CHINA MERCHANTS PORT GROUP CO., LTD.
INTERIM REPORT 2023
Date of Disclosure: 31 August 2023
China Merchants Port Group Co., Ltd. Interim Report 2023
Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior managers of China Merchants Port Group Co., Ltd. (hereinafter referred to asthe “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of thisReport and its summary, and shall be jointly and severally liable for any misrepresentations,misleading statements or material omissions therein.Xu Song, the Company’s legal representative, Tu Xiaoping, the Company’s Chief Financial Officer,and Hu Shaode, the person-in-charge of the accounting organ hereby guarantee that the financialstatements carried in this Report are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Report and itssummary.Any forward-looking statements such as future plans or development strategies mentioned hereinshall not be considered as the Company’s promises to investors. And investors are reminded toexercise caution when making investment decisions.Risks faced by the Company and counter measures have been explained in Item X in “Part IIIManagement Discussion and Analysis” herein, which investors are kindly reminded to pay attentionto.Securities Times, China Securities Journal, Shanghai Securities News, Ta Kung Pao (HK) andwww.cninfo.com.cn have been designated by the Company for information disclosure. And allinformation about the Company shall be subject to what’s disclosed on the aforesaid media. Investorsare kindly reminded to pay attention to these media.The Company is not subject to any industry-specific disclosure requirements.The Company has no interim dividend plan, either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
China Merchants Port Group Co., Ltd. Interim Report 2023
Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 1
Part II Corporate Information and Key Financial Information ...... 6
Part III Management Discussion and Analysis ...... 11
Part IV Corporate Governance ...... 37
Part V Environmental and Social Responsibility ...... 39
Part VI Significant Events ...... 45
Part VII Share Changes and Shareholder Information ...... 61
Part VIII Preference Shares ...... 66
Part IX Bonds ...... 68
Part X Financial Statements ...... 72
China Merchants Port Group Co., Ltd. Interim Report 2023
Documents Available for ReferenceI. Financial Statements carrying the signatures and stamps of the Company Principal, the ChiefFinancial Officer and the person in charge of accounting firm;II. Original copies of all documents and the announcements thereof disclosed in the reportingperiod on “Securities Times”, “China Securities Journal”, “Shanghai Securities News” and“Ta Kung Pao”.
China Merchants Port Group Co., Ltd. Interim Report 2023
Definitions
Term
| Term | Definition |
| The “Company”, “CMPort” or “we” | China Merchants Port Group Co., Ltd., formerly known as “Shenzhen Chiwan Wharf Holdings Limited” |
| CMG | China Merchants Group Co., Limited |
| CMPort Holdings | China Merchants Port Holdings Company Limited (00144.HK) |
| CSRC | China Securities Regulation Commission |
| CMIT | China Merchants International Technology Co., Ltd., |
| Dongguan Machong | Dongguan Chiwan Port Service Co., Ltd. |
| Shantou Port | Shantou CMPort Group Co., Ltd. |
| Zhanjiang Port | Zhanjiang Port (Group) Co., Ltd. |
| Shunde New Port | Guangdong Yide Port Limited |
| Zhangzhou Port | Zhangzhou China Merchants Port Co., Ltd. |
| CMICT | Ningbo Daxie China Merchants International Container Terminal Co., Ltd. |
| CICT | Colombo International Container Terminals Ltd. |
| HIPG | Hambantota International Port Group |
| LCT | Lome Container Terminal Ltd. |
| TCP | TCP Participa??es S.A |
| TEU | Twenty Foot Equivalent Unit |
| CM ePort | The wharf e-commerce platform, i.e. the unified customer service platform |
| Yingkou Port | Yingkou Port Co., Ltd. |
| Liaoning Port/ Dalian Port | Liaoning Port Co., Ltd., formerly known as Dalian Port (PDA) Company Limited |
| SASAC of the State Council | State-Owned Assets Supervision and Administration Commission of the State Council |
| SIPG | Shanghai International Port (Group) Co., Ltd. |
| Tianjin Port Container Terminal | Tianjin Port Container Terminal Co., Ltd. |
| QQCTU | Qingdao Qianwan United Container Terminal Co., Ltd. |
| CMCS | China Merchants Container Services Limited |
| Modern Terminals | Modern Terminals Limited |
| Taiwan Kao Ming Container | Kao Ming Container Terminal Corp. |
| TL | Terminal Link S.A.S. |
| Kumport | Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim Sirketi |
| PDSA | Port de Djibouti S.A. |
| TICT | Tin-Can Island Container Terminal Ltd. |
| QQTU | Qingdao Qianwan United Terminal Co., Ltd. |
| Qingdao Dongjiakou | Qingdao Port Dongjiakou Ore Terminal Co., Ltd. |
| Laizhou Port | Yantai Port Group Laizhou Port Co. LTD |
| Xiamen Port | Zhangzhou China Merchants Xiamen Port Affairs Co., Ltd. |
| Ningbo Zhoushan Port | Ningbo Zhoushan Port Company Limited |
China Merchants Port Group Co., Ltd. Interim Report 2023
CYBER CHIC
| CYBER CHIC | CYBER CHIC COMPANY LIMITED |
| The cninfo website | www.cninfo.com.cn |
| SZSE | Shenzhen Stock Exchange |
| The “Articles of Association” | The Articles of Association of China Merchants Port Group Co., Ltd. |
| RMB RMB’0,000 RMB’00,000,000 | Expressed in the Chinese currency of Renminbi Expressed in tens of thousands of Renminbi Expressed in hundreds of millions of Renminbi (unless otherwise specified) |
Note: In this Report, certain total numbers may not be exactly equal to the summation of their sub-item numbers as a result of roundoff.
China Merchants Port Group Co., Ltd. Interim Report 2023
Part II Corporate Information and Key Financial InformationI Corporate Information
Stock name
| Stock name | CM Port Group/ CM Port Group B | Stock code | 001872/201872 |
| Stock exchange for stock listing | Shenzhen Stock Exchange | ||
| Company name in Chinese | 招商局港口集团股份有限公司 | ||
| Abbr. (if any) | 招商港口 | ||
| Company name in English (if any) | China Merchants Port Group Co., Ltd. | ||
| Abbr. (if any) | CMPort | ||
| Legal representative | Xu Song | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Li Yubin | Hu Jingjing |
| Address | 24/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street, Nanshan, Shenzhen, PRC | 24/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street, Nanshan, Shenzhen, PRC |
| Tel. | +86 755 26828888 | +86 755 26828888 |
| Fax | +86 755 26886666 | +86 755 26886666 |
| Email address | Cmpir@cmhk.com | Cmpir@cmhk.com |
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and theirzip codes, website address, email address and other contact information of the Company in theReporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2022Annual Report.
China Merchants Port Group Co., Ltd. Interim Report 2023
2. Media for Information Disclosure and Place where this Report is LodgedIndicate by tick mark whether any change occurred to the information disclosure media and the placefor lodging the Company’s periodic reports in the Reporting Period.
□ Applicable √ Not applicable
The website of the stock exchange, media and other websites where the Company’s periodic reportsare disclosed, as well as the place for lodging such reports did not change in the Reporting Period.The said information can be found in the 2022 Annual Report.
3. Other Relevant Information
Indicate by tick mark whether any change occurred to the other relevant information in the ReportingPeriod.
□ Applicable √ Not applicable
IV Key Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason for retrospective restatements: Change to accounting policiesThe Ministry of Finance issued Interpretation No. 16 for the Accounting Standards for BusinessEnterprises (C.K. [2022] No. 31) on 30 November 2022, which stipulates that the “accountingtreatments for deferred income taxes associated with assets and liabilities arising from a singletransaction to which the initial recognition exemption does not apply” shall take effect since 1 January2023. In accordance with the aforesaid standard and regulations of the Ministry of Finance, theCompany has adopted Interpretation No. 16 for the Accounting Standards for Business Enterprisessince 1 January 2023.
| H1 2023 | H1 2022 | Change (%) | ||
| Before | Restated | Restated | ||
| Operating revenue (RMB) | 7,795,261,570.99 | 8,150,462,367.19 | 8,150,462,367.19 | -4.36% |
| Net profit attributable to the listed company’s shareholders (RMB) | 1,902,334,759.43 | 1,981,861,324.62 | 1,988,560,957.83 | -4.34% |
China Merchants Port Group Co., Ltd. Interim Report 2023
Net profitattributable tothe listedcompany’sshareholdersbeforeexceptionalgains and losses(RMB)
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 1,801,393,373.15 | 1,920,549,245.60 | 1,927,248,878.81 | -6.53% |
| Net cash generated from/used in operating activities (RMB) | 2,310,845,305.96 | 3,221,251,177.09 | 3,221,251,177.09 | -28.26% |
| Basic earnings per share (RMB/share) | 0.76 | 1.03 | 1.03 | -26.21% |
| Diluted earnings per share (RMB/share) | 0.76 | 1.03 | 1.03 | -26.21% |
| Weighted average return on equity (%) | 3.43% | 4.88% | 4.88% | -1.45% |
| 30 June 2023 | 31 December 2022 | Change (%) | ||
| Before | Restated | Restated | ||
| Total assets (RMB) | 204,928,889,409.33 | 197,525,530,887.76 | 197,587,102,447.31 | 3.72% |
| Equity attributable to the listed company’s shareholders (RMB) | 55,744,255,220.13 | 54,267,143,304.02 | 54,291,425,886.65 | 2.68% |
The total share capital at the end of the last trading session before the disclosure of this Report:
| Total share capital at the end of the last trading session before the disclosure of this Report (share) | 2,499,074,661 |
Fully diluted earnings per share based on the latest total share capital above:
| Fully diluted earnings per share based on the latest total share capital above (RMB/share) | 0.7612 |
China Merchants Port Group Co., Ltd. Interim Report 2023
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences between Domestics and Foreign AccountingPrinciple
□ Applicable √ Not applicable
VI Exceptional Gains and Losses
Unit: RMB
Item
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -6,698,657.83 | - |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 46,639,497.49 | - |
| Capital occupation charges on non-financial enterprises that are charged to current profit or loss | 113,972,342.76 | - |
China Merchants Port Group Co., Ltd. Interim Report 2023
Gain or loss on fair-valuechanges in held-for-tradingfinancial assets and liabilities& income from disposal ofheld-for-trading financialassets and liabilities andavailable-for-sale financialassets (exclusive of theeffective portion of hedgesthat arise in the Company’sordinary course of business)
| Gain or loss on fair-value changes in held-for-trading financial assets and liabilities & income from disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 143,037,303.68 | - |
| Reversed portions of impairment allowances for receivables which are tested individually for impairment | 2,371,890.55 | - |
| Non-operating income and expense other than the above | 33,504,023.58 | - |
| Less: Income tax effects | 65,076,056.83 | - |
| Non-controlling interests effects (net of tax) | 166,808,957.12 | - |
| Total | 100,941,386.28 |
Particulars about other gains and losses that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies recurrent gain/loss as an exceptional gain/loss itemlisted in the Explanatory Announcement No. 1 on Information Disclosure for Companies OfferingTheir Securities to the Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2023
Part III Management Discussion and AnalysisI. Principal activities of the Company during the reporting period
1、Principal activities and business models
The Company is principally engaged in port investment and operation, comprehensive development,smart technology and port ecosystem businesses.The port investment and operation business includes containers and bulk cargo handling andwarehousing services. The Company has established a comprehensive port network across the hublocations along coastal China, and the terminals which the Company invested in or invested in andmanaged are located in hub locations across Hong Kong, Taiwan, Shenzhen, Ningbo, Shanghai,Qingdao, Tianjin, Dalian, Zhangzhou, Zhanjiang, and Shantou, as well as in Asia, Africa, Europe,Oceania, South and North America, amongst others. In terms of port investment, the Company putsemphasis on its presence in global major hub locations, gateway ports and regions with huge marketpotential, rapid economic growth and promising development, in order to capture investmentopportunities in ports, logistics and related infrastructure and further improve the global port network.In terms of the comprehensive development business, leveraging on the innovative park businessmodels and services, the Company conducts in-depth exploration of synergy value between ports andparks, and provides customers with diversified value-added services, including warehousing leasing,customs clearance, division or merger of cargoes, documentation services, in Shenzhen QianhaiwanBonded Port Zone, Qingdao Qianwan Bonded Port Zone, Tianjin Dongjiang Bonded Port Zone,Djibouti International Free Trade Zone, Hambantota Industrial Park, amongst others.In terms of the smart technology business, the Company utilizes cutting-edge digital technology, givesfull play to its advantages of big data and rich application scenarios, drives its industrial digitalizationand digital industrialization, and provides customers with premium port services through smart portsolutions, an open platform for smart ports and smart port technology operation.In terms of the port ecosystem business, which is based on ports as the core and includes port tugboatservice, tallying business and engineering supervision and management business, the Companyintegrates the port ecological service resources, promotes the collaboration and cooperation betweenthe upstream and downstream of the port logistics value chain and lays a key focus on the opennessand sharing of resources, to advance the smooth trade development as well as the efficient operationof the logistics, information flow and capital flow of the port service chain and further help customersreduce costs and increase efficiency.The main business segments of the Company are as follows:
China Merchants Port Group Co., Ltd. Interim Report 2023
Businesssegments
| Business segments | Business content |
| Port investment and operation business | Port investment： ● The Company puts emphasis on its presence in global major hub locations, gateway ports and regions with huge market potential, rapid economic growth and promising development, in order to capture investment opportunities in ports, logistics and related infrastructure, and further improve the global port network. Port operation： ● Containers: The Company provides ship berthing, loading and unloading services to ship companies, offers container storage service to ship companies and cargo owners and provides overhead box services to tractor companies. The Company also engages in the businesses of division or merger of cargoes in containers, container leasing and container maintenance; ● Bulk cargoes: the Company is engaged in bulk cargo handling and transportation in port zones, as well as storage services in yards. The major types of cargoes handled include food, steel, woods and sandstones. ● Port tugboat service, tallying business and engineering supervision and management business. |
| Comprehensive development business | The Company provides various services, including warehouse/yard leasing, loading and unloading in warehouses/yards, customs clearance and division or merger of cargoes at terminals, intermodal transportation, logistics and transportation and value-added warehousing services for clients (including logistics companies, trading companies or cargo owners). Relying on the port-surrounding land resources, the Company conducts the comprehensive development to enhance the land value as well as the value of commercial properties, and provides customers with quality property leasing and other related services. |
Smart technologybusiness
| Smart technology business | The Company focuses on smart port solutions, an open platform for smart ports and smart port technology operation, accelerates the industry upgrading from "digitization" to "digital intelligence", continues to empower the core businesses of port production, management, service and ecology, and injects new momentum into port enterprises through digital technology. |
| Port ecosystem business | The Company gives full play to the advantages of partners’ ecological resources, empowers the industry through digital and smart technology and creates an open digital industrialization ecology to achieve all-win harmony through collaborative construction. The Company also follows the green and low-carbon principle and seizes the opportunity of new energy technology change to provide customers with new port-related energy services. Centering on the major port business, it promotes business model innovation through technology changes and provides port supply chain extended services. |
2. Development stage and cyclical characteristic of the industry in which the Company operatesand its industry position during the reporting period
(1) Macro economic and trade landscape
In the first half of 2023, uncertainties in the global economy have increased, with a sluggish economicrecovery. In particular, there remained the ongoing geopolitical friction, high inflation and largestockpiles inhibiting consumer demand in developed countries, interest rate hikes in Europe and theUnited States slowing down the investment growth in emerging markets, and China and the UnitedStates have launched a new round of wrestling in the high-tech field. According to the “WorldEconomic Outlook” published by the International Monetary Fund (“IMF”) in July 2023, the globaleconomy in 2023 was expected to increase by 3.0%, representing a decrease of 0.5 percentage pointsyear-on-year. Specifically, developed economies were expected to grow by 1.5%, representing adecrease of 1.2 percentage points year-on-year, while emerging markets and developing economieswere expected to grow by 4.0%, keeping flat year-on-year. According to the report published by U.S.Department of Commerce, the U.S. GDP grew by 2.4% in the second quarter, up from 2% in the first
China Merchants Port Group Co., Ltd. Interim Report 2023
quarter. According to statistics of Eurostat, in the second quarter of 2023, the Eurozone GDP grew by
0.3% quarter-on-quarter, among which German GDP was flat and France grew by 0.5% quarter-on-quarter. The economic situation in Japan was relatively complex, despite in June certain indicatorssuch as value of industrial output rebounded more than expected, its economic and fiscal situationwas still uncertain; while the economy of the South Korea grew better than expected in the secondquarter, with GDP up 0.9% year-on-year, unchanged from the first quarter. In terms of global trade,the volume of global trade was expected to grow by 2.0% in 2023, representing a decrease of 3.2%year-on-year. Amidst weak consumption of goods, rising uncertainty about the future geoeconomicconditions, sluggish productivity growth and more challenging financial conditions, companies havescaled back investment in capacity.In the first half of 2023, China adhered to the general principle of seeking progress while maintainingstability under the complex and severe external environment, and China's overall economy graduallyrecovered with a positive momentum, and foreign trade kept stable with its improved quality asexpected. According to the statistics of National Bureau of Statistics of China, China’s GDP wasRMB59.30 trillion in the first half of 2023, representing an increase of 5.5% year-on-year at constantprices. However, special attention shall also be paid to the weak recovery of the world economic,slowing global trade and investment, increasing unilateralism, protectionism and geopolitical risks,as well as the lasting impact of declining external demand on China's foreign trade. According to thestatistics published by the General Administration of Customs of China, the total value of importsand exports of trade in goods in China amounted to RMB20.1 trillion in the first half of 2023,representing an increase of 2.1% year-on-year, among which the export value was RMB11.46 trillion,representing an increase of 3.7% year-on-year, and the import value was RMB8.64 trillion,representing a decrease of 0.1% year-on-year. The trade surplus was RMB2.82 trillion, up 17.4%.The total value of imports and exports in China denominated in US dollar amounted to USD 2.92trillion, representing a decrease of 4.7%.The regionalization trend of global industrial and supply chain was obvious and the implementationof RCEP has injected impetus into the integrated development of regional economy. The imports andexports between China and ASEAN denominated in RMB increased by 5.4% year-on-year in the firsthalf of 2023. Under the trend of diversification and fragmentation of demand, cross-border e-commerce was booming, with the cross-border e-commerce imports and exports amounting to RMB
1.1 trillion in the first half of 2023, representing an increase of 16% year-on-year, according to thestatistics published by the General Administration of Customs of China. The development of digitalintelligence technologies such as big data, artificial intelligence, cloud computing, Internet of Things,and blockchain has exerted a profound impact on trade patterns, structures and landscape. Aninterdependent industrial Internet platform ecology will be built to further strengthen the flow ofproduction factors and commodities and improve the overall efficiency.Looking ahead to the second half of 2023, the risks to global growth remain skewed to the downside,with inflation likely to remain high or even rise in the event of further shocks, including those causedby the intensifying Russia-Ukraine conflict and extreme weather, triggering further tightening ofmonetary policy. However, the likelihood of a more favourable outcome for global growth is alsorising, and core inflation may fall faster than expected, reducing the need for tighter monetary policy.
China Merchants Port Group Co., Ltd. Interim Report 2023
The IMF expects the global economy to grow by 3.0% in 2023. In advanced economies, growth willcontinue to slow significantly in 2023, from 2.7% in 2022 to 1.5% in 2023 and 1.4% in 2024. Growthin emerging market and developing economies is expected to remain broadly stable at 4.0% in 2023and 4.1% in 2024. Total world trade (including goods and services) is expected to grow by 2.0% in2023, rising to 3.7% in 2024.In the second half of 2023, China's real estate sector may contract more than expected, weakconfidence leads to weaker-than-expected consumption, and possible fiscal tightening in response tolower local government tax revenues, these uncertainties will put some pressure on China's economicgrowth. The international market demand may be better than expected, consumption growth mayfurther release potential, the trend of digital and green economy continues to strengthen, and scientificand technological innovation will become an important driving force for China's economicdevelopment. In the coming stage, the Chinese government will continue to adhere to the generalprinciple of seeking progress while maintaining stability, work hard to smooth the economic cycle,make greater efforts to change the growth model, adjust the structure and increase the growthmomentum, and strive to achieve effective qualitative improvement and reasonable quantitativegrowth of the economy.
（2）Trend analysis of the port and shipping industry
The international shipping industry has been deeply affected by the reshaping of the global industrialand supply chain, which has led to significant adjustments in shipping route layout. According to thereport of Alphaliner, a shipping consultancy, as at the end of July 2023, the capacity deployed by linercompanies on Asia-Europe routes grew by 3.4% year-on-year, and a decrease of 19.1% year-on-yearon trans-Pacific routes. In terms of port of calls, the number of liner calls from China at U.S. portsplummeted, and more container cargoes arrived in the United States from Vietnam, Mexico and otherregions. According to the report of Lloyd's List, the number of goods shipped from China to theUnited States fell 17% in 2022; the number of liner calls from China to Vietnam increased by 23%;the number of liner calls from Vietnam to the United States increased from 44 to 62, representing anincrease of 41%; the number of liner calls from China to Mexico increased by 14% year-on-year; andthe number of direct flights between China and Russia increased to 342, representing an increase of88% year-on-year.In 2023, uncertainties in the container transport market increased, and the fundamental of supply anddemand was cautiously optimistic. The international freight rates fell sharply and hovered at lowlevels. On the supply side, the shipping market entered a new round of delivery capacity and theaverage port time continued to shorten, and the idle capacity of container ships accounted forapproximately 4.4%; while on the demand side, Drewry, a shipping consultancy, expected that theglobal port throughput would rise by approximately 1% in 2023. Due to the decline in freight rate,shipping companies have accordingly focused on cost control and business diversification to ensureprofitability, including optimizing fleet capacity, reducing charter costs and slow sailing, extendingboth ends of the shipping logistics chain and investing in the field of zero carbon.Affected by the global economy and trade and the international shipping industry, plus a slowdown
China Merchants Port Group Co., Ltd. Interim Report 2023
in the growth of the global port industry, the container business volume handled in major hublocations decreased to varying degrees. Drewry, a shipping consultancy, expected global portthroughput growth of 1% in 2023 and 3% between 2024 and 2027. According to the statistics ofAlphaliner, the total container throughput of the world's top 20 ports amounted to 83.43 million TEUsfor the first quarter of 2023, representing a decrease of 11.7% year-on-year. In addition to the MiddleEast (Dubai Port) and Northeast Asia (Busan Port), the container throughput handled in ports in otherregions declined in various degrees. In particular, ports in the Greater China region handled 51.54million TEUs, representing a decrease of 0.25% year-on-year; ports in Southeast Asia handled 11.07million TEUs, representing a decrease of 2.0% year-on-year; ports in Europe and North Americahandled 6.33 million TEUs and 5.35 million TEUs, respectively, representing a decrease of 8.8% and
29.9% year-on-year. While China's port industry performed well in the first half of 2023 in terms ofthe main indicators. According to the statistics published by the Ministry of Transport, theaccumulated cargo volume handled by Chinese ports reached 8,188.8 million tonnes from January toJune 2023, representing an increase of 8.0% year-on-year, and the accumulated container throughputhandled reached 149.19 million TEUs, representing an increase of 4.8% year-on-year. Among which,coastal ports handled an accumulated cargo volume of 5,331.86 million tonnes, representing anincrease of 7.3% year-on- year, while the accumulated container throughput was 130.88 million TEUs,representing an increase of 4.2% year-on-year.
(3) The Company’s industry position
The Company is the global leading port investor and operator, as one of the top port operators in theworld, and has the resource endowment and unique advantages to build a world-class comprehensiveport service provider. In terms of scale, the Company has established a relatively complete portnetwork at major hub locations along coastal China, with its presence in 50 ports in 25 countries andregions including Asia, Africa, Europe, Oceania, South and North America. In 2022, the Company'sequity throughput of containers reached 50.6 million TEUs, ranking third among the global portoperators. In terms of quality, the master terminals controlled by the Company have occupied variousmarket and regional leading positions, continued to promote ESG construction, and strived to createan ESG port benchmark in the industry. In addition, leveraging on the good ground of port technologyand based on the TOS system self-developed by CMPort, the Company has worked out the worldwidefirst full-case, full-time, all-regime and multi-factor traditional container terminal upgrading solution,and has built the trade facilitation platform for the Guangdong-Hong Kong-Macao Greater Bay Areathrough blockchain technology, which has been extended to 30 terminals to help enhance the tradefacilitation level in the Greater Bay Area. In terms of performance, the Company has continuallypromoted high-quality development and has been an industry leader in terms of net profit margin andoverall labour productivity and other indicators.II. Core competitiveness analysis
1. Sound shareholder background and resource integration capabilityCMG, the de facto controller of the Company, was the Hundred Years' central State-owned enterprisesstarting with port shipping logistics business that owns excellent reputation and resources available
China Merchants Port Group Co., Ltd. Interim Report 2023
in the industry.Founded in 1872, CMG is an integrated and diversified key enterprise under the direct administrationof the PRC central government, also a one of the four major Chinese enterprises in Hong Kong withtwo global companies counted on Fortune Global 500 list. Currently, it mainly focusses on three coreindustries, namely transportation & logistics, integrated finance and comprehensive development ofcities and industrial zones. In recent years, CMG successively realized the transformation from thesethree primary industries to the three major platforms of industrial management, financial services,investment and capital operation, and also began to deploy its footprint in big health, testing and othersectors.CMG’s Transportation & Logistics Business Department includes port, highway, energy shipping,logistics, naval architecture and marine engineering businesses, and has a wide range of coordinatedspace for industrial chain service. Acceleration of international development and improvement onlogistics network layout will effectively bolster CMPort’s capabilities related to create a world-classport investment and operation platform which can gives a global push as well as an interconnectedinternational port comprehensive service system.
2. Professional and high-efficiency global port investment capabilityThe Company focuses on port investment, grasps global trend and seizes opportunities in region toachieve full-process and full-cycle management on investments.As an important carrier for domestic and overseas port investment and operation of CMG, theCompany has over 20 years of experience for port investment and over 10 years thereof for overseasinvestment. A scientific and professional investment management system has been set up with aresearch team specialized in investment global which owns a wealth of experience in policy research,industry analysis, risk control, fund raising, post-investment management. The Company continuesto work in development of global industrial supply chain, keeps up with major strategic opportunitiesin domestic and dynamic investment opportunities in overseas and properly invests in hub andgateways of strategic significance around the world.The Company strives to balance its investment portfolio within the regional and life cycle of ports.Adhering to the principle of “extensive consultation, joint development and shared benefits”, itsoverseas business has developed local-based business operation and formed a community of sharedfuture based on the consolidation of connectivity and cooperation and expand new internationalcooperation, to the greater extent that capability strengthened in cope with various risks such asindustry fluctuations, trade conflicts and emergencies.
3. Fleshing out the port comprehensive management capabilityThe Company has committed to port operation and improved comprehensive management capabilitythrough application of digital intelligence technology and integrated platform.
China Merchants Port Group Co., Ltd. Interim Report 2023
The Company endeavors to operation management of port business for years, based on digitalmanagement and cost control with aiming at improving quality and efficiency, thus forms a portoperational management system leading the industry. Self-developed Smart Management Platform(“SMP”) is a united platform that runs through the whole process, connects the whole scene, anddocks the whole system of the enterprise, so as to achieve comprehensive digital management ofbusiness process. It provides a one-stop operating model for the Decision-making personnel,Management and Executive to support the management decision based on the presentation andanalysis of global business core data. For the same time, the Company keeps applying measures ofcost control and forms a complete system thereof, and achieves cost savings and efficiency gains inpractice and effectivity manner with respect of process optimization, resource conservation,technological innovation, realizing its potential according to such policy and optimized allocation.The port comprehensive management capability of the Group for years has marked a good reputationin the industry.
4. Continuously optimized supply chain comprehensive service capabilityThe Company adhered to create values on the blockchain centered on ports as well as the logisticschain targeted on it.With the objective of becoming a high-quality and world-class comprehensive port service provider,the Company keeps enhancing corporate value. First, in respect of the advanced comprehensivedevelopment capability, taking port business as the core and leveraging the synergy of different portzones as well as city-industry integration, the Company explores the comprehensive port developmentmodel of “Port-Park-City”. Based on the traditional loading and discharging and ancillary services atports, it established the comprehensive development model that offered high value-added services toenterprises. Currently, the Company has participated in promoting the comprehensive portdevelopment model of “Port-Park-City” in various overseas regions and has achieved remarkableresults and helped foster new profit growth points for the Company. Secondly, in respect of moderncomprehensive logistics service capability, both the shipping and port sectors gradually shifted toform alliances, the Company is actively integrating its domestic and overseas port assets andcapitalises on its relatively complete global port network to provide customers with comprehensiveport logistics service solutions, forming its unique competitive strength under the assistance ofresources such as maritime logistics, land transportation, storage, logistics and trading from CMG.
5. Self-innovative intelligent port construction capability
The Company rises to the call of the industry, pushing for traditional industrial upgrading and itsprogress set the direction of intelligent port construction.The Company sticks into the promotion of digitalization transformation, leads technologiesinnovation and industrial application by combining with new technology and development andreleases overall solutions for smart ports featuring CMPort’s characteristics. In terms of the coreproduction system between the port and the park, although the self-developed system of CMIT, ahigh-tech enterprise under the Company broke the monopoly of foreign suppliers, it still stresses the
China Merchants Port Group Co., Ltd. Interim Report 2023
importance of intensifying related scientific research, with strengths concentrated on new structureand intelligent upgrade of CTOS system. In terms of industrial network platform construction, wehave updated comprehensive service platform to 3.0 version, i.e., “CM ePort 3.0” which based onglobal port network of the Company to provide the port shipping logistics industry the one-stop portintegrating services including intelligent logistics, intelligent port as well as intelligent finance andbusiness. The construction of intelligent port ecology circle leverages such system for achievinginnovation of port business model. In terms of the construction of intelligent port, Mawan Smart Portof the Company taking a lead from traditional bulk terminals upgraded to 5G intelligent port thatintegrating 5G, Beidou system, artificial intelligence, automation and other scientific and intelligencetechnologies. It has greatly improved productivity, green degree and management level of the portand achieved good economic and social benefits, while rewards the Science and Technology Prize ofChina Port and Harbors Association and plays a demonstration role in the industry.III. Core business analysis
1. Port business review
(1) Overview of port business
In the first half of 2023, port businesses coincided with industry mainstream trend which scaled upshare of key region market, and the Company’s investment on Ningbo Port also increased its businessvolume. The Company’s ports handled a total container throughput of 87.075 million TEUs, up 30.4%year-on-year. Bulk cargo volume handled by the Company’s ports increased by 115.3% year-on-yearto 630 million tonnes, which was mainly thanks to the business volume of Ningbo Port included inthe Company since October 2022, contributing business increment of the Company with containerthroughput of 19.74 million TEUs and bulk cargo throughput of 333 million TEUs in the first half ofthe year. For container business, the Company’s ports in Mainland China handled a containerthroughput of 67.747 million TEUs, representing a year-on-year increase of 46.4%, ports in HongKong and Taiwan regions contributed a total container throughput of 2.791 million TEUs,representing a year-on-year decrease of 22.4%, and the total container throughput handled by theCompany’s overseas ports grew by 116.7% year-on-year to 16.537 million TEUs. In terms of bulkcargo business, the Company’s ports in Mainland China handled a bulk cargo volume of 627 milliontonnes, up 116.7% year-on-year, and overseas ports handled a bulk cargo volume of 2.797 milliontonnes, down 12.8% year-on-year.
Table 3-1 Throughput of the Company and changes in 1H 2023
Item
| Item | 1H 2023 | 1H 2022 | Changes |
| Container throughput (’0,000 TEU) | 8,707.5 | 6,677.3 | 30.4% |
China Merchants Port Group Co., Ltd. Interim Report 2023
Among which: Mainland China
| Among which: Mainland China | 6,774.7 | 4,628.9 | 46.4% |
Hong Kong and Taiwan
| Hong Kong and Taiwan | 279.1 | 359.7 | -22.4% |
| Overseas | 1,653.7 | 1,688.7 | -2.1% |
Bulk cargo throughput (’0,000
tonnes)
| Bulk cargo throughput (’0,000 tonnes) | 62,959.7 | 29,243.6 | 115.3% |
| Among which: Mainland China | 62,680.0 | 28,922.7 | 116.7% |
| Overseas | 279.7 | 320.9 | -12.8% |
Note: 1. The statistics represented the total throughput of the holding subsidiaries, associates and jointventures of the Company; 2. Dalian Port Co., Ltd., the joint stock company, was generally changedto Liaoning Port Co., Ltd due to the merger of Yingkou Port Co., Ltd. by it through conversion andabsorption. As such, the Company has been including the business volume of Yingkou Port Co., Ltdsince February 2021. 3. On September 2022, the Company being a strategic investor has completedthe subscription of 2021 non-public A share issuance of Ningbo Port, representing holding 23.08%equities of Ningbo Port in total and became the second largest shareholder of such company. As such,the Company has been including the business volume of Ningbo Port since October 2022.
(2) Operation condition of port business by region
Table 3-2 Container throughput of the Company and changes in 1H 2023 (in’0,000 TEU)
| Region and port company | 1H 2023 | 1H 2022 | Changes | ||
| Pearl River Delta region | Holding company | West Shenzhen Port Zone | 618.8 | 647.9 | -4.5% |
| Shunde New Port | 17.9 | 21.0 | -14.8% | ||
| Joint stock company | Chu Kong River Trade Terminal | 43.5 | 42.3 | 2.8% | |
Yangtze River
Delta region
| Yangtze River Delta region | Joint stock company | SIPG Group | 2,373.5 | 2,254.6 | 5.3% |
| Joint stock company | Ningbo Zhoushan Port (excluding Ningbo Daxie) | 1,974.0 | - | - | |
| Holding company | Ningbo Daxie | 140.0 | 172.7 | -18.9% | |
| Bohai Rim region | Joint stock company | Tianjin Port Container Terminal | 405.6 | 431.9 | -6.1% |
China Merchants Port Group Co., Ltd. Interim Report 2023
QQCTU
| QQCTU | 523.7 | 443.2 | 18.2% |
Liaoning Port Co., Ltd.
| Liaoning Port Co., Ltd. | 533.4 | 468.5 | 13.9% | ||
| South-East region | Holding company | Zhangzhou Port | 15.9 | 13.6 | 16.9% |
| Shantou Port | 72.5 | 74.4 | -2.6% | ||
| South-West region | Holding company | Zhanjiang Port | 55.9 | 58.9 | -5.1% |
| Hong Kong and Taiwan region | Holding company /Joint stock company | CMCS/Modern Terminals | 197.3 | 250.1 | -21.1% |
| Joint stock company | Taiwan Kao Ming Container | 81.8 | 109.6 | -25.4% | |
| Overseas region | Holding company | ||||
| CICT | 159.0 | 161.7 | -1.7% | ||
| TCP | 57.1 | 56.2 | 1.6% | ||
| LCT | 80.7 | 71.6 | 12.7% | ||
| Joint stock company | TL | 1,238.3 | 1,294.4 | -4.3% | |
| Kumport | 67.9 | 61.3 | 10.8% | ||
| PDSA | 36.6 | 30.3 | 20.8% | ||
| TICT | 14.1 | 13.6 | 3.7% | ||
| Total | 8,707.5 | 6,677.7 | 30.4% | ||
Note: 1. Dalian Port Co., Ltd., the joint stock company, was generally changed to Liaoning Port Co.,Ltd due to the merger of Yingkou Port Co., Ltd. by it through conversion and absorption. As such,the Company has been including the business volume of Yingkou Port Co., Ltd since February 2021.
2. On September 2022, the Company being a strategic investor has completed the subscription of2021 non-public A share issuance of Ningbo Port, representing holding 23.08% equities of NingboPort in total and became the second largest shareholder of such company. As such, the Company hasbeen including the business volume of Ningbo Port since October 2022.Table 3-3 Bulk cargo volume handled by the Company and changes in 1H 2023 (in’0,000 tonnes)
China Merchants Port Group Co., Ltd. Interim Report 2023
Region and port company
| Region and port company | 1H 2023 | 1H 2022 | Changes | ||
| Pearl River Delta region | Holding company | ||||
| West Shenzhen Port Zone | 811.8 | 810.8 | 0.1% | ||
| Dongguan Machong | 923.1 | 839.7 | 9.9% | ||
| Shunde New Port | 370.8 | 291.6 | 27.2% | ||
| Joint stock company | Chu Kong River Trade Terminal | 167.5 | 183.1 | -8.5% | |
Yangtze RiverDelta region
| Yangtze River Delta region | Joint stock company | SIPG Group | 4,239.0 | 3,011.4 | 40.8% |
| Joint stock company | Ningbo Zhoushan Port | 33,302.0 | - | - | |
| Bohai Rim region | Joint stock company | QQTU | 684.5 | 863.1 | -20.7% |
| Qingdao Port Dongjiakou | 3,845.4 | 3,865.6 | -0.5% | ||
| Liaoning Port Co., Ltd. | 11,910.8 | 12,761.6 | -6.7% | ||
| Laizhou Harbour Affairs | 1,004.3 | 1,071.5 | -6.3% |
South-East region
region
| South-East region region | Holding company | Zhangzhou Port | 444.5 | 439.2 | 1.2% |
| Xia Men Bay Terminals | 281.3 | 321.8 | -12.6% | ||
| Shantou Port | 254.1 | 151.3 | 67.9% | ||
| South-West region region | Holding company | Zhanjiang Port | 4,440.9 | 4,311.8 | 3.0% |
Overseas region
| Overseas region | Holding company | HIPG | 72.6 | 79.2 | -8.3% |
| Joint stock company | Kumport | 19.1 | 3.6 | 430.6% | |
| PDSA | 188.0 | 238.0 | -21.0% | ||
| Total | 62,959.7 | 29,243.7 | 115.3% | ||
Note: 1. Dalian Port Co., Ltd., the joint stock company, was generally changed to Liaoning Port Co.,Ltd due to the merger of Yingkou Port Co., Ltd. by it through conversion and absorption. As such,the Company has been including the business volume of Yingkou Port Co., Ltd. since February 2021.
2. On September 2022, the Company being a strategic investor has completed the subscription of2021 non-public A share issuance of Ningbo Port, representing holding 23.08% equities of NingboPort in total and became the second largest shareholder of such company. As such, the Company hasbeen including the business volume of Ningbo Port since October 2022.
Pearl River Delta regionBeing significantly affected by foreign trade and industrial structure, the container business wentdown with the market. The West Shenzhen Port Zone handled a total of container throughput of 6.188million TEUs, down 4.5% year-on-year, and a bulk cargo volume of 8.118 million tonnes, up 0.1%year-on-year. Shunde New Port handled a container throughput of 0.179 million TEUs, down 14.8%year-on-year, which was influenced by the lower demand for import and export from Europe andAmerica; and a bulk cargo volume of 3.708 million tonnes, representing an increase of 27.2% year-on-year, mainly benefiting from the increase of steel volume driven by raising demand frommanufacturing enterprises. Dongguan Machong handled a bulk cargo volume of 9.231 million tonnes,representing an increase of 9.9% year-on-year, mainly due to the expansion of grain-forage market.
