is a performance obligation satisfied during a period of time and the Group recognizes revenueduring a period of time according to the progress of performance if one of the followingconditions is met: (i) the customer obtains and consumes economic benefits at the same time ofthe Group's performance; (ii) the customer is able to control goods or services in progress duringthe Group's performance; (iii) goods or services generated during the Group's performance haveirreplaceable utilization, and the Group is entitled to collect amounts of cumulative performancepart which have been done up to now. Otherwise, revenue is recognized at a point in time whenthe customer obtains control over the relevant 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
Contract assets refer to the Group's right to consideration in exchange for goods or services thatthe Group has transferred to a customer when that right is conditioned on something other thanthe passage of time. For the details of accounting policies on impairment of contract assets, pleasesee Note (IV) 10. The Group's unconditional (i.e., depending on the passage of time only) right toreceive consideration from the customer is separately presented as receivables.
Contract liabilities refer to the Group's obligation to transfer goods or services to a customer forconsideration received or receivable from the customer.
Contract assets and contract liabilities under the same contract will be presented on a net basis.
If there are two or more of performance obligations included in the contract, at the inception ofthe contract, the Group allocates the transaction price to each single performance obligation basedon the proportion of stand-alone selling price of goods or services promised in each stand-aloneperformance obligation. However, if there is conclusive evidence indicating that the contractdiscount or variable consideration is only relative with one or more (not the whole) performanceobligations in the contract, the Group will allocate the contract discount or variable considerationto relative one or more performance obligations. Stand-alone selling price refers to the price of asingle sale of goods or services. If the stand-alone selling price cannot be observed directly, theGroup estimates the stand-alone selling price through comprehensive consideration of all relativeinformation that can be reasonably acquired and maximum use of observable inputs.
In case of the existence of variable consideration (such as sales discount) in the contract, theGroup shall determine the best estimate of variable consideration based on the expected value orthe most probably occurred amount. The transaction price including variable consideration shallnot exceed the amount of the cumulatively recognized revenue which is unlikely to besignificantly reversed when relevant uncertainty is eliminated. At each balance sheet date, theGroup re-estimates the amount of variable consideration which should be included in transactionprice.
If the customer pays non-cash consideration, the Group determines the transaction price based onthe fair value of the non-cash consideration. If the fair value of non-cash consideration cannot bereasonably estimated, the Group shall determine the transaction price indirectly by reference tothe stand-alone selling price of the goods or services promised to transfer to the customer.
In case of the existence of a significant financing component in the contract, the Group shalldetermine the transaction price on the assumption that the customer has paid the amount payableby cash when obtaining the control over the goods or services. Differences between transactionprice and contract consideration are amortized using effective interest method during the contractlife. At the inception of the contract, if the period between when the Group transfers a promisedgoods or service to a customer and when the customer pays for that goods or service will be oneyear or less, the Group would not consider the significant component in the contract.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
The Group assesses whether it controls each specified goods or service before that goods orservice is transferred to the customer to determine whether the Group is a principal or an agent. Ifthe Group controls the specified good or service before that good or service is transferred to acustomer, the Group is a principal and recognizes revenue in the gross amount of considerationreceived or receivable. Otherwise, the Group is an agent and recognizes revenue in the amount ofany fee or commission to which it expects to be entitled. The fee or commission is the net amountof consideration that the Group retains after paying the other party the consideration received inexchange for the goods or services to be provided by that party, or is determined in accordancewith the established commission amount or percentage, etc.
Where the Group receives receipts in advance from a customer for sales of goods or rendering ofservices, the amount is first recognized as a liability and then transferred to revenue when therelated performance obligation has been satisfied. When the Group's receipts in advance are notrequired to be refunded and it is probable that the customer will waive all or part of its contractualrights, the Group recognizes the said amounts as revenue on a pro-rata basis in accordance withthe pattern of exercise of the customer's contractual rights, if the Group expects to be entitled tothe amounts relating to the contractual rights waived by the customer; otherwise, the Groupreverses the related balance of the said liabilities to revenue only when it is highly unlikely thatthe customer will require performance of the remaining performance obligations.
28. Contract costs
28.1 Costs of obtaining a contract
For the incremental cost of obtaining the contract (cost that will not occur if the contract is notobtained) that is expected to be recoverable, it is recognized as an asset. If the amortization periodof such asset is less than one year, it is recognized in profit or loss for the period when incurred.Other expenses incurred for obtaining the contract is included in profit or loss for the period whenincurred, except for those explicitly assumed by the customer.
28.2 Costs to fulfil a contract
If the costs incurred in fulfilling a contract are not within the scope of any standards other thanRevenue Standards, the Group recognizes an asset only if those costs meet all of the followingcriteria: (1) the costs relate directly to a contract or to an anticipated contract that the Group canspecifically identify; (2) the costs enhance resources of the Group that will be used in satisfyingperformance obligations in the future; and (3) the costs are expected to be recovered. The assetmentioned above shall be amortized on a basis that is consistent with the revenue recognition ofthe goods or services to which the asset relates and recognized in profit or loss for the period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Contract costs - continued
28.3 Losses of assets related to contract costs
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 otherASBE; then, for assets related to contract costs, if the carrying amount of the assets is higher thanthe difference between: (1) the remaining consideration that the Group expects to obtain for thetransfer of the goods or services related to the assets; and (2) the estimated costs to be incurred forthe transfer of the related goods or services, any excess is provided for impairment and recognizedas impairment loss of assets.
After the provision for impairment of assets related to contract costs is made, if the factors ofimpairment in previous periods change so that the difference between the above two is higher thanthe carrying amount of the assets, the original provision for impairment of the assets is reversedand recognized in profit or loss for the period, provided that the carrying amount of the assetsafter the reversal does not exceed the carrying amount of the assets at the date of reversalassuming no provision for impairment was made.
29. 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, retired or damaged prior to the end of its useful life, the related undistributeddeferred income is transferred to profit or loss of the disposal period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
29. Government grants - continued
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 for the period in which the related costs or losses are recognized; If thegrant 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 are distinguished foraccounting treatment; if it is difficult to distinguish, they should be classified as governmentgrants related to income as a whole.
A government grant related to the Group's daily activities is recognized in other income based onthe nature of economic activities; a government grant not related to the Group's daily activities isrecognized 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.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 - continued
Deferred tax liabilities are recognized for taxable temporary differences associated withinvestments in subsidiaries, associates and joint ventures, except where the Group is able tocontrol the timing of the reversal of the temporary differences and it is probable that thetemporary differences will not be reversed in the foreseeable future. Deferred tax assets arisingfrom deductible temporary differences associated with investments in subsidiaries, associates andjoint ventures are recognized to the extent that it is probable that future taxable profits will beavailable against which the deductible temporary differences can be utilized and they are expectedto be reversed in the foreseeable future.
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 shareholders' equity, in which case they are recognized in other comprehensive incomeor shareholders' equity, and when they arise from business combinations, in which case theyadjust the carrying amount 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.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases
A lease is a contract in which the lessor, for a certain period of time, gives the lessee the right touse the assets to obtain a consideration.
For contracts entered into, the Group assesses whether the contract is, or contains, a lease at thecommencement date. Such contract will not be reassessed unless the terms and conditions of thecontract are subsequently changed.
31.1 The Group as lessee
31.1.1 Separating components of a lease
For a contract that contains one or more lease components or non-lease components, the Groupseparates each individual lease and non-lease component and allocates the contract considerationin the relative proportion of the sum of the individual price of each lease component and theindividual price of the non-lease component.
31.1.2 Right-of-use assets
Except for short-term leases and leases of low-value assets, the Group recognizes the right-of-useassets of the leases at the commencement date. The commencement date of the lease is the datefrom which the lessor provides the leased assets to make them available for use by the Group.Right-of-use assets are initially measured at cost. The cost includes:
? 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 Group in dismantling and removing the underlying
asset, 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 are depreciated from thecommencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-use assets are depreciated from the commencement date to the earlier of the end of the useful lifeof the 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Except for short-term leases and leases of low-value assets, the Group initially measures leaseliabilities at the present value of the outstanding lease payments at the commencement date. Incalculating the present value of the lease payments, the Group uses the implicit interest rate of thelease as the discount rate. If it is not possible to determine the implicit interest rate of the lease,the incremental borrowing rate shall be applied.
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 recognized in profit or loss, or in the cost of relevant assets, in the periodof those payments.
After the commencement date, interest expenses on the lease liabilities in each period during thelease term is calculated by a constant periodic rate of interest, and included in profit or loss orcharged to cost of related assets.
After the commencement date, the Group shall remeasure the lease liabilities and makecorresponding adjustments to the related right-of-use assets in the following circumstances. If thecarrying amount of the right-of-use assets is reduced to zero and there is a further reduction in themeasurement of the lease liabilities, the Group shall recognize the difference in profit or loss:
? where 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;? where there is a change in the amounts expected to be payable under a residual valueguarantee, or in future lease payments resulting from a change in an index or a rate used todetermine those payments, the Group remeasures the lease liabilities, on the basis of therevised lease payments and the unchanged discount rate, unless the change in the leasepayments results from a change in floating interest rates, in which case a revised discountrate is applied to calculate the present value.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 of low-value assets
The Group elects not to recognize right-of-use assets or lease liabilities for short-term leases andleases of low-value assets, i.e. port and terminal facilities, buildings, machinery and equipment,furniture, fixture and other equipment, motor vehicles and cargo ships and others. A short-termlease is a lease that, at the commencement date, has a lease term of 12 months or less and does notcontain a call option. A lease of low-value assets is a lease that, the value of the underlying assetis less than RMB50,000 when it is new. For short-term leases and leases of low-value assets, theGroup recognizes the lease payments in profit or loss, or in the cost of related assets on a straight-line basis over each period within 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 liabilities based on thepresent value of the changed lease payments and the revised discount rate.
For lease modifications that decrease the scope of the lease or shorten the term of the lease, theGroup should decrease the carrying amount of the right-of-use assets with any gain or lossrelating to the partial or full termination of the lease recognized in profit or loss. For re-measurement of lease liabilities due to other lease modifications, a corresponding adjustment ismade to the carrying amount of the right-of-use assets.
31.2 The Group as lessor
31.2.1 Separating components of a lease
For a contract that contains lease components and non-lease components, the Group allocates thecontract consideration in accordance with the Revenue Standards on allocation of transactionprices, based on the respective individual prices of the lease components and the non-leasecomponents.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 recognizes lease receipts from operating leases as rental income using a straight-linemethod over the respective periods of the lease term. The Group's initial direct costs incurred inconnection with operating leases are capitalized when the costs incurred, and are allocated toprofit or loss for the period over the lease term on the same basis as the recognition of rentalincome.
Variable lease receipts acquired by the Group in connection with operating leases that are notincluded in the lease receipts are recognized in profit or loss for the period when they are actuallyincurred.
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 lease investment with assets under finance lease derecognized. The net lease investmentis the sum of any unguaranteed residual value and the present value of the lease receipts over thelease term discounted at the interest rate implicit in lease.
The lease receivable comprises the following payments collected by the Group from the lessee forthe transfer of the right to use the underlying assets during the lease term:
? 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 thelessee will exercise the option.? payments for terminating the lease, provided that the lease term reflects that the lessee will
exercise the option to terminate the lease;? residual value of guarantee provided to the Group by the lessee, a party related to the lessee
and an independent third party with the financial ability to fulfil the guarantee obligations.
Variable lease receipts not included in the net lease investment are recognized in profit or losswhen they are actually incurred.
Interest income for each period over the lease term is calculated and recognized by the Group at afixed periodic rate.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as lessor - continued
31.2.3 Subleases
As the lessor of a sublease, the Group accounts for the original lease contract and the subleasecontract on a separate basis. The Group classifies the subleases based on the right-of-use assetsgenerating 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.
A lease modification should be accounted for as a separate lease if there is a modification in afinance lease and both of the followings apply:
? the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and? the consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope 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 Groupaccounts for the modification as follows:
? If the lease would have been classified as an operating lease had the modification been
effective at the commencement date, the Group should account for the lease modification as
a new lease from the effective date of the modification, and measure the carrying amount of
the underlying assets at the amount equal to the net lease investment before the effective
date of the modification;? If the lease would have been classified as a finance lease had the modification been effective
at the commencement date, the Group should account for it in accordance with the
provisions on contract modification and renegotiation under Accounting Standards for
Business Enterprises No. 22 - Financial Instruments: Recognition and Measurement.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.3 Sale and leaseback transactions
31.3.1 The Group as the seller-lessee
The Group assesses and determines whether the transfer of an asset in a sale and leasebacktransaction constitutes a sale according to the requirements of Revenue Standards. If the transferof an asset does not constitute a sale, the Group continues to recognize the transferred asset andrecognizes a financial liability at an amount equal to the transfer proceeds which is accounted forunder the Accounting Standards for Business Enterprises No. 22 - Financial Instruments:
Recognition and Measurement. If the transfer of an asset constitutes a sale, the Group measuresthe right-of-use assets arising from the leaseback transaction at the proportion of the originalcarrying amount of the asset that relates to the use right obtained from leaseback, and recognizesany gain or loss only on the basis of the rights transferred to the lessor.
31.3.2 The Group as the buyer-lessor
If the transfer of an asset in a sale and leaseback transaction does not constitute a sale, the Groupdoes not recognize the transferred asset but a financial asset at an amount equal to the transferproceeds, and accounts for such financial asset under the Accounting Standards for BusinessEnterprises No. 22 - Financial Instruments: Recognition and Measurement. If the transfer of anasset constitutes a sale, the Group accounts for the purchase of the asset in accordance with otherapplicable Accounting Standards for Business Enterprises and accounts for the lease of the asset.
32. Exchange of non-monetary assets
When the non-monetary assets are of commercial substance and the fair value of assets receivedor the assets given up can be measured reliably, the non-monetary transactions are measured atfair value. For the asset received, the fair value of the asset given up and related taxes payable arerecognized as the cost at initial recognition; For the asset given up, at derecognition, thedifference between the fair value and the carrying amount is recognized in profit or loss for thecurrent period. When there is clear evidence indicating that the fair value of the received asset ismore reliable, for the asset received, the fair value of the asset received and related taxes payableare recognized as the cost at initial recognition; For the asset given up, at derecognition, thedifference between the fair value of the asset received and the carrying amount of the asset givenup is recognized in profit or loss for the current period.
When the non-monetary transactions fail to meet criteria to be measured at fair value, thetransactions are measured at carrying amounts. For the asset received, the carrying amount of theasset given up and relevant taxes payable are recognized as the cost of at initial recognition. Forthe asset given up, at derecognition, no profit or loss is recognized.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
33. Discontinued operation
A discontinued operation is a component of the Group that can be clearly distinguished and satisfiesone of the following conditions, and such component has been disposed of or is classified as held-for-sale:
(1) Such component represents a separate major line of business or geographical area of operations.
(2) Such component is part of the separate major line of business or geographical area of operationsto be disposed of based on the associated plan.
(3) Such component is a subsidiary acquired exclusively for the purpose of resale.
Gains or losses from discontinued operations are presented separately from those from continuingoperations in the income statement. Operating gains or losses such as impairment losses fromdiscontinued operations and the amount of reversals, and the gains or losses from disposals arepresented as discontinued operations. For discontinued operations presented in the current period,the Group restates the information previously presented as gains or losses from continuingoperations in the current financial statements as discontinued operations in the comparableaccounting period.
34. Safety production cost
According to the Administrative Measures for the Collection and Utilization of Enterprise WorkSafety Funds (Cai Zi [2022] No. 136) jointly issued by the Ministry of Finance and theEmergency Department on 13 December 2022, 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, andtransferred to special reserve simultaneously. When safety production cost set aside is utilized, ifthe costs incurred can be categorized as expenditure, the costs incurred should be charged againstthe special reserve. If the costs set aside are used to build up fixed assets, the costs should becharged to construction in progress, and reclassified to fixed assets when the safety projects areready for intended use. Meantime, expenditures in building up fixed assets are directly chargedagainst the special reserve with the accumulated depreciation recognized at the same amount.Depreciation will 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 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 could be vested immediately, with acorresponding increase in capital reserve.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 and accounting estimates as set out in Note (IV), theGroup is required to make judgments, estimates and assumptions about the carrying amounts ofitems in the financial statements that cannot be measured accurately, due to the internaluncertainty of the operating activities. These judgments, estimates and assumptions are based onhistorical experience of the Group's management as well as other factors that are considered to berelevant. Actual results may differ from these estimates.
The Group regularly reviews the judgments, estimates and assumptions on a going concern basis.Changes in accounting estimates which only affect the current period should be recognized in thecurrent period; changes which not only affect the current but the future periods should berecognized in the current and future periods. At the balance sheet date, key assumptions anduncertainties in critical judgments and accounting estimates that are likely to lead to significantadjustments to the carrying amounts of assets and liabilities in the future are as follows:
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 plans of subsidiaries, associates and joint ventures and relevant provisions of tax law.For retained earnings of the investee which are not expected to be distributed, since the profitswill be used for the daily operation and future development of the investee, no deferred taxliabilities are recognized. If the profits to be actually distributed in future years are more or lessthan those expected, corresponding deferred tax liabilities will be recognized or reversed in profitor loss for the period at the earlier of the date on which the profit distribution plan is changed andthe date on which the profit distribution is declared.
Deferred tax assets are recognized based on the deductible temporary differences and thecorresponding tax rate, to the extent that it is probable that future taxable profits will be availableagainst which the deductible temporary differences can be utilized. If the actual taxable income infuture years are more or less than that expected, corresponding deferred tax assets will berecognized or reversed in profit or loss for the period in which they are actually incurred.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 value of fixed assets and intangible assets
The Group assesses the estimated useful lives and residual value of fixed assets and intangibleassets. Such estimate is made by reference to the historical experience of actual useful lives andresidual value of fixed assets and intangible assets of similar nature and function, and is subject tosignificant changes due to technical innovation and fierce industry competition. Where theestimated useful lives and residual value of fixed assets and intangible assets are less than theprevious estimates, the Group will increase the depreciation and amortization, or write off oreliminate the technically obsolete fixed assets or intangible assets.
(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES
1. Changes in significant accounting policies
1.1 Interpretation No. 15 of the Accounting Standards for Business Enterprises
The Interpretation No. 15 of the Accounting Standards for Business Enterprises was issued by theMinistry of Finance on 30 December 2021, which stipulated the accounting treatment of externalsale of products or by-products produced by an enterprise before the fixed assets are ready forintended use or in the process of research and development, as well as the judgment on onerouscontract.
Accounting treatment of external sale of products or by-products produced by an enterprise beforethe fixed assets are ready for intended use or in the process of research and development
In accordance with the Interpretation No. 15, if an enterprise sells products or by-productsproduced before the fixed assets are ready for intended use or in the process of research anddevelopment, it shall, in accordance with the provisions of Revenue Standards and AccountingStandards for Business Enterprises No. 1 - Inventories, respectively conduct accounting treatmentof income and costs related to the trial sale, and include them in profit or loss for the period, butthe balance of the related income from trial sale less cost shall not be used to offset against thecost of fixed assets or research and development expenses. Concurrently, an enterprise shallseparately disclose in the notes the information including the amount of related income from andcost of trial sale, the specific presenting items, and the significant accounting estimates applied indetermining the cost of trial sale. The Interpretation became effective from 1 January 2022, andretroactive adjustments should be made for trial sale that occurred between the beginning of theearliest presentation period of the financial statements and 1 January 2022.
Upon assessment, the Group considers that the adoption of this Interpretation has no significantimpact on the financial statements of the Group.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
1. Changes in significant accounting policies - continued
1.1 Interpretation No. 15 of the Accounting Standards for Business Enterprises - continued
Judgment on onerous contracts
The Interpretation No. 15 clarifies that the "cost to perform the contract" considered by anenterprise in determining whether a contract is an onerous contract shall include the incrementalcost to perform the contract and the apportioned amount of other costs directly related to theperformance of the contract. The Interpretation became effective from 1 January 2022, and anenterprise shall implement this Interpretation on contracts to which the obligations have not beencompletely fulfilled by 1 January 2022. The accumulative effect is adjusted for the openingbalance of retained earnings for the year when the Interpretation is implemented and other relateditems to the financial statements, but not adjusted for the comparative data of prior periods.
Upon assessment, the Group considers that the adoption of this Interpretation has no significantimpact on the financial statements of the Group.
1.2 Interpretation No. 16 of the Accounting Standards for Business Enterprises
The Interpretation No. 16 of the Accounting Standards for Business Enterprises (the"Interpretation No. 16") was issued by the Ministry of Finance on 30 November 2022, whichstipulated the accounting treatment concerning the income tax effect of dividends on a financialinstrument classified as an equity instrument by the issuer, and the change in cash-settled share-based payment to equity-settled share-based payment by an enterprise.
Accounting treatment concerning the income tax effect of dividends on a financial instrumentclassified as an equity instrument by the issuer
In accordance with the Interpretation No. 16, for a financial instrument classified as an equityinstrument by an enterprise in accordance with the Accounting Standards for Business EnterprisesNo. 37 - Presentation of Financial Instruments and other applicable provisions, if the relevantdividend payments are deductible before enterprise income tax in accordance with the relevant taxprovisions, the enterprise, on recognition of dividends payable, shall include the tax effect ofdividends in profit or loss or owners' equity using the same accounting treatment for previoustransactions or events that generated distributable profits. The Interpretation became effectivefrom 30 November 2022. Where the recognition of dividends payable by a financial instrumentclassified as an equity instrument occurs during the period from 1 January 2022 to the effectivedate of the Interpretation, the enterprise shall adjust the tax effect if such effect exists but is nottreated according to the provisions hereinabove. Where the said recognition occurs before 1January 2022 but the relevant financial instrument has not been derecognized as at 1 January2022, the enterprise shall adjust the tax effect retrospectively if such effect exists but is not treatedaccording to the provisions hereinabove.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
1. Changes in significant accounting policies - continued
1.2 Interpretation No. 16 of the Accounting Standards for Business Enterprises - continued
Accounting treatment concerning the income tax effect of dividends on a financial instrumentclassified as an equity instrument by the issuer - continued
The Group considers that the adoption of this Interpretation has no significant impact on thefinancial statements of the Group.
Accounting treatment concerning the change in cash-settled share-based payment to equity-settledshare-based payment by an enterprise
In accordance with the Interpretation No. 16, where an enterprise changes the terms andconditions of a cash-settled share-based payment agreement to those of an equity-settled share-based payment agreement, the enterprise shall, on the date of change, measure the equity-settledshare-based payment at fair value of the equity instrument on which it is granted, include theservices received in capital reserve, and at the same time, derecognize the liability that has beenrecognized for cash-settled share-based payment on the date of change, with the resulteddifference included in profit or loss for the period. The Interpretation became effective from 30November 2022. For the aforesaid transactions that are added during the period from 1 January2022 to the effective date of the Interpretation, the enterprise shall make adjustments inaccordance with the provisions of the Interpretation. If any transaction occurred before 1 January2022 is not treated in accordance with the aforesaid provisions, the accumulative effect shalladjusted for the retained earnings at 1 January 2022 and other related items to the financialstatements, but not adjusted for the comparative data of prior periods.
The Group considers that the adoption of this Interpretation has no significant impact on thefinancial statements of the Group.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 75 -
(VII) TAXES
1. Major taxes and tax rates
Taxes | Tax basis | Tax rate |
Enterprise income tax | Taxable income | 8.25%-34% (Note 1) |
Dividend income tax | 5%,10% (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, lease of real estate, etc. | 3%, 5%, 9% | |
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 0.8-12 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 is subject to an enterprise income tax rate of25%, the subsidiaries set up in Hong Kong are subject to an enterprise income tax rate of
8.25% and 16.5%, the majority of subsidiaries set up in China are subject to an enterpriseincome tax rate of 25% and certain others are subject to the preferential tax rate for smalland micro enterprises of 20%, certain domestic subsidiaries are subject to the preferentialtax rate for high-tech enterprises or encouraged industrial enterprises in the region of 15%,and the other overseas subsidiaries are subject to enterprise income tax rates between 27%and 34%.
The Company obtains dividends distributed by overseas subsidiaries and should payenterprise income tax at a rate of 25% in accordance with relevant Chinese tax laws. TheCompany obtains taxable income outside of China, and the amount of income tax that hasbeen paid abroad can be offset with the current taxable amount. The credit limit is thetaxable amount calculated in accordance with the provisions of the Enterprise Income TaxLaw.
Note 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 on 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%.
Note 3: The VAT amount is the balance of the output tax less the deductible input tax, and the
output tax is calculated in accordance with the sales income and the corresponding tax ratestipulated in the relevant tax laws of China.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VII) TAXES - continued
1. Major taxes and tax rates - continued
Note 4: The social contribution tax is the tax paid by TCP Participa??es S.A. (hereinafter referred
to as "TCP"), an overseas subsidiary of the Group, 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 of 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 some domestic subsidiariesof the Group 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
Item | 31/12/2022 | 31/12/2021 |
Cash | 726,960.10 | 501,446.73 |
Including: RMB | 2,767.60 | 20,504.26 |
USD | 44,853.90 | 105,169.96 |
HKD | 26,167.88 | 23,918.14 |
BRL | 6,536.63 | 5,600.44 |
Others | 646,634.09 | 346,253.93 |
Bank deposits (Note1) | 13,061,475,159.69 | 12,367,010,853.19 |
Including: RMB | 10,688,462,520.89 | 8,311,399,392.65 |
USD | 1,045,085,866.19 | 1,481,370,545.88 |
EUR | 745,066,787.31 | 708,753,319.34 |
BRL | 379,062,088.91 | 273,845,734.48 |
HKD | 141,668,372.90 | 1,567,048,304.98 |
AUD | 4,708,056.85 | 3,805,872.65 |
Others | 57,421,466.64 | 20,787,683.21 |
Other cash and bank balances (Note 2) | 553,726,619.61 | 404,837,106.85 |
Including: RMB | 340,778,819.19 | 404,810,610.86 |
HKD | 212,571,712.02 | 26,495.99 |
USD | 376,088.40 | - |
Total | 13,615,928,739.40 | 12,772,349,406.77 |
Including: Total amount of funds deposited overseas | 4,012,922,744.09 | 4,261,299,895.41 |
Total amount of funds deposited in Finance Company | 1,841,698,554.32 | 2,178,303,655.54 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 on bank deposits was RMB 16,126,969.60, and the
frozen funds of ETC card business amounted to RMB 12,000.00.
Note 2: The balance of the securities margin account totalled RMB 220,246,321.43 in other cash
and bank balances at the end of the year, the principal of the time certificate of deposit thatcan be readily withdrawn on demand at the end of the year totalled RMB 301,000,000.00,the interest of the time certificate of deposit totalled RMB 23,183,152.24, and therestricted deposit totalled RMB 9,297,145.94.
2. Held-for-trading financial assets
Item | 31/12/2022 | 31/12/2021 |
Financial assets at FVTPL | 2,998,781,599.63 | 6,921,831,502.55 |
Including: Debt investment instruments | - | - |
Equity investment instruments | 135,742.11 | 157,196.79 |
Structured deposits | 2,998,645,857.52 | 6,921,674,305.76 |
Total | 2,998,781,599.63 | 6,921,831,502.55 |
3. Notes receivable
(1) Category of notes receivable
Category | 31/12/2022 | 31/12/2021 |
Commercial acceptance | 36,000,000.00 | - |
Bank acceptance | 395,000.00 | 6,081,611.95 |
Total | 36,395,000.00 | 6,081,611.95 |
Less: Provision for credit loss (Note) | - | - |
Carrying amount | 36,395,000.00 | 6,081,611.95 |
Note: The Group believes that the acceptor of its bank acceptance and commercial acceptance
has high credit ratings with no significant credit risks; therefore, no provision for creditloss is made.
(2) As at 31 December 2022, the Group has no notes receivable pledged.
(3) As at 31 December 2022, the Group has no endorsed or discounted and not yet matured
notes receivable at the balance sheet date.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Notes receivable - continued
(4) As at 31 December 2022, the Group has no notes reclassified to accounts receivable due to
the drawers' inability to settle the notes.
(5) The Group has no notes receivable written off in 2022.
4. Accounts receivable
(1) Aging analysis of accounts receivable
Aging | 31/12/2022 | ||
Accounts receivable | Provision for credit loss | Proportion (%) | |
Within 1 year | 1,296,002,000.92 | 30,607,095.51 | 2.36 |
1-2 years | 11,157,744.62 | 3,209,367.93 | 28.76 |
2-3 years | 10,897,749.26 | 9,934,707.42 | 91.16 |
More than 3 years | 52,105,462.08 | 50,262,096.58 | 96.46 |
Total | 1,370,162,956.88 | 94,013,267.44 |
(2) Disclosure of accounts receivable by category
Credit rating | Expected credit loss rate (%) | 31/12/2022 | 31/12/2021 | ||||
Gross carrying amount | Provision for credit loss | Carrying amount | Gross carrying amount | Provision for credit loss | Carrying amount | ||
A | 0.00-0.10 | 757,893,845.42 | 254,506.65 | 757,639,338.77 | 768,959,184.29 | 195,963.28 | 768,763,221.01 |
B | 0.10-0.30 | 437,329,923.88 | 579,435.66 | 436,750,488.22 | 436,073,607.05 | 1,088,792.71 | 434,984,814.34 |
C | 0.30-50.00 | 91,915,183.34 | 12,581,359.16 | 79,333,824.18 | 146,604,738.15 | 32,286,595.88 | 114,318,142.27 |
D | 50.00-100.00 | 83,024,004.24 | 80,597,965.97 | 2,426,038.27 | 55,590,039.99 | 53,078,639.80 | 2,511,400.19 |
Total | 1,370,162,956.88 | 94,013,267.44 | 1,276,149,689.44 | 1,407,227,569.48 | 86,649,991.67 | 1,320,577,577.81 |
(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 2022 | 33,571,351.87 | 53,078,639.80 | 86,649,991.67 |
Gross carrying amount of accounts receivable at 1 January 2022 | |||
- Transfer to credit-impaired accounts receivable | -2,021,454.72 | 2,021,454.72 | - |
- Reversal of accounts receivable that are not credit-impaired | - | - | - |
Provision for the year | 372,106.49 | 25,723,534.94 | 26,095,641.43 |
Reversal for the year | -18,929,147.99 | -1,226,541.07 | -20,155,689.06 |
Transfer-out due to derecognition of financial assets (including direct write-down) | - | -5,205.00 | -5,205.00 |
Other changes | 422,445.82 | 1,006,082.58 | 1,428,528.40 |
At 31 December 2022 | 13,415,301.47 | 80,597,965.97 | 94,013,267.44 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Accounts receivable - continued
(4) Accounts receivable written off in the year
Item | Nature | Amount | Reason for write-off | Procedures performed | Arising from related party transactions or not |
Entity 1 | Service fees | 5,205.00 | The business licence was revoked | Yes | No |
Total | 5,205.00 |
(5) The top five balances of accounts receivable at the end of the year classified by debtor
Name of entity | 31/12/2022 | Aging | Proportion of the amount to the total accounts receivable (%) | Closing balance of provision for credit loss |
Client 1 | 261,495,217.57 | Within 1 year, 2-3 years, more than 3 years | 19.08 | 14,595.06 |
Client 2 | 41,867,906.09 | Within 1 year, 1-2 years, 2-3 years | 3.06 | 71,348.35 |
Client 3 | 24,908,308.44 | More than 3 years | 1.82 | 24,908,308.44 |
Client 4 | 20,674,309.00 | Within 1 year | 1.51 | - |
Client 5 | 20,134,539.40 | Within 1 year | 1.47 | - |
Total | 369,080,280.50 | 26.94 | 24,994,251.85 |
5. Receivables financing
(1) Classification of receivables financing
Item | 31/12/2022 | 31/12/2021 |
Bank acceptance measured at fair value | 163,766,913.10 | 238,429,402.71 |
(2) As at 31 December 2022, the Group has no pledged receivables financing.
