CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2023
FINANCIAL STATEMENTS AND AUDITOR'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2023
CONTENTS PAGE(S)
AUDITOR'S REPORT 1 - 6
CONSOLIDATED BALANCE SHEET 7 - 8
BALANCE SHEET OF THE COMPANY 9 - 10
CONSOLIDATED INCOME STATEMENT 11
INCOME STATEMENT OF THE COMPANY 12
CONSOLIDATED CASH FLOW STATEMENT 13
CASH FLOW STATEMENT OF THE COMPANY 14
CONSOLIDATED STATEMENT OF CHANGES INSHAREHOLDERS' EQUITY 15 - 16
THE COMPANY'S STATEMENT OF CHANGES INSHAREHOLDERS' EQUITY 17 - 18
NOTES TO THE FINANCIAL STATEMENTS 19 - 189
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AUDITOR'S REPORT
De Shi Bao (Shen) Zi (24) No. P03112
(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. (hereinafter referredto as "the Company"), which comprise the consolidated and Company's balance sheets as at 31December 2023, 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 2023, andthe 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 in ouraudit of the financial statements of the current year. These matters were addressed in the context of ouraudit of the financial statements as a whole, and in forming our opinion thereon, we do not provide aseparate 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) 12 to the consolidated financial statements, as at 31 December 2023, thecarrying amount of the Company's long-term equity investments in associates amounts to RMB87,708,124,441.05, accounting for 69.85% of the total shareholder's equity. In 2023, the investmentincome from associates recognized under the equity method amounts to RMB 5,582,402,904.90,accounting for 74.48% 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 the consolidatedfinancial statements.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No. P03112
(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 the Companyby reading the financial statements of the major associates and discussing with the managementabout the financial performance of the major associates and the significant judgments andestimates 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 financial statements ofthe major associates have been adjusted according to the accounting policies and accountingperiods of the Company, and recognized the amount of investment income under equity methodon that basis.
2. Goodwill impairment
As disclosed in Note (VIII) 20 to the consolidated financial statements, as at 31 December 2023, thegoodwill presented in the consolidated financial statements of the Company is RMB 6,493,002,246.44.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 asset groupwhen testing the goodwill for impairment, of which the fair value assessment is based on the marketapproach, and the forecast of future cash flows and the calculation of the present value include keyassumptions, such as growth rate and discount rate. We determine goodwill impairment as a key auditmatter of the consolidated financial statements due to the significant amount of goodwill and that themanagement needs to make significant judgments and estimates when conducting goodwill impairmenttesting.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No. P03112
(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 the reasonableness ofthe discount rate used by the management in predicting the present value of cash flows and thegrowth 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 2023 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 express anyform of assurance conclusion.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No. P03112
(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 that givea true and fair view in accordance with Accounting Standards for Business Enterprises, and for thedesign, 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's abilityto continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the management either intends to liquidate the Company or tocease 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 users takenon the basis of these financial statements.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No. P03112
(Page 5 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
As part of an audit in accordance with China Standards on Auditing, we exercise professional judgmentand maintain professional skepticism throughout the audit. We also:
(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, and obtainedaudit evidence that was sufficient and appropriate to form our opinion. The risk of not detectinga material misstatement resulting from fraud was higher than for one resulting from error, as fraudmay involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal 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 the auditevidence obtained up to the date of our auditor's report. However, future events or conditions maycause 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 underlying transactionsand 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. We remainedsolely 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, and whereapplicable, related safeguards.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (24) No. P03112
(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 matters thatwere of most significance in the audit of the financial statements of the current year and were thereforethe key audit matters. We described these matters in our auditor's report unless law or regulationprecluded public disclosure about the matter or when, in extremely rare circumstances, we determinedthat a matter should not be addressed in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Deloitte Touche Tohmatsu CPA LLP Chinese Certified Public Accountant(Engagement Partner)Shanghai, China
Li Weihua
Chinese Certified Public Accountant
Wang Hongmei
29 March 2024
The auditor's report and the accompanying financial statements are English translations of the Chinese auditor's report andstatutory 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 2023
Consolidated Balance Sheet
RMB
| Item | Notes | 31/12/2023 | 31/12/2022 (Restated) |
| Current Assets: | |||
| Cash and bank balances | (VIII)1 | 16,079,646,178.24 | 13,615,928,739.40 |
| Held-for-trading financial assets | (VIII)2 | 4,568,806,108.84 | 2,998,781,599.63 |
| Notes receivable | (VIII)3 | 325,150,195.09 | 36,395,000.00 |
| Accounts receivable | (VIII)4 | 1,103,901,466.25 | 1,276,149,689.44 |
| Receivables financing | (VIII)5 | 2,001,669.46 | 163,766,913.10 |
| Prepayments | (VIII)6 | 37,664,552.30 | 63,627,425.42 |
| Other receivables | (VIII)7 | 940,014,994.01 | 948,842,094.30 |
| Including: Interest receivable | (VIII)7 | - | - |
| Dividends receivable | (VIII)7 | 343,386,866.06 | 416,040,485.62 |
| Inventories | (VIII)8 | 218,898,192.87 | 225,122,821.48 |
| Non-current assets due within one year | (VIII)9 | 17,451,380.98 | 902,225,293.93 |
| Other current assets | (VIII)10 | 189,673,500.87 | 185,903,140.53 |
| Total current assets | 23,483,208,238.91 | 20,416,742,717.23 | |
| Non-current Assets: | |||
| Long-term receivables | (VIII)11 | 3,856,466,116.99 | 5,661,327,499.07 |
| Long-term equity investments | (VIII)12 | 96,666,117,776.27 | 92,364,293,919.05 |
| Investments in other equity instruments | (VIII)13 | 157,461,648.16 | 171,945,275.02 |
| Other non-current financial assets | (VIII)14 | 877,576,442.83 | 1,745,740,896.41 |
| Investment properties | (VIII)15 | 4,958,374,968.79 | 5,123,690,119.56 |
| Fixed assets | (VIII)16 | 28,986,538,326.35 | 32,033,326,083.50 |
| Including: Fixed assets - cost | 51,987,700,820.76 | 55,185,206,442.91 | |
| Accumulated depreciation | 22,787,694,400.09 | 23,088,313,866.49 | |
| Provision for impairment of fixed assets | 213,504,483.08 | 63,574,868.76 | |
| Construction in progress | (VIII)17 | 2,909,817,281.46 | 2,413,844,407.64 |
| Right-of-use assets | (VIII)18 | 9,441,668,311.22 | 9,342,642,222.33 |
| Intangible assets | (VIII)19 | 18,073,062,184.72 | 19,277,065,115.61 |
| Development expenditure | (IX)2 | 50,990,153.18 | 17,412,196.16 |
| Goodwill | (VIII)20 | 6,493,002,246.44 | 6,411,426,891.09 |
| Long-term prepaid expenses | (VIII)21 | 993,793,505.29 | 986,356,904.90 |
| Deferred tax assets | (VIII)22 | 415,063,477.03 | 434,498,820.95 |
| Other non-current assets | (VIII)23 | 1,194,155,989.62 | 1,186,789,378.79 |
| Total non-current assets | 175,074,088,428.35 | 177,170,359,730.08 | |
| TOTAL ASSETS | 198,557,296,667.26 | 197,587,102,447.31 |
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AT 31 DECEMBER 2023
Consolidated Balance Sheet - continued
RMB
| Item | Notes | 31/12/2023 | 31/12/2022 (Restated) |
| Current liabilities: | |||
| Short-term borrowings | (VIII)24 | 15,714,045,288.97 | 7,164,338,366.18 |
| Notes payable | (VIII)25 | 73,461,165.82 | - |
| Accounts payable | (VIII)26 | 691,765,137.25 | 811,149,397.66 |
| Receipts in advance | (VIII)27 | 17,387,537.36 | 9,886,531.59 |
| Contract liabilities | (VIII)28 | 142,080,101.00 | 141,899,551.03 |
| Employee benefits payable | (VIII)29 | 917,964,606.65 | 936,834,718.13 |
| Including: Payroll payable | 883,913,277.13 | 897,442,262.83 | |
| Welfare payable | - | - | |
| Taxes payable | (VIII)30 | 923,053,572.50 | 917,933,169.09 |
| Other payables | (VIII)31 | 1,654,622,170.02 | 1,755,885,258.26 |
| Including: Interest payable | (VIII)31 | - | - |
| Dividends payable | (VIII)31 | 111,897,214.27 | 92,374,921.29 |
| Non-current liabilities due within one year | (VIII)32 | 6,817,404,289.25 | 11,641,223,688.95 |
| Other current liabilities | (VIII)33 | 2,143,842,534.53 | 3,161,147,525.96 |
| Total current liabilities | 29,095,626,403.35 | 26,540,298,206.85 | |
| Non-current Liabilities: | |||
| Long-term borrowings | (VIII)34 | 18,227,543,954.71 | 12,390,099,177.85 |
| Bonds payable | (VIII)35 | 14,287,508,564.15 | 19,088,293,099.02 |
| Including: Preferred shares | - | - | |
| Perpetual bonds | - | - | |
| Lease liabilities | (VIII)36 | 1,001,172,206.92 | 948,350,914.04 |
| Long-term payables | (VIII)37 | 3,822,862,202.17 | 3,551,315,590.31 |
| Long-term employee benefits payable | (VIII)38 | 603,009,921.91 | 639,095,931.43 |
| Provisions | (VIII)39 | 85,590,059.41 | 35,365,156.43 |
| Deferred income | (VIII)40 | 1,024,776,557.73 | 1,031,273,189.74 |
| Deferred tax liabilities | (VIII)22 | 4,659,638,104.37 | 4,855,019,835.33 |
| Other non-current liabilities | (VIII)41 | 179,634,263.73 | 186,383,117.00 |
| Total non-current liabilities | 43,891,735,835.10 | 42,725,196,011.15 | |
| TOTAL LIABILITIES | 72,987,362,238.45 | 69,265,494,218.00 | |
| Shareholders' equity: | |||
| Share capital | (VIII)42 | 2,499,074,661.00 | 2,499,074,661.00 |
| Including: State capital | - | - | |
| State-owned corporate capital | 2,264,090,797.00 | 2,283,118,870.00 | |
| Collective capital | - | - | |
| Private capital | 218,857,094.00 | 195,001,566.00 | |
| Foreign capital | 16,126,770.00 | 20,954,225.00 | |
| Capital reserve | (VIII)43 | 37,076,846,803.06 | 34,751,640,835.25 |
| Other comprehensive income | (VIII)44 | -903,626,594.35 | -689,553,619.86 |
| Special reserve | (VIII)45 | 34,003,994.41 | 26,358,259.97 |
| Surplus reserve | (VIII)46 | 1,095,980,563.68 | 1,001,917,449.15 |
| Unappropriated profit | (VIII)47 | 19,045,313,519.75 | 16,701,988,301.14 |
| Total equity attributable to shareholders of the Company | 58,847,592,947.55 | 54,291,425,886.65 | |
| Minority interests | 66,722,341,481.26 | 74,030,182,342.66 | |
| TOTAL SHAREHOLDERS' EQUITY | 125,569,934,428.81 | 128,321,608,229.31 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 198,557,296,667.26 | 197,587,102,447.31 |
The accompanying notes form part of the financial statements.
The financial statements were signed by the following:
Xu Song Tu Xiaoping Hu Shaode_______________________ _______________________ ___________________________Legal Representative Chief Financial Officer Head of Accounting Department
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AT 31 DECEMBER 2023
Balance Sheet of the Company
RMB
| Item | Notes | 31/12/2023 | 31/12/2022 |
| Current Assets: | |||
| Cash and bank balances | 3,281,038,218.84 | 3,333,936,587.44 | |
| Held-for-trading financial assets | 1,500,517,808.22 | 1,502,601,369.86 | |
| Prepayments | 10,075,055.61 | - | |
| Other receivables | (XX)1 | 1,742,461,670.32 | 2,749,637,755.23 |
| Including: Interest receivable | (XX)1 | - | - |
| Dividends receivable | (XX)1 | 167,092,526.14 | 147,896,763.88 |
| Other current assets | 10,882,675.96 | 7,774,206.30 | |
| Total current assets | 6,544,975,428.95 | 7,593,949,918.83 | |
| Non-current Assets: | |||
| Long-term receivables | 9,391,615.50 | 9,240,200.34 | |
| Long-term equity investments | (XX)2 | 55,168,618,338.79 | 53,433,613,471.49 |
| Investments in other equity instruments | 148,088,364.25 | 144,700,378.28 | |
| Other non-current financial assets | - | 950,321,309.06 | |
| Fixed assets | 27,343,639.28 | 28,826,135.19 | |
| Including: Fixed assets - cost | 32,478,382.04 | 31,811,887.38 | |
| Accumulated depreciation | 5,134,742.76 | 2,985,752.19 | |
| Provision for impairment of fixed assets | - | - | |
| Construction in progress | 607,774.34 | 15,435,512.32 | |
| Intangible assets | 54,876,218.77 | 50,303,126.12 | |
| Development expenditure | 38,923,289.23 | 6,219,670.14 | |
| Long-term prepaid expenses | 665,319.42 | 873,700.49 | |
| Deferred tax assets | 928,465.21 | 928,465.21 | |
| Total non-current assets | 55,449,443,024.79 | 54,640,461,968.64 | |
| TOTAL ASSETS | 61,994,418,453.74 | 62,234,411,887.47 |
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AT 31 DECEMBER 2023
Balance Sheet of the Company - continued
RMB
| Item | Notes | 31/12/2023 | 31/12/2022 |
| Current Liabilities: | |||
| Receipts in advance | 5,358,074.44 | - | |
| Employee benefits payable | 45,188,572.96 | 38,763,907.88 | |
| Including: Payroll payable | 45,032,983.18 | 38,672,237.18 | |
| Welfare payable | - | - | |
| Taxes payable | 1,046,270.66 | 1,251,923.17 | |
| Other payables | 376,323,201.93 | 373,569,651.65 | |
| Including: Interest payable | - | - | |
| Dividends payable | 34,577,578.12 | 34,577,578.12 | |
| Non-current liabilities due within one year | 5,119,243,623.45 | 2,146,233,151.54 | |
| Other current liabilities | 2,007,190,136.98 | 3,017,713,424.64 | |
| Total current liabilities | 7,554,349,880.42 | 5,577,532,058.88 | |
| Non-current Liabilities: | |||
| Long-term borrowings | 7,979,000,000.00 | 4,988,000,000.00 | |
| Bonds payable | 3,000,000,000.00 | 8,000,000,000.00 | |
| Deferred tax liabilities | 41,948,362.13 | 41,622,256.05 | |
| Total non-current liabilities | 11,020,948,362.13 | 13,029,622,256.05 | |
| TOTAL LIABILITIES | 18,575,298,242.55 | 18,607,154,314.93 | |
| SHAREHOLDERS' EQUITY | |||
| Share capital | 2,499,074,661.00 | 2,499,074,661.00 | |
| Including: State capital | - | - | |
| State-owned corporate capital | 2,264,090,797.00 | 2,283,118,870.00 | |
| Collective capital | - | - | |
| Private capital | 218,857,094.00 | 195,001,566.00 | |
| Foreign capital | 16,126,770.00 | 20,954,225.00 | |
| Capital reserve | 37,704,543,586.11 | 37,749,723,642.07 | |
| Other comprehensive income | 120,520,832.83 | 99,525,686.03 | |
| Surplus reserve | 1,095,980,563.68 | 1,001,917,449.15 | |
| Unappropriated profit | 1,999,000,567.57 | 2,277,016,134.29 | |
| TOTAL SHAREHOLDERS' EQUITY | 43,419,120,211.19 | 43,627,257,572.54 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 61,994,418,453.74 | 62,234,411,887.47 |
The accompanying notes form part of the financial statements.
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FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated Income Statement
RMB
| Item | Notes | 2023 | 2022 (Restated) |
| I. Total operating income | (VIII)48 | 15,750,475,780.22 | 16,230,489,127.55 |
| Less: Operating costs | (VIII)48 | 9,318,186,707.75 | 9,650,461,712.94 |
| Taxes and surcharges | (VIII)49 | 312,998,026.19 | 282,249,473.46 |
| Administrative expenses | (VIII)50 | 1,776,641,155.38 | 1,765,094,736.51 |
| Research and development expenses | (VIII)51 | 223,739,072.07 | 287,706,178.70 |
| Financial expenses | (VIII)52 | 1,839,113,328.14 | 2,258,713,672.42 |
| Including: Interest expenses | 2,238,152,796.66 | 2,225,162,805.79 | |
| Interest income | 497,593,921.36 | 469,834,098.05 | |
| Net exchange loss | 85,519,920.28 | 477,004,284.27 | |
| Add: Other income | (VIII)53 | 224,389,260.77 | 241,648,070.42 |
| Investment income | (VIII)54 | 6,348,676,940.80 | 7,377,655,506.33 |
| Including: Income from investments in associates and joint ventures | (VIII)54 | 5,979,007,585.96 | 7,185,182,148.75 |
| Gains (Losses) from changes in fair value (Losses are marked with "-") | (VIII)55 | 73,352,800.52 | -129,033,650.11 |
| Gains (Losses) from impairment of credit (Losses are marked with "-") | (VIII)56 | 37,284,041.18 | -223,473,576.55 |
| Losses from impairment of assets (Losses are marked with "-") | (VIII)57 | -191,297,311.28 | -22,159,020.20 |
| Gains from disposal of assets | (VIII)58 | 36,759,532.61 | 55,130,095.52 |
| II. Operating profit | 8,808,962,755.29 | 9,286,030,778.93 | |
| Add: Non-operating income | (VIII)59 | 87,302,024.12 | 279,274,452.77 |
| Including: Government grants | - | 1,640,553.77 | |
| Less: Non-operating expenses | (VIII)60 | 97,072,840.72 | 220,442,254.68 |
| III. Gross profit | 8,799,191,938.69 | 9,344,862,977.02 | |
| Less: Income tax expenses | (VIII)63 | 1,303,579,852.93 | 1,112,959,676.75 |
| IV. Net profit | 7,495,612,085.76 | 8,231,903,300.27 | |
| (I) Categorized by continuity of operation | |||
| 1. Net profit from continuing operation | 7,495,612,085.76 | 8,231,903,300.27 | |
| 2. Net profit from discontinued operation | - | - | |
| (II) Categorized by attribution of ownership | |||
| 1. Net profit attributable to shareholders of the Company | 3,571,800,762.16 | 3,338,693,816.70 | |
| 2. Profit or loss attributable to minority shareholders | 3,923,811,323.60 | 4,893,209,483.57 | |
| V. Other comprehensive income, net of tax | (VIII)66 | 209,856,768.77 | 1,628,631,938.02 |
| (I) Other comprehensive income attributable to shareholders of the Company, net of tax | -214,072,974.49 | 208,085,368.23 | |
| 1. Other comprehensive income that will not be reclassified to profit or loss | -73,874,071.89 | -22,706,023.29 | |
| (1) Changes from remeasurement of the defined benefit plan | 7,480,103.34 | -12,793,128.73 | |
| (2) Other comprehensive income that cannot be reclassified to profit or loss under the equity method | -83,841,725.07 | -11,550,762.02 | |
| (3) Changes in fair value of investments in other equity instruments | 2,487,549.84 | 1,637,867.46 | |
| 2. Other comprehensive income that will be reclassified subsequently to profit or loss | -140,198,902.60 | 230,791,391.52 | |
| (1) Other comprehensive income that can be reclassified to profit or loss under the equity method | -366,028,318.84 | -110,193,707.53 | |
| (2) Translation differences of financial statements denominated in foreign currencies | 225,829,416.24 | 340,985,099.05 | |
| (II) Other comprehensive income attributable to minority interests, net of tax | 423,929,743.26 | 1,420,546,569.79 | |
| VI. Total comprehensive income attributable to: | 7,705,468,854.53 | 9,860,535,238.29 | |
| (I) Shareholders of the Company | 3,357,727,787.67 | 3,546,779,184.93 | |
| (II) Minority shareholders | 4,347,741,066.86 | 6,313,756,053.36 | |
| VII. Earnings per share | |||
| (I) Basic earnings per share (Yuan/share) | 1.43 | 1.61 | |
| (II) Diluted earnings per share (Yuan/share) | 1.43 | 1.61 |
The accompanying notes form part of the financial statements.
- 12 -
FOR THE YEAR ENDED 31 DECEMBER 2023
Income Statement of the Company
RMB
| Item | Notes | 2023 | 2022 |
| I. Operating income | (XX)3 | 17,326,885.29 | 3,669,891.36 |
| Less: Operating costs | (XX)3 | 3,686,411.84 | 2,276,202.60 |
| Taxes and surcharges | 2,161,621.42 | 1,126,365.82 | |
| Administrative expenses | 167,273,393.24 | 154,023,617.71 | |
| Research and development expenses | 14,046,526.98 | 15,151,413.80 | |
| Financial expenses | 397,006,521.97 | 361,633,510.16 | |
| Including: Interest expenses | 482,413,617.32 | 491,933,634.55 | |
| Interest income | 89,862,634.06 | 144,120,475.54 | |
| Net exchange loss | 2,296,890.14 | 3,785,346.40 | |
| Add: Other income | 206,131.06 | 499,438.35 | |
| Investment income | (XX)4 | 1,597,599,935.27 | 1,053,614,451.09 |
| Including: Income from investments in associates and joint ventures | (XX)4 | 1,111,522,805.93 | 384,257,363.02 |
| Losses from changes in fair value (Losses are marked with "-") | -48,217,517.53 | -125,383,212.19 | |
| Losses from impairment of assets (Losses are marked with "-") | -43,605,014.00 | - | |
| Gains from disposal of assets | - | 237,727.99 | |
| II. Operating profit | 939,135,944.64 | 398,427,186.51 | |
| Add: Non-operating income | 18,698.11 | 545,089.04 | |
| Less: Non-operating expenses | 104,998.04 | 18.84 | |
| III. Gross profit | 939,049,644.71 | 398,972,256.71 | |
| Less: Income tax expenses | -1,581,500.55 | -8,376,614.77 | |
| IV. Net profit | 940,631,145.26 | 407,348,871.48 | |
| V. Other comprehensive income, net of tax | 20,995,146.80 | 1,625,433.48 | |
| (I) Other comprehensive income that cannot be reclassified to profit or loss | 3,661,309.41 | 1,391,486.75 | |
| 1. Changes from remeasurement of the defined benefit plan | - | - | |
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | 1,120,319.93 | 27,649.59 | |
| 3. Changes in fair value of investments in other equity instruments | 2,540,989.48 | 1,363,837.16 | |
| (II) Other comprehensive income that will be reclassified to profit or loss | 17,333,837.39 | 233,946.73 | |
| 1. Other comprehensive income that can be reclassified to profit or loss under the equity method | 17,333,837.39 | 233,946.73 | |
| 2. Translation differences of financial statements denominated in foreign currencies | - | - | |
| VI. Total comprehensive income | 961,626,292.06 | 408,974,304.96 |
The accompanying notes form part of the financial statements.
- 13 -
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated Cash Flow Statement
RMB
| Item | Notes | 2023 | 2022 |
| I. Cash Flows from Operating Activities: | |||
| Cash receipts from sales of goods and rendering of services | 16,019,658,434.90 | 16,547,850,742.82 | |
| Receipts of tax refunds | 53,272,648.95 | 239,426,543.45 | |
| Other cash receipts relating to operating activities | (VIII) 67(1) | 927,564,019.09 | 1,141,794,925.33 |
| Sub-total of cash inflows | 17,000,495,102.94 | 17,929,072,211.60 | |
| Cash payments for goods purchased and services received | 4,550,256,851.25 | 4,790,513,865.61 | |
| Cash payments to and on behalf of employees | 3,598,624,870.64 | 3,612,535,626.78 | |
| Payments of various types of taxes | 1,418,779,686.67 | 1,579,320,175.46 | |
| Other cash payments relating to operating activities | (VIII) 67(1) | 853,227,059.21 | 1,026,325,153.40 |
| Sub-total of cash outflows | 10,420,888,467.77 | 11,008,694,821.25 | |
| Net Cash Flows from Operating Activities | (VIII) 68(1) | 6,579,606,635.17 | 6,920,377,390.35 |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from disposal and recovery of investments | 28,430,740,038.14 | 40,894,899,081.53 | |
| Cash receipts from investments income | 2,329,944,728.79 | 2,429,981,136.20 | |
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 144,845,803.86 | 13,812,483.21 | |
| Net cash receipts from disposals of subsidiaries and other business units | (VIII) 68(3) | 1,683,385,533.43 | - |
| Other cash receipts relating to investing activities | (VIII) 67(2) | 3,164,955,303.27 | 295,064,509.34 |
| Sub-total of cash inflows | 35,753,871,407.49 | 43,633,757,210.28 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 1,929,374,936.21 | 2,133,837,244.47 | |
| Cash payments to acquire investments | 29,974,648,554.87 | 54,509,066,114.35 | |
| Other cash payments relating to investing activities | (VIII) 67(2) | 82,663,303.33 | 954,802,482.30 |
| Sub-total of cash outflows | 31,986,686,794.41 | 57,597,705,841.12 | |
| Net Cash Flows from Investing Activities | 3,767,184,613.08 | -13,963,948,630.84 | |
| III. Cash Flows from Financing Activities: | |||
| Cash receipts from capital contributions | 217,520,934.61 | 10,642,126,434.50 | |
| Including: Cash receipts from capital contributions from minority shareholders of subsidiaries | 217,520,934.61 | - | |
| Cash receipts from borrowings | 29,416,872,247.55 | 29,859,438,534.05 | |
| Cash receipts from issue of bonds | 6,000,000,000.00 | 19,248,308,650.00 | |
| Other cash receipts relating to financing activities | (VIII) 67(3) | 334,754,229.63 | 56,303,169.80 |
| Sub-total of cash inflows | 35,969,147,411.79 | 59,806,176,788.35 | |
| Cash repayments of borrowings | 31,919,051,211.87 | 46,432,911,425.29 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 5,167,695,546.01 | 4,732,910,153.42 | |
| Including: Payments for distribution of dividends or profits to minority shareholders of subsidiaries | 1,955,677,172.68 | 1,900,086,012.38 | |
| Other cash payments relating to financing activities | (VIII) 67(3) | 6,867,093,830.32 | 1,124,116,740.35 |
| Sub-total of cash outflows | 43,953,840,588.20 | 52,289,938,319.06 | |
| Net Cash Flows from Financing Activities | -7,984,693,176.41 | 7,516,238,469.29 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | 89,206,087.64 | 367,287,004.46 | |
| V. Net Increase in Cash and Cash Equivalents | 2,451,304,159.48 | 839,954,233.26 | |
| Add: Opening balance of cash and cash equivalents | (VIII) 68(2) | 13,567,309,471.62 | 12,727,355,238.36 |
| VI. Closing Balance of Cash and Cash Equivalents | (VIII) 68(2) | 16,018,613,631.10 | 13,567,309,471.62 |
The accompanying notes form part of the financial statements.
- 14 -
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash Flow Statement of the Company
RMB
| Item | Notes | 2023 | 2022 |
| I. Cash Flows from Operating Activities: | |||
| Other cash receipts relating to operating activities | 205,894,785.22 | 108,295,282.75 | |
| Sub-total of cash inflows | 205,894,785.22 | 108,295,282.75 | |
| Cash payments for goods purchased and services received | 142,500.00 | 86,280.54 | |
| Cash payments to and on behalf of employees | 111,864,640.42 | 102,305,409.21 | |
| Payments of various types of taxes | 2,203,522.03 | 162,077,694.07 | |
| Other cash payments relating to operating activities | 197,101,786.33 | 64,738,420.24 | |
| Sub-total of cash outflows | 311,312,448.78 | 329,207,804.06 | |
| Net Cash Flows from Operating Activities | -105,417,663.56 | -220,912,521.31 | |
| II. Cash Flows from Investing Activities: | |||
| Cash receipts from disposal and recovery of investments | 11,200,000,000.00 | 33,317,450,238.74 | |
| Cash receipts from investment income | 934,979,575.11 | 770,719,728.64 | |
| 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 | 1,948,842,841.79 | 50,285,632.68 | |
| Sub-total of cash inflows | 14,083,822,416.90 | 34,139,458,268.06 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 23,594,300.69 | 42,642,426.69 | |
| Cash payments to acquire investments | 11,589,128,994.69 | 45,942,721,212.13 | |
| Other cash payments relating to investing activities | 890,011,664.40 | 1,523,809,248.36 | |
| Sub-total of cash outflows | 12,502,734,959.78 | 47,509,172,887.18 | |
| Net Cash Flows from Investing Activities | 1,581,087,457.12 | -13,369,714,619.12 | |
| III. Cash Flows from Financing Activities: | |||
| Cash receipts from capital contributions | - | 10,642,126,434.50 | |
| Cash receipts from borrowings | 6,250,000,000.00 | 9,171,668,674.85 | |
| Cash receipts from issue of bonds | 6,000,000,000.00 | 16,000,000,000.00 | |
| Other cash receipts relating to financing activities | 6,728,017.13 | 6,303,169.80 | |
| Sub-total of cash inflows | 12,256,728,017.13 | 35,820,098,279.15 | |
| Cash repayments of borrowings | 12,125,000,000.00 | 20,529,408,504.85 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 1,650,693,345.10 | 1,257,422,374.13 | |
| Other cash payments relating to financing activities | 9,832,313.92 | 23,179,821.90 | |
| Sub-total of cash outflows | 13,785,525,659.02 | 21,810,010,700.88 | |
| Net Cash Flows from Financing Activities | -1,528,797,641.89 | 14,010,087,578.27 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | 176,979.73 | 714,582.29 | |
| V. Net (Decrease) Increase in Cash and Cash Equivalents (Losses are marked with "-") | -52,950,868.60 | 420,175,020.13 | |
| Add: Opening balance of cash and cash equivalents | 3,333,936,587.44 | 2,913,761,567.31 | |
| VI. Closing Balance of Cash and Cash Equivalents | 3,280,985,718.84 | 3,333,936,587.44 |
The accompanying notes form part of the financial statements.
- 15 -
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated Statement of Changes in Shareholders' Equity
RMB
| Item | 2023 | ||||||||
| Equity attributable to shareholders of the Company | Minority interests | Total shareholders' equity | |||||||
| Share capital | Capital reserve | Other comprehensive income | Including: Foreign currency conversion difference | Special reserve | Surplus reserve | Unappropriated profit | |||
| I. Closing balance of the preceding year | 2,499,074,661.00 | 34,751,640,835.25 | -691,536,248.44 | -681,788,363.07 | 26,358,259.97 | 1,001,917,449.15 | 16,679,688,347.09 | 73,994,641,893.21 | 128,261,785,197.23 |
| Add: Changes in accounting policies | - | - | 1,982,628.58 | 1,982,628.58 | - | - | 22,299,954.05 | 35,540,449.45 | 59,823,032.08 |
| Corrections of prior period errors | - | - | - | - | - | - | - | - | - |
| Business combination involving enterprises under common control | - | - | - | - | - | - | - | - | - |
| Others | - | - | - | - | - | - | - | - | - |
| II. Opening balance of the year | 2,499,074,661.00 | 34,751,640,835.25 | -689,553,619.86 | -679,805,734.49 | 26,358,259.97 | 1,001,917,449.15 | 16,701,988,301.14 | 74,030,182,342.66 | 128,321,608,229.31 |
| III. Changes for the year | - | 2,325,205,967.81 | -214,072,974.49 | 225,829,416.24 | 7,645,734.44 | 94,063,114.53 | 2,343,325,218.61 | -7,307,840,861.40 | -2,751,673,800.50 |
| (I) Total comprehensive income | - | - | -214,072,974.49 | 225,829,416.24 | - | - | 3,571,800,762.16 | 4,347,741,066.86 | 7,705,468,854.53 |
| (II) Owners' contributions and reduction in capital | - | 2,325,205,967.81 | - | - | -317,684.31 | - | -1,883,909.97 | -9,190,432,492.89 | -6,867,428,119.36 |
| 1. Ordinary shares contributed by owners | - | - | - | - | - | - | - | 685,424,826.14 | 685,424,826.14 |
| 2. Capital contribution from holders of other equity instruments | - | - | - | - | - | - | - | -4,222,148,460.84 | -4,222,148,460.84 |
| 3. Share-based payment recognized in shareholders' equity | - | 1,053,188.36 | - | - | - | - | - | 523,302.32 | 1,576,490.68 |
| 4. Others | - | 2,324,152,779.45 | - | - | -317,684.31 | - | -1,883,909.97 | -5,654,232,160.51 | -3,332,280,975.34 |
| (III) Profit distribution | - | - | - | - | - | 94,063,114.53 | -1,226,591,633.58 | -2,477,802,768.49 | -3,610,331,287.54 |
| 1. Transfer to surplus reserve | - | - | - | - | - | 94,063,114.53 | -94,063,114.53 | - | - |
| 2. Distribution to shareholders | - | - | - | - | - | - | -1,124,583,597.45 | -2,256,143,657.02 | -3,380,727,254.47 |
| 3. Others | - | - | - | - | - | - | -7,944,921.60 | -221,659,111.47 | -229,604,033.07 |
| (IV) Transfers within shareholders' equity | - | - | - | - | - | - | - | - | - |
| 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 | - | - | - | - | - | - | - | - | - |
| 5. Others | - | - | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | - | 7,963,418.75 | - | - | 12,653,333.12 | 20,616,751.87 |
| 1. Transfer to special reserve in the year | - | - | - | - | 61,589,514.21 | - | - | 66,309,179.08 | 127,898,693.29 |
| 2. Amount utilized in the year | - | - | - | - | -53,626,095.46 | - | - | -53,655,845.96 | -107,281,941.42 |
| (VI) Others | - | - | - | - | - | - | - | - | - |
| IV. Closing balance of the year | 2,499,074,661.00 | 37,076,846,803.06 | -903,626,594.35 | -453,976,318.25 | 34,003,994.41 | 1,095,980,563.68 | 19,045,313,519.75 | 66,722,341,481.26 | 125,569,934,428.81 |
- 16 -
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated Statement of Changes in Shareholders' Equity - continued
RMB
| Item | 2022 (Restated) | ||||||||
| Equity attributable to shareholders of the Company | Minority interests | Total shareholders' equity | |||||||
| Share capital | Capital reserve | Other comprehensive income | Including: Foreign currency conversion difference | 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 | -1,020,790,833.54 | 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 | - | - | - | - | - | - | 21,052,360.17 | 33,445,604.29 | 54,497,964.46 |
| 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 | -1,020,790,833.54 | 9,184,429.12 | 961,182,562.00 | 14,226,931,466.66 | 71,267,683,833.64 | 111,089,924,855.94 |
| III. Changes for the year | 576,709,537.00 | 11,158,938,076.55 | 200,571,698.32 | 340,985,099.05 | 17,173,830.85 | 40,734,887.15 | 2,475,056,834.48 | 2,762,498,509.02 | 17,231,683,373.37 |
| (I) Total comprehensive income | - | - | 208,085,368.23 | 340,985,099.05 | - | - | 3,338,693,816.70 | 6,313,756,053.36 | 9,860,535,238.29 |
| (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 owners | 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 | -689,553,619.86 | -679,805,734.49 | 26,358,259.97 | 1,001,917,449.15 | 16,701,988,301.14 | 74,030,182,342.66 | 128,321,608,229.31 |
The accompanying notes form part of the financial statements.
- 17 -
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's Statement of Changes in Shareholders' Equity
RMB
| Item | 2023 | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | Total shareholders' equity | |
| I. Closing balance of the preceding 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 |
| Add: Changes in accounting policies | - | - | - | - | - | - | - |
| Corrections of prior period errors | - | - | - | - | - | - | - |
| Others | - | - | - | - | - | - | - |
| II. Opening 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 |
| III. Changes for the year | - | -45,180,055.96 | 20,995,146.80 | - | 94,063,114.53 | -278,015,566.72 | -208,137,361.35 |
| (I) Total comprehensive income | - | - | 20,995,146.80 | - | - | 940,631,145.26 | 961,626,292.06 |
| (II) Owners' contributions and reduction in capital | - | -45,180,055.96 | - | - | - | - | -45,180,055.96 |
| 1. Ordinary shares contributed by owners | - | - | - | - | - | - | - |
| 2. Share-based payment recognized in shareholders' equity | - | - | - | - | - | - | - |
| 3. Share-based payment recognized in owners' equity | - | 1,890,784.31 | - | - | - | - | 1,890,784.31 |
| 4. Others | - | -47,070,840.27 | - | - | - | - | -47,070,840.27 |
| (III) Profit distribution | - | - | - | - | 94,063,114.53 | -1,218,646,711.98 | -1,124,583,597.45 |
| 1. Transfer to surplus reserve | - | - | - | - | 94,063,114.53 | -94,063,114.53 | - |
| 2 Distribution to shareholders | - | - | - | - | - | -1,124,583,597.45 | -1,124,583,597.45 |
| 3. Others | - | - | - | - | - | - | - |
| (IV) Transfers within shareholders' equity | - | - | - | - | - | - | - |
| 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 | - | - | - | - | - | - | - |
| 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 | 37,704,543,586.11 | 120,520,832.83 | - | 1,095,980,563.68 | 1,999,000,567.57 | 43,419,120,211.19 |
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FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's Statement of Changes in Shareholders' Equity - continued
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 owners | 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 |
The accompanying notes form part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(I) GENERAL INFORMATION OF THE COMPANY
China Merchants Port Group Co., Ltd. (hereinafter referred to as the "Company") is a stock limitedcompany incorporated in Shenzhen, Guangdong Province, on 16 January 1993.
The headquarters of the Company is located in Shenzhen, Guangdong Province. The Company andits subsidiaries (collectively the "Group") are actually engaged in the principal operating activitiesof port service, bonded logistics service and other businesses such as property development andinvestment.
The Company's and consolidated financial statements were approved by the Board of Directors on29 March 2024.
(II) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
Basis of preparation of financial statements
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") issued by theMinistry of Finance ("MoF"). In addition, the Group has disclosed relevant financial informationin accordance with Information Disclosure and Presentation Rules for Companies OfferingSecurities to the Public No. 15 - General Provisions on Financial Reporting (Revised in 2023).
Going concern
As at 31 December 2023, the Group had total current liabilities in excess of total current assets byRMB 5,612,418,164.44. As at 31 December 2023, the Group had available and unused line of creditand bonds amounting to RMB 69,439,268,355.68, which is greater than the balance of the netcurrent liabilities. The Group can obtain financial support from the available line of credit and bondswhen needed. Therefore, the financial statements have been prepared on a going concern basis.
(III) STATEMENT OF COMPLIANCE WITH THE ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and presenttruly and completely, the Company's and consolidated financial position as at 31 December 2023,and the Company's and consolidated results of operations and cash flows for the year then ended.
(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 31 December.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
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 subsidiaries chooseRMB as their functional currency. The Company's overseas subsidiaries choose their functionalcurrencies on the basis of the primary economic environment in which they operate. The Companyadopts RMB to prepare its financial statements.
4. Method for determination of materiality criteria and basis for selection
| Item | Materiality criteria |
| Significant prepayments aged more than 1 year | The amount exceeds RMB 10 million individually |
| Significant dividends receivable aged more than 1 year | The amount exceeds RMB 50 million individually |
| Significant other receivables for which bad debt provision is assessed on an individual basis | The amount exceeds RMB 10 million individually |
| Reversal or recovery of significant bad debt provision | The amount exceeds RMB 10 million individually |
| Impairment testing of significant long-term equity investments | The carrying amount of an individual long-term equity investment≥2% of the amount of total assets |
| Significant construction in progress | The year-end carrying amount of an individual construction in progress ranges top ten |
| Impairment testing of significant construction in progress | The carrying amount of an individual construction in progress ≥20% of the amount of total assets |
| Significant accounts payable aged more than 1 year | The amount exceeds RMB 10 million individually |
| Significant receipts in advance aged more than 1 year | The amount exceeds RMB 10 million individually |
| Significant contract liabilities aged more than 1 year | The amount exceeds RMB 10 million individually |
| Significant dividends payable aged more than 1 year | The amount exceeds RMB 50 million individually |
| Significant other payables aged more than 1 year | The amount exceeds RMB 10 million individually |
| Cash flows from significant investing activities | The amount exceeds 0.5% of the amount of total assets individually |
| Significant non-wholly owned subsidiaries | The amount of total revenue or total assets of subsidiaries exceeds 15% of the amount of total consolidated revenue or total consolidated assets |
| Significant joint ventures or associates | Joint ventures or associates in which the carrying amount of a long-term equity investment accounts for ≥10% of the amount of total consolidated assets or in which the investment income recognized under the equity method accounts for ≥10% of the amount of total consolidated profit |
| Significant commitments | The amount exceeds 0.3% of the amount of total assets individually, including reorganization, mergers and acquisitions, and building of construction in progress, etc. |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for financial instruments which aremeasured at fair value, the Group adopts the historical cost as the principle of measurement of thefinancial statements. Upon being restructured into a stock company, the fixed assets and intangibleassets initially contributed by the state-owned shareholders are recognized based on the valuationamounts confirmed by the state-owned assets administration department. Where assets are impaired,provisions for asset impairment are made in accordance with the relevant requirements.
Where the historical cost is adopted as the measurement basis, assets are recorded at the amount ofcash or cash equivalents paid or the fair value of the consideration given to acquire them at the timeof their acquisition. Liabilities are recorded at the amount of proceeds or assets received or thecontractual amounts for assuming the present obligation, or, at the amounts of cash or cashequivalents expected to be paid to settle the liabilities in the normal course of business.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date, regardless of whether thatprice is directly observable or estimated using valuation technique. Fair value measurement and/ordisclosure in the financial statements are determined according to the above basis.
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.
For financial assets of which transaction prices are the fair value on initial recognition, and of whichvaluation technique involving unobservable input is used in subsequent measurement, the valuationtechnique in the course of valuation is adjusted to enable the result of initial recognition based onthe valuation technique equal to the transaction price.
Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputsto the fair value measurements are observable and the significance of the inputs to the fair valuemeasurement in its entirety, which are described as follows:
? Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities thatthe entity can access at the measurement date;? Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and? Level 3 inputs are unobservable inputs for the asset or liability.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Business combinations
Business combinations are classified into business combinations involving enterprises undercommon control and business combinations not involving enterprises under common control.
6.1 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.
6.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business combinationin which all of the combining enterprises are not ultimately controlled by the same party or partiesbefore and after the combination.
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assetsgiven, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange forcontrol of the 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 administrative expensesattributable to the business combination are recognized in profit or loss in the periods when theyare 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Business combinations - continued
6.2 Business combinations not involving enterprises under common control and goodwill- continued
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 identifiable netassets, the acquirer recognizes the remaining difference immediately in profit or loss for the currentperiod.
If either the fair values of identifiable assets, liabilities and contingent liabilities acquired in acombination or the cost of business combination can be determined only provisionally by the endof the period in which the business combination was affected, the acquirer recognizes and measuresthe combination using those provisional values. Any adjustments to those provisional values withintwelve months after the acquisition date are treated as if they had been recognized and measured onthe acquisition date.
Goodwill arising from a business combination is measured at cost less accumulated impairmentlosses, and is presented separately in the consolidated financial statements.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Consolidated financial statements
7.1 Determination criteria of control
Control exists when the investor has power over the investee; is exposed, or has rights, to variablereturns from its involvement with the investee; and has the ability to use its power over the investeeto affect its returns. The Group reassesses whether or not it controls an investee if facts andcircumstances indicate that there are changes in the above elements of the definition of control.