China Merchants Port Group Co., Ltd. Interim Report 2023
Chu Kong River Trade Terminal handled a total of container throughput of 0.435 million TEUs, up
2.8% year-on-year, and a bulk cargo volume of 1.675 million tonnes, down 8.5% year-on-year.Yangtze River Delta regionBusiness in this region improved steadily, demonstrating the better resilience for hinterland industries.SIPG handled a container throughput of 23.735 million TEUs, up 5.3% year-on-year. Bulk cargovolume handled increased by 40.8% year-on-year to 42.39 million tonnes, mainly due to the lowerbase in the same period last year. Ningbo Zhoushan Port handled a container throughput of 19.74million TEUs, and a bulk cargo volume of 333.02 million tonnes. Ningbo Daxie handled a containerthroughput of 1.40 million TEUs, representing a decrease of 18.9% year-on-year, mainly due to thehigher base in the same period last year.Bohai Rim regionThe performance of container and bulk cargo business showed a large difference in this region.QQCTU delivered a container throughput of 5.237 million TEUs, up 18.2% year-on-year, mainlybenefiting from the adjustment of business policies and more routes. QQTU delivered a bulk cargovolume of 6.845 million tonnes, down 20.7% year-on-year, mainly influenced by the depressedmarket in the region. Qingdao Port Dongjiakou handled a bulk cargo volume of 38.454 million tonnes,down 0.5% year-on-year. Liaoning Port Co., Ltd. handled a container throughput of 5.334 millionTEUs, up 13.9% year-on-year, mainly benefiting from business growth due to the recovery of vesselsin the foreign trade routes; and a bulk cargo volume of 119.108 million tonnes, down 6.7% year-on-year, mainly due to the structural adjustment of goods and the weak import demand for raw materials.Laizhou Harbour Affairs handled a container throughput of 10.043 million tonnes, down 6.3% year-on-year, which was mainly affected by the decrease in the business volume of oil/liquefied chemicals.Tianjin Port Container Terminal handled a container throughput of 4.056 million TEUs, down 6.1%year-on-year, mainly affected by the decrease of import and export containers for foreign trade.South-East regionThe foreign trade container business performed poorer than domestic trade, and there are perioticopportunities for bulk cargo. Zhangzhou Port handled a container throughput of 0.159 million TEUs,increased by 16.9% year-on-year, mainly benefiting from sources expansion of weighted boxes inhinterland trade and increased routes, and the bulk cargo volume it handled increased by 1.2% year-on-year to 4.445 million tonnes. Xia Men Bay Terminals handled a bulk cargo volume of 2.813million tonnes, down 12.6% year-on-year, mainly affected by lower demand from the sand and gravelbusiness. Shantou Port handled a container throughput of 0.725 million TEUs, down 2.6% year-on-year, which was mainly due to the decreased container volume in domestic trade, and the bulk cargovolume it handled increased by 67.9% year-on-year to 2.541 million tonnes, mainly benefiting frombusiness growth in international trade coal import.South-West region
China Merchants Port Group Co., Ltd. Interim Report 2023
Zhanjiang Port handled a container throughput of 0.559 million TEUs, down 5.1% year-on-year, anda bulk cargo volume of 44.409 million tonnes, up 3% year-on-year.Hong Kong and Taiwan regionsCMCS and Modern Terminals in Hong Kong delivered an aggregate container throughput of 1.973million TEUs, down 21.1% year-on-year, which was affected by the decreasing demand in importand export from Europe and America. Kao Ming Container in Taiwan handled a total of containerthroughput of 0.818 million TEUs, down 25.4% year-on-year, mainly caused by decreasing transferbusiness.Overseas operationOverseas container business basically maintained stable, while ports in the emerging marketdemonstrated outstanding performance. Among which, TCP in Brazil handled a container throughputof 0.571 million TEUs, representing an increase of 1.6% year-on-year. LCT in Togo handled acontainer throughput of 0.807 million TEUs, up by 12.7% year-on-year, mainly benefiting from theincrease in containers in local import and export. TICT in Nigeria handled a container throughput of
0.141 million TEUs, up by 3.7% year-on-year. Port de Djibouti S.A. (PDSA) in Djibouti handled acontainer throughput of 0.366 million TEUs, up by 20.8% year-on-year, mainly due to the structuraladjustment of import goods in Ethiopia. In Turkey, Kumport handled a container throughput of 0.679million TEUs, up by 10.8% year-on-year, mainly benefiting from the increase of routes.
2. Implementation of business plan during the reporting period
During the Reporting Period, the Company sticked to its fundamental working principle of makingadvancement while maintaining stable. It proactively coped with the global economic downturn andshrink of demand, continued to focus on endogenous growth and innovation upgrading and capturedopportunities under the complex economic and trade situation to fully implement variousdevelopment measures. In respect of construction of homebase port, technological innovation, marketexpansion, operation management, deepening reform, comprehensive development, ESG and otheraspects, the Company has achieved new accomplishment and made a solid step for high qualitydevelopment.
(1) As for the construction of homebase ports, strengthening regional position and extendingvalue chain. Under the situation that the overall container throughput in the Guangdong-Hong Kong-Macao Greater Bay Area declines, the West Shenzhen homebase port, by adjusting competitivestrategy, consolidated and further enhanced its market share in foreign trade. Meanwhile, it furtheradvanced the upgrade of the hardware of collection and transportation infrastructures of WestShenzhen homebase port, enabling ships of 200,000 tonnes to sail at night in Tonggu channel. Forhomebase port in Sri Lanka, the Company continued to advance the construction of the internationalshipping center in South Asia. CICT continued to optimize route layout and steadily improved itsmarket share in Colombo Market, maintaining its dominant position; besides, it steadily advanced thetrade and logistics project in South Asia, to cultivate the competitiveness with comprehensive service
China Merchants Port Group Co., Ltd. Interim Report 2023
features, building up new development momentum of “port + logistics center”. HIPG strengthenedmarket expansion and its transfer business of RO-RO, liquefied petroleum gas, and fuel oil allrecorded relatively high growth.
(2) In terms of technological innovation, promoting technological innovation and constructingsmart port. CMIT, a subsidiary of the Company, continued to increased investment in R&D oftechnologies, steadily implemented the critical task to overcome the structural upgrade of theContainer Terminal Operation System (CTOS) of Ministry of Transport, continued to optimized theproposal of autonomous driving technology, sped up the R&D and promotion of products ofcomprehensive service platform of “CM ePort” version 3.0, and constantly promoted the deepeningof management of the Smart Management Platform (SMP). In the first half, “5G Mawan Smart Port”was included in the first batch of pioneer application excellent cases and solutions in Shenzhen. On12 August, China Federation of Logistics & Purchasing announced that the “West Shenzhen PortImport Electronic Order Exchange Platform Project Based on Alliance Chain and Cloud Technologyobtained the First Prize of Science and Technology Progress Award.
(3) In terms of market expansion, improving service quality and promoting model innovation.The Latin American bridgehead, TCP’s market share has further improved, and the leading positionof HIPG RoRo in the reginal market has been further strengthened. In the Guangdong-Hong Kong-Macao Greater Bay Area, the Company actively facilitated inter-companies synergy in the ChinaMerchants Group, built high-quality routes with “customized port services” and proactively expandedbusiness along the Southeast Asian routes. With continuous progress, the coordinated port businessin the Guangdong-Hong Kong-Macao Greater Bay Area has covered every major regions ofGuangdong Province. 5 new sites and a total of 30 sites were opened in the first half of 2023, servingnearly 6,000 import and export enterprises and completed more than 0.40 million TEUs in aggregatesince operation.
(4) In terms of operation management, construction of an operation management and controlsystem and improving streamline operation capacity. By leverage of SMP, the Company built aone-stop comprehensive management platform of CMPort, supporting the business analysis of allmodules, namely containers, bulk cargos, logistics park, comprehensive development and intelligenttechnology. SMP takes digital technology as the key force and applies smart tools to drive thetransformation of means, modes and concepts of the operation and management of CMPort. Atpresent, the Company has substantially realized the classification and management of information oflifetime of assets, the standardization and onlineization of major business processes. Besides, theCompany also optimized the engineering management system and set up an engineering managementcenter to carry out works; optimized its profitability and constantly developed measures to enhanceits quality and efficiency; optimized and reshaped its business and financial analysis framework tostrictly control the increase of cost and expenses; deepened cost control to form a normalizationmechanism of cost reduction and higher efficiency. The streamline operation of the Company hasachieved phased results.
(5) In terms of deepening reform, strengthening system and mechanism reform, inspiring thevitality of enterprises. The Company deeply implemented the “Double-Hundred Action” and
China Merchants Port Group Co., Ltd. Interim Report 2023
emphasized on comprehensive industrial system of ports, with an aim to serve the nationaldevelopment strategy, optimize capital layout and improve industrial competitiveness. By focusingon governance mechanism, employment mechanism and incentive mechanism, the Company hasmade new progress in terms of promoting reform of equity diversification, optimizing overseas legalperson governance system, implementing a market-based selection and appointment mechanism, andstrengthening the incentive-oriented role of salary, thus further stimulated the deep vitality of theenterprise. In May 2023, SASAC of the State Council released the special appraisal results of“Double-Hundred Enterprises” of 2022 and the Company received “Excellent” title for itsoutstanding achievements and remarkable reform results.
(6) In terms of comprehensive development, making innovation on commercial mode andconducting promotion to targeted industries. HIPG Industrial Park was occupied by 48 contractedenterprises and realized the introduction of key industries. It continuously enriches the industriallayout and strengthens the joint development with ports. Djibouti International Free Trade Zone wasoccupied by 332 contracted enterprises. Under the environment of interest rate hike and unstablesurrounding situation, the land sales of the Djibouti park made a new record, and the overall operatingresults was stable and better than the same period last year. By leverage on domestic and foreign portsand park resources, the Company promoted the construction of the exhibition center platform of“Made in Liaocheng” in the Djibouti Free Trade Zone, to open up a green channel for domesticcommodities to enter and exit the port and promote the value chain to extend upstream anddownstream.
(7) In terms of ESG construction, included in “Pioneer” list and promoting harmoniousdevelopment. The Company actively implemented the ESG concept and continued to strengthen theESG governance by taking initiative to disclose ESG report, aiming to be the world-class green andintelligent comprehensive port service provider. In the first half of the year, the Company obtainedmany honors from the industry and the capital market for its long-term responsibility managementand performance. On 18 May, at the 2023 Green and Safe Port Conference and the 2nd Beibu GulfGreen Port Development Forum held by China Ports & Harbours Association, Chiwan ContainerTerminal Co., Ltd. and Shenzhen Magang Godown & Wharf Co., Ltd of West Shenzhen homebaseport, both obtained a 4-star rating as “China Green Port” awarded by China Ports & HarboursAssociation; on 13 June, The Company was successfully selected into the "China ESG ListedCompanies First 100" list, ranking 68th and third in the transportation industry.
3. Year-on-year Changes in Key Financial Data
Unit: RMB
| H1 2023 | H1 2022 | Change (%) | Main reason for change | |
| Operating revenue | 7,795,261,570.99 | 8,150,462,367.19 | -4.36% | - |
| Operating costs | 4,519,943,753.79 | 4,637,368,881.65 | -2.53% | - |
| Administrative expense | 790,916,154.65 | 812,502,660.55 | -2.66% | - |
| Finance costs | 960,449,741.90 | 1,351,945,047.67 | -28.96% | - |
| Income tax expense | 613,219,852.56 | 619,132,978.15 | -0.96% | - |
| R&D Investments | 121,041,310.72 | 114,833,178.50 | 5.41% | - |
China Merchants Port Group Co., Ltd. Interim Report 2023
Net cash generatedfrom/used in operatingactivities
| Net cash generated from/used in operating activities | 2,310,845,305.96 | 3,221,251,177.09 | -28.26% | - |
| Net cash generated from/used in investing activities | -1,225,290,440.51 | -1,863,650,103.30 | 34.25% | Effects of changes in structured deposits and project investments |
| Net cash generated from/used in financing activities | -210,222,809.39 | 126,775,022.25 | -265.82% | Effects of changes in project financings, dividend payout and expenditure on increasing holdings in subsidiaries |
| Net increase in cash and cash equivalents | 989,020,982.66 | 1,396,165,516.30 | -29.16% | - |
| Gains from changes in fair value | 143,037,303.68 | -38,026,112.58 | 476.16% | Increased gains from changes in fair value of shares held |
Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.Breakdown of operating revenue:
Unit: RMB
| H1 2023 | H1 2022 | Change (%) | |||
| Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
| Total | 7,795,261,570.99 | 100% | 8,150,462,367.19 | 100% | -4.36% |
| By operating division | |||||
| Port operations | 7,443,891,620.78 | 95.49% | 7,873,061,727.12 | 96.60% | -5.45% |
| Bonded logistics service | 264,962,592.07 | 3.40% | 209,325,133.72 | 2.57% | 26.58% |
| Property development and investment | 86,407,358.14 | 1.11% | 68,075,506.35 | 0.84% | 26.93% |
| By operating segment | |||||
| Mainland China, Hong Kong and Taiwan | 5,624,973,995.70 | 72.16% | 6,200,189,217.85 | 76.07% | -9.28% |
| Other countries and regions | 2,170,287,575.29 | 27.84% | 1,950,273,149.34 | 23.93% | 11.28% |
Operating division, product category or operating segment contributing over 10% of operatingrevenue or operating profit:
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Port operations | 7,443,891,620.78 | 4,271,016,407.42 | 42.62% | -5.45% | -2.53% | -1.73% |
| By operating segment | ||||||
China Merchants Port Group Co., Ltd. Interim Report 2023
MainlandChina, HongKong andTaiwan
| Mainland China, Hong Kong and Taiwan | 5,624,973,995.70 | 3,513,722,578.18 | 37.53% | -9.28% | -6.63% | -1.77% |
| Other countries and regions | 2,170,287,575.29 | 1,006,221,175.61 | 53.64% | 11.28% | 15.12% | -1.54% |
Core business data restated according to the changed methods of measurement that occurred in theReporting Period:
□ Applicable √ Not applicable
IV Analysis of Non-Core Businesses
Unit: RMB
| Amount | As % of profit before tax | Source/Reason | Recurrent or not | |
| Investment income | 3,187,492,718.40 | 68.20% | Share of the profit of joint ventures and associates, mainly Shanghai Port | Yes |
| Gains/Losses from changes in fair value | 143,037,303.68 | 3.06% | Changes in fair value of held-for-trading financial assets | Not |
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
| 30 June 2023 | 31 December 2022 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As % of total assets | Amount | As % of total assets | |||
| Cash and bank balances | 14,440,689,892.60 | 7.05% | 13,615,928,739.40 | 6.89% | 0.16% | Changes in expenditures on operating, investing and financing activities |
| Accounts receivable | 2,083,996,446.24 | 1.02% | 1,276,149,689.44 | 0.65% | 0.37% | Effect of payment periods for port operation |
| Inventories | 244,341,161.12 | 0.12% | 225,122,821.48 | 0.11% | 0.01% | - |
| Investment properties | 5,049,637,728.99 | 2.46% | 5,123,690,119.56 | 2.59% | -0.13% | Provision for depreciation |
| Long-term equity investments | 94,976,270,168.12 | 46.35% | 92,364,293,919.05 | 46.76% | -0.41% | Increased investments, and the effect of share of profits of and dividends from |
China Merchants Port Group Co., Ltd. Interim Report 2023
investeeenterprises
| investee enterprises | ||||||
| Fixed assets | 29,369,002,248.34 | 14.33% | 32,033,326,083.50 | 16.22% | -1.89% | Reclassification of to-be-sold subsidiaries to assets held-for-sale and provision for depreciation |
| Construction in progress | 2,476,908,227.17 | 1.21% | 2,413,844,407.64 | 1.22% | -0.01% | - |
| Right-of-use assets | 9,483,918,238.46 | 4.63% | 9,342,642,222.33 | 4.73% | -0.10% | - |
| Short-term borrowings | 4,980,452,166.69 | 2.43% | 7,164,338,366.18 | 3.63% | -1.20% | Decreased borrowings |
| Contract liabilities | 191,779,113.06 | 0.09% | 141,899,551.03 | 0.07% | 0.02% | No significant change |
| Long-term borrowings | 16,083,606,258.60 | 7.85% | 12,390,099,177.85 | 6.27% | 1.58% | Increased long-term borrowings |
| Lease liabilities | 911,098,409.66 | 0.44% | 948,350,914.04 | 0.48% | -0.04% | - |
2. Major Assets Overseas
| Asset | Source | Asset value (RMB’0,000) | Location | Operations | Control measures to protect asset safety | Return generated (RMB’0,000) | As % of the Company’s net asset value | Material impairment risk (yes/no) |
| Equity assets | Acquired via share offering | 15,519,062.38 | Hong Kong | Port investment and operations | Appointing director, supervisor and senior management /According to the political, economic and legal environment of different countries and regions, establish a targeted internal control system and early warning system. | 341,437.44 | 83.42% | No |
| Other information | N/A | |||||||
3. Assets and Liabilities at Fair Value
Unit: RMB
| Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes through equity | Impairment allowance made in the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Other changes | Ending amount |
China Merchants Port Group Co., Ltd. Interim Report 2023
Financialassets
| Financial assets | ||||||||
| Held-for-trading financial assets (exclusive of derivative financial assets) | 2,998,781,599.63 | 29,660,173.93 | - | - | 14,907,000,000.00 | 13,267,000,000.00 | -23,105,197.47 | 4,645,336,576.09 |
| Other equity instrument investment | 171,945,275.02 | - | - | - | - | - | -17,689,094.74 | 154,256,180.28 |
| Other non-current financial assets | 1,745,740,896.41 | 113,377,129.75 | - | - | - | - | -887,401,857.43 | 971,716,168.73 |
| Subtotal of financial assets | 4,916,467,771.06 | 143,037,303.68 | - | - | 14,907,000,000.00 | 13,267,000,000.00 | -928,196,149.64 | 5,771,308,925.10 |
| Receivables financing | 163,766,913.10 | - | - | - | - | - | -163,766,913.10 | - |
| Total of the above | 5,080,234,684.16 | 143,037,303.68 | - | - | 14,907,000,000.00 | 13,267,000,000.00 | -1,091,963,062.74 | 5,771,308,925.10 |
| Financial liabilities | - | - | - | - | - | - | - | - |
Other changesOther changes in held-for-trading financial assets were mainly caused by changes in structureddeposits.Other changes in investments in other equity instruments are primarily due to a shift to holding assetsheld for sale.Other changes in other non-current financial assets were mainly due to the transfer of equityinvestments from Antong Holdings to long-term equity investments in associated companies.Other changes in receivables financing were mainly due to changes in receivables financing.
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
4. Restricted Asset Rights as at the Period-End
The restricted monetary assets were RMB3,545,619.20 of security deposits.The carrying value of fixed assets as collateral for bank loans was RMB753,008,833.33.The carrying value of construction in progress as collateral for bank loans was RMB7,120,027.83.The carrying value of intangible assets as collateral for bank loans was RMB474,487,529.49.The carrying value of equities and interests as collateral for bank loans was RMB1,133,181,949.12.
China Merchants Port Group Co., Ltd. Interim Report 2023
VI Investments Made
1. Total Investment Amount
Total investment amount inthe Reporting Period (RMB)
| Total investment amount in the Reporting Period (RMB) | Total investment amount in the same period of last year (RMB) | Change (%) |
| 559,850,992.15 | 3,337,218,524.42 | -83.22% |
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
Unit: RMB
| Variety of security | Code of security | Name of security | Initial investment cost | Accounting measurement method | Beginning carrying amount | Gain/loss on fair value changes in the Reporting Period | Accumulated fair value changes recorded in equity | Purchased in the Reporting Period | Sold in the Reporting Period | Gain/loss in the Reporting Period | Ending carrying amount | Accounting title | Funding source |
| Stock | 06198 | Qingdao Port | 124,405,138.80 | Fair value method | 139,233,775.66 | 18,933,003.44 | - | - | - | 10,829,590.59 | 163,210,357.04 | Other non-current financial assets | Self-funded |
| Stock | 601298 | Qingdao Port | 331,404,250.30 | Fair value method | 628,320,000.00 | 152,320,000.00 | - | - | - | 30,161,600.00 | 780,640,000.00 | Other non-current financial assets | Self-funded |
| Stock | 400032 | Petrochemical A1 | 3,500,000.00 | Fair value method | 382,200.00 | - | - | - | - | - | 382,200.00 | Other equity instrument investment | Self-funded |
| Stock | 400009 | Guang Jian 1 | 27,500.00 | Fair value method | 17,000.00 | - | - | - | - | - | 17,000.00 | Other equity instrument investment | Self-funded |
China Merchants Port Group Co., Ltd. Interim Report 2023
Stock
| Stock | 600179 | Antong Holdings | 391,956.73 | Fair value method | 950,457,051.17 | -57,896,503.19 | - | - | - | - | - | Note | Self-funded |
| Total | 459,728,845.83 | -- | 1,718,410,026.83 | 113,356,500.25 | - | - | - | 40,991,190.59 | 944,249,557.04 | -- | -- | ||
Note: As at 30 June 2023, the Company and a subsidiary of the Company, Zhanjiang Zhongli Ocean ShippingTally Co., LTD., held a combined 6.83% equity interest in Antong Holdings and assigned one director to AntongHoldings, thus the Company had a significant influence on Antong Holdings. The equity investment in AntongHoldings will be changed from other non-current financial assets to long-term equity investment in associatedcompanies.
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Funds Raised
(1) Overall Usage of Funds Raised
Unit: RMB’0,000
| Year | Way of raising | Total funds raised | Total funds used in the Current Period | Accumulative fund used | Total funds with usage changed | Accumulative funds with usage changed | Proportion of accumulative funds with usage changed | Total unused funds | The usage and destination of unused funds | Amount of funds raised idle for over two years |
| 2022 | Private placement | 1,066,912.64 | 547,040.00 | 2,007,415.00 | 0 | 0 | 0% | 304,343.76 | Deposited in funds raising account | 0 |
| Total | -- | 1,066,912.64 | 547,040.00 | 2,007,415.00 | 0 | 0 | 0% | 304,343.76 | -- | 0 |
| Explanation of overall usage of funds raised | ||||||||||
| Pursuant to the Reply of China Securities Regulatory Commission on the Approval of the Private Placement of China Merchants Port Group Co., Ltd. (ZJXK [2022] No. 1657), the Company issued, in a private placement, a total of 576,709,537 shares of RMB-denominated ordinary shares (A-shares) to specified investors at a fixed price of RMB18.50/share, raising a total of RMB10,669,126,434.50, with the net amount after deducting issuance costs (exclusive of tax) being RMB10,632,533,330.40. The actual amount deposited in the raised funds account was RMB10,642,126,434.50 (inclusive of to-be-deducted other issuance costs of RMB9,593,104.10. Following the arrival of the aforesaid funds on 15 September 2022, Deloitte Touche Tohmatsu Certified Public Accountants LLP verified the funds raised in the private placement on 16 September 2022 and issued a Capital Verification Report (DSB (Y) Z (22) No. 00471). As of 30 June 2023, a total of RMB20,074,150,000.00 of raised funds had been used, including: (1) RMB7,670,400,000.00 used after the arrival of the raised funds, including RMB7,600,000,000.00 for supplementing working capital and repaying debts in 2022 and RMB70,400,000.00 for supplementing working capital and repaying debts in H1 2023; (2) RMB3,750,000.00 for paying issuance costs; (3) RMB7,800,000,000.00 for purchasing structured deposits (2022: RMB4,900,000,000.00; H1 2023: RMB2,900,000,000.00); (4) RMB500,000,000.00 for purchasing seven days call deposits (2022: RMB200,000,000.00; H1 2023: RMB300,000,000.00); (5) RMB4,100,000,000.00 for purchasing term deposits (2022: RMB1,900,000,000.00; H1 2023: RMB2,200,000,000.00). As of 30 June 2023, the interest income in the account of raised funds minus service charges stood at RMB21,689,730.42 (2022: RMB17,445,775.40; H1 2023: RMB4,243,955.02); the amount of structured deposits redeemed was RMB7,100,000,000.00 (2022: RMB4,100,000,000.00; H1 2023: RMB3,000,000,000.00); the amount of income from structured deposits was RMB26,768,621.00 (2022: RMB10,056,182.64; H1 2023: RMB16,712,438.36); the amount of term deposits redeemed was RMB3,000,000,000.00 (H1 | ||||||||||
China Merchants Port Group Co., Ltd. Interim Report 2023
2023: RMB3,000,000,000.00); the amount of income from term deposits was RMB23,937,230.45 (H1 2023: RMB23,937,230.45);the amount of seven days call deposits redeemed was RMB200,000,000.00 (H1 2023: RMB200,000,000.00); and the amount ofincome from seven days call deposits was RMB3,065,555.56 (H1 2023: RMB3,065,555.56).As of 30 June 2023, the balance in the account of raised funds was RMB3,043,437,571.93.
(2) Commitment Projects of Fund Raised
Unit: RMB’0,000
2023: RMB3,000,000,000.00); the amount of income from term deposits was RMB23,937,230.45 (H1 2023: RMB23,937,230.45);the amount of seven days call deposits redeemed was RMB200,000,000.00 (H1 2023: RMB200,000,000.00); and the amount ofincome from seven days call deposits was RMB3,065,555.56 (H1 2023: RMB3,065,555.56).As of 30 June 2023, the balance in the account of raised funds was RMB3,043,437,571.93.
Committedinvestmentproject and superraise fundarrangement
| Committed investment project and super raise fund arrangement | Changed or not (including partial changes) | Committed investment amount | Investment amount after adjustment (1) | Investment amount in the Reporting Period | Accumulative investment amount as of the period-end (2) | Investment schedule as the period-end (3)＝(2)/(1) | Date of reaching intended use of the project | Realized income in the Reporting Period | Whether reached anticipated income | Whether occurred significant changes in project feasibility |
| Committed investment project | ||||||||||
| Replenishing working capital and repaying debt | No | 1,063,253.33 | 1,063,253.33 | 7,040.00 | 767,040.00 | 72.14% | N/A | N/A | N/A | No |
| Subtotal of committed investment project | -- | 1,063,253.33 | 1,063,253.33 | 7,040.00 | 767,040.00 | -- | -- | N/A | -- | -- |
| Super raise fund arrangement | ||||||||||
| N/A | ||||||||||
| Subtotal of super raise fund arrangement | -- | - | - | - | - | -- | -- | 0 | -- | -- |
| Total | -- | 1,063,253.33 | 1,063,253.33 | 7,040.00 | 767,040.00 | -- | -- | N/A | -- | -- |
| Condition and reason for not reaching the schedule and anticipated income by specific items (including reasons for inputting “N/A” for “Whether reached anticipated income”) | N/A | |||||||||
| Notes of condition of significant changes occurred in project feasibility | N/A | |||||||||
| Amount, usage and schedule of super raise fund | N/A | |||||||||
| Changes in implementation address of investment project | N/A | |||||||||
China Merchants Port Group Co., Ltd. Interim Report 2023
Adjustment ofimplementationmode ofinvestmentproject
| Adjustment of implementation mode of investment project | N/A |
| Upfront investment and transfer of investment project | N/A |
| Use of idle raised funds for cash management purposes | On 29 September 2022, the 7th Extraordinary Meeting of the 10th Board of Directors in 2022 and the 4th Extraordinary Meeting of the 10th Supervisory Committee in 2022 reviewed and approved the Proposal on the Implementation of Cash Management by the Usage of Idle Raised Funds, which agreed the Company to carry out cash management by using idle funds of no more than RMB10 billion on a rolling basis within 12 months of the approval of the said proposal by the Board of Directors. As of 30 June 2023, the Company has purchased RMB7,800,000,000.00 of structured deposits, RMB500,000,000.00 of seven days call deposits and RMB4,100,000,000.00 of term deposits (2022: RMB4,900,000,000.00 of structured deposits; RMB200,000,000.00 of seven days call deposits and RMB1,900,000,000.00 of term deposits; H1 2023: RMB2,900,000,000.00 of structured deposits; RMB300,000,000.00 of seven days call deposits and RMB2,200,000,000.00 of term deposits). As of 30 June 2023, the Company has redeemed RMB7,100,000,000.00 of structured deposits (2022: RMB4,100,000,000.00; H1 2023: RMB3,000,000,000.00); the amount of income from structured deposits was RMB26,768,621.00 (2022: RMB10,056,182.64; H1 2023: RMB16,712,438.36); the Company redeemed RMB3,000,000,000.00 of term deposits (H1 2023: 3,000,000,000.00); the amount of income from term deposit was RMB23,937,230.45 (H1 2023: RMB23,937,230.45); the Company redeemed RMB200,000,000.00 of seven days call deposits (H1 2023: RMB200,000,000.00); the amount of income from seven days call deposits was RMB3,065,555.56 (H1 2023: RMB3,065,555.56). So far, except for the outstanding balance of RMB200,000,000.00 of structured deposits purchased with CMB Shenzhen New Times Sub-branch, RMB500,000,000.00 of structured deposits purchased with BOC Qianhai Shekou Branch, RMB1,100,000,000.00 of term deposits and RMB300,000,000.00 of seven days call deposits purchased with ABC Shenzhen Shekou Sub-branch, other principal has been fully recovered. |
| Amount of surplus in project implementation and the reasons | N/A |
| Usage and destination of unused funds | Unused fund was deposited in the fund-raising account. |
| Problems incurred in fund using and disclosure or other condition | N/A |
(3) Changes in Items of Funds Raised
□ Applicable √ Not applicable
No such cases in the Reporting Period.VII Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
VIII Principal Subsidiaries and Joint Stock CompaniesPrincipal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
China Merchants Port Group Co., Ltd. Interim Report 2023
Unit: RMB
Name
| Name | Relationship with the Company | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Shanghai International Port (Group) Co., Ltd. | Joint stock company | Business related to port, container and terminal | 23,284,144,750.00 | 192,988,811,941.75 | 125,974,637,794.80 | 16,111,541,335.25 | 8,795,215,256.09 | 7,738,322,182.71 |
| China Merchants Port Holdings Company Limited | Subsidiary | Port business, bonded logistics and property investment | 46,668,174,018.78 (HKD) | 155,190,623,786.95 | 109,073,720,638.33 | 5,194,887,619.90 | 3,858,036,798.74 | 3,414,374,406.15 |
| Ningbo Zhoushan Port Company Limited (note) | Joint stock company | Business related to port, integrated logistics, and trade sales | 19,454,388,399.00 | 110,297,999,000.00 | 77,487,682,000.00 | 12,227,049,000.00 | 3,061,992,000.00 | 2,467,948,000.00 |
Note: Ningbo Zhoushan Port financial data accurate to RMB’000.Subsidiaries obtained or disposed of in the Reporting Period:
| Subsidiary | How subsidiary was obtained or disposed in the Reporting Period | Effects on overall operations and operating performance |
| Fortune Centre Group Limited | Newly incorporated | No significant impact |
Other information on principal subsidiaries and joint stock companies:
There is no other information on the Company’s principal subsidiaries and joint stock companies inthe Reporting Period that is required to be disclosed.IX Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
X. Risks exposed by the Company and counter measures
1. Risk of macroeconomic fluctuations
Internationally, the external environment is complex and severe, and the global economic recovery is
China Merchants Port Group Co., Ltd. Interim Report 2023
unstable, uncertain and uneven. Inflation in major developed economies is still at a high level, thepace of interest rate hikes in Europe and the United States has not stopped, the performance ofemerging markets is uneven, the international trade and investment slows down, and the geopoliticalsituation intensifies, all these have had an impact on global economic growth and commodity trademarkets, and brought challenges to the Company's overseas operations and investments.Domestically, China's economy has strong resilience, great potential, and sufficient vitality. Thefundamentals for long-term growth are still solid. However, under the superposition of various factorsexceeding expectations, economic development still faces triple pressures of demand contraction,supply shock, and weakening expectations.In the face of intricate macroeconomic fluctuations, the Company adheres to the global thinking inplanning a layout, and the bottom-line thinking of planning ahead. We will accurately identify,scientifically adapt to, and actively seek changes. We will (1) work hard on deepening theimplementation of the "14th Five-Year Plan" and the spirit of the 20th National Congress of theCommunist Party of China, fully implement the new development concept under the new situation,and optimize the Company’s structure through the transformation and upgrading of the main portbusiness, enhance the momentum of development, and promote the high-quality development of theCompany; (2) further give full play to the function of the main hub of the port, and deeply implementnational strategies such as the National Unified Market, the Guangdong-Hong Kong-Macao GreaterBay Area, and the development of Yangtze River Delta, and the new land-sea corridor in the west,and help build a new development pattern of channel guidance, efficient connection, and radiation-driven development; (3) grasp the policy environment of high-level opening-up to the outside world,break down barriers, discuss cooperation, strengthen connectivity with various regions, andcontinuously improve the quality and coverage of port services; (4) keep an eye on internationalgeopolitical development, follow up with the reconstruction of global industrial supply chain, activelyspecialize in trade movements to adjust the Company's business strategies in a timely manner andprevent the occurrence of major external risk events.
2. Policy risks
There are diverse policy risks in the port industry. Internationally, strike actions in different industriesand scales caused by inflation have swept across Europe and the United States, seriously affectingthe normal operation of society and the stable recovery of the economy. With the negotiation betweenthe government and labor, a series of new policies and measures may be issued. Domestically, Chinasolidly promotes high-level opening-up to the outside world. It not only makes good use of the globalmarket and resources to develop itself, but also promotes the common development of the world. Itcontinuously improves the foreign cooperation supervision system and cooperation tools in trade andinvestment and other fields, and launches a series of import and export policies that are beneficial tothe port industry.Facing the potential policy risks, on the one hand, the Company will strengthen the policy research,and form an objective and correct understanding in the analysis to provide better decision support forthe Company. On the other hand, the Company will continue to improve quality and increase
China Merchants Port Group Co., Ltd. Interim Report 2023
efficiency, strengthen rational allocation of resources, enhance operational management throughinnovative technology and industry digitization, actively seek new future growth and improvesustainable profitability.
3. Operation management risks
Amidst the favorable environment of domestic and overseas ports integration, the Company will fullygrasp the investment opportunities of domestic and overseas ports, further optimize the networklayout of ports by ways of mergers, acquisitions, restructuring and integration of resources, achievehigh-level synergy between port construction and operation and provide more comprehensiveservices for customers around the world. With the deepening of the internationalization process, theCompany is also facing negative conditions such as increased difficulties in the operation andmanagement of ports in some regions and lower returns on investment and operational efficiency.The main risks include: (1) the uncertainty and complexity of the place where we operate, whichfurther increases the risk of investment decisions and the difficulty of investment, operation andmanagement; (2) significant fluctuations of the international exchange rate, with the continuousimprovement of the marketization mechanism of the RMB exchange rate, two-way fluctuations inthe RMB exchange rate have become the norm, and the exchange rates of some developed countriesand emerging markets also entered a downward path; (3) the needs for improvement of theinternational operation management system, the Company shall take the initiative to improve theoverall operational efficiency to meet the needs arising from the rapid development and expansion ofthe enterprises; (4) continuous needs for building a sound corporate risk control system to enhanceour ability to cope with risks.In view of the Company's internal business management risks, we will (1) increase customer loyaltybased on three improvement elements, namely “ market, resources, services ” , take the initiative toidentify new customers and grasp market opportunities; (2) improve the construction of the internalcontrol and compliance system, strengthen the legal empowerment of business capabilities, ensuringeffective risk identification and control and consolidating the foundation of risk control; (3) improvethe risk warning system, continue to strengthen risk identification, early warning and resolutioncapabilities, do a good job in key risk prevention and management in a stable and orderly manner,and continuously improve the Company's risk prevention capabilities.
China Merchants Port Group Co., Ltd. Interim Report 2023
Part IV Corporate GovernanceI Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Meeting
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Index to disclosed information |
| The 2022 Annual General Meeting | Annual General Meeting | 90.81% | 22 May 2023 | 23 May 2023 | See the resolution announcement (No. 2023-045) on www.cninfo.com.cn |
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders withResumed Voting Rights
□ Applicable √ Not applicable
II Change of Directors, Supervisors and Senior Management
| Name | Office title | Type of change | Date of change | Reason for change |
| Gong Man | Employee Supervisor | Left | 7 April 2023 | Job change |
| Zhu Weida | Vice GM | Engaged | 29 April 2023 | Engaged |
| Lei Yuanyuan | Employee Supervisor | Elected | 22 May 2023 | Elected |
| Deng Renjie | Director, Chairman of the Board | Left | 10 July 2023 | Job change |
| Wang Xiufeng | Director, Vice Chairman, CEO | Left | 10 July 2023 | Job change |
| Xu Song | COO, GM, | Left | 14 July 2023 | Job adjustment |
| Xu Song | CEO | Engaged | 14 July 2023 | Engaged |
| Lu Yongxin | Vice GM | Left | 14 July 2023 | Job adjustment |
| Lu Yongxin | COO, GM | Engaged | 14 July 2023 | Engaged |
| Feng Boming | Director, Chairman of the Board | Elected | 31 July 2023 | Elected |
| Xu Song | Vice Chairman | Elected | 31 July 2023 | Elected |
| Lu Yongxin | Director | Elected | 31 July 2023 | Elected |
| Li Wenbo | Vice GM | Engaged | 16 August 2023 | Engaged |
| Liu Libing | CCO | Engaged | 16 August 2023 | Engaged |
III Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployeesThe Company’s review and approval procedures carried out in connection with the Stock Option
China Merchants Port Group Co., Ltd. Interim Report 2023
Incentive Plan are as follows:
1. The 1st Extraordinary Meeting of the 10th Board of Directors in 2023 and 1st ExtraordinaryMeeting of the 10th Supervisory Committee in 2023 of the Company, held on 19 January 2023,reviewed and approved the Proposal on Adjusting the Exercise Prices of the Stock Option IncentivePlan (Phase I) of the Company, the Proposal on Adjusting the Numbers of Qualified Awardees andStock Options to Be Granted of the Stock Option Incentive Plan (Phase I) of the Company, theProposal on the Failure to Meet the Exercise Conditions for the Second Exercise Schedule of theStock Options (the First Batch to be Granted) of the Stock Option Incentive Plan (Phase I) of theCompany, the Proposal on the Failure to Meet the Exercise Conditions for the First Exercise Scheduleof the Stock Options (the Reserved Portion) of the Stock Option Incentive Plan (Phase I) of theCompany, and the Proposal on Canceling Some Stock Options in the Stock Option Incentive Plan(Phase I) of the Company.. Independent directors gave independent opinions of agreement. TheSupervisory Committee of the Company verified the proposals and gave opinions. For details, see therelevant announcements disclosed by the Company on Cninfo (www.cninfo.com.cn) (AnnouncementNo. 2023-005, 2023-006, 2023-007, 2023-008 and 2023-009).
2. On 7 February 2023, upon the review and confirmation of Shenzhen Branch of China SecuritiesDepository and Clearing Corporation Limited, the Company completed the cancellation of somestock options in the stock option incentive plan (phase I). For more details, please refer to theAnnouncement on Completing the Cancellation of Some Stock Options in the Stock Option IncentivePlan (Phase I) of the Company (Announcement No. 2023-010) disclosed by the Company on Cninfo(www.cninfo.com.cn).
China Merchants Port Group Co., Ltd. Interim Report 2023
Part V Environmental and Social Responsibility
I Major Environmental Issues
1. Policies and industry standards pertaining to environmental protectionDuring the Reporting Period, the Company and its subsidiaries with heavy pollutant discharge needsabode by laws and regulations related to environmental protection throughout routine production andoperation, including the Environmental Protection Law of the People’s Republic of China, the Lawof the People’s Republic of China on the Prevention and Control of Atmospheric Pollution, the Lawof the People’s Republic of China on Prevention and Control of Water Pollution, the Law of thePeople’s Republic of China on the Prevention and Control of Solid Waste Pollution, the Law of thePeople’s Republic of China on Noise Pollution Prevention and Control, the Law of the People’sRepublic of China on the Prevention and Control of Soil Pollution, the Law of the People’s Republicof China on Environmental Impact Assessment, and Regulation on the Administration of Permittingof Pollutant Discharges of the People’s Republic of China. They also strictly complied with nationaland industry standards pertaining to environmental protection, such as Standard for Fugitive Emissionof Volatile Organic Compounds, Technical Specification for Setting Identification Signs of HazardousWaste, Standard for Pollution Control on Hazardous Waste Storage, Discharge Standard of Pollutantsfor Municipal Wastewater Treatment Plant, Emission Standard of Air Pollutant for Bulk PetroleumTerminals, Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008).