(3) As at 31 December 2022, the Group's receivables financing that have been endorsed or
discounted and have not yet matured at the balance sheet date are as follows:
Item | 31/12/2022 | 31/12/2021 | ||
Derecognized | Recognized | Derecognized | Recognized | |
Bank acceptance measured at fair value | 105,141,033.28 | - | 153,044,339.75 | - |
6. Prepayments
(1) Aging analysis of prepayments
Aging | 31/12/2022 | 31/12/2021 | ||||
Gross carrying amount | Proportion (%) | Impairment provision | Gross carrying amount | Proportion (%) | Impairment provision | |
Within 1 year | 61,917,391.43 | 97.31 | - | 51,121,689.93 | 99.06 | - |
1-2 years | 1,589,158.49 | 2.50 | - | 351,693.15 | 0.68 | - |
2-3 years | - | - | - | 109,329.76 | 0.21 | - |
More than 3 years | 120,875.50 | 0.19 | - | 24,081.36 | 0.05 | - |
Total | 63,627,425.42 | 100.00 | - | 51,606,794.20 | 100.00 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
6. Prepayments - continued
(2) As at 31 December 2022, 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
Name of entity | Relationship with the Company | 31/12/2022 | Aging | Proportion of the closing balance to the total prepayments (%) | Reason for not being settled |
Entity 1 | Non-related party | 19,122,938.15 | Within 1 year | 30.05 | Unsettled advance premium |
Entity 2 | Non-related party | 8,485,362.69 | Within 1 year and 1-2 years | 13.34 | Unsettled prepayment for communication charges |
Entity 3 | Non-related party | 6,504,288.81 | Within 1 year | 10.22 | Unsettled prepayment for dredging expenses |
Entity 4 | Non-related party | 2,538,109.18 | Within 1 year | 3.99 | Unsettled prepayment for purchase of materials |
Entity 5 | Non-related party | 2,329,721.44 | Within 1 year | 3.66 | Unsettled advance premium |
Total | 38,980,420.27 | 61.26 |
7. Other receivables
7.1 Summary of other receivables
Item | 31/12/2022 | 31/12/2021 |
Dividends receivable | 416,040,485.62 | 264,626,493.85 |
Other receivables | 532,801,608.68 | 431,650,102.02 |
Total | 948,842,094.30 | 696,276,595.87 |
7.2 Dividends receivable
(1) Presentation of dividends receivable
Name of investee | 31/12/2022 | 31/12/2021 |
China Nanshan Development (Group) Incorporation ("Nanshan Group") | 240,591,000.00 | 185,070,000.00 |
Tin-Can Island Container Terminal Ltd | 65,121,449.40 | 19,076,909.00 |
Qingdao Qianwan United Container Terminal Co., Ltd. | 50,000,000.00 | - |
Zhanjiang Merchants Port City Investment Co., Ltd. ("Merchants Port City") | 41,847,044.77 | 41,847,044.77 |
COSCO Logistics (Zhanjiang) Co., Ltd. | 18,449,001.16 | 18,403,959.77 |
Others | 448,447.23 | 493,472.09 |
Total | 416,456,942.56 | 264,891,385.63 |
Less: Provision for credit loss | 416,456.94 | 264,891.78 |
Carrying amount | 416,040,485.62 | 264,626,493.85 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.2 Dividends receivable - continued
(2) Significant dividends receivable aged more than 1 year
Name of investee | 31/12/2022 | 31/12/2021 | Aging | Reason for not being recovered | Impaired or not and the determination basis |
Nanshan Group | 111,042,000.00 | 74,028,000.00 | 1-2 years, 2-3 years | Undergoing relevant formalities, expected to be recovered by the end of 2023 | No |
(3) Changes in provision for credit loss of dividends receivable
Item | Stage 1 | Stage 2 | Stage 3 | Total |
12-month expected credit loss | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | ||
At 1 January 2022 | 264,891.78 | - | - | 264,891.78 |
Gross carrying amount of dividends receivable at 1 January 2022 | ||||
- Transfer to Stage 2 | - | - | - | - |
- Transfer to Stage 3 | - | - | - | - |
- Reverse to Stage 2 | - | - | - | - |
- Reverse to Stage 1 | - | - | - | - |
Provision for the year | 151,565.16 | - | - | 151,565.16 |
Reversal for the year | - | - | - | - |
Transfer-out due to derecognition of financial assets (including direct write-down) | - | - | - | - |
Other changes | - | - | - | - |
At 31 December 2022 | 416,456.94 | - | - | 416,456.94 |
7.3 Other receivables
(1) Aging analysis of other receivables
Aging | 31/12/2022 | ||
Other receivables | Provision for credit loss | Proportion (%) | |
Within 1 year | 487,428,214.83 | 229,150,234.71 | 47.01 |
1-2 years | 192,100,283.58 | 4,690,780.38 | 2.44 |
2-3 years | 12,444,128.52 | 9,740,862.33 | 78.28 |
More than 3 years | 844,098,122.57 | 759,687,263.40 | 90.00 |
Total | 1,536,070,749.50 | 1,003,269,140.82 | 65.31 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Item | 31/12/2022 | 31/12/2021 |
Operation compensation (Note 1) | 859,677,826.43 | 618,500,035.62 |
Advance payments | 295,592,304.09 | 260,222,250.12 |
Land compensation (Note 2) | 89,630,000.00 | 89,630,000.00 |
Special subsidy | 31,716,257.00 | 24,800,000.00 |
Deposits | 26,402,747.81 | 25,492,288.59 |
Compensation for profit or loss on transition | - | 6,347,258.89 |
Others | 233,051,614.17 | 165,222,559.00 |
Total | 1,536,070,749.50 | 1,190,214,392.22 |
Less: Provision for credit loss | 1,003,269,140.82 | 758,564,290.20 |
Carrying amount | 532,801,608.68 | 431,650,102.02 |
Note 1: This represents the operation compensation receivable by a subsidiary of the Company
from the holding company of its minority shareholder in accordance with the agreement.In 2022, the Group recognized compensation of RMB213,574,591.16. As at 31 December2022, the Group has fully provided for credit losses on the accumulated outstandingcompensation amounting to RMB859,677,826.43.
Note 2: On 9 October 2021, Zhanjiang Port (Group) Co., Ltd. (hereinafter referred to as
"Zhanjiang Port"), a subsidiary of the Company, entered into the Agreement on Recoveryof State-owned Land Use Rights with the local government. Pursuant to the Agreement,Zhanjiang Port shall return the land of approximately 195.68 mu located in ZhanjiangComprehensive Bonded Zone on the east of Gangshu Avenue, which is amounting toRMB 89,630,000.00. The above-mentioned land has been returned before 31 December2021. As at 31 December 2022, the above-mentioned land compensation has not beenrecovered yet.
(3) Provision for credit loss of 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 impairment and taking into account thecurrent and future economic conditions.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 of other receivables - continued
As at 31 December 2022, the credit risk and expected credit loss of other receivables of each category of customers are presented as below:
Credit rating | Expected credit loss rate (%) | 31/12/2022 | 31/12/2021 | ||||||
12-month expected credit loss | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | Total | 12-month expected credit loss | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | Total | ||
A | 0.00-0.10 | 532,760,873.61 | - | - | 532,760,873.61 | 431,741,133.45 | - | - | 431,741,133.45 |
B | 0.10-0.30 | - | - | - | - | - | - | - | - |
C | 0.30-50.00 | - | - | - | - | - | - | - | - |
D | 50.00-100.00 | - | - | 1,003,309,875.89 | 1,003,309,875.89 | - | - | 758,473,258.77 | 758,473,258.77 |
Gross carrying amount | 532,760,873.61 | - | 1,003,309,875.89 | 1,536,070,749.50 | 431,741,133.45 | - | 758,473,258.77 | 1,190,214,392.22 | |
Provision for credit loss | 24,451.35 | - | 1,003,244,689.47 | 1,003,269,140.82 | 106,031.43 | - | 758,458,258.77 | 758,564,290.20 | |
Carrying amount | 532,736,422.26 | - | 65,186.42 | 532,801,608.68 | 431,635,102.02 | - | 15,000.00 | 431,650,102.02 |
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 | 31/12/2022 | Provision for credit loss | ECL rate (%) | Reason for provision |
Entity 1 | 859,677,826.43 | 859,677,826.43 | 100.00 | Expected to be unrecoverable (Note) |
Entity 2 | 108,624,448.23 | 108,624,448.23 | 100.00 | Expected to be unrecoverable |
Entity 3 | 14,000,000.00 | 14,000,000.00 | 100.00 | Expected to be unrecoverable |
Total | 982,302,274.66 | 982,302,274.66 |
Note: Refer to Note (VIII) 7.3(2).
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(4) Provision, reversal and write-off of credit loss of other receivables
Provision for credit loss | Stage 1 | Stage 2 | Stage 3 | Total |
12-month expected credit loss | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | ||
At 1 January 2022 | 106,031.43 | - | 758,458,258.77 | 758,564,290.20 |
Balance of other receivables at 1 January 2022 | ||||
- Transfer to Stage 2 | - | - | - | - |
- Transfer to Stage 3 | -37,851.00 | - | 37,851.00 | - |
- Reverse to Stage 2 | - | - | - | - |
- Reverse to Stage 1 | 826,764.77 | - | -826,764.77 | - |
Provision for the year | 17,847.65 | - | 218,784,542.22 | 218,802,389.87 |
Reversal for the year | -888,341.50 | - | -830,770.60 | -1,719,112.10 |
Charge-off for the year | - | - | - | - |
Write-off for the year | - | - | -4,000.00 | -4,000.00 |
Other changes | - | - | 27,625,572.85 | 27,625,572.85 |
At 31 December 2022 | 24,451.35 | - | 1,003,244,689.47 | 1,003,269,140.82 |
(5) Write-off of other receivables in the year
Item | Nature | Amount | Reason for write-off | Procedures performed | Arising from related party transactions or not |
Entity 1 | Others | 4,000.00 | The business licence has been revoked | Yes | No |
Total | 4,000.00 |
(6) The top five balances of other receivables at the end of the year classified by debtor
Name of entity | Nature | 31/12/2022 | Aging | Proportion to total other receivables (%) | Closing balance of provision for credit loss |
Entity 1 | Operation compensation | 859,677,826.43 | Within 1 year, more than 3 years | 55.97 | 859,677,826.43 |
Entity 2 | Advance payments | 123,474,649.44 | Within 1 year, 1-2 years | 8.04 | - |
Entity 3 | Advance payments | 108,624,448.23 | Within 1 year, 1-2 years, 2-3 years, more than 3 years | 7.07 | 108,624,448.23 |
Entity 4 | Land compensation | 89,630,000.00 | 1-2 years | 5.84 | - |
Entity 5 | Advance payments | 45,749,816.80 | Within 1 year | 2.98 | - |
Total | 1,227,156,740.90 | 79.90 | 968,302,274.66 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(7) Receivables involving government grants
Name of entity | Item | 31/12/2022 | Aging | Time and amount expected to be received and its basis |
Shantou CM Port Group Co., Ltd. ("Shantou Port") | Special subsidy for barge line business | 24,800,000.00 | 1-2 years | Expected to be recovered by the end of 2023 |
Shantou Port | Business development subsidy | 6,916,257.00 | Within 1 year | Expected to be recovered by the end of 2023 |
Total | 31,716,257.00 |
8. Inventories
(1) Category of inventories
Item | 31/12/2022 | 31/12/2021 | ||||
Gross carrying amount | Provision for decline in value of inventories | Carrying amount | Gross carrying amount | Provision for decline in value of inventories | Carrying amount | |
Raw materials | 196,425,573.04 | 1,326,130.64 | 195,099,442.40 | 174,693,225.25 | 730,054.35 | 173,963,170.90 |
Finished goods | 17,248,970.37 | - | 17,248,970.37 | 6,576,244.72 | - | 6,576,244.72 |
Others | 12,774,408.71 | - | 12,774,408.71 | 14,380,720.50 | - | 14,380,720.50 |
Total | 226,448,952.12 | 1,326,130.64 | 225,122,821.48 | 195,650,190.47 | 730,054.35 | 194,920,136.12 |
(2) Provision for decline in value of inventories
Item | 31/12/2021 | Provision for the year | Decrease | 31/12/2022 | ||
Provision | Others | Reversal | Write-off | |||
Raw materials | 730,054.35 | 573,122.05 | 22,954.24 | - | - | 1,326,130.64 |
(3) As at 31 December 2022, the Group has no capitalized borrowing cost in the balance of
inventories.
9. Assets held-for-sale
Item | Carrying amount at 31/12/2022 | Fair value at 31/12/2022 | Carrying amount at 31/12/2021 | Fair value at 31/12/2021 |
Long-term assets held-for-sale (Note) | - | - | 337,442,757.28 | 1,380,876,000.00 |
Less: Provision for impairment of assets held-for-sale | - | - | - | - |
Carrying amount | - | - | 337,442,757.28 | 1,380,876,000.00 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Assets held-for-sale - continued
Note: The intangible assets of RMB212,552,105.91, fixed assets of RMB113,712,788.00 and
investment properties of RM B11,177,863.37 were presented as assets held-for-sale by theGroup in 2021. Shantou Municipal Government revised the "Detailed Control Planning ofShantou Zhugang New Town (Partial) - Zhuchigang Area", and the final plan has not yetbeen announced, the schedule for the transfer of the above assets cannot be determined,which no longer meet the criteria for recognition as assets held-for-sale, therefore, theintangible assets held-for-sale were reversed to intangible assets, and provision forimpairment of intangible assets of RMB15,537,122.10 was made. Since the fixed assets andinvestment properties held-for-sale have been disposed by the Group, non-operatingexpenses amounting to RMB 124,890,651.37 were recognized for the period.
10. Non-current assets due within one year
Item | 31/12/2022 | 31/12/2021 |
Long-term receivables due within one year | 903,128,422.35 | 102,458,920.89 |
Less: Provision for credit loss | 903,128.42 | 102,458.92 |
Carrying amount | 902,225,293.93 | 102,356,461.97 |
11. Other current assets
(1) Category of other current assets
Item | 31/12/2022 | 31/12/2021 |
Prepaid taxes | 98,329,205.73 | 64,390,050.80 |
Input tax to be deducted and to be certified | 70,627,183.33 | 254,909,235.38 |
Others | 16,946,751.47 | 20,385,011.23 |
Total | 185,903,140.53 | 339,684,297.41 |
Less: Provision for credit loss | - | - |
Carrying amount | 185,903,140.53 | 339,684,297.41 |
12. Long-term receivables
(1) Details of long-term receivables
Item | 31/12/2022 | 31/12/2021 | Range of discount rate at the end of year | ||||
Gross carrying amount | Provision for credit loss | Carrying amount | Gross carrying amount | Provision for credit loss | Carrying amount | ||
Advances to shareholders (Note1) | 3,864,736,673.31 | 3,864,736.67 | 3,860,871,936.64 | 3,566,614,937.93 | 3,566,614.94 | 3,563,048,322.99 | 4.75%-6.00% |
Finance lease deposits | 10,659,515.88 | 10,659.52 | 10,648,856.36 | 10,000,000.00 | 10,000.00 | 9,990,000.00 | 0-5.37% |
Land compensation receivable (Note 2) | 2,692,032,000.00 | - | 2,692,032,000.00 | 2,692,032,000.00 | - | 2,692,032,000.00 | - |
Total | 6,567,428,189.19 | 3,875,396.19 | 6,563,552,793.00 | 6,268,646,937.93 | 3,576,614.94 | 6,265,070,322.99 | - |
Less: Long-term receivables due within 1 year | 903,128,422.35 | 903,128.42 | 902,225,293.93 | 102,458,920.89 | 102,458.92 | 102,356,461.97 | - |
Long-term receivables due after 1 year | 5,664,299,766.84 | 2,972,267.77 | 5,661,327,499.07 | 6,166,188,017.04 | 3,474,156.02 | 6,162,713,861.02 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 aggregate principal and interest receivable from Terminal Link
SAS, equivalent to RMB 2,977,517,465.06.
On 26 March 2020, China Merchants Port Holdings Company ("CM Port"), a subsidiaryof the Company, provided a long-term loan to Terminal Link SAS for the terminalacquisition project and charged interest to Terminal Link 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 have beentransferred in 2019, and the remaining 187.33 mu of land and attached buildings havebeen transferred in 2020. As at 31 December 2022, 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 2020. As at 31 December 2022, the land compensationtotalling RMB200,000,000.00 has not yet been recovered.
On 22 December 2020, Shantou Port entered into the Contract for the Acquisition of State-Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant to thecontract, the land and attached buildings of approximately 648.78 mu located in ZhuchiDeepwater Port of Shantou should be returned to Shantou Land Reserve Center byShantou 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 amounting toRMB1,344,000,000.00, and the remaining 328.78 mu of land and attached buildings havenot been transferred. As at 31 December 2022, the land compensation totallingRMB1,334,000,000.00 has not yet been recovered.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(2) Provision for credit loss of long-term receivables
Item | Stage 1 | Stage 2 | Stage 3 | Total |
12-month expected credit loss | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | ||
At 1 January 2022 | 3,576,614.94 | - | - | 3,576,614.94 |
Gross carrying amount of long-term receivables at 1 January 2022 | ||||
- Transfer to Stage 2 | - | - | - | - |
- Transfer to Stage 3 | - | - | - | - |
- Reverse to Stage 2 | - | - | - | - |
- Reverse to Stage 1 | - | - | - | - |
Provision for the year | 298,781.25 | - | - | 298,781.25 |
Reversal for the year | - | - | - | - |
Transfer-out due to derecognition of financial assets (including direct write-down) | - | - | - | - |
Other changes | - | - | - | - |
At 31 December 2022 | 3,875,396.19 | - | - | 3,875,396.19 |
(3) As at 31 December 2022, there are no long-term receivables derecognized due to the
transfer of financial assets.
(4) As at 31 December 2022, there are no assets and liabilities arising from the transfer or
continuing involvement of long-term receivables.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Investees | Accounting method | 31/12/2021 | Changes for the year | 31/12/2022 | Closing balance of provision for impairment | ||||||||
Increase | Decrease | Investment income under equity method | Reconciliation of other comprehensive income | Other equity movements | Cash dividends or profits declared | 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 | 2,371,538,986.74 | - | - | 140,072,915.26 | 143,397,707.85 | - | -97,083,253.51 | - | - | 229,278,389.03 | 2,787,204,745.37 | - |
Port of Newcastle | Equity method | 1,959,683,621.36 | - | - | 28,511,394.42 | 33,437,699.85 | - | -16,138,675.17 | - | - | 43,187,735.19 | 2,048,681,775.65 | - |
Qingdao Qianwan United Container Terminal Co., Ltd. | Equity method | 1,490,513,461.30 | - | - | 112,414,404.75 | -387,333.34 | - | -100,000,000.00 | - | - | - | 1,502,540,532.71 | - |
Yantai Port Group Laizhou Port Co., Ltd. | Equity method | 791,515,741.44 | - | - | 32,565,975.37 | - | -669,119.99 | -29,259,207.08 | - | - | - | 794,153,389.74 | - |
Others (Note1) | Equity method | 1,926,751,947.80 | 655,888,204.58 | -12,500,650.29 | 105,777,032.00 | -1,026,371.98 | -10,185,533.53 | -107,432,671.55 | - | - | 26,940,655.22 | 2,584,212,612.25 | - |
Subtotal | 8,540,003,758.64 | 655,888,204.58 | -12,500,650.29 | 419,341,721.80 | 175,421,702.38 | -10,854,653.52 | -349,913,807.31 | - | - | 299,406,779.44 | 9,716,793,055.72 | - | |
II. Associates | |||||||||||||
Shanghai International Port (Group) Co., Ltd. (hereinafter referred to as "Shanghai Port Group") | Equity method | 28,843,807,383.69 | 1,894,169,292.91 | - | 4,762,565,562.93 | -147,093,548.23 | 72,306,099.24 | -1,240,688,187.97 | - | - | -13,168,401.40 | 34,171,898,201.17 | - |
Nanshan Group | Equity method | 6,329,051,540.40 | - | - | 206,680,217.04 | -34,040,766.18 | 4,961,825.16 | -129,549,000.00 | - | - | 93,909.79 | 6,377,197,726.21 | - |
Terminal Link SAS | Equity method | 6,037,993,057.12 | - | - | 364,965,366.44 | -171,058,040.68 | - | -395,450,142.52 | - | - | 559,158,928.01 | 6,395,609,168.37 | - |
Liaoning Port Co., Ltd. ("Liaoning Port") | Equity method | 3,972,400,632.03 | - | - | 144,196,061.13 | 1,662,526.40 | 6,709,793.53 | -73,297,870.21 | - | - | -30,508,264.14 | 4,021,162,878.74 | 354,857,305.25 |
Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | Equity method | 7,306,935,034.12 | - | - | 218,696,415.40 | - | - | -122,444,928.51 | - | - | - | 7,403,186,521.01 | - |
Ningbo Zhoushan Port Company Limited ("Ningbo Zhoushan") (Note2) | Equity method | 3,474,840,934.53 | 14,113,777,882.23 | - | 351,607,511.90 | -958,626.76 | 114,757,041.82 | -75,825,289.44 | - | - | -3,568,909.23 | 17,974,630,545.05 | - |
China Merchants Northeast Asia Development & Investment Co., Ltd. | Equity method | 1,016,048,532.69 | - | - | -13,657,927.07 | - | 14,619,600.09 | - | - | - | - | 1,017,010,205.71 | - |
Others (Note1) | Equity method | 4,832,370,951.30 | 3,300,000.00 | -202,912,747.32 | 730,787,219.18 | -96,473,213.32 | 358,440.59 | -354,225,443.65 | - | - | 373,600,410.29 | 5,286,805,617.07 | 2,310,965.02 |
Subtotal | 61,813,448,065.88 | 16,011,247,175.14 | -202,912,747.32 | 6,765,840,426.95 | -447,961,668.77 | 213,712,800.43 | -2,391,480,862.30 | - | - | 885,607,673.32 | 82,647,500,863.33 | 357,168,270.27 | |
Total | 70,353,451,824.52 | 16,667,135,379.72 | -215,413,397.61 | 7,185,182,148.75 | -272,539,966.39 | 202,858,146.91 | -2,741,394,669.61 | - | - | 1,185,014,452.76 | 92,364,293,919.05 | 357,168,270.27 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments - continued
(1) Details of long-term equity investments - continued
Note 1: In 2022, the Group purchased ordinary shares of ASIA AIRFREIGHT TERMINAL
COMPANY LIMITED (hereinafter referred to as "ASIA AIRFREIGHT") at a priceequivalent to RMB 258,669,516.06. After this transaction, the Group's indirectshareholding in ASIA AIRFREIGHT increased from 20.00% to 34.60%. According to thejoint venture agreement signed in 2022, any decisions on activities related to ASIAAIRFREIGHT shall be unanimously approved by all shareholders. Therefore, the Grouphas joint control over ASIA AIRFREIGHT, which is reclassified as a joint venture froman associate.
Note 2: On 19 September 2022, Ningbo Zhoushan issued 3,646,971,029 ordinary shares to the
Company in a private placement at RMB 3.87 per share. After the completion of theprivate placement, the Company's direct shareholding ratio in Ningbo Zhoushan was
20.98%. Together with the 2.10% equity interest held by CHINA MERCHANTSINTERNATIONAL PORTS (NINGBO) LIMITED, a subsidiary of the Company, the totalshareholding ratio of the Group was 23.08%.
(2) Provision for impairment of long-term equity investments
Item | 31/12/2021 | Effect of change in scope of consolidation | Increase | Decrease | Effect of translation of financial statements denominated in foreign currencies | 31/12/2022 | |
Amount | Reason | ||||||
Liaoning Port | 337,700,959.79 | - | - | - | - | 17,156,345.46 | 354,857,305.25 |
HOA THUONG CORPORATION | 2,135,644.39 | - | - | - | - | 175,320.63 | 2,310,965.02 |
Total | 339,836,604.18 | - | - | - | - | 17,331,666.09 | 357,168,270.27 |
14. Investments in other equity instruments
(1) Details of investments in other equity instruments
Investee | 31/12/2022 | 31/12/2021 |
China Ocean Shipping Agency Shenzhen Co., Ltd. | 144,301,178.28 | 144,998,784.69 |
Others | 27,644,096.74 | 35,253,013.74 |
Total | 171,945,275.02 | 180,251,798.43 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Investments in other equity instruments - continued
(2) Details of non-trading equity instruments
Item | Dividends income recognized for the year | Accumulated gains/losses | Amount transferred to retained earnings from other comprehensive income | Reason for being designated as FVTOCI | Reason for transfer to retained earnings from other comprehensive income |
China Ocean Shipping Agency (Shenzhen) Co., Ltd. | - | 130,791,178.28 | - | The intention of holding the instruments is neither for sale nor profits in short-term | N/A |
Others | 240,001.46 | 927,502.00 | 7,513,669.91 | The intention of holding the instruments is neither for sale nor profits in short-term | Disposal |
Total | 240,001.46 | 131,718,680.28 | 7,513,669.91 |
15. Other non-current financial assets
Item | 31/12/2022 | 31/12/2021 |
Financial assets at FVTPL | 1,745,740,896.41 | 809,515,244.87 |
Including: Investments in equity instruments | 1,745,740,896.41 | 809,515,244.87 |
Including: Antong Holdings Co., Ltd. (hereinafter refers to as "Antong Holdings") (Note) | 950,321,309.06 | - |
Qingdao Port International Co., Ltd. | 767,553,775.66 | 782,723,863.52 |
Others | 27,865,811.69 | 26,791,381.35 |
Note: The Company increases its shares in Antong Holdings in the manner of auction and
assignment. As at 31 December 2022, the Company and its subsidiary Zhanjiang ZhongliOcean Shipping Tally Co., Ltd. hold 6.83% equity interest in Antong Holdings.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Investment properties
(1) Investment properties measured at cost
Item | Land use rights | Buildings and structures | Total |
I. Cost | |||
1. At 1 January 2022 | 114,634,546.67 | 6,181,503,172.76 | 6,296,137,719.43 |
2. Increase for the year | 13,635,278.71 | - | 13,635,278.71 |
(1) Transfer from intangible assets | 13,635,278.71 | - | 13,635,278.71 |
3. Decrease for the year | - | 3,900,320.25 | 3,900,320.25 |
(1) Disposal | - | 2,107,378.79 | 2,107,378.79 |
(2) Transfer to fixed assets | - | 1,792,941.46 | 1,792,941.46 |
4. At 31 December 2022 | 128,269,825.38 | 6,177,602,852.51 | 6,305,872,677.89 |
II. Accumulated depreciation and amortization | |||
1. At 1 January 2022 | 37,448,342.77 | 960,450,961.78 | 997,899,304.55 |
2. Increase for the year | 5,606,648.81 | 181,787,035.38 | 187,393,684.19 |
(1) Provision for the year | 2,489,361.98 | 181,787,035.38 | 184,276,397.36 |
(2) Transfer from intangible assets | 3,117,286.83 | - | 3,117,286.83 |
3. Decrease for the year | - | 3,110,430.41 | 3,110,430.41 |
(1) Disposal | - | 1,407,136.02 | 1,407,136.02 |
(2) Transfer to fixed assets | - | 1,703,294.39 | 1,703,294.39 |
4. At 31 December 2022 | 43,054,991.58 | 1,139,127,566.75 | 1,182,182,558.33 |
III. Impairment provision | |||
1. At 1 January 2022 | - | - | - |
2. Increase for the year | - | - | - |
3. Decrease for the year | - | - | - |
4. At 31 December 2022 | - | - | - |
IV. Carrying amount | |||
1. At 31 December 2022 | 85,214,833.80 | 5,038,475,285.76 | 5,123,690,119.56 |
2. At 1 January 2022 | 77,186,203.90 | 5,221,052,210.98 | 5,298,238,414.88 |
(2) Investment properties without ownership certificates
Item | Carrying amount at 31/12/2022 | Carrying amount at 31/12/2021 | Reasons for not obtaining certificate of title | Expected time of completion |
Buildings, structures, and land use rights | 24,008,665.10 | 17,610,186.51 | Some buildings and structures have not yet obtained certificates of land use rights | The certificate of title is underway |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets
17.1 Summary of fixed assets
Item | 31/12/2022 | 31/12/2021 |
Fixed assets | 32,033,317,707.66 | 31,710,355,613.32 |
Disposal of fixed assets | 8,375.84 | 157,616.97 |
Total | 32,033,326,083.50 | 31,710,513,230.29 |
17.2 Fixed assets
(1) Details of fixed assets
Item | Port and terminal facilities | Buildings and structures | Machinery and equipment, furniture, fixture and other equipment | Motor vehicles and cargo ships | Total |
I. Cost | |||||
1. At 1 January 2022 | 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 |
2. Increase for the year | 824,913,338.79 | 38,430,940.99 | 840,222,928.73 | 93,115,554.87 | 1,796,682,763.38 |
(1) Purchase | 64,427,157.97 | 25,570,736.05 | 280,632,896.25 | 19,411,445.14 | 390,042,235.41 |
(2) Transfer from development expenditure | 27,980,396.94 | - | 38,496,992.72 | - | 66,477,389.66 |
(3) Transfer from construction in progress | 732,505,783.88 | 11,067,263.48 | 425,985,761.47 | 73,704,109.73 | 1,243,262,918.56 |
(4) Transfer from right-of-use assets | - | - | 95,107,278.29 | - | 95,107,278.29 |
(5) Transfer from investment properties | - | 1,792,941.46 | - | - | 1,792,941.46 |
3. Decrease for the year | 39,575,331.19 | 2,188,982.50 | 177,018,134.23 | 34,552,586.47 | 253,335,034.39 |
(1) Disposal or retirement | 39,575,331.19 | 2,188,982.50 | 139,582,895.64 | 34,552,586.47 | 215,899,795.80 |
(2) Transfer to long-term prepaid expenses | - | - | 37,435,238.59 | - | 37,435,238.59 |
4.Adjustments to the amount carried forward | -248,674.87 | -54,830.06 | -931,505.48 | 40,150.44 | -1,194,859.97 |
5. Reclassification | -59,369,813.73 | - | 41,372,754.33 | 17,997,059.40 | - |
6. Effect of translation of financial statements denominated in foreign currencies | 513,272,979.41 | 13,522,351.53 | 306,188,635.81 | 62,827,472.13 | 895,811,438.88 |
7. At 31 December 2022 | 33,376,255,522.14 | 2,027,195,029.06 | 17,467,174,796.88 | 2,314,581,094.83 | 55,185,206,442.91 |
II. Accumulated depreciation | |||||
1. At 1 January 2022 | 9,650,764,730.66 | 546,215,006.96 | 9,774,172,565.39 | 1,008,208,125.97 | 20,979,360,428.98 |
2. Increase for the year | 1,000,510,758.97 | 87,949,643.10 | 858,672,991.59 | 103,336,957.39 | 2,050,470,351.05 |
(1) Provision | 1,000,510,758.97 | 86,246,348.71 | 824,986,165.97 | 103,336,957.39 | 2,015,080,231.04 |
(2) Transfer from right-of-use assets | - | - | 33,686,825.62 | - | 33,686,825.62 |
(3) Transfer from investment properties | - | 1,703,294.39 | - | - | 1,703,294.39 |
3. Decrease for the year | 25,459,493.10 | 2,062,713.45 | 159,079,168.62 | 32,825,589.03 | 219,426,964.20 |
(1) Disposal or retirement | 25,459,493.10 | 2,062,713.45 | 124,761,090.40 | 32,825,589.03 | 185,108,885.98 |
(2) Transfer to long-term prepaid expenses | - | - | 34,318,078.22 | - | 34,318,078.22 |
4. Reclassification | -6,192,288.70 | - | 6,192,288.70 | - | - |
5. Effect of translation of financial statements denominated in foreign currencies | 101,374,613.36 | 3,621,037.39 | 156,343,400.44 | 16,570,999.47 | 277,910,050.66 |
6. At 31 December 2022 | 10,720,998,321.19 | 635,722,974.00 | 10,636,302,077.50 | 1,095,290,493.80 | 23,088,313,866.49 |
III. Impairment provision | |||||
1. At 1 January 2022 | 57,419,468.96 | 63,906.47 | 42,717.28 | - | 57,526,092.71 |
2. Increase for the year | 127,517.67 | 5,921,258.38 | - | - | 6,048,776.05 |
3. Disposal or retirement for the year | - | - | - | - | - |
4. Reclassification | - | - | - | - | - |
5. Other decreases | - | - | - | - | - |
6. At 31 December 2022 | 57,546,986.63 | 5,985,164.85 | 42,717.28 | - | 63,574,868.76 |
IV. Carrying amount | |||||
1. At 31 December 2022 | 22,597,710,214.32 | 1,385,486,890.21 | 6,830,830,002.10 | 1,219,290,601.03 | 32,033,317,707.66 |
2. At 1 January 2022 | 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) The Group has no fixed assets that are temporarily idle as at 31 December 2022.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Item | Carrying amount at 31/12/2022 | Carrying amount at 31/12/2021 |
Buildings and structures | 196,480,507.61 | 174,489,188.90 |
Port and terminal facilities | 33,260,157.31 | 38,957,300.62 |
Machinery and equipment, furniture, fixture and other equipment | 7,920,761.45 | 4,770,103.50 |
Total | 237,661,426.37 | 218,216,593.02 |
(4) Fixed assets without ownership certificates
Item | Carrying amount at 31/12/2022 | Carrying amount at 31/12/2021 | Remark |
Buildings, structures, port and terminal facilities | 1,786,308,720.95 | 2,086,360,399.74 | This is mainly due to the fact that certain buildings and structures have not yet obtained the land use rights of the corresponding land and the approval procedures have not yet been completed. |
(5) Details of fixed assets depreciated but still in use and temporarily idle at the end of the
year, and fixed assets disposed and retired in the year:
Item | Amount | Remark |
Cost of fixed assets fully depreciated but still in use at the end of the year | 4,705,711,997.19 | |
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 | 215,899,795.80 | |
Net book value of fixed assets disposed and retired in the year | 30,790,909.82 | |
Loss on disposal or retirement of fixed assets in the year | 33,130,668.07 |
(6) The details of the Group's fixed assets with restricted ownership as at 31 December 2022
are set out in Note (VIII) 63.