7.2 Preparation of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis ofcontrol.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceaseswhen 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.
For subsidiaries acquired through a business combination involving enterprises not under commoncontrol, the operating results and cash flows from the acquisition date (the date when control isobtained) are included in the consolidated income statement and consolidated cash flow statement,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 inconsistent withthose of the Company, appropriate adjustments are made to the subsidiaries' financial statements inaccordance with the accounting policies of the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Consolidated financial statements - continued
7.2 Preparation of consolidated financial statements - continued
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 line itemof shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributableto minority interests is presented as "minority interests" in the consolidated income statement underthe line item of "net profit". The portion of comprehensive income of subsidiaries for the periodattributable to minority interests is presented as "total comprehensive income attributable tominority shareholders" in the consolidated income statement under the line item of "totalcomprehensive 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 amounts ofthe Company's interests and minority interests are adjusted to reflect the changes in their relativeinterests in the subsidiary. The difference between the amount by which the minority interests areadjusted and the fair value of the consideration paid or received is adjusted to capital reserve. If thecapital reserve is not sufficient to absorb the difference, the excess is adjusted against retainedearnings.
For the stepwise acquisition of equity interest till acquiring control after a few transactions andleading to business combination not involving enterprises under common control, 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Consolidated financial statements - continued
7.2 Preparation of consolidated financial statements - continued
When the Group loses control of a subsidiary in two or more arrangements (transactions), termsand conditions of the arrangements (transactions) and their economic effects are considered. Oneor more of the following indicate that the Group shall account for the multiple arrangements as a'package deal': (i) they are entered into at the same time or in contemplation of each other; (ii) theyform a complete transaction designed to achieve an overall commercial effect; (iii) the occurrenceof one transaction is dependent on the occurrence of at least one other transaction; (iv) onetransaction alone is not economically justified, but it is economically justified when consideredtogether with other transactions. Where the transactions of disposal of equity investments in asubsidiary until the loss of control are assessed as a package deal, these transactions are accountedfor as one transaction of disposal of a subsidiary with loss of control. Before losing control, thedifference of consideration received on disposal and the share of net assets of the subsidiarycontinuously calculated from acquisition date is recognized as other comprehensive income. Whenlosing control, the cumulated other comprehensive income is transferred to profit or loss of theperiod of losing control. If the transactions of disposal of equity investments in a subsidiary are notassessed as a package deal, these transactions are accounted for as unrelated transactions.
8. Joint arrangements
There are two types of joint arrangements - joint operations and joint ventures. The classification isbased on the rights and obligations of the parties under the joint venture arrangement, taking intoaccount factors such as the structure, legal form and contractual terms of the arrangement. A jointoperation is a joint arrangement whereby the parties that have joint control of the arrangement haverights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture isa joint arrangement whereby the parties that have joint control of the arrangement have rights to thenet assets of the arrangement.
The Group accounts for investments in joint ventures using equity method. Refer to Note (IV),
15.3.2 "Long-term equity investments accounted for using the equity method" for details.
When a group entity undertakes its activities under joint operations, the Group as a joint operatorrecognizes in relation to its interest in a joint operation: - its assets, including its share of any assetsheld jointly; its liabilities, including its share of any liabilities incurred jointly; its revenue from thesale of its share of the output arising from the joint operation; its share of the revenue from the saleof the output by the joint operation; and its expenses, including its share of any expenses incurredjointly. The Group accounts for the assets, liabilities, revenues and expenses relating to its interestin a joint operation in accordance with the accounting standards applicable to the particular assets,liabilities, revenues and expenses.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
9. 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.
10. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies
10.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchangerate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currencyusing the spot exchange rates at the balance sheet date. Exchange differences arising from thedifferences between the spot exchange rates prevailing at the balance sheet date and those on initialrecognition or at the previous balance sheet date are recognized in profit or loss for the period,except that (1) exchange differences related to a specific-purpose borrowing denominated in foreigncurrency that qualify for capitalization are capitalized as part of the cost of the qualifying assetduring the capitalization period; (2) exchange differences related to hedging instruments for thepurpose of hedging against foreign currency risks are accounted for using hedge accounting; (3)exchange differences arising from changes in the carrying amounts (other than the amortized cost)of monetary items at fair value through other comprehensive income are recognized as othercomprehensive income.
When the consolidated financial statements include foreign operation(s), if there is foreign currencymonetary item constituting a net investment in a foreign operation, exchange differences arisingfrom changes in exchange rates are recognized as "exchange differences arising from translation offinancial statements denominated in foreign currencies" in other comprehensive income, and inprofit 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies - continued
10.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a foreignoperation are translated from the foreign currency into RMB using the following method: assetsand liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balancesheet date; shareholders' equity items except for unappropriated profit are translated at the spotexchange rates at the dates on which such items arose; all items in the income statement as well asitems reflecting the distribution of profits are translated at the average exchange rates of theaccounting period of the consolidated financial statements; the opening balance of unappropriatedprofit is the translated closing balance of the previous year's unappropriated profit; the closingbalance of unappropriated profit is calculated and presented on the basis of each translated incomestatement and profit distribution item. The difference between the translated assets and theaggregate of liabilities and shareholders' equity items is recognized as other comprehensive incomeand included in shareholders' equity.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign subsidiaryare translated at average exchange rate during the accounting period of consolidated financialstatements. The effect of exchange rate changes on cash and cash equivalents is regarded as areconciling item and presented separately in the cash flow statement as "effect of exchange ratechanges on cash and cash equivalents".
The closing balances and the comparative figures of previous year are presented at the translatedamounts in the previous year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over aforeign operation due to disposal of certain interest in it or other reasons, the Group transfers theaccumulated exchange differences arising 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 interest percentagein foreign operations but does not result in the Group losing control over a foreign operation, theexchange differences arising from the translation of foreign currency statements related to thisdisposed part are re-attributed to minority interests and are not recognized in profit or loss. Forpartial disposals of equity interests in foreign operations which are associates or joint ventures, theproportionate share of the accumulated exchange differences arising from translation of statementsof foreign operations is reclassified to profit or loss.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. 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 (the method fordetermining the fair values of the financial assets and financial liabilities is set out in relateddisclosures under "basis of accounting and principle of measurement" in note(IV) 5). For financialassets and 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, notesreceivable and accounts 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 ("Revenue Standards"),the Group adopts the transaction price as defined in the Revenue Standards for initial measurement.
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.
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 the financialasset or to the amortized cost of the financial liability. When calculating the effective interest rate,the Group estimates future cash flows considering all contractual terms of the financial asset orfinancial liability (such as repayment in advance, extension, call option or other similar 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 and theamount at the maturity date using the effective interest method, net of cumulative credit lossallowance (only applicable to financial assets).
11.1 Classification, recognition and measurement of financial assets
Subsequent to initial recognition, the Group's financial assets of various categories are subsequentlymeasured at amortized cost, at fair value through other comprehensive income or at fair valuethrough profit or loss.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.1 Classification, recognition and measurement of financial assets - continued
If the contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding, and the financial asset isheld within a business model whose objective is achieved by collecting contractual cash flows, theGroup classifies such financial asset as financial assets at amortized cost, which include cash andbank balances, notes receivable, accounts receivable, other receivables, debt investments, and long-term receivables etc.
If the contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding, and the financial asset isheld within a business model whose objective is achieved by both collecting contractual cash flowsand selling the financial asset, the Group classifies such financial asset as financial assets atFVTOCI. The accounts receivable and notes receivable classified as at FVTOCI upon acquisitionare presented under receivables financing, while the remaining items due within one year (inclusive)upon acquisition are presented under other current assets. Other financial assets of such type arepresented as other debt investments if they are due after one year since the acquisition, or presentedunder non-current assets due within one year if they are due within one year (inclusive) since thebalance 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 financial assetsat FVTOCI are presented as investments in other equity instruments.
A financial asset is classified as held for trading if one of the following conditions is satisfied:
? It has been acquired principally for the purpose of selling in the near term; or? On initial recognition, it is part of a portfolio of identified financial instruments that the Groupmanages together and there is objective evidence that the Group has a recent actual pattern ofshort-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 classified asfinancial assets at FVTPL and those designated as financial assets at FVTPL.
? Financial assets not satisfying the criteria of classification as financial assets at amortized costand 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.1 Classification, recognition and measurement of financial assets - continued
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.
11.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using theeffective interest method. Gain or loss arising from impairment or derecognition is recognized inprofit or loss.
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 andrecognizes the interest income based on amortized cost of the financial asset and the effectiveinterest rate through credit adjustment since initial recognition.
11.1.2 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 to thatas if the financial assets have been always measured at amortized cost. Upon derecognition, theaccumulated gains or losses previously included in other comprehensive income are transferred toprofit or loss for the period.
Changes in fair value of non-trading equity instrument investments designated as financial assets atFVTOCI are recognized in other comprehensive income, and the cumulative gains or lossespreviously recognized in other comprehensive income allocated to the part derecognized aretransferred and included in retained earnings. During the period in which the Group holds the non-trading equity instruments, revenue from dividends is recognized in profit or loss for the currentperiod when (1) the Group has established the right of collecting dividends; (2) it is probable thatthe associated economic benefits will flow to the Group; and (3) the amount of dividends can bemeasured reliably.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.1 Classification, recognition and measurement of financial assets - continued
11.1.3 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.
11.2 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 derecognition dueto the transfer of financial assets or financial liabilities arising from continuing involvement of thetransferred financial assets, the Group accounts for the impairment and recognizes the provision forlosses on the basis of expected credit loss ("ECL").
For all contract assets, notes receivable and accounts receivable arising from transactions regulatedby Revenue Standards, and lease receivables arising from transactions regulated by the AccountingStandards for Business Enterprises No. 21 - Leases, the Group recognizes the provision for lossesat an amount equivalent to lifetime ECL.
For other financial instruments (other than purchased or originated credit-impaired financial assets),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 an amountequivalent to lifetime ECL; if the credit risk has not increased significantly since initial recognitionof the financial instruments, the Group recognizes the provision for losses at an amount equivalentto 12-month ECL. The increase or reversal of credit loss provision for financial assets other thanthose classified as at FVTOCI is recognized as impairment loss or gain and included in profit orloss for the period. For financial assets classified as at FVTOCI, the credit loss provision isrecognized in other comprehensive income and the impairment loss or gain is included in profit orloss for the period without reducing the carrying amount of the financial assets in the balance sheet.
Where the Group has measured the provision for losses at an amount equivalent to lifetime ECL ofa financial instrument in prior accounting period, but the financial instrument no longer satisfies thecriteria of significant increase in credit risk since initial recognition at the current balance sheet date,the Group recognizes the provision for losses of the financial instrument at an amount equivalentto 12-month ECL at the current balance sheet date, with any resulting reversal of provision forlosses recognized as impairment gains in profit or loss for the period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.2 Impairment of financial instruments - continued
11.2.1 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 the financialinstrument for impairment.
In particular, the following information is taken into account when assessing whether credit risk hasincreased 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 more stringentcovenants, increased amounts of collateral or guarantees, or higher rate of return, etc.);
(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 of timeand extent to which the fair value of financial assets is less than their amortized cost, andother market information related to the borrower (such as the borrower's debt instrumentsor 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's economicmotives to repay within the time limit specified in contract or affect the probability 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;
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.2 Impairment of financial instruments - continued
11.2.1 Significant increase of credit risk - continued
(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.
The Group assumes that the credit risk on a financial instrument has not increased significantlysince initial recognition if the financial instrument is determined to have lower credit risk at thebalance sheet date. A financial instrument is determined to have lower credit risk if: i) it has a lowerrisk of default, ii) the borrower has a strong capacity to meet its contractual cash flow obligationsin the near term and iii) adverse changes in economic and business conditions in the longer termmay, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flowobligations.
11.2.2 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 evidences ofcredit 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 becomes 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).
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.2 Impairment of financial instruments - continued
11.2.3 Determination of expected credit loss
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 that theGroup expects to receive;? For undrawn loan commitments (refer to Note IV, 11.4.1.3 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, 11.4.1.3 for the detail of accountingpolicies), the credit loss is the present value of the expected payments to reimburse the holderfor the credit loss incurred less any amounts that the Group expects to receive from the 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 the originaleffective interest rate.
The factors reflected by the Group's measurement of ECL of financial instruments include: unbiasedprobability weighted average amount recognized by assessing a series of possible results; time valueof money; reasonable and supportable information related to historical events, current conditionand forecast of future economic position that is available without undue cost or effort at the balancesheet date.
11.2.4 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.
11.3 Transfer of financial assets
The Group will derecognize a financial asset if one of the following conditions is satisfied: (i) thecontractual rights to the cash flows from the financial asset expire; (ii) the financial asset has beentransferred and substantially all the risks and rewards of ownership of the financial asset istransferred to the transferee; or (iii) although the financial asset has been transferred, the Groupneither transfers nor retains substantially all the risks and rewards of ownership of the financialasset but has not retained control of the financial asset.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.3 Transfer of financial assets - continued
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of afinancial asset, and it retains control of the financial asset, the Group will recognize the financialasset to the extent of its continuing involvement in the transferred financial asset and recognize anassociated liability. The Group will measure relevant liabilities as follows:
? For transferred financial assets carried at amortized cost, the carrying amount of relevantliabilities is the carrying amount of financial assets transferred with continuing involvementless amortized cost of the Group's retained rights (if the Group retains relevant rights upontransfer of financial assets) with addition of amortized cost of obligations assumed by theGroup (if the Group assumes relevant obligations upon transfer of financial assets). Relevantliabilities are not designated as financial liabilities at fair value through profit or loss.? For transferred financial assets carried at fair value, the carrying amount of relevant liabilitiesis the carrying amount of financial assets transferred with continuing involvement less fairvalue of the Group's retained rights (if the Group retains relevant rights upon transfer offinancial assets) with addition of fair value of obligations assumed by the Group (if the Groupassumes relevant obligations upon transfer of financial assets). Accordingly, the fair value ofrelevant 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 of theconsideration received from the transfer and any cumulative gain or loss that has been recognizedin other comprehensive income, is recognized in profit or loss. Where the transferred assets are non-trading equity instrument investments designated as at FVTOCI, cumulative gains or lossespreviously recognized in other comprehensive income are transferred out and included in retainedearnings.
If a part of the transferred financial asset qualifies for derecognition, the overall carrying amount ofthe financial asset prior to transfer is allocated between the part that continues to be recognized andthe part that is derecognized, based on the respective fair value of those parts at the date of transfer.The difference between (1) the carrying amount allocated to the part derecognized on the date ofderecognition; and (2) the sum of the consideration received for the part derecognized and anycumulative gain or loss allocated to the part derecognized which has been previously recognized inother comprehensive income, is recognized in profit or loss. Where the transferred assets are non-trading equity instrument investments designated as at FVTOCI, cumulative gains or lossespreviously recognized in other comprehensive income are transferred out and included in retainedearnings.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.4 Classification of financial liabilities and equity instruments
Financial instruments issued by the Group or their components are classified into financial liabilitiesor equity instruments on the basis of the substance of the contractual arrangements and the economicnature not only the legal form, together with the definition of financial liability and equityinstrument on initial recognition.
11.4.1 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at FVTPL and otherfinancial liabilities.
11.4.1.1 Financial liabilities at FVTPL
Financial liabilities at FVTPL consist of financial liabilities held for trading (including derivativesclassified as financial liabilities) and those designated as at FVTPL. Except for derivative financialliabilities presented separately, the financial liabilities at FVTPL are presented as held-for-tradingfinancial liabilities.
A financial liability is classified as held for trading if one of the following conditions is satisfied:
? It has been acquired principally for the purpose of repurchasing in the near term; or? On initial recognition, it is part of a portfolio of identified financial instruments that the Groupmanages together and there is objective evidence that the Group has a recent actual pattern ofshort-term profit-taking; or? It is a derivative that is not a financial guarantee contract or designated and effective as a
hedging instrument.
A financial liability may be designated as at FVTPL on initial recognition when one of the followingconditions is satisfied: (i) Such designation eliminates or significantly reduces accounting mismatch;or (ii) The Group makes management and performance evaluation on a fair value basis, inaccordance with the Group's formally documented risk management or investment strategy, andreports to key management personnel on that basis. (iii) The qualified hybrid financial instrumentcombines financial asset with embedded derivatives.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.4 Classification of financial liabilities and equity instruments - continued
11.4.1 Classification, recognition and measurement of financial liabilities - continued
11.4.1.1 Financial liabilities at FVTPL - continued
For a financial liability designated as at FVTPL, the amount of changes in fair value of the financialliability that are attributable to changes in the credit risk of that liability shall be presented in othercomprehensive income, while other changes in fair value are included in profit or loss for the currentperiod. Upon the derecognition of such financial liability, the accumulated amount of changes infair value that are attributable to changes in the credit risk of that liability, which was recognized inother comprehensive income, is transferred to retained earnings. Any dividend or interest expenseon the financial liabilities is recognized in profit or loss. If the accounting treatment for the impactof the change in credit risk of such financial liability in the above ways would create or enlarge anaccounting mismatch in profit or loss, the Group shall present all gains or losses on that liability(including the effects of changes in the credit risk of that 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.
11.4.1.2 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. Forall costs or expenses arising from modification or renegotiation of the contract, the Group will adjustthe modified carrying amount of the financial liability and make amortization during the remainingterm of the modified financial liability.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.4 Classification of financial liabilities and equity instruments - continued
11.4.1 Classification, recognition and measurement of financial liabilities - continued
11.4.1.3 Financial guarantee contracts and loan commitments
A financial guarantee contract is a contract that requires the issuer to make specified payments toreimburse the holder of the contract for a loss it incurs because a specified debtor fails to makepayment when due in accordance with the original or modified terms of a debt instrument.Subsequent to initial recognition, financial guarantee contracts that are not designated as financialliabilities at fair value through profit or loss or financial liabilities arising from transfer of financialassets that do not meet the derecognition criteria or those arising from continuing involvement inthe transferred financial assets, and loan commitments to provide a loan at a below-market interestrate, which are not designated at fair value through profit or loss, are measured at the higher of: (1)amount of loss provision; and (2) the amount initially recognized less cumulative amortizationamount determined based on the revenue standards.
11.4.2 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation(or part of it) is discharged. An agreement between the Group (the debtor) and the creditor to replacethe original financial liability with a new financial liability with substantially different terms isaccounted for as an extinguishment of the original financial liability and the recognition of a newfinancial liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference betweenthe carrying amount of the financial liability (or part of the financial liability) derecognized and theconsideration paid (including any non-cash assets transferred or new financial liabilities assumed)in profit or loss.
11.4.3 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 of equityinstruments are not recognized by the Group. Transaction costs related to equity transactions arededucted from equity.
The Group recognizes the distribution to holders of the equity instruments as distribution of profits,and dividends paid do not affect total amount of shareholders' equity.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.5 Derivatives and embedded derivatives
Derivatives include forward exchange contracts, currency swaps, interest rate swaps and foreignexchange options, etc. Derivatives are initially measured at fair value at the date when the derivativecontracts are entered into and are subsequently measured at fair value.
Derivatives embedded in hybrid contracts with a financial asset host are not separated by the Group.The hybrid contract shall apply the relevant accounting standards regarding the classification offinancial assets as a whole.
Derivatives embedded in hybrid contracts with hosts that are not financial assets are separated andtreated as separate derivatives by the Group when they meet the following conditions:
(1) the economic characteristics and risks of the embedded derivative are not closely related to
those of the host contract;
(2) a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative;
(3) the hybrid contracts are not measured at fair value through profit or loss.
For the embedded derivative separated from the host contracts, the Group accounts for the hostcontracts in the hybrid contracts with applicable accounting standards. When the embeddedderivatives whose fair value cannot be measured reliably by the Group according to the terms andconditions of the embedded derivatives, the fair value of such derivatives are measured at thedifference between the fair value of the hybrid contracts and the fair value of the host contracts. Byadopting the above method, if the embedded derivative cannot be measured on a stand-alone basisat 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.
11.6 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognized financialassets and financial liabilities, and intends either to settle on a net basis, or to realize the financialasset and settle the financial liability simultaneously, a financial asset and a financial liability shallbe offset and the net amount is presented in the balance sheet. Except for the above circumstances,financial assets and financial liabilities shall be presented separately in the balance sheet and shallnot be offset.
11.7 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 are splitinto liabilities and conversion option which are separately recognized. Therein, the conversionoption that exchanges a fixed amount of cash or other financial assets for a fixed amount of equityinstruments is accounted for as an equity instrument.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.7 Compound instruments - continued
Upon initial recognition, the fair value of liability portion is determined based on the prevailingmarket price of the bonds containing no conversion option. The overall issue price of the convertiblebonds net of the fair value of the liability portion is considered as the value of the conversion optionthat enables the bonds holder to convert the bonds to equity instruments, and is included in otherequity 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 in lossor gain.
The transaction costs incurred for issuance of the convertible bonds are allocated between theliability portion and equity instrument portion in proportion to their respective fair 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.
11.8 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 the dateof reclassification (i.e., the first date of the initial reporting period after the business model of whichthe financial assets are reclassified by the enterprise is changed).
Where a financial asset at amortized cost is reclassified as a financial 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 the Group,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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Financial instruments - continued
11.8 Reclassification of financial instruments - continued
Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group, suchfinancial asset continues to be measured at fair value. At the same time, the accumulated gains orlosses previously recognized in other comprehensive income are transferred to profit or loss for theperiod.
Where a financial asset at FVTPL is reclassified as a financial asset at amortized cost by the Group,the fair value at the date of reclassification is determined as the new gross carrying amount.
Where a financial asset at FVTPL is reclassified as a financial asset at FVTOCI by the Group, suchfinancial asset continues to be measured at fair value.
Where a financial asset at FVTPL is reclassified, the effective interest rate is determined on thebasis of the fair value of the financial asset at the date of reclassification.
12. Receivables
12.1 Determination and accounting methods for expected credit losses of receivables
The Group assesses the credit risk of receivables with significantly different credit risks on anindividual basis, and determine the credit losses of receivables on a portfolio basis using animpairment matrix for other receivables. The amount of increase in or reversal of allowance forexpected credit losses on receivables is included in profit or loss for the period as credit impairmentlosses or gains.
12.2 Categories of portfolios for which bad debt provision is assessed on a portfolio basis
according to credit risk characteristics and the basis for determination
The Group classifies receivables into groups A, B and C based on common risk characteristics. Thecommon credit risk characteristics adopted by the Group include: type of financial instrument,credit risk rating, type of collateral, initial recognition date, remaining contractual term, industry ofthe debtor, geographical location of the debtor, value of the collateral to the financial asset, etc.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
12. Receivables - continued
12.2 Categories of portfolios for which bad debt provision is assessed on a portfolio basis
according to credit risk characteristics and the basis for determination - continued
The Group makes internal credit ratings on customers and determines expected loss rate ofreceivables. Basis for determining 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 |
12.3 Determination criteria for provision of bad debts on an individual basis
| Internal credit ratings | Basis to determine the provision for bad debts on an individual basis | Expected average loss ratio (%) |
| D | There is evidence showing that the receivables from customers are impaired, or that the customers are experiencing significant financial difficulties and thus the receivables will be irrecoverable in the foreseeable future. | 50.00-100.00 |
13. Receivables financing
Notes receivable classified as at FVTOCI should be listed as receivables financing within one year(including one year) from the date of acquisition. Those over one year should be listed as other debtinvestments. For related accounting policies, refer to Note (IV) 11 and Note (IV) 12.
14. Inventories
14.1 Categories of inventories, valuation method of inventories upon delivery, inventory count
system, and amortization method for ow cost and short-lived consumable items andpackaging materials
14.1.1 Categories 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
14. Inventories - continued
14.1 Categories of inventories, valuation method of inventories upon delivery, inventory count
system, and amortization method for ow cost and short-lived consumable items andpackaging materials - continued
14.1.2 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.
14.1.3 Inventory count system
The perpetual inventory system is maintained for stock system.
14.1.4 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.
14.2 Recognition criteria and provision method 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 that previouslycaused inventories to be written down below cost no longer exist so that the net realizable value ofinventories is higher than their cost, the original provision for decline in value is reversed and thereversal is included in profit or loss for the period.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Long-term equity investments
15.1 Basis for determining joint control and significant influence over investee
Control is archived when the Group has the power over the investee and has rights to variablereturns from its involvement with the investee; and has the ability to use its power to affect itsreturns. Joint control is the contractually agreed sharing of control over an economic activity, andexists only when the strategic financial and operating policy decisions relating to the activity requirethe unanimous consent of the parties sharing control. Significant influence is the power toparticipate in the financial and operating policy decisions of the investee but is not control or jointcontrol over those policies. When determining whether an investing enterprise is able to exercisecontrol or significant influence over an investee, the effect of potential voting rights of the investee(for example, warrants and convertible debts) held by the investing enterprises or other parties thatare currently exercisable or convertible shall be considered.
15.2 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 capital reserveis 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 initial investmentcost of the long-term equity investment is the share of carrying amount of owners' equity of theacquiree in the consolidated financial statements of ultimate controlling party at the date ofcombination. The aggregate face value of the shares issued is accounted for as share capital. Thedifference between the initial investment cost and the aggregate face value of the shares issued isadjusted to capital reserve. If the balance of capital reserve is not sufficient to absorb the difference,any excess is adjusted to retained earnings. Where equity interests in an acquiree are acquired instages through multiple transactions ultimately constituting a business combination involvingenterprises under common control, the acquirer shall determine if these transactions are consideredto be a "package deal". If yes, these transactions are accounted for as a single transaction wherecontrol is obtained. If no, the initial investment cost of the long-term equity investment is the shareof carrying amount of owners' equity of the acquiree in the consolidated financial statements ofultimate controlling party at the date of combination. The difference between the initial investmentcost and the sum of carrying amount of equity investments previously held in the acquiree and thenew investment cost is adjusted to capital reserve. If the balance of capital reserve is not sufficientto absorb the difference, any excess is adjusted to retained earnings. Other comprehensive incomerecognized for the previously held equity investments by accounting treatment of equity method ornon-trading equity instrument investments designated as at FVTOCI is not subject to accountingtreatment temporarily.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Long-term equity investments - continued
15.2 Determination of initial investment cost - continued
For a long-term equity investment acquired through business combination not involving enterprisesunder common control, the investment cost of the long-term equity investment acquired is the costof acquisition.
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.
The long-term equity investment acquired otherwise than through a business combination is initiallymeasured at its cost. When the entity is able to exercise significant influence or joint control (butnot control) over an investee due to additional investment, the cost of long-term equity investmentsis the sum of the fair value of previously-held equity investments determined in accordance withAccounting Standards for Business Enterprises No.22 - Financial Instruments: Recognition andMeasurement (ASBE No. 22) and the additional investment cost.
15.3 Subsequent measurement and recognition of profit or loss
15.3.1 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 the Group.
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.
15.3.2 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 investment exceedsthe Group's share of the fair value of the investee's identifiable net assets at the time of acquisition,no adjustment is made to the initial investment cost. Where the initial investment cost is less thanthe Group's share of the fair value of the investee's identifiable net assets at the time of acquisition,the difference is recognized in profit or loss for the period, and the cost of the long-term equityinvestment is adjusted accordingly.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Long-term equity investments - continued
15.3 Subsequent measurement and recognition of profit or loss - continued
15.3.2 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, and recognizedin capital reserve. The Group recognizes its share of the investee's net profit or loss based on thefair value of the investee's individual identifiable assets, etc. at the acquisition date after makingappropriate adjustments. When the investee's accounting policies and accounting period areinconsistent with those of the Group, the Group recognizes investment income and othercomprehensive income after making appropriate adjustments to conform to the Group's accountingpolicies and accounting period. However, unrealized gains or losses resulting from the Group'stransactions with its associates and joint ventures, which do not constitute a business, are eliminatedbased on the proportion attributable to the Group and then investment gains or losses are recognized.However, unrealized losses resulting from the Group's transactions with its associates and jointventures which represent impairment losses on the transferred assets are not eliminated.
The Group discontinues recognizing its share of net losses of the investee after the carrying amountof the long-term equity investment together with any long-term interests that in substance form partof its net investment in the investee are reduced to zero. In addition, if the Group has incurredobligations to assume additional losses, a provision is recognized according to the obligationexpected, and recorded in the investment loss for the period. Where net profits are subsequentlymade by the investee, the Group resumes recognizing its share of those profits only after its shareof the profits exceeds the share of losses previously not recognized.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Long-term equity investments - continued
15.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the proceeds actually receivedand receivable and the carrying amount is recognized in profit or loss for the period. For long-termequity investments accounted for using the equity method, if the remaining interest after disposalis still accounted for using the equity method, other comprehensive income previously recognizedusing the equity method is accounted for on the same basis as would have been required if theinvestee had directly disposed of related assets or liabilities, and transferred to profit or loss for theperiod on a pro rata basis; owners' equity recognized due to other changes in owners' equity of theinvestee (other than net profit or loss, other comprehensive income and profit distribution) istransferred to profit or loss for the period on a pro rata basis. For long-term equity investmentsaccounted for using the cost method, if the remaining interest after disposal is still accounted forusing the cost method, other comprehensive income previously recognized using the equity methodor in accordance with the standards for the recognition and measurement of financial instrumentsbefore obtaining the control over the investee, 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; other changes in owners' equity in the investee's netassets recognized under the equity method (other than net profit or loss, other comprehensiveincome and profit distribution) is transferred to profit or loss for the period on a pro rata basis.
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 remaining sharesafter disposal cannot have joint control or significant influence over the investee, they are accountedfor in accordance with the standards for recognition and measurement of financial instruments, andthe difference between fair value on date of losing control and carrying amount is recognized inprofit or loss for the period. Other comprehensive income recognized using the equity method or inaccordance with the standards for the recognition and measurement of financial instruments beforelosing control over the investee, is accounted for on the same basis as would have been required ifthe investee had directly disposed of related assets or liabilities when the control over the investeeis lost; other changes in owners' equity in the investee's net assets recognized under the equitymethod (other than net profit or loss, other comprehensive income and profit distribution) istransferred to profit or loss for the period on a pro rata basis. Where remaining shares after disposalare accounted for under equity method, other comprehensive income and other owners' equity aretransferred on a pro rata basis. Where remaining shares after disposal are accounted for inaccordance with the standards for recognition and measurement of financial instruments, othercomprehensive income and other owners' equity are all transferred.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Long-term equity investments - continued
15.4 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 directly disposedof related assets or liabilities when the equity method is not adopted, and other changes in owners'equity other than net profit or loss, other comprehensive income and profit distribution aretransferred 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, and thedifference between the amount of disposal and carrying amount of long-term equity investment isrecognized as other comprehensive income, and transferred to profit or loss for the period when thecontrol is lost.
16. 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 theinvestment properties are depreciated over their useful lives using the straight-line method. Thedepreciation life, estimated residual value rate and annual depreciation rate of each category ofinvestment properties are as follows:
| Category | Depreciation life (year) | Residual value rate (%) | Annual depreciation rate (%) |
| Land use rights | 21.25-50 | - | 2.00-4.71 |
| Buildings and structures | 10-43.17 | 5.00 | 2.20-9.50 |
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Investment properties - continued
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.
17. Fixed assets and depreciation
Fixed assets are tangible assets that are held for use in the production or supply of goods or services,for rental to others, or for administrative purposes, and have useful lives of more than oneaccounting year. A fixed asset is recognized only when it is probable that economic benefitsassociated with the asset will flow to the Group and the cost of the asset can be measured reliably.Fixed assets are initially measured at cost. Upon being restructured into a stock company, the fixedassets initially contributed by the state-owned shareholders are recognized based on the valuationamounts confirmed by the state-owned assets administration department.
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 the replacedpart is derecognized. Other subsequent expenditures are recognized in profit or loss for the periodin 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 depreciation life, estimatednet residual value rate and annual depreciation rate of each category of fixed assets are as follows:
| Category | Depreciation life (year) | Residual value rate (%) | Annual depreciation rate (%) |
| Port and terminal facilities | 5-50 | 5.00 | 1.90-19.00 |
| Buildings and structures | 5-30 | 5.00 | 1.90-19.00 |
| Machinery and equipment, furniture and fixture and other equipment | 3-20 | 5.00 | 4.75-31.67 |
| Motor vehicles and cargo ships | 5-25 | 5.00 | 3.80-19.00 |
Estimated net residual value of a fixed asset is the estimated amount that the Group would currentlyobtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset werealready of the age and in the condition expected at the end of its useful life.
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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
18. 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 accounted for by categories of projects initiated, and is transferred to afixed asset when it is ready for intended use. The criteria for judging the intended use shall be oneof the following:
(1) The physical construction (including installation) of fixed assets has been fully or
substantially completed;
(2) The trial production or trial operation has been carried out and the results of which indicate
that the asset is capable of normal operation or producing qualified products on a stablebasis, or the results of which indicate that it is capable of normal functioning or operation;
(3) The fixed assets and intangible assets acquired and constructed have met the design or
contractual requirements or are basically in compliance with the design or contractualrequirements.
19. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifyingasset are capitalized when expenditures for such asset and borrowing costs are incurred andactivities relating to the acquisition, construction or production of the asset that are necessary toprepare the asset for its intended use or sale have commenced. Capitalization of borrowing costsceases when the qualifying asset being acquired, constructed or produced becomes ready for itsintended use or sale. Capitalization of borrowing costs is suspended during periods in which theacquisition, construction or production of a qualifying asset is interrupted abnormally and when theinterruption is for a continuous period of more than 3 months. Capitalization is suspended until theacquisition, construction or production of the asset is resumed. Other borrowing costs arerecognized as an expense in the period in which they are incurred.
Where funds are borrowed under a specific-purpose borrowing, the amount of interest to becapitalized is the actual interest expense incurred on that borrowing for the period less any bankinterest earned from depositing the borrowed funds before being used on the asset or any investmentincome on the temporary investment of those funds. Where funds are borrowed under general-purpose borrowings, the Group determines the amount of interest to be capitalized on suchborrowings by applying a capitalization rate to the weighted average of the excess of cumulativeexpenditures on the asset over the amounts of specific-purpose borrowings. The capitalization rateis the weighted average of the interest rates applicable to the general-purpose borrowings. Duringthe capitalization period, exchange differences related to a specific-purpose borrowing denominatedin foreign currency are all capitalized. Exchange differences in connection with general-purposeborrowings are recognized in profit or loss for the period in which they are incurred.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
20. Intangible assets
20.1 Useful life and the basis for determination, estimates, amortization method or review
procedures
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, theintangible assets initially contributed by the state-owned shareholders are recognized based on thevaluation 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 rate of each category ofintangible assets are as follows:
| Category | Amortization method | Useful life (year) | Residual value (%) |
| Land use rights | Straight-line method | From the date of the land transfer, it is amortized using the straight-line method over the land transfer period | - |
| Terminal operating right | Output/Straight-line method | Output method - it is amortized over periods according to the ratio of the estimated minimum guaranteed throughput to the estimated minimum guaranteed total throughput; straight-line method - it is amortized using the straight-line method over the shortest of the estimated useful life, the beneficial period specified in the contract and the effective life as defined by law | - |
| Others | Straight-line method | It is amortized using the straight-line method over the shortest of the estimated useful life, the beneficial period specified in the contract and the effective life as defined by law | - |
For an intangible asset with a finite useful life, the Group reviews the useful life and amortizationmethod at the end of the year, and makes adjustments when necessary.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
20. Intangible assets - continued
20.2 Scope of R&D expenditure and method for accounting treatment
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 the intangibleasset or the intangible asset itself or, if it is to be used internally, the usefulness of theintangible asset.
(4) the availability of adequate technical, financial and other resources to complete 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, theGroup recognizes all of them in profit or loss for the year. The costs of intangible assets generatedby the internal research only include the total expenditure incurred for the period from the timepoint of capitalization to the time point when the intangible assets are ready for intended use. Forthe identical intangible asset, the expenditures recorded as expenses before they qualify forcapitalization during the development process are not adjusted.
The Group classifies the expenditures on an internal research and development project intoexpenditures in the research phase and expenditures in the development phase. The scope of R&Dexpenditures refer to those directly related to the R&D activities, including wages, salaries, andwelfare expenses of personnel directly engaged in R&D activities, materials directly consumed inR&D activities, depreciation expenses for instruments and equipment used in R&D activities, travel,transportation, and communication expenses required for research and experimental development,etc. Technical feasibility and economic viability studies are adopted as specific criteria forclassifying the research and development phases once such studies have been evaluated andapproved.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Impairment of long-term assets
The Group assesses at the balance sheet date whether there is any indication that long-term equityinvestments, investment properties measured at cost model, fixed assets, construction in progress,right-of-use assets, intangible assets with a finite useful life and assets related to contract costs maybe impaired. If there is any indication that such assets may be impaired, recoverable amounts areestimated for such assets. Intangible assets with indefinite useful life and intangible assets not yetavailable for use are tested for impairment annually, irrespective of whether there is any indicationthat 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 from theasset.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficitis accounted for as an impairment loss and is recognized in profit or loss.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairmenttesting, goodwill is considered together with the related assets group(s) or portfolio of assetsgroup(s), i.e., goodwill is reasonably allocated to the related assets group(s) or portfolio of assetsgroup(s) expected to benefit from the synergies of the combination. An impairment loss isrecognised if the recoverable amount of the assets group(s) or portfolio of assets group(s) (includinggoodwill) is less than its carrying amount. The impairment loss is firstly allocated to reduce thecarrying amount of any goodwill allocated to such assets group(s) or portfolio of assets group(s),and then to the other assets of the group pro-rata on the basis of the carrying amount of each asset(other than goodwill) in the group.
Once the impairment loss of above-mentioned assets is recognized, it shall not be reversed in anysubsequent period.
22. 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 are derived.
23. 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
24. Employee benefits
24.1 Short-term employee benefits
Short-term benefits refer to the employee benefits that the Group is required to make full paymentswithin 12 months after the annual reporting period during which relevant services are provided bythe employees, except the post-employment benefits and termination benefits. Specifically, theshort-term benefits include: employee salaries, bonuses, allowances and subsidies, employeebenefits, social insurance contributions such as the medical insurance and the work 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-term benefits.
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 are measuredat fair value.
Payment made by the Group of social security contributions for employees such as premiums orcontributions on medical insurance, work injury insurance and maternity insurance, etc. andpayments of housing funds, as well as union running costs and employee education costs providedin accordance with relevant requirements, are calculated according to prescribed bases andpercentages in determining the amount of employee benefits and recognized as relevant liabilities,with a corresponding charge to profit or loss for the period or the costs of relevant assets in theaccounting period in which employees provide services.
24.2 Post-employment benefits
Post-employment benefits refer to the rewards and benefits of various forms provided by the Groupafter the employees have retired or terminated the labor relationship with the enterprise for theservices rendered by the employees, except the short-term benefits and the termination benefits.The post-employment benefits consist of the pension insurance, the annuity, the unemploymentinsurance 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 Group enteredinto with the employees on the post-employment benefits or the regulations or measures establishedby the Group for provisions of the post-employee benefits, among which the defined contributionplans refer to the post-employment benefit plan under which the Group shall no longer undertakeany obligations of payments after paying fixed expenses to independent funds; the defined benefitplans refer to the post-employment benefit plans other than the defined contribution plans. Duringthe accounting period in which employees render services to the Group, the amounts payablecalculated based on the defined contribution plans are recognized as liabilities and included in profitor loss for the period or costs of related assets.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
24. Employee benefits - continued
24.2 Post-employment benefits - continued
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 as follows:
? Service cost (including current service cost, past service cost, as well as gains and losses onsettlements);? Net interest of net liabilities or assets of defined benefit 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 are recognizedin profit or loss for the period or costs of related assets. Remeasurement of the net defined benefitliabilities (assets) (including actuarial gains and losses, the return on planned assets, excludingamounts included in net interest on net defined benefit liabilities (assets), and any changes in theeffect of the asset ceiling, excluding amounts included in net interest on net defined benefitliabilities (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.
24.3 Termination benefits
Termination benefits refer to the compensations the Group pay to the employees for terminating theemployment 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.
24.4 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
24. Employee benefits - continued
24.4 Other long-term employee benefits - continued
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 other long-term employee benefits, and changes resulting from the remeasurement of the net liability or netasset for other long-term employee benefits. The total net amount of these items is included in profitor 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 are approvedto quit the job voluntarily. For internal retirement benefits, the internal retirement benefits the Groupis expected to pay during the period from the date when employees stop providing services to thedate of normal retirement are recognized as liabilities at the present value and included in profit orloss for the period when relevant recognition requirements of the internal retirement benefits aremet.
25. 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.
The amount recognized as a provision is the best estimate of the consideration required to settle thepresent obligation at the balance sheet date, taking into account factors pertaining to a contingencysuch as the risks, uncertainties and time value of money. Where the effect of the time value of moneyis material, the amount of the provision is determined by discounting the related future cashoutflows.
Where all or some of the expenditure required to settle a provision is expected to be reimbursed bya third party, the reimbursement is recognized as a separate asset only when it is virtually certainthat reimbursement will be received, and the amount of reimbursement recognized does not exceedthe carrying amount of the provision.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
26. 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 include equity-settled share-based payments.
Equity-settled share-based payments in exchange for services rendered by employees are measuredat fair value of the equity instruments granted to employees at the grant date. Such amount isrecognized as related costs or expenses on a straight-line basis over the vesting period, based on thebest estimate of the number of equity instruments expected to vest/ as related costs or expenses atthe grant date, if the equity instruments could be vested immediately, with a corresponding increasein capital reserve.
27. Preferred stock, perpetual bonds and other financial instruments
The consideration received by the Group for the issuance of equity instruments is included inshareholders' equity after deducting transaction costs. Repurchase the consideration and transactioncosts paid by the Group's equity instruments to reduce shareholders' equity.
The Group classifies financial instruments, or their components, as financial liabilities or equityinstruments at initial recognition based on the contractual terms of the issued perpetual bonds andtheir reflected economic substance, combined with the definitions of financial liabilities and equityinstruments.
For financial instruments such as perpetual bonds classified as equity instruments, interest expenseor dividend (dividend) distributions are treated as profit distributions of the Group, and theirrepurchases, write-offs, etc., are treated as changes in equity, and related transaction costs arededucted from equity.
28. Revenue recognition
28.1 Disclosure of accounting policies adopted for revenue recognition and measurement by type
of business
The Group's revenue is mainly from port business, bonded logistics business and other businesses.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Revenue recognition - continued
28.1 Disclosure of accounting policies adopted for revenue recognition and measurement by type
of business - continued
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 following conditionsis met: (i) the customer obtains and consumes economic benefits at the same time of the Group'sperformance; (ii) the customer is able to control goods or services in progress during the Group'sperformance; (iii) goods or services generated during the Group's performance have irreplaceableutilization, and the Group is entitled to collect amounts of cumulative performance part which havebeen done up to now. Otherwise, revenue is recognized at a point in time when the customer obtainscontrol 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.
The transaction 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. In determining thetransaction price, the Group should consider the effects of variable consideration, significantfinancing components in the contract, non-cash consideration and consideration payable tocustomers.
If there are two or more of performance obligations included in the contract, at the inception of thecontract, the Group allocates the transaction price to each single performance obligation based onthe 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, the Groupshall determine the best estimate of variable consideration based on the expected value or the mostprobably occurred amount. The transaction price including variable consideration shall not exceedthe amount of the cumulatively recognized revenue which is unlikely to be significantly reversedwhen relevant uncertainty is eliminated. At each balance sheet date, the Group re-estimates theamount of variable consideration which should be included in transaction price.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Revenue recognition - continued
28.1 Disclosure of accounting policies adopted for revenue recognition and measurement by type
of business - continued
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 to thestand-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.