2. Administrative permit for the purpose of environmental protectionThe environmental impacts of the construction projects of domestic enterprises controlled by theCompany were assessed as required. Additionally, all domestic pollutant discharge units haveobtained administrative permits for pollutant discharge as per laws and regulations and dischargedpollutants by the administrative permits for pollutant discharge in a legal and compliant manner. Allunits of the Company with heavy pollutant discharge needs have obtained the national pollutantdischarge permit and specific information is as follows:
(1) Pollutant Discharge Permit Number of the First Branch of Zhanjiang Port (Group) Co., Ltd.:
914408008943759949001R
(2) Pollutant Discharge Permit Number of the Third Branch of Zhanjiang Port (Group) Co., Ltd.:
9144080089437609XT001R
(3) Pollutant Discharge Permit Number of Zhanjiang Port Petrochemical Terminal Co., Ltd.:
914408007247840152001R
China Merchants Port Group Co., Ltd. Interim Report 2023
3. The regulations for industrial emissions and the particular requirements for controllingpollutant emissions those are associated with production and operational activities
Name of
thecompanyorsubsidiarycompany
| Name of the company or subsidiary company | Types of major and characteristic pollutants | Names of major and characteristic pollutants | Discharge method | Outlet quantity | Outlet distribution | Discharge concentration (mg/kg) | Pollutant discharge standards | Total discharge | Total discharge approved | Excessive discharge |
| The First Branch of Zhanjiang Port (Group) Co., Ltd. (Key noise discharge unit) | Noise | Noise | Fugitive | -- | -- | Daytime: 57db Night: 50db | Emission Standard for Noise of Industrial Enterprises at Boundary (GB12348-2008)- Standards for Category 3 | -- | -- | No excessive discharge |
| Zhanjiang Port Petrochemical Terminal Co., Ltd. (Key air pollutant discharge unit) (Exhaust emission) | Air pollutants (Plant boundary) | VOC | Fugitive | -- | -- | 2.5mg/m3 | Emission Limits of Air Pollutants (DB44/27-2001) | 82.7757t | 274.96t/a | No excessive discharge |
| Methanol | Fugitive | -- | -- | 2L | ||||||
| Malodor | Fugitive | -- | -- | <10 | Emission Standards for Odor Pollutants (GB14554-93) | |||||
| Air pollutants (In-plant) | VOC | Fugitive | -- | -- | 1.93mg/m3 | Emission Limits of Air Pollutants (DB44/27-2001) | ||||
| VOC | Organized (Intermittent discharge) | 2 | North of the car loading dock | 1469mg/m3 | Emission Standards for Air Pollutants from Oil Storage Depots (GB20950-2020) | |||||
| Methanol | Organized (Intermittent discharge) | 1 | North of the car loading dock | 50mg/m3 | Emission Limits of Air Pollutants (DB44/27-2001) |
4. Treatment of pollutants
During the Reporting Period, the pollution treatment facilities for wastewater and exhaust gas of theenterprises controlled by the Company ran normally, with pollutants discharged in a compliantmanner. In terms of equipment and facilities improvements, a new wastewater treatment station hasbeen put into operation, bringing the total number of treatment stations to 38, resulting in an annualincrease in wastewater treatment capacity of 700,000 tons/year, which eventually reached 24.92million tons per year. 12 new fog guns and one new spraying equipment have been purchased,bringing the total number of them to 136 and 26 respectively. Four new online dust monitoringsystems have been added. Besides, with respect to the VOCs control, the Company has been activelyadding volatile organic compound facilities and conducting governance work to ensure that facilities
China Merchants Port Group Co., Ltd. Interim Report 2023
for volatile organic compounds ran normally. Moreover, sound-proof walls were well maintained toensure that the noise at the plant boundary met the standards. Information on units with heavypollutant discharge needs controlled by the Company is as follows:
(1) The first branch of Zhanjiang Port has a production sewage treatment system, with a treatmentcapacity of 5,800 m3/d. The treated sewage is used for watering and dust control in the port area. Thethird branch of Zhanjiang Port has a production sewage treatment plant, with a treatment capacity of4,500 m3/d. The treated sewage is used for watering and dust control in the port area. The above-mentioned facilities are in normal operation.
(2) Both the first and third branches of Zhanjiang Port use water spray, water mist spray, sprinklers,and other facilities to meet the demand for dust control throughout the operation. The stockpiles arefully covered, and the dust control management of static storage and dynamic operation isstrengthened to reduce dust emissions to the maximum. Specifically, the first branch owns a dust-freeand sound-proof wall with a length of 160 meters and a height of 12 meters on the boundary of theplant. It is also equipped with 15 simple spray towers, 25 mobile remote fog machines, and 2 mobiledust suppression funnels. The third branch has two wind-proof dust suppression walls, 427 and 400meters long, respectively and 3000 meters of yard dust retaining wall. It also has 4 mobile spray guns,2 mobile fog trucks, 14 spray towers, 12 fixed sprayers, 6 dry mist dust suppression system and 4sprinkler systems,. The above-mentioned facilities are in normal operation.
(3) Zhanjiang Port Petrochemical Terminal Co., Ltd. has two production wastewater treatmentsystems and one domestic wastewater treatment system, both of which are in normal operation. Itcompleted the inspection and acceptance of the oil and gas recycling equipment for three 1,000-tonberths and departure platforms. Moreover, it is advancing the implementation of the construction ofthe oil and gas recycling equipment for a 10,000-ton loading berth.
(4) The first and third branches of Zhanjiang Port as well as Zhanjiang Port Petrochemical TerminalCo., Ltd. provide seven special rooms for storing hazardous waste. All the rooms are protected againstthunder, wind, rain, sunlight, and seepage and are equipped with surveillance equipment in thesurrounding places. A qualified third party is entrusted to transport the waste in a timely and compliantmanner.
5. Contingency plan for environmental emergencies
During the Reporting Period, the Contingency Plan for Environmental Emergencies of the Companycontinued to be effective, and all enterprises controlled by the Company prepared a contingency planfor environmental emergencies as required. Units with heavy pollutant discharge needs filedenvironmental emergencies at local ecological and environmental bureaus as required. Details are asfollows:
(1) Contingency Plan for Environmental Emergencies of Zhanjiang Port (Group) Co., Ltd. Filing No.440803-2020-0036-H
China Merchants Port Group Co., Ltd. Interim Report 2023
(2) Contingency Plan for Environmental Emergencies of the First Branch of Zhanjiang Port (Group)Co., Ltd. Filing No. 440803-2021-0025-M
(3) Contingency Plan for Environmental Emergencies of the Third Branch of Zhanjiang Port (Group)Co., Ltd. Filing No. 440802-2022-0002-L
(4) Contingency Plan for Environmental Emergencies of Zhanjiang Port Petrochemical Terminal Co.,Ltd. Filing No. 440803-2021-0040-H
6. Input in environmental governance and protection and payment of environmental protectiontaxThe Company constantly increases its input into environmental protection to make sure that variouspollutants constantly meet the standards and thus contribute to business sustainability. During theReporting Period, the Company spent RMB75.33 million on environmental protection and paidRMB2.6262 million for environmental protection tax in full in time as per laws and regulations.
7. Environmental self-monitoring program
During the Reporting Period, enterprises under the Company that are subject to the pollutantdischarge permits formulated self-monitoring plans as per laws, regulations, and pollutant dischargepermits. As a result, the monitoring results indicated that all indicators met the standards. Informationon units with heavy pollutant discharge needs controlled by the Company is as follows:
(1) The First Branch of Zhanjiang Port (Group) Co., Ltd. has developed a soil and noise self-monitoring plan, by which it conducts noise monitoring every quarter and soil monitoring everysecond half of the year. The monitoring report will be submitted to local ecological and environmentalauthorities.
(2) The Third Branch of Zhanjiang Port (Group) Co., Ltd. has developed a soil self-monitoring plan,by which it conducts soil monitoring every second half of the year. The monitoring report will besubmitted to local ecological and environmental authorities.
(3) Zhanjiang Port Petrochemical Terminal Co., Ltd. has developed an air and soil self-monitoringplan, by which it conducts air monitoring every quarter and soil monitoring every second half of theyear. The monitoring report will be submitted to local ecological and environmental authorities.
8. Administrative penalties for environmental problems during the Reporting Period
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Interim Report 2023
9. Other environmental information that should be disclosed
None
10. Measures taken to decrease carbon emission in the Reporting Period and correspondingeffectsCMPort vigorously responds to and implements the national requirements as well as the requirementsof CMG for carbon peak and carbon neutrality, implements energy saving and carbon reductionstrictly in accordance with the Action Plan of CMPort for Achieving Carbon Peak and CarbonNeutrality formulated and helps the effective implementation of the goal of “achieving carbon peakby 2028 and carbon neutrality by 2060”. At the beginning of the year, the Company identified 57carbon reduction projects for 2023 and included them in the annual energy-saving and environmentalprotection target management responsibility statement, with a carbon reduction of 3,218 tons duringthe Reporting Period.
11. Other information related to environmental protection
NoneII Corporate Social Responsibility (CSR)The Company highlights and practices corporate social responsibilities. While improving businessperformance and creating benefits for shareholders, the Company earnestly performs its socialresponsibilities for employees, society and environment, promotes the sustainable development ofthe enterprise and society, and continues to shape the public-welfare brand, "C-Blue". The mainresults of the work in the first half of 2023 are as follows:
1. Overseas: Thanks to the China Merchants Charity Foundation, the program "China Merchants SilkRoad Love Villages" jointly initiated by Colombo International Container Terminals Ltd. (CICT) andHambantota International Port Group (HIPG) achieved results in Kenda villages, Sri Lanka. Theinfrastructure construction of Love Village has been completed. Community activity centers, medicaland health centers and other facilities were handed over smoothly. The project creates nearly 800 jobsfor local people, and will improve the living environment and living standards of local villagers, andthus develop new villages featuring happiness and harmony. After achieving fruitful results in KendaVillage, the project will take Kenda Village as a successful example to gradually explore the path ofsustainable development in impoverished rural areas overseas, so as to benefit more villages in SriLanka.
2. Domestically: CMPort successfully hosted the Children’s Growth Camp of the C-Blue RuralEducation Charity Programme in Lianping, Heyuan and Weining, Guizhou. Through innovative C-
China Merchants Port Group Co., Ltd. Interim Report 2023
Blue cloud classroom and other forms of activities, it helped rural schools access high-quality urbaneducation resources, committed to promoting rural revitalisation through education. Zhanjiang Portcontinued to promote rural revitalisation. It put more effort into supporting the development of Hai’anTown in Xuwen County, offering community volunteer services vigorously. For instance, it took careof left-behind children through the childcare volunteer service of “Spring Breeze for Seedlings”.Shantou Port worked with Shantou Guang’ao Middle School to carry out practical activities on lovingthe motherland, hometown and port. It took teachers and students from Guang’ao Middle School ona tour of the Guang’ao Port Area and Chaoshan Historical and Cultural Expo Center, allowing thestudents to further understand Chaoshan’s history and culture, experience the beauty of theirhometown, and stimulate their feelings of love for the motherland, hometown and port. The tour alsohelped them realise their responsibilities of inheriting patriotism, promoting traditional culture andassisting in the construction of their hometown. Xiamen Port actively implemented the ruralrevitalisation policy to assist in the employment of some villagers in Shenwo Village and othervillages around the port area. The South China Operations Center actively organised its employees toparticipate in volunteer activities, such as the creation of green port landscape, the caring for the staffof Nanshan Port Special Service Station, Mount Malun environmental protection public welfareactivities, unpaid blood donation, and parent-child volunteer service activities, encouraging them toassume their social responsibilities as the Company’s employees and play their roles as role models.
China Merchants Port Group Co., Ltd. Interim Report 2023
Part VI Significant EventsI Commitments of the Company’s Actual Controller, Shareholders, Related Parties andAcquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Periodor Overdue at the Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.II Occupation of the Company’s Capital by the Controlling Shareholder or any of other RelatedParties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.IV Engagement and Disengagement of Independent AuditorAre the interim financial statements audited?
□Yes √ No
The interim financial statements are unaudited.V Explanations Given by the Board of Directors and the Supervisory Committee Regarding theIndependent Auditor’s “Modified Opinion” on the Financial Statements of the ReportingPeriod
□ Applicable √ Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor’s“Modified Opinion” on the Financial Statements of Last Year
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2023
VIII Legal MattersMajor lawsuits and arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Other legal matters:
Basic information
| Basic information | Amount involved (RMB’0,000) | Whether formed expected liabilities | Progress | The results and influence of lawsuits (arbitrations) | Execution of judgment | Disclosure date | Index to disclosed information |
| The summary of Brazil TCP cases (note) | 94,325.42 | Yes | Unsettled | Low risk | - | - | - |
| The summary of other matters not met disclosure standards of major lawsuits (arbitrations) | 114,679.5 | Not | Unsettled | Low risk | - | - | - |
Note: refer to Notes to Financial Statements-Commitments or Contingency for details of Brazil TCP cases.IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.X Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XI Major Related-Party Transactions
1. Continuing Related-Party Transactions
| Related party | Relationship with the Company | Type of transaction | Specific transaction | Pricing principle | Transaction price (RMB’0,000) | Total value (RMB’0,000) | As % of the total value of all the same-type transactions | Approved transaction line (RMB’0,000) | Over the approved line or not | Way of settlement | Obtainable market price for same-type transactions (RMB’0,000) | Disclosure date | Index to disclosed information |
| Liaoning Port Group Co., Ltd. and its subsidiaries | Under the control of ultimate shareholder | Render service and lease to related party, receive service and lease from related | Lease, labor cost, information service income, etc. | Market price | 5,098.85 | 5,098.85 | 11.71% | 24,983.17 | No | Settled monthly | 5,098.85 | 4 April 2023 | www.cninfo.com.cn (Announcement No. 2023-028) |
China Merchants Port Group Co., Ltd. Interim Report 2023
party
| party | |||||||||||||
| Sinotrans Limited and its subsidiaries | Under the control of ultimate shareholder | Render service and lease to related party, receive service from related party | Labor cost, demurrage, lease, etc. | Market price | 8,053.87 | 8,053.87 | 18.50% | 20,239.79 | No | Settled monthly | 8,053.87 | ||
| China Nanshan Development (Group) Co., Ltd. and its subsidiaries | Affiliated legal person | Render service and lease to related party, receive service and lease from related party | Lease, labor cost, service revenue | Market price | 4,001.70 | 4,001.70 | 9.19% | 14,394.29 | No | Settled monthly | 4,001.70 | ||
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. and its subsidiaries | Under the control of ultimate shareholder | Render service and lease to related party, receive service and lease from related party | Labor cost, lease expense of land and houses | Market price | 6,011.34 | 6,011.34 | 13.81% | 13,323.90 | No | Settled monthly | 6,011.34 | ||
| Total | -- | -- | 23,165.76 | -- | 72,941.15 | -- | -- | -- | -- | -- | |||
| Large-amount sales return in detail | None | ||||||||||||
| Give the actual situation in the Reporting Period (if any) where an estimate had been made for the total value of continuing related-party transactions by type to occur in the Reporting Period | The Proposal on Recognition of 2022 Daily Related-party Transaction and the Forecast of 2023 Daily Related-party Transaction was reviewed and approved on the 2022 Annual General Meeting on 22 May 2023. The daily business transactions of the Company are mainly providing or receiving leasing, providing and receiving labor services. The amount of daily related-party transactions in 2023 is estimated to be RMB1.01 billion. During the Reporting Period, there was no significant difference between the actual amount and the estimated amount. | ||||||||||||
| Reason for any significant difference between the transaction price and the market reference price (if applicable) | N/A | ||||||||||||
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
4. Credits and Liabilities with Related Parties
Credits receivable with related parties
China Merchants Port Group Co., Ltd. Interim Report 2023
Relatedparty
| Related party | Related relationship | Forming reason | Whether there is occupation on non-operating capital or not | Beginning balance (RMB’0,000) | Increased in the Reporting Period (RMB’0,000) | Recovered in the Reporting Period (RMB’0,000) | Interest rate | Interest in the Reporting Period (RMB’0,000) | Ending balance (RMB’0,000) |
| China Merchants Bank | The ultimate controlling shareholder has major influence on it | Bank deposits/Structured deposit | No | 428,803.42 | 2,149,381.70 | 2,212,567.27 | 1.35%- 3.29% | 2,949.86 | 365,617.85 |
| Effects of credits with related parties on the Company’s operating results and financial conditions | The above credits receivable with related parties were mainly deposits in financial institutions which has no major influence on the Company’s operating results and financial conditions. | ||||||||
Liabilities payable with related parties:
| Related party | Related relationship | Forming reason | Beginning balance (RMB’0,000) | Increased in the Reporting Period (RMB’0,000) | Recovered in the Reporting Period (RMB’0,000) | Interest rate | Interest in the Reporting Period (RMB’0,000) | Ending balance (RMB’0,000) |
| China Merchants Bank | The ultimate controlling shareholder has major influence on it | Borrowing | 35,137.82 | 11,009.69 | 4,357.69 | 2.95-3.72% | 793.91 | 41,789.82 |
| Effects of liabilities with related parties on the Company’s operating results and financial conditions | The above liabilities payable with related parties were mainly financial institution loans which had no major influence on the Company’s operating results and financial conditions. | |||||||
5. Transactions with Related Finance Companies
Deposit business
| Related party | Related relationship | Daily maximum limits (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount | Ending balance (RMB’0,000) | |
| Total deposited amount (RMB’0,000) | Total withdrawn amount (RMB’0,000) | ||||||
| China Merchants Group Finance Co., Ltd. | Other company under the same control of controlling shareholder | 500,000.00 | 0.55%-2.1% | 184,169.86 | 1,135,602.72 | 1,228,411.69 | 91,360.89 |
Loan business
China Merchants Port Group Co., Ltd. Interim Report 2023
Related party
| Related party | Related relationship | Loan limit (RMB’0,000) | Interest rate range | Beginning balance (RMB’0,000) | Actual amount | Ending balance (RMB’0,000) | |
| Total loan amount (RMB’0,000) | Total repaid amount (RMB’0,000) | ||||||
| China Merchants Group Finance Co., Ltd. | Other company under the same control of controlling shareholder | 1,000,000.00 | 1.2%-4.06% | 97,983.90 | 35,572.66 | 42,417.55 | 91,139.01 |
Credit or other finance business
| Related party | Related relationship | Type of business | Total amount (RMB’0,000) | Actual amount (RMB’0,000) |
| China Merchants Group Finance Co., Ltd. | Other company under the same control of controlling shareholder | Credit | 1,000,000.00 | 91,139.01 |
6. Transactions with Related Parties by Finance Company Controlled by the Company
□ Applicable √ Not applicable
No such cases in the Reporting Period.
7. Other Major Related-Party Transactions
(1) The Company held the 7th Meeting of the 10th Board of Directors on 31 March 2023, andreviewed and approved the Proposal on the Related-Party Transactions Regarding Making Depositsin and Obtaining Loans from China Merchants Bank in 2023, which was submitted to the 2022Annual General Meeting of the Company for deliberation. The Company held the 2022 AnnualGeneral Meeting on 22 May 2023, and deliberated and approved the Proposal on the Related-PartyTransactions Regarding Making Deposits in and Obtaining Loans from China Merchants Bank in2023, agreeing the Company and its subsidiaries to open bank accounts with China Merchants Bank.In 2023, the maximum deposit balance of the Company and its subsidiaries with China MerchantsBank shall not exceed RMB10 billion, and the maximum credit balance shall not exceed RMB15billion. For details, please refer to the Announcement on the Related-Party Transactions RegardingMaking Deposits in and Obtaining Loans from China Merchants Bank in 2023 (Announcement No.2023-029) disclosed by the Company on 4 April 2023, the Announcement on the Resolution of the2022 General Meeting of Shareholders (Announcement No. 2023-045) disclosed by the Company on23 May 2023 and other relevant announcements.
(2) The Company held the 3rd Extraordinary Meeting of the 10th Board of Directors on 6 April 2023,and reviewed and approved the Proposal on the Related-Party Transaction Regarding ConductingFinancial Leasing between Majority-owned Subsidiaries and Related Parties. For details, please referto the Announcement on the Related-Party Transaction Regarding Conducting Financial Leasingbetween Majority-owned Subsidiaries and Related Parties (Announcement No. 2023-034) disclosedby the Company on 7 April 2023.
(3) The Company held the 4th Extraordinary Meeting of the 10th Board of Directors on 28 April 2023,reviewed and approved the Proposal on the Provision of Financial Assistance by Majority-owned
China Merchants Port Group Co., Ltd. Interim Report 2023
Subsidiaries and Related-Party Transactions to their Equity-participating Companies, which wassubmitted to the 2022 Annual General Meeting of the Company for deliberation. The Company heldthe 2022 Annual General Meeting on 22 May 2023, and deliberated and approved the Proposal onthe Provision of Financial Assistance by Majority-owned Subsidiaries and Related-Party Transactionsto their Equity-participating Companies. For details, please refer to the Announcement on theProvision of Financial Assistance by Majority-owned Subsidiaries and Related-Party Transactions totheir Equity-participating Companies (Announcement No. 2023-040) disclosed by the Company on29 April 2023.Information on the disclosure website for current announcements on significant related-partytransactions:
Name of provisional reports
| Name of provisional reports | Disclosure date | Website |
| Announcement on the Related-Party Transaction Regarding Making Deposits in and Obtaining Loans from China Merchants Bank in 2023 | 4 April 2023 | www.cninfo.com.cn (Announcement No. 2023-029) |
| Announcement on the Related-Party Transaction Regarding Conducting Financial Leasing between Majority-owned Subsidiaries and Related Parties | 7 April 2023 | www.cninfo.com.cn (Announcement No. 2023-034) |
| Announcement on the Provision of Financial Assistance by Majority-owned Subsidiaries and Related-Party Transactions to their Equity-participating Companies | 29 April 2023 | www.cninfo.com.cn (Announcement No. 2023-040) |
XII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2023
2. Major Guarantees
Unit: RMB'0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
| Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries) | ||||||||||
| Guarantee-receiving entity | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Terminal Link SAS | N/A | 6,897.89 | 11 June 2013 | 6,897.89 | General guarantee | About 20 years | Not | Yes | ||
| Terminal Link SAS | 31 March 2022 | 11,684.12 | 25 January 2023 | 11,684.12 | Joint-liability | About 7 years | Not | Yes | ||
| Terminal Link SAS | 4 April 2023 | 249,311.78 | ||||||||
| Kingston Freeport Terminal Limited | 31 March 2022 | 5,118.98 | ||||||||
| KHOR AMBADO FZCO * | 30 March 2019 | 20,810.30 | 24 May 2019 | 12,423.30 | Joint-liability | About 13 years | Not | Yes | ||
| Total approved line for such guarantees in the Reporting Period (A1) | 249,311.78 | Total actual balance of such guarantees in the Reporting Period (A2) | 11,684.12 | |||||||
| Total approved line for such guarantees at the end of the Reporting Period (A3) | 293,823.07 | Total actual balance of such guarantees at the end of the Reporting Period (A4) | 31,005.31 | |||||||
| Guarantee between the Company to its subsidiaries | ||||||||||
| Guarantee-receiving entity | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Chiwan Wharf Holdings (Hong Kong) Limited | 31 March 2022 | 190,000.00 | - | - | - | - | - | - | - | - |
| Port Development (Hongkong) Company Limited | 31 March 2022 | 200,000.00 | - | - | - | - | - | - | - | - |
| Port Development (Hongkong) Company Limited | 4 April 2023 | 100,000.00 | - | - | - | - | - | - | - | - |
China Merchants Port Group Co., Ltd. Interim Report 2023
ChiwanWharfHoldings(HongKong)Limited
| Chiwan Wharf Holdings (Hong Kong) Limited | 4 April 2023 | 100,000.00 | - | - | - | - | - | - | - | - |
| Total approved line for such guarantees in the Reporting Period (B1) | 200,000.00 | Total actual amount of such guarantees in the Reporting Period (B2) | 0.00 | |||||||
| Total approved line for such guarantees at the end of the Reporting Period (B3) | 200,000.00 | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 0.00 | |||||||
| Guarantees provided between subsidiaries | ||||||||||
| Guarantee-receiving entity | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Collateral (if any) | Counter guarantee (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| China Merchants International Terminal (Qingdao) Co., LTD | 16 April 2020 | 50,000.00 | 1 January 2021 | 19,395.59 | Joint-liability | Not | Not | January 2024 | Not | Not |
| Shenzhen Jinyu Rongtai Investment development Co., LTD | N/A | 80,000.00 | 12 January 2017 | 50,000.00 | Joint-liability | Not | Not | About 10 years | Not | Not |
| China Merchants International (China) Investment Co., LTD | N/A | 2,500.00 | 30 June 2016 | 2,500.00 | Joint-liability | Not | Not | About 10 years | Not | Not |
| China Merchants Finance Company Limited | 3 August 2015 | 361,290.00 | 3 August 2015 | 361,290.00 | General guarantee | Not | Not | About 10 years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 6 August 2018 | 650,322.00 | 6 August 2018 | 650,322.00 | General guarantee | Not | Not | About 5 years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 6 August 2018 | 433,548.00 | 6 August 2018 | 433,548.00 | General guarantee | Not | Not | About 10 years | Not | Not |
| CMHI Finance (BVI) Co., Ltd | 26 September 2020 | 578,064.00 | 9 October 2020 | 433,548.00 | General guarantee | Not | Not | About 3 years | Not | Not |
| 144,516.00 | General guarantee | Not | Not | About 5 years | Not | Not | ||||
China Merchants Port Group Co., Ltd. Interim Report 2023
CMHIFinance(BVI)Co., Ltd
| CMHI Finance (BVI) Co., Ltd | 31 March 2022 | 361,290.00 | 1 June 2022 | 361,290.00 | General guarantee | Not | Not | About 5 years | Not | Not |
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | N/A | 18,064.50 | 16 September 2012 | 18,064.50 | General guarantee | Not | Not | About 13 years | Yes | Not |
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | N/A | 5,058.06 | 16 September 2012 | - | - | - | - | - | - | - |
| COLOMBO INTERNATIONAL CONTAINER TERMINALS LIMITED | N/A | 18,064.50 | 16 September 2012 | 18,064.50 | General guarantee | Not | Not | Infinite | Not | Not |
| Lome Container Terminals Co., Ltd | N/A | 2,581.15 | 1 June 2015 | 248.13 | General guarantee | Not | Not | About 9 years | Not | Not |
| Lome Container Terminals Co., Ltd | N/A | 2,581.15 | 1 June 2015 | 248.13 | General guarantee | Not | Not | About 9 years | Not | Not |
| Lome Container Terminals Co., Ltd | N/A | 2,581.15 | 1 June 2015 | 248.13 | General guarantee | Not | Not | About 9 years | Not | Not |
| TCP - TERMINAL DE CONTElNERES DE PARANAGUA S/A. | N/A | 34,975.65 | 19 April 2018 | 6,995.13 | General guarantee | Not | Not | About 6 years | Not | Not |
| Shenzhen Haixin Port Development Co., LTD | 30 March 2019 | 219,090.00 | 26 June 2019 | 97,174.62 | Joint-liability | Not | Not | About 18 years | Not | Not |
| Zhanjiang Port | 31 March 2021 | 80,000.00 | 9 October 2021 | 32,300.00 | Joint-liability | Not | Not | About 3 years | Not | Not |
China Merchants Port Group Co., Ltd. Interim Report 2023
(Group)Co., LTD
| (Group) Co., LTD | ||||||||||
| CMHI Finance (BVI) Co., Ltd | 4 April 2023 | 354,990.00 | - | - | - | Not | Not | - | - | - |
| Ansujie Terminal Storage Service (Shenzhen) Co., Ltd. | 4 April 2023 | 70,000.00 | - | - | - | Not | Not | - | - | - |
| China Merchants International Terminal (Qingdao) Co., LTD | 31 March 2022 | 10,000.00 | - | - | - | Not | Not | - | - | - |
| Shenzhen Haixin Port Development Co., LTD | 4 April 2023 | 105,000.00 | - | - | - | Not | Not | - | - | - |
| Total approved line for such guarantees in the Reporting Period (C1) | 529,990.00 | Total actual amount of such guarantees in the Reporting Period (C2) | 0.00 | |||||||
| Total approved line for such guarantees at the end of the Reporting Period (C3) | 3,411,935.64 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 2,611,688.22 | |||||||
| Total guarantee amount (total of the three kinds of guarantees above) | ||||||||||
| Total guarantee line approved in the Reporting Period (A1+B1+C1) | 979,301.78 | Total actual guarantee amount in the Reporting Period (A2+B2+C2) | 11,684.12 | |||||||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 3,905,758.71 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 2,642,693.53 | |||||||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 47.41% | |||||||||
| Of which: | ||||||||||
| Balance of guarantees provided for shareholders, actual controller and their related parties (D) | 31,005.31 | |||||||||
| Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) | 2,503,607.05 | |||||||||
| Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) | - | |||||||||
| Total of the three amounts above (D+E+F) | 2,534,612.35 | |||||||||
| Joint responsibilities possibly borne in the Reporting Period for undue guarantees (if any) | None | |||||||||
| Provision of external guarantees in breach of the prescribed procedures (if any) | None | |||||||||
3. Cash Entrusted for Wealth Management
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Interim Report 2023
No such cases in the Reporting Period.
4. Continuing Major Contracts
□ Applicable √ Not applicable
5. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIII Other Significant Events
1. The transfer of 45% equity interest in Ningbo Daxie China Merchants InternationalTerminals Co., Ltd. (Ningbo Daxie) by majority-owned subsidiary CMPort Holdings throughpublic tenderThe Proposal on the Transfer of 45% Equity Interest in Ningbo Daxie China Merchants InternationalTerminals Co., Ltd. by a Majority-owned Subsidiary through Public Tender was approved at theSecond Extraordinary Meeting of the 10
thBoard of Directors of the Company in 2023 dated 20 March2023. As such, Cyber Chic Company Limited (hereinafter referred to as “Cyber Chic”), a wholly-owned subsidiary of the Company’s majority-owned subsidiary CMPort Holdings, was approved totransfer its 45% equity interest in Ningbo Daxie through public tender on the China Beijing EquityExchange, and the Company’s management was authorized to deal with the subsequent mattersrelating to the said transaction (including but not limited to the signing of the formal agreement, etc.)at its sole discretion in the transaction process. It was also approved that based on the results of theasset valuation report issued by Beijing China Enterprise Appraisals Co., Ltd., the bottom price wouldbe no less than RMB1,845 million (ultimately subject to the results of the asset valuation report filedto the state-owned assets supervision organization). Final transferee and transaction price would besubject to the results of the public tender. For further information, see Announcement No. 2023-021on the Transfer of 45% Equity Interest in Ningbo Daxie China Merchants International TerminalsCo., Ltd. by a Majority-owned Subsidiary through Public Tender, which has been disclosed by theCompany on 22 March 2023.
China Merchants Port Group Co., Ltd. Interim Report 2023
On 20 April 2023, CYBER CHIC put its 45% equity interest in Ningbo Daxie to a public tender onthe China Beijing Equity Exchange. On 19 May 2023, CYBER CHIC received the "Notification ofTransaction Contract Signing" from the China Beijing Equity Exchange, and Ningbo Zhoushan Portbecame the transferee, with a transaction price of RMB1,845 million. On 25 May 2023, CYBERCHIC and Ningbo Zhoushan Port entered into the Equity Transaction Contract. For furtherinformation, see Announcement No. 2023-046 on Progress of the Transfer of 45% Equity Interest inNingbo Daxie China Merchants International Terminals Co., Ltd. by a Majority-owned Subsidiarythrough Public Tender, which has been disclosed by the Company on 26 May 2023.On 8 August 2023, Ningbo Daxie changed its registered information with the competent industrialand commercial administration and received its new business license upon the equity transfer, withits name changed to “Ningbo Daxie Container Terminal Co., Ltd.”. As such, the equity transfer hasbeen completed and CYBER CHIC no longer holds equity interest in Ningbo Daxie. For furtherinformation, see Announcement No. 2023-063 on Progress of the Transfer of 45% Equity Interest inNingbo Daxie China Merchants International Terminals Co., Ltd. by a Majority-owned Subsidiarythrough Public Tender, which has been disclosed by the Company on 10 August 2023.
2. Index to Disclosed Information
The significant events disclosed by the Company on Securities Times, China Securities Journal,Shanghai Securities News, Ta Kung Pao and www.cninfo.com.cn during the Reporting Period are asfollows:
Announcem
ent No.
| Announcement No. | Date of the announcement | Title of the announcement |
| 2023-001 | 10 January 2023 | Announcement on Obtaining the Registration Approval from the China Securities Regulatory Commission for the Public Offering of Corporate Bonds to Professional Investors |
| 2023-002 | 14 January 2023 | Announcement on the Voluntary Information Disclosure of Business Volume Data of December 2022 |
| 2023-003 | 20 January 2023 | Announcement on the Resolutions of the 1st Extraordinary Meeting of the 10th Board of Directors in 2023 |
| 2023-004 | 20 January 2023 | Announcement on the Resolutions of the 1st Extraordinary Meeting of the 10th Board of Supervisors in 2023 |
| 2023-005 | 20 January 2023 | Announcement on Adjusting the Exercise Prices of the Stock Option Incentive Plan (Phase I) of the Company |
| 2023-006 | 20 January 2023 | Announcement on Adjusting the Numbers of Qualified Awardees and Stock Options to Be Granted of the Stock Option Incentive Plan (Phase I) of the Company |
China Merchants Port Group Co., Ltd. Interim Report 2023
2023-007
| 2023-007 | 20 January 2023 | Announcement on the Failure to Meet the Exercise Conditions for the Second Exercise Schedule of the Stock Options (the First Batch to be Granted) under the Company’s Stock Option Incentive Plan (Phase I) |
| 2023-008 | 20 January 2023 | Announcement on the Failure to Meet the Exercise Conditions for the First Exercise Schedule of the Stock Options (the Reserved Batch to be Granted) under the Company’s Stock Option Incentive Plan (Phase I) |
| 2023-009 | 20 January 2023 | Announcement on Cancelling Some Stock Options under the Company’s Stock Option Incentive Plan (Phase I) |
| 2023-010 | 8 February 2023 | Announcement on Completing the Cancellation of Some Stock Options under the Company’s Stock Option Incentive Plan (Phase I) |
| 2023-011 | 8 February 2023 | Announcement on the Exercise of the Redemption Option of “22 CMPort 03” Corporate Bond and the Waiver of the Exercise of the Adjustment Option of the Coupon Interest of “22 CMPort 03” Corporate Bond |
| 2023-012 | 10 February 2023 | First Reminder on the Exercise of the Redemption Option of “22 CMPort 03” Corporate Bond and the Waiver of the Exercise of the Adjustment Option of the Coupon Interest of “22 CMPort 03” Corporate Bond |
| 2023-013 | 15 February 2023 | Announcement on the Voluntary Information Disclosure of Business Volume Data of January 2023 |
| 2023-014 | 17 February 2023 | Second Reminder on the Exercise of the Redemption Option of “22 CMPort 03” Corporate Bond and the Waiver of the Exercise of the Adjustment Option of the Coupon Interest of “22 CMPort 03” Corporate Bond |
| 2023-015 | 24 February 2023 | Third Reminder on the Exercise of the Redemption Option of “22 CMPort 03” Corporate Bond and the Waiver of the Exercise of the Adjustment Option of the Coupon Interest of “22 CMPort 03” Corporate Bond |
2023-016
| 2023-016 | 1 March 2023 | Reminder of the Issuance of 2023 Phase I Super-short-term Financing Bonds |
| 2023-017 | 7 March 2023 | Announcement on the Issue Results of 2023 Phase I Super-short-term Financing Bonds |
| 2023-018 | 8 March 2023 | Announcement on the Redemption Results and Delisting of “22 CMPort 03” |
| 2023-019 | 15 March 2023 | Announcement on the Voluntary Information Disclosure of Business Volume Data of February 2023 |
| 2023-020 | 22 March 2023 | Announcement on the Resolutions of the 2nd Extraordinary Meeting of the 10th Board of Directors in 2023 |
| 2023-021 | 22 March 2023 | Announcement on the Public Transfer of 45% of CMICT’s Equity by the Majority-Owned Subsidiary |
| 2023-022 | 28 March 2023 | Announcement on the Online Investor Meeting on the 2022 Annual Results |
| 2023-023 | 1 April 2023 | Announcement on the Voluntary Information Disclosure of the 2022 Annual Results by the Majority-Owned Subsidiary |
| 2023-024 | 4 April 2023 | Announcement on the Resolutions of the 7th Meeting of the 10th Board of Directors |
| 2023-025 | 4 April 2023 | Announcement on the Resolutions of the 7th Meeting of the 10th Board of Supervisors |
| 2023-026 | 4 April 2023 | Announcement on the 2022 Profit Distribution and Dividend Payout Plan |
| 2023-027 | 4 April 2023 | Abstract of 2022 Annual Report (Chinese and English Versions) |
| 2023-028 | 4 April 2023 | Announcement on the Confirmation of the Continuing Related-Party Transactions in 2022 and the Estimation of Such Transactions in 2023 |
| 2023-029 | 4 April 2023 | Announcement on the Related-Party Transaction Regarding Making Deposits in and Obtaining Loans from China Merchants Bank in 2023 |
| 2023-030 | 4 April 2023 | Announcement on the External Guarantee Progress of a Majority-Owned Subsidiary of the Company in 2022 and the Expected New External Guarantee Line in the Next 12 Months |
| 2023-031 | 4 April 2023 | Special Report on Deposit and Usage of Raised Fund in 2022 |
| 2023-032 | 4 April 2023 | Announcement on Reappointment of Accounting Firm in 2023 |
China Merchants Port Group Co., Ltd. Interim Report 2023
2023-033
| 2023-033 | 7 April 2023 | Announcement on the Resolutions of the 3rd Extraordinary Meeting of the 10th Board of Directors in 2023 |
| 2023-034 | 7 April 2023 | Announcement on the Related-Party Transaction Regarding Conducting Financial Leasing between Majority-owned Subsidiaries and Related Parties |
2023-035
| 2023-035 | 8 April 2023 | Announcement on the Resignation of Employee Supervisors |
| 2023-036 | 15 April 2023 | Announcement on the Voluntary Information Disclosure of Business Volume Data of March 2023 |
| 2023-037 | 29 April 2023 | Announcement on the Resolutions of the 4th Extraordinary Meeting of the 10th Board of Directors in 2023 |
| 2023-038 | 29 April 2023 | The First Quarter Report 2023 (Chinese and English Versions) |
| 2023-039 | 29 April 2023 | Announcement on the Extension of Financial Assistance Provided by Majority-owned Subsidiaries |
| 2023-040 | 29 April 2023 | Announcement on the Provision of Financial Assistance by Majority-owned Subsidiaries and Related-Party Transactions to their Equity-participating Companies |
| 2023-041 | 29 April 2023 | Announcement on the Appointment of Mr. Zhu Weida as Deputy General Manager |
| 2023-042 | 29 April 2023 | Notice on Convening 2022 Shareholders’ General Meeting |
2023-043
| 2023-043 | 29 April 2023 | Announcement on Accounting Policy Changes |
| 2023-044 | 16 May 2023 | Announcement on the Voluntary Information Disclosure of Business Volume Data of April 2023 |
| 2023-045 | 23 May 2023 | Announcement on the Resolutions of 2022 General Meeting of Shareholders |
| 2023-046 | 26 May 2023 | Announcement on the Progress of the Public Transfer of 45% of CMICT’s Equity by the Majority-Owned Subsidiary |
| 2023-047 | 3 June 2023 | Announcement on the Redemption of the 5th Issue of SCP in 2022 upon Maturity |
| 2023-048 | 14 June 2023 | Reminder of the Issuance of 2023 Phase II Super-short-term Financing Bonds |
| 2023-049 | 15 June 2023 | Announcement on the Voluntary Information Disclosure of Business Volume Data of May 2023 |
| 2023-050 | 17 June 2023 | Announcement on the Issue Results of 2023 Phase II Super-short-term Financing Bonds |
| 2023-051 | 20 June 2023 | Announcement on the 2022 Dividend Payout |
3. Progress of the Internal Control Work
According to the requirements of Basic Rules for Enterprise Internal Control and relevant regulations,the internal control work carried out by the Company during the Reporting Period is as follows:
(1) The development of the internal control system. The Company defined the full coverage of theinternal control system by the standards of control and legal entities, respectively, and performedinternal control assessment. As of H1 2023, the Company completed the supervision and inspectionof the internal control of three organizations and was conducting the supervision and inspection offour subordinate organizations, in accordance with the "Two-year Full Coverage" work plan forsupervising and inspecting internal control systems.
(2) Comprehensive risk management. The Company tracked and controlled operating risk events ina normalized manner, and revised the relevant management rules to monitor the latest status ofquantitative risk indicators. Moreover, it further strengthened the risk control management capabilityby improving quantitative overseas risk indicators, the early warning system of liquidity risk, the
China Merchants Port Group Co., Ltd. Interim Report 2023
credit risk management mechanism, and special risk control measures.