17.3 Disposal of fixed assets
Item | 31/12/2022 | 31/12/2021 |
Machinery and equipment, furniture, fixture and other equipment | 8,375.84 | 78,950.02 |
Motor vehicles and cargo ships | - | 78,666.95 |
Total | 8,375.84 | 157,616.97 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress
(1) Summary of construction in progress
Item | 31/12/2022 | 31/12/2021 |
Construction in progress | 2,405,872,478.61 | 2,543,631,289.59 |
Materials for construction of fixed assets | 7,971,929.03 | 13,953,664.33 |
Total | 2,413,844,407.64 | 2,557,584,953.92 |
(2) Details of construction in progress
Item | 31/12/2022 | 31/12/2021 | ||||
Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
Port and terminal facilities | 1,991,321,268.14 | - | 1,991,321,268.14 | 2,177,670,930.47 | - | 2,177,670,930.47 |
Infrastructure | 201,444,537.67 | - | 201,444,537.67 | 220,531,192.85 | - | 220,531,192.85 |
Berths and yards | 18,728,577.14 | - | 18,728,577.14 | 15,718,097.89 | - | 15,718,097.89 |
Others | 194,378,095.66 | - | 194,378,095.66 | 129,711,068.38 | - | 129,711,068.38 |
Total | 2,405,872,478.61 | - | 2,405,872,478.61 | 2,543,631,289.59 | - | 2,543,631,289.59 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Item | Budget amount | 31/12/2021 | Increase for the year | Transfer to fixed assets | Other decreases for the year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2022 | 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 | 2,817,485,265.02 | 876,374,998.71 | - | - | 136,369,817.80 | 77,359,903.46 | 817,365,084.37 | 57.68 | 57.68 | 927,165.93 | - | - | Own funds and loans |
General cargo terminal project at Donghai Island Port Area of Zhanjiang Port | 905,348,400.00 | 399,676,589.24 | 49,201,245.80 | - | - | - | 448,877,835.04 | 49.58 | 49.58 | 44,364,372.49 | - | - | Own funds and loans |
Phase I project for the stuffing and destuffing service area of Baoman Port Area, Zhanjiang Port | 606,521,505.83 | 133,198,536.39 | 135,846,817.62 | - | - | - | 269,045,354.01 | 44.36 | 44.36 | 19,553,042.20 | 2,863,541.64 | 3.80 | Own funds and loans |
Phase I expansion project for the container terminal at Baoman Port Area, Zhanjiang Port | 2,342,775,800.00 | 180,616,086.92 | 10,847,597.65 | - | - | - | 191,463,684.57 | 8.17 | 8.17 | 953,620.60 | - | - | Own funds and loans |
Back land reclamation project on Haidagan Bulk Yard and Supporting Facilities and Liquid Bulk Berth | 61,000,000.00 | 59,111,396.60 | 1,464,943.20 | - | - | - | 60,576,339.80 | 99.31 | 99.31 | - | - | - | Own funds |
28# Warehouse Relocation Project, Zhanjiang Port | 67,670,000.00 | 47,477,624.53 | 10,091,009.49 | - | - | - | 57,568,634.02 | 85.07 | 85.07 | - | - | - | Own funds |
Installation project of bucket-wheel stacker reclaimer, Zhanjiang Port | 74,800,000.00 | 37,281,088.36 | 14,270,438.57 | - | - | - | 51,551,526.93 | 68.92 | 68.92 | 1,834,635.19 | 1,031,500.49 | 3.80 | Own funds and loans |
Hydraulic structure engineering for the reconstruction project of Berth 1# - 4#, Haixing Terminal | 2,467,361,016.88 | 55,554,170.62 | 38,946,560.03 | 57,254,963.46 | 2,455,752.20 | - | 34,790,014.99 | 98.95 | 98.95 | 66,037,883.84 | - | - | Own funds and loans |
TCP138 kV gas insulated substation project | 44,495,436.48 | 380,307.99 | 33,031,583.03 | - | - | 254,565.41 | 33,666,456.43 | 75.66 | 75.66 | - | - | - | Own funds |
Reconstruction project of automatic fire-fighting process at terminal, old warehouse area and bonded warehouse area | 51,200,000.00 | 1,585,078.25 | 27,193,143.23 | - | - | - | 28,778,221.48 | 56.21 | 56.21 | - | - | - | Own funds |
Total | 9,438,657,424.21 | 1,791,255,877.61 | 320,893,338.62 | 57,254,963.46 | 138,825,570.00 | 77,614,468.87 | 1,993,683,151.64 | 133,670,720.25 | 3,895,042.13 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Item | 31/12/2022 | 31/12/2021 | ||||
Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
Materials for construction of fixed assets | 7,971,929.03 | - | 7,971,929.03 | 13,953,664.33 | - | 13,953,664.33 |
19. Right-of-use assets
(1) Details of right-of-use assets
Item | Port and terminal facilities | Buildings and structures | Machinery and equipment, furniture, fixture and other equipment | Land use rights | Motor vehicles, cargo ships and others | Total |
I. Cost | ||||||
1. At 1 January 2022 | 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 |
2. Increase for the year | 288,309,040.70 | 393,967.46 | 173,928.26 | 17,330,062.14 | 10,283,003.22 | 316,490,001.78 |
(1) Purchase | 288,309,040.70 | 393,967.46 | 173,928.26 | 17,330,062.14 | 10,283,003.22 | 316,490,001.78 |
3. Decrease for the year | 556,587.63 | 6,769,725.12 | 101,023,595.26 | - | 4,136,016.68 | 112,485,924.69 |
(1) Termination of lease | 556,587.63 | 6,769,725.12 | 5,916,316.97 | - | 4,136,016.68 | 17,378,646.40 |
(2) Transfer to fixed assets | - | - | 95,107,278.29 | - | - | 95,107,278.29 |
4. Effect of translation of financial statements denominated in foreign currencies | 519,444,361.48 | 11,677,345.59 | 879,337.36 | 241,248,931.09 | - | 773,249,975.52 |
5. At 31 December 2022 | 7,414,725,804.49 | 174,746,285.16 | 361,404,132.03 | 2,833,468,093.15 | 15,456,422.12 | 10,799,800,736.95 |
II. Accumulated depreciation | ||||||
1. At 1 January 2022 | 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 |
2. Increase for the year | 256,563,424.65 | 18,661,456.23 | 27,974,167.35 | 40,991,223.00 | 5,656,348.75 | 349,846,619.98 |
(1) Provision | 256,563,424.65 | 18,661,456.23 | 27,974,167.35 | 40,991,223.00 | 5,656,348.75 | 349,846,619.98 |
3. Decrease for the year | 555,824.01 | 5,032,643.80 | 39,201,224.12 | - | 1,262,972.43 | 46,052,664.36 |
(1) Termination of lease | 555,824.01 | 5,032,643.80 | 5,514,398.50 | - | 1,262,972.43 | 12,365,838.74 |
(2) Transfer to fixed assets | - | - | 33,686,825.62 | - | - | 33,686,825.62 |
4. Effect of translation of financial statements denominated in foreign currencies | 45,649,809.93 | 2,034,257.96 | 779,062.14 | 25,432,286.82 | - | 73,895,416.85 |
5. At 31 December 2022 | 940,705,350.30 | 59,749,857.79 | 119,454,049.67 | 326,945,093.98 | 10,304,162.88 | 1,457,158,514.62 |
III. Impairment provision | ||||||
1. At 1 January 2022 | - | - | - | - | - | - |
2. Increase for the year | - | - | - | - | - | - |
3. Decrease for the year | - | - | - | - | - | - |
4. At 31 December 2022 | - | - | - | - | - | - |
IV. Carrying amount | ||||||
1. At 31 December 2022 | 6,474,020,454.19 | 114,996,427.37 | 241,950,082.36 | 2,506,522,999.17 | 5,152,259.24 | 9,342,642,222.33 |
2. At 1 January 2022 | 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets - continued
(2) Amount recognized in profit or loss
Category | 2022 |
Depreciation expenses of right-of-use assets (Note 1) | 349,846,619.98 |
Interest expenses on lease liabilities (Note 2) | 73,619,268.64 |
Expenses on short-term leases | 71,711,821.89 |
Expenses on leases of low value assets | 2,118,098.94 |
Variable lease payments not included in the measurement of lease liabilities (Note 3) | - |
Revenue from sublease of right-of-use assets | 16,195,950.82 |
Note 1: In 2022, no depreciation expenses on right-of-use assets are capitalized.
Note 2: In 2022, no interest expenses on lease liabilities are capitalized.
Note 3: In 2022, no variable lease payments are included in the measurement of lease liabilities.
(3) The total cash outflows in relation to leases for the current year amount to RMB
474,672,225.36.
(4) The lease terms of the lease assets of the Group are as follows:
Category | Lease term |
Port, terminal facilities and land | 1-99 years |
Buildings and structures | 1 -99 years |
Machinery and equipment, furniture, fixture and other equipment | 1-6 years |
Motor vehicles and cargo ships | 1-5 years |
Others | 1-7 years |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets
(1) Details of intangible assets
Items | Land use rights | Terminal management rights | Others | Total |
I. Cost | ||||
1. At 1 January 2022 | 14,631,047,267.00 | 8,239,023,292.58 | 1,303,728,681.52 | 24,173,799,241.10 |
2. Increase for the year | 687,985,073.75 | 50,660,718.27 | 124,204,524.49 | 862,850,316.51 |
(1) Purchase | 135,886,518.56 | 50,660,718.27 | 123,235,507.86 | 309,782,744.69 |
(2) Effect of changes in the scope of consolidation (Note 1) | 307,325,684.21 | - | 10,088.50 | 307,335,772.71 |
(3) Other increase (Note 2) | 244,772,870.98 | - | 958,928.13 | 245,731,799.11 |
3. Decrease for the year | 23,764,724.70 | - | 3,104,160.67 | 26,868,885.37 |
(1) Disposal | 10,129,445.99 | - | 2,127,349.47 | 12,256,795.46 |
(2) Transfer to investment properties | 13,635,278.71 | - | - | 13,635,278.71 |
(3) Other decrease | - | - | 976,811.20 | 976,811.20 |
4. Effect of translation of financial statements denominated in foreign currencies | 19,249,792.62 | 744,232,493.19 | 75,756,252.34 | 839,238,538.15 |
5. At 31 December 2022 | 15,314,517,408.67 | 9,033,916,504.04 | 1,500,585,297.68 | 25,849,019,210.39 |
II. Accumulated amortization | ||||
1. At 1 January 2022 | 3,711,905,647.14 | 1,519,335,933.88 | 467,145,279.15 | 5,698,386,860.17 |
2. Increase for the year | 386,303,253.40 | 244,762,995.36 | 71,621,959.52 | 702,688,208.28 |
(1) Provision | 347,310,872.78 | 244,762,995.36 | 71,355,306.18 | 663,429,174.32 |
(2) Effect of changes in the scope of consolidation (Note 1) | 8,085,844.80 | - | 3,034.88 | 8,088,879.68 |
(3) Other increase (Note 2) | 30,906,535.82 | - | 263,618.46 | 31,170,154.28 |
3. Decrease for the year | 9,927,358.38 | - | 1,221,363.52 | 11,148,721.90 |
(1) Disposal | 6,810,071.55 | - | 1,096,272.32 | 7,906,343.87 |
(2) Transfer to investment properties | 3,117,286.83 | - | - | 3,117,286.83 |
(3) Other decrease | - | - | 125,091.20 | 125,091.20 |
4. Effect of translation of financial statements denominated in foreign currencies | 8,171,003.50 | 133,601,781.55 | 24,717,841.08 | 166,490,626.13 |
5. At 31 December 2022 | 4,096,452,545.66 | 1,897,700,710.79 | 562,263,716.23 | 6,556,416,972.68 |
III. Impairment provision | ||||
1. At 1 January 2022 | - | - | - | - |
2. Increase for the year (Note 2) | 15,537,122.10 | - | - | 15,537,122.10 |
3. Decrease for the year | - | - | - | - |
4. At 31 December 2022 | 15,537,122.10 | - | - | 15,537,122.10 |
IV. Carrying amount | ||||
1. At 31 December 2022 | 11,202,527,740.91 | 7,136,215,793.25 | 938,321,581.45 | 19,277,065,115.61 |
2. At 1 January 2022 | 10,919,141,619.86 | 6,719,687,358.70 | 836,583,402.37 | 18,475,412,380.93 |
Note 1: The Group has acquired 51% equity interest of Guangdong Shunkong Port Development
and Construction Co., Ltd. (hereinafter refer to as "Shunkong Port"), which constitutes anasset acquisition. Refer to Note (IX) 1(1) for details.
Note 2: It is mainly arising from Shantou Port. Refer to Note (VIII) 9 for details.
(2) Land use rights without ownership certificates as at 31 December 2022:
Item | Carrying amount at 31/12/2022 | Carrying amount at 31/12/2021 |
Land use rights (Note) | 2,511,195,386.58 | 1,882,080,080.20 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 as at 31 December 2022: - continued
Note: At 31 December 2022, 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 815,234.87 ㎡, and the land use rights forDachanwan Port area Phase II obtained by ASJ, of which the costs are RMB1,235,852,249.87 and RMB 918,521,317.23 respectively.
The land use rights for berth and storage yard within Chiwan Port area obtained by theGroup from Nanshan Group represent the capital contribution from Nanshan Group to theCompany upon restructuring of the Company, while the remaining land use rights areobtained from Nanshan Group by way of long-term lease. Up to date, Nanshan Group hasnot yet obtained the land use rights in respect of the lands within Chiwan watershed,including aforementioned capital contribution and land lease to the Group, therefore, theGroup cannot obtain the ownership certificate for relevant land and buildings on suchland. The Company's management understood that 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 expenditure
Item | 31/12/2021 | Increase for the year | Decrease for the year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2022 | |||
Transfer to intangible assets | Transfer to construction in progress | Transfer to fixed assets | Transfer to profit or loss for the year | |||||
The Greater Bay Area combined port program | - | 93,915,187.41 | - | - | - | 93,915,187.41 | - | - |
Intelligent management platform system | - | 15,151,413.80 | - | - | - | 15,151,413.80 | - | - |
Development of intelligent gate system | - | 10,430,246.01 | - | - | - | 10,430,246.01 | - | - |
Multifunctional Port BTOS Cloud Edge Fusion Platform Phase I R&D Project | - | 8,075,139.92 | - | - | - | 8,075,139.92 | - | - |
RMG automation of the yard operation | - | 7,986,770.09 | - | - | - | 7,986,770.09 | - | - |
Intelligent terminal program | - | 7,549,814.41 | - | - | - | 7,549,814.41 | - | - |
R&D of remote control security system of collision prevention for RTG adjacent container | - | 7,376,402.29 | - | - | - | 7,376,402.29 | - | - |
"Hongzhang" Super Computing Cluster and Port AI model construction system project | - | 6,219,670.14 | - | - | - | - | - | 6,219,670.14 |
Development and application of automatic control systems for heavy oil, diesel, gasoline, and methanol processes | 25,818,970.84 | - | - | - | 25,818,970.84 | - | - | - |
Key technical research for the device used to load crude oil to a train | 21,874,948.38 | - | 253,861.16 | - | 21,621,087.22 | - | - | - |
Others | 34,697,306.63 | 162,760,457.71 | 30,006,701.95 | - | 19,037,331.60 | 137,221,204.77 | - | 11,192,526.02 |
Total | 82,391,225.85 | 319,465,101.78 | 30,260,563.11 | - | 66,477,389.66 | 287,706,178.70 | - | 17,412,196.16 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill
(1) Original carrying amount of goodwill
Investee | 31/12/2021 | Increase | Decrease | Effect of translation of financial statements denominated in foreign currencies | 31/12/2022 |
TCP | 2,329,133,573.36 | - | - | 387,265,949.02 | 2,716,399,522.38 |
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 | 6,994,823,986.40 | - | - | 387,265,949.02 | 7,382,089,935.42 |
(2) Provision for impairment of goodwill
Investee | 31/12/2021 | Provision | Decrease | Effect of translation of financial statements denominated in foreign currencies | 31/12/2022 |
Zhanjiang Port | 418,345,307.68 | - | - | - | 418,345,307.68 |
Shantou Port | 552,317,736.65 | - | - | - | 552,317,736.65 |
Total | 970,663,044.33 | - | - | - | 970,663,044.33 |
(3) Information of asset groups or portfolio of asset groups to which the goodwill belongs
The Group takes the ability to independently generate cash inflows, the way to manage theproduction and operation activities (mainly by geographic areas) and the unified decision on theuse and disposal of the assets as the criteria to determine asset groups or portfolio of asset groups,and performs impairment test of goodwill for the asset groups or portfolio of asset groups on suchbasis. As at 31 December 2022, the asset groups or portfolio of asset groups determined by theGroup include: TCP; Mega Shekou Container Terminals Limited, including Shekou ContainerTerminals Ltd., Shenzhen Lianyunjie Container Terminals Co., Ltd., Anxunjie ContainerTerminals (Shenzhen) Co., Ltd., CM Port, Shantou Port, Zhanjiang port, Ningbo Daxie, ShenzhenMawan Project, including Shenzhen Mawan Port Waterway Co., Ltd. and Shenzhen MagangGodown & Wharf Co., Ltd. (hereinafter referred to as "Magang Godown & Wharf").
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 relatedasset groups and portfolio of asset groups (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 asset groups and portfolio ofasset groups 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 26 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 asset groups and portfolio of asset groups 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 forecast period adopted in 2022 are 11.20%-20.47% and 2.00%-2.62% respectively.The parameters of key assumptions determined by the Group's management are in line with theGroup's historical experience or external source of information.
23. Long-term prepaid expenses
Presentation of long-term prepaid expenses:
Item | 31/12/2021 | Increase for the year | Amortization in the year | Other decreases | 31/12/2022 | Reason for other decreases |
Tonggu channel widening project (Note 1) | 473,211,130.99 | - | 17,764,434.24 | - | 455,446,696.75 | |
West public channel widening project at West port area (Note 2) | 252,759,769.78 | 3,312,887.13 | 6,635,254.04 | - | 249,437,402.87 | |
Relocation project of Nanhai Rescue Bureau | 38,661,479.90 | - | 1,107,368.40 | - | 37,554,111.50 | |
Expenditures for the improvement of leased fixed assets | 20,786,525.04 | 2,460,225.71 | 2,615,577.38 | - | 20,631,173.37 | |
Dredging project | 76,591,867.23 | 9,291,637.47 | 13,269,093.07 | 2,853,992.26 | 69,760,419.37 | Reclassified to West public channel widening project at West port area |
Others | 113,983,768.58 | 83,025,999.52 | 43,482,667.06 | - | 153,527,101.04 | |
Total | 975,994,541.52 | 98,090,749.83 | 84,874,394.19 | 2,853,992.26 | 986,356,904.90 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Long-term prepaid expenses - continued
Note 1: This represents the Group's actual expenses on Shenzhen Western Port Area Tonggu
Channel 210-270M Widening Project. According to relevant resolutions of ShenzhenMunicipal Government, the enterprise and government shall bear 60% and 40% of theexpenses incurred for the 210-240M widening project, and 50% and 50% of the expensesincurred for the 240-270M widening project respectively. 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 lives of the twowidening projects of 35 and 40 years using straight-line method since the completion ofeach project in 2008 and 2019, respectively.
Note 2: This represents the Group's actual expenses on Shenzhen West Port Area Public Channel
Widening Project, of which the widening of 240-270M in the first section was completedon 1 June 2019 and the widening of 240-270M in the second and third sections wascompleted on 5 November 2020. According to relevant resolutions of Shenzhen MunicipalGovernment, the enterprise and government shall bear 50% and 50% of the expensesincurred for the project respectively. The Company's subsidiary has included the expenseson deepening the channel in the item of "long-term prepaid expenses", and amortized suchexpenses over the expected useful life of 40 years using straight-line method since thecompletion of each section of the channel widening project.
24. Deferred income tax
(1) Deferred tax assets without offsetting
Item | 31/12/2022 | 31/12/2021 | ||
Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
Unrealized profit | 756,772,558.79 | 184,729,651.97 | 769,833,723.80 | 187,934,375.63 |
Provision for credit loss | 190,727,520.03 | 35,544,695.31 | 134,107,345.89 | 22,607,019.97 |
Deductible losses | 182,211,924.34 | 40,193,891.36 | 243,923,028.71 | 77,871,713.03 |
Accrued and unpaid wages | 161,026,788.29 | 35,802,355.38 | 133,228,573.09 | 32,069,398.58 |
Depreciation of fixed assets | 154,724,225.49 | 35,753,675.92 | 174,310,058.63 | 38,498,510.97 |
Deferred income | 36,723,054.56 | 8,709,144.22 | 37,320,614.70 | 8,908,126.11 |
Provisions | 35,365,156.43 | 12,024,153.19 | 23,243,718.18 | 7,902,864.18 |
Amortization of computer software | 9,291,532.77 | 2,322,883.19 | 9,375,355.92 | 2,343,838.98 |
Provision for impairment of assets | 5,507,073.16 | 1,376,768.29 | 3,858,354.37 | 964,588.59 |
Organization costs | 3,498,150.00 | 874,537.50 | 5,967,432.36 | 1,491,858.09 |
Others | 57,124,137.75 | 15,595,505.07 | 69,133,036.30 | 17,553,416.71 |
Total | 1,592,972,121.61 | 372,927,261.40 | 1,604,301,241.95 | 398,145,710.84 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Item | 31/12/2022 | 31/12/2021 | ||
Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
Withholding dividend income tax | 37,565,601,815.13 | 2,568,624,605.88 | 32,834,363,823.45 | 2,276,809,099.05 |
Fair value adjustment of assets acquired from business combination | 7,755,954,464.86 | 1,762,190,010.27 | 7,922,514,263.15 | 1,794,717,729.81 |
Depreciation of fixed assets | 1,119,997,714.31 | 280,579,814.18 | 855,120,746.48 | 226,223,855.58 |
Changes in fair value of other non-current financial assets | 330,012,225.76 | 82,503,056.44 | 478,483,648.29 | 99,590,902.64 |
Changes in fair value of investments in other equity instruments | 130,791,178.28 | 32,697,794.57 | 138,988,784.68 | 34,747,196.17 |
Others | 1,169,095,183.52 | 126,676,026.52 | 1,101,926,283.77 | 118,328,687.36 |
Total | 48,071,452,581.86 | 4,853,271,307.86 | 43,331,397,549.82 | 4,550,417,470.61 |
(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 the year | Offset amount of deferred tax assets and liabilities at the beginning of the year | Balance of deferred tax assets or liabilities after offsetting at the beginning of the year |
Deferred tax assets | - | 372,927,261.40 | - | 398,145,710.84 |
Deferred tax liabilities | - | 4,853,271,307.86 | - | 4,550,417,470.61 |
(4) Deductible temporary differences and deductible losses for which deferred tax assets are
not recognized
Item | 31/12/2022 | 31/12/2021 |
Deductible temporary differences | 930,204,772.41 | 944,129,558.25 |
Deductible losses | 2,112,659,943.00 | 2,197,937,158.38 |
Total | 3,042,864,715.41 | 3,142,066,716.63 |
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 are recognized.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred income tax - continued
(5) Deductible losses for which deferred tax assets are not recognized will be expired in the
following years:
Year | 31/12/2022 | 31/12/2021 |
2022 | - | 418,419,582.20 |
2023 | 515,101,493.80 | 568,545,269.63 |
2024 | 488,358,232.03 | 501,044,247.06 |
2025 | 375,208,491.05 | 385,310,677.29 |
2026 | 112,756,494.15 | 300,322,682.88 |
2027 | 600,178,442.73 | - |
Deductible losses due after 2028 | 21,056,789.24 | 24,294,699.32 |
Total | 2,112,659,943.00 | 2,197,937,158.38 |
25. Other non-current assets
Item | 31/12/2022 | 31/12/2021 |
Advances for the channel project (Note) | 989,752,762.75 | 965,997,076.71 |
Prepayments for fixed assets | 117,094,834.14 | 66,519,391.16 |
Prepayments for terminal franchise | 27,493,116.21 | 28,084,523.57 |
Prepayments for land use rights | - | 132,334,704.86 |
Others | 52,448,665.69 | 38,157,256.39 |
Subtotal | 1,186,789,378.79 | 1,231,092,952.69 |
Less: Impairment provision | - | - |
Total | 1,186,789,378.79 | 1,231,092,952.69 |
Note: This represents that the Company's subsidiary Zhanjiang Port, upon its reorganization into
a joint stock company in 2007, signed the Channel Arrangement Agreement with State-owned Assets Supervision and Administration Commission of Zhanjiang ("ZhanjiangSASAC") and China Merchants International Terminal (Zhanjiang) Co., Ltd. According tothe agreement, the channel belongs to Zhanjiang SASAC, therefore, the Group presentedthe advances of channel project that should be repaid by Zhanjiang SASAC as other non-current assets.
26. Short-term borrowings
(1) Classification of short-term borrowings
Item | 31/12/2022 | 31/12/2021 |
Credit loan | 7,149,322,782.85 | 12,450,169,472.03 |
Pledged loans (Note) | 15,015,583.33 | |
Guaranteed loan | - | 1,201,283,333.33 |
Total | 7,164,338,366.18 | 13,651,452,805.36 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. Short-term borrowings - continued
(1) Classification of short-term borrowings - continued
Note: This represents the short-term borrowings of RMB15,015,583.33 from China Merchants
Bank Co., Ltd. obtained by Guangdong Yide Port Co., Ltd. (hereinafter referred to as "YidePort") , a subsidiary of the Company, with its fixed assets as the collateral.
(2) As at 31 December 2022, the Group has no short-term borrowings that are overdue.