The Group assesses whether it controls each specified goods or service before that goods or serviceis transferred to the customer to determine whether the Group is a principal or an agent. If the Groupcontrols the specified good or service before that good or service is transferred to a customer, theGroup is a principal and recognizes revenue in the gross amount of consideration received orreceivable. Otherwise, the Group is an agent and recognizes revenue in the amount of any fee orcommission to which it expects to be entitled. The fee or commission is the net amount ofconsideration 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 accordance withthe 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 the relatedperformance obligation has been satisfied. When the Group's receipts in advance are not requiredto be refunded and it is probable that the customer will waive all or part of its contractual rights, theGroup recognizes the said amounts as revenue on a pro-rata basis in accordance with the pattern ofexercise of the customer's contractual rights, if the Group expects to be entitled to the amountsrelating to the contractual rights waived by the customer; otherwise, the Group reverses the relatedbalance of the said liabilities to revenue only when it is highly unlikely that the customer will requireperformance of the remaining performance obligations.
For port business, the revenue from the handling of containers and bulk cargos is recognized overtime based on the progress of completed services, and the revenue from the storage of containersand bulk cargos is recognized on a straight-line basis over the period of storage.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Revenue recognition - continued
28.1 Disclosure of accounting policies adopted for revenue recognition and measurement by type
of business - continued
For bonded logistics business, the revenue is recognized based on the progress of services rendered,where the progress of completed services is determined based on the proportion of days on servicesprovided to the estimated total number of service days. As at the balance sheet date, the Group hasre-estimated the progress of completed bonded logistics service so that it reflects the changes inperformance status.
28.2 Similar operations under different business models which involve different revenue
recognition and measurement methods
The Group has no similar operations under different business models which involve differentrevenue recognition and measurement methods.
29. Contract costs
29.1 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.
29.2 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 of thegoods 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
29. Contract costs - continued
29.3 Impairment loss 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 other ASBE;then, for assets related to contract costs, if the carrying amount of the assets is higher than thedifference between: (1) the remaining consideration that the Group expects to obtain for the transferof the goods or services related to the assets; and (2) the estimated costs to be incurred for thetransfer of the related goods or services, any excess is provided for impairment and recognized asimpairment 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 reversed andrecognized in profit or loss for the period, provided that the carrying amount of the assets after thereversal does not exceed the carrying amount of the assets at the date of reversal assuming noprovision for impairment was made.
30. Government grants
Government grants are transfer of monetary assets or non-monetary assets from the government tothe Group at no consideration. A government grant is recognized only when the Group can complywith the conditions attached to the grant and the Group will receive the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amountreceived or receivable. If a government grant is in the form of a non-monetary asset, it is measuredat fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. Agovernment grant measured at a nominal amount is recognized immediately in profit or loss for theperiod.
30.1 Determination basis and accounting treatment of government grant related to assets
Government grants of the Group mainly include grants for intelligent system, etc., and thesegovernment grants relate to assets as they will form long-term assets.
A government grant related to an asset is recognized as deferred income, and evenly amortized toprofit or loss over the useful life of the related asset. 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
30. Government grants - continued
30.2 Determination basis and accounting treatment of government grant related to income
Government grants of the Group mainly include grants for business development and specializedoperations, etc., and these government grants relate to income as they will not form long-term assets.The Group classifies government grants that are difficult to be distinguished as government grantsrelated to income aggregately.
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.
A government grant related to the Group's daily activities is recognized in other income or chargedagainst related costs based on the nature of economic activities; a government grant not related tothe Group's daily activities is recognized in non-operating income.
31. Income tax
The income tax expenses include current income tax and deferred income tax.
31.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periodsare measured at the amount expected to be paid (or recovered) according to the requirements of taxlaws.
31.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their taxbase, or between the nil carrying amount of those items that are not recognized as assets or liabilitiesand their tax base that can be determined according to tax laws, deferred tax assets and liabilitiesare recognized using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred taxassets for deductible temporary differences are recognized to the extent that it is probable thattaxable profits will be available against which the deductible temporary differences can be utilized.However, for temporary differences associated with the initial recognition of goodwill and theinitial recognition of an asset or liability arising from a transaction, which is not a businesscombination that affects neither the accounting profit nor taxable profits (or deductible losses) andwill not result in taxable temporary differences and deductible temporary differences in equivalentamounts at the time of transaction, no deferred tax asset or liability is recognized.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Deferred tax assets/ deferred tax liabilities - continued
31.2 Deferred tax assets and deferred tax liabilities - continued
For deductible losses and tax credits that can be carried forward, deferred tax assets are recognizedto the extent that it is probable that future taxable profits will be available against which thedeductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated withinvestments in subsidiaries, associates and joint ventures, except where the Group is able to controlthe timing of the reversal of the temporary differences and it is probable that the temporarydifferences will not be reversed in the foreseeable future. Deferred tax assets arising fromdeductible temporary differences associated with investments in subsidiaries, associates and jointventures are recognized to the extent that it is probable that future taxable profits will be availableagainst which the deductible temporary differences can be utilized and they are expected to bereversed in the foreseeable future.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates applicablein the period in which the asset is realized or the liability is settled according to tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, exceptwhen they arise from transactions or events that are directly recognized in other comprehensiveincome or shareholders' equity, in which case they are recognized in other comprehensive incomeor shareholders' equity, and when they arise from business combinations, in which case they adjustthe 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 the benefitof deferred tax assets to be utilized. Any such reduction in amount is reversed when it becomesprobable that sufficient taxable profits will be available.
31.3 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 liabilities simultaneously,in each future period in which significant amounts of deferred tax assets or liabilities are expectedto be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. 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.
32.1 The Group as lessee
32.1.1 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.
32.1.2 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 underlyingasset, restoring the site on which it is located or restoring the underlying asset to the conditionrequired by the terms and conditions of the lease.
Right-of-use assets are depreciated by the Group in accordance with the ASBE No.4 Fixed Assets.If the Group is reasonably certain, that the lease will transfer ownership of the underlying asset tothe Group by the end of the lease term, the right-of-use assets 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-use assetsare impaired and to account for any impairment loss identified.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Leases - continued
32.1 The Group as lessee - continued
32.1.3 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 value
guarantee, 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Leases - continued
32.1 The Group as lessee - continued
32.1.4 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 asset isless 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.
32.1.5 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 the leasemodification, the Group should allocate the consideration in the modified contract, determine thelease term of the modified lease and remeasure the lease liabilities based on the present value of thechanged 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 loss relatingto the partial or full termination of the lease recognized in profit or loss. For re-measurement oflease liabilities due to other lease modifications, a corresponding adjustment is made to the carryingamount of the right-of-use assets.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Leases - continued
32.1 The Group as lessee - continued
32.1.6 Sale and leaseback transactions
The Group as seller-lessee
The Group applies the requirements of Revenue Standard to determine whether the transfer of anasset is accounted for as a sale of that asset. If the transfer of an asset does not constitute a sale, theGroup shall continue to recognize the transferred assets, recognize a financial liability equal to thetransfer proceeds and accounts for such financial liability in accordance with the AccountingStandards for Business Enterprises No. 22 - Financial Instruments: Recognition and Measurement.If the transfer of an asset is a sale, the Group shall measure the right-of-use assets arising from theleaseback at the proportion of the previous carrying amount of the asset that relates to the right ofuse, and recognize any gain or loss for rights transferred to the lessor only.
32.2 The Group as lessor
32.2.1 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 transaction prices,based on the respective individual prices of the lease components and the non-lease components.
32.2.2 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.
32.2.2.1 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 to profitor loss for the period over the lease term on the same basis as the recognition of rental income.
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Leases - continued
32.2 The Group as lessor - continued
32.2.2 Classification of leases - continued
32.2.2.2 The Group as lessor under finance leases
At the commencement date, the Group recognizes a finance lease receivable at the amount equal tothe net lease investment with assets under finance lease derecognized. The net lease investment isthe sum of any unguaranteed residual value and the present value of the lease receipts over the leaseterm 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 loss whenthey are actually incurred.
Interest income for each period over the lease term is calculated and recognized by the Group at afixed periodic rate.
32.2.3 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Leases - continued
32.2 The Group as lessor - continued
32.2.4 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-aloneprice for the increase in scope with any appropriate adjustment to that stand-alone price.
For a modification to a finance lease that is not accounted for as a separate lease, the Group accountsfor 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.
32.2.5 Sale and leaseback transactions
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
33. Exchange of non-monetary assets
When the non-monetary assets are of commercial substance and the fair value of assets received orthe assets given up can be measured reliably, the non-monetary transactions are measured at fairvalue. 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, the differencebetween the fair value and the carrying amount is recognized in profit or loss for the current period.When there is clear evidence indicating that the fair value of the received asset is more reliable, forthe asset received, the fair value of the asset received and related taxes payable are recognized asthe cost at initial recognition; For the asset given up, at derecognition, the difference between thefair value of the asset received and the carrying amount of the asset given up is recognized in profitor 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. For theasset given up, at derecognition, no profit or loss is recognized.
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 the EmergencyDepartment on 13 December 2022, safety production cost set aside by the Group is directly includedin the cost of relevant products or recognized in profit or loss for the period, and transferred tospecial reserve simultaneously. When safety production cost set aside is utilized, if the costsincurred can be categorized as expenditure, the costs incurred should be charged against the specialreserve. If the costs set aside are used to build up fixed assets, the costs should be charged toconstruction in progress, and reclassified to fixed assets when the safety projects are ready forintended use. Meantime, expenditures in building up fixed assets are directly charged against thespecial reserve with the accumulated depreciation recognized at the same amount. Depreciation willnot be made in the future period on such fixed assets.
(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), the Groupis required to make judgments, estimates and assumptions about the carrying amounts of items inthe financial statements that cannot be measured accurately, due to the internal uncertainty of theoperating activities. These judgments, estimates and assumptions are based on historical experienceof the Group's management as well as other factors that are considered to be relevant. Actual resultsmay differ from these estimates.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
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 be recognizedin the current and future periods. At the balance sheet date, key assumptions and uncertainties incritical judgments and accounting estimates that are likely to lead to significant adjustments to thecarrying 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 cash flowsshall be estimated. Meantime, a rate shall be determined that should reflect the time value of moneyon 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 profits willbe used for the daily operation and future development of the investee, no deferred tax liabilitiesare recognized. If the profits to be actually distributed in future years are more or less than thoseexpected, corresponding deferred tax liabilities will be recognized or reversed in profit or loss forthe period at the earlier of the date on which the profit distribution plan is changed and the date onwhich 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.
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 intangible assets.Such estimate is made by reference to the historical experience of actual useful lives and residualvalue of fixed assets and intangible assets of similar nature and function, and is subject to significantchanges due to technical innovation and fierce industry competition. Where the estimated usefullives and residual value of fixed assets and intangible assets are less than the previous estimates,the Group will increase the depreciation and amortization, or write off or eliminate the technicallyobsolete fixed assets or intangible assets.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES
1. Changes in significant accounting policies
1.1 Interpretation No. 16 of the Accounting Standards for Business Enterprises
The Interpretation No. 16 of the Accounting Standards for Business Enterprises (the "InterpretationNo. 16") was issued by the Ministry of Finance on 30 November 2022, which clarified theaccounting treatment concerning the exemption of initial recognition of deferred income tax relatingto assets and liabilities arising from a single transaction.
Interpretation No. 16 revised the coverage of exemption of the initial recognition of deferred incometax in the Accounting Standards for Business Enterprises No. 18 – Income Tax, and specified thatthe relevant provisions on the exemption of initial recognition of deferred tax liabilities and deferredtax assets are not applicable to a single transaction (not a business combination) that affects neitherthe accounting profit nor taxable income (or deductible losses) at the time of transaction, and wherethe assets and liabilities initially recognized generate equal taxable temporary differences anddeductible temporary differences. The Interpretation became effective from 1 January 2023 andcould be early applied. The Group started to apply the Interpretation from 1 January 2023, adoptedthe retrospective adjustment method for accounting treatment, and restated the financial statementsfor the comparative year. The impacts are listed as follows:
| Item | 1/1/2022 | Adjustment | 1/1/2022 |
| Assets: | |||
| Deferred tax assets | 398,145,710.84 | 56,499,013.55 | 454,644,724.39 |
| Liabilities: | |||
| Deferred tax liabilities | 4,550,417,470.61 | 2,001,049.09 | 4,552,418,519.70 |
| Shareholders' equity: | |||
| Unappropriated profit | 14,205,879,106.49 | 21,052,360.17 | 14,226,931,466.66 |
| Minority interests | 71,234,238,229.35 | 33,445,604.29 | 71,267,683,833.64 |
| Item | 31/12/2022 | Adjustment | 31/12/2022 |
| Assets: | |||
| Deferred tax assets | 372,927,261.40 | 61,571,559.55 | 434,498,820.95 |
| Liabilities: | |||
| Deferred tax liabilities | 4,853,271,307.86 | 1,748,527.47 | 4,855,019,835.33 |
| Shareholders' equity: | |||
| Other comprehensive income | -691,536,248.44 | 1,982,628.58 | -689,553,619.86 |
| Unappropriated profit | 16,679,688,347.09 | 22,299,954.05 | 16,701,988,301.14 |
| Minority interests | 73,994,641,893.21 | 35,540,449.45 | 74,030,182,342.66 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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. 16 of the Accounting Standards for Business Enterprises - continued
| Item | 2022 | Adjustment | 2022 |
| Profit and loss: | |||
| Income tax expenses | 1,113,179,679.35 | -220,002.60 | 1,112,959,676.75 |
| Net profit | 8,231,683,297.67 | 220,002.60 | 8,231,903,300.27 |
| Profit or loss attributable to minority shareholders | 4,894,237,074.85 | -1,027,591.28 | 4,893,209,483.57 |
| Other comprehensive income attributable to shareholders of the Company, net of tax | 206,102,739.65 | 1,982,628.58 | 208,085,368.23 |
| Other comprehensive income attributable to minority interests, net of tax | 1,417,424,133.35 | 3,122,436.44 | 1,420,546,569.79 |
(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% | |
| Income from leases of movable properties | 13% | |
| 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 1-12 per square meter |
| Environmental protection tax (Note 5) | Amount of pollution equivalents of the taxable air pollutants converted based on the quantity of pollutions discharged | RMB 1.8 per pollution equivalent |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VII) TAXES - continued
1. Major taxes and tax rates - continued
Note 1: The Group's enterprise income tax is calculated based on the current tax rate stipulated by
local tax laws. Among them, the Company 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 10%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.
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.
Note 5: The environmental protection tax is the tax paid by Zhanjiang Port (Group) Co., Ltd.
(hereinafter referred to as "Zhanjiang Port"), a domestic subsidiary of the Group, to thegovernment.
2. Tax preference
Certain 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VII) TAXES - continued
2. Tax preference - continued
From 1 January 2023 to 31 December 2027, the urban land use tax for certain 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.
Certain subsidiaries of the Group in China are small and micro enterprises and are subject to apreferential tax rate of 20%. In accordance with the Announcement on Relevant Tax and FeePolicies for Further Supporting the Development of Micro and Small Enterprises and IndividualIndustrial and Commercial Households (Announcement No. 12 of the Ministry of Finance and theState Administration of Taxation in 2023), for small and micro enterprises, the taxable income iscalculated at a reduced rate of 25% and the enterprise income tax is paid at a rate of 20% from 1January 2023 and 31 December 2027.
As approved by Shekou Taxation Sub-bureau of Shenzhen Tax Bureau, State Administration ofTaxation on 12 October 2017, certain subsidiaries of the Group are exempted from VAT forauxiliary logistics services (warehousing services, excluding delivery services) provided tooverseas enterprises in 2023.
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
| Item | 31/12/2023 | 31/12/2022 |
| Cash | 974,692.93 | 726,960.10 |
| Including: RMB | 2,767.60 | 2,767.60 |
| USD | 225,565.37 | 44,853.90 |
| HKD | 25,259.89 | 26,167.88 |
| BRL | 8,625.45 | 6,536.63 |
| Others | 712,474.62 | 646,634.09 |
| Bank deposits (Note 1) | 13,934,385,410.92 | 11,219,776,605.37 |
| Including: RMB | 8,215,456,953.08 | 8,846,763,966.57 |
| USD | 3,189,067,302.34 | 1,045,085,866.19 |
| EUR | 655,188,558.31 | 745,066,787.31 |
| BRL | 283,264,276.30 | 379,062,088.91 |
| HKD | 1,211,715,308.91 | 141,668,372.90 |
| AUD | 36,381,245.06 | 4,708,056.85 |
| FCFA | 295,232,843.14 | - |
| Others | 48,078,923.78 | 57,421,466.64 |
| Other cash and bank balances (Note 2) | 54,207,918.46 | 553,726,619.61 |
| Including: LKR | 39,287,209.66 | - |
| RMB | 14,920,544.77 | 340,778,819.19 |
| HKD | 164.03 | 212,571,712.02 |
| USD | - | 376,088.40 |
| Funds deposited in Finance Company (Note 3) | 2,090,078,155.93 | 1,841,698,554.32 |
| Total | 16,079,646,178.24 | 13,615,928,739.40 |
| Including: Total amount of funds deposited overseas | 4,143,910,318.92 | 4,012,922,744.09 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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 interest receivable and funds frozen for ETC card business which are included in the
balance of bank deposits at the end of the year amounted to RMB 13,563,157.74 and RMB12,000.00, respectively.
Note 2: The funds frozen for litigation, the balance of the securities account, the restricted banker's
letter of guarantee, and the restricted performance bond, which are included in the balanceof other cash and bank balances at the end of the year, amounted to RMB 1,826,085.98,RMB 7,684,462.32, RMB 4,214,480.40, RMB 40,482,889.76.
Note 3: The funds deposited in Finance Company included the interest receivable amounting to
RMB 933,933.26.
2. Held-for-trading financial assets
| Item | 31/12/2023 | 31/12/2022 |
| Financial assets classified as at FVTPL | 4,568,806,108.84 | 2,998,781,599.63 |
| Including: Investments in debt instruments | 450,209.48 | - |
| Investments in equity investments | - | 135,742.11 |
| Structured deposits | 4,568,355,899.36 | 2,998,645,857.52 |
| Total | 4,568,806,108.84 | 2,998,781,599.63 |
3. Notes receivable
(1) Category of notes receivable
| Category | 31/12/2023 | 31/12/2022 |
| Bank acceptance | 315,150,195.09 | 395,000.00 |
| Commercial acceptance | 10,000,000.00 | 36,000,000.00 |
| Total | 325,150,195.09 | 36,395,000.00 |
Note: In 2023, no provision for bad debts of notes receivable is assessed on an individual basis
and, the acceptor of bank acceptance and commercial acceptance for which provision forbad debts is assessed on a portfolio basis has high credit ratings with no significant creditrisks, therefore, no provision for bad debts is made.
(2) As at 31 December 2023, the Group has no notes receivable pledged.
(3) As at 31 December 2023, the Group has no endorsed or discounted and not yet matured
notes receivable at the balance sheet date.
(4) The Group has no notes receivable written off in 2023.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
(1) Overall situation of accounts receivable
| Category | 31/12/2023 | 31/12/2022 |
| Accounts receivable | 1,194,923,829.34 | 1,370,162,956.88 |
| Les: provision for credit loss | 91,022,363.09 | 94,013,267.44 |
| Total | 1,103,901,466.25 | 1,276,149,689.44 |
(2) Aging analysis of accounts receivable
| Aging | 31/12/2023 | 31/12/2022 |
| Within 1 year | 1,112,613,215.99 | 1,296,002,000.92 |
| 1-2 years | 23,735,983.67 | 11,157,744.62 |
| 2-3 years | 3,139,299.76 | 10,897,749.26 |
| More than 3 years | 55,435,329.92 | 52,105,462.08 |
| Total | 1,194,923,829.34 | 1,370,162,956.88 |
(3) Disclosure of accounts receivable by category
| Credit rating | Expected credit loss rate (%) | 31/12/2023 | 31/12/2022 | ||||
| Gross carrying amount | Bad debt provision | Carrying amount | Gross carrying amount | Bad debt provision | Carrying amount | ||
| A | 0.00-0.10 | 622,585,699.82 | 428,822.70 | 622,156,877.12 | 757,893,845.42 | 254,506.65 | 757,639,338.77 |
| B | 0.10-0.30 | 428,914,672.70 | 552,173.90 | 428,362,498.80 | 437,329,923.88 | 579,435.66 | 436,750,488.22 |
| C | 0.30-50.00 | 62,942,396.67 | 9,638,519.30 | 53,303,877.37 | 91,915,183.34 | 12,581,359.16 | 79,333,824.18 |
| D | 50.00-100.00 | 80,481,060.15 | 80,402,847.19 | 78,212.96 | 83,024,004.24 | 80,597,965.97 | 2,426,038.27 |
| Total | -- | 1,194,923,829.34 | 91,022,363.09 | 1,103,901,466.25 | 1,370,162,956.88 | 94,013,267.44 | 1,276,149,689.44 |
(4) Accounts receivable disclosed by method of bad debt provision:
| Category | 31 December 2023 | 31 December 2022 | ||||||||
| Gross carrying amount | Bad debt provision | Carrying amount | Gross carrying amount | Bad debt provision | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | |||
| Bad debt provision assessed on an individual basis | 80,481,060.15 | 6.74 | 80,402,847.19 | 99.90 | 78,212.96 | 83,024,004.24 | 6.06 | 80,597,965.97 | 97.08 | 2,426,038.27 |
| Bad debt provision assessed on a portfolio basis | 1,114,442,769.19 | 93.26 | 10,619,515.90 | 0.95 | 1,103,823,253.29 | 1,287,138,952.64 | 93.94 | 13,415,301.47 | 1.04 | 1,273,723,651.17 |
| Total | 1,194,923,829.34 | 100.00 | 91,022,363.09 | — — | 1,103,901,466.25 | 1,370,162,956.88 | 100.00 | 94,013,267.44 | — — | 1,276,149,689.44 |
Bad debt provision assessed on an individual basis:
| Name | 31 December 2023 | Reason for provision | ||
| Gross carrying amount | Bad debt provision | Proportion (%) | ||
| Entity 1 | 24,908,308.44 | 24,908,308.44 | 100.00 | Low probability of recovery |
| Entity 2 | 15,228,816.61 | 15,150,603.67 | 99.49 | Low probability of recovery |
| Entity 3 | 7,693,327.33 | 7,693,327.33 | 100.00 | Low probability of recovery |
| Entity 4 | 6,169,500.45 | 6,169,500.45 | 100.00 | Low probability of recovery |
| Entity 5 | 5,923,278.20 | 5,923,278.20 | 100.00 | Low probability of recovery |
| Others | 20,557,829.12 | 20,557,829.10 | 100.00 | Low probability of recovery |
| Total | 80,481,060.15 | 80,402,847.19 | — — | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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 disclosed by method of bad debt provision: - continued
Bad debt provision assessed on a portfolio basis:
| Name | 31 December 2023 | ||
| Accounts receivable | Bad debt provision | Proportion (%) | |
| A | 622,585,699.82 | 428,822.70 | 0.07 |
| B | 428,914,672.70 | 552,173.90 | 0.13 |
| C | 62,942,396.67 | 9,638,519.30 | 15.31 |
| Total | 1,114,442,769.19 | 10,619,515.90 | — — |
(5) Measurement of expected credit loss at an amount equivalent to the lifetime expected credit
loss
| Item | Lifetime expected credit loss (not credit-impaired) | Lifetime expected credit loss (credit-impaired) | Total |
| At 1 January 2023 | 13,415,301.47 | 80,597,965.97 | 94,013,267.44 |
| Gross carrying amount of accounts receivable at 1 January 2023 | |||
| - Transfer to credit-impaired accounts receivable | - | - | - |
| - Reversal of accounts receivable that are not credit-impaired | - | - | - |
| Provision for the year | 3,361,539.37 | 17,614,537.42 | 20,976,076.79 |
| Reversal for the year | -5,995,730.86 | -5,694,956.74 | -11,690,687.60 |
| Effect of changes in the scope of consolidation | - | -5,662,552.89 | -5,662,552.89 |
| Transfer-out due to derecognition of financial assets (including direct write-down) | - | -8,087,700.00 | -8,087,700.00 |
| Other changes | -161,594.08 | 1,635,553.43 | 1,473,959.35 |
| At 31 December 2023 | 10,619,515.90 | 80,402,847.19 | 91,022,363.09 |
(6) Details of bad debt provision
| Category | 31/12/2022 | Changes for the year | 31/12/2023 | ||||
| Provision | Recovery or reversal | Effect of changes in the scope of consolidation | Charge-off or write-off | Other changes | |||
| Bad debt provision assessed on an individual basis | 80,597,965.97 | 17,614,537.42 | -5,694,956.74 | -5,662,552.89 | -8,087,700.00 | 1,635,553.43 | 80,402,847.19 |
| Bad debt provision assessed on a portfolio basis | 13,415,301.47 | 3,361,539.37 | -5,995,730.86 | - | - | -161,594.08 | 10,619,515.90 |
| Total | 94,013,267.44 | 20,976,076.79 | -11,690,687.60 | -5,662,552.89 | -8,087,700.00 | 1,473,959.35 | 91,022,363.09 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
(7) Accounts receivable written off in the year
| Item | Nature | Amount | Reason for write-off | Procedures performed | Arising from related party transactions or not |
| Entity A | Service fees | 8,087,700.00 | Confirmed as irrecoverable | Yes | No |
| Total | — — | 8,087,700.00 | — — | — — | — — |
(8) The top five balances of accounts receivable at the end of the year classified by debtor
| Name of entity | Relationship with the Group | 31/12/2023 | Aging | Proportion of the amount to the total accounts receivable (%) | Bad debt provision at 31/12/2023 |
| Client 1 | Non-related party | 259,396,393.45 | Within 1 year, 1-2 years | 21.71 | 30,325.21 |
| Client 2 | Non-related party | 68,403,654.05 | Within 1 year | 5.72 | 54,946.81 |
| Client 3 | Non-related party | 43,464,824.09 | Within 1 year, 1-2 years | 3.64 | 7,510.99 |
| Client 4 | Non-related party | 29,747,677.62 | Within 1 year | 2.49 | 7,909.61 |
| Client 5 | Non-related party | 29,355,671.89 | Within 1 year | 2.46 | - |
| Total | 430,368,221.10 | 36.02 | 100,692.62 |
5. Receivables financing
(1) Classification of receivables financing
| Item | 31/12/2023 | 31/12/2022 |
| Bank acceptance measured at fair value | 2,001,669.46 | 163,766,913.10 |
(2) As at 31 December 2023, the Group has no pledged receivables financing.
(3) At the end of the year, the Company's receivables financing that have been endorsed or
discounted and have not yet matured at the balance sheet date are as follows:
| Item | Amount derecognized at the end of the year | Amount not derecognized at the end of the year |
| Bank acceptance measured at fair value | 16,291,826.66 | - |
| Total | 16,291,826.66 | - |
(4) In 2023, no provision for bad debt of receivables financing is assessed on an individual basis
and, the acceptor of bank acceptance for which provision for bad debts is assessed on aportfolio basis has high credit ratings with no significant credit risks, therefore, no provisionfor credit loss is made.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
(1) Aging analysis of prepayments
| Aging | 31/12/2023 | 31/12/2022 | ||||
| Gross carrying amount | Proportion (%) | Impairment provision | Gross carrying amount | Proportion (%) | Impairment provision | |
| Within 1 year (inclusive) | 36,798,888.01 | 97.70 | - | 61,917,391.43 | 97.31 | - |
| 1-2 years (inclusive) | 615,427.75 | 1.63 | - | 1,589,158.49 | 2.50 | - |
| 2-3 years (inclusive) | 129,361.04 | 0.34 | - | - | - | - |
| More than 3 years | 120,875.50 | 0.33 | - | 120,875.50 | 0.19 | - |
| Total | 37,664,552.30 | 100.00 | - | 63,627,425.42 | 100.00 | - |
(2) As at 31 December 2023, 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 | 31/12/2023 | Aging | Proportion of the closing balance to the total prepayments (%) | Reason for not being settled |
| Entity 1 | Non-related party | 14,057,775.95 | Within 1 year | 37.32 | Unsettled prepayment for premium |
| Entity 2 | Non-related party | 6,591,641.10 | Within 1 year, 1-2 years, and 2-3 years | 17.50 | Unsettled prepayment for communication charges |
| Entity 3 | Non-related party | 2,298,659.10 | Within 1 year | 6.10 | Unsettled prepayment for premium |
| Entity 4 | Non-related party | 743,362.83 | Within 1 year | 1.97 | Unsettled prepayment for procurement |
| Entity 5 | Non-related party | 641,646.87 | Within 1 year | 1.70 | Unsettled prepayment for procurement |
| Total | 24,333,085.85 | 64.59 |
7. Other receivables
7.1 Presentation of other receivables
| Item | 31/12/2023 | 31/12/2022 |
| Dividends receivable | 343,386,866.06 | 416,040,485.62 |
| Other receivables | 596,628,127.95 | 532,801,608.68 |
| Total | 940,014,994.01 | 948,842,094.30 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
(1) Presentation of dividends receivable
| Name of investee | 31/12/2023 | 31/12/2022 |
| China Nanshan Development (Group) Incorporation ("Nanshan Group") | 203,577,000.00 | 240,591,000.00 |
| Zhanjiang Merchants Port City Investment Co., Ltd. ("Merchants Port City") | 38,809,044.77 | 41,847,044.77 |
| Dalian Port Logistics Network Co., Ltd. | 30,605,256.76 | - |
| Yingkou Gangxin Technology Co., Ltd. | 23,881,213.75 | - |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 13,449,001.16 | 18,449,001.16 |
| China Ocean Shipping Agency (Shenzhen) Co., Ltd. | 11,232,000.00 | - |
| Tin-can Island Container Terminal Ltd | 21,960,680.22 | 65,121,449.40 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | - | 50,000,000.00 |
| Others | 216,400.00 | 448,447.23 |
| Sub-total | 343,730,596.66 | 416,456,942.56 |
| Less: Bad debt provision | 343,730.60 | 416,456.94 |
| Carrying amount | 343,386,866.06 | 416,040,485.62 |
(2) Significant dividends receivable aged more than 1 year
| Name of investee | 31/12/2023 | 31/12/2022 | Aging | Reason for not being recovered | Whether bad debts have been incurred and the basis for determination |
| Nanshan Group | 129,549,000.00 | 111,042,000.00 | 1-2 years | Undergoing relevant formalities, expected to be recovered by the end of 2024 | 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 2023 | 416,456.94 | - | - | 416,456.94 |
| Balance at 1 January 2023 | ||||
| - Transfer to Stage 2 | - | - | - | - |
| - Transfer to Stage 3 | - | - | - | - |
| - Reverse to Stage 2 | - | - | - | - |
| - Reverse to Stage 1 | - | - | - | - |
| Provision for the year | - | - | - | - |
| Reversal for the year | -72,726.34 | - | - | -72,726.34 |
| Transfer-out due to derecognition of financial assets (including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| At 31 December 2023 | 343,730.60 | - | - | 343,730.60 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
(4) Details of bad debt provision
| Category | 31/12/2022 | Changes for the year | 31/12/2023 | |||
| Provision | Recovery or reversal | Charge-off or write-off | Other changes | |||
| Bad debt provision assessed on an individual basis | - | - | - | - | - | - |
| Bad debt provision assessed on a portfolio basis | 416,456.94 | - | -72,726.34 | - | - | 343,730.60 |
| Total | 416,456.94 | - | -72,726.34 | - | - | 343,730.60 |
7.3 Other receivables
(1) Aging analysis of other receivables
| Aging | 31/12/2023 | 31/12/2022 | ||||
| Other receivables | Bad debt provision | Proportion (%) | Other receivables | Bad debt provision | Proportion (%) | |
| Within 1 year | 261,380,065.65 | 3,386,613.18 | 1.30 | 487,428,214.83 | 229,150,234.71 | 47.01 |
| 1-2 years | 268,634,561.16 | 189,669,720.48 | 70.61 | 192,100,283.58 | 4,690,780.38 | 2.44 |
| 2-3 years | 189,029,374.18 | 4,675,136.05 | 2.47 | 12,444,128.52 | 9,740,862.33 | 78.28 |
| More than 3 years | 834,322,127.22 | 759,006,530.55 | 90.97 | 844,098,122.57 | 759,687,263.40 | 90.00 |
| Total | 1,553,366,128.21 | 956,738,000.26 | 1,536,070,749.50 | 1,003,269,140.82 | ||
(2) Disclosure of other receivables by nature
| Item | 31/12/2023 | 31/12/2022 |
| Operation compensation (Note 1) | 857,551,782.45 | 859,677,826.43 |
| Advance payments | 264,603,548.43 | 295,592,304.09 |
| Land compensation (Note 2) | 89,630,000.00 | 89,630,000.00 |
| Guarantees and deposits | 24,853,374.42 | 26,402,747.81 |
| Special subsidy | 24,800,000.00 | 31,716,257.00 |
| Others | 291,927,422.91 | 233,051,614.17 |
| Sub-total | 1,553,366,128.21 | 1,536,070,749.50 |
| Less: Bad debt provision | 956,738,000.26 | 1,003,269,140.82 |
| Total | 596,628,127.95 | 532,801,608.68 |
Note 1: It represents the operation compensation receivable by a subsidiary of the Company
from the holding company of its minority shareholder in accordance with the agreement.As at 31 December 2023, a bad debt provision has been made for the accumulatedoutstanding compensation amounting to RMB 857,551,782.45.
Note 2: On 9 October 2021, Zhanjiang Port, a subsidiary of the Company, entered into the
Agreement on Recovery of State-owned Land Use Rights with the local government.Pursuant to the Agreement, Zhanjiang Port shall return the land of approximately 195.68mu located in Zhanjiang Comprehensive Bonded Zone on the east of Shugang Avenue,which is amounting to RMB 89,630,000.00. The above-mentioned land has beenreturned before 31 December 2021. As at 31 December 2023, the above-mentioned landcompensation of RMB 89,630,000.00 has not been recovered yet.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
| Credit rating | Expected credit loss rate (%) | 31/12/2023 | 31/12/2022 | ||||||
| 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 | 596,631,116.95 | - | - | 596,631,116.95 | 532,760,873.61 | - | - | 532,760,873.61 |
| B | 0.10-0.30 | - | - | - | - | - | - | - | - |
| C | 0.30-50.00 | - | - | - | - | - | - | - | - |
| D | 50.00-100.00 | - | - | 956,735,011.26 | 956,735,011.26 | - | - | 1,003,309,875.89 | 1,003,309,875.89 |
| Gross carrying amount | —— | 596,631,116.95 | - | 956,735,011.26 | 1,553,366,128.21 | 532,760,873.61 | - | 1,003,309,875.89 | 1,536,070,749.50 |
| Bad debt provision | —— | 2,989.00 | - | 956,735,011.26 | 956,738,000.26 | 24,451.35 | - | 1,003,244,689.47 | 1,003,269,140.82 |
| Carrying amount | —— | 596,628,127.95 | - | - | 596,628,127.95 | 532,736,422.26 | - | 65,186.42 | 532,801,608.68 |
Significant other receivables for which bad debt provision is assessed on an individual basis (credit rating of D)
| Name | 31/12/2023 | Bad debt provision | ECL rate (%) | Reason for provision |
| Entity 1 | 857,551,782.45 | 857,551,782.45 | 100.00 | Expected to be unrecoverable (Note) |
| Entity 2 | 64,841,250.09 | 64,841,250.09 | 100.00 | Expected to be unrecoverable |
| Entity 3 | 14,000,000.00 | 14,000,000.00 | 100.00 | Expected to be unrecoverable |
| Others | 20,341,978.72 | 20,341,978.72 | 100.00 | Expected to be unrecoverable |
| Total | 956,735,011.26 | 956,735,011.26 | — — | — — |
Note: Refer to Note (VIII) 7.3(2).
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
| 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 2023 | 24,451.35 | - | 1,003,244,689.47 | 1,003,269,140.82 |
| Balance of other receivables at 1 January 2023 | ||||
| - Transfer to Stage 2 | - | - | - | - |
| - Transfer to Stage 3 | - | - | - | - |
| - Reverse to Stage 2 | - | - | - | - |
| - Reverse to Stage 1 | 6,000.00 | - | -6,000.00 | - |
| Provision for the year | 36,129.03 | - | 3,459,687.18 | 3,495,816.21 |
| Reversal for the year | -27,462.35 | - | -47,267,828.40 | -47,295,290.75 |
| Effect of changes in the scope of consolidation | -36,129.03 | - | -545,545.45 | -581,674.48 |
| Charge-off for the year | - | - | - | - |
| Write-off for the year | - | - | -73,074.00 | -73,074.00 |
| Other changes | - | - | -2,076,917.54 | -2,076,917.54 |
| At 31 December 2023 | 2,989.00 | - | 956,735,011.26 | 956,738,000.26 |
(5) Details of bad debt provision
| Category | 01/01/2023 | Changes for the year | 31/12/2023 | ||||
| Provision | Recovery or reversal | Effect of changes in the scope of consolidation | Charge-off or write-off | Other changes | |||
| Bad debt provision assessed on an individual basis | 1,003,244,689.47 | 3,459,687.18 | -47,273,828.40 | -545,545.45 | -73,074.00 | -2,076,917.54 | 956,735,011.26 |
| Bad debt provision assessed on a portfolio basis | 24,451.35 | 36,129.03 | -21,462.35 | -36,129.03 | - | - | 2,989.00 |
| Total | 1,003,269,140.82 | 3,495,816.21 | -47,295,290.75 | -581,674.48 | -73,074.00 | -2,076,917.54 | 956,738,000.26 |
Among which, the bad debt provision recovered or reversed for the period that is significant inamount is listed as below:
| Name | Amount recovered or reversed | Reason for retrieve | Recovered through | Basis to determine the original proportion of bad debt provision and its reasonableness |
| Entity 4 | 47,169,811.32 | Improvement in debtor's operations | Cash | Based on prior years' financial position |
| Total | 47,169,811.32 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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
(6) 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 5 | Rents receivable | 73,074.00 | The counterparty was unable to make payments | Write-off upon approval | No |
| Total | — — | 73,074.00 | — — | — — | — — |
(7) The top five balances of other receivables at the end of the year classified by debtor
| Name of entity | Relationship with the Group | Nature | 31/12/2023 | Aging | Proportion to total other receivables (%) | Closing balance of provision for credit loss |
| Entity 1 | Non-related party | Operation compensation | 857,551,782.45 | Within 1 year, more than 3 years | 55.21 | 857,551,782.45 |
| Entity 2 | Non-related party | Advance payments | 122,674,255.48 | Within 1 year, 1-2 years, 2-3 years | 7.90 | - |
| Entity 3 | Non-related party | Land compensation | 89,630,000.00 | 2-3 years | 5.77 | - |
| Entity 4 | Non-related party | Advance payments | 64,841,250.09 | Within 1 year, 1-2 years, 2-3 years, more than 3 years | 4.17 | 64,841,250.09 |
| Entity 5 | Non-related party | Advance payments | 59,698,841.66 | Within 1 year | 3.84 | - |
| Total | — — | — — | 1,194,396,129.68 | — — | 76.89 | 922,393,032.54 |
8. Inventories
(1) Category of inventories
| Item | 31/12/2023 | 31/12/2022 | ||||
| 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 | 217,097,512.98 | 1,234,628.38 | 215,862,884.60 | 196,425,573.04 | 1,326,130.64 | 195,099,442.40 |
| Finished goods | 2,520,205.91 | - | 2,520,205.91 | 17,248,970.37 | - | 17,248,970.37 |
| Others | 515,102.36 | - | 515,102.36 | 12,774,408.71 | - | 12,774,408.71 |
| Total | 220,132,821.25 | 1,234,628.38 | 218,898,192.87 | 226,448,952.12 | 1,326,130.64 | 225,122,821.48 |
(2) Provision for decline in value of inventories
| Category | 1/1/2023 | Increase | Decrease | Effect of translation of financial statements denominated in foreign currencies | 31/12/2023 | ||
| Provision | Others | Reversal or charge-off | Others | ||||
| Raw materials | 1,326,130.64 | - | - | 99,456.13 | - | 7,953.87 | 1,234,628.38 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Inventories - continued
(2) Provision for decline in value of inventories - continued
Provision for decline in value of inventories is made on an item-by-item basis and no provision fordecline in value of inventories is made on a portfolio basis. Provision for decline in value ofinventories is reversed in the current year due to the rebound in value of inventories.
(3) As at 31 December 2023, the Group has no capitalized borrowing cost in the balance of
inventories.
9. Non-current assets due within one year
(1) Presentation of non-current assets due within one year
| Item | 31/12/2023 | 31/12/2022 |
| Long-term receivables due within one year | 17,468,849.83 | 903,128,422.35 |
| Less: Bad debt provision | 17,468.85 | 903,128.42 |
| Carrying amount | 17,451,380.98 | 902,225,293.93 |
(2) Provision for bad debts
| 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 2023 | 903,128.42 | - | - | 903,128.42 |
| Gross carrying amount of long-term receivables at 1 January 2023 | ||||
| - Transfer to Stage 2 | - | - | - | - |
| - Transfer to Stage 3 | - | - | - | - |
| - Reverse to Stage 2 | - | - | - | - |
| - Reverse to Stage 1 | - | - | - | - |
| Provision for the year | 6,200.00 | - | - | 6,200.00 |
| Reversal for the year | -891,859.57 | - | - | -891,859.57 |
| Transfer-out due to derecognition of financial assets (including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| At 31 December 2023 | 17,468.85 | - | - | 17,468.85 |
(3) Details of bad debt provision
| Category | 31/12/2022 | Changes for the year | 31/12/2023 | |||
| Provision | Recovery or reversal | Charge-off or write-off | Other changes | |||
| Bad debt provision assessed on a portfolio basis | 903,128.42 | 6,200.00 | -891,859.57 | - | - | 17,468.85 |
| Total | 903,128.42 | 6,200.00 | -891,859.57 | - | - | 17,468.85 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
10. Other current assets
(1) Category of other current assets
| Item | 31/12/2023 | 31/12/2022 |
| Input tax to be deducted and certified | 115,121,766.13 | 70,627,183.33 |
| Prepaid taxes | 71,771,659.09 | 98,329,205.73 |
| Others | 2,780,075.65 | 16,946,751.47 |
| Total | 189,673,500.87 | 185,903,140.53 |
11. Long-term receivables
(1) Details of long-term receivables
| Item | 31/12/2023 | 31/12/2022 | Range of discount rate at the end of year | ||||
| Gross carrying amount | Bad debt provision | Carrying amount | Gross carrying amount | Bad debt provision | Carrying amount | ||
| Advances to shareholders (Note 1) | 1,167,470,819.35 | 1,167,470.82 | 1,166,303,348.53 | 3,864,736,673.31 | 3,864,736.67 | 3,860,871,936.64 | 3.65%-8.50% |
| Guarantees for finance leases | 10,695,876.01 | 10,695.88 | 10,685,180.13 | 10,659,515.88 | 10,659.52 | 10,648,856.36 | 0-5.37% |
| Land compensation receivable (Note 2) | 2,691,932,000.00 | - | 2,691,932,000.00 | 2,692,032,000.00 | - | 2,692,032,000.00 | - |
| Others | 4,996,969.31 | - | 4,996,969.31 | - | - | - | - |
| Total | 3,875,095,664.67 | 1,178,166.70 | 3,873,917,497.97 | 6,567,428,189.19 | 3,875,396.19 | 6,563,552,793.00 | - |
| Less: Long-term receivables due within 1 year | 17,468,849.83 | 17,468.85 | 17,451,380.98 | 903,128,422.35 | 903,128.42 | 902,225,293.93 | - |
| Long-term receivables due after 1 year | 3,857,626,814.84 | 1,160,697.85 | 3,856,466,116.99 | 5,664,299,766.84 | 2,972,267.77 | 5,661,327,499.07 | - |
Note 1: It mainly represents the aggregate principal and interest receivable from Port of Newcastle
and Terminal Link SAS, equivalent to RMB 921,402,438.00 and 211,768,361.35,respectively.