4. Communications with the Investment Community such as Researches, Inquiries andInterviews
Date
| Date | Place | Way of communication | Type of communication party | Object of communication | Index to basic information of researches |
| 4 April 2023 | China Merchants Port Building | Teleconferencing | Institution | Representatives from institutions, such as Huachuang Securities, Zheshang Securities, Industrial Securities, Shenwan Hongyuan Securities, Essence Securities, BOC International (China) Co., Ltd., Western Securities, Sinolink Securities, Everbright Securities, Harvest Fund, Bosera Fund, UBS | Main discussions: the basic condition of operations, investments made and the financial condition of the Company; Materials provided: None Index: SZSE EasyIR (http://irm.cninfo.com.cn/ircs/index) |
| 6 April 2023 | China Merchants Port Building | Online communication on network platform | Institution+Individual | All investors | |
| 10 May 2023 | China Merchants Port Building | One-on-one meeting | Institution | Huachuang Securities, Zheshang Securities, Harmony Capital, China Life Insurance, HZBank Wealth Management, Jinxin Fund, Deyun Asset Management, Minsen Investment, Hengli Fund | |
| 1 January 2023 to 30 June 2023 | China Merchants Port Building | By phone, or written inquiry (the EasyIR platform of SZSE or email) | Individual | Individual investors | |
| Times of communications | 46 | ||||
| Number of institutions communicated with | 21 | ||||
| Number of individuals communicated with | 48 | ||||
| Number of other communication parties | 0 | ||||
| Tip-offs or leakages of substantial supposedly-confidential information during communications | No | ||||
China Merchants Port Group Co., Ltd. Interim Report 2023
XIV Significant Events of Subsidiaries
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Interim Report 2023
Part VII Share Changes and Shareholder InformationI Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the Reporting Period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| I. Restricted shares | 576,716,903 | 23.0772% | 0 | 0 | 0 | 0 | 0 | 576,716,903 | 23.0772% |
| 1. Shares held by state | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| 2. Shares held by state-owned legal person | 576,709,537 | 23.0769% | 0 | 0 | 0 | 0 | 0 | 576,709,537 | 23.0769% |
| 3. Shares held by other domestic investors | 7,366 | 0.0003% | 0 | 0 | 0 | 0 | 0 | 7,366 | 0.0003% |
| Including: Shares held by domestic legal person | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| Shares held by domestic natural person | 7,366 | 0.0003% | 0 | 0 | 0 | 0 | 0 | 7,366 | 0.0003% |
| 4. Shares held by foreign investors | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| Including: Shares held by foreign legal person | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| Shares held by foreign natural person | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| II. Unrestricted shares | 1,922,357,758 | 76.9228% | 0 | 0 | 0 | 0 | 0 | 1,922,357,758 | 76.9228% |
China Merchants Port Group Co., Ltd. Interim Report 2023
1. RMB
ordinaryshares
| 1. RMB ordinary shares | 1,742,468,718 | 69.7246% | 0 | 0 | 0 | 0 | 0 | 1,742,468,718 | 69.7246% |
| 2. Domestically listed foreign shares | 179,889,040 | 7.1982% | 0 | 0 | 0 | 0 | 0 | 179,889,040 | 7.1982% |
| 3. Overseas listed foreign shares | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| 4. Other | 0 | 0.0000% | 0 | 0 | 0 | 0 | 0 | 0 | 0.0000% |
| III. Total shares | 2,499,074,661 | 100.0000% | 0 | 0 | 0 | 0 | 0 | 2,499,074,661 | 100.0000% |
Reasons for the share changes:
□ Applicable √ Not applicable
Approval of the share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of the share changes on the basic and diluted earnings per share, equity per share attributableto the Company’s ordinary shareholders and other financial indicators of the prior year and the prioraccounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator tobe disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings as at the Period-End
Unit: share
| Number of ordinary shareholders at the period-end | 29,583 (18,479 A-shareholders and 11,104 B-shareholders) | Number of preferred shareholders with resumed voting rights at the period-end (if any) | 0 |
China Merchants Port Group Co., Ltd. Interim Report 2023
5% or greater ordinary shareholders or top 10 ordinary shareholders
| 5% or greater ordinary shareholders or top 10 ordinary shareholders | |||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total ordinary shares held at the period-end | Increase/decrease in the Reporting Period | Restricted ordinary shares held | Unrestricted ordinary shares held | Shares in pledge, marked or frozen |
| CHINA MERCHANTS PORT INVESTMENT DEVELOPMENT COMPANY LIMITED | Foreign legal person | 45.96% | 1,148,648,648 | 0 | 0 | 1,148,648,648 | 0 |
| ZHEJIANG PROVINCIAL SEAPORT INVESTMENT & OPERATION GROUP CO., LTD. | State-owned legal person | 23.08% | 576,709,537 | 0 | 576,709,537 | 0 | 0 |
| CHINA MERCHANTS GANGTONG DEVELOPMENT (SHENZHEN) CO., LTD. | State-owned legal person | 14.84% | 370,878,000 | 0 | 0 | 370,878,000 | 0 |
| SHENZHEN INFRASTRUCTURE INVESTMENT FUND-SHENZHEN INFRASTRUCTURE INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) | Funds, wealth management products, etc. | 2.59% | 64,850,182 | 0 | 0 | 64,850,182 | 0 |
| BROADFORD GLOBAL LIMITED | State-owned legal person | 2.21% | 55,314,208 | 0 | 0 | 55,314,208 | 0 |
| CHINA-AFRICA DEVELOPMENT FUND | State-owned legal person | 1.69% | 42,190,151 | -21,912,413 | 0 | 42,190,151 | Unknown |
| CHINA CITIC BANK CORPORATION LIMITED-BOCOM SCHRODERS NEW VITALITY DYNAMIC ASSET ALLOCATION MIXED SECURITIES INVESTMENT FUND | Funds, wealth management products, etc. | 0.27% | 6,774,663 | 0 | 0 | 6,774,663 | Unknown |
| CHINA LIFE INSURANCE COMPANY LIMITED-TRADITION- GENERAL INSURANCE PRODUCTS-005L- CT001 HU | Funds, wealth management products, etc. | 0.18% | 4,534,022 | 0 | 0 | 4,534,022 | Unknown |
| HONG KONG SECURITIES CLEARING COMPANY LTD. | Foreign legal person | 0.18% | 4,400,007 | -1,810,889 | 0 | 4,400,007 | Unknown |
| BANK OF CHINA LIMITED- GF MID-CAP AND SMALL-CAP SELECTED MIXED SECURITIES INVESTMENT FUND | Funds, wealth management products, etc. | 0.13% | 3,356,800 | 0 | 0 | 3,356,800 | Unknown |
| Strategic investors or general legal person becoming top-ten ordinary shareholders due to placing of new shares (if any) | Among the foregoing shareholders, Shenzhen Infrastructure Investment Fund-Shenzhen Infrastructure Investment Fund Partnership (Limited Partnership) subscribed for 64,850,182 shares of the Company offered in a non-public manner in 2019 for raising supporting funds at RMB17.16 per share. The subscribed shares were floated on | ||||||
China Merchants Port Group Co., Ltd. Interim Report 2023
Shenzhen Stock Exchange on 4 November 2019, and the lock-in period lasted until 4November 2020. China-Africa Development Fund subscribed for 64,102,564 shares ofthe Company offered in a non-public manner in 2019 for raising supporting funds atRMB17.16 per share. The subscribed shares were floated on Shenzhen Stock Exchangeon 4 November 2019, and the lock-in period lasted until 4 November 2020. ZhejiangProvincial Seaport Investment & Operation Group Co., Ltd. subscribed for 576,709,537shares of the Company offered in a non-public manner at RMB18.50 per share. Thesubscribed shares were floated on Shenzhen Stock Exchange on 12 October 2022, andthe lock-in period lasts until 12 October 2025.
| Shenzhen Stock Exchange on 4 November 2019, and the lock-in period lasted until 4 November 2020. China-Africa Development Fund subscribed for 64,102,564 shares of the Company offered in a non-public manner in 2019 for raising supporting funds at RMB17.16 per share. The subscribed shares were floated on Shenzhen Stock Exchange on 4 November 2019, and the lock-in period lasted until 4 November 2020. Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. subscribed for 576,709,537 shares of the Company offered in a non-public manner at RMB18.50 per share. The subscribed shares were floated on Shenzhen Stock Exchange on 12 October 2022, and the lock-in period lasts until 12 October 2025. | |||
| Related or acting-in-concert parties among the shareholders above | Broadford Global Limited is the controlling shareholder of China Merchants Port Investment Development Company Limited and China Merchants Gangtong Development (Shenzhen) Co., Ltd. The Company does not know whether the other unrestricted shareholders are related parties or not. | ||
| Above shareholders involved in entrusting/being entrusted and giving up voting rights | None | ||
| Special account for share repurchases (if any) among the top 10 shareholders | N/A | ||
| Top 10 unrestricted ordinary shareholders | |||
| Name of shareholder | Unrestricted ordinary shares held at the period-end | Shares by type | |
| Type | Shares | ||
| CHINA MERCHANTS PORT INVESTMENT DEVELOPMENT COMPANY LIMITED | 1,148,648,648 | RMB ordinary share | 1,148,648,648 |
| CHINA MERCHANTS GANGTONG DEVELOPMENT (SHENZHEN) CO., LTD. | 370,878,000 | RMB ordinary share | 370,878,000 |
| SHENZHEN INFRASTRUCTURE INVESTMENT FUND-SHENZHEN INFRASTRUCTURE INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) | 64,850,182 | RMB ordinary share | 64,850,182 |
| BROADFORD GLOBAL LIMITED | 55,314,208 | Domestically listed foreign share | 55,314,208 |
| CHINA-AFRICA DEVELOPMENT FUND | 42,190,151 | RMB ordinary share | 42,190,151 |
| CHINA CITIC BANK CORPORATION LIMITED-BOCOM SCHRODERS NEW VITALITY DYNAMIC ASSET ALLOCATION MIXED SECURITIES INVESTMENT FUND | 6,774,663 | RMB ordinary share | 6,774,663 |
| CHINA LIFE INSURANCE COMPANY LIMITED-TRADITION- GENERAL INSURANCE PRODUCTS-005L- CT001 HU | 4,534,022 | RMB ordinary share | 4,534,022 |
| HONG KONG SECURITIES CLEARING COMPANY LTD. | 4,400,007 | RMB ordinary share | 4,400,007 |
| BANK OF CHINA LIMITED- GF MID-CAP AND SMALL-CAP SELECTED MIXED SECURITIES INVESTMENT FUND | 3,356,800 | RMB ordinary share | 3,356,800 |
| CHINA MERCHANTS SECURITIES (HK) CO., LTD. | 2,741,327 | Domestically listed foreign share | 2,741,327 |
| Related or acting-in-concert parties among top 10 unrestricted ordinary shareholders, as well as between top | Broadford Global Limited is a controlling shareholder of China Merchants Port Investment Development Company Limited and China Merchants Gangtong Development (Shenzhen) Co., Ltd. The Company does not know whether the other | ||
China Merchants Port Group Co., Ltd. Interim Report 2023
10 unrestricted ordinary shareholdersand top 10 ordinary shareholders
| 10 unrestricted ordinary shareholders and top 10 ordinary shareholders | unrestricted shareholders are related parties or not. |
| Top 10 ordinary shareholders involved in securities margin trading (if any) | N/A |
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestrictedordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.IV Change in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
No changes occurred to the shareholdings of the directors, supervisors and senior management in theReporting Period. See the 2022 Annual Report for more details.V Change of the Controlling Shareholder or the De Facto ControllerChange of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.Change of the de facto controller in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2023
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
China Merchants Port Group Co., Ltd. Interim Report 2023
Part IX Bonds
I Enterprise Bonds
□ Applicable √ Not applicable
No enterprise bonds in the Reporting Period.II Corporate Bonds
1. Basic Information of the Corporate Bonds
Unit: RMB’0,000
Name
| Name | Abbr. | Code | Date of issuance | Value date | Maturity | Bonds balance | Interest rate | Way of redemption | Trading place |
| 2020 Public Offering of Corporate Bonds of China Merchants Port Group Co., Ltd. (for qualified investors) (Phase I) | 20 CMPort 01 | 149170 | 7 July 2020 | 7 July 2020 | 8 July 2023 | 200,000.00 | 3.36% | Simple interest is adopted and calculated by year. No compound interest is calculated. Interests are paid once every year and principals paid in lump sum at maturity. In the last installment, the interests are paid together with principal repayment. | Shenzhen Stock Exchange |
| 2022 Public Offering of Corporate Bonds of China Merchants Port Group Co., Ltd. | 22 CMPort 01 | 148052 | 29 August 2022 to 30 August 2022 | 30 August 2022 | 30 August 2025 | 300,000.00 | 2.69% | Simple interest is adopted and calculated by year. No compound interest is | Shenzhen Stock Exchange |
China Merchants Port Group Co., Ltd. Interim Report 2023
(forprofessionalinvestors)(Phase I)
| (for professional investors) (Phase I) | calculated. Interests are paid once every year and principals paid in lump sum at maturity. In the last installment, the interests are paid together with principal repayment. | ||||||||
| 2022 Public Offering of Corporate Bonds of China Merchants Port Group Co., Ltd. (for professional investors) (Phase II) | 22 CMPort 02 | 148058 | 5 September 2022 to 6 September 2022 | 6 September 2022 | 6 September 2024 | 300,000.00 | 2.45% | Simple interest is adopted and calculated by year. No compound interest is calculated. Interests are paid once every year and principals paid in lump sum at maturity. In the last installment, the interests are paid together with principal repayment. | Shenzhen Stock Exchange |
| 2022 Public Offering of Corporate Bonds of China Merchants Port Group Co., Ltd. (for professional | 22 CMPort 03 | 148060 | 8 September 2022 to 9 September 2022 | 9 September 2022 | The maturity date of the bonds is 9 September 2023; if the issuer exercises the redemption | 0 | 1.93% | Simple interest is adopted and calculated by year. No compound interest is calculated. Interests are paid once | Shenzhen Stock Exchange |
China Merchants Port Group Co., Ltd. Interim Report 2023
investors)(PhaseIII)
| investors) (Phase III) | option, the maturity date of the bonds is 8 March 2023; if the investor exercises the resale option, the maturity date of the resale portion of the bonds is 8 March 2023. | every year and principals paid in lump sum at maturity. In the last installment, the interests are paid together with principal repayment. | ||||
| Appropriate arrangement of the investors (if any) | The Company's bonds are publicly issued to professional institutional investors | |||||
| Applicable trading mechanism | Match-and-deal, negotiate-and-deal, click-and-deal, inquire-and-deal, bid-and-deal | |||||
| Risk of termination of listing transactions (if any) and countermeasures | Not | |||||
Overdue bonds
□ Applicable √ Not applicable
2. The Trigger and Execution of the Option Clause of the Issuers or Investors and the InvestorProtection Clause
□ Applicable √ Not applicable
3. Adjustment of Credit Rating Results during the Reporting Period
□ Applicable √ Not applicable
4. Execution and Changes of Guarantee, Repayment Plan and Other Repayment GuaranteeMeasures as well as Influence on Equity of Bond Investors during the Reporting Period
□ Applicable √ Not applicable
III Debt Financing Instruments of Non-financial Enterprises
1. Basic Information of Debt Financing Instruments of a Non-financial Enterprise
Unit: RMB’0,000
| Name | Abbr. | Code | Date of issuance | Value date | Maturity | Bonds balance | Interest rate (%) | Way of redemption | Trading place |
| Medium-term Notes of | 21 CMPort MTN001 | 102100703 | 14 April 2021 | 16 April 2021 | 16 April 2024 | 200,000.00 | 3.52% | Interests paid once every year | Interbank bond market |
China Merchants Port Group Co., Ltd. Interim Report 2023
ChinaMerchants PortGroupCo., Ltd.(Phase I2021)
| China Merchants Port Group Co., Ltd. (Phase I 2021) | and principals paid in lump sum on the redemption date | ||||||||
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase V 2022) | 22 CMPort SCP005 | 012283152 | 1 September 2022 | 5 September 2022 | 2 June 2023 | 0 | 1.75% | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase I 2023) | 23 CMPort SCP001 | 012380785 | 1 March 2023 | 3 March 2023 | 30 August 2023 | 200,000.00 | 2.35% | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Super-short-term Commercial Papers of China Merchants Port Group Co., Ltd. (Phase II 2023) | 23 CMPort SCP002 | 012382233 | 14 June 2023 | 15 June 2023 | 12 December 2023 | 200,000.00 | 2.05% | Principals and interest paid in lump sum at maturity | Interbank bond market |
| Appropriate arrangement of the investors (if any) | Not applicable | ||||||||
| Applicable trading mechanism | Inquiry | ||||||||
| Risk of termination of listing transactions (if any) and countermeasures | None | ||||||||
Matured bonds unredeemed
□ Applicable √ Not applicable
2. Triggering and Implementation of Issuer or Investor Option Clauses and Investor ProtectionClauses
□ Applicable √ Not applicable
3. Credit Rating Adjustments during the Reporting Period
□ Applicable √ Not applicable
China Merchants Port Group Co., Ltd. Interim Report 2023
4. Implementation and Changes of Guarantees, Repayment Plan and Other RepaymentGuarantee Measures during the Reporting Period, and their Impact on the Equity Ownershipof bond holdersDuring the Reporting Period, the Company's credit enhancement mechanism for existing debtfinancing instruments remained unchanged. The repayment plan and other repayment guaranteemeasures did not undergo significant changes. There was no adverse impact on the equity ownershipof debt financing instrument holders.IV Convertible Corporate Bonds
□ Applicable √ Not applicable
No such cases in the Reporting Period.V Losses of Scope of Consolidated Financial Statements during the Reporting Period Exceeding10% of Net Assets up the Period-end of Last Year
□ Applicable √ Not applicable
VI The Major Accounting Data and the Financial Indicators of the Recent 2 Years of theCompany up the Period-end
Item
| Item | 30 June 2023 | 31 December 2022 | Increase/decrease |
| Current ratio | 95.23% | 76.93% | 23.79% |
| Debt/asset ratio | 36.20% | 35.07% | 1.13% |
| Quick ratio | 94.39% | 76.08% | 24.07% |
| H1 2023 | H1 2022 | Increase/decrease | |
| Net profit before exceptional gains and losses (RMB’0,000) | 180,139.34 | 192,054.92 | -6.20% |
| EBITDA/debt ratio | 10.07% | 11.93% | -1.86% |
| Interest cover (times) | 4.12 | 4.76 | -13.45% |
| Cash-to-interest cover (times) | 3.52 | 5.20 | -32.31% |
| EBITDA-to-interest cover (times) | 6.58 | 7.15 | -7.97% |
| Loan repayment ratio | 100.00% | 100.00% | - |
| Interest payment ratio | 100.00% | 100.00% | - |
China Merchants Port Group Co., Ltd. Interim Report 2023
Part X Financial Statements
I Independent Auditor’s ReportThese interim financial statements have not been audited by an independent auditor.II Financial StatementsSee attached.
China Merchants Port Group Co., Ltd.
Board of DirectorsDated 31 August 2023
CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
FINANCIAL STATEMENTSFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
CONTENTS PAGE(S)
THE CONSOLIDATED AND COMPANY'S BALANCE SHEETS 1 - 4
THE CONSOLIDATED AND COMPANY'S INCOME STATEMENTS 5 - 6
THE CONSOLIDATED AND COMPANY'S CASH FLOW STATEMENTS 7 - 8
THE CONSOLIDATED AND COMPANY'S STATEMENTS OF CHANGES INSHAREHOLDERS' EQUITY 9 - 12
NOTES TO THE FINANCIAL STATEMENTS 13 - 161
- 1 -
AT 30 JUNE 2023
Consolidated Balance Sheet
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Notes | 30/6/2023 | 31/12/2022 (restated) |
| Current Assets: | |||
| Cash and bank balances | (VIII) 1 | 14,440,689,892.60 | 13,615,928,739.40 |
| Held-for-trading financial assets | (VIII) 2 | 4,645,336,576.09 | 2,998,781,599.63 |
| Notes receivable | (VIII) 3 | 186,028,246.15 | 36,395,000.00 |
| Accounts receivable | (VIII) 4 | 2,083,996,446.24 | 1,276,149,689.44 |
| Receivables financing | (VIII) 5 | - | 163,766,913.10 |
| Prepayments | (VIII) 6 | 84,241,251.04 | 63,627,425.42 |
| Other receivables | (VIII) 7 | 2,006,436,507.38 | 948,842,094.30 |
| Inventories | (VIII) 8 | 244,341,161.12 | 225,122,821.48 |
| Assets held for sale | (VIII) 9 | 4,034,332,787.01 | - |
| Non-current assets due within one year | (VIII) 10 | 59,033,499.39 | 902,225,293.93 |
| Other current assets | (VIII) 11 | 148,795,701.64 | 185,903,140.53 |
| Total Current Assets | 27,933,232,068.66 | 20,416,742,717.23 | |
| Non-current Assets: | |||
| Long-term receivables | (VIII) 12 | 6,859,846,013.74 | 5,661,327,499.07 |
| Long-term equity investments | (VIII)13 | 94,976,270,168.12 | 92,364,293,919.05 |
| Investments in other equity instruments | (VIII) 14 | 154,256,180.28 | 171,945,275.02 |
| Other non-current financial assets | (VIII) 15 | 971,716,168.73 | 1,745,740,896.41 |
| Investment properties | (VIII) 16 | 5,049,637,728.99 | 5,123,690,119.56 |
| Fixed assets | (VIII) 17 | 29,369,002,248.34 | 32,033,326,083.50 |
| Construction in progress | (VIII) 18 | 2,476,908,227.17 | 2,413,844,407.64 |
| Right-of-use assets | (VIII) 19 | 9,483,918,238.46 | 9,342,642,222.33 |
| Intangible assets | (VIII) 20 | 18,446,203,829.88 | 19,277,065,115.61 |
| Development expenditure | (VIII) 21 | 36,845,103.25 | 17,412,196.16 |
| Goodwill | (VIII) 22 | 6,567,494,230.16 | 6,411,426,891.09 |
| Long-term prepaid expenses | (VIII) 23 | 986,494,548.39 | 986,356,904.90 |
| Deferred tax assets | (VIII) 24 | 412,227,220.14 | 434,498,820.95 |
| Other non-current assets | (VIII) 25 | 1,204,837,435.02 | 1,186,789,378.79 |
| Total Non-current Assets | 176,995,657,340.67 | 177,170,359,730.08 | |
| TOTAL ASSETS | 204,928,889,409.33 | 197,587,102,447.31 |
- 2 -
AT 30 JUNE 2023
Consolidated Balance Sheet - continued
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Note | 30/6/2023 | 31/12/2022 (restated) |
| Current Liabilities: | |||
| Short-term borrowings | (VIII) 26 | 4,980,452,166.69 | 7,164,338,366.18 |
| Notes payable | (VIII) 27 | 39,276,000.00 | - |
| Accounts payable | (VIII) 28 | 531,218,999.62 | 811,149,397.66 |
| Receipts in advance | (VIII) 29 | 42,258,593.81 | 9,886,531.59 |
| Contract liabilities | (VIII) 30 | 191,779,113.06 | 141,899,551.03 |
| Employee benefits payable | (VIII) 31 | 755,339,613.36 | 936,834,718.13 |
| Taxes payable | (VIII) 32 | 1,023,366,962.42 | 917,933,169.09 |
| Other payables | (VIII) 33 | 3,165,399,094.34 | 1,755,885,258.26 |
| Held-for-sale liabilities | (VIII) 34 | 681,983,479.70 | - |
| Non-current liabilities due within one year | (VIII) 35 | 13,422,474,832.50 | 11,641,223,688.95 |
| Other current liabilities | (VIII) 36 | 4,500,231,313.76 | 3,161,147,525.96 |
| Total Current Liabilities | 29,333,780,169.26 | 26,540,298,206.85 | |
| Non-current Liabilities: | |||
| Long-term borrowings | (VIII) 37 | 16,083,606,258.60 | 12,390,099,177.85 |
| Bonds payable | (VIII) 38 | 17,484,215,109.65 | 19,088,293,099.02 |
| Including: Preferred shares | - | - | |
| Perpetual bonds | - | - | |
| Lease liabilities | (VIII) 39 | 911,098,409.66 | 948,350,914.04 |
| Long-term payables | (VIII) 40 | 3,927,125,038.19 | 3,551,315,590.31 |
| Long-term employee benefits payable | (VIII) 41 | 624,346,765.68 | 639,095,931.43 |
| Provisions | (VIII) 42 | 37,446,005.96 | 35,365,156.43 |
| Deferred income | (VIII) 43 | 1,018,957,256.16 | 1,031,273,189.74 |
| Deferred tax liabilities | (VIII) 24 | 4,578,062,228.23 | 4,855,019,835.33 |
| Other non-current liabilities | (VIII) 44 | 178,591,600.54 | 186,383,117.00 |
| Total Non-current Liabilities | 44,843,448,672.67 | 42,725,196,011.15 | |
| TOTAL LIABILITIES | 74,177,228,841.93 | 69,265,494,218.00 | |
| SHAREHOLDERS' EQUITY: | |||
| Share capital | (VIII) 45 | 2,499,074,661.00 | 2,499,074,661.00 |
| Capital reserve | (VIII) 46 | 35,070,375,533.28 | 34,751,640,835.25 |
| Other comprehensive income | (VIII) 47 | -350,736,236.07 | -689,553,619.86 |
| Special reserve | (VIII) 48 | 43,884,349.65 | 26,358,259.97 |
| Surplus reserve | (VIII) 49 | 1,001,917,449.15 | 1,001,917,449.15 |
| Unappropriated profit | (VIII) 50 | 17,479,739,463.12 | 16,701,988,301.14 |
| Total equity attributable to shareholders of the Company | 55,744,255,220.13 | 54,291,425,886.65 | |
| Minority interests | 75,007,405,347.27 | 74,030,182,342.66 | |
| TOTAL SHAREHOLDERS' EQUITY | 130,751,660,567.40 | 128,321,608,229.31 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 204,928,889,409.33 | 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
- 3 -
AT 30 JUNE 2023
Balance Sheet of the Company
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Note | 30/6/2023 | 31/12/2022 |
| Current Assets: | |||
| Cash and bank balances | 5,162,021,339.41 | 3,333,936,587.44 | |
| Held-for-trading financial assets | 2,509,140,547.94 | 1,502,601,369.86 | |
| Other receivables | (XVIII) 1 | 1,418,521,632.58 | 2,749,637,755.23 |
| Other current assets | 8,725,411.89 | 7,774,206.30 | |
| Total Current Assets | 9,098,408,931.82 | 7,593,949,918.83 | |
| Non-current Assets: | |||
| Long-term receivables | 9,555,457.97 | 9,240,200.34 | |
| Long-term equity investments | (XVIII) 2 | 54,449,149,531.65 | 53,433,613,471.49 |
| Investments in other equity instruments | 144,700,378.28 | 144,700,378.28 | |
| Other non-current financial assets | - | 950,321,309.06 | |
| Fixed assets | 28,306,351.20 | 28,826,135.19 | |
| Construction in progress | 100,604.53 | 15,435,512.32 | |
| Intangible assets | 56,493,136.33 | 50,303,126.12 | |
| Development expenditure | 27,476,298.75 | 6,219,670.14 | |
| Long-term prepaid expenses | 698,960.39 | 873,700.49 | |
| Deferred tax assets | 928,465.21 | 928,465.21 | |
| Total Non-current Assets | 54,717,409,184.31 | 54,640,461,968.64 | |
| TOTAL ASSETS | 63,815,818,116.13 | 62,234,411,887.47 |
- 4 -
AT 30 JUNE 2023
Balance Sheet of the Company - continued
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Note | 30/6/2023 | 31/12/2022 |
| Current liabilities: | |||
| Receipts in advance | 7,075,471.70 | - | |
| Employee benefits payable | 30,353,653.34 | 38,763,907.88 | |
| Taxes payable | 744,010.41 | 1,251,923.17 | |
| Other payables | 387,931,046.81 | 373,569,651.65 | |
| Non-current liabilities due within one year | 4,220,661,703.69 | 2,146,233,151.54 | |
| Other current liabilities | 4,017,249,315.07 | 3,017,713,424.64 | |
| Total Current Liabilities | 8,664,015,201.02 | 5,577,532,058.88 | |
| Non-current Liabilities: | |||
| Long-term borrowings | 5,984,000,000.00 | 4,988,000,000.00 | |
| Bonds payable | 6,000,000,000.00 | 8,000,000,000.00 | |
| Deferred tax liabilities | 43,257,050.57 | 41,622,256.05 | |
| Total Non-current Liabilities | 12,027,257,050.57 | 13,029,622,256.05 | |
| TOTAL LIABILITIES | 20,691,272,251.59 | 18,607,154,314.93 | |
| SHAREHOLDERS' EQUITY: | |||
| Share capital | 2,499,074,661.00 | 2,499,074,661.00 | |
| Capital reserve | 37,728,804,777.23 | 37,749,723,642.07 | |
| Other comprehensive income | 110,122,503.24 | 99,525,686.03 | |
| Surplus reserve | 1,001,917,449.15 | 1,001,917,449.15 | |
| Unappropriated profit | 1,784,626,473.92 | 2,277,016,134.29 | |
| TOTAL SHAREHOLDERS' EQUITY | 43,124,545,864.54 | 43,627,257,572.54 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 63,815,818,116.13 | 62,234,411,887.47 |
The accompanying notes form part of the financial statements.
- 5 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
Consolidated Income Statement
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Note | Current Period | Prior Period (restated) |
| I. Operating income | (VIII) 51 | 7,795,261,570.99 | 8,150,462,367.19 |
| Less: Operating costs | (VIII) 51 | 4,519,943,753.79 | 4,637,368,881.65 |
| Taxes and levies | (VIII) 52 | 141,777,332.44 | 135,514,540.07 |
| Administrative expenses | (VIII) 53 | 790,916,154.65 | 812,502,660.55 |
| Research and development expenses | 121,041,310.72 | 114,833,178.50 | |
| Financial expenses | (VIII) 54 | 960,449,741.90 | 1,351,945,047.67 |
| Including: Interest expenses | 1,112,890,609.92 | 1,140,997,429.67 | |
| Interest income | 248,901,354.18 | 212,820,789.37 | |
| Add: Other income | (VIII) 55 | 62,556,943.27 | 87,480,824.65 |
| Investment income | (VIII) 56 | 3,187,492,718.40 | 4,355,273,765.49 |
| Including: Income from investments in associates and joint ventures | (VIII) 56 | 3,095,294,518.20 | 4,211,173,480.05 |
| Gains (losses) from changes in fair value | (VIII) 57 | 143,037,303.68 | -38,026,112.58 |
| Gains (losses) on impairment of credit | (VIII) 58 | -7,295,621.30 | 2,882,412.61 |
| Gains on impairment of assets | 65,324.84 | - | |
| Gains (losses) on disposal of assets | (VIII) 59 | 352,045.75 | -207,276.37 |
| II. Operating profit | 4,647,341,992.13 | 5,505,701,672.55 | |
| Add: Non-operating income | (VIII) 60 | 36,583,484.46 | 20,192,926.39 |
| Less: Non-operating expenses | (VIII) 61 | 10,079,003.33 | 20,267,458.29 |
| III. Gross profit | 4,673,846,473.26 | 5,505,627,140.65 | |
| Less: Income tax expenses | (VIII) 62 | 613,219,852.56 | 619,132,978.15 |
| IV. Net profit | 4,060,626,620.70 | 4,886,494,162.50 | |
| (I) Categorization by continuity of operation | |||
| 1. Net profit of continued operation | 4,060,626,620.70 | 4,886,494,162.50 | |
| 2. Net profit of discontinued operation | - | - | |
| (II) Categorization by attribution of ownership | |||
| 1. Net profit attributable to shareholders of the Company | 1,902,334,759.43 | 1,988,560,957.83 | |
| 2. Profit or loss attributable to minority interests | 2,158,291,861.27 | 2,897,933,204.67 | |
| V. Other comprehensive income, net of tax | (VIII) 64 | 1,427,173,705.07 | 444,444,067.16 |
| Other comprehensive income attributable to shareholders of the Company, net of tax | 338,817,383.79 | -17,684,131.58 | |
| (I) Other comprehensive income that will not be reclassified to profit or loss | 29,979,361.65 | -76,728,084.39 | |
| 1. Changes as a result of remeasurement of the defined benefit plan | - | - | |
| 2. Other comprehensive income that will not be reclassified to profit or loss under the equity method | 29,979,361.65 | -78,616,754.21 | |
| 3. Fair value changes of investments in other equity instruments | - | 1,888,669.82 | |
| (II) Other comprehensive income that will be reclassified subsequently to profit or loss | 308,838,022.14 | 59,043,952.81 | |
| 1. Other comprehensive income that will be reclassified to profit or loss under the equity method | 18,341,346.24 | -117,324,901.44 | |
| 2. Translation differences of financial statements denominated in foreign currencies | 290,496,675.90 | 176,368,854.25 | |
| Other comprehensive income attributable to minority interests, net of tax | 1,088,356,321.28 | 462,128,198.74 | |
| VI. Total comprehensive income | 5,487,800,325.77 | 5,330,938,229.66 | |
| Total comprehensive income attributable to shareholders of the Company | 2,241,152,143.22 | 1,970,876,826.25 | |
| Total comprehensive income attributable to minority interests | 3,246,648,182.55 | 3,360,061,403.41 | |
| VII. Earnings per share | |||
| (I) Basic earnings per share | 0.76 | 1.03 | |
| (II) Diluted earnings per share | 0.76 | 1.03 |
The accompanying notes form part of the financial statements.
- 6 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
Income Statement of the Company
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Note | Current Period | Prior Period |
| I. Operating income | (XVIII) 3 | 8,968,995.20 | - |
| Less: Operating costs | (XVIII) 3 | 1,843,205.76 | 1,132,979.70 |
| Taxes and levies | 103,691.21 | 152,914.98 | |
| Administrative expenses | 66,853,404.89 | 74,398,609.92 | |
| Research and development expenses | 7,589,098.79 | - | |
| Financial expenses | 206,197,148.38 | 176,214,861.88 | |
| Including: Interest expenses | 251,482,309.35 | 220,415,407.89 | |
| Interest income | 48,604,367.40 | 51,040,811.33 | |
| Add: Other income | 206,131.06 | 366,921.86 | |
| Investment income | (XVIII) 4 | 954,616,989.55 | 762,872,589.73 |
| Including: Income from investments in associates and joint ventures | (XVIII) 4 | 513,357,921.90 | 136,885,266.28 |
| Gains (losses) from changes in fair value | -48,735,325.75 | 8,456,279.18 | |
| II. Operating profit | 632,470,241.03 | 519,796,424.29 | |
| Add: Non-operating income | - | 34,957.54 | |
| Less: Non-operating expenses | - | 18.84 | |
| III. Gross profit | 632,470,241.03 | 519,831,362.99 | |
| Less: Income tax expenses | 276,303.95 | -6,336,709.00 | |
| IV. Net profit | 632,193,937.08 | 526,168,071.99 | |
| V. Other comprehensive income, net of tax | 10,596,817.21 | 498,042.27 | |
| (I) Other comprehensive income that will not be reclassified subsequently to profit or loss | - | 1,914,691.56 | |
| 1. Changes as a result of remeasurement of the defined benefit plan | - | - | |
| 2. Other comprehensive income that will not be reclassified to profit or loss under the equity method | - | 27,649.59 | |
| 3. Fair value changes of investments in other equity instruments | - | 1,887,041.97 | |
| (II) Other comprehensive income that will be reclassified to profit or loss | 10,596,817.21 | -1,416,649.29 | |
| 1. Other comprehensive income that will be reclassified to profit or loss under the equity method | 10,596,817.21 | -1,416,649.29 | |
| 2. Translation differences of financial statements denominated in foreign currencies | - | - | |
| VI. Total comprehensive income | 642,790,754.29 | 526,666,114.26 |
The accompanying notes form part of the financial statements.
- 7 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
Consolidated Cash Flow Statement
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Note | Current Period | Prior Period |
| I. Cash Flows from Operating Activities | |||
| Cash receipts from the sale of goods and the rendering of services | 7,087,683,808.17 | 7,946,044,540.63 | |
| Receipts of tax refunds | 8,515,483.02 | 185,224,132.63 | |
| Other cash receipts relating to operating activities | (VIII) 65 (1) | 373,799,421.93 | 448,659,531.56 |
| Sub-total of cash inflows from operating activities | 7,469,998,713.12 | 8,579,928,204.82 | |
| Cash payments for goods purchased and services received | 2,200,251,570.38 | 2,240,288,101.95 | |
| Cash payments to and on behalf of employees | 1,955,256,571.31 | 1,879,756,634.11 | |
| Payments of various types of taxes | 615,016,288.84 | 827,509,481.12 | |
| Other cash payments relating to operating activities | (VIII) 65 (2) | 388,628,976.63 | 411,122,810.55 |
| Sub-total of cash outflows from operating activities | 5,159,153,407.16 | 5,358,677,027.73 | |
| Net Cash Flow from Operating Activities | (VIII) 66 (1) | 2,310,845,305.96 | 3,221,251,177.09 |
| II. Cash Flows from Investing Activities | |||
| Cash receipts from disposals and recovery of investments | 13,267,000,000.00 | 23,921,644,162.50 | |
| Cash receipts from investment income | 849,743,795.10 | 733,820,028.32 | |
| Net cash receipts from disposals of fixed assets, intangible assets and other long-term assets | 29,004,019.28 | 1,250,786.03 | |
| Other cash receipts relating to investing activities | (VIII) 65 (3) | 103,159,042.89 | 94,566,178.69 |
| Sub-total of cash inflows from investing activities | 14,248,906,857.27 | 24,751,281,155.54 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 554,196,022.65 | 950,600,127.64 | |
| Cash payments to acquire investments | 14,912,654,969.50 | 24,696,618,396.78 | |
| Other cash payments relating to investing activities | (VIII) 65 (4) | 7,346,305.63 | 967,712,734.42 |
| Sub-total of cash outflows from investing activities | 15,474,197,297.78 | 26,614,931,258.84 | |
| Net Cash Flow from Investing Activities | -1,225,290,440.51 | -1,863,650,103.30 | |
| III. Cash Flows from Financing Activities | |||
| Cash receipts from capital contributions | 107,188,200.00 | - | |
| Including: Cash receipts from capital contributions from minority shareholders of subsidiaries | 107,188,200.00 | - | |
| Cash receipts from borrowings | 8,326,794,657.48 | 14,789,220,290.65 | |
| Cash receipts from issue of bonds | 4,000,000,000.00 | 7,000,000,000.00 | |
| Other cash receipts relating to financing activities | (VIII) 65 (5) | 322,361,300.44 | 52,897,609.21 |
| Sub-total of cash inflows from financing activities | 12,756,344,157.92 | 21,842,117,899.86 | |
| Cash repayments of borrowings | 10,190,021,538.82 | 19,426,456,859.41 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 2,301,689,391.64 | 2,063,908,899.16 | |
| Including: Payments for distribution of dividends or profits to minority shareholders of subsidiaries | 284,157,004.21 | 298,311,895.58 | |
| Other cash payments relating to financing activities | (VIII) 65 (6) | 474,856,036.85 | 224,977,119.04 |
| Sub-total of cash outflows from financing activities | 12,966,566,967.31 | 21,715,342,877.61 | |
| Net Cash Flow from Financing Activities | -210,222,809.39 | 126,775,022.25 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | 113,688,926.60 | -88,210,579.74 | |
| V. Net Increase in Cash and Cash Equivalents | 989,020,982.66 | 1,396,165,516.30 | |
| Add: Opening balance of cash and cash equivalents | (VIII) 66 (2) | 13,567,309,471.62 | 12,727,355,238.36 |
| VI. Closing Balance of Cash and Cash Equivalents | (VIII) 66 (2) | 14,556,330,454.28 | 14,123,520,754.66 |
The accompanying notes form part of the financial statements.