27. Notes payable
Category | 31/12/2022 | 31/12/2021 |
Commercial acceptance | - | 1,895,987.17 |
Total | - | 1,895,987.17 |
28. Accounts payable
Item | 31/12/2022 | 31/12/2021 |
Service fee | 299,350,272.24 | 279,969,574.04 |
Material purchase | 132,460,163.17 | 147,895,793.90 |
Construction fee | 110,687,325.42 | 189,852,525.62 |
Equipment payments | 87,445,302.02 | 34,478,229.18 |
Rental fee | 8,304,019.32 | 6,226,422.72 |
Others | 172,902,315.49 | 185,397,893.05 |
Total | 811,149,397.66 | 843,820,438.51 |
(1) Aging of accounts payable
Aging | 31/12/2022 | 31/12/2021 | ||
Amount | Proportion (%) | Amount | Proportion (%) | |
Within 1 year (inclusive) | 710,976,970.28 | 87.65 | 751,095,352.31 | 89.01 |
1-2 years (inclusive) | 47,038,049.65 | 5.80 | 58,151,929.86 | 6.89 |
2-3 years (inclusive) | 26,667,189.69 | 3.29 | 8,515,047.38 | 1.01 |
More than 3 years | 26,467,188.04 | 3.26 | 26,058,108.96 | 3.09 |
Total | 811,149,397.66 | 100.00 | 843,820,438.51 | 100.00 |
(2) Significant accounts payable aged more than one year
Name of entity | 31/12/2022 | Aging | Reason for outstanding or not being carried forward |
Shenzhen City Planning and Land Resources Committee Nanshan Administration | 21,642,795.50 | More than 3 years | The government planning project has not been completed, and the ownership certificate is not obtained. |
Quanzhou Antong Logistics Co., Ltd. | 16,948,161.45 | 1-2 years | To be paid upon confirmation by both parties. |
Total | 38,590,956.95 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Receipts in advance
Item | 31/12/2022 | 31/12/2021 |
Rental fee received in advance | 6,205,443.31 | 6,724,007.73 |
Management fee received in advance | - | 2,163,886.70 |
Others | 3,681,088.28 | 425,271.58 |
Total | 9,886,531.59 | 9,313,166.01 |
(1) Aging of receipts in advance
Aging | 31/12/2022 | 31/12/2021 | ||
Amount | Proportion (%) | Amount | Proportion (%) | |
Within 1 year (inclusive) | 9,884,079.59 | 99.98 | 9,283,472.35 | 99.68 |
1-2 years (inclusive) | - | - | 13,943.66 | 0.15 |
2-3 years (inclusive) | - | - | - | - |
More than 3 years | 2,452.00 | 0.02 | 15,750.00 | 0.17 |
Total | 9,886,531.59 | 100.00 | 9,313,166.01 | 100.00 |
(2) As at 31 December 2022, the Group has no significant receipts in advance aged more than
one year.
30. Contract liabilities
(1) Presentation of contract liabilities
Item | 31/12/2022 | 31/12/2021 |
Service fee received in advance | 59,729,035.75 | 47,772,567.97 |
Port charges received in advance | 55,045,635.27 | 122,718,356.71 |
Warehousing fee received in advance | 3,048,588.90 | 15,698,102.34 |
Others | 24,076,291.11 | 10,595,498.24 |
Total | 141,899,551.03 | 196,784,525.26 |
(2) There are no significant changes in the carrying amount of contract liabilities during the
year.
(3) As at 31 December 2022, the Group has no significant contract liabilities aged more than
one year.
(4) Qualitative and quantitative analysis of contract liabilities
Contract liabilities mainly represent the amount received by the Group for the port servicesprovided to customers. The payment is collected according to the time agreed in the contract. TheGroup recognizes contract revenue based on the progress of the contract. The contract liabilitieswill be recognized as revenue after the Group fulfils its performance obligations.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Contract liabilities - continued
(5) Revenue recognized in the year and included in the carrying amount of contract liabilities
at the beginning of the year
An amount of RMB 140,142,620.89 included in the carrying amount of contract liabilities at thebeginning of 2022 has been recognized as revenue in the current year, including contractliabilities arising from settled but unfinished construction resulting from the contract of servicefees received in advance amounting to RMB 8,013,654.49, contract liabilities arising from settledbut unfinished construction resulting from the contract of port charges received in advanceamounting to RMB 116,799,424.52, contract liabilities arising from settled but unfinishedconstruction resulting from contract of warehousing fee received in advance amounting to RMB5,750,669.26, and contract liabilities arising from settled but unfinished construction resultingfrom other contracts amounting to RMB 9,578,872.62.
31. Employee benefits payable
(1) Presentation of employee benefits payable
Item | 31/12/2021 | Effect of changes in the scope of consolidation | Increase for the year | Decrease for the year | 31/12/2022 |
1. Short-term benefits | 808,913,314.49 | - | 3,310,660,483.51 | 3,198,040,372.01 | 921,533,425.99 |
2. Post-employment benefits - defined contribution plan | 6,125,899.58 | - | 343,308,676.05 | 336,051,060.70 | 13,383,514.93 |
3. Termination benefits | 5,900,000.00 | - | 15,889,694.23 | 19,366,411.45 | 2,423,282.78 |
4. Other benefits due within 1 year | - | - | 4,157,316.73 | 4,157,316.73 | - |
5. Others | -522,798.60 | - | 4,105,888.70 | 4,088,595.67 | -505,505.57 |
Total | 820,416,415.47 | - | 3,678,122,059.22 | 3,561,703,756.56 | 936,834,718.13 |
(2) Presentation of short-term benefits
Item | 31/12/2021 | Effect of changes in the scope of consolidation | Increase for the year | Decrease for the year | 31/12/2022 |
I. Wages and salaries, bonuses, allowances and subsidies | 783,600,775.04 | - | 2,695,618,818.79 | 2,581,777,331.00 | 897,442,262.83 |
II. Staff welfare | - | - | 155,387,145.54 | 155,387,145.54 | - |
III. Social insurance contributions | 9,058,171.24 | - | 186,709,033.43 | 185,221,665.23 | 10,545,539.44 |
Including: Medical insurance | 7,678,856.08 | - | 158,869,279.10 | 157,916,591.22 | 8,631,543.96 |
Work injury insurance | 47,248.95 | - | 16,735,913.65 | 16,729,245.83 | 53,916.77 |
Others | 1,332,066.21 | - | 11,103,840.68 | 10,575,828.18 | 1,860,078.71 |
IV. Housing funds | -74,747.24 | - | 195,607,230.11 | 195,627,543.34 | -95,060.47 |
V. Labor union and employee education funds | 16,412,863.42 | - | 46,296,443.95 | 49,067,177.41 | 13,642,129.96 |
VI. Other short-term benefits | -83,747.97 | - | 31,041,811.69 | 30,959,509.49 | -1,445.77 |
Total | 808,913,314.49 | - | 3,310,660,483.51 | 3,198,040,372.01 | 921,533,425.99 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Employee benefits payable - continued
(3) Defined benefit plans
Item | 31/12/2021 | Effect of changes in the scope of consolidation | Increase for the year | Decrease for the year | 31/12/2022 |
I. Basic pension | 5,795,491.40 | - | 256,851,622.57 | 252,886,027.83 | 9,761,086.14 |
II. Unemployment insurance | 43,200.24 | - | 4,199,055.46 | 4,193,228.79 | 49,026.91 |
III. Enterprise annuity | 287,207.94 | - | 82,257,998.02 | 78,971,804.08 | 3,573,401.88 |
Total | 6,125,899.58 | - | 343,308,676.05 | 336,051,060.70 | 13,383,514.93 |
The Company and its domestic subsidiaries participate in the pension insurance andunemployment insurance plan established by government institutions as required. According tosuch plans, the Group contributes in proportion to the local government. The Group hasestablished an enterprise annuity system, and accrues and pays the enterprise annuity according tothe enterprise annuity system of the Company and its domestic subsidiaries. In addition to abovecontributions, the Group has no further payment obligations. The corresponding expenses areincluded in profit or loss for the period or the cost of related assets when incurred.
32. Taxes payable
Item | 31/12/2022 | 31/12/2021 |
Enterprise income tax | 804,846,345.79 | 2,098,884,089.24 |
VAT | 30,032,002.80 | 19,025,631.30 |
Other taxes | 83,054,820.50 | 44,809,531.14 |
Total | 917,933,169.09 | 2,162,719,251.68 |
33. Other payables
(1) Summary of other payables
Item | 31/12/2022 | 31/12/2021 |
Dividends payable | 92,374,921.29 | 48,803,019.31 |
Other payables | 1,663,510,336.97 | 2,091,305,321.77 |
Total | 1,755,885,258.26 | 2,140,108,341.08 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(2) Dividends payable
Item | 31/12/2022 | 31/12/2021 |
Ordinary share dividends | 92,374,921.29 | 48,803,019.31 |
Including: Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | 41,400,234.06 | - |
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) | 14,000,000.00 | 18,349,264.69 |
Sri Lanka Ports Authority | 10,446,900.00 | - |
Dalian City Investment Holding Group Co., Ltd. | 3,527,787.23 | 3,527,787.23 |
Dalian Port Jifa Logistics Co., Ltd. ("Jifa Logistics") | 3,000,000.00 | 4,945,967.80 |
Qingdao Qingbao Investment Holding Co., Ltd. | - | 1,979,999.59 |
Note: As at 31 December 2022, the significant dividends payable over one year include RMB
20,000,000.00 due to China Merchants Zhangzhou Development Zone Co., Ltd. and RMB14,000,000.00 due to Dalian Port Container, which are dividends not yet distributed to theinvestors.
(3) Other payables
(a) Disclosure of other payables by nature
Item | 31/12/2022 | 31/12/2021 |
Amount payable for construction and quality warranty | 643,816,817.51 | 821,093,777.44 |
Deposits | 221,628,920.81 | 446,198,541.16 |
Accrued expenses | 190,048,988.98 | 198,863,463.79 |
Customer discount (Note) | 164,622,341.62 | 102,393,978.35 |
Port construction and security fee | 36,697,168.04 | 59,026,576.51 |
Balance of payment for transfer of land use rights | 11,295,700.00 | 11,295,700.00 |
Others | 395,400,400.01 | 452,433,284.52 |
Total | 1,663,510,336.97 | 2,091,305,321.77 |
Note 1: Refer to Note (VIII) 50 (3) for details.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(3) Other payables - continued
(b) Significant other payables aged over 1 year
Company name | Amount payable | Aging | Reason for being outstanding |
Transport Bureau of Shenzhen Municipality (Ports Administration of Shenzhen Municipality) | 79,639,296.08 | 2-3 years and more than 3 years | To be paid upon confirmation by both parties |
Zhanjiang Transportation Bureau | 44,941,876.39 | 1-2 years and 2-3 years | To be paid upon confirmation by both parties |
Shanghai Zhenhua Heavy Industries Co., Ltd. | 35,727,372.57 | 1-2 years and more than 3 years | The contracted settlement condition has not been reached |
Shantou Transportation Bureau | 31,358,355.47 | More than 3 years | To be paid upon confirmation by both parties |
Guangdong JIAYE Reserve Logistics Co., Ltd. | 25,000,000.00 | 2-3 years | To be paid upon confirmation by both parties |
CCCC Fourth Harbor Engineering Co., Ltd. | 23,261,795.77 | 1-2 years and 2-3 years | To be paid upon confirmation by both parties |
China First Metallurgical Group Co., Ltd. | 16,798,178.60 | 2-3 years | The contracted settlement condition has not been reached |
Suhua Construction Group Co., Ltd. | 12,717,406.19 | 1-2 years | The contracted settlement condition has not been reached |
Shenzhen Bulk Cement Office | 12,238,226.14 | More than 3 years | To be paid upon confirmation by both parties |
Dalian Huarui Heavy Industry Group Co., Ltd | 12,169,705.81 | 2-3 years | To be paid upon confirmation by both parties |
Wuxi Huadong Heavy Machinery Co., Ltd. | 10,090,410.68 | 1-2 years | To be paid upon confirmation by both parties |
China Merchants Real Estate (Shenzhen) Co., Ltd. | 10,079,369.00 | More than 3 years | To be paid upon confirmation by both parties |
Guangdong Hengtai Guotong Industrial Co., Ltd. | 10,000,000.00 | 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 |
Shenzhen Penglilong Industrial Co., Ltd. | 8,157,000.00 | 2-3 years and more than 3 years | To be paid upon confirmation by both parties |
Shaanxi Nonferrous Construction Co., Ltd. | 7,880,134.55 | 1-2 years, 2-3 years | To be paid upon confirmation by both parties |
CCCC Third Harbor Engineering Co., Ltd. | 6,829,964.04 | 1-2 years and more than 3 years | The contracted settlement condition has not been reached |
Shenzhen Aohua Zhongmao Industry Co., Ltd. | 6,156,000.00 | 2-3 years and more than 3 years | To be paid upon confirmation by both parties |
CCCC Guangzhou Dredging Co., Ltd. | 6,059,593.85 | 1-2 years | The contracted settlement condition has not been reached |
Total | 369,104,685.14 |
34. Non-current liabilities due within one year
Item | 31/12/2022 | 31/12/2021 |
Long-term borrowings due within one year (Note VIII 36) | 2,313,191,859.96 | 1,187,781,073.61 |
Including: Credit borrowings | 1,368,934,869.99 | 399,437,084.19 |
Guaranteed borrowings | 219,564,028.82 | 158,812,554.95 |
Mortgage and pledged borrowings | 724,692,961.15 | 629,531,434.47 |
Bonds payable due within one year (Note VIII 37) | 8,668,651,537.27 | 6,554,177,357.66 |
Lease liabilities due within one year (Note VIII 38) | 306,942,164.80 | 298,117,295.41 |
Long-term payables due within one year (Note VIII 39) | 155,665,725.85 | 139,696,643.49 |
Long-term employee benefits payable due within one year (Note VIII 40) | 54,414,877.57 | 64,306,914.00 |
Other non-current liabilities due within one year (Note VIII 43) | 142,357,523.50 | 24,130,000.00 |
Total | 11,641,223,688.95 | 8,268,209,284.17 |
35. Other current liabilities
Item | 31/12/2022 | 31/12/2021 |
Short-term bonds payable | 3,017,713,424.64 | 2,002,416,438.36 |
Accrued professional agency fee | 124,799,040.22 | 128,664,439.94 |
Others | 18,635,061.10 | 27,416,897.55 |
Total | 3,161,147,525.96 | 2,158,497,775.85 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Other current liabilities - continued
Changes in short-term bonds payable:
Name of bond | Face value | Date of issue | Term of the bond | Amount of issue | 31/12/2021 | Amount issued in the current year | Interest accrued based on par value | Amortization of premiums or discounts | Repayment in the current year | 31/12/2022 |
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 | 2,002,416,438.36 | - | 9,665,753.42 | - | 2,012,082,191.78 | - |
2.32% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2022-1-17 | 90 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 11,441,095.89 | - | 2,011,441,095.89 | - |
2.15% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2022-3-2 | 180 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 10,602,739.73 | - | 1,010,602,739.73 | - |
2.13% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2022-3-28 | 180 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 21,008,219.18 | - | 2,021,008,219.18 | - |
2.00% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2022-6-14 | 180 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 19,726,027.40 | - | 2,019,726,027.40 | - |
1.75% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2022-9-1 | 270 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 5,657,534.24 | - | - | 1,005,657,534.24 |
1.93% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2022-9-8 | 180 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 12,055,890.40 | - | - | 2,012,055,890.40 |
Total | 12,000,000,000.00 | 12,000,000,000.00 | 2,002,416,438.36 | 10,000,000,000.00 | 90,157,260.26 | - | 9,074,860,273.98 | 3,017,713,424.64 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Long-term borrowings
Category | 31/12/2022 | 31/12/2021 | Range of year-end interest rate |
Credit borrowings | 12,319,883,867.05 | 5,366,543,524.76 | 1.20%-5.17% |
Guaranteed borrowings (Note 1) | 1,020,670,858.02 | 1,076,679,935.08 | 1.20%-13.58% |
Mortgage and pledged borrowings (Note 2) | 1,362,736,312.74 | 1,889,397,484.66 | 3.72%-7.08% |
Total | 14,703,291,037.81 | 8,332,620,944.50 | |
Less: Long-term borrowings due within one year | 2,313,191,859.96 | 1,187,781,073.61 | |
Including: Credit borrowings | 1,368,934,869.99 | 399,437,084.19 | |
Guaranteed borrowings | 219,564,028.82 | 158,812,554.95 | |
Mortgage and pledged borrowings | 724,692,961.15 | 629,531,434.47 | |
Long-term borrowings due after one year | 12,390,099,177.85 | 7,144,839,870.89 |
Note 1: The borrowings were guaranteed by Magang Godown & Wharf, China Merchants Port
(Shenzhen) Co., Ltd., CM Port and Guangdong Zhanjiang Logistics Co., Ltd.
Note 2: As at 31 December 2022, the Group obtained the long-term borrowings of
RMB1,362,736,312.74 (31 December 2021: RMB1,889,397,484.66) with its entire equityin Colombo International Container Terminals Limited (hereinafter referred to as"CICT"), the entire equity in Thesar Maritime Limited (hereinafter referred to as "TML"),the land use rights with property right, fixed assets and construction in progress of YidePort, the land use rights with property right of Shenzhen Haixing Harbor DevelopmentCo., Ltd. (hereinafter referred to as "Shenzhen Haixing"), as well as the land use rightswith property right and fixed assets of CM Port (Zhoushan) RoRo Wharf Co., Ltd.(hereinafter referred to as "Zhoushan RoRo"), mortgaged as collaterals.
Details of mortgage and pledged borrowings are as follows:
Company name | 31/12/2022 | 31/12/2021 | Collateral and pledge |
China Development Bank Corporation | 494,997,308.55 | 747,186,761.93 | The Group's entire equity in CICT |
Bank of China Qianhai Shekou Branch | 280,013,198.30 | 241,370,822.03 | Land use rights of Shenzhen Haixing |
China Construction Bank Shunde Branch | 236,479,995.32 | 264,182,129.41 | Land use rights, fixed assets and construction in progress of Yide Port |
International Finance Corporation | 123,849,460.76 | 230,966,536.60 | The Group's entire equity in TML |
African Development Bank | 56,864,864.36 | 106,074,913.93 | |
Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. | 46,859,749.65 | 87,410,830.23 | |
The OpecFund For International Development | 40,139,904.25 | 74,876,376.58 | |
Societe de Promotion et de Participation pour la Cooperation Economique S.A. | 40,170,265.09 | 74,932,105.74 | |
Deutsche Investitions-und Entwicklungsgesellschaft MBH | 33,449,920.21 | 62,397,008.21 | |
China Minsheng Bank Co., Ltd. Zhoushan Branch | 9,911,646.25 | - | Land use rights and fixed assets of Zhoushan RoRo |
Total | 1,362,736,312.74 | 1,889,397,484.66 |
Note: See Note (VIII) 63 for the above mortgages and pledges.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable
(1) Bonds payable
Item | 31/12/2022 | 31/12/2021 |
4.375% USD 900 million corporate bond | 6,371,347,105.64 | 5,814,296,318.30 |
5.000% USD 600 million corporate bond | 4,227,154,465.35 | 3,859,622,116.07 |
4.750% USD 500 million corporate bond | 3,542,544,662.47 | 3,236,350,690.37 |
4.000% USD 500 million corporate bond | 3,482,186,896.02 | - |
2.690% RMB 3 billion corporate bond | 3,027,415,890.40 | - |
2.450% RMB 3 billion corporate bond | 3,023,560,273.97 | - |
3.520% RMB 2 billion corporate bond | 2,050,147,945.19 | 2,050,147,945.19 |
3.360% RMB 2 billion corporate bond | 2,032,587,397.25 | 2,032,587,397.26 |
5.000% USD 500 million corporate bond | - | 3,207,848,098.69 |
4.890% RMB 2.5 billion corporate bond | - | 2,585,407,534.25 |
IPCA + 7.816% BRL300 million corporate bond | - | 438,789,671.67 |
Total | 27,756,944,636.29 | 23,225,049,771.80 |
Less: Bonds payable due within one year | 8,668,651,537.27 | 6,554,177,357.66 |
Bonds payable due after one year | 19,088,293,099.02 | 16,670,872,414.14 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable - continued
(2) Changes in bonds payable
Name of bonds | Face value | Date of issue | Term of the bond | Amount of issue | 31/12/2021 | Amount issued in the current year | Interest accrued based on par value | Amortization of premiums or discounts | Repayment in current year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2022 |
4.375% USD 900 million corporate bond | USD 900,000,000.00 | 2018-8-6 | 5 years | USD 900,000,000.00 | 5,814,296,318.30 | - | 264,896,739.04 | 11,073,294.93 | 264,383,189.24 | 545,463,942.61 | 6,371,347,105.64 |
5.000% USD 600 million corporate bond | USD 600,000,000.00 | 2018-8-6 | 10 years | USD 600,000,000.00 | 3,859,622,116.07 | - | 201,826,086.88 | 5,180,268.23 | 201,434,810.85 | 361,960,805.02 | 4,227,154,465.35 |
4.750% USD 500 million corporate bond | USD 500,000,000.00 | 2015-8-3 | 10 years | USD 500,000,000.00 | 3,236,350,690.37 | - | 159,745,629.95 | 5,992,447.04 | 159,745,630.01 | 300,201,525.12 | 3,542,544,662.47 |
5.000% USD 500 million corporate bond | USD 500,000,000.00 | 2012-5-4 | 10 years | USD 500,000,000.00 | 3,207,848,098.69 | - | 56,051,102.73 | 2,373,647.20 | 3,453,390,105.04 | 187,117,256.42 | - |
4.890% RMB 2.5 billion corporate bond | 2,500,000,000.00 | 2017-4-21 | 5 years | 2,500,000,000.00 | 2,585,407,534.25 | - | 36,842,465.75 | - | 2,622,250,000.00 | - | - |
3.360% RMB2 billion corporate bond | 2,000,000,000.00 | 2020-7-7 | 3 years | 2,000,000,000.00 | 2,032,587,397.26 | - | 67,199,999.99 | - | 67,200,000.00 | - | 2,032,587,397.25 |
3.520% RMB2 billion corporate bond | 2,000,000,000.00 | 2021-4-14 | 3 years | 2,000,000,000.00 | 2,050,147,945.19 | - | 70,400,000.00 | - | 70,400,000.00 | - | 2,050,147,945.19 |
IPCA + 7.816% BRL300 million corporate bond | BRL299,632,900.00 | 2016-11-7 | 6 years | BRL 299,632,900.00 | 438,789,671.67 | - | 52,973,250.12 | 55,225,349.19 | 617,313,997.29 | 70,325,726.31 | - |
4.000% USD 500 million corporate bond | USD 500,000,000.00 | 2022-6-1 | 5 years | USD 500,000,000.00 | - | 3,351,484,939.46 | 79,052,449.94 | 1,561,139.17 | 67,422,791.10 | 117,511,158.55 | 3,482,186,896.02 |
2.690% RMB 3 billion corporate bond | 3,000,000,000.00 | 2022-8-29 | 3 years | 3,000,000,000.00 | - | 3,000,000,000.00 | 27,415,890.40 | - | - | - | 3,027,415,890.40 |
2.450% RMB 3 billion corporate bond | 3,000,000,000.00 | 2022-9-5 | 2 years | 3,000,000,000.00 | - | 3,000,000,000.00 | 23,560,273.97 | - | - | - | 3,023,560,273.97 |
Total | 23,225,049,771.80 | 9,351,484,939.46 | 1,039,963,888.77 | 81,406,145.76 | 7,523,540,523.53 | 1,582,580,414.03 | 27,756,944,636.29 | ||||
Less: Bonds payable due within one year | 6,554,177,357.66 | 8,668,651,537.27 | |||||||||
Bonds payable due after one year | 16,670,872,414.14 | 19,088,293,099.02 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Lease liabilities
(1) Lease liabilities
Category | 31/12/2022 | 31/12/2021 |
Lease payment | 1,963,098,776.36 | 2,060,643,997.13 |
Unrecognized financing cost | -707,805,697.52 | -707,331,795.63 |
Total | 1,255,293,078.84 | 1,353,312,201.50 |
Less: Lease liabilities due within one year | 306,942,164.80 | 298,117,295.41 |
Lease liabilities due after one year | 948,350,914.04 | 1,055,194,906.09 |
(2) Maturity of lease liabilities
Item | 31/12/2022 |
Minimum lease payments under non-cancellable leases: | |
1st year subsequent to the balance sheet date | 364,803,817.74 |
2nd year subsequent to the balance sheet date | 215,854,408.62 |
3rd year subsequent to the balance sheet date | 48,250,795.11 |
Subsequent years | 1,334,189,754.89 |
Total | 1,963,098,776.36 |
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 | 31/12/2022 | 31/12/2021 |
Long-term payables | 3,698,632,219.45 | 3,540,616,228.99 |
Special payables | 8,349,096.71 | 21,259,780.90 |
Total | 3,706,981,316.16 | 3,561,876,009.89 |
Less: Long-term payables due within one year | 155,665,725.85 | 139,696,643.49 |
Long-term payables due after one year | 3,551,315,590.31 | 3,422,179,366.40 |
(2) Long-term payables
Item | 31/12/2022 | 31/12/2021 |
Terminal management rights (Note 1) | 3,657,579,951.15 | 3,125,647,576.58 |
Finance lease payable (Note 2) | 41,052,268.30 | - |
Payable to minority shareholders of subsidiaries | - | 411,858,969.58 |
Others | - | 3,109,682.83 |
Total | 3,698,632,219.45 | 3,540,616,228.99 |
Less: Long-term payables due within one year | 155,665,725.85 | 139,696,643.49 |
Long-term payables due after one year | 3,542,966,493.60 | 3,400,919,585.50 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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: On 12 August 2011, the Group reached a 35-year building, operation and transfer agreement
through the subsidiary CICT and Sri Lanka Port Authority on the building, operation,management and development of Colombo Port South Container Terminal (hereinafter referredto as "BOT"). The above-mentioned amount payable for the acquisition of terminalmanagement rights is determined by discounting the amount to be paid in the future using theprevailing market interest rate according to the BOT agreement. As at 31 December 2022, theamount payable for the acquisition of terminal management rights is RMB 867,784,742.01.
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 as "APPA"). The agreement provides for an initial term of 25 yearsfor the franchising rights. In April 2016, TCP and APPA entered into the SupplementalAgreement, which extends the term to 50 years and will be expired in October 2048.
On 9 September 2021, TCP, a subsidiary of the Company, entered into a supplementalagreement to the Lease Agreement with APPA for the franchising rights of the Ports ofParanaguá and Antonina, pursuant to which the base figure for the calculation offranchising rights for the Ports of Paranaguá and Antonina was adjusted from Brazil IGP-M Inflation Index ("IGP-M index") to the Extended National Consumer Price Index("IPCA index") of Brazilian Institute of Geography and Statistics("IBGE"). In November2021, TCP readjusted the franchising rights using the IPCA index. As at 31 December2022, the amount of franchising rights payable was RMB 2,789,795,209.14.
Note 2: On 15 June 2022, Zhoushan RoRo, a subsidiary of the Company, entered into a finance
lease contract for sale and leaseback with China Merchants Finance Leasing (Tianjin) Co.,Ltd.
(3) Special payables
Item | 31/12/2021 | Increase for the year | Decrease for the year | 31/12/2022 | Reason |
Refunds of port construction fee | 12,675,502.52 | - | 12,675,502.52 | - | Note 1 |
Employee housing fund | 4,686,678.97 | 439,962.71 | - | 5,126,641.68 | Note 2 |
Innovation workshop for model workers | 3,897,599.41 | - | 675,144.38 | 3,222,455.03 | |
Total | 21,259,780.90 | 439,962.71 | 13,350,646.90 | 8,349,096.71 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 "PortConstruction Fee Management Measures" promulgated by the Ministry of Finance, thispayment is dedicated to the construction of water transport infrastructure and terminalconstruction, which has been fully used in the current period.
Note 2: This represents the repairing fund for public areas and public facilities and equipment
established after the Group sells the public-owned house on the collectively allocated landto employees. The fund is contributed by all the employees having ownership of the houseaccording to the rules and is specially managed and used for specific purpose.
40. Long-term employee benefits payable
(1) Long-term employee benefits payable
Item | 31/12/2022 | 31/12/2021 |
Post-employment benefits - net liabilities of defined benefit plans | 516,950,669.03 | 463,858,274.44 |
Termination benefits | 64,274,552.96 | 71,467,335.47 |
Others (Note) | 112,285,587.01 | 117,662,796.72 |
Total | 693,510,809.00 | 652,988,406.63 |
Less: Long-term employee benefits payable due within one year | 54,414,877.57 | 64,306,914.00 |
Long-term employee benefits payable due after one year | 639,095,931.43 | 588,681,492.63 |
Note: This represents the employee relocation costs of the Company's subsidiary Shantou Port in
connection with land acquisition and reservation.
(2) Changes in defined benefit plans
Present value of defined benefit plan obligations:
Item | 2022 | 2021 |
I. Opening balance | 463,858,274.44 | 429,830,989.42 |
II. Defined benefit cost included in profit or loss for the period | 24,392,165.72 | 26,633,751.24 |
1. Current service cost | 11,191,538.44 | 11,482,700.68 |
2. Past service cost | - | - |
3. Interest adjustment | 13,200,627.28 | 15,151,050.56 |
III. Defined benefit cost included in other comprehensive income | 50,820,198.04 | 31,841,388.55 |
1. Actuarial gains | 49,959,657.35 | 32,665,927.62 |
2. Effect of exchange rate changes | 860,540.69 | -824,539.07 |
IV. Other changes | -22,119,969.17 | -24,447,854.77 |
1. Benefits paid | -22,119,969.17 | -24,447,854.77 |
2. Changes in the scope of consolidation | - | - |
V. Closing balance | 516,950,669.03 | 463,858,274.44 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Long-term employee benefits payable - continued
(2) Changes in defined benefit plans - 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 the above-mentionedretirement benefit plan obligations in an actuarial manner based on the expected cumulativewelfare unit method. The Group recognizes the liabilities based on the actuarial results. Therelevant actuarial gains or losses are included in other comprehensive income and cannot bereclassified into profit or loss in the future. Past service costs are recognized in profit or loss 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
Item | 31/12/2021 | Increase for the year | Decrease for the year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2022 | Reason |
Pending litigation | 23,243,718.18 | 17,513,729.66 | 9,547,298.48 | 4,155,007.07 | 35,365,156.43 | Note |
Sales discount | - | 193,589,600.16 | 193,589,600.16 | - | - | |
Other | 1,003,584.24 | - | 1,003,584.24 | - | - | |
Total | 24,247,302.42 | 211,103,329.82 | 204,140,482.88 | 4,155,007.07 | 35,365,156.43 |
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 | 31/12/2021 | Increase for the year | Decrease for the year | 31/12/2022 |
Government grants | 1,075,566,122.15 | 1,565,800.00 | 45,858,732.41 | 1,031,273,189.74 |
Unrealized sale-and- leaseback income | 391,762.76 | - | 391,762.76 | - |
Total | 1,075,957,884.91 | 1,565,800.00 | 46,250,495.17 | 1,031,273,189.74 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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:
Category | 31/12/2021 | Addition | Amount recognized in other income | 31/12/2022 | Related to assets /related to income |
Refund from marine reclamation land | 336,471,484.55 | - | 19,349,167.92 | 317,122,316.63 | Related to assets |
Tonggu channel widening project (Note) | 262,314,289.68 | - | 7,057,783.56 | 255,256,506.12 | Related to assets |
Special subsidies for facilities and equipment | 233,339,756.18 | - | 10,372,155.79 | 222,967,600.39 | Related to assets |
West public channel widening project at West port area (Note) | 208,661,435.58 | - | 5,439,716.28 | 203,221,719.30 | Related to assets |
Government subsidies for intelligent system | 13,471,673.46 | 1,090,800.00 | 1,626,034.95 | 12,936,438.51 | Related to assets |
Refund of land transfer charges | 6,301,466.61 | - | 267,200.04 | 6,034,266.57 | Related to assets |
Subsidy for green and low carbon port project | 140,390.02 | - | 140,390.02 | - | Related to assets |
Others | 14,865,626.07 | 475,000.00 | 1,606,283.85 | 13,734,342.22 | Related to assets |
Total | 1,075,566,122.15 | 1,565,800.00 | 45,858,732.41 | 1,031,273,189.74 |
Note: Refer to Note (VIII) 23 for details.