On 14 June 2018, China Merchants Port Holdings Company ("CM Port"), a subsidiary ofthe Company, provided a long-term loan to Port of Newcastle, which matures in 2023 andhas been extended to 31 December 2034 as stipulated in an agreement entered into duringthe year. The loan carries interest at a rate of weighted average interest rate on debt asdetermined by local authority of Port of Newcastle plus 0.5%.
On 31 May 2023, CM Port, a subsidiary of the Company, provided a long-term loan toTerminal Link SAS for making additional capital injection to Saigang project and chargedinterest to Terminal Link SAS at an interest rate of 6.15%.
Note 2: On 5 November 2019, Shantou CM Port Group Co., Ltd. ("Shantou Port") entered into
the Contract for the Acquisition of State-Owned Land Use Rights in Shantou with ShantouLand Reserve Center. Pursuant to the contract, the land and attached buildings ofapproximately 370.96 mu located in Zhuchi Deepwater Port on the south of ZhongshanEast Road of Shantou should be returned to Shantou Land Reserve Center by ShantouPort, which is amounting to RMB1,558,032,000.00. Among them, 183.63 mu of land andattached buildings have been transferred in 2019, and the remaining 187.33 mu of landand attached buildings have been transferred in 2020. As at 31 December 2023, the landcompensation totalling RMB1,158,032,000.00 has not yet been recovered.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Long-term receivables - continued
(1) Details of long-term receivables - continued
Note 2: - continued
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 2023, 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 amountingto RMB1,344,000,000.00, and the remaining 328.78 mu of land and attached buildingshave not been transferred. As at 31 December 2023, the land compensation totalling RMB1,333,900,000.00 has not yet been recovered.
(2) Long-term receivables disclosed by method of bad debt provision
| Category | 31 December 2023 | 31 December 2022 | ||||||||
| Gross carrying amount | Bad debt provision | Carrying amount | Gross carrying amount | Bad debt provision | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | Amount | Proportion (%) | |||
| Bad debt provision assessed on a portfolio basis | 3,875,095,664.67 | 100.00 | 1,178,166.70 | 0.03 | 3,873,917,497.97 | 6,567,428,189.19 | 100.00 | 3,875,396.19 | 0.06 | 6,563,552,793.00 |
| Total | 3,875,095,664.67 | 100.00 | 1,178,166.70 | — — | 3,873,917,497.97 | 6,567,428,189.19 | 100.00 | 3,875,396.19 | — — | 6,563,552,793.00 |
Bad debt provision assessed on a portfolio basis
| Name | 31 December 2023 | ||
| Accounts receivable | Bad debt provision | Proportion (%) | |
| A | 3,875,095,664.67 | 1,178,166.70 | 0.03 |
| Total | 3,875,095,664.67 | 1,178,166.70 | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Long-term receivables - continued
(3) 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 2023 | 3,875,396.19 | - | - | 3,875,396.19 |
| Gross carrying amount of long-term receivables at 1 January 2023 | ||||
| - Transfer to Stage 2 | - | - | - | - |
| - Transfer to Stage 3 | - | - | - | - |
| - Reverse to Stage 2 | - | - | - | - |
| - Reverse to Stage 1 | - | - | - | - |
| Provision for the year | 921,438.82 | - | - | 921,438.82 |
| Reversal for the year | -3,618,668.31 | - | - | -3,618,668.31 |
| Charge-off for the year | - | - | - | - |
| Write-off for the year | - | - | - | - |
| Other changes | - | - | - | - |
| At 31 December 2023 | 1,178,166.70 | - | 1,178,166.70 | |
(4) Details of bad debt provision
| Category | 1/1/2023 | Changes for the year | 31/12/2023 | |||
| Provision | Recovery or reversal | Charge-off or write-off | Effect of changes in the scope of consolidation | |||
| Advances to shareholders | 3,864,736.67 | 921,402.46 | -3,618,668.31 | - | - | 1,167,470.82 |
| Guarantees for finance leases | 10,659.52 | 36.36 | - | - | - | 10,695.88 |
| Land compensation receivable | - | - | - | - | - | - |
| Others | - | - | - | - | - | - |
| Total | 3,875,396.19 | 921,438.82 | -3,618,668.31 | - | - | 1,178,166.70 |
(5) There are no long-term receivables written off during the year.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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 equity investments
(1) Details of long-term equity investments
| Investees | Accounting method | 31/12/2022 | Changes for the year | 31/12/2023 | 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 | 2,787,204,745.37 | - | - | 186,208,262.73 | -847,649,041.64 | - | -123,177,188.28 | - | - | 43,254,636.78 | 2,045,841,414.96 | - |
| Port of Newcastle | Equity method | 2,048,681,775.65 | - | - | -10,864,327.20 | -22,300,558.83 | - | - | - | - | 59,506,810.29 | 2,075,023,699.91 | - |
| Others | Equity method | 4,880,906,534.70 | 5,720,923.74 | -33,913,627.22 | 221,260,745.53 | -9,322,791.00 | -1,228,997.17 | -239,356,160.34 | - | - | 13,061,592.11 | 4,837,128,220.35 | - |
| Sub-total | 9,716,793,055.72 | 5,720,923.74 | -33,913,627.22 | 396,604,681.06 | -879,272,391.47 | -1,228,997.17 | -362,533,348.62 | - | - | 115,823,039.18 | 8,957,993,335.22 | - | |
| II. Associates | |||||||||||||
| Shanghai International Port (Group) Co., Ltd. (hereinafter referred to as "Shanghai Port Group") | Equity method | 34,171,898,201.17 | - | - | 3,700,844,097.27 | -15,345,010.77 | 269,871,649.40 | -914,383,798.30 | - | - | - | 37,212,885,138.77 | - |
| Nanshan Group | Equity method | 6,377,197,726.21 | - | - | 214,805,574.66 | 43,279,577.18 | 757,245.35 | -74,028,000.00 | - | - | -2,767,082.88 | 6,559,245,040.52 | - |
| Terminal Link SAS | Equity method | 6,395,609,168.37 | - | - | 221,059,137.39 | 110,006,179.63 | - | -381,826,231.04 | - | - | 108,192,659.85 | 6,453,040,914.20 | - |
| Liaoning Port Co., Ltd. ("Liaoning Port") （Note） | Equity method | 4,021,162,878.74 | - | - | 151,571,456.52 | 1,605,319.83 | 2,186,919.86 | -47,236,402.20 | - | - | -5,132,381.49 | 4,124,157,791.26 | 359,989,686.74 |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | Equity method | 7,403,186,521.01 | - | - | 42,538,797.17 | - | - | - | - | - | - | 7,445,725,318.18 | - |
| Ningbo Zhoushan Port Company Limited ("Ningbo Zhoushan") | Equity method | 17,974,630,545.05 | - | - | 1,049,986,813.85 | 20,609,205.32 | -23,196,655.58 | -390,875,794.33 | - | - | - | 18,631,154,114.31 | - |
| Others | Equity method | 6,303,815,822.78 | 892,560,547.98 | -5,123,348.92 | 201,597,028.04 | -15,914,070.05 | -191,087.11 | -128,730,841.44 | - | - | 33,902,072.53 | 7,281,916,123.81 | 2,344,389.02 |
| Sub-total | 82,647,500,863.33 | 892,560,547.98 | -5,123,348.92 | 5,582,402,904.90 | 144,241,201.14 | 249,428,071.92 | -1,937,081,067.31 | - | - | 134,195,268.01 | 87,708,124,441.05 | 362,334,075.76 | |
| Total | 92,364,293,919.05 | 898,281,471.72 | -39,036,976.14 | 5,979,007,585.96 | -735,031,190.33 | 248,199,074.75 | -2,299,614,415.93 | - | - | 250,018,307.19 | 96,666,117,776.27 | 362,334,075.76 | |
Note: The provision for the impairment of Liaoning Port is made in previous years. No evidence of impairment was found this year, and no
impairment test was conducted.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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 equity investments - continued
(2) Impairment testing of significant long-term equity investments
The recoverable amount is determined at the present value of expected future cash flows
| Item | Carrying amount | Recoverable amount | Projection period | Key parameters for projection period | Basis to determine the parameters for projection period | Key parameters for steady period | Basis to determine the key parameters for steady period |
| Terminal Link SAS(note) | 6,453,040,914.20 | 7,453,973,943.83 | 5 years | Pre-tax discount rate, 7.8%~12.2% | The discount rate is a pre-tax discount rate that reflects the specific risks of the underlying asset group or combination of asset groups | Perpetual growth rate, 1.559%~5.010% | Forward inflation rate published by BNP Paribas |
Note: The Terminal Link SAS Asset Group consists of five asset groups which are tested for impairment during the year with no impairment identified.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Investments in other equity instruments
(1) Details of investments in other equity instruments
| Item | 1/1/2023 | Changes for the year | 31/12/2023 | Dividend income recognized for the year | Accumulated gains included in other comprehensive income | Accumulated losses included in other comprehensive income | Reasons for designation as at fair value through other comprehensive income | ||||
| Addition | Reduction | Gains included in other comprehensive income for the year | Losses included in other comprehensive income for the year | Effect of changes in the scope of consolidation | |||||||
| China Ocean Shipping Agency Shenzhen Co., Ltd. | 144,301,178.28 | - | - | 3,387,985.97 | - | - | 147,689,164.25 | 20,056,500.00 | 134,179,164.25 | - | It is a non-trading equity instrument investment |
| Others | 27,644,096.74 | - | - | 33,084.28 | -215,602.37 | -17,689,094.74 | 9,772,483.91 | - | 3,873,283.91 | -3,128,300.00 | It is a non-trading equity instrument investment |
| Total | 171,945,275.02 | - | - | 3,421,070.25 | -215,602.37 | -17,689,094.74 | 157,461,648.16 | 20,056,500.00 | 138,052,448.16 | -3,128,300.00 | —— |
(2) There are no other equity instruments derecognized for the year.
| Item | Accumulated gains transferred to retained earnings due to derecognition | Accumulated losses transferred to retained earnings due to derecognition | Reason for derecognition |
| Others | - | - | Changes in the scope of consolidation |
| Total | - | - | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Other non-current financial assets
| Item | 31/12/2023 | 31/12/2022 |
| Financial assets at FVTPL | 877,576,442.83 | 1,745,740,896.41 |
| Including: Investments in equity instruments | 877,576,442.83 | 1,745,740,896.41 |
| Including: Antong Holdings Co., Ltd. ("Antong Holdings") (Note) | - | 950,321,309.06 |
| Qingdao Port International Co., Ltd. | 850,222,729.23 | 767,553,775.66 |
| Others | 27,353,713.60 | 27,865,811.69 |
Note: As at 31 December 2023, the Company and Zhanjiang Zhongli Ocean Shipping Tally Co.,
Ltd., a subsidiary of the Company, together hold 6.83% equity interest in Antong Holdingsand has appointed one director to Antong Holdings. Therefore, the Company has significantinfluence over Antong Holdings and has changed its equity investment in Antong Holdingsfrom other non-current financial assets to long-term equity investments in an associate.
15. Investment properties
(1) Investment properties measured at cost
| Item | Land use rights | Buildings and structures | Total |
| I. Cost | |||
| 1. At 1 January 2023 | 128,269,825.38 | 6,177,602,852.51 | 6,305,872,677.89 |
| 2. Increase for the year | 8,388,170.37 | 13,843,232.32 | 22,231,402.69 |
| (1) Purchases | - | 1,002,852.62 | 1,002,852.62 |
| (2) Transfer from fixed assets | - | 12,840,379.70 | 12,840,379.70 |
| (3) Transfer from intangible assets | 8,388,170.37 | - | 8,388,170.37 |
| 3. Decrease for the year | - | - | - |
| 4. At 31 December 2023 | 136,657,995.75 | 6,191,446,084.83 | 6,328,104,080.58 |
| II. Accumulated depreciation and amortization | |||
| 1. At 1 January 2023 | 43,054,991.58 | 1,139,127,566.75 | 1,182,182,558.33 |
| 2. Increase for the year | 4,514,324.10 | 183,032,229.36 | 187,546,553.46 |
| (1) Provision for the year | 2,571,200.74 | 180,261,875.48 | 182,833,076.22 |
| (2) Transfer from fixed assets | - | 2,770,353.88 | 2,770,353.88 |
| (3) Transfer from intangible assets | 1,943,123.36 | - | 1,943,123.36 |
| 3. Decrease for the year | - | - | - |
| 4. At 31 December 2023 | 47,569,315.68 | 1,322,159,796.11 | 1,369,729,111.79 |
| III. Impairment provision | |||
| 1. At 1 January 2023 | - | - | - |
| 2. Increase for the year | - | - | - |
| 3. Decrease for the year | - | - | - |
| 4. At 31 December 2023 | - | - | - |
| IV. Carrying amount | |||
| 1. At 31 December 2023 | 89,088,680.07 | 4,869,286,288.72 | 4,958,374,968.79 |
| 2. At 1 January 2023 | 85,214,833.80 | 5,038,475,285.76 | 5,123,690,119.56 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
15. Investment properties - continued
(2) Investment properties without ownership certificates
| Item | Carrying amount at 31/12/2023 | Carrying amount at 31/12/2022 | Reasons for not obtaining certificate of title | Expected time of completion |
| Buildings, structures, and land use rights | 24,363,424.74 | 24,008,665.10 | Some buildings and structures have not yet obtained certificates of land use rights | The certificate of title is underway |
16. Fixed assets
16.1 Summary of fixed assets
| Item | 31/12/2023 | 31/12/2022 |
| Fixed assets | 28,986,501,937.59 | 32,033,317,707.66 |
| Disposal of fixed assets | 36,388.76 | 8,375.84 |
| Total | 28,986,538,326.35 | 32,033,326,083.50 |
16.2 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 2023 | 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 |
| 2. Increase for the year | 355,653,533.35 | 5,819,641.52 | 946,224,073.20 | 15,977,020.14 | 1,323,674,268.21 |
| (1) Purchase | 37,782,655.58 | 31,964.06 | 322,325,677.27 | 13,660,825.82 | 373,801,122.73 |
| (2) Transfer from development expenditure | 6,341,635.07 | - | 8,723,850.63 | - | 15,065,485.70 |
| (3) Transfer from construction in progress | 311,529,242.70 | 1,453,075.86 | 344,378,153.65 | 2,316,194.32 | 659,676,666.53 |
| (4) Transfer from right-of-use assets | - | - | 270,796,391.65 | - | 270,796,391.65 |
| (5) Transfer from other accounts | - | 4,334,601.60 | - | - | 4,334,601.60 |
| 3. Decrease for the year | 2,763,230,873.66 | 261,672,874.02 | 1,842,920,457.17 | 60,681,086.42 | 4,928,505,291.27 |
| (1) Disposal or retirement | 42,219,921.65 | 16,064,482.96 | 139,255,106.92 | 52,104,672.51 | 249,644,184.04 |
| (2) Transfer to investment properties | - | 12,840,379.70 | - | - | 12,840,379.70 |
| (3) Effect of changes in the scope of consolidation | 2,720,840,274.13 | 232,768,011.36 | 1,701,179,778.57 | 8,576,413.91 | 4,663,364,477.97 |
| (4) Transfer to right-of-use assets | 170,677.88 | - | 2,485,571.68 | - | 2,656,249.56 |
| 4. Adjustments to the amount carried forward | -1,058,728.12 | - | 184,445.13 | 83,718.00 | -790,564.99 |
| 5. Reclassification | -57,793,950.52 | 51,434,642.27 | 6,359,308.25 | - | - |
| 6. Effect of translation of financial statements denominated in foreign currencies | 227,485,569.31 | 2,918,280.50 | 164,288,140.60 | 13,423,975.49 | 408,115,965.90 |
| 7. At 31 December 2023 | 31,137,311,072.50 | 1,825,694,719.33 | 16,741,310,306.89 | 2,283,384,722.04 | 51,987,700,820.76 |
| II. Accumulated depreciation | — — | — — | — — | — — | — — |
| 1. At 1 January 2023 | 10,720,998,321.19 | 635,722,974.00 | 10,636,302,077.50 | 1,095,290,493.80 | 23,088,313,866.49 |
| 2. Increase for the year | 963,017,607.23 | 78,532,518.38 | 930,468,443.58 | 108,868,177.01 | 2,080,886,746.20 |
| (1) Provision | 963,017,607.23 | 74,197,916.78 | 837,465,030.34 | 108,868,177.01 | 1,983,548,731.36 |
| (2) Transfer from right-of-use assets | - | - | 93,003,413.24 | - | 93,003,413.24 |
| (3) Transfer from other accounts | - | 4,334,601.60 | - | - | 4,334,601.60 |
| 3. Decrease for the year | 1,131,042,660.07 | 90,575,216.73 | 1,243,641,341.44 | 55,932,196.77 | 2,521,191,415.01 |
| (1) Disposal or retirement | 31,267,071.50 | 14,971,013.85 | 121,150,414.20 | 49,154,025.33 | 216,542,524.88 |
| (2) Transfer to investment properties | - | 2,770,353.88 | - | - | 2,770,353.88 |
| (3) Effect of changes in the scope of consolidation | 1,099,775,588.57 | 72,833,849.00 | 1,122,490,927.24 | 6,778,171.44 | 2,301,878,536.25 |
| 4. Reclassification | -1,509,396.69 | 625,422.16 | 883,974.53 | - | - |
| 5. Effect of translation of financial statements denominated in foreign currencies | 46,017,171.79 | 713,896.63 | 88,553,012.49 | 4,401,121.50 | 139,685,202.41 |
| 6. At 31 December 2023 | 10,597,481,043.45 | 625,019,594.44 | 10,412,566,166.66 | 1,152,627,595.54 | 22,787,694,400.09 |
| III. Impairment provision | — — | — — | — — | — — | — — |
| 1. At 1 January 2023 | 57,546,986.63 | 5,985,164.85 | 42,717.28 | - | 63,574,868.76 |
| 2. Increase for the year | 138,917,159.59 | 3,429,362.62 | 7,577,097.23 | - | 149,923,619.44 |
| 3. Disposal or retirement for the year | - | - | - | - | - |
| 4. Effect of translation of financial statements denominated in foreign currencies | - | - | 5,994.88 | - | 5,994.88 |
| 5. At 31 December 2023 | 196,464,146.22 | 9,414,527.47 | 7,625,809.39 | - | 213,504,483.08 |
| IV. Carrying amount | — — | — — | — — | — — | — — |
| 1. At 31 December 2023 | 20,343,365,882.83 | 1,191,260,597.42 | 6,321,118,330.84 | 1,130,757,126.50 | 28,986,501,937.59 |
| 2. At 1 January 2023 | 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Fixed assets - continued
16.2 Fixed assets - continued
(2) The Group has no fixed assets that are temporarily idle as at 31 December 2023.
(3) Fixed assets leased out under operating leases
| Item | Carrying amount at 31/12/2023 | Carrying amount at 31/12/2022 |
| Buildings and structures | 190,979,949.85 | 196,480,507.61 |
| Port and terminal facilities | 35,709,105.32 | 33,260,157.31 |
| Machinery and equipment, furniture, fixture and other equipment | 5,012,091.76 | 7,920,761.45 |
| Total | 231,701,146.93 | 237,661,426.37 |
(4) Fixed assets without ownership certificates
| Item | Carrying amount at 31/12/2023 | Carrying amount at 31/12/2022 | Remark |
| Buildings, structures, port and terminal facilities | 1,539,024,375.12 | 1,786,308,720.95 | 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 | 4,947,824,713.22 | |
| 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 | 249,644,184.04 | |
| Net book value of fixed assets disposed and retired in the year | 33,101,659.16 | |
| Loss on disposal or retirement of fixed assets in the year | 18,876,795.60 |
(6) The details of the Group's fixed assets with restricted ownership as at 31 December 2023
are set out in Note (VIII) 64.
(7) Impairment testing of fixed assets
The recoverable amount is determined at the present value of expected future cash flows
| Item | Carrying amount | Recoverable amount | Amount of impairment | Projection period | Key parameters for projection period | Key parameters for steady period | Basis to determine the key parameters for steady period |
| Zhoushan RoRo Asset Group (Note) | 397,078,829.12 | 208,048,600.00 | 189,030,229.12 | 10 years | Pre-tax discount rate, 12.01% | Perpetual growth rate, 2.20% | China's forward inflation rate published by the World Bank |
| Total | 397,078,829.12 | 208,048,600.00 | 189,030,229.12 | — — | — — | — — | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Fixed assets - continued
16.2 Fixed assets - continued
(7) Impairment testing of fixed assets - continued
Note: Zhoushan RoRo Asset Group include fixed assets and intangible assets, of which fixed
assets are impaired at the amount of RMB 147,557,081.15 and intangible assets areimpaired at the amount of RMB 41,473,147.97.
16.3 Disposal of fixed assets
| Item | 31/12/2023 | 31/12/2022 |
| Machinery and equipment, furniture, fixture and other equipment | 36,388.76 | 8,375.84 |
| Total | 36,388.76 | 8,375.84 |
17. Construction in progress
(1) Presentation of construction in progress
| Item | 31/12/2023 | 31/12/2022 |
| Construction in progress | 2,907,014,186.24 | 2,405,872,478.61 |
| Materials for construction of fixed assets | 2,803,095.22 | 7,971,929.03 |
| Total | 2,909,817,281.46 | 2,413,844,407.64 |
(2) Details of construction in progress
| Item | 31/12/2023 | 31/12/2022 | ||||
| Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
| Port and terminal facilities | 2,380,800,758.33 | - | 2,380,800,758.33 | 1,991,321,268.14 | - | 1,991,321,268.14 |
| Infrastructure | 252,638,193.22 | - | 252,638,193.22 | 201,444,537.67 | - | 201,444,537.67 |
| Berths and yards | 178,174,354.90 | - | 178,174,354.90 | 18,728,577.14 | - | 18,728,577.14 |
| Cargo ships under construction | 1,726,548.68 | - | 1,726,548.68 | - | - | - |
| Others | 93,674,331.11 | - | 93,674,331.11 | 194,378,095.66 | - | 194,378,095.66 |
| Total | 2,907,014,186.24 | - | 2,907,014,186.24 | 2,405,872,478.61 | - | 2,405,872,478.61 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Construction in progress - continued
(3) The top ten balances of construction in progress
| Item | Budget amount | 31/12/2022 | Increase for the year | Transfer to fixed assets | Other decreases for the year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2023 | 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 | 817,365,084.37 | - | - | - | 13,860,209.69 | 831,225,294.06 | 57.68 | 57.68 | 942,888.05 | - | - | Own funds and loans |
| Phase I project for the stuffing and destuffing service area of Baoman Port Area, Zhanjiang Port | 683,007,100.00 | 269,045,354.01 | 227,860,991.66 | - | - | - | 496,906,345.67 | 72.75 | 72.75 | 29,908,415.82 | 10,355,373.62 | 3.50 | Own funds and loans |
| General cargo terminal project at Donghai Island Port Area of Zhanjiang Port | 905,348,400.00 | 448,877,835.04 | 67,384.80 | - | - | - | 448,945,219.84 | 49.59 | 49.59 | 44,364,372.49 | - | - | Own funds and loans |
| Phase I expansion project for the container terminal at Baoman Port Area, Zhanjiang Port | 2,342,775,800.00 | 191,463,684.57 | 37,101,454.78 | - | - | - | 228,565,139.35 | 9.76 | 9.76 | 1,011,370.60 | 57,750.00 | 3.30 | Own funds and loans |
| TCP tire-type container crane project | 211,491,137.08 | 16,222,603.92 | 138,123,291.50 | 6,430,507.98 | - | 6,438,252.61 | 154,353,640.05 | 76.02 | 76.02 | - | - | - | Own funds |
| Subsequent construction work in progress at HIPG terminal | 84,992,400.00 | 28,006,814.86 | 56,051,165.83 | 16,985,386.70 | 3,212,066.78 | 657,829.52 | 64,518,356.73 | 99.67 | 99.67 | - | - | - | Own funds |
| Back land reclamation project on Haidagan Bulk Yard and Supporting Facilities and Liquid Bulk Berth | 82,400,000.00 | 60,576,339.80 | 1,674,220.80 | - | - | - | 62,250,560.60 | 75.55 | 75.55 | - | - | - | Own funds |
| Installation project of bucket-wheel stacker reclaimer, Zhanjiang Port | 74,800,000.00 | 51,551,526.93 | 837,359.25 | - | - | - | 52,388,886.18 | 70.04 | 70.04 | 2,671,994.44 | 837,359.25 | 3.50 | Own funds and loans |
| AMPLIACAO PLATAFORMAS REEFER | 71,524,388.49 | - | 53,555,672.30 | 6,045,103.81 | - | 1,479,878.70 | 48,990,447.19 | 76.95 | 76.95 | - | - | - | Own funds |
| Dachanwan phase II project | 918,521,317.23 | 24,872,917.72 | 21,319,643.76 | - | - | - | 46,192,561.48 | 5.03 | 5.03 | - | - | - | Own funds |
| Total | 8,192,345,807.82 | 1,907,982,161.22 | 536,591,184.68 | 29,460,998.49 | 3,212,066.78 | 22,436,170.52 | 2,434,336,451.15 | — — | — — | 78,899,041.40 | 11,250,482.87 | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Construction in progress - continued
(4) Materials for construction of fixed assets
| Item | 31/12/2023 | 31/12/2022 | ||||
| Gross carrying amount | Provision for impairment | Carrying amount | Gross carrying amount | Provision for impairment | Carrying amount | |
| Materials for construction of fixed assets | 2,803,095.22 | - | 2,803,095.22 | 7,971,929.03 | - | 7,971,929.03 |
(5) Impairment testing of construction in progress
The recoverable amount is determined at the present value of expected future cash flows
| Item | Carrying amount | Recoverable amount | Amount of impairment | Projection period | Key parameters for projection period | Key parameters for steady period | Basis to determine the key parameters for steady period |
| HIPG Asset Group | 9,116,161,496.49 | 51,365,680,683.52 | - | 5 years | Pre-tax discount rate, 7.55% | Perpetual growth rate, 7% | Consult the expected growth rate of the industry |
| Total | 9,116,161,496.49 | 51,365,680,683.52 | - |
18. 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 2023 | 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 |
| 2. Increase for the year | 126,996,462.16 | 47,184,328.34 | 5,908,348.40 | 314,033,487.98 | 5,119,357.99 | 499,241,984.87 |
| (1) Purchase | 126,825,784.28 | 47,184,328.34 | 3,422,776.72 | 314,033,487.98 | 5,119,357.99 | 496,585,735.31 |
| (2) Others | 170,677.88 | - | 2,485,571.68 | - | - | 2,656,249.56 |
| 3. Decrease for the year | 83,575,652.80 | 14,851,420.78 | 277,492,044.42 | - | 8,251,408.84 | 384,170,526.84 |
| (1) Termination of lease | 83,575,652.80 | 13,723,966.87 | 6,695,652.77 | - | 8,251,408.84 | 112,246,681.28 |
| (2) Decrease due to change in the scope of consolidation | - | 1,127,453.91 | - | - | - | 1,127,453.91 |
| (3) Transfer to fixed assets | - | - | 270,796,391.65 | - | - | 270,796,391.65 |
| 4. Effect of translation of financial statements denominated in foreign currencies | 104,207,338.95 | 2,294,309.58 | 594,918.95 | 49,298,269.33 | - | 156,394,836.81 |
| 5. At 31 December 2023 | 7,562,353,952.80 | 209,373,502.30 | 90,415,354.96 | 3,196,799,850.46 | 12,324,371.27 | 11,071,267,031.79 |
| II. Accumulated depreciation | — — | — — | — — | — — | — — | — — |
| 1. At 1 January 2023 | 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 |
| 2. Increase for the year | 262,536,189.49 | 24,038,515.68 | 20,649,140.40 | 46,180,031.37 | 4,099,083.51 | 357,502,960.45 |
| (1) Provision | 262,536,189.49 | 24,038,515.68 | 20,649,140.40 | 46,180,031.37 | 4,099,083.51 | 357,502,960.45 |
| 3. Decrease for the year | 80,201,819.61 | 14,365,794.00 | 99,372,627.07 | - | 8,251,408.84 | 202,191,649.52 |
| (1) Termination of lease | 80,201,819.61 | 13,538,700.80 | 6,369,213.83 | - | 8,251,408.84 | 108,361,143.08 |
| (2) Transfer to fixed assets | - | - | 93,003,413.24 | - | - | 93,003,413.24 |
| (3) Decrease due to change in the scope of consolidation | - | 827,093.20 | - | - | - | 827,093.20 |
| 4. Effect of translation of financial statements denominated in foreign currencies | 10,472,990.85 | 495,286.98 | 558,342.85 | 5,602,274.34 | - | 17,128,895.02 |
| 5. At 31 December 2023 | 1,133,512,711.03 | 69,917,866.45 | 41,288,905.85 | 378,727,399.69 | 6,151,837.55 | 1,629,598,720.57 |
| III. Impairment provision | — — | — — | — — | — — | — — | — — |
| 1. At 1 January 2023 | - | - | - | - | - | - |
| 2. Increase for the year | - | - | - | - | - | - |
| 3. Decrease for the year | - | - | - | - | - | - |
| 4. At 31 December 2023 | - | - | - | - | - | - |
| IV. Carrying amount | — — | — — | — — | — — | — — | — — |
| 1. At 31 December 2023 | 6,428,841,241.77 | 139,455,635.85 | 49,126,449.11 | 2,818,072,450.77 | 6,172,533.72 | 9,441,668,311.22 |
| 2. At 1 January 2023 | 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Intangible assets
(1) Details of intangible assets
| Item | Land use rights | Terminal management rights | Others | Total |
| I. Cost | — — | — — | — — | — — |
| 1. At 1 January 2023 | 15,314,517,408.67 | 9,033,916,504.04 | 1,500,585,297.68 | 25,849,019,210.39 |
| 2. Increase for the year | 4,829,976.87 | 70,899,565.34 | 210,116,533.73 | 285,846,075.94 |
| (1) Purchase | 4,707,118.86 | 70,899,565.34 | 204,248,227.46 | 279,854,911.66 |
| (2) Transfer from R&D expenditure | - | - | 279,255.32 | 279,255.32 |
| (3) Other increase | 122,858.01 | - | 5,589,050.95 | 5,711,908.96 |
| 3. Decrease for the year | 1,391,040,555.28 | - | 97,786,230.03 | 1,488,826,785.31 |
| (1) Disposal | 117,561,406.55 | - | 12,263,934.48 | 129,825,341.03 |
| (2) Effect of changes in the scope of consolidation | 1,242,052,238.36 | - | 85,144,042.52 | 1,327,196,280.88 |
| (3) Transfer to investment properties | 8,388,170.37 | - | - | 8,388,170.37 |
| (4) Other decrease | 23,038,740.00 | - | 378,253.03 | 23,416,993.03 |
| 4. Effect of translation of financial statements denominated in foreign currencies | 3,238,376.56 | 614,328,132.15 | 55,732,509.00 | 673,299,017.71 |
| 5. At 31 December 2023 | 13,931,545,206.82 | 9,719,144,201.53 | 1,668,648,110.38 | 25,319,337,518.73 |
| II. Accumulated amortization | — — | — — | — — | — — |
| 1. At 1 January 2023 | 4,096,452,545.66 | 1,897,700,710.79 | 562,263,716.23 | 6,556,416,972.68 |
| 2. Increase for the year | 337,512,145.19 | 265,684,203.80 | 83,683,325.73 | 686,879,674.72 |
| (1) Provision | 337,512,145.19 | 265,684,203.80 | 83,683,325.73 | 686,879,674.72 |
| (2) Other increase | - | - | - | - |
| 3. Decrease for the year | 136,784,782.90 | - | 70,286,984.40 | 207,071,767.30 |
| (1) Disposal | 24,240,728.18 | - | 12,642,187.51 | 36,882,915.69 |
| (2) Transfer to investment properties | 1,943,123.36 | - | - | 1,943,123.36 |
| (3) Effect of changes in the scope of consolidation | 110,600,931.36 | - | 57,644,796.89 | 168,245,728.25 |
| (4) Other decrease | - | - | - | - |
| 4. Effect of translation of financial statements denominated in foreign currencies | 1,454,778.05 | 131,353,162.92 | 20,232,242.87 | 153,040,183.84 |
| 5. At 31 December 2023 | 4,298,634,686.00 | 2,294,738,077.51 | 595,892,300.43 | 7,189,265,063.94 |
| III. Impairment provision | — — | — — | — — | — — |
| 1. At 1 January 2023 | 15,537,122.10 | - | - | 15,537,122.10 |
| 2. Increase for the year | 28,662,259.14 | - | 12,810,888.83 | 41,473,147.97 |
| 3. Decrease for the year | - | - | - | - |
| 4. At 31 December 2023 | 44,199,381.24 | - | 12,810,888.83 | 57,010,270.07 |
| IV. Carrying amount | — — | — — | — — | — — |
| 1. At 31 December 2023 | 9,588,711,139.58 | 7,424,406,124.02 | 1,059,944,921.12 | 18,073,062,184.72 |
| 2. At 1 January 2023 | 11,202,527,740.91 | 7,136,215,793.25 | 938,321,581.45 | 19,277,065,115.61 |
(2) Land use rights without ownership certificates as at 31 December 2023:
| Item | Carrying amount at 31/12/2023 | Carrying amount at 31/12/2022 |
| Land use rights (Note) | 2,374,139,495.63 | 2,511,195,386.58 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Intangible assets - continued
(2) Land use rights without ownership certificates as at 31 December 2023: - continued
Note: At 31 December 2023, the land use rights without ownership certificates mainly represent
the land use rights for berth and storage yard within Chiwan Port area obtained by the Groupfrom Nanshan Group, with an area of 691,828.56 m
, and Dachanwan Port area Phase IIland use rights obtained by ASJ, the costs of which are RMB 1,179,949,191.44 and RMB918,521,317.23 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 such land.The Company's management understood that Nanshan Group is negotiating with relevantgovernment departments regarding the historical issues, and the date when the Group canobtain the ownership certificate of relevant land and buildings on such land cannot beestimated reliably.
ASJ is negotiating with relevant government departments for handling the ownershipcertificates of Dachanwan Port area Phase II land use rights obtained by it.
(3) Impairment testing of intangible assets
Refer to Note (VIII), 16.2 (7) for details.
20. Goodwill
(1) Details of goodwill
| Investee | Sources | 31/12/2022 | Increase | Decrease | Effect of translation of financial statements denominated in foreign currencies | 31/12/2023 |
| TCP | Acquisition of equity | 2,716,399,522.38 | - | - | 270,072,549.76 | 2,986,472,072.14 |
| Mega Shekou Container Terminals Limited ("Mega SCT") | Acquisition of equity | 1,815,509,322.42 | - | - | - | 1,815,509,322.42 |
| CM Port | Acquisition of equity | 993,992,000.00 | - | - | - | 993,992,000.00 |
| Shantou Port | Acquisition of equity | 552,317,736.65 | - | - | - | 552,317,736.65 |
| Zhanjiang Port | Acquisition of equity | 418,345,307.68 | - | - | - | 418,345,307.68 |
| Shenzhen Mawan Project | Acquisition of equity | 408,773,001.00 | - | - | - | 408,773,001.00 |
| Ningbo Daxie Container Terminal Co., Ltd. (formerly known as Ningbo Daxie China Merchants International Terminals Co. Ltd.) ("Ningbo Daxie") | Consolidation of associate into subsidiary | 188,497,194.41 | - | 188,497,194.41 | - | - |
| Others | Acquisition of equity | 288,255,850.88 | - | - | - | 288,255,850.88 |
| Sub-total | — — | 7,382,089,935.42 | - | 188,497,194.41 | 270,072,549.76 | 7,463,665,290.77 |
| Provision for impairment of goodwill | — — | 970,663,044.33 | - | - | - | 970,663,044.33 |
| Total | — — | 6,411,426,891.09 | - | 188,497,194.41 | 270,072,549.76 | 6,493,002,246.44 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Goodwill - continued
(2) Provision for impairment of goodwill
| Investee | 31/12/2022 | Provision | Decrease | Effect of translation of financial statements denominated in foreign currencies | 31/12/2023 |
| 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
| Name | Composition of asset groups or portfolio of asset groups to which it is allocated and its basis | Is it consistent with that of the prior year? |
| TCP | The Group identifies asset groups or portfolio of asset groups based on their ability to generate cash inflows independently, the manner in which they manage their production and operating activities (primarily by geographic region), and the unified decision-making on use or disposal of assets. | Yes |
| Mega SCT | Yes | |
| CM Port | Yes | |
| Shantou Port | Yes | |
| Zhanjiang Port | Yes | |
| Shenzhen Mawan Project | Yes | |
| Others | Yes |
When testing the goodwill for impairment, the Group compares the carrying amount of related assetgroups 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 of assetgroups that generate goodwill at fair value less cost of disposal or at present value of expected futurecash flows. The fair value is determined using market approach. The present value of cash flows isestimated based on the forecast of cash flows for 5 years to 25 years detailed forecast period andsubsequent forecast period. The estimated future cash flows for the detailed forecast period arebased on the business plan established by the management; the expected future cash flows for thesubsequent forecast period are determined in conjunction with the level of the final year of thedetailed forecast period, combined with the Group's business plans, industry trends and inflationrates. The growth rate adopted will not exceed the long-term average growth rate of the countrywhere the asset groups and portfolio of asset groups are located. The key assumptions used by theGroup in estimating the present value of future cash flows include growth rate and discount rate etc.The pre-tax discount rate and the growth rate for subsequent forecast period adopted in 2023 are
10.97%-21.99% and 2.20%-3.02% respectively. The parameters of key assumptions determined bythe Group's management are in line with the Group's historical experience or external source ofinformation.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Goodwill - continued
(4) Specific method for determination of recoverable amount
The recoverable amount is determined at the present value of expected future cash flows
| Item | Projection period | Key parameters for projection period | Basis to determine the key parameters for projection period | Key parameters for steady period | Basis to determine the key parameters for steady period |
| Mega SCT | 5 years | 1. Pre-tax discount rate: 12.23% 2. Average revenue growth rate for projection period: 3.35% 3. Average profit margin for projection period: 37.58% | 1. The discount rate is a pre-tax discount rate that reflects the specific risks of the underlying asset group or combination of asset groups. 2. Average revenue growth rate for projection period and average profit margin for projection period: Taking into account comprehensive factors such as each company's business operations, performance, key financial indicators and market environment | 1. Pre-tax discount rate: 12.23% 2. Average revenue growth rate for steady period: 2.20% 3. Average profit margin for steady period: 42.89% | 1. The discount rate is a pre-tax discount rate that reflects the specific risks of the underlying asset group or combination of asset groups. 2. Average revenue growth rate for steady period: China's forward inflation rate published by the World Bank (TCP refers to Brazil's forward inflation rate published by the World Bank) 3. Average profit margin for steady period: Taking into account comprehensive factors such as each company's business operations, performance, key financial indicators and market environment |
| TCP | 25 years | 1. Pre-tax discount rate: 21.99% 2. Average revenue growth rate for projection period: 5.36% 3. Average profit margin for projection period: 53.33% | 1. Pre-tax discount rate: 21.99% 2. Average revenue growth rate for steady period: 3.02% 3. Average profit margin for steady period: 54.81% |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Long-term prepaid expenses
Presentation of long-term prepaid expenses:
| Item | 31/12/2022 | Effect of changes in the scope of consolidation | Increase for the year | Amortization in the year | Other decreases | 31/12/2023 | Reason for other decreases |
| Tonggu channel widening project (Note 1) | 455,446,696.75 | - | - | 14,449,031.76 | - | 440,997,664.99 | — — |
| West public channel widening project at West port area (Note 2) | 249,437,402.87 | - | - | 9,919,028.64 | 1,538,430.04 | 237,979,944.19 | Reclassify to dredging project |
| Dredging project | 69,760,419.37 | - | 26,871,419.28 | 17,342,403.61 | - | 79,289,435.04 | — — |
| Relocation project of Nanhai Rescue Bureau | 37,554,111.50 | - | - | 1,107,368.40 | - | 36,446,743.10 | — — |
| Expenditures for the improvement of leased fixed assets | 20,631,173.37 | - | 3,920,837.53 | 2,374,618.58 | 82,477.87 | 22,094,914.45 | Transfer to inventory account |
| Others | 153,527,101.04 | -8,905,237.72 | 80,141,950.88 | 47,779,010.68 | - | 176,984,803.52 | — — |
| Total | 986,356,904.90 | -8,905,237.72 | 110,934,207.69 | 92,971,461.67 | 1,620,907.91 | 993,793,505.29 | — — |
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Deferred income tax
(1) Deferred tax assets before offsetting
| Item | 31/12/2023 | 31/12/2022 (Restated) | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Lease liabilities | 812,240,581.51 | 218,145,932.73 | 582,736,512.28 | 164,262,934.19 |
| Unrealized profit | 749,254,178.80 | 183,009,204.87 | 756,772,558.79 | 184,729,651.97 |
| Terminal operating right | 714,547,999.18 | 214,364,399.78 | 702,633,317.13 | 210,789,995.14 |
| Depreciation of fixed assets | 162,352,087.79 | 40,588,021.95 | 154,724,225.49 | 35,753,675.92 |
| Provision for credit loss | 151,277,238.51 | 32,071,347.97 | 190,727,520.03 | 35,544,695.31 |
| Accrued and unpaid wages | 126,623,677.19 | 27,883,418.55 | 161,026,788.29 | 35,802,355.38 |
| Provisions | 85,590,059.41 | 29,100,620.20 | 35,365,156.43 | 12,024,153.19 |
| Deductible losses | 43,785,085.09 | 10,946,271.43 | 182,211,924.34 | 40,193,891.36 |
| Deferred income | 39,203,663.56 | 9,101,072.49 | 36,723,054.56 | 8,709,144.22 |
| Amortization of computer software | 7,345,031.20 | 1,836,257.80 | 9,291,532.77 | 2,322,883.19 |
| Provision for impairment of assets | 6,698,523.93 | 1,555,485.91 | 5,507,073.16 | 1,376,768.29 |
| Organization costs | 1,028,867.64 | 257,216.91 | 3,498,150.00 | 874,537.50 |
| Others | 70,987,022.41 | 18,570,226.51 | 57,124,137.75 | 15,595,505.07 |
| Total | 2,970,934,016.22 | 787,429,477.10 | 2,878,341,951.02 | 747,980,190.73 |
(2) Deferred tax liabilities before offsetting
| Item | 31/12/2023 | 31/12/2022 (Restated) | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Withholding dividend income tax | 41,551,214,196.81 | 2,840,377,397.22 | 37,565,601,815.13 | 2,568,624,605.88 |
| Lease business | 1,017,854,192.39 | 282,003,933.26 | 783,000,219.10 | 224,483,346.07 |
| Terminal operating right | 307,617,857.01 | 92,285,357.10 | 302,488,503.92 | 90,746,551.18 |
| Fair value adjustment of assets acquired from business combination | 4,880,293,882.18 | 1,292,552,086.64 | 7,755,954,464.86 | 1,762,190,010.27 |
| Depreciation of fixed assets | 975,166,842.96 | 272,103,476.86 | 1,119,997,714.31 | 280,579,814.18 |
| Changes in fair value of other non-current financial assets | 408,104,042.76 | 99,604,068.18 | 330,012,225.76 | 82,503,056.44 |
| Changes in fair value of investments in other equity instruments | 134,179,164.24 | 33,544,791.03 | 130,791,178.28 | 32,697,794.57 |
| Valuation of held-for-trading financial assets and liabilities | 2,161,643.84 | 540,410.96 | - | - |
| Others | 1,045,132,765.59 | 118,992,583.19 | 1,169,095,183.52 | 126,676,026.52 |
| Total | 50,321,724,587.78 | 5,032,004,104.44 | 49,156,941,304.88 | 5,168,501,205.11 |
(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 current year | Balance of deferred tax assets or liabilities after offsetting at the end of the current year | Offset amount of deferred tax assets and liabilities at the end of the prior year (Restated) | Balance of deferred tax assets or liabilities after offsetting at the end of the prior year (Restated) |
| Deferred tax assets | -372,366,000.07 | 415,063,477.03 | -313,481,369.78 | 434,498,820.95 |
| Deferred tax liabilities | -372,366,000.07 | 4,659,638,104.37 | -313,481,369.78 | 4,855,019,835.33 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Deferred income tax - continued
(4) Deductible temporary differences and deductible losses for which deferred tax assets are
not recognized
| Item | 31/12/2023 | 31/12/2022 |
| Deductible temporary differences | 966,126,806.19 | 930,204,772.41 |
| Deductible losses | 2,334,799,700.50 | 2,112,659,943.00 |
| Total | 3,300,926,506.69 | 3,042,864,715.41 |
The Group recognizes deferred income tax assets to the extent of future taxable income that is likelyto be obtained to offset the deductible temporary differences and deductible losses. For the excessof deductible temporary differences and deductible losses over future taxable income, no deferredtax assets are recognized.