- 8 -
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
Cash Flow Statement of the Company
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Note | Current Period | Prior Period |
| I. Cash Flows from Operating Activities | |||
| Receipts of tax refunds | 1,576,989.49 | 1,181,089.86 | |
| Other cash receipts relating to operating activities | 43,868,259.92 | 33,183,150.38 | |
| Sub-total of cash inflows from operating activities | 45,445,249.41 | 34,364,240.24 | |
| Cash payments for goods purchased and services received | 40,000.00 | 57,280.00 | |
| Cash payments to and on behalf of employees | 63,518,456.65 | 50,444,029.40 | |
| Payments of various types of taxes | 257,952.03 | 161,506,258.88 | |
| Other cash payments relating to operating activities | 30,081,745.57 | 35,013,421.74 | |
| Sub-total of cash outflows from operating activities | 93,898,154.25 | 247,020,990.02 | |
| Net Cash Flow from Operating Activities | -48,452,904.84 | -212,656,749.78 | |
| II. Cash Flows from Investing Activities | |||
| Cash receipts from disposals and recovery of investments | 5,500,000,000.00 | 20,036,632,041.97 | |
| Cash receipts from investment income | 809,514,985.64 | 630,452,904.29 | |
| Other cash receipts relating to investing activities | 1,814,592,762.53 | 468.00 | |
| Sub-total of cash inflows from investing activities | 8,124,107,748.17 | 20,667,085,414.26 | |
| Cash payments to acquire or construct fixed assets, intangible assets and other long-term assets | 14,018,573.00 | 1,566,408.28 | |
| Cash payments to acquire investments | 6,503,750,000.00 | 21,026,322,904.70 | |
| Other cash payments relating to investing activities | 440,005,946.71 | 180,004,179.30 | |
| Sub-total of cash outflows from investing activities | 6,957,774,519.71 | 21,207,893,492.28 | |
| Net Cash Flow from Investing Activities | 1,166,333,228.46 | -540,808,078.02 | |
| III. Cash Flows from Financing Activities | |||
| Cash receipts from borrowings | 1,120,000,000.00 | 3,126,668,674.85 | |
| Cash receipts from issue of bonds | 4,000,000,000.00 | 7,000,000,000.00 | |
| Other cash receipts relating to financing activities | 160,820.44 | 2,897,609.21 | |
| Sub-total of cash inflows from financing activities | 5,120,160,820.44 | 10,129,566,284.06 | |
| Cash repayments of borrowings | 3,104,000,000.00 | 6,217,408,504.85 | |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 1,304,284,778.80 | 1,038,085,659.53 | |
| Other cash payments relating to financing activities | 2,061,702.22 | 3,282,168.31 | |
| Sub-total of cash outflows from financing activities | 4,410,346,481.02 | 7,258,776,332.69 | |
| Net Cash Flow from Financing Activities | 709,814,339.42 | 2,870,789,951.37 | |
| IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | 372,588.93 | 356,593.08 | |
| V. Net Increase in Cash and Cash Equivalents | 1,828,067,251.97 | 2,117,681,716.65 | |
| 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 | 5,162,003,839.41 | 5,031,443,283.96 |
The accompanying notes form part of the financial statements.
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
- 9 -
Consolidated Statement of Changes in Shareholders' Equity
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Current Period | |||||||
| Attributable to shareholders of the Company | Minority interests | Total shareholders' equity | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | |||
| I. Closing balance of the preceding year | 2,499,074,661.00 | 34,751,640,835.25 | -691,536,248.44 | 26,358,259.97 | 1,001,917,449.15 | 16,679,688,347.09 | 73,994,641,893.21 | 128,261,785,197.23 |
| Add: Changes in accounting policies | - | - | 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 period (restated) | 2,499,074,661.00 | 34,751,640,835.25 | -689,553,619.86 | 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 period | - | 318,734,698.03 | 338,817,383.79 | 17,526,089.68 | - | 777,751,161.98 | 977,223,004.61 | 2,430,052,338.09 |
| (I) Total comprehensive income | - | - | 338,817,383.79 | - | - | 1,902,334,759.43 | 3,246,648,182.55 | 5,487,800,325.77 |
| (II) Owners' contributions and reduction in capital | - | 318,734,698.03 | - | - | - | - | -698,157,619.42 | -379,422,921.39 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - | - |
| 2. Capital contribution from holders of other equity instruments | - | - | - | - | - | - | - | - |
| 3. Share-based payment recognized in shareholders' equity | - | 859,840.86 | - | - | - | - | 493,006.74 | 1,352,847.60 |
| 4. Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
| 5. Others | - | 317,874,857.17 | - | - | - | - | -698,650,626.16 | -380,775,768.99 |
| (III) Profit distribution | - | - | - | - | - | -1,124,583,597.45 | -1,593,417,985.35 | -2,718,001,582.80 |
| 1. Transfer to surplus reserve | - | - | - | - | - | - | - | - |
| 2. Transfer to general risk reserve | - | - | - | - | - | - | - | - |
| 3. Distributions to shareholders | - | - | - | - | - | -1,124,583,597.45 | -1,493,778,223.41 | -2,618,361,820.86 |
| 4. Others | - | - | - | - | - | - | -99,639,761.94 | -99,639,761.94 |
| (IV) Transfers within shareholders' equity | - | - | - | - | - | - | - | - |
| 1. Capitalization of capital reserve | - | - | - | - | - | - | - | - |
| 2. Capitalization of surplus reserve | - | - | - | - | - | - | - | - |
| 3. Loss made up by surplus reserve | - | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | 17,526,089.68 | - | - | 22,150,426.83 | 39,676,516.51 |
| 1. Appropriation in the period | - | - | - | 31,106,449.65 | - | - | 36,567,997.25 | 67,674,446.90 |
| 2. Utilization in the period | - | - | - | -13,580,359.97 | - | - | -14,417,570.42 | -27,997,930.39 |
| (VI) Others | - | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 2,499,074,661.00 | 35,070,375,533.28 | -350,736,236.07 | 43,884,349.65 | 1,001,917,449.15 | 17,479,739,463.12 | 75,007,405,347.27 | 130,751,660,567.40 |
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
- 10 -
Consolidated Statement of Changes in Shareholders' Equity - continued
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Prior Period (restated) | |||||||
| Attributable to shareholders of the Company | Minority interests | Total shareholders' equity | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | |||
| I. Closing balance of the preceding year | 1,922,365,124.00 | 23,592,702,758.70 | -890,125,318.18 | 9,184,429.12 | 961,182,562.00 | 14,205,879,106.49 | 71,234,238,229.35 | 111,035,426,891.48 |
| Add: Changes in accounting policies | - | - | - | - | - | 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 period | 1,922,365,124.00 | 23,592,702,758.70 | -890,125,318.18 | 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 period | - | 254,031,538.43 | -25,197,801.49 | 23,131,406.80 | - | 1,169,457,624.42 | 754,027,683.10 | 2,175,450,451.26 |
| (I) Total comprehensive income | - | - | -17,684,131.58 | - | - | 1,988,560,957.83 | 3,360,061,403.41 | 5,330,938,229.66 |
| (II) Owners' contributions and reduction in capital | - | 254,031,538.43 | - | - | - | - | -514,463,334.99 | -260,431,796.56 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - | - |
| 2. Capital contribution from holders of other equity instruments | - | - | - | - | - | - | - | - |
| 3. Share-based payment recognized in shareholders' equity | - | 3,448,276.71 | - | - | - | - | 2,516,367.90 | 5,964,644.61 |
| 4. Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
| 5. Others | - | 250,583,261.72 | - | - | - | - | -516,979,702.89 | -266,396,441.17 |
| (III) Profit distribution | - | - | - | - | - | -826,617,003.32 | -2,118,639,819.08 | -2,945,256,822.40 |
| 1. Transfer to surplus reserve | - | - | - | - | - | - | - | - |
| 2. Transfer to general risk reserve | - | - | - | - | - | - | - | - |
| 3. Distributions to shareholders | - | - | - | - | - | -826,617,003.32 | -2,025,521,443.67 | -2,852,138,446.99 |
| 4. Others | - | - | - | - | - | - | -93,118,375.41 | -93,118,375.41 |
| (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 made up by surplus reserve | - | - | - | - | - | - | - | - |
| 4. Others | - | - | -7,513,669.91 | - | - | 7,513,669.91 | - | - |
| (V) Special reserve | - | - | - | 23,131,406.80 | - | - | 27,069,433.76 | 50,200,840.56 |
| 1. Appropriation in the period | - | - | - | 32,027,158.31 | - | - | 37,984,383.50 | 70,011,541.81 |
| 2. Utilization in the period | - | - | - | -8,895,751.51 | - | - | -10,914,949.74 | -19,810,701.25 |
| (VI) Others | - | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 1,922,365,124.00 | 23,846,734,297.13 | -915,323,119.67 | 32,315,835.92 | 961,182,562.00 | 15,396,389,091.08 | 72,021,711,516.74 | 113,265,375,307.20 |
The accompanying notes form part of the financial statements.
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
- 11 -
Statement of Changes in Shareholders' Equity of the Company
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Current Period | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | Total shareholders' equity | |
| I. Closing balance of the preceding year | 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 period | 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 period | - | -20,918,864.84 | 10,596,817.21 | - | - | -492,389,660.37 | -502,711,708.00 |
| (I) Total comprehensive income | - | - | 10,596,817.21 | - | - | 632,193,937.08 | 642,790,754.29 |
| (II) Owners' contributions and reduction in capital | - | -20,918,864.84 | - | - | - | - | -20,918,864.84 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - |
| 2. Share-based payment recognized in shareholders' equity | - | 1,096,369.68 | - | - | - | - | 1,096,369.68 |
| 3. Others | - | -22,015,234.52 | - | - | - | - | -22,015,234.52 |
| (III) Profit distribution | - | - | - | - | - | -1,124,583,597.45 | -1,124,583,597.45 |
| 1. Transfer to surplus reserve | - | - | - | - | - | - | - |
| 2. Transfer to general risk reserve | - | - | - | - | - | - | - |
| 3. Distributions to shareholders | - | - | - | - | - | -1,124,583,597.45 | -1,124,583,597.45 |
| 4. Others | - | - | - | - | - | - | - |
| (IV) Transfers within shareholders' equity | - | - | - | - | - | - | - |
| 1. Capitalization of capital reserve | - | - | - | - | - | - | - |
| 2. Capitalization of surplus reserve | - | - | - | - | - | - | - |
| 3. Loss made up by surplus reserve | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| (V) Special reserve | - | - | - | - | - | - | - |
| 1. Appropriation in the period | - | - | - | - | - | - | - |
| 2. Utilization in the period | - | - | - | - | - | - | - |
| (VI) Others | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 2,499,074,661.00 | 37,728,804,777.23 | 110,122,503.24 | - | 1,001,917,449.15 | 1,784,626,473.92 | 43,124,545,864.54 |
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023
- 12 -
Statement of Changes in Shareholders' Equity of the Company - continued
Unit: RMB
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Prior Period | ||||||
| Share capital | Capital reserve | Other comprehensive income | Special reserve | Surplus reserve | Unappropriated profit | Total shareholders' equity | |
| I. Closing balance of the preceding year | 1,922,365,124.00 | 27,594,079,596.13 | 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 period | 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 period | - | 6,143,196.15 | -7,013,999.70 | - | - | - 292,936,889.36 | -293,807,692.91 |
| (I) Total comprehensive income | - | - | 498,042.27 | - | - | 526,168,071.99 | 526,666,114.26 |
| (II) Owners' contributions and reduction in capital | - | 6,143,196.15 | - | - | - | - | 6,143,196.15 |
| 1. Ordinary shares contributed by shareholders | - | - | - | - | - | - | - |
| 2. Share-based payment recognized in shareholders' equity | - | 4,805,671.45 | - | - | - | - | 4,805,671.45 |
| 3. Others | - | 1,337,524.70 | - | - | - | 1,337,524.70 | |
| (III) Profit distribution | - | - | - | - | - | -826,617,003.32 | -826,617,003.32 |
| 1. Transfer to surplus reserve | - | - | - | - | - | - | - |
| 2. Transfer to general risk reserve | - | - | - | - | - | - | - |
| 3. Distributions 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 made up by surplus reserve | - | - | - | - | - | - | - |
| 4. Others | - | - | -7,512,041.97 | - | - | 7,512,041.97 | - |
| (V) Special reserve | - | - | - | - | - | - | - |
| 1. Appropriation in the period | - | - | - | - | - | - | - |
| 2. Utilization in the period | - | - | - | - | - | - | - |
| (VI) Others | - | - | - | - | - | - | - |
| IV. Closing balance of the period | 1,922,365,124.00 | 27,600,222,792.28 | 98,398,294.82 | - | 961,182,562.00 | 2,436,570,221.95 | 33,018,738,995.05 |
The accompanying notes form part of the financial statements.
- 13 -
(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 headquarter of the Company is located in Shenzhen, Guangdong Province. The Company andits subsidiaries (collectively referred to as "the Group") are principally engaged in the rendering ofport services, bonded logistics services and other businesses such as property development andinvestment.
The consolidated and Company's financial statements have been approved by the Board of Directorson 29 August 2023.
See Note (X) "Equity in Other Entities" for details of the scope of consolidated financial statementsfor the current period. See Note (IX) "Changes in Scope of Consolidation" for details of changes inthe scope of consolidated financial statements for the current period.
(II) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
Basis of preparation of financial statements
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") issued by theMinistry of Finance ("MoF"). In addition, the Group has disclosed relevant financial information inaccordance with Compilation Rules for Information Disclosure by Companies Offering Securitiesto the Public No. 15 - General Provisions on Financial Reports (2014 Revision).
Going concern
As at 30 June 2023, the Group has total current liabilities in excess of total current assets of RMB1,400,548,100.60. As at 30 June 2023, the Group has available and unused lines of credit and bondsamounting to RMB 67,024,496,484.81, which is greater than the balance of the net current liabilities.The Group can obtain financial support from the available lines of credit and bonds when needed.Therefore, the financial statements have been prepared on a going concern basis.
(III) STATEMENT OF COMPLIANCE WITH THE ASBE
The financial statements of the Company have been prepared in accordance with ASBE, and presenttruly and completely, the consolidated and Company's financial position as of 30 June 2023, andthe consolidated and Company's results of operations, shareholders' equity and cash flows for theperiod from 1 January to 30 June 2023.
- 14 -
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
1. Accounting year
The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.
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 services, bonded logistics services and other services 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 functionalcurrency on the basis of the primary economic environment in which they operate. The Companyadopts RMB to prepare its financial statements.
4. Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for certain financial instrumentswhich are measured at fair value, the Group adopts the historical cost as the principle ofmeasurement of the financial statements. When the Group was restructured into a stock company,fixed assets and intangible assets initially contributed by state-owned shareholders were recognizedbased on valuation amounts confirmed by the state-owned assets administration department. Whereassets are impaired, provisions for asset impairment are made in accordance with relevantrequirements.
Where the historical cost is adopted as the measurement basis, assets are recorded at the amount ofcash or cash equivalents paid or the fair value of the consideration given to acquire them at the timeof their acquisition. Liabilities are recorded at the amount of proceeds or assets received or thecontractual amounts for assuming the present obligation, or, at the amount of cash or cashequivalents expected to be paid to settle the liabilities in the normal course of business.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. Regardless of whetherthat price is directly observable or estimated using valuation technique, fair value measurement anddisclosure 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.
- 15 -
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
4. Basis of accounting and principle of measurement - continued
For financial assets of which the transaction price is the fair value at initial recognition, and ofwhich the subsequent fair value measurement uses a valuation technique involving unobservableinputs, the valuation technique should be calibrated so that the initial recognition result determinedusing the valuation technique equals 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 valuemeasurements 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 observablefor the asset or liability, either directly or indirectly; and? Level 3 inputs are unobservable inputs for the asset or liability.
5. Business combinations
Business combinations are classified into business combinations involving enterprises undercommon control and business combinations not involving enterprises under common control.
5.1 Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination inwhich all of the combining enterprises are ultimately controlled by the same party or parties bothbefore and after the combination, and that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recordedby the combining entities at the date of the combination. The difference between the carryingamount of the net assets obtained and the carrying amount of the consideration paid for thecombination is adjusted to the share premium in capital reserve. If the share premium is notsufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss for the period inwhich they are incurred.
5.2 Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business combinationin which all of the combining enterprises are not ultimately controlled by the same party or partiesbefore and after the combination.
- 16 -
(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Business combinations - continued
5.2 Business combinations not involving enterprises under common control and goodwill - continued
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assetsgiven, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange forcontrol of the acquiree. Where a business combination not involving enterprises under commoncontrol is achieved in stages that involve multiple transactions, the cost of combination is the sumof the consideration paid at the acquisition date and the fair value at the acquisition date of theacquirer's previously held interest in the acquiree. Intermediary expenses (fees in respect of auditing,legal services, valuation and consultancy services, etc.) and other administrative expensesattributable to the business combination are recognized in profit or loss for the period 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.
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 Measurement(the "ASBE No. 22") and Accounting Standards for Business Enterprises No. 13 - Contingencies.Any changes or adjustments are 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. Business combinations - continued
5.2 Business combinations not involving enterprises under common control and goodwill - continued
If either the fair values of identifiable assets, liabilities and contingent liabilities acquired in acombination or the cost of business combination can be determined only provisionally by the endof the period in which the business combination is effected, the acquirer recognizes and measuresthe combination using those provisional values. Any adjustments to those provisional values within12 months after the acquisition date are treated as if they had been recognized and measured at theacquisition date.
Goodwill arising on a business combination is measured at cost less accumulated impairment losses,and is presented separately in the consolidated financial statements.
For the purpose of impairment testing, goodwill is considered together with the related assets groupor portfolio of assets groups, i.e., goodwill is reasonably allocated to the related assets group orportfolio of assets groups expected to benefit from the synergies of the combination. An impairmentloss is recognized if the recoverable amount of the assets group or portfolio of assets groups (towhich the goodwill is allocated) is less than its carrying amount. The impairment loss is firstlyallocated to reduce the carrying amount of any goodwill allocated to such assets group or portfolioof assets groups, and then reduce the carrying amount of other assets pro-rata on the basis of thecarrying amount of each asset (other than goodwill) in the assets group or portfolio of assets groups.
Recoverable amount is the higher of the fair value of an asset net of cost of disposal and the presentvalue of the asset's estimated future cash flows.
The impairment loss of goodwill is recognized in profit or loss for the period when it is incurredand will not be reversed in subsequent periods.
6. Consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis ofcontrol. Control exists when the investor has power over the investee; is exposed, or has rights, tovariable returns from its involvement with the investee; and has the ability to use its power over theinvestee to 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.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Consolidated financial statements - continued
For subsidiaries acquired through a business combination involving enterprises not 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 combined partyunder merger by absorption are included in the Group's scope of consolidation as if they had beenincluded in the scope of consolidation from the date when they first came under the common controlof the ultimate controlling party. Their operating results and cash flows from the beginning of theearliest reporting period or the date when they first came under the common control of the ultimatecontrolling party are included in the consolidated income statement and consolidated cash flowstatement, 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.
The effect of intra-group transactions on the consolidated financial statements is eliminated onconsolidation.
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 "profit or loss attributable to minority interests" in theconsolidated income statement under the line item of net profit. The portion of comprehensiveincome of subsidiaries for the period attributable to minority interests is presented as "totalcomprehensive income attributable to minority shareholders" in the consolidated income statementunder the line item of total comprehensive income.
When the minority shareholders' share of loss of a subsidiary exceeds the minority shareholders'share of the opening balance of owners' equity of the subsidiary, the excess amount is still allocatedagainst minority interests.
Acquisition of minority interests or partial disposal of equity investments in a subsidiary that do notresult in the loss of control over the subsidiary is accounted for as equity transactions. The carryingamounts of the Company's interests and minority interests are adjusted to reflect the changes in theirrelative interests in the subsidiary. The difference between the amount by which the minorityinterests are adjusted and the fair value of the consideration paid or received is adjusted to capitalreserve. If the capital reserve is not sufficient to absorb the difference, the excess is adjusted againstretained earnings.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Consolidated financial statements - continued
Where equity interests in an acquiree are acquired in stages through multiple transactions,ultimately constituting a business combination not involving enterprises under common control, theaccounting treatment shall be made taking into account whether these transactions are a "packagedeal". If yes, these transactions are accounted for as a single transaction where control is obtained.If no, they are accounted for as transactions where control is obtained at the acquisition date.Specifically, the equity interests held in the acquiree prior to the acquisition date are remeasured atthe fair value at the acquisition date, and the difference between the fair value and carrying amountis recognized in profit or loss for the period; where the equity interests held in the acquiree prior tothe acquisition date involve changes in other comprehensive income and other owners' equity underthe equity method, the changes are transferred to income for the period to which the acquisitiondate is attributable.
Where the control over a subsidiary is lost due to partial disposal of equity investments or otherreasons, any retained interest is remeasured at its fair value at the date when control is lost. Thedifference between (i) the aggregate of the consideration received on disposal and the fair value ofany retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculatedfrom the acquisition date according to the original proportion of ownership interests is recognizedas investment income for the period in which control is lost, and the goodwill is offset accordingly.Other comprehensive income associated with equity investments in the former subsidiary isreclassified to investment income for the period in which control is lost.
Where the disposal of equity investments in a subsidiary until the control is lost is achieved in stagesthrough multiple transactions, the multiple transactions are usually considered as a package deal ifthe terms, conditions and economic effects of the transactions satisfy one or several of the followingcircumstances: (i) they are entered into at the same time or in contemplation of one another; (ii)they form a complete transaction designed to achieve an overall commercial effect; (iii) theoccurrence of one transaction is dependent on the occurrence of at least one other transaction; (iv)one transaction alone is not economically justified, but it is economically justified when consideredtogether with other transactions. Where the transactions of disposal of equity investments in asubsidiary until the control is lost are a package deal, these transactions are accounted for as a singletransaction of disposal of a subsidiary resulting in loss of control. Before losing control, thedifference between each disposal consideration and the corresponding share of net assets of thesubsidiary continuously calculated from acquisition date is recognized as other comprehensiveincome. When control is lost, the cumulated other comprehensive income is transferred to profit orloss for the period in which control is lost. If the transactions of disposal of equity investments in asubsidiary until control is lost are not a package deal, these transactions are accounted for as separatetransactions.
7. Joint arrangements
Joint arrangement refers to the arrangement jointly controlled by two or more participating parties.The Group's joint arrangements have the following characteristics: (1) all the participating partiesare bound by the arrangement; (2) the arrangement is jointly controlled by two or more participatingparties. Any participating party cannot control the arrangement separately and any participatingparty having joint control of the arrangement can stop other participating parties or the group ofparticipating parties from the separate control over the arrangement.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Joint arrangements - continued
Joint control is the contractually agreed sharing of control of an arrangement, and exists only whenthe decisions on the relevant activities require the unanimous consent of the parties sharing control.
Joint arrangements comprise of joint operations and joint ventures. A joint operation is a jointarrangement whereby the parties sharing control have rights to the assets and assume liabilitiesrelating to the arrangement. A joint venture is a joint arrangement whereby the parties sharingcontrol have rights to only the net assets of the arrangement.
8. Cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cashequivalents are the Group's short-term (generally due within 3 months since the acquisition date),highly liquid investments that are readily convertible to known amounts of cash and which aresubject to an insignificant risk of changes in value.
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies
9.1 Transactions denominated in foreign currencies
A foreign currency transaction is recorded, on initial recognition, by applying the spot exchangerate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currencyusing the spot exchange rates at the balance sheet date. Exchange differences arising from thedifferences between the spot exchange rates prevailing at the balance sheet date and those 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 gross carrying amounts (other than the amortizedcost) of monetary items classified as at fair value through other comprehensive income arerecognized as other comprehensive income.
When the consolidated financial statements include foreign operation(s), if there is a foreigncurrency monetary item constituting a net investment in a foreign operation, exchange differencesarising from changes in exchange rates are recognized as "translation differences of financialstatements denominated in foreign currencies" in other comprehensive income, and in profit andloss for the period upon disposal of the foreign operation.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies - continued
9.1 Transactions denominated in foreign currencies - continued
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 and the amounts infunctional currency remain unchanged. Foreign currency non-monetary items measured at fairvalue are re-translated at the spot exchange rates on the date the fair value is determined. Differencebetween the re-translated functional currency amount and the original functional currency amountis treated as changes in fair value (including changes of exchange rate) and is recognized in profitand loss or as other comprehensive income.
9.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a foreignoperation are translated from the foreign currency into RMB using the following method: all assetsand liabilities in the balance sheet are translated at the spot exchange rates 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 arise; 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 profitdistribution item. The difference between the translated assets and the aggregate of liabilities andshareholders' equity items is recognized as other comprehensive income and included inshareholders' equity.
Cash flows arising from a transaction in foreign currency and cash flows of an overseas subsidiaryare translated at average exchange rates 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 prior year comparative figures are presented in the amounts translated based on the financialstatements for the prior year.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over aforeign operation due to partial disposal of equity investments in it or other reasons, the Grouptransfers the accumulated exchange differences arising on translation of financial statements of thisforeign operation attributable to the owners' equity of the Company and presented under othercomprehensive income, to profit or loss for the period in which the disposal occurs.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
9. Transactions denominated in foreign currencies and translation of financial
statements denominated in foreign currencies - continued
9.2 Translation of financial statements denominated in foreign currencies - continued
In case of partial disposal of equity investments or any other reason which results in lowerpercentage of equity interests in a foreign operation but does not result in losing control over theforeign operation, the translation differences of financial statements denominated in foreigncurrencies related to this disposed part are re-attributed to minority interests and are not recognizedin profit and loss. For partial disposals of equity interests in foreign operations which are associatesor joint ventures, the proportionate share of the accumulated translation differences of financialstatements denominated in foreign currencies of foreign operations are reclassified to profit or loss.
10. Financial instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to contractualprovisions of a financial instrument.
All regular way purchases or sales of financial assets are recognized and derecognized on a tradedate basis.
Financial assets and financial liabilities are initially measured at fair value. For financial assets andfinancial liabilities at fair value through profit or loss for the period, relevant transaction costs aredirectly recognized in profit or loss; upon initial recognition of contract assets, accounts receivableand notes receivable that do not contain significant financing component or without considering thefinancing component included in the contract with a term not exceeding one year under theAccounting Standards for Business Enterprises No. 14 - Revenue ("Revenue Standards"), the Groupadopts 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 by considering all the contractual terms of the financial assetor financial liability (such as repayment in advance, extension, call option or other similar options)(without considering the expected credit losses).
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
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).
10.1 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.
If contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding, and the financial asset isheld within a business model whose objective is to hold financial assets in order to collectcontractual cash flows, the Group classifies the financial asset as financial assets at amortized cost.Such types of financial assets mainly include cash and bank balances, notes receivable, accountsreceivable, other receivables, debt investments and long-term receivables.
If contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding, and the financial asset isheld within a business model whose objective is achieved by both collecting contractual cash flowsand selling the financial asset, the Group classifies the financial asset as financial assets at fair valuethrough other comprehensive income ("FVTOCI"). Accounts receivable and notes receivableclassified as FVTOCI at acquisition are presented as receivables financing, while the remainingitems due within one year (inclusive) upon acquisition are presented under other current assets.Other financial assets of such type are presented as other debt investments if they are due after oneyear since the acquisition, or presented under non-current assets due within one year if they are duewithin one year (inclusive) since the balance sheet date.
On initial recognition, the Group may irrevocably designate non-trading equity instruments, otherthan contingent consideration recognized through business combination not involving enterprisesunder common control, as financial assets at FVTOCI on an individual basis. Such 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets - continued
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.
Financial assets at FVTPL assets other than derivative financial assets are presented as "held-for-trading financial assets". Financial assets with a maturity over one year since the balance sheet date(or without a fixed maturity) and expected to be held for over one year are presented under othernon-current financial assets.
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using theeffective interest method. Gain or loss arising from impairment or derecognition is recognized inprofit or loss.
For financial assets measured at amortized cost, the Group recognizes interest income using theeffective interest method. The Group calculates and recognizes interest income by applying theeffective interest rate to the gross carrying amount of the financial assets, 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 assets and the credit-adjusted effective interest rate.
10.1.2 Financial assets at FVTOCI
Changes in fair value of financial assets at FVTOCI are included in other comprehensive income,except that related impairment losses or gains, interest income calculated using the effective interestmethod and exchange gains or losses are recognized in profit or loss for the current period. Amountscharged to profit or loss for each period equal to the amount charged to profit or loss as if it hasalways been measured at amortized cost. Upon derecognition of the financial asset, the cumulativegains or losses previously recognized in other comprehensive income shall be transferred out fromother comprehensive income and recognized in profit or loss.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets - continued
10.1.2 Financial assets at FVTOCI - continued
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 are transferred out and included in retainedearnings upon derecognition of the financial assets. During the period in which the Group holds thenon-trading equity instruments, revenue from dividends is recognized in profit or loss for the currentperiod when (1) the Group's right to collect dividends has been established; (2) it is probable thatthe associated economic benefits will flow to the Group; and (3) the amount of dividends can bemeasured reliably.
10.1.3 Financial assets at FVTPL
Financial assets at FVTPL are subsequently measured at fair value. Gains or losses arising fromchanges in fair values and dividends and interests related to the financial assets are recognized inprofit or loss.
10.2 Impairment of financial instruments
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 guaranteecontracts that are neither financial liabilities at FVTPL nor financial liabilities arising from transferof financial assets that does not satisfy the derecognition criteria or continuing involvement in 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, accounts receivable and notes 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 the lifetime ECL.
For other financial instruments, other than purchased or originated credit-impaired financial assets,the Group assesses changes in credit risks of the relevant financial asset since initial recognition ateach balance sheet date. If the credit risk has increased significantly since initial recognition of thefinancial instruments, the Group recognizes the provision for losses at an amount equivalent tolifetime ECL; if the credit risk has not increased significantly since initial recognition of thefinancial instruments, the Group recognizes the provision for losses at an amount equivalent to 12-month ECL. The increase or reversal of credit loss provision for financial assets other than thoseclassified as at FVTOCI is recognized as impairment loss or gain and included in profit or loss forthe period. For financial assets classified as at FVTOCI, the credit loss provision is recognized inother comprehensive income and the impairment loss or gain is included in profit or loss for theperiod without reducing the carrying amount of the financial assets in the balance sheet.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
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.
10.2.1 Significant increase in 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 that the Group becomes a party to the irrevocable commitment isconsidered as the date of initial recognition in applying the provisions on impairment of financialinstruments.
In particular, the following information is taken into account when assessing whether credit risk hasincreased significantly:
(1) Significant changes in internal price indicators of credit risk as a result of a change 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).
(3) Significant changes in external market indicators of credit risk for the same financial
instrument or similar financial instruments with the same expected life. These indicatorsinclude the credit spread, the credit swap prices for the borrower, the length of time or theextent to which the fair value of a financial asset has been less than its amortized cost andother market information related to the borrower, such as changes in the price of a borrower'sdebt and equity instruments.
(4) An actual or expected significant change in the financial instrument's external credit rating.
(5) An actual or expected internal credit rating downgrade for the borrower.
(6) Adverse changes in business, financial or economic conditions that are expected to cause a
significant change in the debtor's ability to meet its debt obligations.
(7) An actual or expected significant change in the operating results of the debtor.
(8) Significant increases in credit risk on other financial instruments of the same debtor.
(9) Significant adverse change in the regulatory, economic, or technological environment of the
debtor.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.1 Significant increase in credit risk - continued
(10) Significant changes in the value of the collateral supporting the obligation or in the quality
of third-party guarantees or credit enhancements, which are expected to reduce the debtor'seconomic motives to repay within the time limit specified in contract or affect theprobability of default.
(11) Significant changes in the debtor's economic motives to repay within the time limit specified
in contract.
(12) Expected changes to loan contract, including the exemption or revision of contractual
obligations, the granting of interest-free periods, the jump in interest rates, the requirementfor additional collateral or guarantees, or other changes in the contractual framework forfinancial instruments that may result from the breach of contract.
(13) Significant changes in the expected performance and behaviour of the debtor.
(14) Changes in the Group's credit management approach in relation to the 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.
10.2.2 Credit-impaired financial assets
When an event or several events that are expected to have adverse impact on the future cash flowsof the financial assets have occurred, the financial assets become credit-impaired. The 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 is probable that the debtor will enter bankruptcy or other financial reorganizations.
(5) The disappearance of an active market for that financial asset because of financial
difficulties of the issuer or the debtor.
(6) Purchase or origination of a financial asset with a large scale of discount, which reflects
facts of credit loss incurred.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.2 Credit-impaired financial assets - continued
Based on the Group's internal credit risk management, the Group considers an event of defaultoccurs when information developed internally or obtained from external sources indicates that thedebtor is unlikely to pay its creditors, including the Group, in full (without taking into account anycollaterals held by the Group).
10.2.3 Determination of expected credit loss
Lease receivables are assessed for ECL individually by the Group. In addition, the Group usesimpairment matrix to calculate ECL for notes receivable, accounts receivable, other receivables,contract assets, debt investments and other debt investments on a portfolio basis. The Groupclassifies financial instruments into different groups based on common risk characteristics.Common credit risk characteristics include credit risk rating, the date of initial recognition,remaining contractual period, industry of debtor and geographical location of the debtor.
The Group determines the ECL of relevant financial instruments using the following methods:
? For a financial asset, the credit loss is the present value of the difference between thecontractual cash flows that are due to the Group under the contract and the cash flows that theGroup expects to receive.? For a lease receivable, the credit loss is the present value of the difference between thecontractual cash flows that are due to the Group under the contract and the cash flows that theGroup expects to receive.? For undrawn loan commitments (refer to Note (IV) 10.4.1.3 for details of accounting policies),the ECL is the present value of the difference between the contractual cash flows that are dueto the Group if the holder of the loan commitments draws down the loan, and the cash flowsthat the Group expects to receive if the loan is drawn down. The Group's estimation of theECL for loan commitments is consistent with its expectation of the loan commitments drawndown.? For a financial guarantee contract (refer to Note (IV) 10.4.1.3 for details of accountingpolicies), the expected loss is the present value of the expected payments to reimburse theholder for a credit loss that it incurs less any amounts that the Group expects to receive fromthe holder, the debtor or any other party.? For a financial asset that has become credit-impaired at the balance sheet date, but not apurchased or originated credit-impaired financial asset, the credit loss is the differencebetween the asset's gross carrying amount and the present value of estimated future cash flowsdiscounted at the financial asset's original effective interest rate.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.3 Determination of expected credit loss - continued
The 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 condition andforecast of future economic position that is available without undue cost or effort at the balancesheet date.
10.2.4 Write-down of financial assets
When the Group no longer reasonably expects that the contractual cash flows of financial assetscan be collected in aggregate or in part, the Group will directly write down the gross carryingamount of the financial asset, which constitutes derecognition of relevant financial assets.
10.3 Transfer of financial assets
The Group will derecognize a financial asset if one of the following conditions is satisfied: (i) thecontractual rights to the cash flows from the financial asset expire; (ii) the financial asset has beentransferred and substantially all the risks and rewards of ownership of the financial asset istransferred to the transferee; or (iii) although the financial asset has been transferred, the Groupneither transfers nor retains substantially all the risks and rewards of ownership of the financialasset but has not retained control of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of afinancial asset, and it retains control of the financial asset, the Group will recognize the financialasset to the extent of its continuing involvement in the transferred financial asset and recognize anassociated liability. The Group will measure relevant liabilities as follows:
? For transferred financial assets carried at amortized cost, the carrying amount of relevantliabilities is the carrying amount of financial assets transferred with continuing involvementless amortized cost of the Group's retained rights (if the Group retains relevant rights upontransfer of financial assets) with addition of amortized cost of obligations assumed by theGroup (if the Group assumes relevant obligations upon transfer of financial assets). Relevantliabilities are not designated as financial liabilities at fair value through profit or loss.? For transferred financial assets carried at fair value, the carrying amount of relevant financial
liabilities is the carrying amount of financial assets transferred with continuing involvementless fair value of the Group's retained rights (if the Group retains relevant rights upon transferof financial assets) with addition of fair value of obligations assumed by the Group (if theGroup assumes relevant obligations upon transfer of financial assets). Accordingly, the fairvalue of relevant rights and obligations shall be measured on an individual basis.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.3 Transfer of financial assets - continued
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the differencebetween (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 values of those parts on transfer date. Thedifference between (1) the sum of the consideration received for the part derecognized and anycumulative gain or loss allocated to the part derecognized which has been previously recognized inother comprehensive income, and (2) the carrying amount allocated to the part derecognized onderecognition date is recognized in profit or loss. If the transferred asset is a non-trading equityinstrument investment designated as at FVTOCI, the cumulative gain or loss that has beenpreviously recognized in other comprehensive income is transferred out and included in retainedearnings.
If the transfer of a financial asset in its entirety does not satisfy the derecognition criteria, the Groupcontinues to recognize the transferred financial asset in its entirety. The consideration received fromtransfer of assets is recognized as a financial liability upon receipt.
10.4 Classification of financial liabilities and equity instruments
Financial instruments issued by the Group are classified into financial liabilities or equityinstruments on the basis of the substance of the contractual arrangements and the economic naturenot only its legal form, together with the definition of financial liabilities and equity instruments oninitial recognition.
10.4.1 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at FVTPL and otherfinancial liabilities.
10.4.1.1 Financial liabilities at FVTPL
Financial liabilities at FVTPL consist of held-for-trading financial liabilities (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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.1 Financial liabilities at FVTPL - continued
A financial liability is classified as held for trading if one of the following conditions is satisfied:
? It has been assumed principally for the purpose of repurchasing in the near term; or? On initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and there is objective evidence that the Group has a recent actual pattern ofshort-term profit-taking; or? It is a derivative that is not a financial guarantee contract or designated and effective as ahedging instrument.
A financial liability may be designated as at FVTPL on initial recognition when one of the followingconditions is satisfied: (i) such designation eliminates or significantly reduces accounting mismatch;or (ii) the Group makes management and performance evaluation on a fair value basis, inaccordance with the Group's formally documented risk management or investment strategy, andreports to key management personnel on that basis; or (iii) the qualified hybrid contract containingembedded derivatives.
Held-for-trading financial liabilities are subsequently measured at fair value. Any gains or lossesarising from changes in the fair value and any dividend or interest expenses paid on the financialliabilities are recognized in profit or loss.
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 change in fairvalue due to the change in the credit risk of such financial liability, which was recognized in othercomprehensive income, is transferred to retained earnings. Any dividend or interest expense on thefinancial liability is recognized in profit or loss. If the accounting treatment for the impact of thechange 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, and includes the changes in the financial liabilitiesin profit or loss for the period.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.2 Other financial liabilities
Except for financial liabilities, financial guarantee contracts and loan commitments arising fromtransfer of financial assets that do not meet the derecognition criteria or those arising fromcontinuing involvement in the transferred financial assets, other financial liabilities aresubsequently measured at amortized cost, with gain or loss arising from derecognition oramortization recognized in profit or loss.
If the modification or renegotiation for the contract by the Group and its counterparties does notresult in derecognition of a financial liability subsequently measured at amortized cost but thechanges in contractual cash flows, the Group will recalculate the carrying amount of the financialliability, with relevant gain or loss recognized in profit or loss. The Group will determine thecarrying amount of the financial liability based on the present value of renegotiated or modifiedcontractual cash flows discounted at the original effective interest rate of the financial liability. 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.
10.4.1.3 Financial guarantee contracts and loan commitments
A financial guarantee contract is a contract that requires the issuer to make specified payments toreimburse the holder of the contract for a loss it incurs because a specified debtor fails to makepayment when due in accordance with the original or modified terms of a debt instrument.Subsequent to initial recognition, financial guarantee contracts that are not designated as financialliabilities at fair value through profit or loss or financial liabilities arising from transfer of financialassets that do not meet the derecognition criteria or those arising from continuing involvement inthe transferred financial assets, and loan commitments to provide a loan at a below-market interestrate, which are not designated at fair value through profit or loss, are measured at the higher of: (1)amount of loss provision; and (2) the amount initially recognized less cumulative amortizationamount determined based on the revenue standards.
10.4.2 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation(or part of it) is discharged. An agreement between the Group (the debtor) and the creditor 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities and equity instruments - continued
10.4.2 Derecognition of financial liabilities - continued
When the Group derecognizes a financial liability or a part of it, it recognizes the difference betweenthe carrying amount of the financial liability (or part of the financial liability) derecognized and theconsideration paid (including any non-cash assets transferred or new financial liabilities assumed)in profit or loss.
10.4.3 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Groupafter deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased,sold and cancelled by the Group are recognized as changes of equity. Changes in fair value of equityinstruments is not recognized by the Group. Transaction costs related to equity transactions arededucted from equity.
The Group recognizes the distribution to holders of the equity instruments as distribution of profits,dividends paid do not affect total amount of shareholders' equity.
10.5 Derivatives and embedded derivatives
Derivatives include forward exchange contracts, currency swaps, interest rate swaps and foreignexchange options. Derivatives are initially measured at fair value at the date when the derivativecontracts are entered into and are subsequently remeasured at fair value.
For a hybrid contract comprising of embedded derivatives and a host contract, if the host contractis a financial asset, the Group does not separate the embedded derivatives from the hybrid contractbut takes the hybrid contract as a whole in applying relevant accounting standards regarding theclassification of financial assets.