43. Other non-current liabilities
Item | 31/12/2022 | 31/12/2021 |
Actuarial cost for the calculation of pension benefit difference for the public security bureau staff (Note 1) | 175,742,813.67 | 176,939,999.96 |
Third party borrowings (Note 2) | 143,755,523.50 | - |
Berth priority call right (Note 3) | 4,480,217.05 | 9,595,454.89 |
Related party borrowings (Note 2) | 3,162,000.00 | - |
Others | 1,600,086.28 | 660,123.68 |
Total | 328,740,640.50 | 187,195,578.53 |
Less: Other non-current liabilities due within one year | 142,357,523.50 | 24,130,000.00 |
Including: Third party borrowings | 123,755,523.50 | - |
Actuarial cost for the calculation of pension benefits difference for the public security bureau staff | 15,440,000.00 | 24,130,000.00 |
Related party borrowings | 3,162,000.00 | - |
Other non-current liabilities due after one year | 186,383,117.00 | 163,065,578.53 |
Note 1: Refer to Note (VIII) 49 for details.
Note 2: This represents the principal and interest on borrowings of the subsidiary of the Company
Shunkong Port from its minority shareholder Guangdong Shunkong City Investment RealEstate Co., Ltd. and its related party Guangdong Shunkong Transportation Investment Co.,Ltd.
Note 3: This represents the berth priority call right as agreed in the contract entered into with the
customers in 2003, with total amount of USD14 million. The Group must give priority tothe berthing requirements of the contracted customers during the contract period. TheGroup amortized the berth priority right over 20 years using straight-line method. In 2022,the amount included in operating income is RMB 5,115,237.84.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Share capital
Item | 31/12/2021 | Changes for the year | 31/12/2022 | ||||
New issue of share | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
2022 | |||||||
I. Restricted tradable shares | |||||||
1. State-owned shares | - | - | - | - | - | - | - |
2. State-owned legal person shares (Note 1) | - | 576,709,537.00 | - | - | - | 576,709,537.00 | 576,709,537.00 |
3. Other domestic shares | 9,821.00 | - | - | - | -2,455.00 | -2,455.00 | 7,366.00 |
4. Foreign shares (Note2) | 1,148,648,648.00 | - | - | - | -1,148,648,648.00 | -1,148,648,648.00 | - |
Total restricted tradable shares | 1,148,658,469.00 | 576,709,537.00 | - | - | -1,148,651,103.00 | -571,941,566.00 | 576,716,903.00 |
II. Non-restricted tradable shares | - | - | - | - | - | - | |
1. Ordinary shares denominated in RMB | 593,819,745.00 | - | - | - | 1,148,648,973.00 | 1,148,648,973.00 | 1,742,468,718.00 |
2. Foreign capital shares listed domestically | 179,886,910.00 | - | - | - | 2,130.00 | 2,130.00 | 179,889,040.00 |
3. Foreign capital shares listed overseas | - | - | - | - | - | - | - |
4. Others | - | - | - | - | - | - | - |
Total non-restricted tradable shares | 773,706,655.00 | - | - | - | 1,148,651,103.00 | 1,148,651,103.00 | 1,922,357,758.00 |
III. Total shares | 1,922,365,124.00 | 576,709,537.00 | - | - | - | 576,709,537.00 | 2,499,074,661.00 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Share capital - continued
Item | 31/12/2020 | Changes for the year | 31/12/2021 | ||||
New issue of share | 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 | - | - | - | -325.00 | -325.00 | 593,819,745.00 |
2. Foreign capital shares listed domestically | 179,886,910.00 | - | - | - | - | - | 179,886,910.00 |
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 |
Note 1: The changes for the year represent 576,709,537 A-shares issued by the Company to Zhejiang Haigang Investment Operation Group Co., Ltd.
in a private placement at RMB 18.50 per share. The net proceeds after deducting all issuing expenses amount to RMB 10,632,533,330.40,increasing the share capital by RMB 576,709,537.00 and capital reserve by RMB 10,055,823,793.40.
Note 2: On 30 October 2018, pursuant to the Reply of China Securities Regulatory Commission to Approve Shenzhen Chiwan Wharf Holdings Ltd.
on Issuing Shares to China Merchants Investment Development Company Limited for Acquisition of Assets and Raising Supporting Funds(Zheng Jian Xu Ke [2018] No.1750), the Company issued 1,148,648,648 A-shares to China Merchants Investment Development CompanyLimited, which were listed on SZSE on 26 December 2018, subject to a sale restriction for a period of 36 months from the listing date with anautomatic 6-month extension. The restricted shares began to be circulated in 2022, and were transferred into non-restricted shares.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Capital Reserve
Item | 31/12/2021 | Increase | Decrease | 31/12/2022 |
2022 | ||||
Capital premium | 23,189,922,809.62 | 11,018,890,153.88 | - | 34,208,812,963.50 |
Including: Capital contributed by investors (Note 1) | 7,012,992,483.94 | 10,055,823,793.40 | - | 17,068,816,277.34 |
Differences arising from business combination involving enterprises under common control | 13,302,937,205.73 | - | - | 13,302,937,205.73 |
Differences arising from acquisition of minority interests (Note 2) | 1,215,209,939.74 | 950,213,874.28 | - | 2,165,423,814.02 |
Others | 1,658,783,180.21 | 12,852,486.20 | - | 1,671,635,666.41 |
Other capital reserve | 402,779,949.08 | 151,303,029.21 | 11,255,106.54 | 542,827,871.75 |
Including: Transfer from capital reserve under the previous accounting system | -2,781,133.00 | - | - | -2,781,133.00 |
Unexercised share-based payment (Note 3) | 9,956,938.60 | 5,617,671.30 | 9,983,207.90 | 5,591,402.00 |
Other changes in owners' equity of the investee under equity method other than changes in net profit or loss, profit distribution and other comprehensive income | 395,604,143.48 | 145,685,357.91 | 1,271,898.64 | 540,017,602.75 |
Total | 23,592,702,758.70 | 11,170,193,183.09 | 11,255,106.54 | 34,751,640,835.25 |
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 | 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 | 10,096,607.62 | 11,870,209.58 | 12,009,878.60 | 9,956,938.60 |
Other changes in owners' equity of the investee under equity method other than changes in net profit or loss, profit distribution and other comprehensive income | 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 |
Note 1: Refer to Note (VIII) 44 for details.
Note 2: The changes for the year mainly represent the dividends attributable to CM Port that the
Company chose to acquire in the form of share replacement and shareholding increase,which increased the capital reserve by RMB 950,213,874.28. Refer to Note (X) 2 for details.
Note 3: Refer to Note (XIV) 2 for details.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income
Item | 31/12/2021 | 2022 | Other changes | 31/12/2022 | ||||
Pre-tax amount for the year | Less: Amount included in other comprehensive income in the prior period but transferred to profit or loss in the current period | Less: Income tax expenses | Attributable to owners of the Company, net of tax | Attributable to minority shareholders, net of tax | ||||
2022 | ||||||||
I. Other comprehensive income that will not be reclassified subsequently to profit or loss | 81,233,996.26 | -72,230,027.20 | - | 329,334.05 | -22,706,023.29 | -49,853,337.96 | 7,513,669.91 | 51,014,303.06 |
Including: Changes arising from remeasurement of defined benefit plans | 2,603,415.85 | -49,039,668.45 | - | - | -12,793,128.73 | -36,246,539.72 | - | -10,189,712.88 |
Other comprehensive income that can't be reclassified to profit or loss under equity method | 2,643,088.68 | -25,906,733.50 | - | - | -11,550,762.02 | -14,355,971.48 | - | -8,907,673.34 |
Changes in fair value of other equity instruments | 75,987,491.73 | 2,716,374.75 | - | 329,334.05 | 1,637,867.46 | 749,173.24 | 7,513,669.91 | 70,111,689.28 |
II. Other comprehensive income that will be reclassified subsequently to profit or loss | -971,359,314.44 | 1,696,086,234.25 | - | - | 228,808,762.94 | 1,467,277,471.31 | - | -742,550,551.50 |
Including: Other comprehensive income that may be reclassified to profit or loss under equity method | 49,431,519.10 | -246,633,232.89 | - | - | -110,193,707.53 | -136,439,525.36 | - | -60,762,188.43 |
Translation differences of financial statements denominated in foreign currencies | -1,020,790,833.54 | 1,942,719,467.14 | - | - | 339,002,470.47 | 1,603,716,996.67 | - | -681,788,363.07 |
Total other comprehensive income | -890,125,318.18 | 1,623,856,207.05 | - | 329,334.05 | 206,102,739.65 | 1,417,424,133.35 | 7,513,669.91 | -691,536,248.44 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income - continued
Item | 31/12/2020 | 2021 | Other changes | 31/12/2021 | ||||
Pre-tax amount for the year | Less: Amount included in other comprehensive income in the prior period but transferred to profit or loss in the current period | Less: Income tax expenses | Attributable to owners of the Company, net of tax | Attributable to minority shareholders, net of tax | ||||
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 benefit plans | 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 reclassified 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 reclassified 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47. Special reserve
Item | 31/12/2021 | Increase | Decrease | 31/12/2022 |
Safety production cost | 9,184,429.12 | 62,696,039.72 | 45,522,208.87 | 26,358,259.97 |
48. Surplus reserve
Item | 31/12/2021 | Increase | Decrease | 31/12/2022 |
Statutory surplus reserve | 961,182,562.00 | 40,734,887.15 | - | 1,001,917,449.15 |
49. Unappropriated profit
Item | Amount | Proportion of appropriation or allocation |
2022 | ||
Unappropriated profit at the beginning of the year before adjustment | 14,205,879,106.49 | |
Add: Adjustment to unappropriated profit at beginning of the year | - | |
Including: Effect of business combinations involving enterprises under common control | - | |
Unappropriated profit at the beginning of the year after adjustment | 14,205,879,106.49 | |
Add: Net profit of the year attributable to shareholders of the Company | 3,337,446,222.82 | |
Transfer of other comprehensive income | 7,513,669.91 | |
Less: Transfer to statutory surplus reserve | 40,734,887.15 | |
Transfer to discretionary surplus reserve | - | |
Transfer to general risk reserve | - | |
Ordinary shares' dividends payable | 826,617,003.32 | Note (1) |
Ordinary shares' dividends converted into share capital | - | |
Pension benefit difference | 3,798,761.66 | Note (2) |
Others | - | |
Unappropriated profit at the end of the year | 16,679,688,347.09 |
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 year | 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 Company | 2,685,829,204.07 | |
Less: Transfer to statutory surplus reserve | 70,492,239.72 | |
Transfer to discretionary surplus reserve | - | |
Transfer to general risk reserve | - | |
Ordinary shares' dividends payable | 730,498,747.12 | |
Ordinary shares' dividends converted into share capital | - | |
Pension benefit difference | 3,525,104.12 | |
Others | 4,554,105.32 | |
Unappropriated profit at the end of the year | 14,205,879,106.49 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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 21 April 2022, the Company
distributes cash dividends of RMB 4.30 (inclusive of tax) for every 10 shares, totallingRMB 826,617,003.32 on the basis of the total shares of 1,922,365,124 at the end of 2021.
Note 2: This represents the difference between the pension benefits under the original standard
and the retirement benefits of Zhanjiang municipal police borne by Zhanjiang Port.Zhanjiang Port recognizes the related liabilities based on the actuarial results, andunappropriated profit of RMB 3,798,761.66 is eliminated based on the proportion ofequity interest in Zhanjiang Port.
50. Operating income and operating costs
(1) Operating income and operating costs
Item | 2022 | 2021 | ||
Income | Cost | Income | Cost | |
Principal operation | 16,072,394,601.93 | 9,433,786,605.46 | 15,099,983,817.24 | 8,827,960,579.72 |
Other operations | 158,094,525.62 | 216,675,107.48 | 183,824,357.36 | 218,875,602.77 |
Total | 16,230,489,127.55 | 9,650,461,712.94 | 15,283,808,174.60 | 9,046,836,182.49 |
(2) Revenue from contracts
Category of contracts | Ports operation | Bonded logistics operation | Other operations | Total |
Mainland China, Hong Kong and Taiwan area | 11,540,287,421.98 | 406,998,753.60 | 158,094,525.62 | 12,105,380,701.20 |
- Pearl River Delta | 6,774,045,422.66 | 263,389,266.60 | 158,094,525.62 | 7,195,529,214.88 |
- Yangtze River Delta | 1,139,944,516.62 | - | - | 1,139,944,516.62 |
- Bohai Rim | 74,222,857.10 | 143,609,487.00 | - | 217,832,344.10 |
- Other areas | 3,552,074,625.60 | - | - | 3,552,074,625.60 |
Other countries | 4,086,514,642.86 | 38,593,783.49 | - | 4,125,108,426.35 |
Total | 15,626,802,064.84 | 445,592,537.09 | 158,094,525.62 | 16,230,489,127.55 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Operating income and operating costs - continued
(3) Description of performance obligations
The Group provides port service, bonded logistics service and other services. These services areobligations performed over a period of time. For port services, as the handling time for containersand bulk cargos is short, the management believes that it is not necessary to recognize revenueaccording to the progress towards the completion of contract and it is an appropriate method torecognize the fulfilment of performance obligation and revenue upon the completion of theservice. For bonded logistics service and other services, the customers evenly obtain and consumethe economic benefits from the Group's performance of contract, meanwhile the charging rules asagreed in the contract terms usually adopt daily/month/yearly basis. During the process ofrendering 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 volume finally realized within the contract period isuncertain, the contract consideration is subject to variable factors. The management includes thispart of discount in other payables and provisions. At the end of the year, the variableconsiderations arising from sales discount are set out in Note (VIII) 33 (3) and Note (VIII) 41.
51. Taxes and surcharges
Item | 2022 | 2021 |
Property tax | 63,233,633.53 | 70,389,135.52 |
Land use tax | 36,260,260.97 | 34,202,909.60 |
City construction and maintenance tax | 8,456,389.09 | 9,898,436.53 |
Education surcharges and local education surcharges | 6,253,550.00 | 7,369,925.21 |
Stamp duty | 8,694,943.46 | 3,995,999.87 |
Others (Note) | 159,350,696.41 | 66,117,837.58 |
Total | 282,249,473.46 | 191,974,244.31 |
Note: Others mainly represent the social contribution tax and tax on services borne by TCP, a
subsidiary of the Company, totalled BRL116,502,509.42 (equivalent to RMB151,706,417.51) for the year.
52. Administrative expenses
Item | 2022 | 2021 |
Employee benefits | 1,280,394,043.79 | 1,254,118,714.39 |
Fees paid to agencies | 80,164,840.55 | 67,169,001.82 |
Depreciation expenses | 79,095,275.09 | 71,427,267.44 |
Amortization of intangible assets | 54,493,578.78 | 62,610,371.46 |
Others | 270,946,998.30 | 273,835,203.39 |
Total | 1,765,094,736.51 | 1,729,160,558.50 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
53. Financial expenses
Item | 2022 | 2021 |
Interest expenses | 1,960,177,578.36 | 1,740,044,260.37 |
Less: Interest income | 469,834,098.05 | 377,563,874.49 |
Less: Capitalized interest expenses | 30,960,097.84 | 55,177,640.96 |
Exchange differences | 477,004,284.27 | -8,805,663.12 |
Interest expenses -Terminal management rights (Note) | 222,326,056.63 | 145,044,317.17 |
Interest expenses on lease liabilities | 73,619,268.64 | 79,937,678.42 |
Handling fee | 21,148,526.03 | 14,643,061.91 |
Others | 5,232,154.38 | 7,216,457.99 |
Total | 2,258,713,672.42 | 1,545,338,597.29 |
Note: Details are set out in Note (VIII) 39.
54. Other income
Item | 2022 | 2021 |
Business development subsidy | 94,355,004.33 | 250,536,747.94 |
Transfer from allocation of deferred income (Note VIII 42) | 45,858,732.41 | 44,110,161.98 |
Additional deduction of VAT | 45,179,805.12 | 24,740,974.05 |
Special fund for operation | 7,385,898.57 | 9,947,660.80 |
Steady post subsidies | 5,771,198.38 | 15,167,723.22 |
Others | 43,097,431.61 | 18,741,893.09 |
Total | 241,648,070.42 | 363,245,161.08 |
55. Investment income
(1) Details of investment income:
Item | 2022 | 2021 |
Income from long-term equity investments under equity method | 7,185,182,148.75 | 6,290,957,480.59 |
Including: Income from long-term equity investments of associates under equity method | 6,765,840,426.95 | 6,048,315,587.10 |
Income from long-term equity investments of joint ventures under equity method | 419,341,721.80 | 242,641,893.49 |
Income from disposal of long-term equity investments | -20,508.06 | 225,846,183.50 |
Investment income from held-for-trading financial assets | 152,728,622.47 | 72,438,700.63 |
Investment income from other non-current financial assets | 39,525,241.71 | 40,297,383.53 |
Dividend income from investments in other equity instruments | 240,001.46 | 7,409,762.66 |
Total | 7,377,655,506.33 | 6,636,949,510.91 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
55. Investment income - continued
(2) Details of income from long-term equity investments under equity method
Investee | 2022 | 2021 | Reason for changes |
SIPG | 4,762,565,562.93 | 4,190,349,799.99 | Changes in net profit of investee |
Terminal Link SAS | 364,965,366.44 | 476,262,839.86 | Changes in net profit of investee |
Ningbo Zhoushan | 351,607,511.90 | 229,363,153.19 | Changes in net profit of investee |
Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | 218,696,415.40 | 130,229,025.57 | Changes in net profit of investee |
Nanshan Group | 206,680,217.04 | 685,312,588.00 | Changes in net profit of investee |
Liaoning Port | 144,196,061.13 | 177,413,349.12 | Changes in net profit of investee |
Euro-Asia Oceangate, S.àr.l. | 140,072,915.26 | 57,559,118.21 | Changes in net profit of investee |
Qingdao Qianwan United Container Terminal Co., Ltd. | 112,414,404.75 | 83,154,378.77 | Changes in net profit of investee |
Yantai Port Group Laizhou Port Co., Ltd | 32,565,975.37 | 33,327,096.27 | Changes in net profit of investee |
Port of Newcastle | 28,511,394.42 | 12,868,828.80 | Changes in net profit of investee |
China Merchants Northeast Asia Development and Investment Co., Ltd | -13,657,927.07 | 8,262,246.98 | Changes in net profit of investee |
Others | 836,564,251.18 | 206,855,055.83 | Changes in net profit of investee |
Total | 7,185,182,148.75 | 6,290,957,480.59 |
56. Gains (Losses) from changes in fair value
Item | 2022 | 2021 |
Held-for-trading financial assets | 34,417,357.38 | 11,666,053.97 |
Other non-current financial assets | -163,451,007.49 | -96,596,314.84 |
Including: Financial assets at fair value through profit or loss | -163,451,007.49 | -96,596,314.84 |
Other non-current liabilities | - | 306,172,536.04 |
Including: Financial liabilities at fair value through profit or loss | - | 306,172,536.04 |
Total | -129,033,650.11 | 221,242,275.17 |
57. Gains (losses) from impairment of credit
Item | 2022 | 2021 |
I. Gains (losses) from impairment of credit of accounts receivable | -5,939,952.37 | -13,674,941.27 |
II. Gains (losses) from impairment of credit of other receivables | -217,234,842.93 | -239,661,663.35 |
III. Gains (losses) from impairment of credit of long-term receivables | -298,781.25 | 382,987.12 |
Total | -223,473,576.55 | -252,953,617.50 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
58. Gains (losses) from impairment of assets
Item | 2022 | 2021 |
Gains (losses) from decline in value of inventories | -573,122.05 | - |
Gains (losses) from impairment of fixed assets | -6,048,776.05 | - |
Gains (losses) from impairment of intangible assets | -15,537,122.10 | - |
Gains (losses) from impairment of long-term equity investments | - | -2,147,208.07 |
Gains (losses) from impairment of goodwill | - | -418,345,307.68 |
Total | -22,159,020.20 | -420,492,515.75 |
59. Gains (losses) on disposal of assets
Item | 2022 | 2021 | Amount included in non-recurring profit or loss for the current year |
Gains on disposal of non-current assets | 55,130,095.52 | 35,576,459.42 | 55,130,095.52 |
Including: Gains (losses) on disposal of fixed assets | -1,824,719.58 | 9,374,568.54 | -1,824,719.58 |
Gains on disposal of intangible assets | 57,590,483.04 | 30,064,375.22 | 57,590,483.04 |
Other gains (losses) | -635,667.94 | -3,862,484.34 | -635,667.94 |
60. Non-operating income
Item | 2022 | 2021 | Amount included in non-recurring profit or loss for the current year |
Operation compensation (Note) | 213,574,591.16 | - | 213,574,591.16 |
Exempted current accounts | 25,091,421.77 | 1,446,930.55 | 25,091,421.77 |
Management service fee and directors' remuneration | 8,190,857.40 | 7,912,260.93 | 8,190,857.40 |
Income from relocation compensation | 6,955,000.00 | - | 6,955,000.00 |
Land rent deduction | 6,421,113.49 | 6,952,470.22 | 6,421,113.49 |
Gains from retirement or damage of non-current assets | 3,138,573.24 | 3,613,726.26 | 3,138,573.24 |
Including: Gains from retirement or damage of fixed assets | 3,138,573.24 | 3,613,726.26 | 3,138,573.24 |
Compensation received for violation of contracts | 2,930,876.85 | 3,519,366.77 | 2,930,876.85 |
Government grants | 1,640,553.77 | 875,528.75 | 1,640,553.77 |
Insurance claims | 341,555.58 | 886,184.77 | 341,555.58 |
Profit from tax saving | - | 12,743,050.88 | - |
Others | 10,989,909.51 | 5,518,018.37 | 10,989,909.51 |
Total | 279,274,452.77 | 43,467,537.50 | 279,274,452.77 |
Note: Refer to Note (VIII) 7.3 (2) for details.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
61. Non-operating expenses
Item | 2022 | 2021 | Amount included in non-recurring profit or loss for the current year |
Losses on retirement of non-current assets | 162,620,964.79 | 31,484,815.39 | 162,620,964.79 |
Including: Losses on retirement or damage of fixed assets | 34,444,521.73 | 31,294,087.61 | 34,444,521.73 |
Donations | 21,352,071.53 | 11,156,992.01 | 21,352,071.53 |
Litigation loss | 20,603,558.61 | 11,267,275.13 | 20,603,558.61 |
Compensation, liquidated damages and penalties | 11,552,735.44 | 9,220,103.11 | 11,552,735.44 |
Others | 4,312,924.31 | 32,399,507.47 | 4,312,924.31 |
Total | 220,442,254.68 | 95,528,693.11 | 220,442,254.68 |
62. Income tax expenses
Item | 2022 | 2021 |
Current income tax expenses | 871,429,455.95 | 1,162,076,514.07 |
Deferred income tax expenses | 241,750,223.40 | 267,016,570.24 |
Total | 1,113,179,679.35 | 1,429,093,084.31 |
Reconciliation of income tax expenses to the accounting profit is as follows:
Item | 2022 |
Total profit | 9,344,862,977.02 |
Income tax expenses calculated at 25% | 2,336,215,744.26 |
Effect of non-deductible costs, expenses and losses | 289,093,163.69 |
Accrued income tax | 396,949,980.28 |
Effect of deductible temporary differences and deductible losses for which deferred tax assets are not recognized in the year | 179,395,402.49 |
Effect of tax-free income (Note) | -1,014,336,274.34 |
Effect of tax incentives and changes in tax rate | -437,172,907.98 |
Effect of different tax rates of subsidiaries operating in other jurisdictions | -585,607,312.75 |
Effect of utilizing deductible losses for which deferred tax assets were not recognized in prior period | -106,596,821.30 |
Effect of adjustments to income tax of prior year | 13,427,061.13 |
Others | 41,811,643.87 |
Income tax expenses | 1,113,179,679.35 |
Note: This mainly represents the tax effect of income from investments in joint ventures and
associates.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
63. Assets with restricted ownership or use right
Item | 31/12/2022 | 31/12/2021 |
Cash and bank balances (Note 1) | 9,309,145.94 | 12,830,212.33 |
Equity investment in CICT (Note 2) | 2,115,796,097.99 | 2,026,382,103.10 |
Equity investment in TML (Note 2) | 1,047,063,416.30 | 411,893,452.06 |
Fixed assets (Note 3) | 341,870,382.84 | 278,015,952.68 |
Intangible assets (Note 4) | 222,040,259.68 | 212,232,642.30 |
Construction in progress (Note 4) | 4,298,598.50 | 12,388,924.87 |
Total | 3,740,377,901.25 | 2,953,743,287.34 |
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) 26 and Note (VIII) 36.
Details of sale and leaseback are set out in (VIII) 39.
Note 4: Details of mortgage borrowings are set out in Note (VIII) 36.
64. Other comprehensive income, net of tax
Details are set out in Note (VIII) 46.
65. Items in cash flow statement
(1) Other cash receipts relating to operating activities:
Item | 2022 | 2021 |
Interest income | 258,843,106.76 | 133,986,424.52 |
Government grants | 146,183,117.33 | 300,310,363.33 |
Insurance indemnities | 58,668,674.41 | 7,390,248.30 |
Guarantees and deposits | 56,548,699.29 | 38,247,722.18 |
Rentals | 6,633,711.38 | 9,641,271.39 |
Refund of port construction fee and service charges | - | 130,668.41 |
Others | 614,917,616.16 | 534,021,573.18 |
Total | 1,141,794,925.33 | 1,023,728,271.31 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(2) Other cash payments relating to operating activities
Item | 2022 | 2021 |
Advance payment | 328,830,785.30 | 275,907,895.42 |
Operating expenses such as operating costs and administrative expenses etc. | 136,317,839.62 | 182,351,696.26 |
Guarantees and deposits | 47,134,870.60 | 28,616,516.45 |
Rentals | 22,559,158.93 | 14,653,775.08 |
Harbor dues on cargo | 14,619,372.24 | 15,776,034.06 |
Port charges | 5,422,920.14 | 11,723,562.35 |
Port construction fee | - | 12,001,158.90 |
Others | 471,440,206.57 | 334,083,168.45 |
Total | 1,026,325,153.40 | 875,113,806.97 |
(3) Other cash receipts relating to investing activities
Item | 2022 | 2021 |
Interest on advances for the project | 169,844,015.81 | 162,918,518.18 |
Net cash receipts from acquisition of subsidiaries and other business units (Note) | 74,295,900.85 | - |
Recovered principal for the advances of the project | 45,535,614.18 | 179,243,313.40 |
Recovered lending | - | 8,980,037.68 |
Others | 5,388,978.50 | 86,014,701.83 |
Total | 295,064,509.34 | 437,156,571.09 |
Note: Refer to Note (VIII) 65 (4) for details.