(5) Deductible losses for which deferred tax assets are not recognized will be expired in the
following years:
| Year | 31/12/2023 | 31/12/2022 |
| 2023 | - | 515,101,493.80 |
| 2024 | 483,200,212.68 | 488,358,232.03 |
| 2025 | 375,189,307.19 | 375,208,491.05 |
| 2026 | 110,765,532.94 | 112,756,494.15 |
| 2027 | 612,819,518.30 | 600,178,442.73 |
| 2028 | 752,825,129.39 | - |
| Deductible losses due after 2029 | - | 21,056,789.24 |
| Total | 2,334,799,700.50 | 2,112,659,943.00 |
23. Other non-current assets
| Item | 31/12/2023 | 31/12/2022 |
| Advances for the channel project (Note) | 1,013,508,448.79 | 989,752,762.75 |
| Prepayments for fixed assets | 144,896,516.09 | 117,094,834.14 |
| Prepayments for terminal franchise | 29,807,737.16 | 27,493,116.21 |
| Others | 5,943,287.58 | 52,448,665.69 |
| total | 1,194,155,989.62 | 1,186,789,378.79 |
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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Short-term borrowings
(1) Classification of short-term borrowings
| Item | 31/12/2023 | 31/12/2022 |
| Credit borrowings | 15,593,937,427.86 | 7,149,322,782.85 |
| Guaranteed borrowings (Note 1) | 110,096,708.33 | - |
| Mortgage borrowings (Note 2) | 10,011,152.78 | 15,015,583.33 |
| Total | 15,714,045,288.97 | 7,164,338,366.18 |
Note 1: The borrowings are guaranteed by Guangdong Zhanjiang Port Logistics Co., Ltd. ("Zhanjiang
Port Logistics"), a subsidiary of the Company.
Note 2: It represents the short-term borrowings obtained by Zhoushan RoRo, a subsidiary of the
Company, with the land use rights and buildings on the land held by it as the collateral.
(2) As at 31 December 2023, the Group has no short-term borrowings that are overdue.
25. Notes payable
| Category | 31/12/2023 | 31/12/2022 |
| Bank acceptance | 64,280,925.21 | - |
| Commercial acceptance | 9,180,240.61 | - |
| Total | 73,461,165.82 | - |
26. Accounts payable
| Item | 31/12/2023 | 31/12/2022 |
| Service fee | 246,400,717.07 | 299,350,272.24 |
| Material purchase fee | 117,170,447.10 | 132,460,163.17 |
| Construction fee | 100,672,753.10 | 110,687,325.42 |
| Equipment payments | 52,762,565.74 | 87,445,302.02 |
| Rental fee | 13,591,518.23 | 8,304,019.32 |
| Others | 161,167,136.01 | 172,902,315.49 |
| Total | 691,765,137.25 | 811,149,397.66 |
(1) Aging of accounts payable
| Aging | 31/12/2023 | 31/12/2022 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 617,528,837.76 | 89.27 | 710,976,970.28 | 87.65 |
| 1-2 years | 26,506,267.62 | 3.83 | 47,038,049.65 | 5.80 |
| 2-3 years | 30,254,034.46 | 4.37 | 26,667,189.69 | 3.29 |
| More than 3 years | 17,475,997.41 | 2.53 | 26,467,188.04 | 3.26 |
| Total | 691,765,137.25 | 100.00 | 811,149,397.66 | 100.00 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. Accounts payable - continued
(2) Significant accounts payable aged more than 1 year
| Name of entity | 31/12/2023 | Aging | Reason for outstanding or not being carried forward |
| Quanzhou Antong Logistics Co., Ltd. | 16,948,161.45 | 2-3 years | To be paid upon confirmation by both parties. |
27. Receipts in advance
| Item | 31/12/2023 | 31/12/2022 |
| Rental fee received in advance | 8,993,727.31 | 6,205,443.31 |
| Management fee received in advance | 2,659,217.99 | - |
| Others | 5,734,592.06 | 3,681,088.28 |
| Total | 17,387,537.36 | 9,886,531.59 |
(1) Aging of receipts in advance
| Aging | 31/12/2023 | 31/12/2022 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 17,387,537.36 | 100.00 | 9,884,079.59 | 99.98 |
| 1-2 years | - | - | - | - |
| 2-3 years | - | - | - | - |
| More than 3 years | - | - | 2,452.00 | 0.02 |
| Total | 17,387,537.36 | 100.00 | 9,886,531.59 | 100.00 |
(2) As at 31 December 2023, the Group has no significant receipts in advance aged more than
one year.
(3) As at 31 December 2023, the Group has no receipts in advance with significant changes in
carrying amount.
28 Contract liabilities
(1) Details of contract liabilities
| Item | 31/12/2023 | 31/12/2022 |
| Port charges received in advance | 84,869,413.45 | 55,045,635.27 |
| Service fee received in advance | 26,198,333.07 | 59,729,035.75 |
| Warehousing fee received in advance | 3,204,091.87 | 3,048,588.90 |
| Others | 27,808,262.61 | 24,076,291.11 |
| Total | 142,080,101.00 | 141,899,551.03 |
(2) There are no significant changes in carrying amount of contract liabilities during the year.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28 Contract liabilities - continued
(3) As at 31 December 2023, the Group has no significant contract liabilities aged more than
one year.
(4) Qualitative analysis of contract liabilities
Contract liabilities mainly represent the amount received by the Group for the port services providedto customers. The payment is collected according to the time agreed in the contract. The Grouprecognizes contract revenue based on the progress of the contract. The contract liabilities will berecognized as revenue after the Group fulfils its performance obligations.
(5) Revenue recognized in the year and included in the carrying amount of contract liabilities
at the beginning of the year
An amount of RMB 91,180,530.23 included in the carrying amount of contract liabilities at thebeginning of 2023 has been recognized as revenue in the current year, including contract liabilitiesarising from settled but unfinished construction resulting from the contract of service fees receivedin advance amounting to RMB 24,937,772.66, contract liabilities arising from settled but unfinishedconstruction resulting from the contract of port charges received in advance amounting to RMB50,149,195.64, contract liabilities arising from settled but unfinished construction resulting fromcontract of warehousing fee received in advance amounting to RMB 3,048,588.90, and contractliabilities arising from settled but unfinished construction resulting from other contracts amountingto RMB 13,044,973.03.
29. Employee benefits payable
(1) Presentation of employee benefits payable
| Item | 31/12/2022 | Effect of changes in the scope of consolidation | Increase for the year | Decrease for the year | 31/12/2023 |
| 1. Short-term benefits | 921,533,425.99 | -35,636,773.69 | 3,243,766,906.07 | 3,219,390,381.18 | 910,273,177.19 |
| 2. Post-employment benefits - defined contribution plan | 13,383,514.93 | -4,201,592.85 | 351,623,760.71 | 352,451,682.76 | 8,354,000.03 |
| 3. Termination benefits | 2,423,282.78 | - | 5,158,916.08 | 7,582,198.86 | - |
| 4. Other benefits due within 1 year | - | - | 4,053,449.56 | 4,053,449.56 | - |
| 5. Others | -505,505.57 | -631,121.04 | 5,145,597.17 | 4,671,541.13 | -662,570.57 |
| Total | 936,834,718.13 | -40,469,487.58 | 3,609,748,629.59 | 3,588,149,253.49 | 917,964,606.65 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Employee benefits payable - continued
(2) Presentation of short-term benefits
| Item | 31/12/2022 | Effect of changes in the scope of consolidation | Increase for the year | Decrease for the year | 31/12/2023 |
| 1. Wages and salaries, bonuses, allowances and subsidies | 897,442,262.83 | -33,339,184.53 | 2,606,547,914.19 | 2,586,737,715.36 | 883,913,277.13 |
| 2. Staff welfare | - | - | 169,221,198.72 | 169,221,198.72 | - |
| 3. Social insurance contributions | 10,545,539.44 | -891,098.34 | 204,136,593.97 | 199,978,211.04 | 13,812,824.03 |
| Including: Medical insurance | 8,631,543.96 | -836,747.58 | 173,636,271.40 | 170,223,587.11 | 11,207,480.67 |
| Work injury insurance | 53,916.77 | -54,350.76 | 17,211,021.96 | 17,210,587.97 | - |
| Others | 1,860,078.71 | - | 13,289,300.61 | 12,544,035.96 | 2,605,343.36 |
| 4. Housing funds | -95,060.47 | 274.00 | 198,040,769.72 | 198,042,657.10 | -96,673.85 |
| 5. Labour union and employee education funds | 13,642,129.96 | -1,406,764.82 | 50,814,109.87 | 50,314,255.40 | 12,735,219.61 |
| 6. Other short-term benefits | -1,445.77 | - | 15,006,319.60 | 15,096,343.56 | -91,469.73 |
| Total | 921,533,425.99 | -35,636,773.69 | 3,243,766,906.07 | 3,219,390,381.18 | 910,273,177.19 |
(3) Presentation of defined benefit plans
| Item | 31/12/2022 | Effect of changes in the scope of consolidation | Increase for the year | Decrease for the year | 31/12/2023 |
| I. Basic pension | 9,761,086.14 | -1,383,333.72 | 258,989,715.66 | 259,128,522.95 | 8,238,945.13 |
| II. Unemployment insurance | 49,026.91 | -49,434.91 | 6,077,524.71 | 6,077,116.71 | - |
| III. Enterprise annuity | 3,573,401.88 | -2,768,824.22 | 86,556,520.34 | 87,246,043.10 | 115,054.90 |
| Total | 13,383,514.93 | -4,201,592.85 | 351,623,760.71 | 352,451,682.76 | 8,354,000.03 |
The Company and its domestic subsidiaries participate in the pension insurance and unemploymentinsurance plan established by government institutions as required. According to such plans, theGroup contributes in proportion to the local government. The Group has established an enterpriseannuity system, and accrues and pays the enterprise annuity according to the enterprise annuitysystem of the Company and its domestic subsidiaries. In addition to above contributions, the Grouphas no further payment obligations. The corresponding expenses are included in profit or loss forthe period or the cost of related assets when incurred.
30. Taxes payable
| Item | 31/12/2022 | Effect of changes in the scope of consolidation | Provision for the year | Payment for the year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2023 |
| Enterprise income tax | 804,846,345.79 | -3,002,884.36 | 1,123,434,326.28 | 1,108,672,570.98 | 3,089,589.10 | 819,694,805.83 |
| VAT | 30,032,002.80 | -613,554.49 | 205,611,948.35 | 215,161,352.07 | 352,761.87 | 20,221,806.46 |
| Other taxes | 83,054,820.50 | -4,006,342.06 | 522,874,894.04 | 522,097,230.12 | 3,310,817.85 | 83,136,960.21 |
| Total | 917,933,169.09 | -7,622,780.91 | 1,851,921,168.67 | 1,845,931,153.17 | 6,753,168.82 | 923,053,572.50 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Other payables
(1) Presentation of other payables
| Item | 31/12/2023 | 31/12/2022 |
| Dividends payable | 111,897,214.27 | 92,374,921.29 |
| Other payables | 1,542,724,955.75 | 1,663,510,336.97 |
| Total | 1,654,622,170.02 | 1,755,885,258.26 |
(2) Dividends payable
| Item | 31/12/2023 | 31/12/2022 |
| Ordinary share dividends | 111,897,214.27 | 92,374,921.29 |
| Including: China Merchants Zhangzhou Development Zone Co., Ltd. (Note) | 77,734,806.46 | 20,000,000.00 |
| Dalian Port Container Development Co., Ltd. ("Dalian Port Container") | 16,160,696.61 | 14,000,000.00 |
| Dalian Port Jifa Logistics Co., Ltd. | 9,575,104.42 | 3,000,000.00 |
| Yingkou Port Group Co., Ltd. ("Yingkou Port Group") | 5,372,456.78 | - |
| Yiu Lian Dockyards Limited | 2,334,150.00 | - |
| Qingdao Port (Group) Co., Ltd. | 720,000.00 | - |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | - | 41,400,234.06 |
| Sri Lanka Ports Authority | - | 10,446,900.00 |
| Dalian City Construction Investment Group Co., Ltd (formerly known as Dalian City Investment Holding Group Co., Ltd. ) | - | 3,527,787.23 |
Note: As at 31 December 2023, the Group has no significant dividends payable aged more than
one year.
(3) Other payables
(a) Disclosure of other payables by nature
| Item | 31/12/2023 | 31/12/2022 |
| Amount payable for construction and quality warranty | 575,941,472.21 | 643,816,817.51 |
| Guarantees and deposits | 246,316,308.32 | 221,628,920.81 |
| Accrued expenses | 139,920,340.25 | 190,048,988.98 |
| Customer discount | 129,780,042.30 | 164,622,341.62 |
| Port construction and security fee | 27,939,655.23 | 36,697,168.04 |
| Balance of payment for transfer of land use rights | - | 11,295,700.00 |
| Others | 422,827,137.44 | 395,400,400.01 |
| Total | 1,542,724,955.75 | 1,663,510,336.97 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Other payables - continued
(3) Other payables - continued
(b) Significant other payables aged more than one year or past due
| Company name | Amount payable | Aging | Reason for being outstanding |
| Transport Bureau of Shenzhen Municipality (Ports Administration of Shenzhen Municipality) | 79,679,948.23 | 1-2 years and more than 3 years | To be paid upon confirmation by both parties |
| CCCC Water Transport Planning and Design Institute Co., Ltd. | 58,666,012.94 | 1-2 years, 2-3 years and more than 3 years | To be paid upon confirmation by both parties |
| Lac Assal Investment Holding Company Limited | 48,162,348.73 | 1-2 years | To be paid upon confirmation by both parties |
| Shanghai Zhenhua Heavy Industries Co., Ltd. | 37,248,716.35 | 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 |
| Wuxi Huadong Heavy Machinery Co., Ltd. | 10,090,410.68 | 2-3 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 Groton Group Co., Ltd. (formerly known as 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 |
| Total | 295,285,161.40 | —— | —— |
32. Non-current liabilities due within one year
| Item | 31/12/2023 | 31/12/2022 |
| Long-term borrowings due within one year (Note VIII, 34) | 1,033,008,184.01 | 2,313,191,859.96 |
| Including: Credit borrowings | 532,282,391.00 | 1,368,934,869.99 |
| Guaranteed borrowings | 410,725,775.58 | 219,564,028.82 |
| Mortgage and pledged borrowings | 30,352,589.61 | 715,461,578.62 |
| Guaranteed and mortgage borrowings | 59,647,427.82 | 9,231,382.53 |
| Bonds payable due within one year (Note VIII, 35) | 5,267,490,749.32 | 8,668,651,537.27 |
| Lease liabilities due within one year (Note VIII, 36) | 248,634,286.86 | 306,942,164.80 |
| Long-term payables due within one year (Note VIII, 37) | 184,534,373.50 | 155,665,725.85 |
| Long-term employee benefits payable due within one year (Note VIII, 38) | 49,730,825.21 | 54,414,877.57 |
| Other non-current liabilities due within one year (Note VIII, 41) | 34,005,870.35 | 142,357,523.50 |
| Total | 6,817,404,289.25 | 11,641,223,688.95 |
33. Other current liabilities
(1) Details of other current liabilities
| Item | 31/12/2023 | 31/12/2022 |
| Short-term bonds payable | 2,007,190,136.98 | 3,017,713,424.64 |
| Accrued professional agency fee | 114,638,017.33 | 124,799,040.22 |
| Others | 22,014,380.22 | 18,635,061.10 |
| Total | 2,143,842,534.53 | 3,161,147,525.96 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(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 current liabilities - continued
(2) Changes in short-term bonds payable
| Name of bond | Face value | Coupon rate | Date of issue | Term of the bond | Amount of issue | 31/12/2022 | Amount issued in the current year | Interest accrued based on par value | Amortization of premiums or discounts | Repayment in the current year | 31/12/2023 | Is it in breach of contract? |
| 2.43% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2.43% | 2023-11-7 | 90 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 7,190,136.98 | - | - | 2,007,190,136.98 | No |
| 2.35% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2.35% | 2023-3-1 | 180 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 23,114,754.10 | - | 2,023,114,754.10 | - | No |
| 2.05% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2.05% | 2023-6-14 | 180 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 20,163,934.43 | - | 2,020,163,934.43 | - | No |
| 1.75% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 1.75% | 2022-9-1 | 270 days | 1,000,000,000.00 | 1,005,657,534.24 | - | 7,287,671.24 | - | 1,012,945,205.48 | - | No |
| 1.93% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 1.93% | 2022-9-8 | 180 days | 2,000,000,000.00 | 2,012,055,890.40 | - | 6,979,725.60 | - | 2,019,035,616.00 | - | No |
| Total | 9,000,000,000.00 | — — | — — | — — | 9,000,000,000.00 | 3,017,713,424.64 | 6,000,000,000.00 | 64,736,222.35 | - | 7,075,259,510.01 | 2,007,190,136.98 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
34. Long-term borrowings
| Category | 31/12/2023 | 31/12/2022 | Range of year-end interest rate |
| Credit borrowings | 16,857,281,855.60 | 12,319,883,867.05 | 1.20%-3.80% |
| Guaranteed borrowings (Note 1) | 845,725,775.58 | 1,020,670,858.02 | 2.95%-12.90% |
| Mortgage and pledged borrowings (Note 2) | 314,794,387.22 | 1,082,723,114.44 | 3.40%-3.96% |
| Guaranteed and mortgage borrowings (Note 3) | 1,242,750,120.32 | 280,013,198.30 | 2.95% |
| Total | 19,260,552,138.72 | 14,703,291,037.81 | — — |
| Less: Long-term borrowings due within one year | 1,033,008,184.01 | 2,313,191,859.96 | — — |
| Including: Credit borrowings | 532,282,391.00 | 1,368,934,869.99 | — — |
| Guaranteed borrowings | 410,725,775.58 | 219,564,028.82 | — — |
| Mortgage and pledged borrowings | 30,352,589.61 | 715,461,578.62 | — — |
| Guaranteed and mortgage borrowings | 59,647,427.82 | 9,231,382.53 | |
| Long-term borrowings due after one year | 18,227,543,954.71 | 12,390,099,177.85 | — — |
Note 1: The borrowings are guaranteed by Shenzhen Magang Godown & Wharf Co., Ltd., China
Merchants Port (Shenzhen) Co., Ltd. and CM Port.
Note 2: On 31 December 2023, the Group obtained the long-term borrowings of RMB
314,794,387.22(31 December 2022: RMB 1,082,723,114.44) with the land with propertyright, fixed assets and construction in progress of Yide Port Co., Ltd. ("Yide Port"), aswell as the land with property right of Guangdong Shunkong Port Development andConstruction Co., Ltd. ("Shunkong Port"), as collaterals.
Note 3: On 31 December 2023, Shenzhen Haixing Harbor Development Co., Ltd. ("Shenzhen
Haixing") obtained the long-term borrowings of RMB 1,242,750,120.32 (31 December2022: RMB 280,013,198.30) with the land with property right as collaterals, and theborrowings are guaranteed by CM Port and Sinotrans South China Co., Ltd.
Details of mortgage and pledged borrowings are as follows:
| Company name | 31/12/2023 | 31/12/2022 | Collateral and pledge |
| Bank of China Qianhai Shekou Branch | 1,242,750,120.32 | 280,013,198.30 | Land use rights of Shenzhen Haixing |
| China Construction Bank Shunde Branch | 206,239,867.27 | 236,479,995.32 | Land use rights and fixed assets of Yide Port |
| Bank of Communications Co., Ltd. Guangdong Branch | 108,554,519.95 | - | Land use rights (Phase II) of Shunde |
| China Development Bank Corporation | - | 494,997,308.55 | The Group's entire equity in CICT |
| International Finance Corporation | - | 123,849,460.76 | The Group's entire equity in TML |
| African Development Bank | - | 56,864,864.36 | |
| Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. | - | 46,859,749.65 | |
| The OpecFund For International Development | - | 40,139,904.25 | |
| Societe de Promotion et de Participation pour la Cooperation Economique S.A. | - | 40,170,265.09 | |
| Deutsche Investitions-und Entwicklungsgesellschaft MBH | - | 33,449,920.21 | |
| China Minsheng Bank Co., Ltd. Zhoushan Branch | - | 9,911,646.25 | Land use rights and fixed assets of Zhoushan RoRo |
| Total | 1,557,544,507.54 | 1,362,736,312.74 |
Note: See Note (VIII) 64 for the above mortgages and pledges.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Bonds payable
(1) Bonds payable
| Item | 31/12/2023 | 31/12/2022 |
| 5.000% USD 600 million corporate bond | 4,304,565,371.23 | 4,227,154,465.35 |
| 4.750% USD 500 million corporate bond | 3,605,285,143.36 | 3,542,544,662.47 |
| 4.000% USD 500 million corporate bond | 3,544,024,689.32 | 3,482,186,896.02 |
| 2.690% RMB 3 billion corporate bond | 3,027,415,890.40 | 3,027,415,890.40 |
| 2.450% RMB 3 billion corporate bond | 3,023,560,273.97 | 3,023,560,273.97 |
| 3.520% RMB 2 billion corporate bond | 2,050,147,945.19 | 2,050,147,945.19 |
| 4.375% USD 900 million corporate bond | - | 6,371,347,105.64 |
| 3.360% RMB 2 billion corporate bond | - | 2,032,587,397.25 |
| Total | 19,554,999,313.47 | 27,756,944,636.29 |
| Less: Bonds payable due within one year | 5,267,490,749.32 | 8,668,651,537.27 |
| Bonds payable due after one year | 14,287,508,564.15 | 19,088,293,099.02 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Bonds payable - continued
(2) Details of bonds payable
| Name of bonds | Face value | Coupon rate | Date of issue | Term of the bond | Amount of issue | 31/12/2022 | 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 | 31/12/2023 | Is it in breach of contract? |
| 4.375% USD 900 million corporate bond | USD 900,000,000.00 | 4.3750% | 2018-8-6 | 5 years | USD 900,000,000.00 | 6,371,347,105.64 | - | 165,969,062.10 | 7,181,597.31 | 6,594,432,388.71 | 49,934,623.66 | - | No |
| 5.000% USD 600 million corporate bond | USD 600,000,000.00 | 5.0000% | 2018-8-6 | 10 years | USD 600,000,000.00 | 4,227,154,465.35 | - | 211,325,733.29 | 5,708,335.36 | 211,183,578.27 | 71,560,415.50 | 4,304,565,371.23 | No |
| 4.750% USD 500 million corporate bond | USD 500,000,000.00 | 4.7500% | 2015-8-3 | 10 years | USD 500,000,000.00 | 3,542,544,662.47 | - | 167,360,385.31 | 2,662,117.20 | 167,360,385.38 | 60,078,363.76 | 3,605,285,143.36 | No |
| 3.360% RMB 2 billion corporate bond | 2,000,000,000.00 | 3.3600% | 2020-7-7 | 3 years | 2,000,000,000.00 | 2,032,587,397.25 | - | 34,612,602.75 | - | 2,067,200,000.00 | - | - | No |
| 3.520% RMB 2 billion corporate bond | 2,000,000,000.00 | 3.5200% | 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 | No |
| 4.000% USD 500 million corporate bond | USD 500,000,000.00 | 4.0000% | 2022-6-1 | 5 years | USD 500,000,000.00 | 3,482,186,896.02 | - | 140,882,105.54 | 2,781,931.67 | 140,841,532.67 | 59,015,288.76 | 3,544,024,689.32 | No |
| 2.690% RMB 3 billion corporate bond | 3,000,000,000.00 | 2.6900% | 2022-8-29 | 3 years | 3,000,000,000.00 | 3,027,415,890.40 | - | 80,700,000.00 | - | 80,700,000.00 | - | 3,027,415,890.40 | No |
| 2.450% RMB 3 billion corporate bond | 3,000,000,000.00 | 2.4500% | 2022-9-5 | 2 years | 3,000,000,000.00 | 3,023,560,273.97 | - | 73,500,000.00 | - | 73,500,000.00 | - | 3,023,560,273.97 | No |
| Total | — — | — — | — — | — — | — — | 27,756,944,636.29 | - | 944,749,888.99 | 18,333,981.54 | 9,405,617,885.03 | 240,588,691.68 | 19,554,999,313.47 | No |
| Less: Bonds payable due within one year | — — | — — | — — | — — | — — | 8,668,651,537.27 | — — | — — | — — | — — | 5,267,490,749.32 | — — | |
| Bonds payable due after one year | — — | — — | — — | — — | — — | 19,088,293,099.02 | — — | — — | — — | — — | 14,287,508,564.15 | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Lease liabilities
(1) Lease liabilities
| Category | 31/12/2023 | 31/12/2022 |
| Lease payment | 2,782,133,802.80 | 1,963,098,776.36 |
| Unrecognized financing cost | -1,532,327,309.02 | -707,805,697.52 |
| Total | 1,249,806,493.78 | 1,255,293,078.84 |
| Less: Lease liabilities due within one year | 248,634,286.86 | 306,942,164.80 |
| Lease liabilities due after one year | 1,001,172,206.92 | 948,350,914.04 |
(2) Maturity of lease liabilities
| Item | 31/12/2023 |
| Minimum lease payments under non-cancellable leases: | |
| 1st year subsequent to the balance sheet date | 298,065,006.16 |
| 2nd year subsequent to the balance sheet date | 91,365,497.12 |
| 3rd year subsequent to the balance sheet date | 86,669,003.03 |
| Subsequent years | 2,306,034,296.49 |
| Total | 2,782,133,802.80 |
The Group is not exposed to any significant liquidity risk associated with lease liabilities.
37. Long-term payables
(1) Presentation of long-term payables
| Item | 31/12/2023 | 31/12/2022 |
| Long-term payables | 4,001,789,922.65 | 3,698,632,219.45 |
| Special payables | 5,606,653.02 | 8,349,096.71 |
| Total | 4,007,396,575.67 | 3,706,981,316.16 |
| Less: Long-term payables due within one year | 184,534,373.50 | 155,665,725.85 |
| Long-term payables due after one year | 3,822,862,202.17 | 3,551,315,590.31 |
(2) Long-term payables
| Item | 31/12/2023 | 31/12/2022 |
| Terminal management rights (Note) | 3,958,393,516.47 | 3,657,579,951.15 |
| Others | 43,396,406.18 | 41,052,268.30 |
| Total | 4,001,789,922.65 | 3,698,632,219.45 |
| Less: Long-term payables due within one year | 184,534,373.50 | 155,665,725.85 |
| Long-term payables due after one year | 3,817,255,549.15 | 3,542,966,493.60 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Long-term payables - continued
(2) Long-term payables - continued
Note: Mainly from CICT and TCP terminal management rights purchased. On 12 August 2011, the
Group reached a 35-year building, operation and transfer agreement through the subsidiary CICTand Sri Lanka Port Authority on the building, operation, management and development ofColombo Port South Container Terminal (hereinafter referred to as "BOT"). The above-mentioned amount payable for the acquisition of terminal management rights is determined bydiscounting the amount to be paid in the future using the prevailing market interest rate accordingto the BOT agreement. As at 31 December 2023, the amount payable for the acquisition ofterminal management rights is RMB 876,500,567.56.
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 of franchisingrights for the Ports of Paranaguá and Antonina was adjusted from Brazil IGP-M InflationIndex ("IGP-M index") to the Extended National Consumer Price Index ("IPCA index") ofBrazilian Institute of Geography and Statistics("IBGE"). In November 2021, TCPreadjusted the franchising rights using the IPCA index. As at 31 December 2023, the amountof franchising rights payable was RMB 3,081,892,948.91.
(3) Special payables
| Item | 31/12/2022 | Increase for the year | Decrease for the year | Effect of changes in the scope of consolidation | 31/12/2023 | Reason |
| Employee housing fund | 5,126,641.68 | 480,061.34 | 50.00 | - | 5,606,653.02 | Note |
| Innovation workshop for model workers | 3,222,455.03 | - | - | -3,222,455.03 | - | |
| Total | 8,349,096.71 | 480,061.34 | 50.00 | -3,222,455.03 | 5,606,653.02 |
Note: 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.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Long-term employee benefits payable
(1) Long-term employee benefits payable
| Item | 31/12/2023 | 31/12/2022 |
| Post-employment benefits - net liabilities of defined benefit plans | 509,605,071.25 | 516,950,669.03 |
| Termination benefits | 58,098,932.22 | 64,274,552.96 |
| Others (Note) | 85,036,743.65 | 112,285,587.01 |
| Total | 652,740,747.12 | 693,510,809.00 |
| Less: Long-term employee benefits payable due within one year | 49,730,825.21 | 54,414,877.57 |
| Long-term employee benefits payable due after one year | 603,009,921.91 | 639,095,931.43 |
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 | 2023 | 2022 |
| I. Opening balance | 516,950,669.03 | 463,858,274.44 |
| II. Defined benefit cost included in profit or loss for the period | 31,630,084.71 | 24,392,165.72 |
| 1. Current service cost | 14,097,094.50 | 11,191,538.44 |
| 2. Past service cost | 2,420,000.00 | - |
| 3. Interest adjustment | 15,112,990.21 | 13,200,627.28 |
| III. Defined benefit cost included in other comprehensive income | -22,975,434.75 | 50,820,198.04 |
| 1. Actuarial gains | -23,856,287.15 | 49,959,657.35 |
| 2. Effect of exchange rate changes | 880,852.40 | 860,540.69 |
| IV. Other changes | -16,000,247.74 | -22,119,969.17 |
| 1. Benefits paid | -16,000,247.74 | -22,119,969.17 |
| 2. Changes in the scope of consolidation | - | - |
| V. Closing balance | 509,605,071.25 | 516,950,669.03 |
The Company's subsidiaries provide the registered retirees and in-service staff with supplementarypost-employment benefit plans.
The Group hired a third-party actuary to estimate the present value of the above-mentionedretirement benefit plan obligations in an actuarial manner based on the expected cumulative welfareunit method. The Group recognizes the liabilities based on the actuarial results. The relevantactuarial gains or losses are included in other comprehensive income and cannot be reclassified intoprofit or loss in the future. Past service costs are recognized in profit or loss for the period in whichthe plan is revised. The net interest is determined by multiplying the defined benefit plan net debtor net assets by the appropriate discount rate.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Provisions
| Item | 31/12/2022 | Increase for the year | Decrease for the year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2023 | Reason |
| Pending litigation | 35,365,156.43 | 52,650,477.00 | 7,489,688.34 | 5,064,114.32 | 85,590,059.41 | Note |
| Sales discount | - | 179,125,657.39 | 179,125,657.39 | - | - | |
| Total | 35,365,156.43 | 231,776,134.39 | 186,615,345.73 | 5,064,114.32 | 85,590,059.41 |
Note: This represents the estimated compensation amount that the Company's subsidiary TCP may
need to pay due to the pending litigation.
40. Deferred income
| Item | 31/12/2022 | Increase for the year | Decrease for the year | 31/12/2023 |
| Government grants | 1,031,273,189.74 | 41,207,834.25 | 47,704,466.26 | 1,024,776,557.73 |
| Total | 1,031,273,189.74 | 41,207,834.25 | 47,704,466.26 | 1,024,776,557.73 |
41. Other non-current liabilities
| Item | 31/12/2023 | 31/12/2022 |
| Actuarial cost for the calculation of pension benefit difference for the public security bureau staff (Note 1) | 198,642,177.67 | 175,742,813.67 |
| Related party borrowings (Note 2) | 11,945,870.35 | 3,162,000.00 |
| Third party borrowings (Note 2) | - | 143,755,523.50 |
| Berth priority call right (Note 3) | 439,990.79 | 4,480,217.05 |
| Others | 2,612,095.27 | 1,600,086.28 |
| Total | 213,640,134.08 | 328,740,640.50 |
| Less: Other non-current liabilities due within one year | 34,005,870.35 | 142,357,523.50 |
| Including: Actuarial cost for the calculation of pension benefits difference for the public security bureau staff | 22,060,000.00 | 15,440,000.00 |
| Related party borrowings | 11,945,870.35 | 3,162,000.00 |
| Third party borrowings | - | 123,755,523.50 |
| Other non-current liabilities due after one year | 179,634,263.73 | 186,383,117.00 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41. Other non-current liabilities - continued
Note 1: It represents the transfer of Zhanjiang Port Public Security Bureau to the People's
Government of Zhanjiang Municipality by Zhanjiang Port, a subsidiary of the Company,in 2020 in accordance with the Notice on the Issuance of the Program on Deepening theManagement System Reform of Ganghang Public Security Organs (Zhong Yang Bian BanFa No. 327 (2017)) and the Notice on the Issuance of the Implementation Plan forDeepening the Management System Reform of Ganghang Public Security Organs inGuangdong Province (Yue Ji Bian Ban Fa No. 221 (2018)). The former in-service policeofficers of Zhanjiang Port Public Security Bureau were transferred as civil servants inaccordance with state regulations, the retired police officers were included in the scope ofpension insurance of the government departments and public institutions in Zhanjiang,and the difference between the pension benefits under the original standard and theretirement benefits of Zhanjiang municipal police officers (the "pension benefitdifference") was borne by Zhanjiang Port.
Shantou Port, a subsidiary of the Company, transferred Shantou Municipal Public SecurityBureau Ganghang Branch (formerly, the Shantou Port Public Security Bureau) to ShantouMunicipal Government, and Shantou Municipal Public Security Bureau Ganghang Branchwas fully taken over by Shantou Municipal Public Security Bureau. The in-service policeofficers were transferred as civil servants in accordance with state regulations, the retiredpolice officers were included in the scope of pension insurance of the governmentdepartments and public institutions in Shantou, and the pension benefit difference wasborne by Shantou Port.
Note 2: It 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: It 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. ChiwanContainer Terminal amortized the berth priority call right over 20 years using straight-linemethod.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Share capital
| Item | 31/12/2022 | Changes for the year | 31/12/2023 | ||||
| New issue of share | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
| 2023 | |||||||
| I. Restricted tradable shares | — — | — — | — — | — — | — — | — — | — — |
| 1. State-owned shares | - | - | - | - | - | - | - |
| 2. State-owned corporate shares | 576,709,537.00 | - | - | - | - | - | 576,709,537.00 |
| 3. Other domestic shares | 7,366.00 | - | - | - | -7,366.00 | -7,366.00 | - |
| 4. Foreign shares | - | - | - | - | - | - | - |
| Total restricted tradable shares | 576,716,903.00 | - | - | - | -7,366.00 | -7,366.00 | 576,709,537.00 |
| II. Non-restricted tradable shares | — — | — — | — — | — — | — — | — — | — — |
| 1. Ordinary shares denominated in RMB | 1,742,468,718.00 | - | - | - | 976.00 | 976.00 | 1,742,469,694.00 |
| 2. Foreign capital shares listed domestically | 179,889,040.00 | - | - | - | 6,390.00 | 6,390.00 | 179,895,430.00 |
| 3. Foreign capital shares listed overseas | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| Total non-restricted tradable shares | 1,922,357,758.00 | - | - | - | 7,366.00 | 7,366.00 | 1,922,365,124.00 |
| III. Total shares | 2,499,074,661.00 | - | - | - | - | - | 2,499,074,661.00 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Share capital - continued
| 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 corporate shares | - | 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 | 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
43. Capital Reserve
| Item | 31/12/2022 | Increase | Decrease | 31/12/2023 |
| 2023 | ||||
| I. Capital premium | 34,208,812,963.50 | 2,244,317,625.22 | - | 36,453,130,588.72 |
| Including: Capital contributed by investors | 17,068,816,277.34 | - | - | 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 1) | 2,165,423,814.02 | 2,242,433,715.25 | - | 4,407,857,529.27 |
| Others | 1,671,635,666.41 | 1,883,909.97 | - | 1,673,519,576.38 |
| II. Other capital reserve | 542,827,871.75 | 104,628,733.77 | 23,740,391.18 | 623,716,214.34 |
| Including: Transfer from capital reserve under the previous accounting system | -2,781,133.00 | - | - | -2,781,133.00 |
| Unexercised share-based payment (Note 2) | 5,591,402.00 | 1,528,712.73 | 475,524.37 | 6,644,590.36 |
| 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 | 540,017,602.75 | 103,100,021.04 | 23,264,866.81 | 619,852,756.98 |
| Total | 34,751,640,835.25 | 2,348,946,358.99 | 23,740,391.18 | 37,076,846,803.06 |
| 2022 | ||||
| I. Capital premium | 23,189,922,809.62 | 11,018,890,153.88 | - | 34,208,812,963.50 |
| Including: Capital contributed by investors | 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 | 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 |
| II. 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 | 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 |
Note 1: 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 2,269,118,327.61. Refer to Note (XI) 2 fordetails.
Note 2: Refer to Note (XVI) 2 for details.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Other comprehensive income
| Item | 31/12/2022 | 2023 | Other changes | 31/12/2023 | |||||
| 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: Amount included in other comprehensive income in the prior period but transferred to retained earnings in the current period | Less: Income tax expenses | Attributable to the Company, net of tax | Attributable to minority shareholders, net of tax | ||||
| 2023 | |||||||||
| I. Other comprehensive income that will not be reclassified subsequently to profit or loss | 51,014,303.06 | 60,755,557.83 | - | - | 846,996.46 | -73,874,071.89 | 133,782,633.26 | - | -22,859,768.83 |
| Including: Changes arising from remeasurement of defined benefit plans | -10,189,712.88 | 25,003,573.00 | - | - | - | 7,480,103.34 | 17,523,469.66 | - | -2,709,609.54 |
| Other comprehensive income that can't be reclassified to profit or loss under equity method | -8,907,673.34 | 32,473,509.74 | - | - | - | -83,841,725.07 | 116,315,234.81 | - | -92,749,398.41 |
| Changes in fair value of other equity instruments | 70,111,689.28 | 3,278,475.09 | - | - | 846,996.46 | 2,487,549.84 | -56,071.21 | - | 72,599,239.12 |
| II. Other comprehensive income that will be reclassified subsequently to profit or loss | -740,567,922.92 | 149,948,207.40 | - | - | - | -140,198,902.60 | 290,147,110.00 | - | -880,766,825.52 |
| Including: Other comprehensive income that may be reclassified to profit or loss under equity method | -60,762,188.43 | -767,504,700.07 | - | - | - | -366,028,318.84 | -401,476,381.23 | - | -426,790,507.27 |
| Translation differences of financial statements denominated in foreign currencies | -679,805,734.49 | 917,452,907.47 | - | - | - | 225,829,416.24 | 691,623,491.23 | - | -453,976,318.25 |
| Total other comprehensive income | -689,553,619.86 | 210,703,765.23 | - | - | 846,996.46 | -214,072,974.49 | 423,929,743.26 | - | -903,626,594.35 |
| 2022 (Restated) | |||||||||
| 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 | 1,701,191,299.27 | - | - | - | 230,791,391.52 | 1,470,399,907.75 | - | -740,567,922.92 |
| 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 | 1,947,824,532.16 | - | - | - | 340,985,099.05 | 1,606,839,433.11 | - | -679,805,734.49 |
| Total other comprehensive income | -890,125,318.18 | 1,628,961,272.07 | - | - | 329,334.05 | 208,085,368.23 | 1,420,546,569.79 | 7,513,669.91 | -689,553,619.86 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Special reserve
| Item | 31/12/2022 | Increase | Decrease | 31/12/2023 |
| Safety production cost | 26,358,259.97 | 61,589,514.21 | 53,943,779.77 | 34,003,994.41 |
46. Surplus reserve
| Item | 31/12/2022 | Increase | Decrease | 31/12/2023 |
| Statutory surplus reserve | 1,001,917,449.15 | 94,063,114.53 | - | 1,095,980,563.68 |
47. Unappropriated profit
| Item | Amount | Proportion of appropriation or allocation |
| 2023 | ||
| Unappropriated profit at the beginning of the year before adjustment | 16,679,688,347.09 | |
| Add: Adjustment to unappropriated profit at beginning of the year | 22,299,954.05 | |
| Including: Changes in accounting policies | 22,299,954.05 | |
| Unappropriated profit at the beginning of the year after adjustment | 16,701,988,301.14 | |
| Add: Net profit of the year attributable to shareholders of the Company | 3,571,800,762.16 | |
| Unappropriated profit carried forward from other comprehensive income | - | |
| Less: Transfer to statutory surplus reserve in the current year | 94,063,114.53 | |
| Transfer to discretionary surplus reserve in the current year | - | |
| Ordinary shares' dividends payable | 1,124,583,597.45 | Note 1 |
| Ordinary shares' dividends converted into share capital | - | |
| Pension benefit difference | 7,944,921.60 | Note 2 |
| Transfer to the National Council for Social Security Fund of the PRC | - | |
| Distribution to holders of other equity instruments | - | |
| Others | 1,883,909.97 | |
| Unappropriated profit at the end of the year | 19,045,313,519.75 | |
| Item | Amount | Proportion of appropriation or allocation |
| 2022 (Restated) | ||
| 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 | 21,052,360.17 | |
| Including: Changes in accounting policies | 21,052,360.17 | |
| Unappropriated profit at the beginning of the year after adjustment | 14,226,931,466.66 | |
| Add: Net profit of the year attributable to shareholders of the Company | 3,338,693,816.70 | |
| Unappropriated profit carried forward from other comprehensive income | 7,513,669.91 | |
| Less: Transfer to statutory surplus reserve in the current year | 40,734,887.15 | |
| Transfer to discretionary surplus reserve in the current year | - | |
| Ordinary shares' dividends payable | 826,617,003.32 | |
| Ordinary shares' dividends converted into share capital | - | |
| Pension benefit difference | 3,798,761.66 | |
| Distribution to holders of other equity instruments | ||
| Others | - | |
| Unappropriated profit at the end of the year | 16,701,988,301.14 | |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47. Unappropriated profit - continued
Note 1: According to the resolution of shareholders' meeting on 22 May 2023, the Company
distributes cash dividends of RMB 4.50 (inclusive of tax) for every 10 shares, totallingRMB 1,124,583,597.45 on the basis of the total shares of 2,499,074,661 at the end of 2022.