If the host contract of the hybrid contract is not a financial asset, the embedded derivatives areseparated from the hybrid contract and treated as separate derivatives by the Group when they meetall 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 contract is not measured at fair value through profit or loss.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.5 Derivatives and embedded derivatives - continued
For the embedded derivative separated from the hybrid contract, the Group accounts for the hostcontract in the hybrid contract with applicable accounting standards. If the fair value of theembedded derivatives 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 contract and the fair value of the host contract. Afteradopting the above method, if the fair value of the embedded derivative still cannot be measured ona stand-alone basis at acquisition date or subsequent balance sheet dates, the hybrid contract, as awhole, is designated as financial instruments at FVTPL.
10.6 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to offset the recognized financialassets and financial liabilities, and intends either to settle on a net basis, or to realize the financialasset and settle the financial liability simultaneously, a financial asset and a financial liability shallbe offset and the net amount is presented in the balance sheet. Except for the above circumstances,financial assets and financial liabilities shall be presented separately in the balance sheet and shallnot be offset.
10.7 Compound instrument
For convertible bonds issued by the Group that contain both liabilities and conversion option thatmay convert the liabilities to its own equity instrument, upon initial recognition, the bonds 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.
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 using theeffective interest method; the value of the conversion option classified as equity instrument remainin equity instrument. The expiry or conversion of convertible bonds will not result in loss or gain.
The transaction costs incurred for issuance of the convertible bonds are allocated between theliability portion and equity instrument portion in proportion to their respective fair value. Thetransaction cost relating to the equity instrument portion is directly included in equity instrument;while the transaction cost relating to the liability portion is included in the carrying amount of theliability, and amortized over the lifetime of the convertible bonds using the effective interest method.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.8 Reclassification of financial instruments
When the Group changes the business model to manage the financial assets, the financial assetsaffected will be reclassified and no financial liabilities will be reclassified.
The financial assets are reclassified by the Group and are accounted for prospectively since the dateof reclassification (i.e. the first date of the initial reporting period after the business model of whichthe financial assets are reclassified by the enterprise is changed).
Where a financial asset at amortized cost is reclassified as a financial assets FVTPL by the Group,such financial asset is measured at fair value at the date of reclassification and the differencebetween the original carrying amount and the fair value is recognized in profit or loss for the period.
Where a financial asset at amortized cost is reclassified as a financial asset at FVTOCI by the Group,such financial asset is measured at the fair value at the date of reclassification, and the differencebetween the original amount and the 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.
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 recognized 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
11. Accounts receivable
The Group performs internal credit ratings on customers and determines expected losses rate ofnotes receivable, accounts receivable, other receivables and long-term receivables. Basis fordetermining ratings and the expected losses rates are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Internalcredit rating
| Internal credit rating | Basis for determining portfolio | Average expected loss rate (%) |
| A | Customers can make repayments within credit term and have good credit records based on historical experience. The probability of default on payment of due amounts is extremely low in the foreseeable future. | 0.00-0.10 |
| B | The customer may have overdue payment based on historical experience but they can make repayments. | 0.10-0.30 |
| C | The evidences indicate that the overdue credit risks of the customer are significantly increased and there is probability of default on payment. | 0.30-50.00 |
| D | The evidences indicate that the accounts receivable are impaired or the customer has significant financial difficulty. The amounts cannot be recovered in the foreseeable future. | 50.00-100.00 |
12. Receivables financing
Notes receivable classified as at FVTOCI are presented as receivables financing if they are duewithin one year (including one year) from the date of acquisition; or presented as other debtinvestments if they are due after one year from the date of acquisition. For related accountingpolicies, refer to Note (IV) 10.
13. Inventories
13.1 Categories of inventories
Inventories include raw materials, goods on hand and others. Inventories are initially measured atcost. Cost of inventories comprises all costs of purchase, costs of conversion and other expendituresincurred in bringing the inventories to their present location and condition.
13.2 Valuation methods of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method andfirst-in-first-out method.
13.3 Basis for determining net realizable value of inventories and provision methods for decline
in value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value. Ifthe cost of inventories is higher than the net realizable value, a provision for decline in value ofinventories is made.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
13. Inventories - continued
13.3 Basis for determining net realizable value of inventories and provision methods for decline
in value of inventories - continued
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 purposes of inventories being held and effect of post balance sheet events.
Provision for decline in value of other inventories is made based on the excess of cost of inventoryover its 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.
13.4 Inventory count system
The perpetual inventory system is adopted as inventory count system.
13.5 Amortization methods for low cost and short-lived consumable items and packaging
materials
Packaging materials and low cost and short-lived consumable items are amortized using theimmediate write-off method.
14. Contract assets
14.1 Recognition and criteria of contract assets
A contract asset represents the Group's right to consideration in exchange for goods or services thatthe Group has transferred to a customer, and such right depends on factors other than the passageof time. The Group's unconditional right (i.e., depending on the passage of time only) to receiveconsideration from the customer is separately presented as receivables.
14.2 Determination and accounting treatments of expected credit losses ("ECL") for contract
assets
Refer to Note (IV) 10.2 "Impairment of financial instruments" for determination and accountingtreatments of ECL for contract assets.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Assets held for sale
Non-current assets and disposal groups are classified as held-for-sale category when the Grouprecovers the carrying amount through a sale (including an exchange of nonmonetary assets that hascommercial substance) rather than continuing use.
Non-current assets or disposal groups classified as held-for-sale are required to satisfy the followingconditions: (1) the asset or disposal group is available for immediate sale in its present conditionaccording to the terms that are usual and customary for sales of such asset or disposal group; (2)the sale is highly probable, i.e. the Group has made a resolution about selling plan and obtained aconfirmed purchase commitment and the sale is expected to be completed within one year.
When there is loss of control over a subsidiary due to disposal of investments in the subsidiary, andthe proposed disposal of investments in the subsidiary satisfies classification criteria of held-for-sale category, the investments in subsidiaries are classified as held-for-sale category as a whole inthe Company's separate financial statements, and all assets and liabilities of subsidiaries areclassified as held-for-sale category in the consolidated financial statements regardless of whetherthat part of the equity investments are remained after the sale.
The Group measures the non-current assets or disposal groups classified as held-for-sale at thelower of their carrying amount and fair value less costs to sell. Where the carrying amount is higherthan the fair value net of costs to sell, the carrying amount should be reduced to the fair value netof costs to sell, and such reduction is recognized in impairment loss of assets and included in profitor loss for the period. Meanwhile, provision for impairment of held-for-sale assets is made. Whenthere is an increase in the fair value of non-current assets held-for-sale net of costs to sell at thebalance sheet date, the original reduction should be reversed in impairment loss of assets recognizedafter the classification of held-for-sale category, and the reversal amount is included in profit or lossfor the period. The impairment losses recognized before such assets are classified as held-for-salecategory shall not be reversed.
Non-current assets classified as held-for-sale or non-current assets in disposal groups are notdepreciated or amortized, and interest and other costs of liabilities of disposal groups classified asheld-for-sale continue to be recognized.
All or part of equity investments in associates or joint ventures are classified as held-for-sale assets.For the part that is classified as held-for-sale, it is no longer accounted for using the equity methodsince the date of the classification.
If an asset or a disposal group classified as held for sale subsequently no longer satisfy the criteriafor recognition as held-for-sale, the Group shall cease to classify the asset or disposal group as heldfor sale. It shall be measured at the lower of (1) the carrying amount of the asset or disposal groupbefore being classified as held for sale, as adjusted for any depreciation, amortization or impairmentthat would have been recognized had the asset or disposal group not been classified as held for sale;and (2) the recoverable amount at the date of the decision not to sell.
If equity investments in associates or joint ventures classified as held for sale no longer satisfy thecriteria of classification as held-for-sale, such investments are accounted for retrospectively usingthe equity method from the date when they are classified as held for sale. The financial statementsfor the period of classification as held-for-sale are adjusted accordingly.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments
16.1 Basis for determining joint control and significant influence over investee
Control is archived when the Group has the power over the investee and has rights to variablereturns from its involvement with the investee; and has the ability to use its power to affect itsreturns. Joint control is the contractually agreed sharing of control over an arrangement, and existsonly when the decisions on relevant activities of the arrangement require unanimous consent ofparticipants sharing control. Significant influence is the power to participate in the financial andoperating policy decisions of the investee but is not control or joint control over those policies.When determining whether an investing enterprise is able to exercise control or significantinfluence over an investee, the effect of potential voting rights of the investee (for example, warrantsand convertible debts) held by the investing enterprises or other parties that are currently exercisableor convertible shall be considered.
16.2 Determination of initial investment cost
For a long-term equity investment acquired through a business combination involving enterprisesunder common control, the 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 the initialinvestment cost and the carrying amount of cash paid, non-cash assets transferred and liabilitiesassumed shall be adjusted to capital reserve. If the balance of capital reserve is not sufficient toabsorb the difference, any excess is adjusted to retained earnings. If the consideration of thecombination is satisfied by the issue of equity securities, the initial investment cost of the long-termequity investment is the share of carrying amount of owners' equity of the acquiree in theconsolidated financial statements of the ultimate controlling party at the date of combination. Theaggregate face value of the shares issued shall be accounted for as share capital. The differencebetween the initial investment cost and the aggregate face value of the shares issued is adjusted tocapital reserve. If the balance of capital reserve is not sufficient to absorb the difference, any excessis adjusted to retained earnings. Where equity interests in an acquiree are acquired in stages throughmultiple transactions, ultimately constituting a business combination involving enterprises undercommon control, the accounting treatment shall be made taking into account whether thesetransactions are a "package deal". If yes, these transactions are accounted for as a single transactionwhere control is obtained. If no, the initial investment cost of the long-term equity investment is theshare of carrying amount of owners' equity of the acquiree in the ultimate controlling party'sconsolidated financial statements at the date of combination. The difference between the initialinvestment cost and the sum of carrying amount of equity investments previously held in theacquiree and the new investment cost is adjusted to capital reserve. If the balance of capital reserveis not sufficient to absorb the difference, any excess is adjusted to retained earnings. Othercomprehensive income recognized for the previously held equity investments under the equitymethod or non-trading equity instrument investments designated as at FVTOCI is not subject toaccounting treatment temporarily.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.2 Determination of initial investment cost - continued
For a long-term equity investment acquired through business combination not involving enterprisesunder common control, the initial investment cost of the long-term equity investment acquired isthe cost of acquisition.
The absorbing party's or acquirer's intermediary expenses (fees in respect of auditing, legal services,valuation and consultancy services, etc.) and other administrative expenses attributable to thebusiness combination are recognized in profit or loss for the period 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 withthe ASBE No. 22 and the additional investment cost.
16.3 Subsequent measurement and recognition of profit or loss
16.3.1 Long-term equity investments accounted for using the cost method
Long-term equity investments in subsidiaries are accounted for using the cost method in theCompany's separate financial statements. A subsidiary is an investee that is controlled by the Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.Additional or recovered investment is adjusted to the cost of long-term equity investment.Investment income is recognized in the period in accordance with the attributable share of cashdividends or profit distributions declared by the investee.
16.3.2 Long-term equity investments accounted for using the equity method
Except for investments in associates and joint ventures completely or partly classified as held-for-sale, the Group accounts for investment in associates and joint ventures using the equity method.An associate is an entity over which the Group has significant influence. A joint venture is a jointarrangement whereby the Group has rights to only the net assets of the arrangement.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.3 Subsequent measurement and recognition of profit or loss - continued
16.3.2 Long-term equity investments accounted for using the equity method - continued
Under the equity method, where the initial investment cost of a long-term equity 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.
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 respectively for the period. Meanwhile, the carrying amount of the long-term equity investment is adjusted. The carrying amount of the long-term equity investment shallbe reduced by the attributable portion of profit distributions or cash dividends declared by theinvestee. Other changes in owners' equity of the investee other than net profit or loss and othercomprehensive income are correspondingly adjusted to the carrying amount of the long-term equityinvestment, and recognized in capital reserve. The Group recognizes its share of the investee's netprofit or loss based on the fair value of the investee's individual identifiable assets, etc. at theacquisition date after making appropriate adjustments. When the investee's accounting policies andaccounting period are inconsistent with those of the Group, the Group recognizes investmentincome and other comprehensive income after making appropriate adjustments to the financialstatements of the investee to conform to the Group's accounting policies and accounting period.However, unrealized gains or losses resulting from the Group's transactions with its associates andjoint ventures, which do not constitute a business, are eliminated based on the proportionattributable to the Group and then investment gains or losses are recognized on such basis. However,unrealized losses resulting from the Group's transactions with its associates and joint ventures whichrepresent impairment losses on the transferred assets are not eliminated.
The Group recognize its share of net losses of the investee to the extent that the carrying amount ofthe long-term equity investment together with any long-term interests that in substance form partof its net investment in the investee are reduced to zero. Except that if the Group has incurredobligations to assume additional losses, a provision is recognized according to the obligationexpected, and recorded in the investment loss for the period. Where net profits are subsequentlymade by the investee, the Group resumes recognizing its share of those profits only after its shareof the profits exceeds the share of losses previously not recognized.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the carrying amount andproceeds actually received is recognized in profit or loss for the period. For long-term equityinvestments accounted for using the equity method, if the remaining interest after disposal is stillaccounted for using the equity method, other comprehensive income previously recognized underthe equity method is accounted for on the same basis as if the investee had directly disposed ofrelated assets or liabilities, and is transferred to profit or loss for the period on a pro rata basis;owners' equity recognized due to changes in other owners' equity of the investee (other than netprofit or loss, other comprehensive income and profit distribution) is transferred to profit or loss forthe period on a pro rata basis. For long-term equity investments accounted for using the cost method,if the remaining interest after disposal is still accounted for using the cost method, othercomprehensive income previously recognized under the equity method or in accordance with thestandards for the recognition and measurement of financial instruments before obtaining the controlover the investee, is accounted for on the same basis as if the investee had directly disposed ofrelated assets or liabilities, and is transferred to profit or loss for the period on a pro rata basis;changes in other owners' equity (other than net profit or loss, other comprehensive income and profitdistribution) in the investee's net assets recognized under the equity method is transferred to profitor loss for the period on a pro rata basis.
Where the Group loses control over the investee due to partial disposal of equity investments, if theremaining equity after disposal enables the Group to exercise joint control or significant influenceover the investee, the remaining equity is accounted for using the equity method and adjusted as ifthey are accounted for using the equity method since the acquisition date in preparing separatefinancial statements; if the remaining equity after disposal does not enable the Group to exercisejoint control or significant influence over the investee, it is accounted for according to relevantprovisions of the standards on recognition and measurement of financial instruments, and thedifference between the fair value and carrying amount at date of losing control is recognized inprofit or loss for the period. Before the Group obtains control over the investee, othercomprehensive income recognized under the equity method or the standards on recognition andmeasurement of financial instruments, is accounted for on the same basis as if the investee haddirectly disposed of related assets or liabilities when the control over the investee is lost; otherchanges in owners' equity (other than net profit or loss, other comprehensive income and profitdistribution) in the investee's net assets recognized under the equity method is transferred to profitor loss for the period when the control over the investee is lost. Where the remaining equity afterdisposal is accounted for using the equity method, other comprehensive income and other owners'equity are transferred on a pro rata basis. Where the remaining equity after disposal is accountedfor in accordance with the standards on recognition and measurement of financial instruments, othercomprehensive income and other owners' equity are all transferred.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments - continued
Where the Group loses joint control or significant influence over the investee after partial disposalof equity investments, the remaining equity after disposal is accounted for in accordance with thestandards on recognition and measurement of financial instruments, and the difference between fairvalue at the date of losing joint control or significant influence and carrying amount is recognizedin profit or loss for the period. Other comprehensive income previously recognized under the equitymethod, is accounted for on the same basis as if the investee had directly disposed of related assetsor liabilities when the equity method is not adopted. Owners' equity recognized due to other changesin owners' equity other than net profit or loss, other comprehensive income and profit distributionare transferred to investment income for the period when the equity method is not adopted.
Where the Group disposes of its equity investments in subsidiaries in stages through multipletransactions until it loses control over the subsidiaries, if these transactions are a "package deal",they are accounted for as a single transaction of disposal of equity investments in subsidiaries. Thedifference between each disposal consideration and the corresponding carrying amount of the long-term equity investments disposed before the control is lost is first recognized as othercomprehensive income, and then fully transferred to profit or loss for the period when the controlis lost.
17. Investment properties
Investment property is property held by the Group to earn rentals or for capital appreciation or both.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 an investment property will flow to the Group and the subsequentexpenditures can be measured reliably. Other subsequent expenditures are recognized in profit orloss for the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts adepreciation or amortization policy for the investment property which is consistent with that forbuildings or land use rights.
An investment property is derecognized upon disposal or when it is permanently withdrawn fromuse and no future economic benefits are expected from the disposal.
When an investment property is sold, transferred, retired or damaged, the Group recognizes theamount of any proceeds on disposal net of the carrying amount and related taxes in profit or lossfor the period.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
18. Fixed assets and depreciation
Fixed assets are tangible assets that are held for use in the production or supply of goods 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. When the Group is restructured into a stock company,the fixed assets initially contributed by the state-owned shareholders are recognized based on thevaluation amounts confirmed by the state-owned assets administration department.
Subsequent expenditures incurred for the fixed asset are included in the cost of the fixed asset if itis probable that economic benefits associated with the asset will flow to the Group and thesubsequent expenditures can be measured reliably. Meanwhile the carrying amount of 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 since the monthsubsequent to the one in which it is ready for intended use. The useful life, estimated net residualvalue rate and annual depreciation rate of each category of fixed assets are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Category
| Category | Useful life | Estimated residual value rate (%) | Annual depreciation rate (%) |
| Port and terminal facilities | 5-50 years | 5.00 | 1.90-19.00 |
| Buildings | 5-50 years | 5.00 | 1.90-19.00 |
| Machinery and equipment, furniture and fixture and other equipment | 3-20 years | 5.00 | 4.75-31.67 |
| Motor vehicles and cargo ships | 5-25 years | 5.00 | 3.80-19.00 |
Estimated net residual value of a fixed asset is the estimated amount that the Group 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, retired ordamaged, the amount of any proceeds on disposal of the asset net of the carrying amount and relatedtaxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and thedepreciation method applied at least once at each financial year-end, and accounts for any changeas a change in an accounting estimate.
19. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include variousconstruction expenditures during the construction period, borrowing costs capitalized before it isready for intended use and other relevant costs. Construction in progress is not depreciated.Construction in progress is transferred to a fixed asset when it is ready for intended use.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
20. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifyingasset are capitalized when expenditures for such asset and borrowing costs are incurred andactivities relating to the acquisition, construction or production of the asset that are necessary toprepare the asset for its intended use or sale have commenced. Capitalization of borrowing costsceases when the qualifying asset being acquired, constructed or produced becomes ready for itsintended use or sale. Capitalization of borrowing costs is suspended during periods in which theacquisition, construction or production of a qualifying asset is interrupted abnormally and 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.
21. Intangible assets
21.1 Intangible assets
Intangible assets include land use rights, terminal operating rights and others.
An intangible asset is measured initially at cost. When the Group was restructured into a stockcompany, the intangible assets initially contributed by the state-owned shareholders are recognizedbased on the valuation amounts confirmed by the state-owned assets administration department.Except for port operation rights, when an intangible asset with a finite useful life is available foruse, its original cost is amortized over its estimated useful life. The terminal operating rights underoutput method are amortized over the operating periods according to the ratio of the estimatedminimum guaranteed throughput to the estimated minimum guaranteed total throughput. When theestimated minimum guaranteed throughput cannot be measured reliably, the straight-line methodwill be used for amortization over the operating periods. An intangible asset with indefinite usefullife is not amortized.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Intangible assets - continued
21.1 Intangible assets - continued
The amortization method, useful life and estimated net residual value of various intangible assetsare as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Category
| Category | Amortization Method | Useful Life (year) | Residual value rate (%) |
| Land use rights | Straight-line method | 40-50 | - |
| Terminal operating right | Output/Straight-line method | 30-50 | - |
| Others | Straight-line method | 5-50 | - |
For an intangible asset with a finite useful life, the Group reviews the useful life and amortizationmethod at the end of the year, and makes adjustments when necessary.
21.2 Research and development expenditure
Expenditure during the research phase is recognized as an expense in the period in which it isincurred.
Expenditure during the development phase that meets all of the following conditions at the sametime is recognized as an 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 period. The costs of intangible assets generatedby the internal research only include the total expenditure incurred for the period from the timepoint when the capitalization criteria are satisfied to date when intangible assets are ready forintended use. For the identical intangible asset, the expenditures expensed and included in profit orloss before they qualify for capitalization during the development process are not adjusted.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
22. Impairment of non-financial assets other than goodwill
The Group assesses at the balance sheet date whether there is any indication that the long-termequity investments, investment properties measured using the cost method, fixed assets,construction in progress, right-of-use assets, intangible assets with a finite useful life and assetsrelated to contract costs may be impaired. If there is any indication that such assets may be impaired,recoverable amounts are estimated for such assets. Intangible assets with indefinite useful life andintangible assets not yet available for use are tested for impairment annually, irrespective of whetherthere is any indication that the assets may be impaired.
Recoverable amount is estimated on an individual basis. If it is not practical to estimate therecoverable amount of an individual asset, the recoverable amount of the asset group to which theasset belongs will be estimated. The recoverable amount of an asset is the higher of its fair valueless costs of disposal and the present value of the future cash flows expected to be derived 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.
Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in anysubsequent period.
23. Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized overthe current and subsequent periods (together of more than one year). Long-term prepaid expensesare amortized using the straight-line method over the expected periods in which benefits are derived.
24. Contract liabilities
A contract liability represents the Group's obligation to transfer goods or services to a customer forconsideration received or receivable from the customer. The contract assets and contract liabilitiesunder the same contract are presented on a net basis.
25. Employee benefits
Employee benefits are all forms of considerations given by the Group in exchange for servicesrendered by employees or for the termination of employment. Employee benefits include short-termbenefits, post-employment benefits, termination benefits and other long-term employee benefits.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.1 Short-term employee benefits
Short-term benefits refer to the employee benefits that the Group is required to make full paymentswithin the 12 months after the end of the annual reporting period in which the employees haverendered relevant services, except the post-employment benefits and termination benefits.Specifically, the short-term benefits include: employee salaries, bonuses, allowances and subsidies,employee benefits, social insurance contributions such as the medical insurance, the work injuryinsurance and the maternity insurance, housing funds, union running costs and employee educationcosts, short-term paid absence, short-term profit sharing plan, non-monetary welfare and othershort-term benefits.
Short-term employee benefits payable are recognized as liabilities, with a corresponding charge tothe profit or loss for the period or included in the costs of related assets in the accounting period inwhich employees provide services to the Group. Staff welfare expenses incurred by the Group arerecognized in profit or loss for the period or the costs of related assets based on the actually occurredamounts when it actually occurred. Non-monetary staff welfare expenses are measured at fair value.
For the Group's payments of social security contributions for employees such as premiums orcontributions on medical insurance, work injury insurance and maternity insurance, and paymentsof housing funds, as well as union running costs and employee education costs provided inaccordance with relevant requirements, the amount of employee benefits are calculated accordingto prescribed bases and percentages and recognized as liabilities, with a corresponding charge tothe profit or loss for the period or included in the costs of related assets in the accounting period inwhich employees have rendered services.
25.2 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 enterprises for theservices rendered by the employees, exclusive of the short-term benefits and the terminationbenefits. The post-employment benefits consist of the pension insurance, the annuity, theunemployment insurance and other post-employment benefits.
Post-employment benefit plans are classified by the Group into defined contribution plans anddefined benefit plans. The post-employment benefit plan refers to agreements the Group enteredinto with the employees on the post-employment benefits or regulations or measures established bythe Group for provisions of the post-employee benefits, among which the defined contribution planrefers to the post-employment benefit plan under which the Group shall no longer undertake anyobligations of payments after paying fixed expenses to independent funds; the defined benefit plansrefer to the post-employment benefit plans other than the defined contribution plans. During theaccounting period in which the employees have rendered services to the Group, the amounts payablecalculated based on the defined contribution plan are recognized as liabilities and included in profitor loss for the period or included in costs of related assets.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.2 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 on
settlements);? Net interest of net liabilities or assets of defined benefit plans (including interest income ofplanned 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 or net assets of defined benefit plans are recognizedin profit or loss for the period or included in costs of related assets. Changes arising fromremeasurement of the net defined benefit liability or asset (including actuarial gains and losses, thereturn on plan assets, excluding amounts included in net interest on the net defined benefit liabilityor asset, and any change in the effect of the asset ceiling, excluding amounts included in net intereston the net defined benefit liability or asset) are recognized in other comprehensive income.
The deficit or surplus resulting from the present value of the defined benefit plan obligation less thefair value of the defined benefit plan assets is recognized as a net defined benefit plan liability orasset.
25.3 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. Where the Group provides terminationbenefits to employees, the liabilities arising from termination benefits are recognized and includedin profit or loss for the period at the earlier of: (1) when the Group cannot unilaterally withdraw theoffer of termination benefits because of the termination plan or a curtailment proposal; and (2) whenthe Group recognizes costs or expenses related to restructuring that involves the payment oftermination benefits.
25.4 Other long-term employee benefits
Other long-term employee benefits refer to all employee benefits except for short-term benefits,post-employment benefits, and termination benefits.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.4 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 benefit costs arising from other long-term employee benefits are recognized asthree components: service cost, net interest on the net liability or net asset for other long-termemployee benefits, and changes resulting from the remeasurement of the net liability or net assetfor other long-term employee benefits. The total net amount of these items is included in profit orloss for the period or cost of related assets.
The Group provides internal retirement benefits to employees accepting internal retirementarrangements. Internal retirement benefits refer to payments of salaries and social securitycontributions for employees who have not reached the retirement age regulated by the country andare approved to quit the job voluntarily. For internal retirement benefits, the internal retirementbenefits the Group is expected to pay during the period from the date when employees stoprendering services to the date of normal retirement are recognized as liabilities at the present valueand included in profit or loss for the period when relevant recognition requirements of the internalretirement benefits are met.
26. Provisions
Provisions are recognized when the Group has a present obligation related with contingencies, andit is probable 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 balance sheet date, taking into account factors pertaining to a contingency suchas the risks, uncertainties and time value of money. Where the effect of the time value of money ismaterial, the amount of the provision is determined by discounting the related future cash outflows.
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.
27. Revenue recognition
The Group's revenue is mainly from the following business types:
(1) Port services;
(2) Bonded logistics services;
(3) Other services such as property development and investment.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
The Group recognizes revenue based on the transaction price allocated to such performanceobligation when a performance obligation is satisfied, i.e. when "control" of the goods or servicesunderlying the particular performance obligation is transferred to the customer. A performanceobligation represents the commitment that a good and service that is distinct shall be transferred bythe Group to the customer. Transaction price refers to the consideration that the Group is expectedto charge due to the transfer of goods or services to the customer, but it does not include paymentsreceived on behalf of third parties and amounts that the Group expects to return to the customer.
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 in progress during the Group's performance;(iii) goods or services generated during the Group's performance have irreplaceable utilization, andthe Group is entitled to collect amounts of cumulative performance part which have been done upto now. Otherwise, the Group will recognize revenue at the point in time when the customer obtainscontrol over relative goods or services.
The Group adopts the 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.
Contract assets refers to the Group's right to consideration in exchange for goods or services thatthe Group has transferred to a customer when that right is conditioned on something other than thepassage of time. Accounting policies relating to the impairment of contract asset are specified inNote (IV) 10. The Company's unconditional (i.e., depending on the passage of time only) right toreceive consideration from the customer is separately presented as receivables.
Contract liabilities refers to the Company's obligation to transfer goods or services to a customerfor which the Company has already received consideration from the customer.
Contract assets and contract liabilities under the same contract are presented at net amount.
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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue recognition - continued
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 mostlikely amount. The transaction price including variable consideration shall not exceed the amountof the cumulatively recognized revenue which is unlikely to be significantly reversed when relevantuncertainty is eliminated. At each balance sheet date, the Group re-estimates the amount of variableconsideration which should be included in transaction price.
Where the customer pays non-cash consideration, the Group recognizes the transaction price basedon the fair value of the non-cash consideration. Where the fair value of the non-cash considerationcannot be reasonably estimated, the Group recognizes the transaction price indirectly by referenceto the stand-alone price of the promised goods or services promised transferred to the customer.
Where the contract includes significant financing component, the Group determines the transactionprice based on assumption that the customer has paid the amount payable by cash when obtainingthe control over the goods or services. The difference between the transaction price and the contractconsideration is amortized within the contract period using effective interest method. At theinception of the contract, if the Group expects that the time interval between the customer'sobtaining control of a promised goods or service and the customer's payment for that goods orservice will not exceed one year, the Group will not consider the significant financing componentin the contract.
The Group assesses whether it controls each specified good or service before that good 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Contract costs
28.1 Costs of obtaining a contract
For the incremental cost of obtaining the contract (cost that will not incur if the contract is notobtained) that is expected to be recoverable, it is recognized as an asset, and shall be amortized ona basis that is consistent with the revenue recognition of the goods or services to which the assetrelates and recognized in profit or loss for the period. If the amortization period of such asset is lessthan one year, it is recognized in profit or loss for the period when incurred. Other expenses incurredfor obtaining the contract is included in profit or loss for the period when incurred, except for thoseexplicitly assumed by the customer.
28.2 Costs to fulfil a contract
If the costs incurred in fulfilling a contract are not within the scope of other standards other thanthe revenue standards, the Group shall recognize an asset from the costs incurred to fulfil a contractonly if those costs meet all of the following criteria: (1) the costs relate directly to a contract or toan anticipated contract that the Group can specifically identify; (2) the costs generate or enhanceresources of the entity that will be used in satisfying performance obligations in the future; and (3)the costs are expected to be recovered. The asset mentioned above shall be amortized on a basis thatis consistent with the transfer to the customer of the goods or services to which the asset relates andrecognized in profit or loss for the period.
28.3 Losses of assets related to contract costs
In determining the impairment losses of assets related to contract costs, the Group first determinesimpairment losses of other assets related to contracts recognized in accordance with other ASBEs;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 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 is made.
29. Government grants
Government grants are transfers of monetary assets or non-monetary assets from the governmentto the Group at no consideration. A government grant is recognized only when the Group cancomply with conditions attached to the grant and the Group will receive the grant.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
29. Government grants - continued
If a government grant takes the form of a monetary asset, it is measured at the amount received orreceivable. If a government grant takes the form of a non-monetary asset, it is measured at fair value.If the fair value cannot be reliably determined, it is measured at a nominal amount. A governmentgrant measured at a nominal amount is recognized immediately in profit or loss for the period.
A government grant related to an asset is recognized as deferred income, and evenly amortized toprofit or loss over the useful life of the related asset. A government grant measured at a nominalamount is recognized immediately in profit or loss for the period. Where the related asset is sold,transferred, scrapped or damaged prior to the end of its useful life, the related undistributed deferredincome is transferred to the profit or loss for the disposal period.
For a government grant related to income, if the grant is a compensation for related expenses orlosses to be incurred in subsequent periods, the grant is recognized as deferred income andrecognized in profit or loss over the periods in which the related costs or losses are recognized; ifthe grant is a compensation for related expenses or losses already incurred, the grant is recognizedimmediately in profit or loss.
For government grants both related to assets and income, different parts are distinguished fordifferent accounting treatments; if it is difficult to distinguish, they should be classified asgovernment grants related to income as a whole.
A government grant related to the Group's daily activities is recognized in other income based onthe nature of economic activities; a government grant not related to the Group's daily activities isrecognized in non-operating income.
30. Income tax
The income tax expenses include current income tax and deferred income tax.
30.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periodsare measured at the amount expected to be paid (or recovered) according to the requirements of taxlaws.
30.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their taxbase, or between the 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
30. Deferred tax assets/ deferred tax liabilities - continued
30.2 Deferred tax assets and deferred tax liabilities - continued
Deferred tax liabilities are 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) atthe time of transaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets 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 difference and it is probable that the temporary differencewill not reverse in the foreseeable future. Deferred tax assets arising from deductible temporarydifferences associated with such investments in subsidiaries, associates and joint ventures are onlyrecognized to the extent that future taxable profits will be available against which the deductibletemporary differences can be utilized and they are expected to be reversed 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 related assets are recovered or the related liabilities are settled accordingto tax laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, exceptwhen they arise from transactions or events that are directly recognized in other comprehensiveincome or in shareholders' equity, in which case they are recognized in other comprehensive incomeor in shareholders' equity, and when they arise from business combinations, in which case theyadjust the carrying amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if itis no longer probable that sufficient taxable profits will be available in the future to allow 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.
30.3 Income tax offsetting
When the Group has a legal right to settle on a net basis and intends either to settle on a net basisor to realize the assets and settle the liabilities simultaneously, current tax assets and current taxliabilities are offset and presented on a net basis.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
30. Deferred tax assets/ deferred tax liabilities - continued
30.3 Income tax offsetting - continued
When the Group has a legal right to settle current tax assets and liabilities on a net basis, anddeferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxationauthority on either the same taxable entity or different taxable entities which intend either to settlecurrent tax assets and liabilities on a net basis or to realize the assets and 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.
31. Leases
A lease is a contract whereby the lessor conveys to the lessee in return for a consideration the rightto use an asset for an agreed period of time.
For contracts entered into, the Group assesses whether a contract is or contains a lease at inceptiondate. Such contract will not be reassessed unless the terms and conditions of the contract aresubsequently changed.
31.1 The Group as Lessee
31.1.1 Separating components of a lease
If a contract contains a lease component and one or more non-lease components, the Group allocatesthe consideration in the contract to each lease component on the basis of the relative stand-aloneprice of the lease components and the aggregate stand-alone price of the non-lease components.
31.1.2 Right-of-use assets
Except for short-term leases and leases for which the underlying asset is of low value, at thecommencement date of the lease, the Group recognizes right-of-use assets. The commencementdate of the lease is the date on which a lessor makes an underlying asset available for use by theGroup. Right-of-use assets are initially measured at cost. The cost of the right-of-use assetscomprises:
? the amount of the initial measurement of the lease liabilities.? any lease payments made at or before the commencement date, less any lease incentives.? any initial direct costs incurred by the Group.? an estimate of costs to be incurred by the lessee in dismantling and removing the underlyingasset, restoring the site on which it is located or restoring the underlying asset to the conditionrequired by the terms and conditions of the lease.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.2 Right-of-use assets - continued
The Group depreciates right-of-use assets by reference to the relevant depreciation provisions ofAccounting Standards for Business Enterprises No. 4 - Fixed Assets. The right-of-use assets aredepreciated over the remaining useful lives of the leased assets where the Group is reasonablycertain to obtain ownership of the underlying assets at the end of the lease term. Otherwise, right-of-use assets are depreciated over the shorter of the lease term and the remaining useful lives of theleased assets.
The Group applies Accounting Standards for Business Enterprises No. 8 - Impairment of Assets, todetermine whether the right-of-use assets are impaired and to account for any impairment lossidentified.
31.1.3 Lease liabilities
Except for short-term leases and leases for which the underlying asset is of low value, at thecommencement date of the lease, the Group measures the lease liabilities at the present value of thelease payments that are not paid at that date. If the interest rate implicit in the lease cannot be readilydetermined, the lessee shall use the lessee's incremental borrowing rate.
The lease payments comprise the following payments by the Group for the right to use theunderlying asset during the lease term:
? fixed payments (including in-substance fixed payments), less any lease incentives.? variable lease payments that depend on an index or a rate.? the exercise price of a purchase option if the Group is reasonably certain to exercise that option.? payments for terminating the lease, if the lease term reflects the Group exercising an optionto terminate the lease.? amounts expected to be payable by the Group under residual value guarantees.
Variable lease payments that depend on an index or a rate, are initially measured using the index orrate as at the commencement date. Variable lease payments not included in the measurement of thelease liabilities, are recognized in profit or loss, or in the cost of relevant assets, in the period ofthose payments.
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 on the remaining balance of the leaseliabilities, and included in profit or loss or charged to cost of related assets.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.3 Lease liabilities - continued
After the commencement date, if one of the following occurs, the lease liabilities are remeasuredby the Group with the adjustments to the related right-of-use assets. If the carrying amount of theright-of-use assets is reduced to zero and there is a further reduction in the measurement of the leaseliabilities, the difference should be recognized in profit or loss.
? there is a change in the lease term, or in the assessment of an option to purchase the underlyingasset, the Group remeasures the lease liabilities, on the basis of the revised lease term and therevised discount rate.? there is a change in the amounts expected to be payable under a residual value guarantee, orin future lease payments resulting from a change in an index or a rate used to determine thosepayments, the Group remeasures the lease liabilities, on the basis of the revised lease paymentsand the unchanged discount rate, unless the change in the lease payments results from a changein floating interest rates, in which case a revised discount is applied to the present value.
31.1.4 Short-term leases and leases of low-value assets
The Group chooses not to recognize right-of-use assets and lease liabilities for short-term leases ofport and terminal facilities, buildings, machinery and equipment, furniture and fixture and otherequipment, motor vehicles and cargo ships, other short-term leases and leases of low-value assets.A short-term lease is a lease that at the commencement date, has a lease term of 12 months or lessand does not contain a call option. A lease of low-value assets is that, the value of the underlyingasset is less than RMB 50,000 when it is new. The Group shall recognize the lease paymentsassociated with short-term leases and leases of low-value assets in profit or loss or cost of relatedassets on a straight-line basis over the lease term.
31.1.5 Lease modifications
A lease modification should be accounted for as a separate lease if both of the following apply:
? the modification increases the scope of the lease by adding the right to use one or moreunderlying assets.? the consideration for the lease increases by an amount commensurate with the stand-alone
price 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 liability by discounting the revisedpayments using a revised discount rate.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.5 Lease modifications - continued
For lease modifications that decrease the scope of the lease or narrow the term of the lease, theGroup should decrease the carrying amount of the right-of-use asset with any gain or loss relatingto the partial or full termination of the lease should be recognized in profit or loss. Forremeasurement of lease liabilities from all other lease modifications, a corresponding adjustment ismade to the carrying amount of the right-of-use asset.
31.2 The Group as Lessor
31.2.1 Separating components of a lease
Where a contract contains both lease components and non-lease components, the Group shallapportion the contract consideration in accordance with the provisions of the revenue standards onthe apportionment of the transaction price, based on the respective individual prices of the leasecomponents and the non-lease components.
31.2.2 Classification of leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all therisks and rewards of ownership. All other leases are classified as operating leases.
31.2.2.1 The Group as lessor under operating leases
The Group recognizes lease receipts from operating leases as rental income the straight-line methodover the respective periods of the lease term. The Group capitalizes initial direct costs incurred inconnection with operating leases and apportions those costs profit or loss for the period as anexpense over the lease term on the same basis as the recognition of lease 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 when incurred.
31.2.2.2 The Group as lessor under finance leases
At the commencement date, the Group recognizes a finance lease receivable at the amount equal tothe net lease investment with assets under finance leases 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.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.2 Classification of leases - continued
31.2.2.2 The Group as lessor under finance leases - continued
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 the
lessee will exercise the option.? payments for terminating the lease option, provided that the lease term reflects that the lesseewill exercise the option to terminate the lease.? residual value of the guarantee provided to the Group by the lessee, a party related to thelessee and an independent third party with the financial ability to fulfil guaranteed obligations.
Variable payments receivable not included in the net investment in the lease are recognized in profitor loss when they arise.
Interest income for each period over the lease term is calculated and recognized by the Group at afixed periodic rate.
31.2.3 Subleases
As a lessor of the sublease, the Group accounts for the original lease contract and the subleasecontract as two separate contracts. The Group classifies the subleases based on the right-of-useassets generating from the original lease rather than the underlying assets of the original lease.
31.2.4 Lease modifications
The Group accounts for a modification to an operating lease as a new lease from the effective dateof the modification, considering any lease advances or receivables relating to the original lease asthe lease receipts for the new lease.
The Group should account for the modification to a finance lease as a separate lease if both of thefollowings are satisfied:
? The modification increases the scope of the lease by adding the right to use one or more
underlying assets; and? The consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope with any appropriate adjustment to that stand-alone price.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.4 Lease modifications - continued
For a modification to a finance lease that is not accounted for as a separate lease, the Group shouldaccount for the modification as follows:
? If the lease would have been classified as an operating lease had the modification been effectat the inception date, the Group should account for the lease modification as a new lease fromthe effective date of the modification, and measure the carrying amount of the underlyingasset as the net investment in the lease before the effective date of the lease modification.? If the lease would have been classified as a finance lease had the modification been in effectat the inception date, the Group should apply the requirements of contract modification andrenegotiation under the ASBE No. 22.