(4) Net cash receipts from acquisition of subsidiaries and other business units
Item | 2022 |
Business combination and cash or cash equivalents paid for the year | - |
Including: Shunkong Port | - |
Less: Cash and cash equivalents held by subsidiaries at the acquisition date | 74,295,900.85 |
Including: Shunkong Port | 74,295,900.85 |
Net cash receipts for acquisition of subsidiaries | 74,295,900.85 |
Including: Shunkong Port | 74,295,900.85 |
(5) Other cash payments relating to investing activities
Item | 2022 | 2021 |
Taxes on land acquisition and reserve paid by ATJ | 947,426,040.54 | - |
Staff relocation cost in respect of land acquisition and reserve paid by Shantou Port | - | 22,231,894.84 |
Others | 7,376,441.76 | 406.11 |
Total | 954,802,482.30 | 22,232,300.95 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(6) Other cash receipts relating to financing activities
Item | 2022 | 2021 |
Sale and leaseback proceeds | 50,000,000.00 | - |
Others | 6,303,169.80 | - |
Total | 56,303,169.80 | - |
(7) Other cash payments relating to financing activities
Item | 2022 | 2021 |
Payment for the Company's acquisition of minority interests of CM Port | 660,552,076.54 | 76,767,514.23 |
Lease expenses paid | 422,373,905.31 | 412,013,733.57 |
Payment for non-public shares issued by the Company | 7,778,570.52 | - |
Amount paid by Dalian Port Logistics Network Co., Ltd. ("DPN") for acquisition of minority interests | - | 8,748,637.26 |
Others | 33,412,187.98 | 6,000,631.68 |
Total | 1,124,116,740.35 | 503,530,516.74 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Supplementary information | 2022 | 2021 |
1. Reconciliation of net profit to cash flows from operating activities: | ||
Net profit | 8,231,683,297.67 | 7,655,005,989.75 |
Add: Provision for impairment of assets | 22,159,020.20 | 420,492,515.75 |
Provision for impairment of credit | 223,473,576.55 | 252,953,617.50 |
Depreciation of fixed assets | 2,015,080,231.04 | 1,877,442,392.55 |
Depreciation of investment properties | 184,276,397.36 | 189,639,743.80 |
Depreciation of right-of-use assets | 349,846,619.98 | 329,603,141.83 |
Amortization of intangible assets | 663,429,174.32 | 616,107,419.01 |
Amortization of long-term prepaid expenses | 84,874,394.19 | 53,478,222.59 |
Losses (gains) on disposal of fixed assets, intangible assets and other long-term assets | -55,130,095.52 | -35,576,459.42 |
Losses on retirement of fixed assets, intangible assets and other long-term assets | 159,482,391.55 | 27,871,089.13 |
Losses (gains) on changes in fair value | 129,033,650.11 | -221,242,275.17 |
Financial expenses | 2,532,320,466.47 | 1,733,787,046.57 |
Investment loss (income) | -7,377,655,506.33 | -6,636,949,510.91 |
Decrease in deferred tax assets | 25,218,449.44 | 22,711,365.92 |
Increase in deferred tax liabilities | 216,531,773.96 | 244,305,204.32 |
Decrease (increase) in inventories | -30,798,761.65 | 20,057,846.98 |
Decrease (increase) in operating receivables | -245,987,914.80 | -4,503,635.75 |
Increase (decrease) in operating payables | -207,459,774.19 | -34,857,143.97 |
Net cash flows from operating activities | 6,920,377,390.35 | 6,510,326,570.48 |
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 | 13,567,309,471.62 | 12,727,355,238.36 |
Less: Opening balance of cash | 12,727,355,238.36 | 11,898,618,327.29 |
Add: Closing balance of cash equivalents | - | - |
Less: Opening balance of cash equivalents | - | - |
Net increase in cash and cash equivalents | 839,954,233.26 | 828,736,911.07 |
(2) Cash and cash equivalents
Item | 31/12/2022 | 31/12/2021 |
I. Cash | 13,567,309,471.62 | 12,727,355,238.36 |
Including: Cash on hand | 726,960.10 | 501,446.73 |
Bank deposits available for payment at any time | 13,045,336,190.09 | 12,353,104,402.58 |
Other monetary funds available for payment at any time | 521,246,321.43 | 373,749,389.05 |
II. Cash equivalents | - | - |
III. Balance of cash and cash equivalents at the end of the year | 13,567,309,471.62 | 12,727,355,238.36 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Foreign currency monetary items
Item | Closing balance in foreign currency | Exchange rate | Closing balance in RMB |
Cash and bank balances | 1,870,045,925.56 | ||
Including: HKD | 23,605,028.38 | 0.8933 | 21,086,371.85 |
USD | 106,236,908.63 | 6.9646 | 739,897,573.84 |
EUR | 50,979,458.93 | 7.4229 | 378,415,425.69 |
RMB | 730,646,554.18 | 1.0000 | 730,646,554.18 |
Accounts receivable | 178,676,774.99 | ||
Including: HKD | 1,650,559.86 | 0.8933 | 1,474,445.12 |
USD | 3,901,868.86 | 6.9646 | 27,174,955.86 |
EUR | 20,211,423.30 | 7.4229 | 150,027,374.01 |
Other receivables | 390,135,896.19 | ||
Including: HKD | 104,683,569.40 | 0.8933 | 93,513,832.55 |
USD | 1,318,255.97 | 6.9646 | 9,181,125.53 |
EUR | 4,248,621.51 | 7.4229 | 31,537,092.61 |
RMB | 255,903,845.50 | 1.0000 | 255,903,845.50 |
Other non-current assets | 29,157,826.91 | ||
Including: EUR | 3,928,091.03 | 7.4229 | 29,157,826.91 |
Short-term borrowings | 4,090,000,000.00 | ||
Including: RMB | 4,090,000,000.00 | 1.0000 | 4,090,000,000.00 |
Accounts payable | 48,034,232.32 | ||
Including: HKD | 2,235,282.58 | 0.8933 | 1,996,777.93 |
USD | 10,927.50 | 6.9646 | 76,105.67 |
EUR | 6,151,416.39 | 7.4229 | 45,661,348.72 |
RMB | 300,000.00 | 1.0000 | 300,000.00 |
Other payables | 854,538,294.23 | ||
Including: HKD | 41,791,974.49 | 0.8933 | 37,332,770.81 |
USD | 75,312,750.17 | 6.9646 | 524,523,179.83 |
EUR | 7,882,441.07 | 7.4229 | 58,510,571.81 |
RMB | 234,171,771.78 | 1.0000 | 234,171,771.78 |
Non-current liabilities due within one year | 7,204,940,030.45 | ||
Including: USD | 938,308,019.19 | 6.9646 | 6,534,940,030.45 |
RMB | 670,000,000.00 | 1.0000 | 670,000,000.00 |
Long-term borrowings | 4,013,889,870.00 | ||
Including: USD | 600,000.00 | 6.9646 | 4,178,760.00 |
EUR | 45,900,000.00 | 7.4229 | 340,711,110.00 |
RMB | 3,669,000,000.00 | 1.0000 | 3,669,000,000.00 |
Bonds payable | 11,088,293,099.02 | ||
Including: USD | 1,592,093,314.62 | 6.9646 | 11,088,293,099.02 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Government grants
(1) New government grants for the year
Type | Amount | Item | Presentation account | Amount included in profit or loss for the year |
Related to income | 94,355,004.33 | Business development subsidy | Other income | 94,355,004.33 |
Related to income | 7,385,898.57 | Special operation subsidy | Other income | 7,385,898.57 |
Related to income | 5,771,198.38 | Steady post subsidies | Other income | 5,771,198.38 |
Related to assets | 1,090,800.00 | Subsidies for intelligent system | Deferred income | - |
Related to income | 40,691,109.58 | Others | Other income | 40,691,109.58 |
Related to income | 1,640,553.77 | Others | Non-operating income | 1,640,553.77 |
Related to assets | 475,000.00 | Others | Deferred income | 12,500.00 |
Total | 151,409,564.63 | 149,856,264.63 |
69. Leases
(1) Lessor under operating lease
Item | Amount |
I. Revenue | - |
Lease income | 267,730,741.43 |
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 | 332,586,492.93 |
2nd year | 147,065,372.48 |
3rd year | 126,383,756.18 |
4th year | 114,227,301.08 |
5th year | 89,037,712.60 |
Over 5 years | 232,530,205.50 |
Note: The operating leases where the Group acts as the lessor are related to port and terminal
facilities, machinery and 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 and equipment, land and buildings. The Group considers that the unguaranteedbalance of leased assets does not constitute significant risk of the Group, as the assets areproperly used.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
69. Lease - continued
(2) Lessee
Item | Amount |
Interest expenses on lease liabilities | 73,619,268.64 |
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 | 71,711,821.89 |
Expenses on leases of low-value assets (exclusive of expenses on short-term leases 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 | 2,118,098.94 |
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 | 16,195,950.82 |
Total cash outflows relating to leases | 474,672,225.36 |
Income (loss) from sale and leaseback transactions | -21,082,256.97 |
Cash inflows from sale and leaseback transactions | 50,000,000.00 |
Cash outflows from sale and leaseback transactions | 217,934,853.80 |
Others | - |
(IX) CHANGES IN SCOPE OF CONSOLIDATION
1. Changes in scope of consolidation due to other reasons
(1) Subsidiary newly added through asset acquisition
RMB
Name | Net assets at the end of the year |
Shunkong Port | 45,804,616.24 |
Note: On 18 November 2022, the Company acquired 51% equity interest of Shunkong Port at the
consideration of RMB 50,000,000.00.
The above-mentioned acquisition is an asset acquisition, and does not form a business combination.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 140 -
(X) EQUITY IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group - Major subsidiaries
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. (Wharf Holdings Hong Kong) | HK China | HK China | Investment holding | HKD 1,000,000 | 100.00 | - | Established through investment |
Dongguan Shenchiwan Port Affairs Co., Ltd. | 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 | 10,000.00 | 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 |
CM Port (Note 1) | HK China | HK China | Investment holding | HKD 46,668,174,000 | 0.37 | 45.32 | Business combination involving enterprises under common control |
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 | 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 | USD67,400,000 | - | 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 | 1,000.00 | - | 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 | - | 70.00 | Business combination involving enterprises under common control |
Zhangzhou China Merchants Port Co., Ltd. | Zhangzhou China | Zhangzhou China | Logistics support services | 116,700.00 | - | 60.00 | Business combination involving enterprises under common control |
Zhangzhou Investment Promotion Bureau Xiamenwan Port Affairs Co., Ltd. ("Xiamenwan Port Affairs") (Note 2) | 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 | - | 80.00 | Business combination involving enterprises under common control |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 141 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
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 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 |
Lome Container Terminal S.A. (Note 3) | Republic of Togo | Republic of Togo | Logistics support services | XOF 200,000,000 | - | 35.00 | 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 (Private) Limited | Sri Lanka | Sri Lanka | Logistics support services | USD 1,145,480,000 | - | 65.00 | 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 |
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 |
Zhoushan RoRo | Zhoushan China | Zhoushan China | Logistics support services | 17,307.86 | 51.00 | - | Asset acquisition |
Shenzhen Haixing Logistics Development Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 7,066.79 | - | 67.00 | Asset 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. (Note 4) | 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 5) | Ningbo China | Ningbo 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 |
Malai Warehousing (Shenzhen) Co., Ltd | Shenzhen China | Shenzhen China | Owning China Qianhai property | HKD 1,600,000,000 | - | 100.00 | Business combination not involving enterprises under common control |
Ports Development (Hong Kong) Limited (Note 6) | Hong Kong China | Hong Kong China | Investment holding | 2,768,291.56 | 100.00 | - | Established through investment |
Shunkong Port | Foshan China | Foshan China | Property development and management | 6,122.45 | 51.00 | - | Asset acquisition |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 142 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
Note 1: On 19 June 2018, the Company and China Merchants Group (Hong Kong) Co., Ltd.
("CMHK") entered into an "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 CM Port in respect of its voting power of CM Port as entrusted,and performs the voting as per the Company's opinion. In March 2022, the Companytransferred its 43.00% equity contribution in China Merchants Port Holdings CompanyLimited to the wholly-owned subsidiary Ports Development (Hong Kong) Co., Ltd.
In June and October 2022, CM Port respectively distributed 2021 dividends and 2022interim dividends to shareholders. The shareholders may select to receive the dividends allin cash or shares, or receive the dividends part in cash and part in new shares. TheCompany, Ports Development (Hong Kong) Co., Ltd. and CMHK select to receive all itsshare of dividends from the shareholding in CM Port in the form of scrip dividends. In2022, the Company and Ports Development (Hong Kong) Co., Ltd. acquired 64,556,000ordinary shares of CM Port from the secondary market. Upon the completion of abovedistribution and the transaction, the proportion of the ordinary shares of CM Port held bythe Group to the total issued ordinary shares of CM Port was changed from 43.18% to
45.69%, while the proportion of the ordinary shares of CM Port held by CMHK to thetotal issued ordinary shares of CM Port was changed from 21.98% to 22.42%. Therefore,the Company has 68.11% voting power of CM Port in total and has control over CM Port.
Note 2:The Group and China Merchants Zhangzhou Development Zone Co., Ltd. entered into an
"Equity Custody Agreement", according to which China Merchants ZhangzhouDevelopment Zone Co., Ltd. entrusted its 29% equity of ZCMG to the Group for operationand management. Therefore, the Group has 60% voting power of ZCMG and includes it inthe scope of consolidation of the consolidated financial statements.
Note 3:The Group is entitled to the nomination of most members of the executive commission and
has control over Lome Container Terminal S.A. Therefore, the Group includes it in thescope of consolidation of the consolidated financial statements.
Note 4:The Group holds 50% equity interest in Zhanjiang Port Petrochemical Terminal Co., Ltd.
According to the agreement, the Group has control over Zhanjiang Port PetrochemicalTerminal Co., Ltd., and therefore includes it in the scope of consolidation of theconsolidated financial statements.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 143 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
Note 5: 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 over Ningbo Daxie. If theparties to the agreement fail to reach a consensus on matters such as the operation andmanagement of Ningbo Daxie, the decision will be based on the opinion of Cyber ChicCompany Limited. After the signing of the Cooperation Agreement, Cyber Chic CompanyLimited and Ningbo Zhoushan together own more than 50% of the voting rights in NingboDaxie. As a result, the Group is able to exercise control over Ningbo Daxie and includes itin the scope of consolidation of the consolidated financial statements.
Note 6:Ports Development (Hong Kong) Co., Ltd. is a limited liability company established by
the Company in Hong Kong, China on 16 February 2022.
(2) Significant non-wholly-owned subsidiaries
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 |
CM Port | 54.31 | 4,707,642,117.09 | 1,590,573,974.57 | 68,280,647,974.87 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 144 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Key financial information of significant non-wholly-owned subsidiaries
Name of the subsidiary | 31/12/2022 | 31/12/2021 | ||||||||||
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 | |
CM Port | 12,837,082,258.94 | 137,558,098,661.09 | 150,395,180,920.03 | 18,761,895,893.60 | 25,152,356,977.50 | 43,914,252,871.10 | 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 |
Name of the subsidiary | 2022 | 2021 | ||||||
Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | |
CM Port | 10,926,649,847.41 | 7,771,272,424.87 | 9,468,881,467.49 | 5,181,954,271.51 | 9,835,827,140.59 | 7,324,839,959.14 | 6,890,512,293.77 | 4,700,305,072.57 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 145 -
(X) EQUITY IN OTHER ENTITIES - continued
2. Transactions resulting from 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 Company's ownership interests in CM Port is changed from 43.18% to
45.69%. Details are set out in Note (X) 1 (1).
(2) Effect of the transactions on minority interests and equity attributable to owners of the
Company
CM Port | |
Acquisition cost | |
- Cash | 684,350,978.87 |
- Fair value of non-cash assets | 1,408,249,596.23 |
Total acquisition cost | 2,092,600,575.10 |
Less: Share of net assets of subsidiaries calculated based on the proportion of equity acquired | 3,042,814,449.38 |
Difference | -950,213,874.28 |
Including: Adjustment to capital reserve | 950,213,874.28 |
Adjustment to surplus reserve | - |
Adjustment to unappropriated profit | - |
3. Interests in joint ventures and associates
(1) Significant joint ventures or associates
Investee | Principal place of business | Place of registration | Nature of business | Proportion of ownership interests held by the Group (%) | Accounting treatment of investments in associates | |
Direct | Indirect | |||||
Associate | ||||||
SIPG | Shanghai, PRC | Shanghai, PRC | Port and container terminal business | - | 28.05 | Equity method |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 146 -
(X) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of significant associate
Item | SIPG | |
31/12/2022 / 2022 | 31/12/2021/ 2021 | |
Current assets | 46,525,054,810.02 | 50,550,358,636.59 |
Including: Cash and cash equivalents | 26,843,326,028.04 | 28,494,577,716.81 |
Non-current assets | 135,276,650,788.84 | 120,237,119,876.27 |
Total assets | 181,801,705,598.86 | 170,787,478,512.86 |
Current liabilities | 25,863,891,496.14 | 29,281,912,321.67 |
Non-current liabilities | 34,770,765,671.21 | 33,699,936,944.88 |
Total liabilities | 60,634,657,167.35 | 62,981,849,266.55 |
Minority interests | 8,839,640,972.54 | 8,014,833,731.08 |
Equity attributable to shareholders of the Company | 112,327,407,458.97 | 99,790,795,515.23 |
Share of net assets calculated based on the proportion of ownership interests | 31,507,837,792.24 | 26,584,267,925.26 |
Adjustments | ||
- Goodwill | 2,427,508,397.27 | 2,066,192,806.75 |
- Others | 236,552,011.66 | 193,346,651.68 |
Carrying amount of equity investments in associates | 34,171,898,201.17 | 28,843,807,383.69 |
Fair value of publicly quoted equity investments in associates | 34,877,210,592.30 | 33,990,040,779.28 |
Operating income | 37,279,806,723.63 | 34,288,697,334.43 |
Net profit | 17,910,112,648.83 | 15,480,719,994.16 |
Other comprehensive income | -526,788,637.24 | 573,880,124.36 |
Total comprehensive income | 17,383,324,011.59 | 16,054,600,118.52 |
Dividends received from associates in the current year | 1,240,688,187.97 | 793,927,959.22 |
5. Summarized financial information of insignificant associates and joint ventures
Item | 31/12/2022 /2022 | 31/12/2021 / 2021 |
Joint ventures: | ||
Total carrying amount of investments | 9,716,793,055.72 | 8,540,003,758.64 |
Aggregate of following items calculated based on the proportion of ownership interest | ||
- Net profit | 419,341,721.80 | 242,641,893.49 |
- Other comprehensive income | 175,421,702.38 | 4,375,404.14 |
- Total comprehensive income | 594,763,424.18 | 247,017,297.63 |
Associates: | ||
Total carrying amount of investments | 48,475,602,662.16 | 32,969,640,682.19 |
Aggregate of following items calculated based on the proportion of ownership interest | ||
- Net profit | 2,003,274,864.02 | 1,857,965,787.11 |
- Other comprehensive income | -300,868,120.56 | -92,265,491.63 |
- Total comprehensive income | 1,702,406,743.46 | 1,765,700,295.48 |
6. The investees where the Group holds long-term equity investments are not restricted
to transfer funds to the Group.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 147 -
(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 2022, the balances of the Group's assets and liabilities areboth denominated in functional currency, except that the assets and liabilities set out below arerecorded using foreign currencies. Currency risk arising from the foreign currency balance ofassets and liabilities may have impact on the Group's performance.
Item | 31/12/2022 | 31/12/2021 |
Cash and bank balances | 799,833,569.05 | 304,226,402.75 |
Accounts receivable | 29,766,083.42 | 37,640,821.94 |
Other receivables | 360,531,571.16 | 292,001,737.01 |
Short-term borrowings | 4,090,000,000.00 | 653,200,000.00 |
Accounts payable | 2,372,883.60 | 3,534,444.32 |
Other payables | 246,131,122.92 | 131,844,034.16 |
Non-current liabilities due within one year | 670,000,000.00 | 2,585,407,534.25 |
Long-term borrowings | 3,669,000,000.00 | 670,000,000.00 |
Long-term payables | - | 3,433,175,756.61 |
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 on the exchangerate movements, the management considers it is unlikely that the exchange rate changes in thenext year will result in significant loss to the Group.
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges andhedges of a net investment in a foreign operation are highly effective. On the basis of the aboveassumption, where all other variables are held constant, the reasonably possible changes in theforeign exchange rate may have the following pre-tax effect on the profit or loss for the periodand shareholders' equity:
Item | Changes in exchange rate | 2022 | 2021 | ||
Effect on profit | Effect on shareholders' equity | Effect on profit | Effect on shareholders' equity | ||
All foreign currencies | 5% increase against RMB | -383,846,068.61 | -383,846,068.61 | -146,440,030.80 | -146,440,030.80 |
All foreign currencies | 5% decrease against RMB | 383,846,068.61 | 383,846,068.61 | 146,440,030.80 | 146,440,030.80 |
All foreign currencies | 5% increase against USD | 5,221,127.37 | 5,221,127.37 | 5,092,313.03 | 5,092,313.03 |
All foreign currencies | 5% decrease against USD | -5,221,127.37 | -5,221,127.37 | -5,092,313.03 | -5,092,313.03 |
All foreign currencies | 5% increase against HKD | 3,837,255.04 | 3,837,255.04 | -201,218,971.96 | -201,218,971.96 |
All foreign currencies | 5% decrease against HKD | -3,837,255.04 | -3,837,255.04 | 201,218,971.96 | 201,218,971.96 |
All foreign currencies | 5% increase against EUR (including FCFA) | 419,047.06 | 419,047.06 | 402,049.34 | 402,049.34 |
All foreign currencies | 5% decrease against EUR (including FCFA) | - 419,047.06 | - 419,047.06 | -402,049.34 | -402,049.34 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 148 -
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
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.
Sensitivity analysis on interest rate risk
Sensitivity analysis on 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 hedges 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.
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:
Item | Changes in interest rate | 2022 | 2021 | ||
Effect on profit | Effect on shareholders' equity | Effect on profit | Effect on shareholders' equity | ||
Short-term borrowings and long-term borrowings | 1% increase | -207,621,560.74 | -207,621,560.74 | -163,962,806.32 | -163,962,806.32 |
Short-term borrowings and long-term borrowings | 1% decrease | 207,621,560.74 | 207,621,560.74 | 163,962,806.32 | 163,962,806.32 |
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 149 -
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
3. Liquidity risk - continued
As at 31 December 2022, the Group had total current liabilities in excess of total current assets ofRMB 6,123,555,489.62. As at 31 December 2022, the Group had available and unused line ofcredit and bonds amounting to RMB 74,112,485,433.51, which is greater than the balance of thenet current liabilities. The Group can obtain financial support from the available line of credit andbonds when needed. 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 | 7,164,338,366.18 | 7,235,206,811.18 | 7,235,206,811.18 | - | - |
Accounts payable | 811,149,397.66 | 811,149,397.66 | 811,149,397.66 | - | - |
Other payables | 1,755,885,258.26 | 1,755,885,258.26 | 1,755,885,258.26 | - | - |
Non-current liabilities due within one year | 11,571,368,811.38 | 13,000,513,740.76 | 13,000,513,740.76 | - | - |
Other current liabilities | 3,161,147,525.96 | 3,175,491,532.81 | 3,175,491,532.81 | - | - |
Long-term borrowings | 12,390,099,177.85 | 13,332,739,038.22 | - | 11,944,558,295.20 | 1,388,180,743.02 |
Bonds payable | 19,088,293,099.02 | 20,991,603,102.02 | - | 16,723,687,844.84 | 4,267,915,257.18 |
Lease liabilities | 948,350,914.04 | 1,598,294,958.62 | - | 364,988,464.83 | 1,233,306,493.79 |
Other non-current liabilities | 20,000,000.00 | 20,543,476.71 | - | 20,543,476.71 | - |
Long-term payables | 3,542,966,493.60 | 3,546,292,462.09 | - | 643,944,866.57 | 2,902,347,595.52 |
(XII) DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
Item | Fair value at 31/12/2022 | |||
Level 1 | Level 2 | Level 3 | Total | |
Fair value measurement | Fair value measurement | Fair value measurement | ||
Continuously measured at fair value | ||||
Held-for-trading financial assets | 135,742.11 | 2,998,645,857.52 | - | 2,998,781,599.63 |
Receivables financing | - | - | 163,766,913.10 | 163,766,913.10 |
Investments in other equity instruments | - | - | 171,945,275.02 | 171,945,275.02 |
Other non-current financial assets | 1,717,875,084.72 | - | 27,865,811.69 | 1,745,740,896.41 |
Total assets continuously measured at fair value | 1,718,010,826.83 | 2,998,645,857.52 | 363,577,999.81 | 5,080,234,684.16 |
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 and other non-current financial assets aredetermined based on the closing price of the equity instruments at Stock Exchange at 31December 2022.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 150 -
(XII) DISCLOSURE OF FAIR VALUE - continued
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 31/12/2022 | Valuation techniques | Inputs |
Held-for-trading financial assets | 2,998,645,857.52 | 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 31/12/2022 | Valuation techniques | Inputs |
Receivables financing | 163,766,913.10 | Cash flow discounting | Discount rate |
Investments in other equity instruments | 171,945,275.02 | Net worth method | Carrying amount |
Other non-current financial assets | 2,000,000.00 | Cash flow discounting | Discount rate |
Other non-current financial assets | 723,955.24 | Net worth method | Carrying amount |
Other non-current financial assets | 25,141,856.45 | 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 the adjustment of discount and premium.
5. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and liabilities not measured at fair value mainly include notes receivable,accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable,other payables, long-term borrowings, bonds payable, 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 151 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
Name of the Company | Related party relationship | Type of the entity | Place of registration | Nature of business | Issued share capital | Proportion of ownership interests held by the Company (%) | Proportion of voting power held by the Company (%) |
Broadford Global Limited | Parent | Private limited company (share limited) | Hong Kong | Investment holding | HKD 21,120,986,262 | 2.21 | 63.01 (Note) |
Note: Broadford Global Limited directly holds 2.21% equity of the Company, and indirectly holds 14.84% and 45.96% 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(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 associates that have related party transactions with the Group in the currentyear, or formed balances of related party transactions with the Group in the prior year are asfollows:
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 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 |
China Merchants Port (Shenzhen) Industrial Innovation Private Equity Investment Fund Partnership (Limited Partnership) ("Investment Fund") | 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 |
Ningbo Zhoushan and its subsidiaries | Associate |
Shenzhen Baohong Technology 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 |
Tianjin Port Container Terminal Co., Ltd. | Associate |
Lac Assal Investment Holding Company Limited | Associate |
CM Port Chuangrong (Shenzhen) Technology Co., Ltd. | Associate |
Liaoning Port and its subsidiaries | Associate, controlled by the same ultimate controlling shareholder |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
Name of other related parties | Relationship with the Company |
Antong Holdings and its subordinate companies (Note) | The same related natural person |
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 |
Guangdong Shunkong City Investment Real Estate Co. Ltd. | Minority shareholder of subsidiary |
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 Real Estate Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Shenzhen Merchants to Home Technology Co., Ltd. | 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 |
China Merchants Port Investment Development 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 |
China Marine Shipping Agency Guangdong Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Note: Zheng Shaoping resigned as the deputy general manager of the Company on 6 August
2021 and became the chairman of Antong Holdings within 12 months of his departure.Therefore, the related party relationship between the Group and Antong Holdings lastedfrom 22 October 2020 to 6 August 2022.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 154 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
Name of other related parties | Relationship with the Company |
China Merchants 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 Co. Ltd. | 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 |
Yingkou Port Group Co., Ltd. ("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 |
China Yangtze River Shipping Co., Ltd. | Controlled by the same ultimate controlling shareholder |
China Merchants 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. | 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 |
Dalian Port Communications Engineering Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Dalian Jifa South Coast International Logistics Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Dalian Jifa Port Logistics Co., Ltd. | Controlled by the same ultimate controlling shareholder |
CHINA MERCHANTS SHIPPING AND ENTERPRISES COMPANY LIMITED | Controlled by the same ultimate controlling shareholder |
Ningbo Transocean International Forwarding Agency Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Qingdao Sinotrans Mining Technology Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Dalian Bonded Zone Yongdexin Real Estate Development & Construction Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Yingkou Xingang Kuangshi Terminals Co., Ltd. | Controlled by the same ultimate controlling shareholder |
Dandong Port Group Co., Ltd. | 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 Merchants Bank Co., Ltd. | Significantly influenced by the ultimate controlling shareholder |
China Merchants (Shenzhen) Power Supply Co., Ltd. | Significantly influenced by the ultimate controlling shareholder |
Shenzhen Wanhai Building Management Co., Ltd. | Significantly influenced by the ultimate controlling shareholder |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 155 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions
(1) Rendering and receipt of services
Related party | Content of transaction | Pricing method and decision procedures of related transactions | 2022 | 2021 |
Receipt of services: | ||||
Shenzhen Bay Electricity Industry Co., Ltd. | Service expense | Negotiation | 55,476,519.62 | 52,118,359.34 |
China Merchants Finance Lease (Shanghai) Co., Ltd. | Service expense | Negotiation | 21,363,353.64 | - |
Nanshan Group and its subsidiaries | Service expense | Negotiation | 20,553,330.63 | 12,899,160.06 |
Hoi Tung (Shanghai) Company Limited | Service expense | Negotiation | 19,923,373.82 | 9,908,555.07 |
Qingdao Qianwan West Port United Wharf Co., Ltd. | Service expense | Negotiation | 18,229,532.95 | 17,429,281.52 |
Shenzhen Merchants Electricity Supply Co., ltd | Service expense | Negotiation | 17,893,208.32 | 16,896,892.16 |
COSCO Logistics (Zhanjiang) Co., Ltd. | Service expense | Negotiation | 16,324,326.06 | 13,741,598.64 |
Ningbo Zhoushan | Service expense | Negotiation | 14,417,120.66 | 14,902,071.93 |
Shenzhen West Port Security Service Co., Ltd. | Service expense | Negotiation | 11,952,754.94 | 8,628,090.47 |
Yiu Lian Dockyards Limited | Service expense | Negotiation | 8,489,653.19 | 8,484,365.83 |
China Merchants Property Management (Shenzhen) Co., Ltd. | Service expense | Negotiation | 7,959,601.92 | 11,411,320.65 |
Shenzhen Nanyou (Holdings) Ltd. | Service expense | Negotiation | 5,764,441.32 | - |
China Merchants Port Investment Development Company Limited | Service expense | Negotiation | 5,571,699.92 | 2,511,488.39 |
China Merchants Zhangzhou Development Zone Power Supply Co., Ltd. | Service expense | Negotiation | 5,562,706.02 | 5,148,081.30 |
China Merchants Securities Co., Ltd. | Service expense | Negotiation | 5,547,169.80 | - |
Sinoway Shipping Ltd. | Service expense | Negotiation | 4,886,700.00 | - |
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Service expense | Negotiation | 3,896,620.63 | 6,963,663.53 |
Liaoning Port and its subsidiaries | Service expense | Negotiation | 3,612,247.90 | 1,453,666.27 |
Yingkou Port Group and its subsidiaries | Service expense | Negotiation | 2,838,787.56 | 3,655,450.63 |
China Marine Shipping Agency Guangdong Co., Ltd. | Service expense | Negotiation | 2,619,862.38 | 5,128,165.14 |
China Merchant Food (China) Co., Ltd. | Service expense | Negotiation | 2,534,006.83 | 2,010,522.22 |
China Marine Shipping Agency Shenzhen Co., Ltd. | Service expense | Negotiation | 2,486,175.66 | 2,886,771.98 |
Djibouti International Hotel Company | Service expense | Negotiation | 2,344,919.84 | - |
Shenzhen Merchants to Home Technology Co. | Service expense | Negotiation | 2,270,488.10 | 2,529,286.74 |
China Ocean Shipping Tally Shenzhen Co., Ltd. | Service expense | Negotiation | 2,086,506.13 | 2,367,078.52 |
Khor Ambado FZCo | Service expense | Negotiation | 1,765,467.27 | - |
China Merchants Healthcare (Qichun) Co., Ltd. | Service expense | Negotiation | 1,188,397.44 | 874,591.30 |
Shenzhen Municipal Public Security Bureau Shekou Police | Service expense | Negotiation | - | 13,215,162.92 |
Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Service expense | Negotiation | - | 3,246,406.82 |
Qingdao Wutong Century Supply Chain Co., Ltd. | Service expense | Negotiation | - | 1,412,347.77 |
China Merchants Logistics Group Qingdao Co., Ltd. | Service expense | Negotiation | - | 278,746.88 |
China Merchants Your Cellar (Shenzhen) Co., Ltd. | Service expense | Negotiation | - | 145,501.77 |
Other related parties | Service expense | Negotiation | 6,780,732.36 | 5,426,539.23 |
China Merchants Bank Co., Ltd. | Purchase of structured deposits | Negotiation | 900,061,111.11 | 901,314,575.34 |
China Merchants Group Finance Company Limited | Interest expense | Negotiation | 74,066,413.54 | 57,267,460.41 |
China Merchants Bank Co., Ltd. | Interest expense | Negotiation | 8,970,399.98 | 7,309,189.97 |
China Merchants Finance Lease (Tianjin) Co., Ltd. | Interest expense | Negotiation | 724,437.17 | - |
China Merchants Tongshang Finance Lease Co., Ltd. | Property utilities | Negotiation | 4,089,619.16 | - |
Other related parties | Property utilities | Negotiation | - | 1,527,482.73 |
Total | 1,262,251,685.87 | 1,193,091,875.53 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 156 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of services - continued
Related party | Content of transaction | Pricing method and decision procedures of related transactions | 2022 | 2021 |
Rendering of services: | ||||
COSCO Logistics (Zhanjiang) Co., Ltd. | Service income | Negotiation | 203,783,472.45 | 172,689,315.75 |
Liaoning Port and its subsidiaries | Service income | Negotiation | 165,608,963.82 | 84,665,638.27 |
Antong Holdings and its subordinate companies | Service income | Negotiation | 124,308,389.86 | 149,257,485.43 |
Qingdao Qianwan United Container Terminal Co., Ltd. | Service income | Negotiation | 61,896,678.04 | 57,107,934.04 |
China Ocean Shipping Agency (Zhanjiang) Co., Ltd | Service income | Negotiation | 59,100,409.00 | 58,774,852.27 |
China Marine Shipping Agency Guangdong Co., Ltd. | Service income | Negotiation | 57,816,828.74 | 78,136,291.87 |
Yingkou Port Group and its subsidiaries | Service income | Negotiation | 41,932,643.50 | 59,158,823.90 |
China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | Service income | Negotiation | 29,854,035.10 | 19,931,387.34 |
Sinoway Shipping Ltd. | Service income | Negotiation | 22,315,438.97 | 2,275,910.33 |
Liaoning Port Group Co., Ltd. | Service income | Negotiation | 19,746,474.90 | 30,230,480.12 |
Yiu Lian Dockyards (Shekou) Limited | Service income | Negotiation | 15,088,720.57 | 15,861,643.81 |
Sinotrans Central China Co., Ltd. | Service income | Negotiation | 9,600,255.49 | 2,557.32 |
CM Port Chuangrong (Shenzhen) Technology Co., Ltd. | Service income | Negotiation | 8,665,860.83 | 5,060,041.98 |
Sinotrans Container Lines Co., Ltd. | Service income | Negotiation | 7,891,652.35 | 9,659,043.11 |
South China Sinotrans Supply Chain Management Co., Ltd. | Service income | Negotiation | 5,745,399.44 | 3,315,529.59 |
Shenzhen Baohong Technology Co., Ltd. | Service income | Negotiation | 5,562,857.25 | 12,375,371.81 |
Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | Service income | Negotiation | 5,354,930.31 | 8,201,186.45 |
China Ocean Shipping Agency Shenzhen Co. Ltd. | Service income | Negotiation | 4,966,841.25 | 6,742,585.37 |
China Marine Shipping Agency Shenzhen Co., Ltd. | Service income | Negotiation | 4,955,801.22 | 6,065,850.59 |
China Yangtze River Shipping Co., Ltd. | Service income | Negotiation | 4,864,882.39 | 4,015,942.03 |
Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Service income | Negotiation | 4,633,215.32 | 2,060,322.30 |
Qingdao Qianwan West Port United Wharf Co., Ltd. | Service income | Negotiation | 4,335,903.64 | 3,556,894.16 |
China Merchants International Cold Chain (Shenzhen) Company Limited | Service income | Negotiation | 4,050,145.80 | - |
Sinotrans Container Lines (Hong Kong) Company Limited | Service income | Negotiation | 3,545,752.04 | 2,618,545.62 |
Qingdao Qianwan New United Container Terminal Co., Ltd. | Service income | Negotiation | 3,174,751.23 | 2,727,630.47 |
Sinotrans & CSC Holdings Co., Ltd. | Service income | Negotiation | 2,971,698.12 | 1,349,056.61 |
SIPG | Service income | Negotiation | 2,633,413.21 | 1,430,583.02 |
Shantou Zhonglian Tally Co., Ltd | Service income | Negotiation | 2,509,658.22 | 2,688,839.07 |
Yantai Port Group Laizhou Port Co., Ltd. | Service income | Negotiation | 2,075,471.68 | 2,043,962.25 |
China Merchants Port Investment Development Company Limited | Service income | Negotiation | 1,907,632.07 | 6,100,924.53 |
China Merchants Heavy Industry (Jiangsu) Co., Ltd. | Service income | Negotiation | 1,814,935.95 | 2,788,745.68 |
Nanshan Group and its subsidiaries | Service income | Negotiation | 1,707,871.21 | 1,147,657.18 |
Merchants Port City | Service income | Negotiation | 1,672,423.95 | 1,591,345.21 |
Sinotrans Shantou Co., Ltd. | Service income | Negotiation | 1,610,585.09 | 1,411,180.98 |
Tianjin Port Container Terminal Co., Ltd. | Service income | Negotiation | 1,475,548.18 | 722,817.00 |
CHINA MERCHANTS SHIPPING AND ENTERPRISES COMPANY LIMITED | Service income | Negotiation | 1,204,104.79 | 459,445.09 |
Ningbo Transocean International Forwarding Agency Co., Ltd. | Service income | Negotiation | 1,179,815.94 | - |
Investment Fund | Service income | Negotiation | 1,142,414.06 | 821,804.81 |
Shantou International Container Terminals Limited | Service income | Negotiation | 1,068,566.79 | 2,830,152.56 |
Dalian Port Construction Supervision Consulting Co., Ltd. | Service income | Negotiation | 1,060,945.09 | 1,561,447.66 |
Dalian Automobile Terminal Co., Ltd. | Service income | Negotiation | 968,960.44 | 2,162,744.31 |
Dalian Port Group Co., Ltd. | Service income | Negotiation | 890,607.59 | 1,471,595.43 |
China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Service income | Negotiation | 867,155.09 | 2,379,478.59 |
China Merchants Gangrong Big Data Co., Ltd. | Service income | Negotiation | 833,383.69 | 3,839,970.76 |
Shenzhen Dehan Investment Development Co., Ltd. | Service income | Negotiation | 760,365.57 | 1,106,438.68 |
Datong Securities Co., Ltd. | Service income | Negotiation | 752,654.88 | 1,464,247.85 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 157 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of services - continued
Related party | Content of transaction | Pricing method and decision procedures of related transactions | 2022 | 2021 |
Rendering of service: | ||||
China Marine Shipping Agency Guangdong Co., Ltd. | Service income | Negotiation | 681,455.19 | 1,234,211.32 |
Liaoning Electronic Port Co., Ltd. | Service income | Negotiation | 613,207.55 | 1,007,547.18 |
Guizhou East Land Port Operation Co., Ltd. | Service income | Negotiation | 592,407.92 | 2,379,122.83 |
Dalian Port Design Research Institute Co., Ltd. | Service income | Negotiation | 197,369.99 | 1,217,915.13 |
Penavico Shenzhen Warehousing Co., Ltd. | Service income | Negotiation | 160,663.44 | 206,068.60 |
China Merchants-Logistics Shenzhen Co., Ltd. | Service income | Negotiation | 107,700.00 | 364,878.63 |
Broadford (Shenzhen) Port Development Co., Ltd. | Service income | Negotiation | - | 233,023,495.03 |
China Marine Shipping Agency Ningbo Co., Ltd. | Service income | Negotiation | - | 127,750,175.04 |
China Merchants International Cold Chain (Shenzhen) Company Limited | Service income | Negotiation | - | 6,932,874.90 |
Sinotrans (HK) Shipping Limited | Service income | Negotiation | - | 1,270,858.60 |
Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. | Service income | Negotiation | - | 975,890.37 |
China Merchants (Liaoning) Port Development Co., Ltd. | Service income | Negotiation | - | 943,396.22 |
Zhangzhou COSCO Shipping Agency Co., Ltd. | Service income | Negotiation | - | 820,987.04 |
Doraleh Multi-purpose Port | Service income | Negotiation | - | 585,604.28 |
International Djibouti Industrial Parks Operation FZCO | Service income | Negotiation | - | 502,024.39 |
Other related parties | Service income | Negotiation | 26,887,970.55 | 13,882,596.99 |
Terminal Link SAS | Interest income | Negotiation | 169,844,015.81 | 165,180,415.51 |
Port of Newcastle and its subsidiaries | Interest income | Negotiation | 17,721,583.77 | 76,683,050.81 |
China Merchants Group Finance Company Limited | Interest income | Negotiation | 25,519,980.42 | 24,994,228.38 |
Tianjin Haitian Bonded Logistics Co., Ltd. | Interest income | Negotiation | 1,558,375.91 | 1,558,375.91 |
China Merchants Bank Co., Ltd. | Interest income | Negotiation | 105,426,962.23 | 32,931,572.09 |
Merchants Port City | Interest income | Negotiation | - | 1,957,067.27 |
Total | 1,259,220,207.90 | 1,530,266,057.72 |
(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. | Buildings and structures | Negotiation | 10,222,395.86 | 9,711,263.00 |
China Merchants Real Estate (Shenzhen) Co., Ltd. | Buildings and structures | Negotiation | 7,152,157.00 | - |
Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Port and terminal facilities | Negotiation | 6,876,165.97 | 5,533,737.88 |
China Merchant Food (China) Co., Ltd. | Buildings and structures | Negotiation | 5,683,461.66 | 5,414,148.96 |
China Traffic Import and Export Co., Ltd. | Buildings and structures | Negotiation | 5,473,072.56 | 5,212,396.32 |
Nanshan Group and its subsidiaries | Buildings and structures | Negotiation | 5,065,342.55 | 2,478,760.43 |
Qingdao Sinotrans Mining Technology Co., Ltd | Buildings and structures | Negotiation | 4,750,557.12 | - |
Qingdao Sinotrans Supply Chain Management Co., Ltd. | Buildings and structures | Negotiation | 3,558,552.62 | 3,926,471.23 |
Qingdao Qianwan United Container Terminal Co., Ltd. | Buildings and structures | Negotiation | 3,037,651.81 | 2,407,032.41 |
China Merchants Securities Co., Ltd. | Buildings and structures | Negotiation | 2,567,514.78 | 2,265,123.10 |
Yiu Lian Dockyards (Shekou) Limited | Buildings and structures | Negotiation | 2,195,466.64 | 3,008,337.95 |
Qingdao Wutong Century Supply Chain Co., Ltd. | Buildings and structures | Negotiation | 2,119,296.03 | 619,965.10 |
Sinotrans South China Co., Ltd. | Buildings and structures | Negotiation | 564,605.52 | 1,897,332.07 |
Other related parties | Buildings and structures, land use rights | Negotiation | 6,856,178.26 | 7,650,774.22 |
Total | 66,122,418.38 | 50,125,342.67 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 158 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as the lessee:
Name of the lessor | Type of leased assets | Rental (year) | Lease term (disclose the period covered by contract) | Other significant lease terms |
Nanshan Group and its subsidiaries | Buildings and structures | 64,589,226.16 | 2019.01.01-2024.12.31 | N/A |
China Merchants Finance Lease (Shanghai) Co., Ltd. | Port and terminal facilities | 58,302,270.50 | 2018.03.19-2024.03.26 | N/A |
China Merchants Finance Lease (Shanghai) Co., Ltd. | Machinery and equipment, port and terminal facilities | 57,849,868.06 | 2018.11.30-2024.11.30 | N/A |
China Merchants Tongshang Finance Lease Co., Ltd. | Machinery and 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 | 2018.03.19-2024.03.26 | N/A |
China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Port and terminal facilities | 30,584,055.34 | 2022.01.01-2023.12.31 | N/A |
China Merchants Tongshang Finance Lease Co., Ltd. | Machinery and equipment | 17,717,147.04 | 2016.12.26-2022.11.15 | N/A |
EuroAsia Dockyard Enterprise and Development Limited | Port and terminal facilities | 14,696,367.93 | 2022.01.01-2022.12.31 | N/A |
China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Others | 6,115,067.28 | 2022.01.01-2024.12.31 | N/A |
Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Buildings and structures | 4,206,780.00 | 2022.01.01-2022.12.31 | N/A |
Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Others | 3,968,660.38 | 2022.01.15-2022.07.31 | N/A |
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings and structures | 3,889,563.40 | 2021.01.01-2022.12.31 | N/A |
Nanshan Group and its subsidiaries | Others | 3,795,785.53 | 2022.01.01-2024.12.31 | N/A |
China Merchants Finance Lease (Tianjin) Co., Ltd. | Port and terminal facilities | 3,105,625.00 | 2022.06.16-2025.06.16 | With progressively increasing and decreasing rent |
Nanshan Group and its subsidiaries | Buildings and structures | 3,083,925.40 | 2022.01.01-2022.12.31 | N/A |
Shenzhen Nanyou (Holdings) Ltd. | Others | 1,995,553.15 | 2022.01.01-2022.12.31 | N/A |
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings and structures | 1,342,488.00 | 2021.01.01-2022.12.31 | With progressively increasing rent |
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings and structures | 1,241,376.00 | 2022.01.01-2022.12.31 | N/A |
Nanshan Group and its subsidiaries | Buildings and structures | 1,200,466.97 | 2022.01.01-2022.09.30 | N/A |
Shenzhen Wanhai Building Management Co., Ltd. | Buildings and structures | 1,202,209.02 | 2021.06.15-2024.06.14 | With progressively increasing rent |
China Merchants International Cold Chain (Shenzhen) Company Limited | Port and terminal facilities | 1,032,762.89 | 2021.05.01-2024.04.30 | N/A |
China Merchants International Cold Chain (Shenzhen) Company Limited | Buildings and structures | 861,000.00 | 2022.03.22-2023.02.28 | N/A |
China Merchants International Cold Chain (Shenzhen) Company Limited | Buildings and structures | 840,000.00 | 2021.03.01-2022.02.28 | N/A |
Qingdao Qianwan United Container Terminal Co., Ltd. | Buildings and structures | 662,285.71 | 2022.05.01-2023.12.31 | N/A |
Dalian Free Trade Zone Yongdexin Real Estate Development and Construction Co., Ltd. | Buildings and structures | 408,741.23 | 2023.01.01-2023.12.31 | N/A |
China Nanshan Development (Group) Co., Ltd. | Buildings and structures | 319,869.42 | 2019.01.01-2023.12.31 | Attached with renewal option |
China Nanshan Development (Group) Co., Ltd. | Others | 230,502.86 | 2021.01.01-2023.12.31 | N/A |
China Merchants Apartment Development China Merchants Apartment Development | Buildings and structures | 142,674.30 | 2022.01.01-2022.12.31 | N/A |
Nanshan Group and its subsidiaries | Buildings and structures | 118,800.00 | 2019.01.01-2023.12.31 | N/A |
Nanshan Group and its subsidiaries | Port and terminal facilities | 108,078.38 | 2019.01.01-2024.12.31 | Attached with renewal option |
Dalian Port Group Corporation Limited | Buildings and structures | 80,000.00 | 2022.01.01-2022.12.31 | N/A |
Nanshan Group and its subsidiaries | Buildings and structures | 53,931.60 | 2022.09.01-2023.08.31 | N/A |
Dalian Port Communications Engineering Co., Ltd. | Buildings and structures | 50,000.00 | 2022.01.01-2022.12.31 | N/A |
China Merchants International Cold Chain (Shenzhen) Company Limited | Buildings and structures | 48,604.84 | 2022.03.01-2022.03.21 | N/A |
Nanshan Group and its subsidiaries | Others | 11,592.00 | 2021.07.01-2022.06.30 | N/A |
Total | 365,970,846.57 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Related party guarantees
The Group as the guarantor
Secured party | Credit line | Guaranteed amount | Commencement date | Maturity | The guarantee has been completed or not |
2022 | |||||
Terminal Link SAS (Note 1) | 66,490,102.62 | 66,490,102.62 | 1 June 2013 | 2033 | No |
Khor Ambado FZCo (Note 2) | 200,580,480.00 | 120,182,425.59 | 24 May 2019 | 2032 | No |
Total | 267,070,582.62 | 186,672,528.21 | |||
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 |
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 willprovide guarantee for its bank loans and other liabilities to Terminal Link SAS to theextent of the Group's 49% ownership interest in the company. The actual guaranteedamount is RMB 66,490,102.62 as at 31 December 2022. If any guarantee liability occurs,the Group will compensate CMA CGM S.A.
Note 2: Khor Ambado FZCo is a related party 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 2022 is RMB 120,182,425.59.
(4) Borrowings and loans with related parties
Related party | Amount | Commencement date | Maturity date | Description |
2022 | ||||
Borrowings | ||||
China Merchants Group Finance Company Limited | 604,990,472.82 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
China Merchants Bank Co., Ltd. | 140,139,852.77 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
China Merchants Group Finance Company Limited | 31,618,224.87 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
China Merchants Bank Co., Ltd. | 15,015,583.33 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
Total | 791,764,133.79 |
(5) Asset transfer from related parties
Related party | Content of transaction | Pricing method and decision procedures of related transactions | 2022 | 2021 |
Hoi Tung (Shanghai) Company Limited | Fixed assets | Negotiation | 8,831,858.42 | 4,115,044.26 |
Hoi Tung (Shanghai) Company Limited | Construction in progress | Negotiation | 4,853,097.34 | - |
Broadford (Shenzhen) Port Development Co., Ltd. | Equity investment | Valuation | - | 384,000,000.00 |
Hoi Tung (Shenzhen) Company Limited | Machinery and equipment | Market price | - | 1,345,132.74 |
Other related parties | Construction in progress | Negotiation | - | 485,704.85 |
Total | 13,684,955.76 | 389,945,881.85 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(6) Compensation for key management personnel
Item | 2022 | 2021 |
Compensation for key management personnel | 20,313,774.52 | 14,796,861.98 |
6. Amounts due from/to related parties
(1) Amounts due from related parties
Item | Related party | 31/12/2022 | 31/12/2021 |
Cash and bank balances | China Merchants Bank Co., Ltd. | 3,387,973,124.59 | 2,563,011,212.30 |
China Merchants Group Finance Company Limited | 1,841,698,554.32 | 2,178,303,655.54 | |
Total | 5,229,671,678.91 | 4,741,314,867.84 | |
Held-for-trading financial assets | China Merchants Bank Co., Ltd. | 900,061,111.11 | 901,314,575.34 |
Accounts receivable | Ningbo Zhoushan and its subsidiaries | 20,289,988.06 | - |
China Marine Shipping Agency Guangdong Co., Ltd. | 17,505,768.03 | 1,970,902.79 | |
Antong Holdings and its subordinate companies | 8,395,245.04 | 13,014,575.59 | |
SINOWAY SHIPPING LIMITED | 4,564,389.71 | 512,749.94 | |
COSCO Logistics (Zhanjiang) Co., Ltd. | 4,045,734.88 | 5,211,554.51 | |
Qingdao Qianwan West Port United Wharf Co., Ltd. | 3,749,064.99 | 2,315,131.88 | |
Liaoning Port Co., Ltd. | 3,680,900.00 | 1,414,964.00 | |
Yiu Lian Dockyards (Shekou) Limited | 3,554,521.60 | 4,414,431.20 | |
Khor Ambado FZCo | 3,108,610.49 | 2,842,053.59 | |
Dalian Jifa Port Logistics Co., Ltd. | 2,220,941.63 | 337,180.00 | |
Great Horn Development Company FZCo | 2,157,859.50 | 2,606,831.64 | |
Dalian Container Terminal Co., Ltd. | 1,957,840.00 | 330,000.60 | |
Dalian Jifa South Coast International Logistics Co., Ltd. | 1,839,478.79 | 817,625.00 | |
Liaoning Port Group Co., Ltd. | 1,821,581.00 | 733,681.00 | |
Port de Djibouti S.A. | 1,770,749.55 | 1,618,911.45 | |
Qingdao Qianwan United Container Terminal Co., Ltd. | 1,729,380.01 | 1,049,999.99 | |
China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | 1,530,505.68 | 1,341,323.72 | |
Nanshan Group and its subsidiaries | 1,404,627.23 | - | |
Sinotrans Container Lines Co., Ltd. | 1,287,851.75 | 1,436,388.75 | |
China Ocean Shipping Agency Shenzhen Co., Ltd. | 758,113.05 | 1,418,539.82 | |
South China Sinotrans Supply Chain Management Co., Ltd. | 659,854.40 | 475,477.60 | |
Sinotrans (HK) Shipping Limited | 375,748.78 | 1,068,888.42 | |
China Marine Shipping Agency Ningbo Co., Ltd. | 164,981.21 | 6,502,287.89 | |
Yingkou Port Group and its subsidiaries | 160,491.00 | 3,333,618.62 | |
Panjin Port Group | - | 1,467,000.00 | |
China Merchants International Cold Chain (Shenzhen) Company Limited | - | 1,215,660.73 | |
Guizhou East Land Port Operation Co., Ltd. | - | 89,177.60 | |
Other related parties | 13,549,055.64 | 8,951,295.22 | |
Total | 102,283,282.02 | 66,490,251.55 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
Item | Related party | 31/12/2022 | 31/12/2021 |
Dividends receivable | Nanshan Group | 240,591,000.00 | 185,070,000.00 |
Tin-Can Island Container Terminal Ltd | 65,121,449.40 | 19,076,909.00 | |
Qingdao Qianwan United Container Terminal Co., Ltd. | 50,000,000.00 | - | |
Merchants Port City | 41,847,044.77 | 41,847,044.77 | |
COSCO Logistics (Zhanjiang) Co., Ltd. | 18,449,001.16 | 18,403,959.77 | |
Other related parties | 232,047.23 | 277,072.09 | |
Total | 416,240,542.56 | 264,674,985.63 | |
Other receivables | Chu Kong River Trade Terminal Co., Ltd. | 36,053,588.00 | 32,953,940.00 |
Port de Djibouti S.A. | 24,808,664.70 | 22,681,372.48 | |
Shenzhen Nanyou (Holdings) Ltd. | 6,725,260.86 | 110,902.00 | |
Shenzhen Qianhai Shekou Free Trade Investment Development Co., Ltd. | 6,310,000.00 | 6,000,000.00 | |
Zhoushan Blue Ocean Investment Co., Ltd. | 4,996,989.39 | 4,996,989.39 | |
China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. | 2,899,163.95 | 2,899,163.95 | |
EuroAsia Dockyard Enterprise and Development Limited | 1,510,055.76 | 1,380,231.20 | |
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 1,132,846.40 | 1,132,846.40 | |
Nanshan Group and its subsidiaries | 1,009,839.70 | 129,239.70 | |
China Merchants Port Investment Development Company Limited | - | 5,000,000.00 | |
Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | - | 4,907,365.06 | |
COSCO Logistics (Zhanjiang) Co., Ltd. | - | 2,190,539.40 | |
Other related parties | 3,550,453.73 | 6,477,504.63 | |
Total | 88,996,862.49 | 90,860,094.21 | |
Prepayments | Nanshan Group and its subsidiaries | 9,000.00 | - |
Other related parties | 6,351.75 | - | |
Total | 15,351.75 | - | |
Non-current assets due within one year | Port of Newcastle and its subsidiaries | 852,919,208.25 | 60,029,243.30 |
Terminal Link SAS | 46,409,214.10 | 42,429,677.59 | |
China Merchants Finance Lease (Tianjin) Co., Ltd. | 3,800,000.00 | - | |
Total | 903,128,422.35 | 102,458,920.89 | |
Long-term receivables | Terminal Link SAS | 2,931,108,250.96 | 2,679,769,106.42 |
Tianjin Haitian Bonded Logistics Co., Ltd. | 34,300,000.00 | 34,300,000.00 | |
China Merchants Finance Lease (Shanghai) Co., Ltd. | 6,200,000.00 | - | |
China Merchants Finance Lease (Tianjin) Co., Ltd. | 659,515.88 | 10,000,000.00 | |
Port of Newcastle and its subsidiaries | - | 750,086,910.62 | |
Total | 2,972,267,766.84 | 3,474,156,017.04 | |
Other non-current assets | China Traffic Import and Export Co., Ltd. | - | 20,854,077.98 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Item | Related party | 31/12/2022 | 31/12/2021 |
Short-term borrowings | China Merchants Group Finance Company Limited | 413,453,629.50 | 3,393,366,381.96 |
China Merchants Bank Co., Ltd. | 15,015,583.33 | - | |
Total | 428,469,212.83 | 3,393,366,381.96 | |
Other current liabilities | China Merchants Group Finance Company Limited | 10,056,575.34 | 10,012,082.19 |
Accounts payable | Antong Holdings and its subordinate companies | 16,948,161.45 | - |
Ningbo Zhoushan and its subsidiaries | 16,725,206.29 | 1,159,307.43 | |
Qingdao Qianwan West Port United Wharf Co., Ltd. | 8,007,474.16 | 6,742,200.79 | |
Shenzhen Bay Electricity Industry Co., Ltd. | 4,920,501.06 | 4,987,709.79 | |
SINOWAY SHIPPING LIMITED | 4,886,700.00 | - | |
Nanshan Group and its subsidiaries | 4,259,215.79 | 3,154,427.56 | |
EuroAsia Dockyard Enterprise and Development Limited | 2,363,408.70 | 3,142,704.91 | |
China Merchants Port Investment Development Company Limited | 1,203,536.99 | 37,539.37 | |
Yiu Lian Dockyards Limited | 792,077.94 | 2,651,200.00 | |
China Marine Shipping Agency Shenzhen Co., Ltd. | 248,149.17 | 633,810.99 | |
Other related parties | 4,212,603.81 | 3,064,781.40 | |
Total | 64,567,035.36 | 25,573,682.24 | |
Receipts in advance | Qingdao Wutong Century Supply Chain Co., Ltd. | 196,301.30 | - |
Other related parties | 160,600.00 | 53,057.84 | |
Total | 356,901.30 | 53,057.84 | |
Contract liabilities | Dalian Container Terminal Co., Ltd. | 9,679,785.44 | 3,573,179.78 |
Dandong Port Group Co., Ltd. | 3,842,709.07 | - | |
Qingdao Qianwan United Container Terminal Co., Ltd. | 1,556,753.55 | 1,050,000.00 | |
Yingkou Xingang Kuangshi Terminals Co., Ltd. | 1,514,844.30 | - | |
Antong Holdings and its subordinate companies | 1,468,616.91 | 1,994,209.18 | |
COSCO Logistics (Zhanjiang) Co., Ltd. | 1,275,397.28 | - | |
Qingdao Sinotrans Supply Chain Management Co., Ltd. | 368,484.60 | 1,578,302.00 | |
Other related parties | 2,508,480.44 | 2,897,061.68 | |
Total | 22,215,071.59 | 11,092,752.64 | |
Dividends payable | Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | 41,400,234.06 | - |
China Merchants Zhangzhou Development Zone Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |
Dalian Port Container | 14,000,000.00 | 18,349,264.69 | |
Sri Lanka Ports Authority | 10,446,900.00 | - | |
Jifa Logistics | 3,000,000.00 | 4,945,967.80 | |
Total | 88,847,134.06 | 43,295,232.49 | |
Other payables | Lac Assal Investment Holding Company Limited | 47,359,371.46 | - |
Antong Holdings and its subordinate companies | 12,730,734.37 | 8,077,252.00 | |
China Merchants Real Estate (Shenzhen) Co., Ltd. | 10,079,369.00 | 10,079,369.00 | |
China Merchants Shekou Industrial Zone Holdings Co., Ltd. | 6,420,820.68 | - | |
China Merchants Port Investment Development Company Limited | 4,130,081.82 | 7,417,802.54 | |
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 3,750,000.03 | 7,839,816.47 | |
China Merchants Real Estate Co., Ltd. | 3,263,853.86 | - | |
Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | 1,628,515.12 | 1,579,720.16 | |
Zhanjiang Xiagang United Development Co., Ltd. | 1,439,753.57 | 1,433,473.84 | |
China Merchant Food (China) Co., Ltd. | 1,069,017.00 | 1,069,017.00 | |
Shenzhen Baohong Technology Co., Ltd. | 749,269.39 | - | |
Port de Djibouti S.A. | - | 254,894,592.46 | |
Terminal Link SAS | - | 3,910,337.39 | |
Other related parties | 6,732,058.14 | 5,419,228.21 | |
Total | 99,352,844.44 | 301,720,609.07 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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
Item | Related party | 31/12/2022 | 31/12/2021 |
Non-current liabilities due within one year | China Merchants Group Finance Company Limited | 110,838,087.45 | 27,106,533.22 |
China Merchants Finance Lease (Shanghai) Co., Ltd. | 103,236,707.51 | 104,204,701.37 | |
Nanshan Group and its subsidiaries | 65,165,836.97 | 56,174,150.92 | |
China Merchants Tongshang Finance Lease Co., Ltd. | 45,115,824.42 | 60,639,407.07 | |
China Merchants Shekou Industrial Zone Holdings Co., Ltd. | 37,012,422.69 | - | |
China Merchants Finance Lease (Tianjin) Co., Ltd. | 32,339,542.44 | 32,788,124.97 | |
EuroAsia Dockyard Enterprise and Development Limited | 14,255,883.08 | 13,030,256.95 | |
China Merchants Bank Co., Ltd. | 11,362,639.43 | 4,227,333.34 | |
Guangdong Shunkong City Investment Real Estate Co. Ltd. | 3,162,000.00 | - | |
China Merchants International Cold Chain (Shenzhen) Company Limited | 1,050,270.17 | - | |
China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | - | 6,029,278.06 | |
Other related parties | 1,962,815.09 | 961,513.13 | |
Total | 425,502,029.25 | 305,161,299.03 | |
Other non-current liabilities | Nanshan Group and its subsidiaries | - | 1,020,381.51 |
Long-term borrowings | China Merchants Group Finance Company Limited | 445,490,692.58 | 543,744,022.45 |
China Merchants Bank Co., Ltd. | 325,000,000.00 | 196,000,000.00 | |
Total | 770,490,692.58 | 739,744,022.45 | |
Lease liabilities | China Merchants Finance Lease (Shanghai) Co., Ltd. | 75,833,546.45 | 177,500,213.13 |
Nanshan Group and its subsidiaries | 65,431,073.09 | 58,651,209.31 | |
China Merchants Finance Lease (Tianjin) Co., Ltd. | 15,833,403.29 | 47,500,069.97 | |
China Merchants Shekou Industrial Zone Holdings Co., Ltd. | 5,993,041.70 | - | |
China Merchants International Cold Chain (Shenzhen) Company Limited | 253,362.41 | 1,353,404.41 | |
China Merchants Tongshang Finance Lease Co., Ltd. | - | 44,730,575.22 | |
Other related parties | 803,148.25 | 181,987.02 | |
Total | 164,147,575.19 | 329,917,459.06 | |
Long-term payables | China Merchants Finance Lease (Tianjin) Co., Ltd. | 41,052,268.30 | - |
(XIV) SHARE-BASED PAYMENTS
1. Overall share-based payments
Total equity instruments granted by the Company in the year | None |
Total equity instruments exercised by the Company in the year | None |
Total equity instruments of the Company that became invalid in the year | 5,948,200 shares |
Range of exercise prices and remaining contractual life of the Company's stock options outstanding at the end of the year | Exercise price: RMB 14.71 to RMB 16.69; The remaining contractual life: 49 months |
Range of exercise prices and remaining contractual life of the Company's other equity instruments outstanding at the end of the year | None |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 164 -
(XIV) SHARE-BASED PAYMENTS - continued
2. Equity-settled share-based payments
The method used to determine the fair value of equity instruments at the grant date | The cost of granted stock options was estimated using the Black Scholes Model. |
The basis for determining the number of exercisable equity instruments | At each balance sheet date in the vesting 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 the current year and the estimates of prior year | Criteria of exercising in vesting period of batch 2 are not satisfied |
The aggregate amount of equity-settled share-based payments that is included in capital reserve | 5,591,402.00 |
Total expenses recognized for the equity-settled share-based payments in the year | -7,631,891.11 |
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), which was deliberated and approvedby the 1
stExtraordinary General Meeting of the Company in 2020 on 3 February 2020, theCompany 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. Witha lockup period of 24 months from the grant date, the stock options are exercisable upon expiry ofthe 24-month lockup period in the premise that the vesting conditions are satisfied. The stockoptions are exercisable in three batches, specifically, 40% for the first batch (after 24 months butwithin 36 months subsequent to the grant date), 30% for the second batch (after 36 months butwithin 48 months subsequent to the grant date) and the remaining 30% for the third batch (after 48months but within 84 months subsequent to the grant date). Each stock option entitles the holderto subscribe for one ordinary share of the Company.