Note 2: This represents the difference between the pension benefits under the original standard
and the retirement benefits of Shantou municipal police officers borne by Shantou Port.Shantou Port recognizes the related liabilities based on the actuarial results, andunappropriated profit of RMB 7,944,921.60 is eliminated based on the proportion ofequity interest in Shantou Port.
48. Operating income and operating costs
(1) Details of operating income and operating costs
| Item | 2023 | 2022 | ||
| Income | Cost | Income | Cost | |
| Principal operation | 15,568,944,030.70 | 9,085,897,544.06 | 16,072,394,601.93 | 9,433,786,605.46 |
| Other operations | 181,531,749.52 | 232,289,163.69 | 158,094,525.62 | 216,675,107.48 |
| Total | 15,750,475,780.22 | 9,318,186,707.75 | 16,230,489,127.55 | 9,650,461,712.94 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
48. Operating income and operating costs - continued
(2) Breakdown information of operating income and operating costs
| Category of contracts | Ports operation | Bonded logistics operation | Other operations | Total | ||||
| Operating income | Operating costs | Operating income | Operating costs | Operating income | Operating costs | Operating income | Operating costs | |
| Mainland China, Hong Kong and Taiwan area | 10,284,643,568.10 | 6,714,915,284.62 | 492,433,288.31 | 254,604,583.47 | 181,531,749.52 | 232,289,163.69 | 10,958,608,605.93 | 7,201,809,031.78 |
| - Pearl River Delta | 6,075,691,801.01 | 3,640,281,453.34 | 343,594,001.79 | 181,329,868.92 | 181,531,749.52 | 232,289,163.69 | 6,600,817,552.32 | 4,053,900,485.95 |
| - Yangtze River Delta | 557,788,311.93 | 361,926,675.75 | - | - | - | - | 557,788,311.93 | 361,926,675.75 |
| - Bohai Rim | 76,760,801.96 | 63,825,074.56 | 148,839,286.52 | 73,274,714.55 | - | - | 225,600,088.48 | 137,099,789.11 |
| - Other areas | 3,574,402,653.20 | 2,648,882,080.97 | - | - | - | - | 3,574,402,653.20 | 2,648,882,080.97 |
| Other countries | 4,751,630,018.56 | 2,081,165,945.51 | 40,237,155.73 | 35,211,730.46 | - | - | 4,791,867,174.29 | 2,116,377,675.97 |
| Total | 15,036,273,586.66 | 8,796,081,230.13 | 532,670,444.04 | 289,816,313.93 | 181,531,749.52 | 232,289,163.69 | 15,750,475,780.22 | 9,318,186,707.75 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
48. 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 the service.For bonded logistics service and other services, the customers evenly obtain and consume theeconomic 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 of renderingservices, the Group recognizes revenue using straight-line method. At the same time, the Group isprimarily responsible for the above services and generally does not have any commitment to theamount of money expected to be returned to the customer.
Part of the Group's handling contracts are established with discount terms, i.e., the customers whosebusiness volume reaches agreed level, are granted with preferential charge rate or discount. At theend of the year, as the business volume finally realized within the contract period is uncertain, thecontract consideration is subject to variable factors. The management includes this part of discountin other payables and provisions. At the end of the year, the variable considerations arising fromsales discount are set out in Note (VIII) 31 (3) and Note (VIII) 39.
(4) Descriptions on allocation to remaining performance obligations
At the end of the year, the amount of revenue corresponding to the performance obligations whichthe Group has entered into a contract for but has not fulfilled or completely fulfilled mainly includedthe contract liabilities of RMB 142,080,101.00, of which RMB 97,512,251.80 is expected to berecognized as revenue in 2024; and RMB 44,567,849.20 is expected to be recognized as revenue in2025 and subsequent years.
49. Taxes and surcharges
| Item | 2023 | 2022 |
| Property tax | 75,912,651.85 | 63,233,633.53 |
| Land use tax | 37,809,190.33 | 36,260,260.97 |
| City construction and maintenance tax | 7,891,945.97 | 8,456,389.09 |
| Education surcharges and local education surcharges | 5,953,401.79 | 6,253,550.00 |
| Stamp duty | 5,057,465.35 | 8,694,943.46 |
| Others (Note) | 180,373,370.90 | 159,350,696.41 |
| Total | 312,998,026.19 | 282,249,473.46 |
Note: Others mainly represent the social contribution tax and tax on services borne by TCP, a
subsidiary of the Company, totalled BRL 120,997,445.84 (equivalent to RMB170,698,356.69) for the year.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Administrative expenses
| Item | 2023 | 2022 |
| Employee benefits | 1,297,690,387.03 | 1,280,394,043.79 |
| Depreciation expenses | 75,710,865.79 | 79,095,275.09 |
| Fees paid to agencies | 63,693,285.42 | 80,164,840.55 |
| Amortization of intangible assets | 56,233,463.25 | 54,493,578.78 |
| Others | 283,313,153.89 | 270,946,998.30 |
| Total | 1,776,641,155.38 | 1,765,094,736.51 |
51. Research and development expenses
| Item | 2023 | 2022 |
| Employee benefits | 163,593,250.77 | 218,783,071.72 |
| Direct materials and outsourced R&D | 41,115,107.10 | 47,737,604.22 |
| Depreciation and amortization | 11,500,358.17 | 15,813,613.68 |
| Others | 7,530,356.03 | 5,371,889.08 |
| Total | 223,739,072.07 | 287,706,178.70 |
52. Financial expenses
| Item | 2023 | 2022 |
| Interest expenses | 2,016,181,859.25 | 1,960,177,578.36 |
| Less: Interest income | 497,593,921.36 | 469,834,098.05 |
| Less: Capitalized interest expenses | 45,140,959.39 | 30,960,097.84 |
| Exchange differences | 85,519,920.28 | 477,004,284.27 |
| Interest expenses -Terminal management rights (Note) | 206,277,567.64 | 222,326,056.63 |
| Interest expenses on lease liabilities | 60,834,329.16 | 73,619,268.64 |
| Handling fee | 5,316,520.88 | 21,148,526.03 |
| Others | 7,718,011.68 | 5,232,154.38 |
| Total | 1,839,113,328.14 | 2,258,713,672.42 |
Note: Details are set out in Note (VIII) 37.
53. Other income
| Classification by nature | 2023 | 2022 |
| Business development subsidy | 113,983,657.91 | 94,355,004.33 |
| Transfer from allocation of deferred income (Note VIII 40) | 47,704,466.26 | 45,858,732.41 |
| Additional deduction of VAT | 25,604,125.36 | 45,179,805.12 |
| Special fund for operation | 18,439,586.22 | 7,385,898.57 |
| Steady post subsidies | 1,682,015.15 | 5,771,198.38 |
| Others | 16,975,409.87 | 43,097,431.61 |
| Total | 224,389,260.77 | 241,648,070.42 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
54. Investment income
(1) Details of investment income:
| Item | 2023 | 2022 |
| Income from long-term equity investments under equity method | 5,979,007,585.96 | 7,185,182,148.75 |
| Including: Income from long-term equity investments of associates under equity method | 5,582,402,904.90 | 6,765,840,426.95 |
| Income from long-term equity investments of joint ventures under equity method | 396,604,681.06 | 419,341,721.80 |
| Investment income from disposal of subsidiaries | 216,949,902.47 | - |
| Income from disposal of long-term equity investments (Losses are marked with "-") | 77,647.56 | -20,508.06 |
| Investment income from held-for-trading financial assets | 91,219,728.19 | 152,728,622.47 |
| Investment income from other non-current financial assets | 41,365,576.62 | 39,525,241.71 |
| Dividend income from investments in other equity instruments | 20,056,500.00 | 240,001.46 |
| Total | 6,348,676,940.80 | 7,377,655,506.33 |
(2) Details of income from long-term equity investments under equity method
| Investee | 2023 | 2022 | Reason for changes |
| SIPG | 3,700,844,097.27 | 4,762,565,562.93 | Changes in net profit of investee |
| Ningbo Zhoushan | 1,049,986,813.85 | 351,607,511.90 | Changes in net profit of investee |
| Terminal Link SAS | 221,059,137.39 | 364,965,366.44 | Changes in net profit of investee |
| Nanshan Group | 214,805,574.66 | 206,680,217.04 | Changes in net profit of investee |
| Euro-Asia Oceangate S.àr.l. | 186,208,262.73 | 140,072,915.26 | Changes in net profit of investee |
| Liaoning Port | 151,571,456.52 | 144,196,061.13 | Changes in net profit of investee |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | 42,538,797.17 | 218,696,415.40 | Changes in net profit of investee |
| Others | 411,993,446.37 | 996,398,098.65 | Changes in net profit of investee |
| Total | 5,979,007,585.96 | 7,185,182,148.75 |
55. Gains (Losses) from changes in fair value
| Source resulting in gains from changes in fair values (Losses are marked with "-") | 2023 | 2022 |
| Held-for-trading financial assets | 49,197,662.35 | 34,417,357.38 |
| Other non-current financial assets | 24,155,138.17 | -163,451,007.49 |
| Including: Financial assets at fair value through profit or loss | 24,155,138.17 | -163,451,007.49 |
| Total | 73,352,800.52 | -129,033,650.11 |
56. Gains (Losses) from impairment of credit
| Item | 2023 | 2022 |
| I. Losses from impairment of credit of accounts receivable | -9,285,389.19 | -5,939,952.37 |
| II. Gains (Losses) from impairment of credit of other receivables (Losses are marked with "-") | 43,872,200.88 | -217,234,842.93 |
| III. Gains (Losses) from impairment of credit of long-term receivables (Losses are marked with "-") | 2,697,229.49 | -298,781.25 |
| Total | 37,284,041.18 | -223,473,576.55 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
57. Losses from impairment of assets
| Item | 2023 | 2022 |
| Losses from impairment of fixed assets | -149,923,619.44 | -6,048,776.05 |
| Losses from impairment of intangible assets | -41,473,147.97 | -15,537,122.10 |
| Gains (Losses) from decline in value of inventories (Losses are marked with "-") | 99,456.13 | -573,122.05 |
| Total | -191,297,311.28 | -22,159,020.20 |
58. Gains from disposal of assets
| Item | 2023 | 2022 | Amount included in non-recurring profit or loss for the current year |
| Gains from disposal of non-current assets | 36,759,532.61 | 55,130,095.52 | 36,759,532.61 |
| Including: Gains from disposal of intangible assets | 35,051,791.80 | 57,590,483.04 | 35,051,791.80 |
| Gains (Losses) from disposal of fixed assets (Losses are marked with "-") | 1,713,921.04 | -1,824,719.58 | 1,713,921.04 |
| Other losses | -6,180.23 | -635,667.94 | -6,180.23 |
59. Non-operating income
| Item | 2023 | 2022 | Amount included in non-recurring profit or loss for the current year |
| Compensation received for violation of contracts | 55,396,338.32 | 2,930,876.85 | 55,396,338.32 |
| Management service fee and directors' remuneration | 11,964,440.07 | 8,190,857.40 | 11,964,440.07 |
| Land rent deduction | 7,124,609.25 | 6,421,113.49 | 7,124,609.25 |
| Income from relocation compensation | 5,558,730.17 | 6,955,000.00 | 5,558,730.17 |
| Gains from retirement or damage of non-current assets | 1,966,904.66 | 3,138,573.24 | 1,966,904.66 |
| Including: Gains from retirement or damage of fixed assets | 1,765,984.40 | 3,138,573.24 | 1,765,984.40 |
| Exempted current accounts | 197,118.09 | 25,091,421.77 | 197,118.09 |
| Insurance claims | 44,269.64 | 341,555.58 | 44,269.64 |
| Operation compensation (Note) | - | 213,574,591.16 | - |
| Government grants | - | 1,640,553.77 | - |
| Others | 5,049,613.92 | 10,989,909.51 | 5,049,613.92 |
| Total | 87,302,024.12 | 279,274,452.77 | 87,302,024.12 |
Note: Refer to Note (VIII), 7.3 (2) for details.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
60. Non-operating expenses
| Item | 2023 | 2022 | Amount included in non-recurring profit or loss for the current year |
| Litigation loss | 42,689,603.93 | 20,603,558.61 | 42,689,603.93 |
| Losses on retirement of non-current assets | 24,548,001.45 | 162,620,964.79 | 24,548,001.45 |
| Including: Losses on retirement or damage of fixed assets | 22,356,701.04 | 34,444,521.73 | 22,356,701.04 |
| Expenditure on public welfare donations | 11,153,329.51 | 21,352,071.53 | 11,153,329.51 |
| Compensation and liquidated damages | 1,195,947.89 | 11,552,735.44 | 1,195,947.89 |
| Administrative fines and late fees | 624,038.01 | - | 624,038.01 |
| Others | 16,861,919.93 | 4,312,924.31 | 16,861,919.93 |
| Total | 97,072,840.72 | 220,442,254.68 | 97,072,840.72 |
61. Borrowing costs
| Item | Capitalization rate | Amount capitalized |
| Construction in progress | — — | — — |
| Phase I project for the stuffing and destuffing service area of Baoman Port Area, Zhanjiang Port | 3.50% | 10,355,373.62 |
| Phase II project for the operation area terminal at Liaogeshan Port Area, Foshan Port | 4.19% | 10,134,790.48 |
| Installation project of bucket-wheel stacker reclaimer, Zhanjiang Port | 3.50% | 837,359.25 |
| Phase I expansion project for the container terminal at Baoman Port Area, Zhanjiang Port | 3.30% | 57,750.00 |
| Other non-current assets | — — | — — |
| Advances for channels | 3.50% | 23,755,686.04 |
| Sub-total | — — | 45,140,959.39 |
| Interest expenses included in profit or loss for the period (Excludes interest expense on terminal operating rights and lease liabilities） | — — | 1,971,040,899.86 |
| Total | — — | 2,016,181,859.25 |
62. Translation of foreign currencies
| Item | 2023 |
| Exchange differences included in profit or loss for the period | 85,519,920.28 |
| Total | 85,519,920.28 |
63. Income tax expenses
| Item | 2023 | 2022 |
| Current income tax expenses | 1,129,424,872.77 | 871,429,455.95 |
| Deferred income tax expenses | 174,154,980.16 | 241,530,220.80 |
| Total | 1,303,579,852.93 | 1,112,959,676.75 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
63. Income tax expenses - continued
Reconciliation of income tax expenses to the accounting profit is as follows:
| Item | 2023 |
| Total profit | 8,799,191,938.69 |
| Income tax expenses calculated at 25% | 2,199,797,984.67 |
| Effect of non-deductible costs, expenses and losses | 272,242,876.02 |
| Accrued income tax | 384,531,164.82 |
| Effect of deductible temporary differences and deductible losses for which deferred tax assets are not recognized in the year | 232,164,986.26 |
| Effect of tax-free income (Note) | -1,152,685,934.75 |
| Effect of tax incentives and changes in tax rate | -461,574,423.95 |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | -191,471,358.38 |
| Effect of utilizing deductible losses for which deferred tax assets were not recognized in prior period | -47,180,168.14 |
| Effect of adjustments to income tax of prior year | -19,545,836.05 |
| Others | 87,300,562.43 |
| Income tax expenses | 1,303,579,852.93 |
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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
64. Assets with restricted ownership and use right
| Item | 31/12/2023 | 31/12/2022 | ||||||
| Gross carrying amount | Carrying amount | Type of restriction | Status of restriction | Gross carrying amount | Carrying amount | Type of restriction | Status of restriction | |
| Cash and bank balances (Note 1) | 46,535,456.14 | 46,535,456.14 | Restricted guarantee | Performance bonds, frozen funds, etc. | 9,309,145.94 | 9,309,145.94 | Restricted guarantees | Performance bonds, frozen funds for card business of Bank of Communications |
| Equity investment in CICT (Note 2) | - | - | — — | — — | 2,115,796,097.99 | 2,115,796,097.99 | Pledge | Pledge of equity |
| Equity investment in TML (Note 2) | - | - | — — | — — | 1,047,063,416.30 | 1,047,063,416.30 | Pledge | Pledge of equity |
| Fixed assets (Note 3) | 330,222,332.58 | 291,001,239.59 | Mortgage | Mortgage borrowings | 341,870,382.84 | 341,870,382.84 | Mortgage | Mortgage borrowings |
| Intangible assets (Note 3) | 457,654,685.65 | 457,654,685.65 | Mortgage | Mortgage borrowings | 222,040,259.68 | 222,040,259.68 | Mortgage | Mortgage borrowings |
| Construction in progress (Note 3) | - | - | — — | — — | 4,298,598.50 | 4,298,598.50 | Restricted construction in progress | Mortgage borrowings |
| Total | 834,412,474.37 | 795,191,381.38 | — — | — — | 3,740,377,901.25 | 3,740,377,901.25 | — — | — — |
Note 1: Details of restricted cash and bank balances are set out in Note (VIII) 1.
Note 2: Details of pledged equity are set out in Note (VIII) 34.
Note 3: Details of mortgage borrowings are set out in Note (VIII) 24 and Note (VIII) 34.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Provision for impairment of assets and provision for credit loss
| Item | 31/12/2022 | Effect of changes in the scope of consolidation | Provision for the year | Reversal for the year | Write-off and charge-off for the year | Transfer-out due to sale in the current year | Other increases for the year | Other decreases for the year | Effect of translation of financial statements denominated in foreign currencies | 31/12/2023 |
| Provision for credit loss of accounts receivable | 94,013,267.44 | -5,662,552.89 | 20,976,076.79 | -11,690,687.60 | - 8,087,700.00 | - | - | - | 1,473,959.35 | 91,022,363.09 |
| Provision for credit loss of other receivables | 1,003,685,597.76 | -581,674.48 | 3,495,816.21 | -47,368,017.09 | -73,074.00 | - | - | - | -2,076,917.54 | 957,081,730.86 |
| Provision for decline in value of inventories | 1,326,130.64 | - | - | -99,456.13 | - | - | - | - | 7,953.87 | 1,234,628.38 |
| Provision for credit loss of long-term receivables | 3,875,396.19 | - | 921,438.82 | -3,618,668.31 | - | - | - | - | - | 1,178,166.70 |
| Provision for impairment of long-term equity investments | 357,168,270.27 | - | - | - | - | - | - | - | 5,165,805.49 | 362,334,075.76 |
| Provision for impairment of fixed assets | 63,574,868.76 | - | 149,923,619.44 | - | - | - | - | - | 5,994.88 | 213,504,483.08 |
| Provision for impairment of intangible assets | 15,537,122.10 | - | 41,473,147.97 | - | - | - | - | - | - | 57,010,270.07 |
| Provision for impairment of goodwill | 970,663,044.33 | - | - | - | - | - | - | - | - | 970,663,044.33 |
| Total | 2,509,843,697.49 | -6,244,227.37 | 216,790,099.23 | -62,776,829.13 | -8,160,774.00 | - | - | - | 4,576,796.05 | 2,654,028,762.27 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Other comprehensive income, net of tax
Details are set out in Note (VIII) 44.
67. Items in cash flow statement
(1) Cash relating to operating activities
Other cash receipts relating to operating activities
| Item | 2023 | 2022 |
| Interest income | 316,807,536.02 | 258,843,106.76 |
| Government grants | 163,169,407.30 | 146,183,117.33 |
| Guarantees and deposits | 59,967,562.07 | 56,548,699.29 |
| Insurance indemnities | 11,868,450.00 | 58,668,674.41 |
| Rentals | 11,677,109.86 | 6,633,711.38 |
| Others | 364,073,953.84 | 614,917,616.16 |
| Total | 927,564,019.09 | 1,141,794,925.33 |
Other cash payments relating to operating activities
| Item | 2023 | 2022 |
| Advance payment | 191,928,420.03 | 328,830,785.30 |
| Operating expenses such as operating costs and administrative expenses etc. | 167,200,604.70 | 136,317,839.62 |
| Guarantees and deposits | 59,616,680.63 | 47,134,870.60 |
| Rentals | 26,007,218.14 | 22,559,158.93 |
| Harbor dues on cargo | 7,279,452.46 | 14,619,372.24 |
| Port charges | 5,743,216.19 | 5,422,920.14 |
| Others | 395,451,467.06 | 471,440,206.57 |
| Total | 853,227,059.21 | 1,026,325,153.40 |
(2) Cash relating to investing activities
Cash receipts relating to significant investing activities
| Item | 2023 | 2022 |
| Recovered structured deposits | 28,397,000,000.00 | 40,874,000,000.00 |
| Recovered lending(Note 1) | 2,965,681,743.10 | - |
| Dividends received | 2,186,696,975.69 | 2,239,605,794.55 |
| Funds for disposal of subsidiaries received (Note 2) | 1,683,385,533.43 | - |
| Total | 35,232,764,252.22 | 43,113,605,794.55 |
Note 1: It represents the recovery of RMB 2,965,681,743.10 lent to Terminal Link SAS.
Note 2: The funds received for disposal of subsidiaries during the year represent the amount
received for disposal of Ningbo Daxie.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Items in cash flow statement - continued
(2) Cash relating to investing activities - continued
Cash payments relating to significant investing activities
| Item | 2023 | 2022 |
| Purchase of structured deposits | 29,967,000,000.00 | 36,954,000,000.00 |
| Investment funds | - | 17,549,460,113.25 |
| Total | 29,967,000,000.00 | 54,503,460,113.25 |
Other cash receipts relating to investing activities
| Item | 2023 | 2022 |
| Recovered lending by Terminal Link SAS | 2,965,681,743.10 | - |
| Interest on advances for the project | 177,940,904.60 | 169,844,015.81 |
| Net cash receipts from acquisition of subsidiaries and other business units | - | 74,295,900.85 |
| Recovered principal for the advances of the project | - | 45,535,614.18 |
| Others | 21,332,655.57 | 5,388,978.50 |
| Total | 3,164,955,303.27 | 295,064,509.34 |
Other cash payments relating to investing activities
| Item | 2023 | 2022 |
| Performance guarantees for project development | 39,087,797.69 | - |
| Disposal of equity of subsidiaries | 35,267,442.35 | - |
| Payment of taxes on land acquisition and reserve by An Tong Jie Terminal Warehouse Service (Shenzhen) Co., Ltd. ("ATJ") | - | 947,426,040.54 |
| Others | 8,308,063.29 | 7,376,441.76 |
| Total | 82,663,303.33 | 954,802,482.30 |
(3) Cash relating to financing activities
Other cash receipts relating to financing activities
| Item | 2023 | 2022 |
| Sale and leaseback proceeds | 328,026,212.50 | 50,000,000.00 |
| Others | 6,728,017.13 | 6,303,169.80 |
| Total | 334,754,229.63 | 56,303,169.80 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 139 -
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Items in cash flow statement - continued
(3) Cash relating to financing activities - continued
Other cash payments relating to financing activities
| Item | 2023 | 2022 |
| Repayment of perpetual bonds | 4,222,148,460.84 | - |
| Payment for the Company's acquisition of minority interests of CM Port | 872,848,916.41 | 660,552,076.54 |
| Lease expenses paid | 829,455,300.35 | 422,373,905.31 |
| Payment for the Company's acquisition of minority interests of Oasis King International Limited | 818,659,106.04 | - |
| Payment for the Company's acquisition of minority interests of CM International Tech | 109,901,500.00 | - |
| Payment for non-public shares issued by the Company | - | 7,778,570.52 |
| Others | 14,080,546.68 | 33,412,187.98 |
| Total | 6,867,093,830.32 | 1,124,116,740.35 |
Changes in liabilities arising from financing activities
| Item | 31/12/2022 | Increase for the year | Decrease for the year | 31/12/2023 | ||
| Cash changes | Non-cash changes | Cash changes | Non-cash changes | |||
| Short-term borrowings | 7,164,338,366.18 | 18,324,960,509.40 | 531,121,750.39 | 10,306,375,337.00 | - | 15,714,045,288.97 |
| Long-term borrowings | 12,390,099,177.85 | 11,091,911,738.15 | - | 4,325,439,446.26 | 929,027,515.03 | 18,227,543,954.71 |
| Non-current liabilities due within one year | 11,641,223,688.95 | - | 7,930,642,448.33 | 12,695,530,031.31 | 58,931,816.72 | 6,817,404,289.25 |
| Bonds payable | 19,088,293,099.02 | - | 199,215,465.13 | - | 5,000,000,000.00 | 14,287,508,564.15 |
| Lease liabilities | 948,350,914.04 | - | 404,265,256.81 | 114,686,862.61 | 236,757,101.32 | 1,001,172,206.92 |
| Dividends payable | 92,374,921.29 | - | 2,924,344,643.64 | 2,880,173,694.97 | 24,648,655.69 | 111,897,214.27 |
| Other current liabilities | 3,017,713,424.64 | 6,328,026,212.50 | 77,180,966.07 | 7,415,730,466.23 | - | 2,007,190,136.98 |
| Total | 54,342,393,591.97 | 35,744,898,460.05 | 12,066,770,530.37 | 37,737,935,838.38 | 6,249,365,088.76 | 58,166,761,655.25 |
(4) The Company has no cash flows presented on a net basis
(5) Significant activities that do not involve cash receipts and payment for the current period
but have an impact on the enterprise's financial position or may affect the enterprise's cashflows in the future and their financial effects:
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
| Supplementary information | 2023 | 2022 (Restated) |
| 1. Reconciliation of net profit to cash flows from operating activities: | — — | — — |
| Net profit | 7,495,612,085.76 | 8,231,903,300.27 |
| Add: Provision for impairment of assets | 191,297,311.28 | 22,159,020.20 |
| Provision for impairment of credit | -37,284,041.18 | 223,473,576.55 |
| Depreciation of fixed assets | 1,983,548,731.36 | 2,015,080,231.04 |
| Depreciation of investment properties | 182,833,076.22 | 184,276,397.36 |
| Depreciation of right-of-use assets | 357,502,960.45 | 349,846,619.98 |
| Amortization of intangible assets | 686,879,674.72 | 663,429,174.32 |
| Amortization of long-term prepaid expenses | 92,971,461.67 | 84,874,394.19 |
| Losses (Gains) from disposal of fixed assets, intangible assets and other long-term assets (Losses are marked with "-") | -36,759,532.61 | -55,130,095.52 |
| Losses on retirement of fixed assets, intangible assets and other long-term assets | 22,581,096.79 | 159,482,391.55 |
| Losses (Gains) from changes in fair value (Losses are marked with "-") | -73,352,800.52 | 129,033,650.11 |
| Financial expenses | 2,185,350,735.70 | 2,532,320,466.47 |
| Investment loss (income) (Losses are marked with "-") | -6,348,676,940.80 | -7,377,655,506.33 |
| Decrease in deferred tax assets | 19,435,343.92 | 20,145,903.44 |
| Increase in deferred tax liabilities | 154,719,636.24 | 221,384,317.36 |
| Decrease (Increase) in inventories (Losses are marked with "-") | 6,316,130.87 | -30,798,761.65 |
| Decrease (Increase) in operating receivables (Losses are marked with "-") | -132,511,582.62 | -245,987,914.80 |
| Increase (Decrease) in operating payables (Losses are marked with "-") | -170,856,712.08 | -207,459,774.19 |
| Net cash flows from operating activities | 6,579,606,635.17 | 6,920,377,390.35 |
| 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 | - | - |
| 3. Net changes in cash and cash equivalents: | — — | |
| Closing balance of cash | 16,018,613,631.10 | 13,567,309,471.62 |
| Less: Opening balance of cash | 13,567,309,471.62 | 12,727,355,238.36 |
| Add: Closing balance of cash equivalents | - | - |
| Less: Opening balance of cash equivalents | - | - |
| Net increase in cash and cash equivalents | 2,451,304,159.48 | 839,954,233.26 |
(2) Cash and cash equivalents
| Item | 31/12/2023 | 31/12/2022 |
| I. Cash | 16,018,613,631.10 | 13,567,309,471.62 |
| Including: Cash on hand | 974,692.93 | 726,960.10 |
| Bank deposits available for payment at any time | 16,009,954,475.85 | 13,045,336,190.09 |
| Other monetary funds available for payment at any time | 7,684,462.32 | 521,246,321.43 |
| II. Cash equivalents | - | - |
| III. Balance of cash and cash equivalents at the end of the year | 16,018,613,631.10 | 13,567,309,471.62 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Supplementary information to the cash flow statement - continued
(3) Net cash receipts from disposal of subsidiaries
| Amount | |
| Cash or cash equivalents received in the current year from disposal of subsidiaries in the current year | 1,797,936,550.00 |
| Including: Ningbo Daxie | 1,714,909,050.00 |
| Dalian Port Logistics Network Co., Ltd. | 63,716,000.00 |
| Yingkou Gangxin Technology Co., Ltd. | 19,311,500.00 |
| Less: Cash and cash equivalents held by subsidiaries on the date when control is lost | 149,818,458.92 |
| Including: Ningbo Daxie | 31,523,516.57 |
| Dalian Port Logistics Network Co., Ltd. | 86,068,813.26 |
| Yingkou Gangxin Technology Co., Ltd. | 32,226,129.09 |
| Add: Cash or cash equivalents received in the current year from disposal of subsidiaries in prior periods | - |
| Including: Ningbo Daxie | - |
| Dalian Port Logistics Network Co., Ltd. | - |
| Yingkou Gangxin Technology Co., Ltd. | - |
| Net cash receipts from disposal of subsidiaries | 1,648,118,091.08 |
(4) The Company has no items with restricted use but are still presented as cash and cash
equivalents.
(5) Cash and bank balances not classified as cash and cash equivalents
| Items | 2023 | 2022 | Reason |
| Restricted guarantees | 44,697,370.16 | 9,297,145.94 | Restricted scope of use |
| Interest receivable from bank deposits | 14,497,091.00 | 16,126,969.60 | Not actually received |
| Funds frozen for litigation | 1,826,085.98 | - | Not available for withdrawal at any time |
| Guarantees frozen for ETC | 12,000.00 | 12,000.00 | Not available for withdrawal at any time |
| Interest on time deposit | - | 23,183,152.24 | Not actually received |
| Total | 61,032,547.14 | 48,619,267.78 | / |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
69. Foreign currency monetary items
| Item | Closing balance in foreign currency | Exchange rate | Closing balance in RMB |
| Cash and bank balances | 2,988,104,992.31 | ||
| Including: HKD | 19,647,056.77 | 0.9062 | 17,804,555.79 |
| USD | 317,185,988.33 | 7.0827 | 2,246,533,199.54 |
| RMB | 408,295,641.99 | 1.0000 | 408,295,641.99 |
| EUR | 40,140,420.78 | 7.8592 | 315,471,594.99 |
| Accounts receivable | 173,075,521.17 | ||
| Including: HKD | 512,979.31 | 0.9062 | 464,872.11 |
| USD | 1,423,085.41 | 7.0827 | 10,079,287.03 |
| EUR | 20,680,395.21 | 7.8592 | 162,531,362.03 |
| Other receivables | 799,457,535.30 | ||
| Including: HKD | 524,271,214.69 | 0.9062 | 475,105,060.18 |
| USD | 1,343,324.84 | 7.0827 | 9,514,366.84 |
| EUR | 9,691,705.64 | 7.8592 | 76,169,052.97 |
| RMB | 238,669,055.31 | 1.0000 | 238,669,055.31 |
| Long-term receivables | 282,209,825.00 | ||
| Including: EUR | 25,995,028.12 | 7.8592 | 204,300,125.00 |
| Short-term borrowings | 6,885,485,000.00 | ||
| USD | 550,000,000.00 | 7.0827 | 3,895,485,000.00 |
| RMB | 2,990,000,000.00 | 1.0000 | 2,990,000,000.00 |
| Accounts payable | 40,104,170.70 | ||
| Including: HKD | 1,173,832.48 | 0.9062 | 1,063,750.47 |
| USD | 44,617.49 | 7.0827 | 316,012.30 |
| EUR | 4,927,270.96 | 7.8592 | 38,724,407.93 |
| Other payables | 668,048,202.56 | ||
| Including: HKD | 32,251,917.27 | 0.9062 | 29,227,332.47 |
| USD | 39,743,432.26 | 7.0827 | 281,490,807.67 |
| EUR | 13,924,592.03 | 7.8592 | 109,436,153.68 |
| RMB | 247,893,908.74 | 1.0000 | 247,893,908.74 |
| Non-current liabilities due within one year | 175,706,225.87 | ||
| Including: USD | 23,489,155.23 | 7.0827 | 166,366,639.76 |
| RMB | 9,339,586.11 | 1.0000 | 9,339,586.11 |
| Long-term borrowings | 4,656,000,000.00 | ||
| Including: RMB | 4,656,000,000.00 | 1.0000 | 4,656,000,000.00 |
| Bonds payable | 11,287,508,564.15 | ||
| Including: USD | 1,593,673,113.95 | 7.0827 | 11,287,508,564.15 |
| Long-term payables | 9,391,615.50 | ||
| Including: HKD | 2,366,680.97 | 0.9062 | 2,144,733.63 |
| USD | 1,023,180.69 | 7.0827 | 7,246,881.87 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
70. Leases
(1) Lessor under operating lease
| Item | Amount |
| I. Revenue | — — |
| Lease income | 288,005,772.42 |
| 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 | 206,915,451.16 |
| 2nd year | 144,032,701.64 |
| 3rd year | 118,298,471.55 |
| 4th year | 83,869,818.08 |
| 5th year | 45,923,854.38 |
| Over 5 years | 121,551,555.20 |
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.
(2) Lessee
| Item | Amount |
| Interest expenses on lease liabilities | 60,834,329.16 |
| 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 | 55,635,496.52 |
| 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 | 2,564,521.41 |
| 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 | 11,364,199.51 |
| Total cash outflows relating to leases | 837,856,182.83 |
| Income (loss) from sale and leaseback transactions | 61,743,409.02 |
| Cash inflows from sale and leaseback transactions | 328,026,212.50 |
| Cash outflows from sale and leaseback transactions | 520,496,584.08 |
| Others | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
70. Leases - continued
(2) Lessee - continued
Sale and leaseback transactions and basis for determination:
Note: For the purpose of raising funds and leasing back for use, the Company carries out sale and
leaseback transaction with the legally owned terminal assets as the subject of the transferand the leased assets, for a term of three years. As the Company is entitled to repurchase atthe expiry of the lease term and the repurchase price is not lower than the original sellingprice, it is considered as a financing transaction and is recognized as a long-term payablewhen the amount is received from the lessor, and the difference between the original sellingprice and the repurchase price is recognized as interest expenses.
(IX) R&D EXPENDITURE
1. Disclosure by nature of expenses
| Item | 2023 | 2022 |
| Employee benefits | 166,273,348.83 | 222,334,684.01 |
| Direct materials and outsourced R&D | 78,769,899.84 | 57,140,031.23 |
| Depreciation and amortisation | 11,654,856.90 | 16,295,546.56 |
| Others | 15,963,664.54 | 23,694,839.98 |
| Total | 272,661,770.11 | 319,465,101.78 |
| Including: R&D expenditure recorded as expenses | 223,739,072.07 | 287,706,178.70 |
| R&D expenditure capitalised | 48,922,698.04 | 31,758,923.08 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 145 -
(IX) R&D EXPENDITURE - continued
2. Development expenditure for R&D projects that qualify for capitalisation
| Item | 31/12/2022 | Increase | Decrease | 31/12/2023 | ||
| Internal development expenditure | Recognised as fixed assets | Recognised as intangible assets | Transferred to profit or loss for the period | |||
| Eport | - | 30,150,532.71 | - | - | - | 30,150,532.71 |
| Other R&D projects | 17,412,196.16 | 19,364,847.34 | 15,065,485.70 | 279,255.32 | 592,682.01 | 20,839,620.47 |
| Total | 17,412,196.16 | 49,515,380.05 | 15,065,485.70 | 279,255.32 | 592,682.01 | 50,990,153.18 |
(X) CHANGES IN SCOPE OF CONSOLIDATION
1. Disposal of subsidiaries
Loss of control over subsidiaries
| Name of the subsidiary | Point in time of losing control | Disposal consideration at point in time of losing control | Disposal proportion at point in time of losing control (%) | Disposal approach at point in time of losing control | Determination basis for point in time of losing control | Difference between disposal consideration and shares of corresponding net assets of the subsidiary at consolidated level | Proportion of remaining equity at the date of losing control (%) | Amount of other comprehensive income related to equity investments of the original subsidiary transferred to investment gains or losses or retained earnings |
Ningbo Daxie
| Ningbo Daxie | August 2023 | 1,845,000,000.00 | 45.00 | Transfer of equity | Completion of transaction and transfer of control | 205,336,602.02 | - | - |
Dalian Port Logistics NetworkCo., Ltd.
| Dalian Port Logistics Network Co., Ltd. | November 2023 | 63,716,000.00 | 79.03 | Transfer of equity | Completion of transaction and transfer of control | 19,694,127.20 | - | - |
| Gangxin Technology | November 2023 | 19,311,500.00 | 100.00 | Transfer of equity | Completion of transaction and transfer of control | -8,080,826.75 | - | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 146 -
(XI) 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 of the Company (%) | 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 48,730,938,800 | 0.38 | 48.90 | 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 |
| CM International Tech | Shenzhen China | Shenzhen China | IT service | 8,784.82 | 56.26 | 43.74 | 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 | - | 100.00 | 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 | - | 100.00 | Business combination involving enterprises under common control |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 147 -
(XI) 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 of the Company (%) | 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 SCT | BVI | BVI | Investment holding | USD 120.00 | - | 80.00 | Business combination involving enterprises under common control |
| Oasis King International Limited | BVI | BVI | Investment holding | USD 100.00 | - | 100.00 | 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 | - | 100.00 | Business combination involving enterprises under common control |
| Gainpro Resources Limited | BVI | BVI | Investment holding | USD 1.00 | - | 76.47 | Business combination involving enterprises under common control |
| Hambantota International Port Group (Private) Limited | Sri Lanka | Sri Lanka | Logistics support services | USD 1,145,480,000 | - | 85.00 | Business combination involving enterprises under common control |
| Shantou port | Shantou China | Shantou China | Logistics support services | 12,500.00 | - | 60.00 | Business combination involving enterprises under common control |
| Shenzhen Jinyu Rongtai Investment Development Co., Ltd. | Shenzhen China | Shenzhen China | Property lease, etc. | 80,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Merchants Qianhaiwan Real Estate Co., Ltd | Shenzhen China | Shenzhen China | Property lease, etc. | 20,000.00 | - | 100.00 | Asset acquisition |
| 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 | 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 | - | 100.00 | Asset acquisition |
| Zhanjiang Port | Zhanjiang China | Zhanjiang China | Logistics support services | 587,420.91 | 30.78 | 27.58 | Business combination not involving enterprises under common control |
| Zhanjiang Port International Container Terminal Co., Ltd. | 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 |
| Zhanjiang Port Logistics | Zhanjiang China | Zhanjiang China | Logistics support services | 10,000.00 | - | 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 | - | 51.00 | 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 involving enterprises under common control |
| Ports Development (Hong Kong) Limited | 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 | 34,489.79 | 51.00 | - | Asset acquisition |
| South Asia Trade and Logistics Center Co., Ltd.("SACL") ( Note 5) | Sri Lanka | Sri Lanka | Logistics support services | USD 37,140,000 | - | 70.00 | Established through investment |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XI) 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 2023, CM Port respectively distributed 2022 dividends and 2023interim dividends to shareholders. The shareholders may select to receive the dividendsall in cash or shares, or receive the dividends part in cash and part in new shares. TheCompany and Ports Development (Hong Kong) Co., Ltd. select to receive all dividendsattributable to their shareholdings in CM Port in the form of shares, and CMHK selects toreceive the 2022 dividends in cash and the 2023 interim dividends attributable to itsshareholding in CM Port in the form of shares. In 2023, Ports Development (Hong Kong)Co., Ltd. acquired 94,702,000 ordinary shares of CM Port from the secondary market.Upon the completion of above distribution and the transaction, the proportion of theordinary shares of CM Port held by the Group to the total issued ordinary shares of CMPort was changed from 45.69% to 49.28%, while the proportion of the ordinary shares ofCM Port held by CMHK to the total issued ordinary shares of CM Port was changed from
22.42% to 21.85%. Therefore, the Company has 71.13% voting power on CM Port in totaland is able to exercise 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 itin the 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 inthe scope 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.
Note 5: SACL is a limited liability company established by CM Port in Sri Lanka on 21 April
2023.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XI) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(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 | 50.72 | 3,790,168,766.29 | 1,716,130,041.14 | 61,593,070,426.41 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XI) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Major financial information of significant non-wholly-owned subsidiaries
| Name of the subsidiary | 31/12/2023 | 31/12/2022 | ||||||||||
| 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 | 15,917,026,132.04 | 135,313,877,243.36 | 151,230,903,375.40 | 18,457,977,486.53 | 27,802,818,508.45 | 46,260,795,994.98 | 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 |
| Name of the subsidiary | 2023 | 2022 | ||||||
| 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 | 10,503,277,811.44 | 6,466,697,575.11 | 7,608,794,449.88 | 4,852,710,141.52 | 10,926,649,847.41 | 7,771,272,424.87 | 9,468,881,467.49 | 5,181,954,271.51 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XI) 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 Group's ownership interests in CM Port is changed from 45.69% to 49.28%.Details are set out in Note (XI) 1 (1).
During the year, the Group's ownership interests in CM International Tech is changed from 56.92%to 100%.
During the year, the Group's ownership interests in Oasis King International Limited is changedfrom 70.00% to 100%.