31.2.5 Sale and leaseback transactions
31.2.5.1 The Group as the seller-lessee
The Group assesses and determines whether the transfer of an asset in a sale and leasebacktransaction constitutes a sale according to the requirements of revenue standards. If the transfer ofan asset does not constitute a sale, the Group should continue to recognize the transferred asset andshould recognize a financial liability at an amount equal to the transfer proceeds applying the ASBENo. 22 . If the transfer of an asset is a sale, the Group should measure the right-of-use asset arisingfrom the leaseback at the proportion of the original carrying amount of the asset that relates to theright of use, and recognize only any gain or loss that relates to the rights transferred to the lessor.
31.2.5.2 The Group as the buyer-lessor
If the transfer of an asset in a sale and leaseback transaction does not constitutes a sale, the Groupdoes not recognize the transferred asset, but a financial asset at an amount equal to the transferproceeds, and accounts for such financial asset under the ASBE No. 22. If the transfer of an assetconstitutes a sale, the Group accounts for the purchase of the asset in accordance with otherapplicable ASBEs and accounts for the lease of the asset.
32. Exchange of Non-Monetary Assets
When a non-monetary assets transaction has commercial substance and the fair value of the assetsreceived or surrendered can be measured reliably. For assets received, the fair value of the assetssurrendered and relevant payable taxes shall be regarded as the transaction cost of the assetsreceived at initial recognition. For assets surrendered, the difference between the fair value and thecarrying value of the asset surrendered shall be recognized in profit or loss for the period. Whenthere is clear evidence indicating that the fair value of the assets received is more reliable, the costof assets received and surrendered shall be calculated in different ways. For the assets received, thefair value of the asset received and related taxes payable are recognized as the cost at initialrecognition. For the assets surrendered, at derecognition, the difference between the fair value ofthe assets received and the carrying amount of the assets surrendered shall be recognized in profitor loss for the period.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32. Exchange of Non-Monetary Assets - continued
Where a non-monetary assets transaction fails to meet criteria to be measured at fair value, thetransaction is measured at carrying amount. For the assets received, the carrying amount of theassets surrendered and relevant taxes payable are recognized as the cost at initial recognition. Forthe assets surrendered, at derecognition, no profit or loss is recognized.
33. Discontinued Operation
A discontinued operation is a component of the Group that can be clearly distinguished, either hasbeen disposed of or is classified as held for sale, and meets one of the following conditions:
(1) Such component represents a separate major line of business or geographic area of
operations.
(2) Such component is part of a single coordinated plan to dispose of a separate major line of
business or geographic area of operations.
(3) Such component is a subsidiary acquired exclusively with a view to resale.
Gains or losses from discontinued operations are presented separately from those from continuingoperations in the income statement. Operating gains or losses such as impairment losses fromdiscontinued operations and the amount of reversals, and the gains or losses from disposals arepresented as discontinued operations. For discontinued operations presented in the current period,the Group restates the information previously presented as gains or losses from continuingoperations in the financial statements for the period as discontinued operations in the comparableaccounting period.
34. Safety production cost
According to the Administrative Measures for the Collection and Utilization of Enterprise WorkSafety Funds (Cai Zi [2022] No. 136) jointly issued by the Ministry of Finance and 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 to thespecial 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.
35. Share-based payments
A share-based payment is a transaction which the Group grants equity instruments, in return forservices rendered by employees or other parties. The Group's share-based payments include equity-settled share-based payments.
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(IV) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
35. Share-based payments - continued
Equity-settled share-based payments in exchange for services rendered by employees are measuredat the 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 vest immediately, with a corresponding increase in capitalreserves.
(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 historicalexperiences of the Group's management as well as other factors that are considered to be relevant.Actual results may differ from these estimates.
The Group regularly reviews the judgments, estimates and assumptions on a going concern basis.Changes in accounting estimates which only affect the current period should be recognized incurrent period; changes which not only affect the current but the future periods should be recognizedin current and future periods. At the balance sheet date, key assumptions and uncertainties in criticaljudgments and accounting estimates that are likely to lead to significant adjustments to the bookvalues of assets and liabilities in the future are:
Goodwill impairment
For the purpose of impairment testing, the present value of the expected future cash flows of theassets group or portfolio including goodwill shall be calculated, and such expected future cash flowsshall be estimated. Meantime, a pre-tax rate shall be determined that should reflect the time valueof money on the current market and the specific interest risks.
Recognition of deferred income tax
The Group calculates and makes provision for deferred tax liabilities according to the profitdistribution plan of subsidiaries, associates and the joint ventures subject to the related law. Forretained earnings which are not allocated by the investment company, since the profits will be usedto invest the company's daily operation and future development, no deferred tax liabilities arerecognized. If the actually distributed profits in the future are more or less than those expected,corresponding deferred tax liabilities will be recognized or reversed at the earlier of the date onwhich the profit distribution plan is changed and the date on which the profit distribution is declared,in profit and loss for the period.
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(V) CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES AND KEY
ASSUMPTIONS AND UNCERTAINTIES IN ACCOUNTING ESTIMATES - continued
Recognition of deferred income tax - continued
Deferred tax assets are recognized based on the deductible temporary difference and thecorresponding tax rate, to the extent that it is probable that future taxable profit will be availableagainst which the deductible temporary differences can be utilized. If the actual taxable income inthe future is more or less than that expected, corresponding deferred tax assets will be recognizedor reversed in profit or loss for the period in which they are actually incurred.
Estimated useful lives and residual values of fixed assets and intangible assets
The Group assesses the estimated useful lives and residual values of its fixed assets and intangibleassets. Such assessment is made by reference to the historical experience of actual useful lives andresidual values of fixed assets and intangible assets of a similar nature and function, and may subjectto significant changes due to technical innovation and fierce industry competition. Where theestimated useful lives and residual values of fixed assets and intangible assets are less than theprevious estimates, the Group will increase the depreciation and amortization, or write off oreliminate the technically obsolete fixed assets or intangible assets.
(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES
1. Changes in significant accounting policies and their effects
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 stipulated theaccounting treatment concerning the exemption of initial recognition of deferred income tax relatingto assets and liabilities arising from a single transaction.
The Interpretation No. 16 revised the coverage of exemption of the initial recognition of deferredincome tax in the Accounting Standards for Business Enterprises No. 18 - Income Tax, and specifiedthat the relevant provisions on the exemption of initial recognition of deferred tax liabilities anddeferred tax assets are not applicable to a single transaction (not a business combination) that affectsneither the accounting profit nor taxable income (or deductible losses) at the time of transaction,and where the assets and liabilities initially recognized generate equal taxable temporary differencesand deductible temporary differences. The Interpretation became effective from 1 January 2023 andcould be early applied. The Group early applied the Interpretation in the current year, and accountedfor the single transactions retrospectively that occurred between the beginning of the earliestpresentation period of the financial statements and 31 December 2022, and restated the comparativefinancial statements. The impact on the relevant items is as follows:
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(VI) CHANGES IN SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
1. Changes in significant accounting policies and their effects - continued
1.1 Interpretation No. 16 of the Accounting Standards for Business Enterprises - continued
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| 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 |
| Item | 2022 | Adjustment | 2022 |
| Profit or 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 interests | 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 |
| Item | January - June 2022 | Adjustment | January - June 2022 |
| Profit or loss: | |||
| Income tax expenses | 625,643,717.42 | -6,510,739.27 | 619,132,978.15 |
| Net profit | 4,879,983,423.23 | 6,510,739.27 | 4,886,494,162.50 |
| Profit or loss attributable to minority interests | 2,898,122,098.61 | -188,893.94 | 2,897,933,204.67 |
| Other comprehensive income attributable to shareholders of the Company, net of tax | -18,696,061.65 | 1,011,930.07 | -17,684,131.58 |
| Other comprehensive income attributable to minority interests, net of tax | 460,425,177.92 | 1,703,020.82 | 462,128,198.74 |
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(VII) TAXES
1. Major taxes and tax rates
CHINA MERCHANTS PORT GROUP CO., LTD.Taxes
| Taxes | Tax basis | Tax rate |
| Enterprise income tax | Taxable income | 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, real estate lease, etc. | 3%, 5%, 9% | |
| Social contribution tax (Note 4) | Income | 0.65%-7.6% |
| Deed tax | Land use right and property transfer amount | 3%-5% |
| Property tax | 70% of cost of property or rental income | 1.2% or 12% |
| City maintenance and construction tax | VAT paid | 1%-7% |
| Education surcharges | VAT paid | 3% |
| Land use tax | Land area actually occupied | RMB 0.8-12 per square meter |
Note 1: The Group's enterprise income tax is calculated based on the current tax rate stipulated by
local tax laws. Among them, the Company are subject to an enterprise income tax rate of25%, the subsidiaries set up in Hong Kong are subject to an enterprise income tax rate of
8.25% and 16.5%, the majority of subsidiaries set up in China are subject to an enterpriseincome tax rate of 25% and certain others are subject to the preferential tax rate for smalland micro enterprises of 20%, certain domestic subsidiaries are subject to the preferentialtax rate for high-tech enterprises or encouraged industrial enterprises in the region of 15%,and the other overseas subsidiaries are subject to enterprise income tax rates between 27%and 34%.
The Company obtains dividends distributed by overseas subsidiaries and should payenterprise income tax at a rate of 25% in accordance with relevant Chinese tax laws. TheCompany obtains taxable income outside of China, and the amount of income tax that hasbeen paid abroad can be offset with the current taxable amount. The credit limit is thetaxable amount calculated in accordance with the provisions of the Enterprise Income TaxLaw.
Note 2: Foreign investors who receive dividends of profits from Chinese subsidiaries in 2008 and
thereafter generally shall pay withholding income tax at a rate of 10% in accordance withthe relevant provisions of the PRC enterprise income tax. For companies incorporated incertain regions (including Hong Kong and Singapore), if the companies are actual ownersholding more than 25% interest in the subsidiaries in China, they will enjoy a preferentialtax rate of 5%.
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 the overseas subsidiary of the Group, TCP
Participa??es S.A. ( hereinafter referred to as "TCP"), to the local government.
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(VII) TAXES - continued
2. Tax preference
Some subsidiaries of the Group in China are recognized as high-tech enterprises or encouragedindustrial enterprises in the region and are subject to an enterprise income tax rate of 15%. TheGroup's subsidiaries outside China may be subject to enterprise income tax preference inaccordance with relevant local tax policies.
For the period from 1 January 2023 to 31 December 2027, the urban land use tax for the Group'ssome domestic subsidiaries on the land for bulk commodity storage facilities is levied at the reducedrate of 50% of the tax amount applicable to the grade of the land.
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Cash on hand | 5,239,515.56 | 726,960.10 |
| RMB | 2,767.60 | 2,767.60 |
| USD | 194,787.09 | 44,853.90 |
| HKD | 26,964.67 | 26,167.88 |
| XOF | 4,689,468.47 | 204,626.05 |
| BRL | 8,820.47 | 6,536.63 |
| Others | 316,707.26 | 442,008.04 |
| Bank deposits (Note 1) | 14,256,207,464.50 | 13,061,475,159.69 |
| RMB | 10,947,167,940.52 | 10,688,462,520.89 |
| USD | 2,226,239,397.64 | 1,045,085,866.19 |
| EUR | 676,483,008.93 | 745,066,787.31 |
| BRL | 179,341,909.61 | 379,062,088.91 |
| HKD | 201,423,648.76 | 141,668,372.90 |
| AUD | 11,786.68 | 4,708,056.85 |
| Others | 25,539,772.36 | 57,421,466.64 |
| Other monetary funds (Note 2) | 179,242,912.54 | 553,726,619.61 |
| RMB | 61,171,729.51 | 340,778,819.19 |
| HKD | 117,681,853.83 | 212,571,712.02 |
| USD | 389,329.20 | 376,088.40 |
| Total | 14,440,689,892.60 | 13,615,928,739.40 |
| Including: Total amount of funds deposited overseas | 4,440,318,647.60 | 4,012,922,744.09 |
| Total amount of funds deposited in finance companies | 913,608,945.27 | 1,841,698,554.32 |
Note 1: The closing balance of bank deposits includes interest receivable of RMB 7,852,286.96
and the frozen funds of ETC card business of RMB 12,000.00.
Note 2: The balance of the securities margin account totaled RMB 125,363,071.85 in other cash
and bank balances at the end of the period, the principal of the time certificate of depositin other cash and bank balances that can be readily withdrawn on demand at the end of theperiod totaled RMB 50,000,000.00, the interest of the time certificate of deposit totaledRMB 346,221.49, the restricted deposit totaled RMB 3,533,619.20.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Held-for-trading financial assets
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Financial assets measured at FVTPL | 4,645,336,576.09 | 2,998,781,599.63 |
| Including: Equity investment instruments | - | 135,742.11 |
| Structured deposits | 4,645,336,576.09 | 2,998,645,857.52 |
| Total | 4,645,336,576.09 | 2,998,781,599.63 |
3. Notes receivable
(1) Classification of notes receivable
| Category | 30/6/2023 | 31/12/2022 |
| Bank acceptance | 186,028,246.15 | 395,000.00 |
| Commercial acceptance | - | 36,000,000.00 |
| Total | 186,028,246.15 | 36,395,000.00 |
| Less: Provision for credit losses (Note) | - | - |
| Carrying amount | 186,028,246.15 | 36,395,000.00 |
Note: The Group believes that the acceptor of its bank acceptance has high credit ratings with no
significant credit risks; therefore, no provision for credit loss is made.
(2) As at 30 June 2023, there were no notes receivable pledged.
(3) As at 30 June 2023, there were no notes receivable endorsed or discounted but unmatured
at the balance sheet date.
(4) As at 30 June 2023, there were no notes reclassified to accounts receivable due to the
drawers' inability to settle the note.
(5) For the period from 1 January to 30 June 2023, there were no notes receivable written off.
4. Accounts receivable
(1) Disclosure of accounts receivable by aging
| Aging | 30/6/2023 | ||
| Accounts receivable | Provision for credit loss | Proportion (%) | |
| Within 1 year | 2,094,587,779.58 | 24,963,870.21 | 1.19 |
| 1 - 2 years | 20,964,069.55 | 9,280,113.40 | 44.27 |
| 2 - 3 years | 3,463,930.96 | 2,144,229.20 | 61.90 |
| Over 3 years | 67,452,065.90 | 66,083,186.94 | 97.97 |
| Total | 2,186,467,845.99 | 102,471,399.75 | 4.69 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Accounts receivable - continued
(2) Disclosure of accounts receivable by categories
CHINA MERCHANTS PORT GROUP CO., LTD.
Creditrating
| Credit rating | ECL rate (%) | 30/6/2023 | 31/12/2022 | ||||
| Gross carrying amount | Provision for credit loss | Book value | Gross carrying amount | Provision for credit loss | Book value | ||
| A | 0.00-0.10 | 1,348,465,570.21 | 628,740.36 | 1,347,836,829.85 | 757,893,845.42 | 254,506.65 | 757,639,338.77 |
| B | 0.10-0.30 | 648,061,012.35 | 593,266.86 | 647,467,745.49 | 437,329,923.88 | 579,435.66 | 436,750,488.22 |
| C | 0.30-50.00 | 95,320,508.67 | 13,436,823.75 | 81,883,684.92 | 91,915,183.34 | 12,581,359.16 | 79,333,824.18 |
| D | 50.00-100.00 | 94,620,754.76 | 87,812,568.78 | 6,808,185.98 | 83,024,004.24 | 80,597,965.97 | 2,426,038.27 |
| Total | 2,186,467,845.99 | 102,471,399.75 | 2,083,996,446.24 | 1,370,162,956.88 | 94,013,267.44 | 1,276,149,689.44 | |
(3) Changes in provision for credit loss of accounts receivable
| Item | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | Total |
| Opening balance | 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 receivables | -84,939.18 | 84,939.18 | - |
| -- Reverse to not credit-impaired accounts receivable | - | - | - |
| Provision for the period | 1,522,412.78 | 6,995,029.89 | 8,517,442.67 |
| Reversal for the period | -845,775.96 | -1,579,894.47 | -2,425,670.43 |
| Transfer-out on derecognition of financial assets (including direct write-down) | - | - | - |
| Other changes | 651,831.86 | 1,714,528.21 | 2,366,360.07 |
| Closing balance | 14,658,830.97 | 87,812,568.78 | 102,471,399.75 |
(4) For the period from 1 January to 30 June 2023, there were no accounts receivable written
off during this period.
(5) Top five balances of account receivables classified by debtor
| Name of entities | 30/6/2023 | Aging | Proportion of the amount to the total accounts receivable (%) | Closing balance of provision for credit loss |
| Client 1 | 654,725,695.87 | Within 1 year, 1 - 2 years | 29.94 | 4,556.21 |
| Client 2 | 63,695,381.12 | Within 1 year | 2.91 | - |
| Client 3 | 54,509,949.10 | Within 1 year | 2.49 | - |
| Client 4 | 42,497,336.16 | Within 1 year, 1 - 2 years | 1.94 | 148.55 |
| Client 5 | 32,409,055.59 | Within 1 year | 1.48 | - |
| Total | 847,837,417.84 | 38.76 | 4,704.76 |
5. Receivables financing
(1) Receivables financing classification
| Item | 30/6/2023 | 31/12/2022 |
| Bank acceptance measured at fair value | - | 163,766,913.10 |
(2) As at 30 June 2023, the Group has no pledged receivables financing.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Receivables financing - continued
(3) As at 30 June 2023, receivables financing endorsed or discounted which are not yet due at
the balance sheet date are as follows
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 30/6/2023 | 31/12/2022 | ||
| Derecognized | Recognized | Derecognized | Recognized | |
| Bank acceptance measured at fair value | 47,471,451.74 | - | 105,141,033.28 | - |
6. Prepayments
(1) Presentation of prepayments by aging
| Aging | 30/6/2023 | 31/12/2022 | ||||
| Gross carrying amount | Proportion (%) | Provision for impairment | Gross carrying amount | Proportion (%) | Provision for impairment | |
| Within 1 year | 83,385,768.48 | 98.99 | - | 61,917,391.43 | 97.31 | - |
| 1 - 2 years | 725,500.99 | 0.86 | - | 1,589,158.49 | 2.50 | - |
| 2 - 3 years | 33,106.07 | 0.04 | - | - | - | - |
| Over 3 years | 96,875.50 | 0.11 | - | 120,875.50 | 0.19 | - |
| Total | 84,241,251.04 | 100.00 | - | 63,627,425.42 | 100.00 | - |
(2) As at 30 June 2023, the Group has no significant prepayments aged more than one year.
(3) Top five balances of prepayments at the end of the period classified by entities
| Name of entities | Relationship with the Company | 30/6/2023 | Aging | Proportion of the closing balance to the total prepayments (%) | Reason for not being settled |
| Entity 1 | Non-related party | 10,378,696.99 | Within 1 year | 12.32 | Unsettled prepaid communication expenses |
| Entity 2 | Non-related party | 7,913,085.18 | Within 1 year | 9.39 | Unsettled advance premium |
| Entity 3 | Non-related party | 4,748,700.38 | Within 1 year | 5.64 | Unsettled advance labor expenses |
| Entity 4 | Non-related party | 4,256,518.06 | Within 1 year & 1 - 2 years | 5.05 | Unsettled prepaid communication expenses |
| Entity 5 | Non-related party | 3,074,177.02 | Within 1 year & 1 - 2 years | 3.65 | Unsettled advance premium |
| Total | 30,371,177.63 | 36.05 |
7. Other receivables
7.1 Summary of other receivables
| Item | 30/6/2023 | 31/12/2022 |
| Dividends receivable | 1,386,530,246.60 | 416,040,485.62 |
| Other receivables | 619,906,260.78 | 532,801,608.68 |
| Total | 2,006,436,507.38 | 948,842,094.30 |
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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
CHINA MERCHANTS PORT GROUP CO., LTD.Name of investees
| Name of investees | 30/6/2023 | 31/12/2022 |
| Shanghai International Port (Group) Co., Ltd. ("SIPG") | 914,383,798.30 | - |
| China Nanshan Development (Group) Incorporation ("Nanshan Group") | 240,591,000.00 | 240,591,000.00 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 50,000,000.00 | 50,000,000.00 |
| Liaoning Port Co., Ltd. ("Liaoning Port") | 47,754,255.87 | - |
| Zhanjiang Merchants Port City Investment Co., Ltd. ("Merchants Port City") | 41,847,044.77 | 41,847,044.77 |
| Qingdao Port International Co., Ltd. | 41,451,110.91 | - |
| Tin-Can Island Container Terminal Ltd | 32,242,479.35 | 65,121,449.40 |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 18,449,001.16 | 18,449,001.16 |
| Others | 1,199,474.53 | 448,447.23 |
| Total | 1,387,918,164.89 | 416,456,942.56 |
| Less: Provision for credit loss | 1,387,918.29 | 416,456.94 |
| Book value | 1,386,530,246.60 | 416,040,485.62 |
(2) Significant dividends receivable aged more than one year
| Name of investee | 30/6/2023 | 31/12/2022 | Aging | Why unrecovered | Impaired or not, and basis of determination |
| Nanshan Group | 111,042,000.00 | 111,042,000.00 | 1 - 2 years & 2 - 3 years | Relevant procedures are being handled and it is expected to be recovered by the end of 2023 | No |
(3) Changes in provision for credit loss of dividends receivable
| Item | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Opening balance | 416,456.94 | - | - | 416,456.94 |
| Gross carrying amount of dividends receivable at 1 January 2023 | ||||
| -- Transfer to stage 2 | - | - | - | - |
| -- Transfer to stage 3 | - | - | - | - |
| -- Reversal to stage 2 | - | - | - | - |
| -- Reversal to stage 1 | - | - | - | - |
| Provision for the period | 971,461.22 | - | - | 971,461.22 |
| Reversal for the period | - | - | - | - |
| Transfer-out on derecognition of financial assets (including direct write-down) | - | - | - | - |
| Other changes | 0.13 | - | - | 0.13 |
| Closing balance | 1,387,918.29 | - | - | 1,387,918.29 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables
(1) Disclosure of other receivables by aging
CHINA MERCHANTS PORT GROUP CO., LTD.
Aging
| Aging | 30/6/2023 | ||
| Other receivables | Provision for credit loss | Proportion (%) | |
| Within 1 year | 501,774,160.72 | 188,260,025.68 | 37.52 |
| 1 - 2 years | 190,128,116.37 | 4,957,459.05 | 2.61 |
| 2 - 3 years | 43,455,737.68 | 5,810,476.64 | 13.37 |
| Over 3 years | 887,594,183.14 | 804,017,975.76 | 90.58 |
| Total | 1,622,952,197.91 | 1,003,045,937.13 | 61.80 |
(2) Presentation of other receivables by nature
| Item | 30/6/2023 | 31/12/2022 |
| Operation compensation (Note 1) | 859,526,752.84 | 859,677,826.43 |
| Advances | 305,255,064.41 | 295,592,304.09 |
| Land compensation (Note 2) | 89,630,000.00 | 89,630,000.00 |
| Deposits | 47,560,784.42 | 26,402,747.81 |
| Special subsidy | 31,716,257.00 | 31,716,257.00 |
| Others | 289,263,339.24 | 233,051,614.17 |
| Total | 1,622,952,197.91 | 1,536,070,749.50 |
| Less: Provision for credit loss | 1,003,045,937.13 | 1,003,269,140.82 |
| Book value | 619,906,260.78 | 532,801,608.68 |
Note 1: This represents the operation compensation receivable by a subsidiary of the Company
from the holding company of its minority shareholder in accordance with the agreement.As at 30 June 2023, the Group has fully made provision for credit losses on the accumulatedoutstanding compensation amounting to RMB 859,526,752.84 which has not been receivedyet.
Note 2: On 9 October 2021, Zhanjiang Port (Group) Co., Ltd., (hereinafter referred to as the
"Zhanjiang Port"), a subsidiary of the Company, entered into the Agreement on Recoveryof State-owned Land Use Rights with the People's Government of Xiashan District,Zhanjiang Municipal. Pursuant to the Agreement, Zhanjiang Port shall return the landlocated in the Zhanjiang Comprehensive Bonded Zone on the east of the Gangshu Avenueof approximately 195.68 mu, which is equivalent to RMB 89,630,000.00. Theaforementioned land was then returned before 31 December 2021. As at 30 June 2023, theabove-mentioned land compensation of RMB 89,630,000.00 has not been recovered yet.
(3) Provision for credit loss on other receivables
As part of the Group's credit risk management, the Group conducts internal credit ratings for itscustomers and determines the expected loss rate for other receivables for each rating. Such expectedaverage loss rates are based on actual historical impairments while taking account of the currentand future economic conditions.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(3) Provision for credit loss on other receivables - continued
As at 30 June 2023, the credit risk and ECL of other receivables of each category of customers arepresented as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Credit rating
| Credit rating | ECL rate (%) | 30/6/2023 | 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 | 618,034,114.14 | - | - | 618,034,114.14 | 532,760,873.61 | - | - | 532,760,873.61 |
| B | 0.10-0.30 | - | - | - | - | - | - | - | - |
| C | 0.30-50.00 | - | - | - | - | - | - | - | - |
| D | 50.00-100.00 | - | - | 1,004,918,083.77 | 1,004,918,083.77 | - | - | 1,003,309,875.89 | 1,003,309,875.89 |
| Gross carrying amount | 618,034,114.14 | - | 1,004,918,083.77 | 1,622,952,197.91 | 532,760,873.61 | - | 1,003,309,875.89 | 1,536,070,749.50 | |
| Provision for credit loss | 25,765.15 | - | 1,003,020,171.98 | 1,003,045,937.13 | 24,451.35 | - | 1,003,244,689.47 | 1,003,269,140.82 | |
| Book value | 618,008,348.99 | - | 1,897,911.79 | 619,906,260.78 | 532,736,422.26 | - | 65,186.42 | 532,801,608.68 | |
Including: Significant other receivables for which the provision for credit loss is assessed
individually at the end of the period (credit rating of D)
| Name of entities | 30/6/2023 | Provision for credit loss | ECL rate (%) | Reasons for provision |
| Entity 1 | 859,526,752.84 | 859,526,752.84 | 100.00 | Expected to be unrecoverable (Note) |
| Entity 2 | 110,593,785.02 | 108,624,448.23 | 98.22 | Expected to be unrecoverable |
| Entity 3 | 14,000,000.00 | 14,000,000.00 | 100.00 | Expected to be unrecoverable |
| Total | 984,120,537.86 | 982,151,201.07 | — — | — — |
Note: Refer to Note 1 to Note (VIII) 7.3 (2) for details.
(4) Provision for and recovery or reversal of credit loss of other receivables for the period
| Item | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Opening balance | 24,451.35 | - | 1,003,244,689.47 | 1,003,269,140.82 |
| Gross carrying amount of other receivables at 1 January 2023 | ||||
| --Transfer to stage 2 | - | - | - | - |
| --Transfer to stage 3 | -4,342.69 | - | 4,342.69 | - |
| --Reversal to stage 2 | - | - | - | - |
| --Reversal to stage 1 | 180,361.18 | - | -180,361.18 | - |
| Provision for the period | 531.59 | - | 51,410.13 | 51,941.72 |
| Reversal for the period | -175,236.28 | - | - | -175,236.28 |
| Other changes | - | - | -99,909.13 | -99,909.13 |
| Closing balance | 25,765.15 | - | 1,003,020,171.98 | 1,003,045,937.13 |
(5) The Group has no other receivables written off for the period from 1 January to 30 June
2023.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Other receivables - continued
(6) At the end of the period, top five balances of other receivables classified by debtor are as
follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Name of entities
| Name of entities | Nature | 30/6/2023 | Aging | Proportion of the amount to the total other receivables (%) | Provision for credit loss at the end of the current period |
| Entity 1 | Operation compensation | 859,526,752.84 | Within 1 year, over 3 years | 52.96 | 859,526,752.84 |
| Entity 2 | Advances | 122,674,255.48 | Within 1 year, 1 - 2 years, 2 - 3 years | 7.56 | - |
| Entity 3 | Advances | 110,593,785.02 | Within 1 year, 2 - 3 years, over 3 years | 6.81 | 108,624,448.23 |
| Entity 4 | Land compensation | 89,630,000.00 | 1 - 2 years | 5.52 | - |
| Entity 5 | Advances | 53,305,610.59 | Within 1 year | 3.28 | - |
| Total | 1,235,730,403.93 | 76.13 | 968,151,201.07 |
(7) Receivables involving government grants
| Name of entities | Item | 30/6/2023 | Aging | Time and amount expected to be received and its basis |
| Shantou CM Port Group Co., Ltd. ("Shantou Port") | Special subsidy for barge line business | 24,800,000.00 | 2 - 3 years | Expected to be recovered by the end of 2023 |
| Shantou Port | Business development subsidy | 6,916,257.00 | 1 - 2 years | Expected to be recovered by the end of 2023 |
| Total | 31,716,257.00 |
8. Inventories
(1) Categories of inventories
| Item | 30/6/2023 | 31/12/2022 | ||||
| Gross carrying amount | Provision for decline in value of inventories | Book value | Gross carrying amount | Provision for decline in value of inventories | Book value | |
| Raw materials | 226,504,438.82 | 1,276,181.39 | 225,228,257.43 | 196,425,573.04 | 1,326,130.64 | 195,099,442.40 |
| Goods on hand | 18,387,867.55 | - | 18,387,867.55 | 17,248,970.37 | - | 17,248,970.37 |
| Others | 725,036.14 | - | 725,036.14 | 12,774,408.71 | - | 12,774,408.71 |
| Total | 245,617,342.51 | 1,276,181.39 | 244,341,161.12 | 226,448,952.12 | 1,326,130.64 | 225,122,821.48 |
(2) Provision for decline in value of inventories
| Item | 31/12/2022 | Provision | Decrease | 30/6/2023 | ||
| Provision | Others | Reversal | Write-off | |||
| Raw materials | 1,326,130.64 | - | 15,375.59 | 65,324.84 | - | 1,276,181.39 |
(3) As at 30 June 2023, the Group has no capitalized borrowing cost in the balance of
inventories.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Assets held for sale
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Book value at the end of the period | Fair value at the end of the period | Estimated disposal expenses | Disposal date |
| Disposal group held for sale (Note) | 4,034,332,787.01 | 4,364,666,376.36 | 1,762,730.00 | 8 August 2023 |
| Less: Provision for impairment of assets held for sale | - | |||
| Book value | 4,034,332,787.01 |
Note: The Company's subsidiary Cyber Chic Company Limited listed its 45% equity in Ningbo
Daxie China Merchants International Terminals Co., Ltd. ("Ningbo Daxie") at ChinaBeijing Equity Exchange on 20 April 2023. On 19 May 2023, Ningbo Zhoushan PortCompany Limited ("Ningbo Zhoushan") became the transferee. On 25 May 2023, CyberChic Company Limited and Ningbo Zhoushan signed the Equity Transfer Contract, withtransfer price (inclusive of tax) amounting to RMB 1,845,000,000.00. As of 30 June 2023,the Transaction has not yet been completed.
10. Non-current assets due within one year
| Item | 30/6/2023 | 31/12/2022 |
| Long-term receivables due within one year | 59,092,591.98 | 903,128,422.35 |
| Less: Provision for credit loss | 59,092.59 | 903,128.42 |
| Book value | 59,033,499.39 | 902,225,293.93 |
11. Other current assets
Categories of other current assets:
| Item | 30/6/2023 | 31/12/2022 |
| Input tax to be deducted and to be certified | 74,840,534.57 | 70,627,183.33 |
| Prepaid taxes | 67,972,442.47 | 98,329,205.73 |
| Others | 5,982,724.60 | 16,946,751.47 |
| Total | 148,795,701.64 | 185,903,140.53 |
| Less: Provision for credit loss | - | - |
| Book value | 148,795,701.64 | 185,903,140.53 |
12. Long-term receivables
(1) Details of long-term receivables
| Item | 30/6/2023 | 31/12/2022 | Range of discount rate at the end of the period | ||||
| Gross carrying amount | Provision for credit loss | Book value | Gross carrying amount | Provision for credit loss | Book value | ||
| Advances to shareholders (Note 1) | 4,220,399,632.45 | 4,220,399.63 | 4,216,179,232.82 | 3,864,736,673.31 | 3,864,736.67 | 3,860,871,936.64 | 4.75%-8.50% |
| Financing lease deposits | 10,678,959.27 | 10,678.96 | 10,668,280.31 | 10,659,515.88 | 10,659.52 | 10,648,856.36 | 0-5.37% |
| Land compensation receivable (Note 2) | 2,692,032,000.00 | - | 2,692,032,000.00 | 2,692,032,000.00 | - | 2,692,032,000.00 | - |
| Total | 6,923,110,591.72 | 4,231,078.59 | 6,918,879,513.13 | 6,567,428,189.19 | 3,875,396.19 | 6,563,552,793.00 | - |
| Less: Long-term receivables due within 1 year | 59,092,591.98 | 59,092.59 | 59,033,499.39 | 903,128,422.35 | 903,128.42 | 902,225,293.93 | - |
| Long-term receivables due over 1 year | 6,864,017,999.74 | 4,171,986.00 | 6,859,846,013.74 | 5,664,299,766.84 | 2,972,267.77 | 5,661,327,499.07 | - |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(1) Details of long-term receivables - continued
Note 1: It mainly represents the aggregate of the Group's principal and interest receivable from
Terminal Link SAS, equivalent to RMB 3,288,169,195.32.
As at 26 March 2020, China Merchants Port Holdings Company ("CM Port"), a subsidiaryof the Company, provided a long-term loan to Terminal Link SAS for the terminalacquisition project and charged interest to Terminal Link SAS at an interest rate of 6%.
As of 31 May 2023, CM Port, a subsidiary of the Company, provided a long-term loan toTerminal Link SAS for its Thessaloniki Port Project and charged interest to Terminal LinkSAS at an interest rate of 6.15%.
Note 2: On 5 November 2019, Shantou Port entered into the Contract for the Acquisition of State-
Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant to thecontract, the land and attached buildings of approximately 370.96 mu located in ZhuchiDeepwater Port on the south of Zhongshan East Road of Shantou should be returned toShantou Land Reserve Center by Shantou Port, which were equivalent to RMB1,558,032,000.00. Therein, the land and attached building of approximately 183.63 mu hasbeen handed over in 2019, while the remaining land and attached building of approximately
187.33 mu has been handed over in 2020. As at 30 June 2023, the land compensation totalingRMB 1,158,032,000.00 had not yet been recovered.
On 21 August 2020, Shantou Port entered into the Contract for the Acquisition of State-Owned Land Use Rights in Shantou with Land Reserve Center of Shantou Haojiang District.Pursuant to the contract, the land and attached buildings of approximately 152.34 mu locatedin Yutianwen, Queshi, Haojiang District, Shantou, should be returned to Land ReserveCenter of Shantou Haojiang District by Shantou Port, which were equivalent to RMB250,000,000.00. The transfer of above-mentioned land and attached buildings wascompleted before 31 December 2020. As at 30 June 2023, the land compensation totallingRMB 200,000,000.00 had 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 by ShantouPort, which is amounting to RMB 2,724,876,000.00. Among them, 320 mu of land andattached buildings had been transferred by 31 December 2020, which were equivalent toRMB 1,344,000,000.00; and the remaining 328.78 mu of land and attached buildings havenot been transferred. As at 30 June 2023, the land compensation totalling RMB1,334,000,000.00 had not yet been recovered.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(2) Provision for credit loss on long-term receivables
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Opening balance | 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 | - | - | - | - |
| -- Reversal to stage 2 | - | - | - | - |
| -- Reversal to stage 1 | - | - | - | - |
| Provision for the period | 1,199,718.23 | - | - | 1,199,718.23 |
| Reversal for the period | -844,035.83 | - | - | -844,035.83 |
| Transfer-out on derecognition of financial assets (including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| Closing balance | 4,231,078.59 | - | - | 4,231,078.59 |
(3) As at 30 June 2023, there are no long-term receivables derecognized due to the transfer of
financial assets.
(4) As at 30 June 2023, there are no assets and liabilities arising from the transfer or continuing
involvement of long-term receivables.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments
(1) Details of long-term equity investments
CHINA MERCHANTS PORT GROUP CO., LTD.Investees
| Investees | Accounting method | 31/12/2022 | Changes for the period | 30/6/2023 | Balance of provision for impairment at the end of the period | ||||||||
| Increase | Decrease | Investment profit or loss under the equity method | Reconciling items from other comprehensive income | Other equity movements | Distribution of 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 | - | - | 52,892,617.53 | - | - | - | - | - | 100,331,656.35 | 2,940,429,019.25 | - |
| Port of Newcastle | Equity method | 2,048,681,775.65 | - | - | 16,104,684.73 | -1,446,746.71 | - | - | - | - | 47,953,982.50 | 2,111,293,696.17 | - |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Equity method | 1,502,540,532.71 | - | - | 65,204,791.15 | - | 1,538,101.66 | - | - | - | - | 1,569,283,425.52 | - |
| Yantai Port Group Laizhou Port Co., Ltd. | Equity method | 794,153,389.74 | - | - | 20,672,709.37 | - | -1,476,439.54 | -28,133,178.67 | - | - | - | 785,216,480.90 | - |
| Others | Equity method | 2,584,212,612.25 | 5,720,923.74 | - | 15,100,630.76 | - | 745,615.12 | -100,454,790.83 | - | - | 21,479,598.97 | 2,526,804,590.01 | - |
| Subtotal | 9,716,793,055.72 | 5,720,923.74 | - | 169,975,433.54 | -1,446,746.71 | 807,277.24 | -128,587,969.50 | - | - | 169,765,237.82 | 9,933,027,211.85 | - | |
| II. Associates | |||||||||||||
| SIPG | Equity method | 34,171,898,201.17 | - | - | 2,053,880,439.55 | -6,899,675.46 | -51,177,797.53 | -914,383,798.30 | - | - | - | 35,253,317,369.43 | - |
| Nanshan Group | Equity method | 6,377,197,726.21 | - | - | 113,853,548.75 | 68,503,427.36 | 88,958.34 | - | - | - | -3,151,081.70 | 6,556,492,578.96 | - |
| Terminal Link SAS | Equity method | 6,395,609,168.37 | - | - | 123,523,209.71 | 61,784,485.73 | - | -375,045,012.35 | - | - | 217,267,732.58 | 6,423,139,584.04 | - |
| Liaoning Port | Equity method | 4,021,162,878.74 | - | - | 71,442,863.94 | 1,581,868.93 | 4,126,703.30 | -47,754,255.87 | - | - | -10,287,159.53 | 4,040,272,899.51 | 365,662,318.91 |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | Equity method | 7,403,186,521.01 | - | - | 21,312,200.00 | - | - | - | - | - | - | 7,424,498,721.01 | - |
| Ningbo Zhoushan | Equity method | 17,974,630,545.05 | - | - | 486,448,025.41 | 11,657,422.21 | -22,722,867.87 | -390,875,794.33 | - | - | - | 18,059,137,330.47 | - |
| China Merchants Northeast Asia Development Investment Co., Ltd. | Equity method | 1,017,010,205.71 | - | - | 3,116,967.23 | - | - | - | - | - | - | 1,020,127,172.94 | - |
| Antong Holdings Co., Ltd. ("Antong Holdings") (Note) | Equity method | - | 892,560,547.98 | - | 10,337,508.05 | - | - | - | - | - | - | 902,898,056.03 | - |
| Others (Note) | Equity method | 5,286,805,617.07 | - | - | 41,404,322.02 | -31,451,275.23 | -104,425.86 | -81,607,955.82 | - | - | 148,312,961.70 | 5,363,359,243.88 | 2,381,331.36 |
| Subtotal | 82,647,500,863.33 | 892,560,547.98 | - | 2,925,319,084.66 | 105,176,253.54 | -69,789,429.62 | -1,809,666,816.67 | - | - | 352,142,453.05 | 85,043,242,956.27 | 368,043,650.27 | |
| Total | 92,364,293,919.05 | 898,281,471.72 | - | 3,095,294,518.20 | 103,729,506.83 | -68,982,152.38 | -1,938,254,786.17 | - | - | 521,907,690.87 | 94,976,270,168.12 | 368,043,650.27 | |
Note: As of 30 June 2023, the Company and its subsidiary China Ocean Shipping Tally Co., Ltd., Zhanjiang totally hold 6.83% equity in Antong
Holdings, and assigned one director to Antong Holdings. Therefore, the Company has significant influence over Antong Holdings andreclassified its equity investment in Antong Holdings from other non-current assets to long-term equity investments in associates.