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 grantdate is 29 January 2021. With a lockup period of 24 months from the grant date, the stock optionsare exercisable upon expiry of the 24-month lockup period in the premise that the vestingconditions are satisfied. The stock options are exercisable in two batches, specifically, 50% for thefirst batch (after 24 months but within 36 months subsequent to the grant date), and the remaining50% for the second batch (after 36 months but within 72 months subsequent to the grant date).Each stock option entitles the holder to subscribe for one ordinary share of the Company.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XIV) SHARE-BASED PAYMENTS - continued
2. Equity-settled share-based payments - continued
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 in respect of the first batch of stock option granted understock option incentive plan (phase I) on 30 January 2021; the Company uniformly adjusted theexercise price from RMB 17.34 per share to 16.69 per share in respect of the first batch of stockoption granted under stock option incentive plan (phase I), and the exercise price of the reservedportion of stock option from RMB 15.09 per share to 14.71 per share on 29 January 2022.
As at the date on which the financial statements are issued, as the criteria of exercise in the secondvesting period of the stock option (1
stbatch) under the stock option incentive plan (phase I) arenot satisfied, the Company has cancelled the 3,886,800 shares of stock option corresponding tothe second vesting period of the stock option (1
stbatch) under the stock option incentive plan(phase I). Since the criteria of exercise in the first vesting period of the stock option (the reservedportion) under the stock option incentive plan (phase I) are not satisfied, the Company hascancelled the 265,000 shares of stock option corresponding to the first vesting period of the stockoption (the reserved portion) under the stock option incentive plan (phase I). As 21 of theincentive targets have retired or no longer serve the Company, the corresponding 1,796,400 sharesof stock option have been cancelled.
(XV) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
Item | 31/12/2022 | 31/12/2021 |
Commitments that have been entered into but have not been recognized in the financial statements | ||
- Commitment to make contributions to the investees | 38,956,185.01 | 211,620,680.00 |
- Commitment to acquire and construct long-term assets | 1,802,316,899.52 | 1,755,687,773.54 |
- Commitment to invest port construction | 5,571,690.76 | 5,093,914.88 |
- Others | 383,560.31 | - |
Total | 1,847,228,335.60 | 1,972,402,368.42 |
2. Contingencies
Item | 31/12/2022 | 31/12/2021 |
Contingent liabilities brought by external litigations (Note 1) | 279,438,527.06 | 207,807,928.33 |
Guarantee for borrowings of related parties (Note 2) | 186,672,528.21 | 175,517,115.86 |
Total | 466,111,055.27 | 383,325,044.19 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 166 -
(XV) COMMITMENTS AND CONTINGENCIES - continued
2. Contingencies - continued
Note 1: This mainly represents the significant contingent liabilities arising from the litigations
between TCP and its subsidiaries and local tax authority, employee or former employee ofTCP and its subsidiaries in Brazil at as the year end. According to the latest estimates ofthe Group's management, the possible compensation is RMB279,438,527.06 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 needs to make counter-bonification to the Groupin respect of the above contingent liabilities, with the compensation amount not exceedingpre-determined amount and specified period.
Zhanjiang Port, a subsidiary of the Company, entered into an EPC contract for the GeneralCargo Terminal Project at Donghai Island Port Area of Zhanjiang Port with CCCC WaterTransport Planning and Design Institute Co., Ltd. on 28 June 2016, with the agreedconstruction period from 28 June 2016 to 8 June 2018. After the contract was signed, theoverall progress of the project construction was delayed due to the optimization andadjustment of the layout plan and process design for the terminal. In December 2022,CCCC Water Transport Planning and Design Institute Co., Ltd. filed a litigation to thecourt for losses caused by delay in construction, adjustment to project scale, changes indesign, and other reasons, and may require Zhanjiang Port for compensation.
As at 31 December 2022, the claims of CCCC Water Transport Planning and DesignInstitute Co., Ltd. were inconsistent with those agreed in the contract, the relevant result ofthe litigation could not be reasonably estimated, and the management of the Groupbelieved that the possibility of loss was quite low, therefore, no provisions were made forthe above pending litigation.
Note 2: As at 31 December 2022, the guarantees provided by the Group for related parties are
detailed in Note XIII 5(3).
As at 31 December 2022, the directors of the Company evaluated the default risks ofrelated companies on the above-mentioned loan financing and other liabilities, andbelieved that the risks were not significant and the possibility of guaranteed payments wasvery small.
Except for the above-mentioned contingencies, as at 31 December 2022, the Group had noother major guarantees and other contingencies that need to be explained.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 167 -
(XVI) EVENTS AFTER THE BALANCE SHEET
According to the profit distribution plan for 2022 and as approved by the 7th meeting of the 10thboard of directors on 31 March 2023, the Company, based on the total shares of 2,499,074,661 asat 31 December 2022, distributes cash dividends at RMB 4.50 for every 10 shares, totalling RMB1,124,583,597.45. The above profit distribution plan has not yet been approved by shareholders'meeting.
(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. The CODM considers the operation of the Group in terms of business and locations.
Individual operating segments for which discrete financial information is available are identifiedby the CODM and are operated by their respective management teams. These individual operatingsegments are aggregated in arriving at the reporting segments of the Group.
From business and location perspectives, the management assesses the performance of theGroup's business operations including ports operation, bonded logistics operation and otheroperations.
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 is 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
Bonded logistics operation
Bonded logistics operation includes logistics park operation, ports transportation and airport cargohandling operated by the Group and its associates and joint ventures.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
Other operations
Other operations mainly include property development and investment and logistics businessoperated by the Group's associates, property investment operated by the Group and corporatefunction.
Each of the segments under ports operation includes the operations of a number of ports invarious locations within one geographic location. For the purpose of segment reporting, theseindividual operating segments have been aggregated into reportable segments on geographic basisin order to present a more systematic and structured segment information. To give details of eachof the operating segments, in the opinion of the directors of the Company, would result inparticulars of excessive length.
Bonded logistics operation and other operations include a number of different operations, each ofwhich is considered as a separate but insignificant operating segment by the CODM. For segmentreporting, these individual operating segments have been aggregated according to the nature 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 RMB1,672,365,283.13,representing 10.30% (2021: 11.52%) of the Group's operating income for 2022.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments
Segment financial information for 2022 is as follows:
Item | Ports operation | Bonded logistics operation | Others | Unappropriated amount | Total | |||||
Mainland China, Hong Kong and Taiwan | Other locations | Sub-total | ||||||||
Pearl River Delta | Yangtze River Delta | Bohai Rim | Others | |||||||
Operating income | 6,774,045,422.66 | 1,139,944,516.62 | 74,222,857.10 | 3,552,074,625.60 | 4,086,514,642.86 | 15,626,802,064.84 | 445,592,537.09 | 158,094,525.62 | - | 16,230,489,127.55 |
Operating cost | 3,849,914,782.32 | 696,788,162.45 | 62,264,300.65 | 2,691,172,225.32 | 1,853,376,921.16 | 9,153,516,391.90 | 280,270,213.56 | 216,675,107.48 | - | 9,650,461,712.94 |
Segment operating profit (loss) | 2,924,130,640.34 | 443,156,354.17 | 11,958,556.45 | 860,902,400.28 | 2,233,137,721.70 | 6,473,285,672.94 | 165,322,323.53 | -58,580,581.86 | - | 6,580,027,414.61 |
Taxes and surcharges | 32,239,840.06 | 5,674,557.52 | 1,102,665.95 | 49,561,307.23 | 152,923,436.63 | 241,501,807.39 | 22,188,514.91 | 18,305,796.73 | 253,354.43 | 282,249,473.46 |
Administrative expense | 435,544,849.33 | 37,586,936.77 | 9,903,393.91 | 536,045,336.65 | 266,594,657.88 | 1,285,675,174.54 | 46,846,479.95 | 1,356,901.51 | 431,216,180.51 | 1,765,094,736.51 |
R&D expenses | 227,962,954.81 | 40,790,798.38 | - | 18,952,425.51 | - | 287,706,178.70 | - | - | - | 287,706,178.70 |
Financial expenses | 43,042,474.05 | 12,623,313.35 | 16,617,530.89 | 105,755,359.90 | 202,779,070.53 | 380,817,748.72 | 11,831,333.17 | 42,509,881.22 | 1,823,554,709.31 | 2,258,713,672.42 |
Other income | 128,422,018.54 | 6,905,602.77 | 99,278.36 | 73,123,957.51 | - | 208,550,857.18 | 20,996,809.22 | 2,259,661.58 | 9,840,742.44 | 241,648,070.42 |
Investment income | 222,543,823.37 | 5,152,876,665.17 | 334,188,303.02 | 53,824,558.05 | 1,070,198,985.49 | 6,833,632,335.10 | 94,330,245.64 | 425,089,497.20 | 24,603,428.39 | 7,377,655,506.33 |
Gains (losses) from changes in fair value | 34,481,879.58 | - | -28,084,576.60 | 1,009,908.14 | - | 7,407,211.12 | -136,440,861.23 | - | - | -129,033,650.11 |
Gains from impairment of credit (losses) | -5,932,959.08 | - | 269,053.38 | 19,276,798.42 | -221,119,087.29 | -207,506,194.57 | -15,967,381.98 | - | - | -223,473,576.55 |
Gains (losses) from impairment of assets | -573,122.05 | - | - | -21,585,898.15 | - | -22,159,020.20 | - | - | - | -22,159,020.20 |
Gains (losses) from disposal of assets | -186,834.36 | - | - | -2,189,571.61 | 61,495.66 | -2,314,910.31 | 104,763.84 | 57,352,755.05 | -12,513.06 | 55,130,095.52 |
Operating profit (loss) | 2,564,095,328.09 | 5,506,263,016.09 | 290,807,023.86 | 274,047,723.35 | 2,459,981,950.52 | 11,095,195,041.91 | 47,479,570.99 | 363,948,752.51 | -2,220,592,586.48 | 9,286,030,778.93 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 170 -
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2022 is as follows: - continued
Item | Ports operation | Bonded logistics operation | Others | Unappropriated amount | Total | |||||
Mainland China, Hong Kong and Taiwan | Other locations | Sub-total | ||||||||
Pearl River Delta | Yangtze River Delta | Bohai Rim | Others | |||||||
Non-operating income | 18,342,596.09 | 2,900,356.17 | 22,378,312.31 | 10,237,915.83 | 221,044,827.94 | 274,904,008.34 | 50,933.02 | 992,336.45 | 3,327,174.96 | 279,274,452.77 |
Non-operating expenses | 23,387,870.39 | 1,035,713.16 | - | 148,923,783.29 | 29,888,387.79 | 203,235,754.63 | 10,000.00 | - | 17,196,500.05 | 220,442,254.68 |
Total profit (loss) | 2,559,050,053.79 | 5,508,127,659.10 | 313,185,336.17 | 135,361,855.89 | 2,651,138,390.67 | 11,166,863,295.62 | 47,520,504.01 | 364,941,088.96 | -2,234,461,911.57 | 9,344,862,977.02 |
Income tax expenses | 517,928,967.15 | 218,235,972.45 | 19,104,784.49 | 39,483,784.58 | 225,040,819.77 | 1,019,794,328.44 | 17,884,281.49 | 73,694,575.33 | 1,806,494.09 | 1,113,179,679.35 |
Net profit (loss) | 2,041,121,086.64 | 5,289,891,686.65 | 294,080,551.68 | 95,878,071.31 | 2,426,097,570.90 | 10,147,068,967.18 | 29,636,222.52 | 291,246,513.63 | -2,236,268,405.66 | 8,231,683,297.67 |
Segment assets | 24,257,996,252.39 | 58,080,072,708.01 | 9,491,073,768.13 | 27,095,782,491.19 | 44,322,822,242.58 | 163,247,747,462.30 | 4,719,190,904.43 | 19,523,260,761.95 | 10,035,331,759.08 | 197,525,530,887.76 |
Total assets in the financial statements | 197,525,530,887.76 | |||||||||
Segment liabilities | 10,543,319,204.88 | 1,993,414,192.41 | 142,428,100.05 | 7,095,951,456.64 | 7,184,350,827.79 | 26,959,463,781.77 | 472,931,692.54 | 849,543,150.07 | 40,981,807,066.15 | 69,263,745,690.53 |
Total liabilities in the financial statements | 69,263,745,690.53 | |||||||||
Supplementary information: | ||||||||||
Depreciation and amortization | 1,119,781,238.27 | 214,719,968.82 | 882,688.51 | 851,694,182.33 | 801,221,249.28 | 2,988,299,327.21 | 98,440,779.50 | 184,744,488.91 | 26,022,221.27 | 3,297,506,816.89 |
Interest income | 49,428,469.37 | 2,890,732.29 | 543,508.80 | 27,921,113.89 | 255,001,470.66 | 335,785,295.01 | 1,231,657.13 | 1,329,524.29 | 131,487,621.62 | 469,834,098.05 |
Interest expense | 86,468,640.13 | 10,921,214.61 | - | 128,204,357.08 | 415,728,796.45 | 641,323,008.27 | 13,108,859.14 | 26,701,866.03 | 1,544,029,072.35 | 2,225,162,805.79 |
Investment income from long-term equity investments under equity method | 134,882,198.77 | 5,114,173,074.83 | 293,371,940.22 | 53,436,206.60 | 1,070,198,985.49 | 6,666,062,405.91 | 94,330,245.64 | 424,789,497.20 | - | 7,185,182,148.75 |
Long-term equity investments under equity method | 1,741,189,123.54 | 52,146,528,746.22 | 8,605,621,312.90 | 1,094,348,450.19 | 13,193,855,158.62 | 76,781,542,791.47 | 1,496,017,782.58 | 14,086,733,345.00 | - | 92,364,293,919.05 |
Non-current assets other than long-term equity investments | 18,338,841,436.04 | 4,203,682,076.56 | 15,863,803.61 | 21,159,269,860.52 | 25,053,023,827.83 | 68,770,681,004.56 | 2,058,218,100.73 | 5,083,564,521.74 | 880,089,692.55 | 76,792,553,319.58 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2021 is as follows:
Item | Ports operation | Bonded logistics operation | Others | Unappropriated 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) | 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 (losses) from changes in fair value | 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 |
Gains (losses) from impairment of credit | -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 |
Gains (losses) from impairment of assets | - | - | - | -418,345,307.68 | -2,147,208.07 | -420,492,515.75 | - | - | - | -420,492,515.75 |
Gains (losses) from disposal of assets | 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) | 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
- 172 -
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2021 is as follows: - continued
Item | Ports operation | Bonded logistics operation | Others | Unappropriated 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 |
Total profit (loss) | 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) | 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 investments 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 investments 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 investments | 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
The Group's total revenue from external transactions in Mainland China and other countries andregions, and total non-current assets other than financial assets and deferred tax assets located inMainland China and other countries and regions are presented as follows
Revenue from external transactions | 2022 | 2021 |
Mainland China, Hong Kong and Taiwan | 12,105,380,701.20 | 11,550,563,244.63 |
Pearl River Delta | 7,195,529,214.88 | 6,646,437,978.26 |
Yangtze River Delta | 1,139,944,516.62 | 955,807,808.06 |
Bohai Rim | 217,832,344.10 | 202,120,126.70 |
Others | 3,552,074,625.60 | 3,746,197,331.61 |
Other locations | 4,125,108,426.35 | 3,733,244,929.97 |
Total | 16,230,489,127.55 | 15,283,808,174.60 |
Total non-current assets | 31/12/2022 | 31/12/2021 |
Mainland China, Hong Kong and Taiwan | 130,723,044,577.52 | 109,645,185,780.08 |
Pearl River Delta | 42,150,053,552.57 | 45,414,657,732.10 |
Yangtze River Delta | 56,350,210,822.78 | 34,860,356,989.30 |
Bohai Rim | 9,147,542,234.74 | 7,318,137,784.88 |
Others | 23,075,237,967.43 | 22,052,033,273.80 |
Other locations | 38,433,802,661.11 | 35,806,732,228.78 |
Total | 169,156,847,238.63 | 145,451,918,008.86 |
(3) Degree of reliance on major customers
The total operating income derived from the top five customers of the Group is RMB3,298,081,685.23, accounting for 20.32% 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 | 31/12/2022 | 31/12/2021 |
Dividends receivable | 147,896,763.88 | 177,295,422.67 |
Other receivables | 2,601,740,991.35 | 1,079,447,548.34 |
Total | 2,749,637,755.23 | 1,256,742,971.01 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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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) Presentation of dividends receivable
Investee | 31/12/2022 | 31/12/2021 |
Chiwan Wharf Holdings (Hong Kong) Ltd. | 147,680,363.88 | 147,680,363.88 |
Shenzhen Petrochemical Industry (Group) Co., Ltd. | 216,400.00 | 216,400.00 |
China Merchants Bonded Logistics Co., Ltd. | - | 15,707,120.00 |
Dongguan Shenchiwan Wharf Co., Ltd. | - | 13,691,538.79 |
Total | 147,896,763.88 | 177,295,422.67 |
Less: Provision for credit loss | - | - |
Carrying amount | 147,896,763.88 | 177,295,422.67 |
(2) Significant dividends receivable aged over 1 year
Item | 31/12/2022 | 31/12/2021 | Reason for outstanding | Impaired or not and the determination basis |
Chiwan Wharf Holdings (Hong Kong) Ltd. | 147,680,363.88 | 147,680,363.88 | In processing and expected to be recovered in 2023 | No |
Total | 147,680,363.88 | 147,680,363.88 |
1.3 Other receivables
(1) Aging analysis of other receivables
Aging | 31/12/2022 | ||
Other receivables | Provision for credit loss | Proportion of provision (%) | |
Within 1 year | 1,526,322,695.78 | - | - |
1 to 2 years | 289,656,927.75 | - | - |
2 to 3 years | 457,984,135.87 | - | - |
More than 3 years | 328,160,688.55 | 383,456.60 | 0.12 |
Total | 2,602,124,447.95 | 383,456.60 |
(2) Disclosure of other receivables by nature
Item | 31/12/2022 | 31/12/2021 |
Amounts due from related parties | 2,596,356,894.67 | 1,072,941,653.53 |
Advances | 2,467,600.00 | 4,741,428.81 |
Others | 3,299,953.28 | 2,147,922.60 |
Total | 2,602,124,447.95 | 1,079,831,004.94 |
Less: Provision for credit loss | 383,456.60 | 383,456.60 |
Carrying amount | 2,601,740,991.35 | 1,079,447,548.34 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.3 Other receivables - continued
(3) 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 rate of other receivables under each credit rating.Such expected average loss rate is based on historical actual impairment and takes intoconsideration of current and expected future economic conditions.
At 31 December 2022, the credit risk and expected credit loss of other receivables by category ofcustomers are as follows:
Credit rating | Expected credit loss rate (%) | 31/12/2022 | 31/12/2021 | ||||||
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 | 2,601,740,991.35 | - | - | 2,601,740,991.35 | 1,079,447,548.34 | - | - | 1,079,447,548.34 |
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 |
Gross carrying amount | 2,601,740,991.35 | - | 383,456.60 | 2,602,124,447.95 | 1,079,447,548.34 | - | 383,456.60 | 1,079,831,004.94 | |
Provision for credit loss | - | - | 383,456.60 | 383,456.60 | - | - | 383,456.60 | 383,456.60 | |
Carrying amount | 2,601,740,991.35 | - | - | 2,601,740,991.35 | 1,079,447,548.34 | - | - | 1,079,447,548.34 |
(4) Provision, recovery and reversal of credit loss of other receivables
Item | Stage 1 | Stage 2 | Stage 3 | Total |
12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
At 1 January 2022 | - | 383,456.60 | 383,456.60 | |
Balance of other receivables at 1 January 2022 | ||||
- Transfer to Stage 2 | - | - | - | - |
- Transfer to Stage 3 | - | - | - | - |
- Reverse to Stage 2 | - | - | - | - |
- Reverse to Stage 1 | - | - | - | - |
Provision for the year | - | - | - | - |
Reversal for the year | - | - | - | - |
Transfer out due to derecognition of financial assets (including direct write-down) | - | - | - | - |
Other changes | - | - | - | - |
At 31 December 2022 | - | - | 383,456.60 | 383,456.60 |
(5) The Company has no recovery or reversal of significant provision for credit loss in the
current year.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(6) The Group has no other receivables written off during the year.
(7) The top five balances of other receivables at the end of the year classified by debtor
Name of entity | Relationship with the Company | Nature | Closing balance | Aging | Proportion to total other receivables (%) | Closing balance of provision for credit loss |
Shenzhen Haixing | Subsidiary | Loan to related parties | 1,302,461,738.81 | Within 1 year, 1-2 years, 2-3 years, More than 3 years | 50.05 | - |
Chiwan Wharf Holdings (Hong Kong) Ltd. | Subsidiary | Loan to related parties | 1,151,028,753.86 | Within 1 year | 44.23 | - |
Shunkong Port | Subsidiary | Loan to related parties | 142,866,402.00 | Within 1 year | 5.49 | - |
CM International Tech | Subsidiary | Advances | 2,467,600.00 | Within 1 year | 0.09 | - |
Shenzhen Shekou Local Taxation Bureau | Third party | Others | 711,772.07 | More than 3 years | 0.03 | - |
Total | 2,599,536,266.74 | 99.89 | - |
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
Investee | 31/12/2021 | Changes for the year | 31/12/2022 | Closing balance of provision for impairment | |||||||
Increase | Decrease | Investment income under equity method | Reconciliation of other comprehensive income | Other equity movements | Cash dividends or profit declared | Provision for impairment | Others | ||||
I. Subsidiaries | |||||||||||
Ports Development (Hong Kong) Limited (Note 1) | - | 29,203,045,326.23 | - | - | - | - | - | - | - | 29,203,045,326.23 | - |
Zhanjiang Port | 3,381,825,528.52 | - | - | - | - | - | - | - | - | 3,381,825,528.52 | - |
Chiwan Container Terminal Co., Ltd. | 421,023,199.85 | - | - | - | - | - | - | - | - | 421,023,199.85 | - |
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 | - |
Dongguan Shenchiwan Port Affairs Co., Ltd. | 186,525,000.00 | - | - | - | - | - | - | - | - | 186,525,000.00 | - |
Dongguan Shenchiwan Wharf Co., Ltd. | 175,000,000.00 | - | - | - | - | - | - | - | - | 175,000,000.00 | - |
CM Port (Note 2) | 29,290,281,157.45 | 81,605,936.30 | -29,203,045,325.40 | - | - | - | - | - | - | 168,841,768.35 | - |
CM Port (Zhoushan) RoRo Logistics Co., Ltd. | 149,709,800.00 | - | - | - | - | - | - | - | - | 149,709,800.00 | - |
Yide Port (Note 3) | - | 131,866,700.00 | - | - | - | - | - | - | - | 131,866,700.00 | - |
Shunkong Port (Note 4) | - | 50,000,000.00 | - | - | - | - | - | - | - | 50,000,000.00 | - |
Shenzhen Chiwan Tugboat Co., Ltd. | 24,000,000.00 | - | - | - | - | - | - | - | - | 24,000,000.00 | - |
CM International Tech | 20,561,075.02 | - | - | - | - | - | - | - | - | 20,561,075.02 | - |
Shenzhen Chiwan International Freight Agency Co., Ltd. | 5,500,000.00 | - | - | - | - | - | - | - | - | 5,500,000.00 | - |
Sanya Merchants Port Development Co., Ltd. | 2,040,000.00 | - | - | - | - | - | - | - | - | 2,040,000.00 | - |
Chiwan Wharf Holdings (Hong Kong) Ltd. | 1,070,000.00 | - | - | - | - | - | - | - | - | 1,070,000.00 | - |
Chiwan Shipping (Hong Kong) Limited | 1,051,789.43 | - | - | - | - | - | - | - | - | 1,051,789.43 | - |
Sub-total | 34,115,791,361.36 | 29,466,517,962.53 | -29,203,045,325.40 | - | - | - | - | - | - | 34,379,263,998.49 | - |
II. Associates | |||||||||||
Ningbo Zhoushan (Note 5) | 1,792,998,234.68 | 14,113,777,882.23 | - | 258,454,001.50 | 261,596.32 | 102,528,280.42 | -39,140,468.28 | - | - | 16,228,879,526.87 | - |
China Merchants Northeast Asia Development & Investment Co., Ltd. | 1,016,048,532.69 | - | - | -13,657,927.07 | - | 14,619,600.09 | - | - | - | 1,017,010,205.71 | - |
China Merchants Bonded Logistics Co., Ltd. | 395,249,112.00 | - | - | 17,113,806.79 | - | - | - | - | - | 412,362,918.79 | - |
Sub-total | 3,204,295,879.37 | 14,113,777,882.23 | - | 261,909,881.22 | 261,596.32 | 117,147,880.51 | -39,140,468.28 | - | - | 17,658,252,651.37 | - |
III. Joint ventures | |||||||||||
Yantai Port Group Laizhou Port Co., Ltd. | 791,515,741.44 | - | - | 32,565,975.37 | - | -669,119.99 | -29,259,207.08 | - | - | 794,153,389.74 | - |
Fujian Zhaohang Logistics Management Partnership (Limited Partnership) ("Zhaohang Logistics") | 511,210,432.62 | - | - | 91,193,783.34 | - | -10,269,949.21 | - | - | - | 592,134,266.75 | - |
Shenzhen Gangteng Internet Technology Co., Ltd. (Note 6) | - | 11,250,000.00 | - | -1,440,834.86 | - | - | - | - | - | 9,809,165.14 | - |
China Merchants Antong Logistics Management Company (Note 7) | 9,727,878.94 | - | -9,794,887.44 | 67,008.50 | - | - | - | - | - | - | - |
Investment Fund | - | 1,085,852.21 | -1,047,401.66 | -38,450.55 | - | - | - | - | - | - | - |
Sub-total | 1,312,454,053.00 | 12,335,852.21 | -10,842,289.10 | 122,347,481.80 | - | -10,939,069.20 | -29,259,207.08 | - | - | 1,396,096,821.63 | - |
Total | 38,632,541,293.73 | 43,592,631,696.97 | -29,213,887,614.50 | 384,257,363.02 | 261,596.32 | 106,208,811.31 | -68,399,675.36 | - | - | 53,433,613,471.49 | - |
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(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. (1).
Note 2: Details are set out in Note (X) 1. (1).
Note 3: The Company has entered into an equity transfer agreement with its subsidiary China
Merchants International Port Development (Hong Kong) Limited (hereinafter referred toas "Port Development") on 22 December 2022. Pursuant to the agreement, PortDevelopment transfers 51% of equity interests in Yide Port to the Company. Upon thecompletion of the transaction, the Company directly holds and has control over Yide Port.
Note 4: Details are set out in Note (IX) 1.
Note 5: Details are set out in Note (VIII) 13 (1).
Note 6: Shenzhen Gangteng Internet Technology Co., Ltd. is a joint venture established jointly by
the Company, Shenzhen Tencent Industry Venture Capital Co., Ltd., CM InternationalTech, Haixing Port and Shenzhen Zhigangbilin Internet Technology Partnership (LP). TheCompany has paid the capital contribution of RMB 11,250,000.00 on 23 February 2022.
Note 7: On 7 May 2022, the Company, Shandong Xincheng Hengye Group Co., Ltd. and
Quanzhou Antong Internet of Things Co., Ltd. reached an agreement unanimously on thedissolution of the logistics business, and implemented corresponding liquidation andcancellation procedures.
3. Operating income and operating costs
Item | 2022 | 2021 | ||
Income | Cost | Income | Cost | |
Principal operation | - | - | - | - |
Other operations | 3,669,891.36 | 2,276,202.60 | 2,642,001.75 | 2,265,959.45 |
Total | 3,669,891.36 | 2,276,202.60 | 2,642,001.75 | 2,265,959.45 |
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022(Unless otherwise specified, the monetary unit shall be RMB.)
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(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
4. Investment income
(1) Details of investment income
Item | 2022 | 2021 |
Income from long-term equity investments under cost method | 549,150,517.02 | 1,324,423,832.08 |
Income from long-term equity investments under equity method | 384,257,363.02 | 226,225,111.65 |
Income from held-for-trading financial assets | 120,227,079.12 | 38,750,781.56 |
Income from investments in other equity instruments | - | 7,409,500.00 |
Income from disposal of long-term equity investments | -20,508.07 | - |
Total | 1,053,614,451.09 | 1,596,809,225.29 |
(2) Income from long-term equity investments under cost method
Investee | 2022 | 2021 | Reason for changes |
Shenzhen Chiwan Harbor Container Co. Ltd. | 173,751,858.77 | 143,574,378.69 | Changes in profit distribution of investee |
Chiwan Container Terminal Co., Ltd. | 166,925,696.05 | 115,287,847.14 | Changes in profit distribution of investee |
Zhanjiang Port | 91,862,080.91 | 23,395,773.67 | Changes in profit distribution of investee |
Dongguan Shenchiwan Wharf Co., Ltd. | 37,543,998.58 | 48,020,128.82 | Changes in profit distribution of investee |
Shenzhen Chiwan Tugboat Co., Ltd. | 29,238,925.84 | 30,409,076.03 | Changes in profit distribution of investee |
Shenzhen Chiwan Port Development Co., Ltd. | 20,415,654.72 | 14,577,752.63 | Changes in profit distribution of investee |
Shenchiwan Port Affairs | 18,111,237.23 | 2,664,219.41 | Changes in profit distribution of investee |
CM Port | 11,069,965.98 | 946,405,578.84 | Changes in profit distribution of investee |
Shenzhen Chiwan International Freight Agency Co., Ltd. | 231,098.94 | 89,076.85 | Changes in profit distribution of investee |
Total | 549,150,517.02 | 1,324,423,832.08 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
Item | Amount | Remark |
Gains or losses on disposal of non-current assets | -104,372,804.10 | |
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) | 196,086,614.17 | |
Income earned from lending funds to non-financial institutions and recognized in profit or loss | 189,123,975.49 | |
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 asset management | - | |
Provision of impairment of assets 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 | - | |
Gains or losses arising from contingencies other than those related to normal operating business | - | |
Gains from changes in 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 financial assets/financial liabilities | -129,033,650.11 | |
Reversal of provision for accounts receivable that are tested for credit loss individually | 18,730,660.58 | |
Gains or losses on entrusted loans | - | |
Gains or losses on changes in 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 | - | |
Other non-operating income or expenses other than above | 216,674,035.87 | |
Other profit or loss that meets the definition of non-recurring profit or loss | -213,574,591.16 | Note |
Tax effects | -12,258,847.06 | |
Effects of minority interests (after tax) | -169,099,324.67 | |
Total | -7,723,930.99 |
Note: Refer to Note (VIII) 7.3 (2) for details.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2022
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.
Item | Weighted average return on net assets (%) | EPS | |
Basic EPS | Diluted EPS | ||
Net profit attributable to ordinary shareholders | 7.5443 | 1.6138 | 1.6137 |
Net profit attributable to ordinary shareholders after deducting non-recurring profit or loss | 7.5617 | 1.6175 | 1.6175 |