(2) Effect of the transactions on minority interests and equity attributable to owners of the
Company
| CM Port | CM International Tech | Oasis King International Limited | Total | |
| Acquisition cost | ||||
| - Cash | 880,259,262.73 | 109,901,500.00 | 818,659,106.04 | 1,808,819,868.77 |
| - Fair value of non-cash assets | 1,398,559,890.07 | - | - | 1,398,559,890.07 |
| Total acquisition cost | 2,278,819,152.80 | 109,901,500.00 | 818,659,106.04 | 3,207,379,758.84 |
| Less: Share of net assets of subsidiaries calculated based on the proportion of equity acquired | 4,547,937,480.41 | 82,775,475.48 | 819,100,518.20 | 5,449,813,474.09 |
| Difference | -2,269,118,327.61 | 27,126,024.52 | -441,412.16 | -2,242,433,715.25 |
| Including: Adjustment to capital reserve | 2,269,118,327.61 | -27,126,024.52 | 441,412.16 | 2,242,433,715.25 |
| 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 |
| Ningbo Zhoushan | Ningbo, PRC | Ningbo, PRC | Port and container terminal business | 20.98 | 2.10 | Equity method |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XI) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of significant associate
| SIPG | ||
| 31/12/2023 / 2023 | 31/12/2022/ 2022 | |
| Current assets | 53,049,570,240.87 | 46,525,054,810.02 |
| Including: Cash and cash equivalents | 35,721,676,040.14 | 26,843,326,028.04 |
| Non-current assets | 150,525,944,932.10 | 135,276,650,788.84 |
| Total assets | 203,575,515,172.97 | 181,801,705,598.86 |
| Current liabilities | 22,835,359,505.98 | 25,863,891,496.14 |
| Non-current liabilities | 44,553,743,360.00 | 34,770,765,671.21 |
| Total liabilities | 67,389,102,865.98 | 60,634,657,167.35 |
| Net assets | 136,186,412,306.99 | 121,167,048,431.51 |
| Minority interests | 13,010,972,126.11 | 8,839,640,972.54 |
| Net assets attributable to owners of the Company | 123,175,440,180.88 | 112,327,407,458.97 |
| Share of net assets calculated based on the proportion of ownership interests | 34,550,710,970.74 | 31,507,837,792.24 |
| Adjustments | ||
| - Goodwill | 2,427,508,397.27 | 2,427,508,397.27 |
| - Others | 234,665,770.76 | 236,552,011.66 |
| Carrying amount of equity investments in associates | 37,212,885,138.77 | 34,171,898,201.17 |
| Fair value of publicly quoted equity investments in associates | 32,003,432,940.50 | 34,877,210,592.30 |
| Operating income | 37,551,570,005.56 | 37,279,806,723.63 |
| Net profit | 14,007,787,452.35 | 17,910,112,648.83 |
| Other comprehensive income | -58,126,233.99 | -526,788,637.24 |
| Total comprehensive income | 13,949,661,218.36 | 17,383,324,011.59 |
| Dividends received from associates in the current year | 914,383,798.30 | 1,240,688,187.97 |
| Ningbo Zhoushan | |
| 31/12/2023 | |
| Current assets | 19,223,549,000.00 |
| Including: Cash and cash equivalents | 9,635,337,000.00 |
| Non-current assets | 93,105,852,000.00 |
| Total assets | 112,329,401,000.00 |
| Current liabilities | 22,201,633,000.00 |
| Non-current liabilities | 9,429,720,000.00 |
| Total liabilities | 31,631,353,000.00 |
| Net assets | 80,698,048,000.00 |
| Minority interests | 5,828,457,000.00 |
| Net assets attributable to owners of the Company | 74,869,591,000.00 |
| Share of net assets calculated based on the proportion of ownership interests | 17,279,901,602.80 |
| Adjustments | |
| - Goodwill | 1,231,115,756.87 |
| - Others | 120,136,754.64 |
| Carrying amount of equity investments in associates | 18,631,154,114.31 |
| Fair value of publicly quoted equity investments in associates | 15,982,528,312.20 |
| Operating income | 25,993,200,000.00 |
| Net profit | 5,156,174,000.00 |
| Other comprehensive income | 76,072,000.00 |
| Total comprehensive income | 5,232,246,000.00 |
| Dividends received from associates in the current year | 390,875,794.33 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XI) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of significant associate - continued
Note: Ningbo Zhoushan has become an important associate this year and only disclosed financial
data for this year, Ningbo Zhoushan's financial data are accurate to the nearest RMB1,000.00.
5. Summarized financial information of insignificant associates and joint ventures
| Item | 31/12/2023 /2023 | 31/12/2022 / 2022 (Restated) |
| Joint ventures: | — — | — — |
| Total carrying amount of investments | 8,957,993,335.22 | 9,716,793,055.72 |
| Aggregate of following items calculated based on the proportion of ownership interest | — — | — — |
| - Net profit | 396,604,681.06 | 419,341,721.80 |
| - Other comprehensive income | -879,272,391.47 | 175,421,702.38 |
| - Total comprehensive income | -482,667,710.41 | 594,763,424.18 |
| Associates: | — — | — — |
| Total carrying amount of investments | 31,864,085,187.97 | 48,475,602,662.16 |
| Aggregate of following items calculated based on the proportion of ownership interest | — — | — — |
| - Net profit | 831,571,993.78 | 2,003,274,864.02 |
| - Other comprehensive income | 138,977,006.59 | -300,868,120.56 |
| - Total comprehensive income | 970,549,000.37 | 1,702,406,743.46 |
6. The investees where the Group holds long-term equity investments are not restricted
to transfer funds to the Group.
(XII) GOVERNMENT GRANTS
1. Government grants recognised as receivables at the end of current year
| Balance of receivables as at the end of current year | 2,181,470.00 |
2. Liabilities involving government grants
| Item | 31/12/2022 | New government grants | Amount included in non-operating income | Amount included in other income | Other changes | 31/12/2023 | Related to assets/income |
| Deferred income | 1,031,273,189.74 | 41,207,834.25 | - | 47,704,466.26 | - | 1,024,776,557.73 | Related to assets |
| Total | 1,031,273,189.74 | 41,207,834.25 | - | 47,704,466.26 | - | 1,024,776,557.73 | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XII) GOVERNMENT GRANTS - continued
3. Government grants included in profit or loss
| Item | 2023 | 2022 |
| Business development subsidy | 113,983,657.91 | 94,355,004.33 |
| Special fund for operation | 18,439,586.22 | 7,385,898.57 |
| Steady post subsidies | 1,682,015.15 | 5,771,198.38 |
| Others | 15,133,244.06 | 42,331,663.35 |
| Total | 149,238,503.34 | 149,843,764.63 |
(XIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
The Group's major financial instruments include cash and bank balances, held-for-trading financialassets, notes receivable, accounts receivable, receivables financing, other receivables, long-termreceivables, other non-current financial assets, borrowings, notes payable, accounts payable, otherpayables, other current liabilities, non-current liabilities due within one year, bonds payable, long-term payables, other non-current liabilities, etc. Details of these financial instruments are disclosedin Note (VIII). The risks associated with these financial instruments and the policies on how tomitigate these risks are set out below. Management of the Group manages and monitors theseexposures to ensure the risks are monitored at a certain level.
The Group adopts sensitivity analysis technique to analyse how the profit and loss for the periodand shareholders' equity would have been affected by reasonably possible changes in the relevantrisk variables. As it is unlikely that risk variables will change in an isolated manner, and theinterdependence among risk variables will have significant effect on the amount ultimatelyinfluenced by the changes in a single risk variable, the following are based on the assumption thatthe change in each risk variable is on a stand-alone basis.
1. Risk management objectives, policies and procedures, and changes for the period
The Group's risk management objectives are to achieve a proper balance between risks and yield,minimise the adverse impacts of risks on the Group's operation performance, and maximise thebenefits of the shareholders and other stakeholders. Based on these risk management objectives, theGroup's basic risk management strategy is to identify and analyse the Group's exposure to variousrisks, establish an appropriate maximum tolerance to risk, implement risk management, andmonitors regularly and effectively these exposures to ensure the risks are monitored at a certainlevel.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives, policies and procedures, and changes for the period- continued
1.1 Market risk
1.1.1 Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. TheGroup's exposure to the currency risk is primarily associated with HKD, USD and EUR. Except forpart of the purchases and sales, the Group's other principal activities are denominated and settled inRMB. As at 31 December 2023, the balances of the Group's assets and liabilities are bothdenominated in functional currency, except that the assets and liabilities set out below are recordedusing foreign currencies. Currency risk arising from the foreign currency balance of assets andliabilities may have impact on the Group's performance.
| Item | 31/12/2023 | 31/12/2022 |
| Cash and bank balances | 487,182,682.32 | 799,833,569.05 |
| Accounts receivable | 10,544,159.14 | 29,766,083.42 |
| Other receivables | 339,131,902.71 | 360,531,571.16 |
| Long-term receivables | 204,300,125.00 | - |
| Short-term borrowings | 2,990,000,000.00 | 4,090,000,000.00 |
| Accounts payable | 1,379,762.77 | 2,372,883.60 |
| Other payables | 300,187,007.82 | 246,131,122.92 |
| Non-current liabilities due within one year | 9,339,586.11 | 670,000,000.00 |
| Long-term borrowings | 4,656,000,000.00 | 3,669,000,000.00 |
| Long-term payables | 9,391,615.50 | - |
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 exchange ratemovements, the management considers it is unlikely that the exchange rate changes in the next yearwill result in significant loss to the Group.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives, policies and procedures, and changes for the period- continued
1.1 Market risk - continued
1.1.1 Currency risk - continued
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges andhedges of a net investment in a foreign operation are highly effective. On the basis of the aboveassumption, where all other variables are held constant, the reasonably possible changes in theforeign exchange rate may have the following pre-tax effect on the profit or loss for the period andshareholders' equity:
| Item | Changes in exchange rate | 2023 | 2022 | ||
| Effect on profit | Effect on shareholders' equity | Effect on profit | Effect on shareholders' equity | ||
| All foreign currencies | 5% increase against RMB | -362,713,439.88 | -362,713,439.88 | -383,846,068.61 | -383,846,068.61 |
| All foreign currencies | 5% decrease against RMB | 362,713,439.88 | 362,713,439.88 | 383,846,068.61 | 383,846,068.61 |
| All foreign currencies | 5% increase against USD | -18,083,083.38 | -18,083,083.38 | 5,221,127.37 | 5,221,127.37 |
| All foreign currencies | 5% decrease against USD | 18,083,083.38 | 18,083,083.38 | -5,221,127.37 | -5,221,127.37 |
| All foreign currencies | 5% increase against HKD | 23,046,933.58 | 23,046,933.58 | 3,837,255.04 | 3,837,255.04 |
| All foreign currencies | 5% decrease against HKD | -23,046,933.58 | -23,046,933.58 | -3,837,255.04 | -3,837,255.04 |
| All foreign currencies | 5% increase against EUR (including FCFA) | 11,592,634.53 | 11,592,634.53 | 419,047.06 | 419,047.06 |
| All foreign currencies | 5% decrease against EUR (including FCFA) | -11,592,634.53 | -11,592,634.53 | - 419,047.06 | - 419,047.06 |
1.1.2 Interest rate risk - changes in cash flows
Risk of changes in cash flows of financial instruments arising from interest rate changes is mainlyrelated to bank loans with floating interest rate. (See Note (VIII) 24 and Note (VIII) 34). The Groupcontinuously and closely monitors the impact of interest rate changes on the Group's interest raterisk. The Group's policy is to maintain these borrowings at floating rates. Presently, the Group hasno arrangement such as interest rate swaps.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives, policies and procedures, and changes for the period- continued
1.1 Market risk - continued
1.1.2 Interest rate risk - changes in cash flows - continued
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 interest ratecan 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 and liabilitiesare calculated using cash flow discounting method by applying the market interest rate at balancesheet date.
On the basis of above assumptions, where the other variables held constant, the pre-tax effect ofpossible and reasonable changes in interest rate on the profit or loss for the period and shareholders'equity are as follows:
| Item | Changes in interest rate | 2023 | 2022 | ||
| Effect on profit | Effect on shareholders' equity | Effect on profit | Effect on shareholders' equity | ||
| Short-term borrowings and long-term borrowings | 1% increase | -342,406,182.88 | -342,406,182.88 | -207,621,560.74 | -207,621,560.74 |
| Short-term borrowings and long-term borrowings | 1% decrease | 342,406,182.88 | 342,406,182.88 | 207,621,560.74 | 207,621,560.74 |
1.2 Credit risk
As at 31 December 2023, the Group's maximum exposure to credit risk which will cause a financialloss to the Group due to failure to discharge an obligation by the counterparties and financialguarantees issued by the Group (without considering the available collateral or other creditenhancements) is arising from cash and bank balances (Note (VIII), 1), notes receivable (Note(VIII), 3), accounts receivable (Note (VIII), 4), other receivables (Note (VIII), 7), long-termreceivables (Note (VIII), 11), etc. At the balance sheet date, the carrying amounts of the Group'sfinancial assets represent its maximum exposure to credit risk. In addition, the Group's maximumcredit risk exposure to credit losses includes the amount of financial guarantee contract as disclosedin Note (XVII), 2 "Contingencies".
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
1. Risk management objectives, policies and procedures, and changes for the period- continued
1.2 Credit risk - continued
In order to minimise the credit risk, the Group has delegated a department responsible fordetermination of credit limits, credit approvals and other monitoring procedures to ensure thatfollow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverableamount of financial assets at each balance sheet date to ensure that adequate provision for creditloss is made for relevant financial assets. In this regard, the management of the Group considersthat the Group's credit risk is significantly reduced.
The credit risk on cash and bank balances is limited because they are deposited with financialinstitutions with high credit ratings.
The Group has no significant concentration of credit risk, with exposure spread over a number ofcounterparties and customers.
The Group has adopted a policy to ensure that all sales customers have good credit records.
1.3 Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and cashequivalents deemed adequate by the management to finance the Group's operations and mitigatethe effects of fluctuations in cash flows. The management monitors the utilisation of bankborrowings and ensures compliance with loan covenants.
As at 31 December 2023, the Group had total current liabilities in excess of total current assets ofRMB 5,612,418,164.44. As at 31 December 2023, the Group had available and unused line of creditand bonds amounting to RMB 69,439,268,355.68, which is greater than the balance of the netcurrent liabilities. The Group can obtain financial support from the available line of credit and bondswhen needed. Therefore, the Group's management believes that the Group has no significantliquidity risk.
The following is the maturity analysis for financial assets and financial liabilities held by the Groupwhich 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 | 15,714,045,288.97 | 16,173,813,350.97 | 16,173,813,350.97 | - | - |
| Notes payable | 73,461,165.82 | 73,461,165.82 | 73,461,165.82 | - | - |
| Accounts payable | 691,765,137.25 | 691,765,137.25 | 691,765,137.25 | - | - |
| Other payables | 1,654,622,170.02 | 1,654,622,170.02 | 1,654,622,170.02 | - | - |
| Non-current liabilities due within one year | 6,745,613,464.04 | 7,946,167,971.57 | 7,946,167,971.57 | - | - |
| Other current liabilities | 2,143,842,534.53 | 2,153,429,383.85 | 2,153,429,383.85 | - | - |
| Long-term borrowings | 18,227,543,954.71 | 19,240,642,199.11 | - | 17,013,554,984.11 | 2,227,087,215.00 |
| Bonds payable | 14,287,508,564.15 | 15,590,487,807.53 | - | 15,590,487,807.53 | - |
| Lease liabilities | 1,001,172,206.92 | 2,484,068,796.64 | - | 282,009,548.65 | 2,202,059,247.99 |
| Long-term payables | 3,817,255,549.15 | 6,096,325,412.76 | - | 826,260,924.50 | 5,270,064,488.26 |
| Related-party guarantees | 347,437,758.18 | 347,437,758.18 | 114,527,259.00 | 156,254,811.86 | 76,655,687.32 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 159 -
(XIV) DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
| Item | Fair value at 31/12/2023 | |||
| 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 | - | 4,568,806,108.84 | - | 4,568,806,108.84 |
| Receivables financing | - | - | 2,001,669.46 | 2,001,669.46 |
| Investments in other equity instruments | - | - | 157,461,648.16 | 157,461,648.16 |
| Other non-current financial assets | 850,222,729.23 | - | 27,353,713.60 | 877,576,442.83 |
| Total assets continuously measured at fair value | 850,222,729.23 | 4,568,806,108.84 | 186,817,031.22 | 5,605,845,869.29 |
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 31 December2023.
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 31/12/2023 | Valuation techniques | Inputs |
| Held-for-trading financial assets | 4,568,806,108.84 | 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 the input.
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 31/12/2023 | Valuation techniques | Inputs |
| Receivables financing | 2,001,669.46 | Cash flow discounting | Discount rate |
| Investments in other equity instruments | 157,461,648.16 | Net worth method | Carrying amount |
| Other non-current financial assets | 737,436.89 | Net worth method | Carrying amount |
| Other non-current financial assets | 26,616,276.71 | 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 asnet worth method, listed company comparison approach etc.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 160 -
(XIV) DISCLOSURE OF FAIR VALUE - continued
5. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and liabilities not measured at fair value mainly include notes receivable,accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable,other payables, long-term borrowings, bonds payable, lease liabilities and long-term payables etc.
The Group's management believes that the carrying amounts of financial assets and financialliabilities at amortized cost in the financial statements approximate their fair values.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 161 -
(XV) 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 Development CompanyLimited respectively. The ultimate controlling shareholder of the Company is China Merchants Group.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in Note (X) 1, Note (XI) 1.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 162 -
(XV) 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 (XI) 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 as follows:
| Name of joint venture or associate | Relationship with the Company |
| Port of Newcastle and its subsidiaries | Joint venture |
| Guizhou East Land Port Operation Co., Ltd. | Joint venture |
| Qingdao Qianwan 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 |
| 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 |
| Ningbo Port Container Transportation Co., Ltd. | Associate |
| Shenzhen Chiwan Haike Industrial Operation Co., Ltd. | Associate |
| Liaoning Port and its subsidiaries | Associate, controlled by the same ultimate controlling shareholder |
| New Land-Sea Corridor Operation (Zhanjiang) Co., Ltd. | Associate |
| Antong Holdings and its subordinate companies | Associate |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 163 -
(XV) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
| Name of other related parties | Relationship with the Company |
| 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 |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | Minority shareholder of subsidiary |
| Dalian Port Logistics Technology Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Dalian Port Communications Engineering Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Marine Shipping Agency Guangdong Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Hoi Tung (Shanghai) Company Limited | Controlled by the same ultimate controlling shareholder |
| 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 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 |
| 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 |
| 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XV) 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 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-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. and its subsidiaries ("Yingkou Port Group") | 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 West Port Security Service Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Dalian Port Container | Controlled by the same ultimate controlling shareholder |
| China Merchants Apartment Development (Shenzhen) 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 |
| Jifa Logistics | 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 |
| 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 |
| China Merchants Port and Shipping Digital Technology (Liaoning) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Ocean Driller III Limited | Controlled by the same ultimate controlling shareholder |
| Dalian Ganglong Technology Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Qingdao Sinotrans Logistics Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Shenzhen Wanhai Building Management Co., Ltd. | Significantly influenced by the ultimate controlling shareholder |
| China Merchants Union (BVI) limited | Significantly influenced by the 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 |
| 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 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 165 -
(XV) 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 | 2023 | 2022 | |
| Receipt of services: | |||||
| Shenzhen Bay Electricity Industry Co., Ltd. | Service expense | Negotiation | 56,553,895.23 | 55,476,519.62 | |
| Shenzhen Nanyou (Holdings) Ltd. | Service expense | Negotiation | 37,373,052.06 | 5,764,441.32 | |
| China Merchants (Shenzhen) Power Supply Co., Ltd. | Service expense | Negotiation | 19,085,551.42 | 17,893,208.32 | |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Service expense | Negotiation | 18,954,315.25 | 18,229,532.95 | |
| China Merchants Property Management (Shenzhen) Co., Ltd. | Service expense | Negotiation | 15,013,993.93 | 7,959,601.92 | |
| Nanshan Group and its subsidiaries | Service expense | Negotiation | 12,922,553.88 | 20,553,330.63 | |
| Ocean Driller III Limited | Service expense | Negotiation | 12,444,743.72 | - | |
| Shenzhen West Port Security Service Co., Ltd. | Service expense | Negotiation | 11,300,450.18 | 11,952,754.94 | |
| Yiu Lian Dockyards Limited | Service expense | Negotiation | 8,104,140.51 | 8,489,653.19 | |
| Ningbo Zhoushan and its subsidiaries | Service expense | Negotiation | 7,569,178.76 | 14,417,120.66 | |
| China Merchants Zhangzhou Development Zone Power Supply Co., Ltd. | Service expense | Negotiation | 6,449,368.77 | 5,562,706.02 | |
| International Djibouti Industrial Parks Operation FZCo | Service expense | Negotiation | 6,264,666.66 | 2,344,919.84 | |
| Hoi Tung (Shanghai) Company Limited | Service expense | Negotiation | 5,014,184.85 | 19,923,373.82 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Service expense | Negotiation | 5,000,000.00 | 3,896,620.63 | |
| Other related parties | Service expense | Negotiation | 37,272,690.46 | 60,512,567.41 | |
| China Merchants Bank Co., Ltd. | Purchase of structured deposits | Negotiation | 3,180,000,000.00 | 900,061,111.11 | |
| China Merchants Group Finance Company Limited | Interest expense | Negotiation | 26,303,900.66 | 74,066,413.54 | |
| China Merchants Bank Co., Ltd. | Interest expense | Negotiation | 17,596,634.76 | 8,970,399.98 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | Interest expense | Negotiation | 2,117,332.10 | 724,437.17 | |
| Total | 3,485,340,653.20 | 1,236,798,713.07 | |||
| Rendering of service: | |||||
| COSCO Logistics (Zhanjiang) Co., Ltd. | Service income | Negotiation | 243,101,038.82 | 203,783,472.45 | |
| Antong Holdings and its subordinate companies | Service income | Negotiation | 108,978,140.94 | 124,308,389.86 | |
| Liaoning Port and its subsidiaries | Service income | Negotiation | 80,155,659.35 | 165,608,963.82 | |
| China Ocean Shipping Agency (Zhanjiang) Co., Ltd | Service income | Negotiation | 75,114,485.59 | 59,100,409.00 | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Service income | Negotiation | 69,319,211.87 | 61,896,678.04 | |
| China Marine Shipping Agency Guangdong Co., Ltd. | Service income | Negotiation | 36,263,254.23 | 57,816,828.74 | |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | Service income | Negotiation | 26,223,978.84 | 29,854,035.10 | |
| Yingkou Port Group Co., Ltd. and its subsidiaries ("Yingkou Port Group") | Service income | Negotiation | 25,600,739.56 | 41,932,643.50 | |
| Yiu Lian Dockyards (Shekou) Limited | Service income | Negotiation | 12,403,540.05 | 15,088,720.57 | |
| Sinotrans Container Lines Co., Ltd. | Service income | Negotiation | 11,703,055.83 | 7,891,652.35 | |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | Service income | Negotiation | 10,684,159.25 | 5,354,930.31 | |
| New Land-Sea Corridor Operation (Zhanjiang) Co., Ltd. | Service income | Negotiation | 9,724,814.72 | - | |
| CM Port Chuangrong (Shenzhen) Technology Co., Ltd. | Service income | Negotiation | 8,632,714.51 | 8,665,860.83 | |
| Shenzhen Baohong Technology Co., Ltd. | Service income | Negotiation | 8,201,361.90 | 5,562,857.25 | |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Service income | Negotiation | 7,196,978.46 | 4,050,145.80 | |
| China Merchants Port Investment Development Company Limited | Service income | Negotiation | 6,905,698.13 | 1,907,632.07 | |
| China Ocean Shipping Agency Shenzhen Co. Ltd. | Service income | Negotiation | 6,779,104.47 | 4,966,841.25 | |
| Other related parties | Service income | Negotiation | 81,221,890.50 | 141,359,228.82 | |
| Terminal Link SAS | Service income | Negotiation | 138,262,807.50 | 169,844,015.81 | |
| Port of Newcastle and its subsidiaries | Service income | Negotiation | 55,424,394.92 | 17,721,583.77 | |
| China Merchants Bank Co., Ltd. | Service income | Negotiation | 51,248,973.95 | 105,426,962.23 | |
| China Merchants Group Finance Company Limited | Service income | Negotiation | 33,052,458.75 | 25,519,980.42 | |
| Tianjin Haitian Bonded Logistics Co., Ltd. | Service income | Negotiation | 1,210,342.38 | 1,558,375.91 | |
| China Merchants Union (BVI) limited | Default income | Negotiation | 34,137,339.48 | - | |
| Total | 1,141,546,144.00 | 1,259,220,207.90 | |||
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 166 -
(XV) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(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 | 14,311,677.72 | 10,222,395.86 |
| Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Port and terminal facilities | Negotiation | 6,680,118.90 | 6,876,165.97 |
| China Merchant Food (China) Co., Ltd. | Buildings and structures | Negotiation | 5,964,675.96 | 5,683,461.66 |
| China Traffic Import and Export Co., Ltd. | Buildings and structures | Negotiation | 5,473,072.56 | 5,473,072.56 |
| Qingdao Sinotrans Mining Technology Co., Ltd. | Buildings and structures | Negotiation | 4,750,557.12 | 4,750,557.12 |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | Buildings and structures | Negotiation | 3,438,231.48 | 3,558,552.62 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Buildings and structures | Negotiation | 3,323,938.08 | 3,037,651.81 |
| CM Port Chuangrong (Shenzhen) Technology Co., Ltd. | Equipment and storage yards | Negotiation | 2,719,625.46 | 1,819,957.10 |
| Qingdao Wutong Century Supply Chain Co., Ltd. | Buildings and structures | Negotiation | 2,705,626.50 | 2,119,296.03 |
| China Merchants Securities Co., Ltd. | Buildings and structures | Negotiation | 2,697,967.83 | 2,567,514.78 |
| Nanshan Group and its subsidiaries | Buildings and structures | Negotiation | 2,283,922.57 | 5,065,342.55 |
| Yiu Lian Dockyards (Shekou) Limited | Buildings and structures | Negotiation | 2,268,270.47 | 2,195,466.64 |
| Qingdao Sinotrans Logistics Co., Ltd. | Buildings and structures | Negotiation | 2,064,723.80 | - |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | Buildings and structures | Negotiation | - | 7,152,157.00 |
| Other related parties | Buildings and structures, land use rights | Negotiation | 5,928,324.10 | 5,600,826.68 |
| Total | 64,610,732.55 | 66,122,418.38 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 167 -
(XV) 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 | Short-term lease expenses or expenses on leases of low-value assets that are accounted for using simplified approach | Variable lease payments that are not included in the measurement of lease liabilities | Rental paid | Interest expenses on lease liabilities | Addition to right-of-use assets | |||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||
| China Merchants Finance Lease (Shanghai) Co., Ltd. | Port and terminal facilities, Machinery and equipment | - | - | - | - | 110,343,653.60 | 116,152,138.56 | 7,734,573.29 | 13,517,478.02 | - | - |
| Nanshan Group | Buildings and structures, Port and terminal facilities, Land use right, Others | 34,242.32 | 28,161.16 | - | - | 69,881,796.93 | 72,311,711.35 | 4,454,094.13 | 7,595,712.33 | - | 9,903,480.08 |
| China Merchants Tongshang Finance Lease Co., Ltd. | Machinery and equipment | - | - | - | - | 46,381,918.54 | 64,099,065.58 | 1,266,294.12 | 3,844,907.71 | - | - |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | Port and terminal facilities | - | - | - | - | 41,997,224.42 | 38,839,274.64 | 4,035,780.92 | 4,986,303.85 | - | - |
China Merchants Shekou Industrial Zone HoldingsCo., Ltd.
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Port and terminal facilities, Land use right | - | - | - | - | 36,699,122.62 | 36,699,122.62 | 1,209,619.98 | 3,046,636.47 | 91,911,426.83 | 78,187,153.30 |
| EuroAsia Dockyard Enterprise and Development Limited | Port and terminal facilities | - | - | - | - | 14,908,924.82 | 14,696,367.93 | 446,855.68 | 440,484.85 | 14,462,069.14 | 14,255,883.08 |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Port and terminal facilities, Land use right | 7,937,320.80 | 7,892,513.32 | - | - | 8,175,440.38 | 8,175,440.38 | - | - | - | - |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings and structures | - | - | - | - | 6,488,599.40 | 6,473,427.40 | 471,603.69 | 181,534.99 | 10,920,656.12 | - |
| Shenzhen Nanyou (Holdings) Ltd. | Land use right | 1,655,096.34 | 1,995,553.15 | - | - | 1,995,553.20 | 1,995,553.15 | - | - | - | - |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Port and terminal facilities | 148,500.00 | 859,290.00 | - | - | 1,893,762.89 | 2,782,367.73 | 32,922.55 | 83,666.10 | - | - |
| Shenzhen Wanhai Building Management Co., Ltd. | Buildings and structures | - | - | - | - | 1,881,947.00 | 1,202,209.02 | 70,805.86 | 106,595.46 | 1,708,272.10 | - |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 168 -
(XV) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as the lessee: - continued
| Name of the lessor | Type of leased assets | Short-term lease expenses or expenses on leases of low-value assets that are accounted for using simplified approach | Variable lease payments that are not included in the measurement of lease liabilities | Rental paid | Interest expenses on lease liabilities | Addition to right-of-use assets | |||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||
| Dalian Bonded Zone Yongdexin Real Estate Development & Construction Co., Ltd. | Buildings and structures | - | - | - | - | 413,854.72 | 408,741.23 | - | - | - | 393,967.46 |
China Merchants Apartment Development(Shenzhen) Co., Ltd.
| China Merchants Apartment Development (Shenzhen) Co., Ltd. | Buildings and structures | 144,662.87 | 142,674.30 | - | - | 142,674.30 | 142,674.30 | - | - | - | - |
| Dalian Port Group Corporation Limited | Buildings and structures | - | - | - | - | 80,000.00 | 80,000.00 | 5,613.75 | 9,766.56 | - | - |
| Dalian Port Communications Engineering Co., Ltd. | Buildings and structures | - | - | - | - | 50,000.00 | 50,000.00 | 8,196.73 | 11,498.73 | - | - |
| Shenzhen Chiwan Haike Industrial Operation Co., Ltd. | Buildings and structures | - | 1,101,345.84 | - | - | - | 1,200,466.97 | - | - | - | ` |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Port and terminal facilities | - | - | - | - | - | 662,285.71 | - | 18,421.02 | - | 1,079,443.53 |
| Total | 9,919,822.33 | 12,019,537.77 | - | - | 341,334,472.82 | 365,970,846.57 | 19,736,360.70 | 33,843,006.09 | 119,002,424.19 | 103,819,927.45 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 169 -
(XV) 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 |
| 2023 | |||||
| Terminal Link SAS (Note 1) | 76,655,687.32 | 76,655,687.32 | 11 June 2013 | 2033 | No |
| Khor Ambado FZCo (Note 2) | 203,981,760.00 | 156,254,811.86 | 24 May 2019 | 2032 | No |
| Terminal Link SAS (Note 1) | 114,527,259.00 | 114,527,259.00 | 25 Jan 2023 | 2030 | No |
| Total | 395,164,706.32 | 347,437,758.18 | — — | — — | — — |
| 2022 | |||||
| Terminal Link SAS (Note 1) | 66,490,102.62 | 66,490,102.62 | 11 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 | — — | — — | — — |
Note 1: CMA CGM S.A. is another shareholder of Terminal Link SAS, an associate of the Group.
The Group has made a commitment to CMA CGM S.A. that the Group will provideguarantee for its bank loans and other liabilities to Terminal Link SAS to the extent of theGroup's 49% ownership interest in the company. The actual guaranteed amount is RMB191,182,946.32as at 31 December 2023. If any guarantee liability occurs, the Group willcompensate 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 2023 is RMB 156,254,811.86.
(4) Borrowings and loans with related parties
| Related party | Amount | Commencement date | Maturity date | Description |
| 2023 | ||||
| Borrowings | ||||
| China Merchants Bank Co., Ltd. | 1,150,941,725.01 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
| China Merchants Group Finance Company Limited | 576,421,628.29 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| Ocean Driller III Limited | 332,846,013.33 | Actual borrowing date | Agreed repayment date | Other current liabilities |
| China Merchants Group Finance Company Limited | 207,179,377.43 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
| China Merchants Bank Co., Ltd. | 68,062,333.33 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| Total | 2,335,451,077.39 | — — | — — | — — |
| 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 | — — | — — | — — |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 170 -
(XV) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(5) Asset transfer from related parties
| Related party | Content of transaction | Pricing method and decision procedures of related transactions | 2023 | 2022 |
| Ningbo Zhoushan | Equity investment | Valuation | 1,845,000,000.00 | - |
| Liaoning Port | Equity investment | Valuation | 83,027,500.00 | - |
| Dalian Port Container | Equity investment | Valuation | 57,083,400.00 | - |
| Jifa Logistics | Equity investment | Valuation | 33,815,300.00 | - |
| Yingkou Port Group | Equity investment | Valuation | 19,002,800.00 | - |
| Hoi Tung (Shanghai) Company Limited | Fixed assets | Negotiation | - | 8,831,858.42 |
| Hoi Tung (Shanghai) Company Limited | Construction in progress | Negotiation | - | 4,853,097.34 |
| Total | — — | — — | 2,037,929,000.00 | 13,684,955.76 |
(6) Compensation for key management personnel
| Item | 2023 | 2022 |
| Compensation for key management personnel | 18,932,731.03 | 20,313,774.52 |
6. Amounts due from/to related parties that have not settled
(1) Amounts due from related parties
| Item | Related party | 31/12/2023 | 31/12/2022 |
| Cash and bank balances | China Merchants Bank Co., Ltd. | 3,778,553,414.06 | 3,387,973,124.59 |
| China Merchants Group Finance Company Limited | 2,090,078,155.93 | 1,841,698,554.32 | |
| Total | 5,868,631,569.99 | 5,229,671,678.91 | |
| Held-for-trading financial assets | China Merchants Bank Co., Ltd. | - | 900,061,111.11 |
| Accounts receivable | Antong Holdings and its subordinate companies | 8,919,131.23 | 8,395,245.04 |
| China Marine Shipping Agency Guangdong Co., Ltd. | 2,765,338.38 | 17,505,768.03 | |
| Sinotrans Container Lines Co., Ltd. | 2,763,240.00 | 1,287,851.75 | |
| Great Horn Development Company FZCo | 2,162,941.76 | 2,157,859.50 | |
| China Ocean Shipping Agency Shenzhen Co. Ltd. | 2,035,495.50 | 758,113.05 | |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | 1,750,277.36 | 1,530,505.68 | |
| Dalian Container Terminal Co., Ltd. | 1,725,150.00 | 1,957,840.00 | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 1,505,114.97 | 4,045,734.88 | |
| Nanshan Group and its subsidiaries | 1,214,194.85 | 1,404,627.23 | |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | 1,207,750.72 | 3,749,064.99 | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 1,188,600.01 | 1,729,380.01 | |
| Yiu Lian Dockyards (Shekou) Limited | 1,077,910.40 | 3,554,521.60 | |
| Sinoway Shipping Ltd. | 755,606.02 | 4,564,389.71 | |
| Sinotrans (HK) Shipping Limited | 682,942.44 | 375,748.78 | |
| Liaoning Port | - | 3,680,900.00 | |
| Khor Ambado FZCo | - | 3,108,610.49 | |
| Dalian Jifa Port Logistics Co., Ltd. | - | 2,220,941.63 | |
| Dalian Jifa South Coast International Logistics Co., Ltd. | - | 1,839,478.79 | |
| Liaoning Port Group Co., Ltd. | - | 1,821,581.00 | |
| Port de Djibouti S.A. | - | 1,770,749.55 | |
| South China Sinotrans Supply Chain Management Co., Ltd. | - | 659,854.40 | |
| China Marine Shipping Agency Ningbo Co., Ltd. | - | 164,981.21 | |
| Yingkou Port Group Co., Ltd. and its subsidiaries ("Yingkou Port Group") | - | 160,491.00 | |
| Other related parties | 5,733,746.69 | 13,549,055.64 | |
| Total | 35,487,440.33 | 102,283,282.02 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 171 -
(XV) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
| Item | Related party | 31/12/2023 | 31/12/2022 |
| Dividends receivable | Nanshan Group | 203,577,000.00 | 240,591,000.00 |
| Merchants Port City | 38,809,044.77 | 41,847,044.77 | |
| Dalian Port Logistics Network Co., Ltd. | 30,605,256.76 | - | |
| Yingkou Gangxin Technology Co., Ltd. | 23,881,213.75 | - | |
| Tin-Can Island Container Terminal Ltd | 21,960,680.22 | 65,121,449.40 | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 13,449,001.16 | 18,449,001.16 | |
| China Ocean Shipping Agency Shenzhen Co. Ltd. | 11,232,000.00 | - | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | - | 50,000,000.00 | |
| Other related parties | - | 232,047.23 | |
| Total | 343,514,196.66 | 416,240,542.56 | |
| Other receivables | Chu Kong River Trade Terminal Co., Ltd. | 36,575,039.20 | 36,053,588.00 |
| Shenzhen Nanyou (Holdings) Ltd. | 30,639,652.92 | 6,725,260.86 | |
| Port de Djibouti S.A. | 24,966,517.50 | 24,808,664.70 | |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | 6,310,000.00 | 6,310,000.00 | |
| China Merchants Port Investment Development Company Limited | 2,830,188.69 | - | |
| EuroAsia Dockyard Enterprise and Development Limited | 1,531,896.04 | 1,510,055.76 | |
| Tin-Can Island Container Terminal Ltd | 1,320,562.03 | - | |
| Nanshan Group and its subsidiaries | 1,189,566.10 | 1,009,839.70 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 1,166,408.40 | 1,132,846.40 | |
| Zhoushan Blue Ocean Investment Co., Ltd. | - | 4,996,989.39 | |
| China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. | - | 2,899,163.95 | |
| Other related parties | 2,142,975.51 | 3,550,453.73 | |
| Total | 108,672,806.39 | 88,996,862.49 | |
| Prepayments | Nanshan Group and its subsidiaries | - | 9,000.00 |
| Other related parties | 250,084.22 | 6,351.75 | |
| Total | 250,084.22 | 15,351.75 | |
| Non-current assets due within one year | Terminal Link SAS | 7,468,849.83 | 46,409,214.10 |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | 6,200,000.00 | - | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 3,800,000.00 | 3,800,000.00 | |
| Port of Newcastle and its subsidiaries | - | 852,919,208.25 | |
| Total | 17,468,849.83 | 903,128,422.35 | |
| Long-term receivables | Port of Newcastle and its subsidiaries | 921,402,438.00 | - |
| Terminal Link SAS | 204,299,511.52 | 2,931,108,250.96 | |
| Tianjin Haitian Bonded Logistics Co., Ltd. | 34,300,000.00 | 34,300,000.00 | |
| Zhoushan Blue Ocean Investment Co., Ltd. | 4,996,989.39 | - | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 695,876.01 | 659,515.88 | |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | - | 6,200,000.00 | |
| Total | 1,165,694,814.92 | 2,972,267,766.84 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 172 -
(XV) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties
| Item | Related party | 31/12/2023 | 31/12/2022 |
| Short-term borrowings | China Merchants Bank Co., Ltd. | 1,150,880,891.67 | 15,015,583.33 |
| China Merchants Group Finance Company Limited | 200,176,534.70 | 413,453,629.50 | |
| Total | 1,351,057,426.37 | 428,469,212.83 | |
| Other current liabilities | China Merchants Group Finance Company Limited | - | 10,056,575.34 |
| Accounts payable | Khor Ambado FZCo | 22,639,585.37 | - |
| Antong Holdings and its subordinate companies | 20,360,897.30 | 16,948,161.45 | |
| Dalian Port Logistics Technology Co., Ltd. | 17,607,121.00 | - | |
| Ningbo Zhoushan and its subsidiaries | 14,691,952.29 | 16,725,206.29 | |
| Dalian Port Logistics Network Co., Ltd. | 8,355,644.80 | - | |
| Nanshan Group and its subsidiaries | 5,968,662.37 | 4,259,215.79 | |
| Shenzhen Bay Electricity Industry Co., Ltd. | 5,394,353.74 | 4,920,501.06 | |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | 4,066,438.84 | 8,007,474.16 | |
| China Merchants Port and Shipping Digital Technology (Liaoning) Co., Ltd. | 2,905,000.00 | - | |
| Dalian Ganglong Technology Co., Ltd. | 2,739,450.00 | - | |
| EuroAsia Dockyard Enterprise and Development Limited | 2,413,589.56 | 2,363,408.70 | |
| Shenzhen Merchants to Home Technology Co., Ltd. | 1,781,775.33 | - | |
| China Merchants Port Investment Development Company Limited | 1,649,069.28 | 1,203,536.99 | |
| Yiu Lian Dockyards Limited | 1,135,115.31 | 792,077.94 | |
| Sinoway Shipping Ltd. | - | 4,886,700.00 | |
| China Marine Shipping Agency Shenzhen Co., Ltd. | 259,966.50 | 248,149.17 | |
| Other related parties | 2,761,309.78 | 4,212,603.81 | |
| Total | 100,037,979.18 | 64,567,035.36 | |
| Receipts in advance | China Merchants Port Investment Development Company Limited | 5,358,074.44 | - |
| Qingdao Wutong Century Supply Chain Co., Ltd. | 196,301.30 | 196,301.30 | |
| Other related parties | - | 160,600.00 | |
| Total | 5,554,375.74 | 356,901.30 | |
| Contract liabilities | COSCO Logistics (Zhanjiang) Co., Ltd. | 4,552,313.24 | 1,275,397.28 |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | 1,464,429.12 | 368,484.60 | |
| China Merchants Port Investment Development Company Limited | 660,943.40 | - | |
| China Ocean Shipping Agency Shenzhen Co. Ltd. | 633,024.00 | - | |
| Shenzhen Baohong Technology Co., Ltd. | 459,049.11 | - | |
| Qingdao Sinotrans Logistics Co., Ltd. | 440,727.56 | - | |
| Dalian Container Terminal Co., Ltd. | - | 9,679,785.44 | |
| Dandong Port Group Co., Ltd. | - | 3,842,709.07 | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | - | 1,556,753.55 | |
| Yingkou Xingang Kuangshi Terminals Co., Ltd. | - | 1,514,844.30 | |
| Antong Holdings and its subordinate companies | - | 1,468,616.91 | |
| Other related parties | 1,021,090.85 | 2,508,480.44 | |
| Total | 9,231,577.28 | 22,215,071.59 | |
| Dividends payable | China Merchants Zhangzhou Development Zone Co., Ltd. | 77,734,806.46 | 20,000,000.00 |
| Dalian Port Container | 16,160,696.61 | 14,000,000.00 | |
| Jifa Logistics | 9,575,104.42 | 3,000,000.00 | |
| Yingkou Port Group | 5,372,456.78 | - | |
| Yiu Lian Dockyards Limited | 2,334,150.00 | - | |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | - | 41,400,234.06 | |
| Sri Lanka Ports Authority | - | 10,446,900.00 | |
| Total | 111,177,214.27 | 88,847,134.06 | |
| Other payables | Lac Assal Investment Holding Company Limited | 64,310,900.95 | 47,359,371.46 |
| Terminal Link SAS | 10,423,425.44 | - | |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | 10,079,369.00 | 10,079,369.00 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 5,000,000.03 | 3,750,000.03 | |
| Antong Holdings and its subordinate companies | 4,743,266.37 | 12,730,734.37 | |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | 1,690,130.78 | 1,628,515.12 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 173 -
(XV) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
| Item | Related party | 31/12/2023 | 31/12/2022 |
| Other payables | China Merchant Food (China) Co., Ltd. | 1,069,017.00 | 1,069,017.00 |
| China Traffic Import and Export Co., Ltd. | 1,055,975.76 | - | |
| Hoi Tung (Shanghai) Company Limited | 966,785.34 | - | |
| China Merchants International Cold Chain (Shenzhen) Company Limited | 757,976.00 | - | |
| Shenzhen Baohong Technology Co., Ltd. | 749,269.39 | 749,269.39 | |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | - | 6,420,820.68 | |
| China Merchants Port Investment Development Company Limited | - | 4,130,081.82 | |
| China Merchants Real Estate Co., Ltd. | - | 3,263,853.86 | |
| Zhanjiang Xiagang United Development Co., Ltd. | - | 1,439,753.57 | |
| Other related parties | 6,946,931.01 | 6,732,058.14 | |
| Total | 107,793,047.07 | 99,352,844.44 | |
| Non-current liabilities due within one year | China Merchants Group Finance Company Limited | 288,071,994.22 | 110,838,087.45 |
| China Merchants Bank Co., Ltd. | 199,326,195.84 | 11,362,639.43 | |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | 76,461,173.65 | 103,236,707.51 | |
| Nanshan Group and its subsidiaries | 63,331,699.85 | 65,165,836.97 | |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | 35,719,107.95 | 37,012,422.69 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 7,548,329.72 | 32,339,542.44 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 6,396,788.04 | - | |
| China Merchants International Cold Chain (Shenzhen) Company Limited | 375,528.56 | 1,050,270.17 | |
| China Merchants Tongshang Finance Lease Co., Ltd. | - | 45,115,824.42 | |
| EuroAsia Dockyard Enterprise and Development Limited | - | 14,255,883.08 | |
| Guangdong Shunkong City Investment Real Estate Co. Ltd. | - | 3,162,000.00 | |
| Other related parties | - | 1,962,815.09 | |
| Total | 677,230,817.83 | 425,502,029.25 | |
| Long-term borrowings | China Merchants Group Finance Company Limited | 721,624,592.13 | 445,490,692.58 |
| China Merchants Bank Co., Ltd. | 158,000,000.00 | 325,000,000.00 | |
| Total | 879,624,592.13 | 770,490,692.58 | |
| Lease liabilities | China Merchants Shekou Industrial Zone Holdings Co., Ltd. | 62,185,360.58 | 5,993,041.70 |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | - | 75,833,546.45 | |
| Nanshan Group and its subsidiaries | - | 65,431,073.09 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | - | 15,833,403.29 | |
| China Merchants International Cold Chain (Shenzhen) Company Limited | - | 253,362.41 | |
| Other related parties | 1,070,904.61 | 803,148.25 | |
| Total | 63,256,265.19 | 164,147,575.19 | |
| Long-term payables | China Merchants Finance Lease (Tianjin) Co., Ltd. | 33,905,690.32 | 41,052,268.30 |
(XVI) SHARE-BASED PAYMENTS
1. Equity instruments
| Type of targets granted | Granted in the current year | Exercised in the current year | Unlocked in the current year | Lapsed in the current year | ||||
| Qty. | Amount | Qty. | Amount | Qty. | Amount | Qty. | Amount | |
| Management | - | - | - | - | - | - | 354,720 | 1,129,997.09 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 174 -
(XVI) SHARE-BASED PAYMENTS - continued
1. Equity instruments - continued
Outstanding stock option or other equity instruments at the end of current year
| Type of targets granted | Outstanding stock option at the end of current year | |
| Range of exercise prices | Remaining term of contract | |
| Management | RMB 14.28 to RMB 16.53 | 37 months |
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 1 and batch 2 are not satisfied |
| The aggregate amount of equity-settled share-based payments that is included in capital reserve | 6,644,590.36 |
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
st
Extraordinary General Meeting of the Company in 2020 on 3 February 2020, the Companyimplemented a stock option plan with effect from 3 February 2020 to grant 238 incentive recipients17,198,000 stock options with an exercise price of RMB17.80 per share. With a lockup period of24 months from the grant date, the stock options are exercisable upon expiry of the 24-month lockupperiod in the premise that the vesting conditions are satisfied. The stock options are exercisable inthree batches, specifically, 40% for the first batch (after 24 months but within 36 months subsequentto the grant date), 30% for the second batch (after 36 months but within 48 months subsequent tothe grant date) and the remaining 30% for the third batch (after 48 months but within 84 monthssubsequent to the grant date). Each stock option entitles the holder to subscribe for one ordinaryshare of the Company.
On 5 March 2021, the granting of stock option (reserved portion) under stock option inventive plan(phase I) was completed. The reserved portion of stock option targets to total 3 persons, granting530,000 shares of stock option with exercise price of RMB15.09 per share. The grant date is 29January 2021. With a lockup period of 24 months from the grant date, the stock options areexercisable upon expiry of the 24-month lockup period in the premise that the vesting conditionsare satisfied. The stock options are exercisable in two batches, specifically, 50% for the first batch(after 24 months but within 36 months subsequent to the grant date), and the remaining 50% for thesecond batch (after 36 months but within 72 months subsequent to the grant date). Each stock optionentitles the holder to subscribe for one ordinary share of the Company.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 175 -
(XVI) 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 underthe stock option incentive plan (phase I) on 30 January 2021; the Company uniformly adjusted theexercise price from RMB 17.34 per share to 16.96 per share in respect of the first batch of stockoption granted under the 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; theCompany uniformly adjusted the exercise price from RMB 16.96 per share to 16.53 per share inrespect of the first batch of stock option granted under the stock option incentive plan (phase I), andthe exercise price of the reserved portion of stock option from RMB 14.71 per share to 14.28 pershare on 20 January 2023.
As at the date on which the financial statements are issued, as 12 of the incentive targets for the firstbatch of stock option granted under the stock option incentive plan (phase I) have retired or nolonger serve the Company, the board of directors of the Company decided to cancel in total of339,600 shares of stock option granted but not yet exercised by such persons; as 5 of the incentivetargets for the third vesting period of the stock option (1
stbatch) under the stock option incentiveplan (phase I) of the Company have not satisfied the criteria of exercise in their performanceassessment, the Company has cancelled the 20% of the stock option (totalling 15,120 shares) forthe third vesting period of the stock option (1
st
batch) under the stock option incentive plan (phaseI) held by the 5 incentive targets.
As at the date on which the financial statements are issued, 195 incentive targets who can exercisethe rights for the third vesting period of the stock option (1
st
batch) under the stock option incentiveplan (phase I) included: (1) 190 incentive targets who met the designated grades in the performanceassessment, holding 100% of the stock option (totalling 3,471,600 shares) for the third vestingperiod of the stock option (1
stbatch) under the stock option incentive plan (phase I) of the Companyand satisfying the criteria of exercise; and (2) 5 incentive targets who met the designated grades inthe performance assessment, holding 80% of the stock option (totalling 60,480 shares) for the thirdvesting period of the stock option (1
stbatch) under the stock option incentive plan (phase I) of theCompany and satisfying the criteria of exercise. The second vesting period of the stock option(reserved portion) under the stock option incentive plan (phase I) targets to total 3 persons who canexercise the rights. The 3 incentive targets have met the designated grades in the performanceassessment, and 100% of stock option for the second vesting period of the stock option (reservedportion) under the stock option incentive plan (phase I) of the Company held by them have satisfiedthe criteria of exercise, granting 265,000 shares of exercisable stock option for the second vestingperiod of the stock option (reserved portion) under the stock option incentive plan (phase I).
3. Share-based payment expenses in the current year
| Type of targets granted | Equity-settled share-based payment expenses |
| Management | 4,016,693.76 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 176 -
(XVII) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
| Item | 31/12/2023 | 31/12/2022 |
| Commitments that have been entered into but have not been recognized in the financial statements | ||
| - Commitment to make contributions to the investees | 467,604,906.76 | 38,956,185.01 |
| - Commitment to acquire and construct long-term assets | 2,407,538,867.35 | 1,802,316,899.52 |
| - Commitment to invest port construction | - | 5,571,690.76 |
| - Others | - | 383,560.31 |
| Total | 2,875,143,774.11 | 1,847,228,335.60 |
2. Contingencies
| Item | 31/12/2023 | 31/12/2022 |
| Contingent liabilities brought by external litigations (Note 1) | 946,218,359.48 | 279,438,527.06 |
| Guarantee for borrowings of related parties (Note 2) | 347,437,758.18 | 186,672,528.21 |
| Total | 1,293,656,117.66 | 466,111,055.27 |
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 employeeof TCP and its subsidiaries in Brazil at as the year end. According to the latest estimatesof the Group's management, the possible compensation is RMB 946,218,359.48 but it isnot likely 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 the Zhanjiang Port for compensation.
The claims of CCCC Water Transport Planning and Design Institute Co., Ltd. wereinconsistent with those agreed in the contract, the relevant result of the litigation could notbe reasonably estimated, and the management of the Company believed that the possibilityof loss was quite low, therefore, no provisions were made for the above pending litigation.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 177 -
(XVII) COMMITMENTS AND CONTINGENCIES - continued
2. Contingencies - continued
Note 2: As at 31 December 2023, the guarantees provided by the Group for related parties are
detailed in Note XV 5(3).
As at 31 December 2023, 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 2023, the Group had no othermajor guarantees and other contingencies that need to be explained.
(XVIII)EVENTS AFTER THE BALANCE SHEET
According to the profit distribution plan for 2023 and as approved by the 7th meeting of the 10thboard of directors on 29 March 2024, the Company, based on the total shares of 2,499,074,661 asat 31 December 2023, distributes cash dividends at RMB 5.80(inclusive of tax) for every 10 shares,totalling RMB 1,449,463,303.38. The above profit distribution plan has not yet been approved byshareholders' meeting.
(XIX) 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 the Group'sbusiness operations including ports operation, bonded logistics operation and other operations.
Ports operation
Ports operation includes container terminal operation, bulk and general cargo terminal operationoperated by the Group and its associates and joint ventures.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 178 -
(XIX) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
Ports operation - continued
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.
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 in variouslocations within one geographic location. For the purpose of segment reporting, these individualoperating segments have been aggregated into reportable segments on geographic basis in order topresent a more systematic and structured segment information. To give details of each of theoperating segments, in the opinion of the directors of the Company, would result in particulars ofexcessive 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 of theiroperations 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 RMB 2,007,111,746.88,representing 12.74% (2022: 10.30%) of the Group's operating income for 2023.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 179 -
(XIX) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments
Segment financial information for 2023 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 | 6,075,691,801.01 | 557,788,311.93 | 76,760,801.96 | 3,574,402,653.20 | 4,751,630,018.56 | 15,036,273,586.66 | 532,670,444.04 | 181,531,749.52 | - | 15,750,475,780.22 |
| Operating cost | 3,640,281,453.34 | 361,926,675.75 | 63,825,074.56 | 2,648,882,080.97 | 2,081,165,945.51 | 8,796,081,230.13 | 289,816,313.93 | 232,289,163.69 | - | 9,318,186,707.75 |
| Segment operating profit (Losses are marked with "-") | 2,435,410,347.67 | 195,861,636.18 | 12,935,727.40 | 925,520,572.23 | 2,670,464,073.05 | 6,240,192,356.53 | 242,854,130.11 | -50,757,414.17 | - | 6,432,289,072.47 |
| Taxes and surcharges | 36,973,822.23 | 2,937,337.05 | 1,126,391.13 | 45,970,219.08 | 174,670,480.72 | 261,678,250.21 | 26,757,765.42 | 24,332,840.83 | 229,169.73 | 312,998,026.19 |
| Administrative expense | 437,814,344.01 | 26,162,000.70 | 9,644,685.03 | 529,927,581.34 | 289,653,304.36 | 1,293,201,915.44 | 49,569,679.55 | 1,111,358.13 | 432,758,202.26 | 1,776,641,155.38 |
| R&D expenses | 176,892,569.73 | 23,890,344.38 | - | 22,956,157.96 | - | 223,739,072.07 | - | - | - | 223,739,072.07 |
| Financial expenses | 57,700,690.44 | 20,953,099.98 | 1,883,921.89 | 85,621,075.66 | 55,969,633.29 | 222,128,421.26 | 3,129,354.57 | 20,854,412.74 | 1,593,001,139.57 | 1,839,113,328.14 |
| Other income | 148,491,604.96 | 10,227,298.67 | 203,918.26 | 50,512,014.48 | - | 209,434,836.37 | 14,668,272.54 | 286,151.86 | - | 224,389,260.77 |
| Investment income | 130,131,600.03 | 4,956,167,513.13 | 416,731,511.24 | 50,706,320.64 | 454,900,989.67 | 6,008,637,934.71 | 59,521,957.15 | 245,264,989.05 | 35,252,059.89 | 6,348,676,940.80 |
| Gains from changes (Losses are marked with "-") in fair value | 102,777,832.55 | -58,125,015.24 | 80,543,109.95 | -6,584,009.33 | - | 118,611,917.93 | -57,875,873.69 | 9,644,865.10 | 2,971,891.18 | 73,352,800.52 |
| Gains from impairment of credit (Losses are marked with "-") | 7,327,814.78 | -36,129.03 | - | 3,468,262.80 | -7,171,766.68 | 3,588,181.87 | 33,695,859.31 | - | - | 37,284,041.18 |
| Gains from impairment of assets (Losses are marked with "-") | -1,091,994.67 | -189,030,229.12 | - | - | -1,175,087.49 | -191,297,311.28 | - | - | - | -191,297,311.28 |
| Gains from disposal of assets (Losses are marked with "-") | 6,196,256.45 | - | -7,362.22 | 34,965,994.86 | 507,804.31 | 41,662,693.40 | -602,074.20 | -4,253,879.72 | -47,206.87 | 36,759,532.61 |
| Operating profit (Losses are marked with "-") | 2,119,862,035.36 | 4,841,122,292.48 | 497,751,906.58 | 374,114,121.64 | 2,597,232,594.49 | 10,430,082,950.55 | 212,805,471.68 | 153,886,100.42 | -1,987,811,767.36 | 8,808,962,755.29 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 180 -
(XIX) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2023 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 | 30,640,040.33 | 206,852.93 | 541,008.01 | 8,475,666.30 | 41,553,418.13 | 81,416,985.70 | 151,072.00 | 397,901.93 | 5,336,064.49 | 87,302,024.12 |
| Non-operating expenses | 7,067,285.26 | 269,926.28 | 89,933.45 | 20,553,447.08 | 59,763,043.59 | 87,743,635.66 | 323,424.06 | - | 9,005,781.00 | 97,072,840.72 |
| Total profit (Losses are marked with "-") | 2,143,434,790.43 | 4,841,059,219.13 | 498,202,981.14 | 362,036,340.86 | 2,579,022,969.03 | 10,423,756,300.59 | 212,633,119.62 | 154,284,002.35 | -1,991,481,483.87 | 8,799,191,938.69 |
| Income tax expenses | 496,377,795.59 | 258,020,898.94 | 44,218,770.18 | 58,080,621.40 | 383,193,406.85 | 1,239,891,492.96 | 35,421,490.70 | 27,848,029.46 | 418,839.81 | 1,303,579,852.93 |
| Net profit (Losses are marked with "-") | 1,647,056,994.84 | 4,583,038,320.19 | 453,984,210.96 | 303,955,719.46 | 2,195,829,562.18 | 9,183,864,807.63 | 177,211,628.92 | 126,435,972.89 | -1,991,900,323.68 | 7,495,612,085.76 |
| Segment assets | 23,724,145,365.09 | 57,709,896,939.07 | 9,703,687,046.02 | 27,727,348,979.52 | 42,500,927,378.99 | 161,366,005,708.69 | 4,712,961,257.31 | 19,403,999,499.27 | 13,074,330,201.99 | 198,557,296,667.26 |
| Total assets in the financial statements | 198,557,296,667.26 | |||||||||
| Segment liabilities | 7,029,170,965.33 | 1,275,695,327.99 | 158,452,621.02 | 6,498,242,286.20 | 7,189,272,994.18 | 22,150,834,194.72 | 540,614,061.66 | 617,809,748.89 | 49,678,104,233.18 | 72,987,362,238.45 |
| Total liabilities in the financial statements | 72,987,362,238.45 | |||||||||
| Supplementary information: | ||||||||||
| Depreciation and amortization | 1,126,510,216.09 | 113,947,562.11 | 882,064.68 | 875,850,774.90 | 866,605,229.04 | 2,983,795,846.82 | 102,034,394.34 | 194,738,423.53 | 23,167,239.73 | 3,303,735,904.42 |
| Interest income | 42,679,230.74 | 2,243,451.14 | 714,733.07 | 22,543,238.68 | 256,085,052.61 | 324,265,706.24 | 7,210,199.57 | 1,678,151.13 | 164,439,864.42 | 497,593,921.36 |
| Interest expense | 90,781,497.89 | 10,849,293.26 | - | 107,297,773.92 | 314,310,921.43 | 523,239,486.50 | 8,495,591.27 | 19,075,433.27 | 1,687,342,285.62 | 2,238,152,796.66 |
| Investment income from long-term equity investments under equity method | 44,963,451.52 | 4,750,830,911.12 | 375,529,615.82 | 47,995,671.63 | 454,900,989.67 | 5,674,220,639.76 | 59,521,957.15 | 245,264,989.05 | - | 5,979,007,585.96 |
| Long-term equity investments under equity method | 1,764,751,439.03 | 55,844,039,253.08 | 8,777,428,828.42 | 1,715,660,813.08 | 12,507,306,667.48 | 80,609,187,001.09 | 1,756,185,613.17 | 14,300,745,162.01 | - | 96,666,117,776.27 |
| Non-current assets other than long-term equity investments | 18,193,324,391.19 | 398,488,128.16 | 14,938,012.93 | 20,908,386,344.60 | 26,031,938,950.63 | 65,547,075,827.51 | 2,381,793,244.49 | 4,753,153,217.29 | 419,380,677.78 | 73,101,402,967.07 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 181 -
(XIX) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment financial information for 2022 is as follows:
| Item | Ports operation | Bonded logistics operation | Others | Unappropriated amount (Restated) | Total (Restated) | |||||
| 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 (Losses are marked with "-") | 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 from changes in fair value (Losses are marked with "-") | 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 are marked with "-") | -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 from impairment of assets (Losses are marked with "-") | -573,122.05 | - | - | -21,585,898.15 | - | -22,159,020.20 | - | - | - | -22,159,020.20 |
| Gains from disposal of assets (Losses are marked with "-") | -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 (Losses are marked with "-") | 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 182 -
(XIX) 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 (Restated) | Total (Restated) | |||||
| 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 (Losses are marked with "-") | 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 | 224,820,817.17 | 1,019,574,325.84 | 17,884,281.49 | 73,694,575.33 | 1,806,494.09 | 1,112,959,676.75 |
| Net profit (Losses are marked with "-") | 2,041,121,086.64 | 5,289,891,686.65 | 294,080,551.68 | 95,878,071.31 | 2,426,317,573.50 | 10,147,288,969.78 | 29,636,222.52 | 291,246,513.63 | -2,236,268,405.66 | 8,231,903,300.27 |
| Segment assets | 24,260,000,005.96 | 58,080,072,708.01 | 9,491,073,768.13 | 27,095,782,491.19 | 44,382,357,967.93 | 163,309,286,941.22 | 4,719,222,985.06 | 19,523,260,761.95 | 10,035,331,759.08 | 197,587,102,447.31 |
| Total assets in the financial statements | 197,587,102,447.31 | |||||||||
| Segment liabilities | 10,545,067,732.35 | 1,993,414,192.41 | 142,428,100.05 | 7,095,951,456.64 | 7,184,350,827.79 | 26,961,212,309.24 | 472,931,692.54 | 849,543,150.07 | 40,981,807,066.15 | 69,265,494,218.00 |
| Total liabilities in the financial statements | 69,265,494,218.00 | |||||||||
| 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XIX) 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 | 2023 | 2022 |
| Mainland China, Hong Kong and Taiwan | 10,958,608,605.93 | 12,105,380,701.20 |
| Pearl River Delta | 6,600,817,552.32 | 7,195,529,214.88 |
| Yangtze River Delta | 557,788,311.93 | 1,139,944,516.62 |
| Bohai Rim | 225,600,088.48 | 217,832,344.10 |
| Others | 3,574,402,653.20 | 3,552,074,625.60 |
| Other locations | 4,791,867,174.29 | 4,125,108,426.35 |
| Total | 15,750,475,780.22 | 16,230,489,127.55 |
| Total non-current assets | 31/12/2023 | 31/12/2022 |
| Mainland China, Hong Kong and Taiwan | 128,859,143,257.19 | 130,723,044,577.52 |
| Pearl River Delta | 40,390,524,565.51 | 42,150,053,552.57 |
| Yangtze River Delta | 56,242,527,381.24 | 56,350,210,822.78 |
| Bohai Rim | 9,297,697,381.31 | 9,147,542,234.74 |
| Others | 22,928,393,929.13 | 23,075,237,967.43 |
| Other locations | 40,908,377,486.15 | 38,433,802,661.11 |
| Total | 169,767,520,743.34 | 169,156,847,238.63 |
(3) Degree of reliance on major customers
The total operating income derived from the top five customers of the Group is RMB4,146,867,314.45, accounting for 26.33% of the Group's operating income.
(XX)NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Other receivables
1.1 Summary of other receivables
| Item | 31/12/2023 | 31/12/2022 |
| Dividends receivable | 167,092,526.14 | 147,896,763.88 |
| Other receivables | 1,575,369,144.18 | 2,601,740,991.35 |
| Total | 1,742,461,670.32 | 2,749,637,755.23 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XX)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 | 31/12/2023 | 31/12/2022 |
| Wharf Holdings Hong Kong | 147,680,363.88 | 147,680,363.88 |
| CM International Tech | 4,758,668.03 | - |
| Chiwan Shipping (Hong Kong) Limited | 3,205,094.23 | - |
| Shenzhen Petrochemical Industry (Group) Co., Ltd. | 216,400.00 | 216,400.00 |
| China Ocean Shipping Agency (Shenzhen) Co., Ltd. | 11,232,000.00 | - |
| Total | 167,092,526.14 | 147,896,763.88 |
| Less: Provision for credit loss | - | - |
| Carrying amount | 167,092,526.14 | 147,896,763.88 |
(2) Significant dividends receivable aged more than 1 year
| Item | 31/12/2023 | 31/12/2022 | Reason for outstanding | Impaired or not and the determination basis |
| Wharf Holdings Hong Kong | 147,680,363.88 | 147,680,363.88 | In processing and expected to be recovered in 2024 | No |
| Total | 147,680,363.88 | 147,680,363.88 |
1.3 Other receivables
(1) Aging analysis of other receivables
| Aging | 31/12/2023 | ||
| Other receivables | Provision for credit loss | Proportion of provision (%) | |
| Within 1 year | 910,122,251.73 | - | - |
| 1 to 2 years | 662,450,976.98 | - | - |
| 2 to 3 years | 2,467,600.00 | - | - |
| More than 3 years | 711,772.07 | 383,456.60 | 53.87 |
| Total | 1,575,752,600.78 | 383,456.60 | — — |
(2) Disclosure of other receivables by nature
| Item | 31/12/2023 | 31/12/2022 |
| Amounts due from related parties | 1,553,447,353.90 | 2,596,356,894.67 |
| Advances | 4,965,337.56 | 2,467,600.00 |
| Others | 17,339,909.32 | 3,299,953.28 |
| Total | 1,575,752,600.78 | 2,602,124,447.95 |
| Less: Provision for credit loss | 383,456.60 | 383,456.60 |
| Carrying amount | 1,575,369,144.18 | 2,601,740,991.35 |
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XX)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
| Credit rating | Expected credit loss rate (%) | 31/12/2023 | 31/12/2022 | ||||||
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | Total | 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | Total | ||
| A | 0.00-0.10 | 1,575,369,144.18 | - | - | 1,575,369,144.18 | 2,601,740,991.35 | - | - | 2,601,740,991.35 |
| 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 | 1,575,369,144.18 | - | 383,456.60 | 1,575,752,600.78 | 2,601,740,991.35 | - | 383,456.60 | 2,602,124,447.95 | |
| Provision for credit loss | - | - | 383,456.60 | 383,456.60 | - | - | 383,456.60 | 383,456.60 | |
| Carrying amount | 1,575,369,144.18 | - | - | 1,575,369,144.18 | 2,601,740,991.35 | - | - | 2,601,740,991.35 | |
(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 2023 | - | - | 383,456.60 | 383,456.60 |
| Balance of other receivables at 1 January 2023 | ||||
| - 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 2023 | - | - | 383,456.60 | 383,456.60 |
(5) Details of bad debt provision
| Category | 31/12/2022 | Changes for the year | 31/12/2023 | ||||
| Provision | Recovery or reversal | Effect of changes in the scope of consolidation | Charge-off or write-off | Other changes | |||
| Bad debt provision assessed on an individual basis | 383,456.60 | - | - | - | - | - | 383,456.60 |
| Bad debt provision assessed on a portfolio basis | - | - | - | - | - | - | - |
| Total | 383,456.60 | - | - | - | - | - | 383,456.60 |
(6) 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 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XX)NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS- continued
1. Other receivables - continued
(7) The Group has no other receivables written off during the year.
(8) 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 | 1,541,029,169.74 | Within 1 year, 1-2 years | 97.80 | - |
| Wharf Holdings Hong Kong | Subsidiary | Lease payment | 15,189,918.60 | Within 1 year | 0.96 | - |
| Shunkong Port | Subsidiary | Loan to related parties | 12,418,184.16 | Within 1 year, 1-2 years | 0.79 | - |
| CM International Tech | Subsidiary | Advances | 2,467,600.00 | 2-3 years | 0.16 | - |
| Shenzhen Shekou Local Taxation Bureau | Third party | Others | 711,772.07 | More than 3 years | 0.05 | - |
| Total | 1,571,816,644.57 | 99.76 | - |
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XX)NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
(1) Breakdown of long-term equity investments
| Investee | 31/12/2022 | Changes for the year | 31/12/2023 | 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 | |||||||||||
| Shenzhen Chiwan International Freight Agency Co., Ltd. | 5,500,000.00 | - | - | - | - | - | - | - | - | 5,500,000.00 | - |
| Shenzhen Chiwan Harbor Container Co. Ltd. | 250,920,000.00 | - | - | - | - | - | - | - | - | 250,920,000.00 | - |
| Shenzhen Chiwan Port Development Co., Ltd. | 206,283,811.09 | - | - | - | - | - | - | - | - | 206,283,811.09 | - |
| Wharf Holdings Hong Kong | 1,070,000.00 | - | - | - | - | - | - | - | - | 1,070,000.00 | - |
| Shenzhen Chiwan Tugboat Co., Ltd. | 24,000,000.00 | - | - | - | - | - | - | - | - | 24,000,000.00 | - |
| Chiwan Container Terminal Co., Ltd. | 421,023,199.85 | - | - | - | - | - | - | - | - | 421,023,199.85 | - |
| Shenchiwan Port Affairs | 186,525,000.00 | - | - | - | - | - | - | - | - | 186,525,000.00 | - |
| Dongguan Shenchiwan Wharf Co., Ltd. | 175,000,000.00 | - | - | - | - | - | - | - | - | 175,000,000.00 | - |
| Chiwan Shipping (Hong Kong) Limited | 1,051,789.43 | - | - | - | - | - | - | - | - | 1,051,789.43 | - |
| CM Port (Note 1) | 168,841,768.35 | 12,474,393.06 | - | - | - | - | - | - | - | 181,316,161.41 | - |
| Zhoushan RoRo | 149,709,800.00 | - | - | - | - | - | - | 43,605,014.00 | - | 106,104,786.00 | 43,605,014.00 |
| Zhanjiang Port | 3,381,825,528.52 | - | - | - | - | - | - | - | - | 3,381,825,528.52 | - |
| CM International Tech (Note 2) | 20,561,075.02 | 109,901,500.00 | - | - | - | - | - | - | - | 130,462,575.02 | - |
| Sanya Merchants Port Development Co., Ltd. | 2,040,000.00 | - | - | - | - | - | - | - | - | 2,040,000.00 | - |
| Ports Development (Hong Kong) Limited | 29,203,045,326.23 | - | - | - | - | - | - | - | - | 29,203,045,326.23 | - |
| Shunkong Port (Note 3) | 50,000,000.00 | 144,673,400.00 | - | - | - | - | - | - | - | 194,673,400.00 | - |
| Guangdong Yide Port Co., Ltd. | 131,866,700.00 | - | - | - | - | - | - | - | - | 131,866,700.00 | - |
| Sub-total | 34,379,263,998.49 | 267,049,293.06 | - | - | - | - | - | 43,605,014.00 | - | 34,602,708,277.55 | 43,605,014.00 |
| II. Associates | |||||||||||
| Ningbo Zhoushan | 16,228,879,526.87 | - | - | 966,972,107.64 | 18,734,157.32 | -45,798,686.57 | -355,122,265.53 | - | - | 16,813,664,839.73 | - |
| China Merchants Northeast Asia Development & Investment Co., Ltd. | 1,017,010,205.71 | - | - | 1,668,941.79 | - | -144,795.94 | - | - | - | 1,018,534,351.56 | - |
| China Merchants Bonded Logistics Co., Ltd. | 412,362,918.79 | - | - | 54,128,341.59 | - | - | -84,285,525.91 | - | - | 382,205,734.47 | - |
| Antong Holdings (Note 4) | - | 892,445,435.37 | - | 29,869,705.60 | - | 17,223.61 | - | - | - | 922,332,364.58 | - |
| Sub-total | 17,658,252,651.37 | 892,445,435.37 | - | 1,052,639,096.62 | 18,734,157.32 | -45,926,258.90 | -439,407,791.44 | - | - | 19,136,737,290.34 | - |
| III. Joint ventures | - | - | |||||||||
| Yantai Port Group Laizhou Port Co., Ltd. | 794,153,389.74 | - | - | 38,645,587.47 | -280,000.00 | -1,858,614.11 | -28,133,178.67 | - | - | 802,527,184.43 | - |
| Fujian Zhaohang Logistics Management Partnership (Limited Partnership) | 592,134,266.75 | - | - | 21,878,659.99 | - | 714,032.74 | - | - | - | 614,726,959.48 | - |
| Shenzhen Gangteng Internet Technology Co., Ltd. (Note 5) | 9,809,165.14 | 3,750,000.00 | - | -1,640,538.15 | - | - | - | - | - | 11,918,626.99 | - |
| Sub-total | 1,396,096,821.63 | 3,750,000.00 | 58,883,709.31 | -280,000.00 | -1,144,581.37 | -28,133,178.67 | - | - | 1,429,172,770.90 | - | |
| Total | 53,433,613,471.49 | 1,163,244,728.43 | - | 1,111,522,805.93 | 18,454,157.32 | -47,070,840.27 | -467,540,970.11 | 43,605,014.00 | - | 55,168,618,338.79 | 43,605,014.00 |
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
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(XX)NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS- continued
2. Long-term equity investments - continued
(1) Details of long-term equity investments - continued
Note 1: Details are set out in Note (XI) 1. (1).
Note 2: Details are set out in Note (XI) 2. (1).
Note 3: In July and December 2023, the Company and Guangdong Shunkong City Investment
Real Estate Co. Ltd. entered into a capital increase agreement for Shunkong Port in twoparts, whereby the two parties agreed to increase the capital by RMB 218,751,400.00 andRMB 153,823,600.00 together in accordance with their respective shareholding ratios of51% and 49%, of which the Company contributed RMB 111,563,200.00 and RMB78,450,000.00. According to the capital increase agreement, the Company paid a total ofRMB 144,673,400.00 for the capital increase at the end of the year. The shareholding ratioof the two investors remained unchanged after the capital increase.
Note 4: Details are set out in Note (VIII) 14.
Note 5: The Company fulfilled the investment agreement in the current year and paid the second
contribution amounting to RMB 3,750,000.00.
(2) Details of impairment testing of long-term equity investments
The Company recognized a provision for impairment of long-term equity investmentsamounting to RMB 43,605,014.00 based on the share of Zhoushan RoRo's recoverableamount, refer to Note (VIII), 16.2 (7) for details.
3. Operating income and operating costs
| Item | 2023 | 2022 | ||
| Income | Cost | Income | Cost | |
| Principal operation | - | - | - | - |
| Other operations | 17,326,885.29 | 3,686,411.84 | 3,669,891.36 | 2,276,202.60 |
| Total | 17,326,885.29 | 3,686,411.84 | 3,669,891.36 | 2,276,202.60 |
CHINA MERCHANTS PORT GROUP CO., LTD
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2023(Unless otherwise specified, the monetary unit shall be RMB)
- 189 -
(XX)NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS- continued
4. Investment income
(1) Details of investment income
| Item | 2023 | 2022 |
| Income from long-term equity investments under cost method | 416,405,658.26 | 549,150,517.02 |
| Income from long-term equity investments under equity method | 1,111,522,805.93 | 384,257,363.02 |
| Income from held-for-trading financial assets | 49,614,971.08 | 120,227,079.12 |
| Income from investments in other equity instruments | 20,056,500.00 | - |
| Income from disposal of long-term equity investments | - | -20,508.07 |
| Total | 1,597,599,935.27 | 1,053,614,451.09 |
(2) Income from long-term equity investments under cost method
| Investee | 2023 | 2022 | Reason for changes |
| Chiwan Container Terminal Co., Ltd. | 149,527,479.94 | 166,925,696.05 | Changes in profit distribution of investee |
| Shenzhen Chiwan Harbor Container Co. Ltd. | 111,712,423.41 | 173,751,858.77 | Changes in profit distribution of investee |
| Zhanjiang Port | 36,552,790.18 | 91,862,080.91 | Changes in profit distribution of investee |
| Dongguan Shenchiwan Wharf Co., Ltd. | 33,386,741.74 | 37,543,998.58 | Changes in profit distribution of investee |
| Dongguan Shenchiwan Port Affairs Co., Ltd. | 26,519,896.50 | 18,111,237.23 | Changes in profit distribution of investee |
| Shenzhen Chiwan Tugboat Co., Ltd. | 20,137,075.44 | 29,238,925.84 | Changes in profit distribution of investee |
| CM Port | 11,184,689.72 | 11,069,965.98 | Changes in profit distribution of investee |
| Shenzhen Chiwan Port Development Co., Ltd. | 9,751,697.73 | 20,415,654.72 | Changes in profit distribution of investee |
| CM International Tech | 9,517,336.07 | - | Changes in profit distribution of investee |
| Chiwan Shipping (Hong Kong) Limited | 7,902,673.23 | - | Changes in profit distribution of investee |
| Shenzhen Chiwan International Freight Agency Co., Ltd. | 212,854.30 | 231,098.94 | Changes in profit distribution of investee |
| Total | 416,405,658.26 | 549,150,517.02 | -- |
SUPPLEMENTARY INFORMATIONFOR THE YEAR ENDED 31 DECEMBER 2023
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
| Item | Amount | Remark |
| Gains or losses on disposal of non-current assets, including those charged off for which provision for impairment of assets has been made | 231,205,985.85 | |
| Government grants recognized in profit or loss (other than grants which are closely related to the Company's business, in line with the national regulations, enjoyed under established standards and have a continuous impact on the Company's profit or loss) | 149,238,503.34 | |
| Income earned from lending funds to non-financial institutions and recognized in profit or loss | 194,897,544.80 | |
| 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 | - | |
| Losses on assets due to force majeure, e.g., natural disasters | - | |
| Gains or losses on debt restructuring | - | |
| Lump-sum costs incurred by the enterprises as a result of the discontinuation of relevant business activities, e.g., expenditure for layoff of employees, etc. | - | |
| Gains from 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 or losses from changes in fair value of financial assets and financial liabilities held by non-financial enterprises other than effective hedging operation relating to the Company's normal operations, and gains or losses from disposal of financial assets and financial liabilities | 73,352,800.52 | |
| Reversal of provision for accounts receivable that are tested for impairment individually | 52,962,785.14 | |
| Gains or losses on entrusted loans | - | |
| Gains or losses from changes in fair value of investment properties that are subsequently measured using the fair value model | - | |
| One-time effect of adjustments in tax laws and accounting laws and regulations on profit or loss for the period | - | |
| Custodian fees earned from entrusted operation | - | |
| Share-based payment expenses recognized once due to the cancellation or modification of equity incentive plans | - | |
| For cash-settled share-based payments, gains or losses arising from changes in fair value of employee benefits payable after the vesting date | - | |
| Other non-operating income or expenses other than above | 12,810,280.19 | |
| Other profit or loss that meets the definition of non-recurring profit or loss | - | |
| Tax effects | -145,340,260.29 | |
| Effects of minority interests (after tax) | -336,553,661.12 | |
| Total | 232,573,978.43 |
The revised Explanatory Announcement No. 1 on Information Disclosure for Companies Making PublicOffering - Non-recurring Profit or Loss (Revised in 2023) was issued by the China Securities RegulatoryCommission on 22 December 2023, and the effect of the revision on non-recurring profit or loss for thecomparable accounting periods is reflected as a decrease of non-recurring profit or loss by RMB18,600,132.64.
SUPPLEMENTARY INFORMATIONFOR THE YEAR ENDED 31 DECEMBER 2023
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 with InformationDisclosure and Presentation Rules for Companies Making Public Offering No. 9 - Calculation andDisclosure of Return on Net Assets and Earnings per Share (revised in 2010) issued by China SecuritiesRegulatory Commission.
| Item | Weighted average return on net assets (%) | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 6.3455 | 1.4292 | 1.4292 |
| Net profit attributable to ordinary shareholders after deducting non-recurring profit or loss | 5.9324 | 1.3362 | 1.3362 |
SUPPLEMENTARY INFORMATIONFOR THE YEAR ENDED 31 DECEMBER 2023
3. SUPPLEMENTARY INFORMATION RELATING TO ITEMS IN THE FINANCIAL
STATEMENTS DUE TO RETROSPECTIVE APPLICATION OF ACCOUNTINGPOLICIES
| Item | 31/12/2023 | 31/12/2022 | 1/1/2022 | Item | 31/12/2023 | 31/12/2022 | 1/1/2022 |
| Current Assets: | Current liabilities: | ||||||
| Cash and bank balances | 16,079,646,178.24 | 13,615,928,739.40 | 12,772,349,406.77 | Short-term borrowings | 15,714,045,288.97 | 7,164,338,366.18 | 13,651,452,805.36 |
| Held-for-trading financial assets | 4,568,806,108.84 | 2,998,781,599.63 | 6,921,831,502.55 | Notes payable | 73,461,165.82 | - | 1,895,987.17 |
| Notes receivable | 325,150,195.09 | 36,395,000.00 | 6,081,611.95 | Accounts payable | 691,765,137.25 | 811,149,397.66 | 843,820,438.51 |
| Accounts receivable | 1,103,901,466.25 | 1,276,149,689.44 | 1,320,577,577.81 | Receipts in advance | 17,387,537.36 | 9,886,531.59 | 9,313,166.01 |
| Receivables financing | 2,001,669.46 | 163,766,913.10 | 238,429,402.71 | Contract liabilities | 142,080,101.00 | 141,899,551.03 | 196,784,525.26 |
| Prepayments | 37,664,552.30 | 63,627,425.42 | 51,606,794.20 | Employee benefits payable | 917,964,606.65 | 936,834,718.13 | 820,416,415.47 |
| Other receivables | 940,014,994.01 | 948,842,094.30 | 696,276,595.87 | Taxes payable | 923,053,572.50 | 917,933,169.09 | 2,162,719,251.68 |
| Inventories | 218,898,192.87 | 225,122,821.48 | 194,920,136.12 | Other payables | 1,654,622,170.02 | 1,755,885,258.26 | 2,140,108,341.08 |
| Assets held-for-sale | - | - | 337,442,757.28 | Non-current liabilities due within one year | 6,817,404,289.25 | 11,641,223,688.95 | 8,268,209,284.17 |
| Non-current assets due within one year | 17,451,380.98 | 902,225,293.93 | 102,356,461.97 | Other current liabilities | 2,143,842,534.53 | 3,161,147,525.96 | 2,158,497,775.85 |
| Other current assets | 189,673,500.87 | 185,903,140.53 | 339,684,297.41 | Total current liabilities | 29,095,626,403.35 | 26,540,298,206.85 | 30,253,217,990.56 |
| Total current assets | 23,483,208,238.91 | 20,416,742,717.23 | 22,981,556,544.64 | Non-current Liabilities: | |||
| Non-current Assets: | Long-term borrowings | 18,227,543,954.71 | 12,390,099,177.85 | 7,144,839,870.89 | |||
| Long-term receivables | 3,856,466,116.99 | 5,661,327,499.07 | 6,162,713,861.02 | Bonds payable | 14,287,508,564.15 | 19,088,293,099.02 | 16,670,872,414.14 |
| Long-term equity investments | 96,666,117,776.27 | 92,364,293,919.05 | 70,353,451,824.52 | Including: Preferred shares | - | - | - |
| Other non-current financial assets | 877,576,442.83 | 1,745,740,896.41 | 809,515,244.87 | Perpetual bonds | - | - | - |
| Investments in other equity instruments | 157,461,648.16 | 171,945,275.02 | 180,251,798.43 | Provisions | 1,001,172,206.92 | 948,350,914.04 | 1,055,194,906.09 |
| Investment properties | 4,958,374,968.79 | 5,123,690,119.56 | 5,298,238,414.88 | Lease liabilities | 3,822,862,202.17 | 3,551,315,590.31 | 3,422,179,366.40 |
| Fixed assets | 28,986,538,326.35 | 32,033,326,083.50 | 31,710,513,230.29 | Long-term payables | 603,009,921.91 | 639,095,931.43 | 588,681,492.63 |
| Construction in progress | 2,909,817,281.46 | 2,413,844,407.64 | 2,557,584,953.92 | Long-term employee benefits payable | 85,590,059.41 | 35,365,156.43 | 24,247,302.42 |
| Right-of-use assets | 9,441,668,311.22 | 9,342,642,222.33 | 8,743,077,542.19 | Deferred income | 1,024,776,557.73 | 1,031,273,189.74 | 1,075,957,884.91 |
| Intangible assets | 18,073,062,184.72 | 19,277,065,115.61 | 18,475,412,380.93 | Deferred tax liabilities | 4,659,638,104.37 | 4,855,019,835.33 | 4,552,418,519.70 |
| Development expenditure | 50,990,153.18 | 17,412,196.16 | 82,391,225.85 | Other non-current liabilities | 179,634,263.73 | 186,383,117.00 | 163,065,578.53 |
| Goodwill | 6,493,002,246.44 | 6,411,426,891.09 | 6,024,160,942.07 | Total non-current liabilities | 43,891,735,835.10 | 42,725,196,011.15 | 34,697,457,335.71 |
| Long-term prepaid expenses | 993,793,505.29 | 986,356,904.90 | 975,994,541.52 | TOTAL LIABILITIES | 72,987,362,238.45 | 69,265,494,218.00 | 64,950,675,326.27 |
| Deferred tax assets | 415,063,477.03 | 434,498,820.95 | 454,644,724.39 | Owners' equity: | |||
| Other non-current assets | 1,194,155,989.62 | 1,186,789,378.79 | 1,231,092,952.69 | Share capital | 2,499,074,661.00 | 2,499,074,661.00 | 1,922,365,124.00 |
| Total non-current assets | 175,074,088,428.35 | 177,170,359,730.08 | 153,059,043,637.57 | Including: Preferred shares | - | - | - |
| Perpetual bonds | - | - | - | ||||
| Capital reserve | 37,076,846,803.06 | 34,751,640,835.25 | 23,592,702,758.70 | ||||
| Less: Treasury shares | - | - | - | ||||
| Other comprehensive income | -903,626,594.35 | -689,553,619.86 | -890,125,318.18 | ||||
| Special reserve | 34,003,994.41 | 26,358,259.97 | 9,184,429.12 | ||||
| Surplus reserve | 1,095,980,563.68 | 1,001,917,449.15 | 961,182,562.00 | ||||
| Unappropriated profit | 19,045,313,519.75 | 16,701,988,301.14 | 14,226,931,466.66 | ||||
| Total equity attributable to equity holders of the Company | 58,847,592,947.55 | 54,291,425,886.65 | 39,822,241,022.30 | ||||
| Minority interests | 66,722,341,481.26 | 74,030,182,342.66 | 71,267,683,833.64 | ||||
| TOTAL OWNERS' EQUITY | 125,569,934,428.81 | 128,321,608,229.31 | 111,089,924,855.94 | ||||
| TOTAL ASSETS | 198,557,296,667.26 | 197,587,102,447.31 | 176,040,600,182.21 | TOTAL LIABILITIES AND OWNERS' EQUITY | 198,557,296,667.26 | 197,587,102,447.31 | 176,040,600,182.21 |