- 79 -
(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments - continued
(2) Provisions for impairment losses of long-term equity investments
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 31/12/2022 | Effect of consolidation scope change | Increase | Decrease | Effect of translation of financial statements denominated in foreign currencies | 30/6/2023 | |
| Amount | Reason | ||||||
| Liaoning Port | 354,857,305.25 | - | - | - | - | 10,805,013.66 | 365,662,318.91 |
| HOA THUONG CORPORATION | 2,310,965.02 | - | - | - | - | 70,366.34 | 2,381,331.36 |
| Total | 357,168,270.27 | - | - | - | - | 10,875,380.00 | 368,043,650.27 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Investments in other equity instruments
(1) Details of investments in other equity instruments
CHINA MERCHANTS PORT GROUP CO., LTD.Investees
| Investees | 30/6/2023 | 31/12/2022 |
| China Ocean Shipping Agency (Shenzhen) Co., Ltd. | 144,301,178.28 | 144,301,178.28 |
| Others (Note) | 9,955,002.00 | 27,644,096.74 |
| Total | 154,256,180.28 | 171,945,275.02 |
Note: The change for the period represents the transfer to held-for-sale assets. Details are set out
in Note (VIII) 9.
(2) Details of investments in non-trading equity instruments
| Item | Dividends income recognized for the period | Accumulated gains | Amounts transferred to retained earnings from other comprehensive income | Reason for designation as FVTOCI | Reason for transfer from other comprehensive income to retained earnings |
| China Ocean Shipping Agency (Shenzhen) Co., Ltd. | 8,824,500.00 | 130,791,178.28 | - | The intention of holding is neither for sale nor profits in short-term | N/A |
| Others | - | 927,502.00 | - | The intention of holding is neither for sale nor profits in short-term | N/A |
| Total | 8,824,500.00 | 131,718,680.28 | - |
15. Other non-current financial assets
| Item | 30/6/2023 | 31/12/2022 |
| Financial assets classified as at FVTPL | 971,716,168.73 | 1,745,740,896.41 |
| Including: Investments in equity instruments | 971,716,168.73 | 1,745,740,896.41 |
| Including: Qingdao Port International Co., Ltd. | 943,850,357.04 | 767,553,775.66 |
| Antong Holdings (Note) | - | 950,321,309.06 |
| Others | 27,865,811.69 | 27,865,811.69 |
Note: Refer to Note (VIII) 13 (1) for details.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Investment properties
(1) Investment properties measured under the cost method
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Land use rights | Buildings | Total |
| I. Cost | |||
| 1. Balance at 1 January 2023 | 128,269,825.38 | 6,177,602,852.51 | 6,305,872,677.89 |
| 2. Increase for the period | 8,388,170.37 | 13,446,587.56 | 21,834,757.93 |
| (1) Purchase | - | 606,207.86 | 606,207.86 |
| (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 in the current period | - | - | - |
| (1) Disposal | - | - | - |
| 4. Balance at 30 June 2023 | 136,657,995.75 | 6,191,049,440.07 | 6,327,707,435.82 |
| II. Accumulated depreciation and amortization | |||
| 1. Balance at 1 January 2023 | 43,054,991.58 | 1,139,127,566.75 | 1,182,182,558.33 |
| 2. Increase for the period | 3,228,723.73 | 92,658,424.77 | 95,887,148.50 |
| (1) Provision for the period | 1,285,600.37 | 89,888,070.89 | 91,173,671.26 |
| (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 in the current period | - | - | - |
| (1) Disposal | - | - | - |
| 4. Balance at 30 June 2023 | 46,283,715.31 | 1,231,785,991.52 | 1,278,069,706.83 |
| III. Impairment provision | |||
| 1. Balance at 1 January 2023 | - | - | - |
| 2. Increase for the period | - | - | - |
| 3. Decrease for the period | - | - | - |
| 4. Balance at 30 June 2023 | - | - | - |
| IV. Book value | |||
| 1. At 30 June 2023 | 90,374,280.44 | 4,959,263,448.55 | 5,049,637,728.99 |
| 2. At 1 January 2023 | 85,214,833.80 | 5,038,475,285.76 | 5,123,690,119.56 |
(2) Investment properties without ownership certificates
| Item | Book value at 30/6/2023 | Book value at 31/12/2022 | Reasons for certificate of title not completed | Expected time of completion |
| Buildings and land use rights | 23,121,370.28 | 24,008,665.10 | Certificates of land use rights have not yet been obtained for some buildings | The certificate of title is underway |
17. Fixed assets
17.1 Summary of fixed assets
| Item | 30/6/2023 | 31/12/2022 |
| Fixed assets | 29,368,062,834.14 | 32,033,317,707.66 |
| Disposal of fixed assets | 939,414.20 | 8,375.84 |
| Total | 29,369,002,248.34 | 32,033,326,083.50 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets - continued
17.2 Fixed assets
(1) Details of fixed assets
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Port and terminal facilities | Buildings | Machinery and equipment, furniture and fixture and other equipment | Motor vehicles and cargo ships | Total |
| I. Cost | |||||
| 1. Balance 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 period | 166,267,635.05 | - | 188,906,526.61 | 2,510,111.49 | 357,684,273.15 |
| (1) Purchase | 19,556,058.19 | - | 56,789,316.27 | 1,802,166.51 | 78,147,540.97 |
| (2) Transfer from development expenditure | 6,180,387.49 | - | - | - | 6,180,387.49 |
| (3) Transfer from construction in progress | 140,531,189.37 | - | 132,117,210.34 | 707,944.98 | 273,356,344.69 |
| 3. Decrease for the period | 2,752,315,156.03 | 255,679,754.27 | 1,684,785,634.24 | 28,698,058.50 | 4,721,478,603.04 |
| (1) Disposal or retirement | 31,550,712.90 | 10,765,927.51 | 28,732,766.99 | 22,588,577.82 | 93,637,985.22 |
| (2) Transfer to investment properties | - | 12,840,379.70 | - | - | 12,840,379.70 |
| (3) Transfer to assets held for sale | 2,720,764,443.13 | 232,073,447.06 | 1,656,052,867.25 | 6,109,480.68 | 4,615,000,238.12 |
| 4. Adjustments to the amount pre-carried forward | -13,175,135.93 | - | 83,817.50 | 153,503.23 | -12,937,815.20 |
| 5. Reclassification adjustment | -59,046,162.00 | 54,686,102.51 | 4,360,059.49 | - | - |
| 6. Effect of translation of financial statements denominated in foreign currencies | 326,075,212.68 | 5,523,017.17 | 217,639,577.40 | 26,589,788.07 | 575,827,595.32 |
| 7. Balance at 30 June 2023 | 31,044,061,915.91 | 1,831,724,394.47 | 16,193,379,143.64 | 2,315,136,439.12 | 51,384,301,893.14 |
| II. Accumulated depreciation | |||||
| 1. Balance 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 period | 499,620,447.03 | 40,220,195.44 | 425,210,913.41 | 54,324,524.44 | 1,019,376,080.32 |
| (1) Provision | 499,620,447.03 | 40,220,195.44 | 425,210,913.41 | 54,324,524.44 | 1,019,376,080.32 |
| 3. Decrease for the period | 1,125,790,748.86 | 86,044,776.86 | 1,117,181,049.65 | 26,675,935.40 | 2,355,692,510.77 |
| (1) Disposal or retirement | 24,707,161.36 | 10,228,860.28 | 24,782,219.42 | 21,440,552.66 | 81,158,793.72 |
| (2) Transfer to investment properties | - | 2,770,353.88 | - | - | 2,770,353.88 |
| (3) Transfer to assets held for sale | 1,101,083,587.50 | 73,045,562.70 | 1,092,398,830.23 | 5,235,382.74 | 2,271,763,363.17 |
| 4. Reclassification adjustment | -845,856.47 | 1,050,452.16 | -204,595.69 | - | - |
| 5. Effect of translation of financial statements denominated in foreign currencies | 74,573,669.64 | 1,449,687.99 | 115,937,277.13 | 8,706,119.44 | 200,666,754.20 |
| 6. Balance at 30 June 2023 | 10,168,555,832.53 | 592,398,532.73 | 10,060,064,622.70 | 1,131,645,202.28 | 21,952,664,190.24 |
| III. Impairment provision | |||||
| 1. Balance at 1 January 2023 | 57,546,986.63 | 5,985,164.85 | 42,717.28 | - | 63,574,868.76 |
| 2. Increase for the period | - | - | - | - | - |
| 3. Disposal or retirement | - | - | - | - | - |
| 4. Reclassification amount | - | - | - | - | - |
| 5. Other decreases | - | - | - | - | - |
| 6. Balance at 30 June 2023 | 57,546,986.63 | 5,985,164.85 | 42,717.28 | - | 63,574,868.76 |
| IV. Book value | |||||
| 1. At 30 June 2023 | 20,817,959,096.75 | 1,233,340,696.89 | 6,133,271,803.66 | 1,183,491,236.84 | 29,368,062,834.14 |
| 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 |
(2) As at 30 June 2023, the Group had no temporarily idle fixed assets.
(3) Fixed assets leased out under operating leases
| Item | 30/6/2023 | 31/12/2022 |
| Buildings | 197,515,868.27 | 196,480,507.61 |
| Port and terminal facilities | 30,919,502.66 | 33,260,157.31 |
| Machinery and equipment, furniture and fixture and other equipment | 2,307,599.86 | 7,920,761.45 |
| Total | 230,742,970.79 | 237,661,426.37 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets - continued
17.2 Fixed assets - continued
(4) Fixed assets without ownership certificates
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Book value at 30/6/2023 | Book value at 31/12/2022 | Remarks |
| Buildings, port and terminal facilities | 1,599,372,964.58 | 1,786,308,720.95 | This is mainly because the land use rights of the land have not been obtained yet and the approval procedures have not yet been completed for certain buildings. |
(5) Details of fixed assets depreciated but still in use and temporarily idle at the end of the
period, and fixed assets disposed of and retired in the year:
| Item | Amount | Remark |
| Cost of fixed assets fully depreciated but still in use as at the end of the period | 4,191,753,815.46 | |
| Cost of fixed assets temporarily idle as at the end of the period | - | |
| Fixed assets disposed and retired for the period: | ||
| Including: Cost of fixed assets disposed and retired | 93,637,985.22 | |
| Net value of fixed assets disposed and retired | 12,479,191.50 | |
| Profit or loss on disposal or retirement of fixed assets | -6,724,988.70 |
(6) Details of the Group's fixed assets with restricted ownership as at 30 June 2023 are shown
in Note (VIII) 63.
17.3 Disposal of fixed assets
| Item | 30/6/2023 | 31/12/2022 |
| Motor vehicles and cargo ships | 862,574.35 | - |
| Port and terminal facilities | 43,926.96 | - |
| Machinery and equipment, furniture and fixture and other equipment | 29,934.91 | 8,375.84 |
| Buildings | 2,977.98 | - |
| Total | 939,414.20 | 8,375.84 |
18. Construction in progress
(1) Summary of construction in progress
| Item | 30/6/2023 | 31/12/2022 |
| Construction in progress | 2,472,492,744.00 | 2,405,872,478.61 |
| Materials for construction of fixed assets | 4,415,483.17 | 7,971,929.03 |
| Total | 2,476,908,227.17 | 2,413,844,407.64 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
(2) Details of construction in progress
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 30/6/2023 | 31/12/2022 | ||||
| Gross carrying amount | Provision for impairment | Book value | Gross carrying amount | Provision for impairment | Book value | |
| Port and terminal facilities | 2,070,958,005.86 | - | 2,070,958,005.86 | 1,991,321,268.14 | - | 1,991,321,268.14 |
| Infrastructure | 201,735,167.90 | - | 201,735,167.90 | 201,444,537.67 | - | 201,444,537.67 |
| Berths and yards | 2,140,835.44 | - | 2,140,835.44 | 18,728,577.14 | - | 18,728,577.14 |
| Others | 197,658,734.80 | - | 197,658,734.80 | 194,378,095.66 | - | 194,378,095.66 |
| Total | 2,472,492,744.00 | - | 2,472,492,744.00 | 2,405,872,478.61 | - | 2,405,872,478.61 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
(3) The top ten balances of construction in progress
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Budget amount | 31/12/2022 | Increase for the period | Transfer to fixed assets | Other decreases for the period | Effect of translation of financial statements denominated in foreign currencies | 30/6/2023 | Proportion of accumulated construction investment in budget (%) | Construction progress (%) | Accumulated amount of capitalized interest | Including: capitalized interest for the period | Interest capitalization rate for the current period (%) | Capital source |
| Reconstruction project of HIPG container, oil terminal and tank area | 2,817,485,265.02 | 817,365,084.37 | - | - | - | 28,776,658.92 | 846,141,743.29 | 57.68 | 57.68 | - | - | - | Own funds and loans |
| General cargo terminal project at Donghai Island Port Area of Zhanjiang Port | 905,348,400.00 | 448,877,835.04 | - | - | - | - | 448,877,835.04 | 49.58 | 49.58 | 44,364,372.49 | - | - | Own funds and loans |
| Phase I project for the stuffing and destuffing service area of Baoman Port Area, Zhanjiang Port | 683,007,100.00 | 269,045,354.01 | 50,186,817.21 | - | - | - | 319,232,171.22 | 46.74 | 46.74 | 23,748,849.77 | 4,195,807.57 | 3.50 | Own funds and loans |
Phase I expansion project for the containerterminal at Baoman Port Area, Zhanjiang Port
| Phase I expansion project for the container terminal at Baoman Port Area, Zhanjiang Port | 2,342,775,800.00 | 191,463,684.57 | - | - | - | - | 191,463,684.57 | 8.17 | 8.17 | 953,620.60 | - | - | Own funds and loans |
| Phase II terminal project for working area of Liaogeshan Port Area of Foshan Port | 746,878,600.00 | 16,402,742.35 | 64,409,960.93 | - | - | - | 80,812,703.28 | 10.82 | 10.82 | 7,751,875.50 | 5,879,925.00 | 4.19 | Own funds and loans |
| Haida dry bulk cargo storage yard and supporting facilities and land reclamation works at the back of the liquid bulk berth | 61,000,000.00 | 60,576,339.80 | 418,555.20 | - | - | - | 60,994,895.00 | 99.99 | 99.99 | - | - | - | Own funds |
| Zhanjiang Port bucket-wheel stacker reclaimer installation project | 74,800,000.00 | 51,551,526.93 | 502,499.73 | - | - | - | 52,054,026.66 | 69.59 | 69.59 | 2,337,134.92 | 502,499.73 | 3.50 | Own funds and loans |
| TCP138 kV gas insulated substation project | 46,894,702.14 | 33,666,456.43 | 7,711,139.44 | 1,578,530.06 | - | 1,072,840.79 | 40,871,906.60 | 90.52 | 90.52 | - | - | - | Own funds |
| Transtaineres 31 A 41 | 191,841,963.30 | 16,222,603.85 | 19,353,467.42 | - | - | 1,376,978.25 | 36,953,049.52 | 19.26 | 19.26 | - | - | - | Own funds |
| Dachan Bay Phase II | 918,521,317.23 | 24,872,917.72 | 10,659,821.88 | - | - | - | 35,532,739.60 | 3.87 | 3.87 | - | - | - | Own funds |
| Total | 8,788,553,147.69 | 1,930,044,545.07 | 153,242,261.81 | 1,578,530.06 | - | 31,226,477.96 | 2,112,934,754.78 | 79,155,853.28 | 10,578,232.30 |
(4) Materials for construction of fixed assets
| Item | 30/6/2023 | 31/12/2022 | ||||
| Gross carrying amount | Provision for impairment | Book value | Gross carrying amount | Provision for impairment | Book value | |
| Materials for construction of fixed assets | 4,415,483.17 | - | 4,415,483.17 | 7,971,929.03 | - | 7,971,929.03 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets
(1) Details of right-of-use assets
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Port and terminal facilities | Buildings | Machinery and equipment, furniture and fixture and other equipment | Land | Motor vehicles, cargo ships and others | Total |
| I. Cost | ||||||
| 1. Balance 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 period | - | 28,068,531.69 | - | 1,196,619.58 | 5,119,357.99 | 34,384,509.26 |
| (1) Purchase | - | 28,068,531.69 | - | 1,196,619.58 | 5,119,357.99 | 34,384,509.26 |
| 3. Decrease for the period | 4,045,800.11 | 20,012,413.69 | - | - | 7,620,740.24 | 31,678,954.04 |
| (1) Termination of lease | 1,079,443.59 | 20,012,413.69 | - | - | 7,620,740.24 | 28,712,597.52 |
| (2) Other decreases | 2,966,356.52 | - | - | - | - | 2,966,356.52 |
| 4. Effect of translation of financial statements denominated in foreign currencies | 216,190,714.32 | 4,763,460.67 | 779,975.10 | 99,052,642.18 | - | 320,786,792.27 |
| 5. Balance at 30 June 2023 | 7,626,870,718.70 | 187,565,863.83 | 362,184,107.13 | 2,933,717,354.91 | 12,955,039.87 | 11,123,293,084.44 |
| II. Accumulated depreciation | ||||||
| 1. Balance 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 period | 128,935,618.09 | 10,470,122.25 | 10,772,259.73 | 21,105,466.02 | 2,116,442.71 | 173,399,908.80 |
| (1) Provision | 128,935,618.09 | 10,470,122.25 | 10,772,259.73 | 21,105,466.02 | 2,116,442.71 | 173,399,908.80 |
| 3. Decrease for the period | 434,260.05 | 20,012,425.31 | - | - | 7,620,740.24 | 28,067,425.60 |
| (1) Termination of lease | 434,260.05 | 20,012,425.31 | - | - | 7,620,740.24 | 28,067,425.60 |
| 4. Effect of translation of financial statements denominated in foreign currencies | 23,078,225.25 | 1,078,828.47 | 759,236.09 | 11,967,558.35 | - | 36,883,848.16 |
| 5. Balance at 30 June 2023 | 1,092,284,933.59 | 51,286,383.20 | 130,985,545.49 | 360,018,118.35 | 4,799,865.35 | 1,639,374,845.98 |
| III. Impairment provision | ||||||
| 1. Balance at 1 January 2023 | - | - | - | - | - | - |
| 2. Increase for the period | - | - | - | - | - | - |
| 3. Decrease for the period | - | - | - | - | - | - |
| 4. Balance at 30 June 2023 | - | - | - | - | - | - |
| IV. Book value | ||||||
| 1. At 30 June 2023 | 6,534,585,785.11 | 136,279,480.63 | 231,198,561.64 | 2,573,699,236.56 | 8,155,174.52 | 9,483,918,238.46 |
| 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 |
(2) Amount recognized in profit or loss
| Category | Current period |
| Depreciation expenses of right-of-use assets (Note 1) | 173,399,908.80 |
| Interest expenses on lease liabilities (Note 2) | 31,418,935.49 |
| Expenses for short-term leases | 27,727,081.54 |
| Expenses for leases of low value assets | - |
| Variable lease payments not included in the measurement of lease liabilities (Note 3) | - |
| Revenue from sublease of right-of-use assets | 5,446,966.10 |
Note 1: No depreciation expenses of right-of-use assets are capitalized in the period from 1 January
to 30 June 2023.
Note 2: No interest expenses of lease liabilities are capitalized in the period from 1 January to 30
June 2023.
Note 3: No variable lease payments are included in the measurement of lease liabilities in the period
from 1 January to 30 June 2023.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets - continued
(3) The total cash outflows in relation to leases for the period from 1 January to 30 June 2023
amount to RMB 185,790,438.60.
(4) Lease assets of the Group with the lease term as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Category
| Category | Lease term |
| Port, terminal facilities and land | 1-99 years |
| Buildings | 1-99 years |
| Machinery and equipment, furniture and fixture and other equipment | 1-6 years |
| Motor vehicles and cargo ships | 1-5 years |
| Others | 1-7 years |
20. Intangible assets
(1) Details of intangible assets
| Item | Land use rights | Terminal management rights | Others | Total |
| I. Cost | ||||
| 1. Balance 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 | 4,707,118.86 | 43,719,613.58 | 40,889,212.89 | 89,315,945.33 |
| (1) Purchase | 4,707,118.86 | 43,719,613.58 | 21,764,674.87 | 70,191,407.31 |
| (2) Transfer from construction in progress | - | - | 19,124,538.02 | 19,124,538.02 |
| 3. Decrease for the period | 1,273,356,290.72 | - | 58,256,537.20 | 1,331,612,827.92 |
| (1) Disposal | - | - | 2,263,495.21 | 2,263,495.21 |
| (2) Transfer to investment properties | 8,388,170.37 | - | - | 8,388,170.37 |
| (3) Transfer to held-for-sale assets | 1,242,052,238.36 | - | 55,993,041.99 | 1,298,045,280.35 |
| (4) Other decreases | 22,915,881.99 | - | - | 22,915,881.99 |
| 4. Effect of translation of financial statements denominated in foreign currencies | 6,817,634.87 | 736,700,068.21 | 68,483,026.94 | 812,000,730.02 |
| 5. Balance at 30 June 2023 | 14,052,685,871.68 | 9,814,336,185.83 | 1,551,701,000.31 | 25,418,723,057.82 |
| II. Accumulated depreciation | ||||
| 1. Balance 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 | 179,624,677.82 | 137,166,812.77 | 40,582,392.29 | 357,373,882.88 |
| (1) Provision | 179,624,677.82 | 137,166,812.77 | 40,582,392.29 | 357,373,882.88 |
| 3. Decrease for the period | 114,864,953.22 | - | 35,839,154.48 | 150,704,107.70 |
| (1) Disposal | - | - | 1,268.38 | 1,268.38 |
| (2) Transfer to investment properties | 1,943,123.36 | - | - | 1,943,123.36 |
| (3) Transfer to held-for-sale assets | 112,921,829.86 | - | 35,837,886.10 | 148,759,715.96 |
| 4. Effect of translation of financial statements denominated in foreign currencies | 3,099,417.95 | 165,696,645.72 | 25,099,294.31 | 193,895,357.98 |
| 5. Balance at 30 June 2023 | 4,164,311,688.21 | 2,200,564,169.28 | 592,106,248.35 | 6,956,982,105.84 |
| III. Impairment provision | ||||
| 1. Balance at 1 January 2023 | 15,537,122.10 | - | - | 15,537,122.10 |
| 2. Increase for the period | - | - | - | - |
| 3. Decrease for the period | - | - | - | - |
| 4. Balance at 30 June 2023 | 15,537,122.10 | - | - | 15,537,122.10 |
| IV. Book value | ||||
| 1. At 30 June 2023 | 9,872,837,061.37 | 7,613,772,016.55 | 959,594,751.96 | 18,446,203,829.88 |
| 2. At 1 January 2023 | 11,202,527,740.91 | 7,136,215,793.25 | 938,321,581.45 | 19,277,065,115.61 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets - continued
(2) Land use rights without ownership certificates as at 30 June 2023:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Book value at 30/6/2023 | Book value at 31/12/2022 |
| Land use rights (Note) | 2,447,228,773.99 | 2,511,195,386.58 |
Note: At 30 June 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 815,234.87 m?, and the land use rights for DachanBay Port area Phase II obtained by Ansujie Terminals Warehousing Service (Shenzhen) Co.,Ltd. ("ASJ"), of which the costs are RMB 1,235,852,249.87 and RMB 918,521,317.23,respectively.
The land use rights for berth and storage yard within Chiwan Port area obtained by theGroup from Nanshan Group represent the capital contribution from Nanshan Group to theCompany upon restructuring of the Company, while the remaining land use rights areobtained from Nanshan Group by way of long-term lease. Up to date, as Nanshan Grouphas not yet obtained the land use rights in respect of the lands within Chiwan watershed,including aforementioned capital investment and land lease to the Group, therefore theGroup cannot obtain the ownership certificate for relevant land and buildings on such land.The Company's management understood that the Nanshan Group is negotiating withrelevant government departments regarding the historical issues, and the date when theGroup can obtain the ownership certificate of relevant land and buildings on such landcannot be estimated reliably.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Development expenditure
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 31/12/2022 | Increase for the period | Decrease for the period | Effect of translation of financial statements denominated in foreign currencies | 30/6/2023 | |||
| Transfer to intangible assets | Transfer to construction in progress | Transfer to fixed assets | Transfer to profit or loss | |||||
| Eport 3.0 | - | 21,219,772.61 | - | - | - | - | - | 21,219,772.61 |
| The Greater Bay Area combined port program | - | 10,773,326.59 | - | - | - | 10,773,326.59 | - | - |
| Intelligent management platform system | - | 6,810,988.87 | - | - | - | 6,810,988.87 | - | - |
| R&D of intelligent gate system | - | 4,841,003.43 | - | - | - | 4,841,003.43 | - | - |
| RMG automation of the yard operation | - | 3,227,335.61 | - | - | - | 3,227,335.61 | - | - |
| Intelligent terminal program | - | 3,043,978.94 | - | - | - | 3,043,978.94 | - | - |
| "Hongzhang" Super Computing Cluster and Port AI model construction system project | 6,219,670.14 | 36,856.00 | - | - | - | - | - | 6,256,526.14 |
| Others | 11,192,526.02 | 96,701,343.25 | - | - | 6,180,387.49 | 92,344,677.28 | - | 9,368,804.50 |
| Total | 17,412,196.16 | 146,654,605.30 | - | - | 6,180,387.49 | 121,041,310.72 | - | 36,845,103.25 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill
(1) Cost of goodwill
CHINA MERCHANTS PORT GROUP CO., LTD.
Investees
| Investees | 31/12/2022 | Increase | Decrease | Effect of translation of financial statements denominated in foreign currencies | 30/6/2023 |
| TCP | 2,716,399,522.38 | - | - | 344,564,533.48 | 3,060,964,055.86 |
| Mega Shekou Container Terminals Limited | 1,815,509,322.42 | - | - | - | 1,815,509,322.42 |
| China Merchants Port Holdings | 993,992,000.00 | - | - | - | 993,992,000.00 |
| Shantou Port | 552,317,736.65 | - | - | - | 552,317,736.65 |
| Zhanjiang Port | 418,345,307.68 | - | - | - | 418,345,307.68 |
| Shenzhen Mawan Project | 408,773,001.00 | - | - | - | 408,773,001.00 |
| Ningbo Daxie (Note) | 188,497,194.41 | - | 188,497,194.41 | - | - |
| Others | 288,255,850.88 | - | - | - | 288,255,850.88 |
| Total | 7,382,089,935.42 | - | 188,497,194.41 | 344,564,533.48 | 7,538,157,274.49 |
Note: The reasons for decrease in the period are detailed in Note (VIII) 9.
(2) Provision for impairment of goodwill
| Investees | 31/12/2022 | Increase | Decrease | Effect of translation of financial statements denominated in foreign currencies | 30/6/2023 |
| 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 assets group or portfolio of assets group to which the goodwill belongs
The Group takes the ability to independently generate cash inflows, the way of management ofproduction and operation activities (mainly by geographic areas) and unified decision on the useand disposal of the assets as the criteria to determine assets group or portfolio of assets group, andperforms impairment test of goodwill for the assets group or portfolio of assets group as determined.As at 30 June 2023, the assets group or portfolio of assets group determined by the Group include:
TCP; Mega Shekou Container Terminals Limited, including Shekou Container Terminals Ltd.,Shenzhen Lianyunjie Container Terminals Co., Ltd., Anxunjie Container Terminals (Shenzhen) Co.,Ltd.; CM Port; Shantou Port; Zhanjiang port; Shenzhen Mawan Project, including ShenzhenMawan Port Waterway Co., Ltd., Shenzhen Magang Godown & Wharf Co., Ltd. (hereinafterreferred to as "Magang Godown & Wharf").
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill - continued
(4) Impairment test of goodwill and key parameters
When testing the goodwill for impairment, the Group compares the carrying amount of relatedassets group and portfolio of assets group (including goodwill) with the recoverable amount. If therecoverable amount is less than the carrying amount, the difference is included in profit or loss forthe period. The Group determines the recoverable amount of the assets group and portfolio of assetsgroup 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 26 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 assets group and portfolio of assets group 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 parameters of key assumptions determined by the Group's management are in line with theGroup's historical experience or external source of information.
23. Long-term prepaid expenses
The items of long-term prepaid expenses are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 31/12/2022 | Increase for the period | Amortization for period | Other decreases | 30/6/2023 | Reason for other decreases |
| Tonggu channel widening project (Note 1) | 455,446,696.75 | - | 7,256,445.77 | - | 448,190,250.98 | |
| Public channel widening project in west port area (Note 2) | 249,437,402.87 | - | 4,959,514.32 | 1,538,430.04 | 242,939,458.51 | Reclassification to dredging engineering |
| Dredging project | 69,760,419.37 | 10,912,085.19 | 7,650,248.96 | - | 73,022,255.60 | |
| Relocation project of Nanhai Rescue Bureau | 37,554,111.50 | - | 553,684.20 | - | 37,000,427.30 | |
| Leasehold improvement | 20,631,173.37 | 2,325,631.13 | 982,741.14 | - | 21,974,063.36 | |
| Others | 153,527,101.04 | 40,924,050.07 | 22,150,670.48 | 8,932,387.99 | 163,368,092.64 | Transfer to held-for-sale assets |
| Total | 986,356,904.90 | 54,161,766.39 | 43,553,304.87 | 10,470,818.03 | 986,494,548.39 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Long-term prepaid expenses - continued
Note 1: This represents the Group's actual expenses on the Shenzhen West Port Area Tonggu
Channel 210-270 Meters Widening Project. According to relevant resolutions ofShenzhen municipal government, the expenses incurred for the 210-240 Meters WideningProject are born by the enterprise and government on 60% to 40% principle, and the 240-270 Meters Widening Project are born by the enterprise and government on 50% to 50%principle. The Company's subsidiary has included the expenses on deepening the channelin the item of "long-term prepaid expenses", and amortized such expenses over theexpected useful life of 35 and 40 years using the straight-line method since the completionof the two widening projects in 2008 and 2019, respectively.
Note 2: This represents the Group's actual expenses on the Public Channel Widening Project in
Shenzhen West Port Area, of which the widening of 240-270 meters in the first sectionwas completed on 1 June 2019 and the widening of 240-270 meters in the second and thirdsections was completed on 5 November 2020. According to relevant resolutions ofShenzhen Municipal Government, the expenses incurred for the project are born by theenterprise and government on 50% to 50% principle. The Company's subsidiary hasincluded the expenses on deepening the channel in the item of "long-term prepaidexpenses", and amortized such expenses over the expected useful life of 40 years usingstraight-line method since the completion of each section of the channel widening project.
24. Deferred income tax
(1) Deferred tax assets without offsetting
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 30/6/2023 | 31/12/2022 (restated) | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Unrealized profit | 753,812,553.51 | 184,069,224.61 | 756,772,558.79 | 184,729,651.97 |
| Terminal management rights of Colombo International Container Terminals Limited ("CICT") | 727,370,658.74 | 218,211,197.62 | 702,633,317.13 | 210,789,995.14 |
| Leasing business | 615,522,900.67 | 171,780,408.15 | 582,736,512.28 | 164,262,934.19 |
| Provision for credit loss | 198,117,679.78 | 38,741,993.22 | 190,727,520.03 | 35,544,695.31 |
| Accrued and unpaid wages | 147,153,190.69 | 32,325,130.15 | 161,026,788.29 | 35,802,355.38 |
| Depreciation of fixed assets | 140,159,191.44 | 35,039,797.86 | 154,724,225.49 | 35,753,675.92 |
| Deductible losses | 128,172,599.24 | 22,996,737.33 | 182,211,924.34 | 40,193,891.36 |
| Provisions | 37,446,005.96 | 12,731,642.03 | 35,365,156.43 | 12,024,153.19 |
| Deferred income | 37,105,912.07 | 8,860,569.11 | 36,723,054.56 | 8,709,144.22 |
| Amortization of computer software | 9,315,400.29 | 2,328,850.07 | 9,291,532.77 | 2,322,883.19 |
| Provision for impairment of assets | 5,507,073.15 | 1,376,768.29 | 5,507,073.16 | 1,376,768.29 |
| Organization costs | 3,498,150.00 | 874,537.50 | 3,498,150.00 | 874,537.50 |
| Others | 48,710,363.43 | 7,223,105.47 | 57,124,137.75 | 15,595,505.07 |
| Total | 2,851,891,678.97 | 736,559,961.41 | 2,878,341,951.02 | 747,980,190.73 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred income tax - continued
(2) Deferred tax liabilities without offsetting
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 30/6/2023 | 31/12/2022 (restated) | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Accrued dividend income tax | 38,640,966,994.57 | 2,614,191,523.81 | 37,565,601,815.13 | 2,568,624,605.88 |
| Fair value adjustment of assets acquired by business combination | 6,336,801,036.16 | 1,396,223,379.41 | 7,755,954,464.86 | 1,762,190,010.27 |
| Depreciation of fixed assets | 980,326,962.11 | 269,370,246.17 | 1,119,997,714.31 | 280,579,814.18 |
| Leasing business | 814,739,123.95 | 232,167,612.81 | 783,000,219.10 | 224,483,346.07 |
| Changes in fair value of other non-current financial assets | 501,389,851.26 | 136,332,154.29 | 330,012,225.76 | 82,503,056.44 |
| Terminal management rights of CICT | 313,138,100.62 | 93,941,430.19 | 302,488,503.92 | 90,746,551.18 |
| Changes in fair value of investments in other equity instruments | 130,791,178.28 | 32,697,794.57 | 130,791,178.28 | 32,697,794.57 |
| Others | 1,164,498,193.47 | 127,470,828.25 | 1,169,095,183.52 | 126,676,026.52 |
| Total | 48,882,651,440.42 | 4,902,394,969.50 | 49,156,941,304.88 | 5,168,501,205.11 |
(3) Deferred tax assets or liabilities presented at the net amount after offsetting
| Item | Offset amount of deferred tax assets and liabilities at 30/6/2023 | Balance of deferred tax assets or liabilities after offsetting at 30/6/2023 | Offset amount of deferred tax assets and liabilities at 31/12/2022 (restated) | Balance of deferred tax assets or liabilities after offsetting at 31/12/2022 (restated) |
| Deferred tax assets | -324,332,741.27 | 412,227,220.14 | -313,481,369.78 | 434,498,820.95 |
| Deferred tax liabilities | -324,332,741.27 | 4,578,062,228.23 | -313,481,369.78 | 4,855,019,835.33 |
(4) Deductible temporary differences and deductible losses for which deferred tax assets are not
recognized
| Item | 30/6/2023 | 31/12/2022 |
| Deductible temporary differences | 877,051,801.50 | 930,204,772.41 |
| Deductible losses | 2,025,767,945.94 | 2,112,659,943.00 |
| Total | 2,902,819,747.44 | 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 unrecognized deferred tax assets will be expired in the following years:
| Year | 30/6/2023 | 31/12/2022 |
| 2023 | 320,313,610.88 | 515,101,493.80 |
| 2024 | 370,378,814.60 | 488,358,232.03 |
| 2025 | 314,003,118.58 | 375,208,491.05 |
| 2026 | 105,721,728.09 | 112,756,494.15 |
| 2027 | 630,699,970.36 | 600,178,442.73 |
| 2028 | 262,413,482.74 | - |
| Deductible losses due after 2029 | 22,237,220.69 | 21,056,789.24 |
| Total | 2,025,767,945.94 | 2,112,659,943.00 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
25. Other non-current assets
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Advances for channel project (Note) | 1,001,532,979.67 | 989,752,762.75 |
| Prepayments for fixed assets | 167,943,529.78 | 117,094,834.14 |
| Prepayments for terminal franchise | 29,876,385.37 | 27,493,116.21 |
| Others | 5,484,540.20 | 52,448,665.69 |
| Total | 1,204,837,435.02 | 1,186,789,378.79 |
| Less: Impairment provision | - | - |
| Net book value | 1,204,837,435.02 | 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 Company includedthe advances for channel project that should be repaid by Zhanjiang SASAC in other non-current assets.
26. Short-term borrowings
(1) Classification of short-term borrowings
| Item | 30/6/2023 | 31/12/2022 |
| Credit loan | 4,925,403,277.82 | 7,149,322,782.85 |
| Pledged loan (Note 1) | 25,024,305.54 | 15,015,583.33 |
| Guaranteed loan (Note 2) | 30,024,583.33 | - |
| Total | 4,980,452,166.69 | 7,164,338,366.18 |
Note 1: The Company's subsidiary Guangdong Yide Port Co., Ltd. ("Yide Port") obtained short-
term borrowings of RMB 15,014,166.66 (31 December 2022: RMB 15,015,583.33) fromChina Merchants Bank Co., Ltd. by pledging its fixed assets. The Company's subsidiaryCM Port (Zhoushan) RoRo Wharf Co., Ltd. ("Zhoushan RoRo") obtained short-termborrowings of RMB 10,010,138.88 from China Merchants Bank Co., Ltd. by pledging itsland use rights and fixed assets.
Note 2: This loan was guaranteed by the Company's subsidiary Guangdong Zhanjiang Port
Logistics Co., Ltd ("Zhanjiang Port Logistics").
(2) At 30 June 2023, the Group has no outstanding short-term borrowings that were overdue.
27. Notes payable
| Category | 30/6/2023 | 31/12/2022 |
| Bank acceptance | 39,276,000.00 | - |
| Total | 39,276,000.00 | - |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
28. Accounts payable
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Service fee payable | 190,032,871.47 | 299,350,272.24 |
| Construction cost payable | 84,066,275.41 | 110,687,325.42 |
| Payables on materials | 61,847,740.98 | 132,460,163.17 |
| Payables on equipment | 37,363,790.52 | 87,445,302.02 |
| Rent payable | 9,164,641.30 | 8,304,019.32 |
| Others | 148,743,679.94 | 172,902,315.49 |
| Total | 531,218,999.62 | 811,149,397.66 |
(1) Aging of accounts payable:
| Aging | 30/6/2023 | 31/12/2022 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year (inclusive) | 448,646,072.53 | 84.46 | 710,976,970.28 | 87.65 |
| 1 - 2 years (inclusive) | 25,833,900.12 | 4.86 | 47,038,049.65 | 5.80 |
| 2 - 3 years (inclusive) | 51,536,035.13 | 9.70 | 26,667,189.69 | 3.29 |
| Over 3 years | 5,202,991.84 | 0.98 | 26,467,188.04 | 3.26 |
| Total | 531,218,999.62 | 100.00 | 811,149,397.66 | 100.00 |
(2) Significant accounts payable aged more than one year
| Item | 30/6/2023 | Aging | Reason for outstanding |
| Quanzhou Antong Logistics Co., Ltd. | 16,948,161.45 | 2 - 3 years | To be paid upon confirmation by both parties |
29. Receipts in advance
| Item | 30/6/2023 | 31/12/2022 |
| Land transfer fee received in advance | 20,000,000.00 | - |
| Rent received in advance | 10,098,709.48 | 6,205,443.31 |
| Management fee received in advance | 2,652,350.02 | - |
| Others | 9,507,534.31 | 3,681,088.28 |
| Total | 42,258,593.81 | 9,886,531.59 |
(1) Aging of receipts in advance
| Aging | 30/6/2023 | 31/12/2022 | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year (inclusive) | 42,258,593.81 | 100.00 | 9,884,079.59 | 99.98 |
| 1 - 2 years (inclusive) | - | - | - | - |
| 2 - 3 years (inclusive) | - | - | - | - |
| Over 3 years | - | - | 2,452.00 | 0.02 |
| Total | 42,258,593.81 | 100.00 | 9,886,531.59 | 100.00 |
(2) There are no significant receipts in advance aged more than one year as at 30 June 2023.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Contract liabilities
(1) Presentation of contract liabilities
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Service fee received in advance | 100,041,676.37 | 59,729,035.75 |
| Port charges received in advance | 54,819,723.10 | 55,045,635.27 |
| Warehousing fee received in advance | 5,354,937.00 | 3,048,588.90 |
| Others | 31,562,776.59 | 24,076,291.11 |
| Total | 191,779,113.06 | 141,899,551.03 |
(2) For the period from 1 January to 30 June 2023, there were no significant changes in the
carrying amount of contract liabilities.
(3) There are no significant contract liabilities aged more than one year at 30 June 2023.
(4) Qualitative and quantitative analysis of contract liabilities
The contract liability mainly represents the amount received by the Group to provide portservices to customers. The payment is collected according to the contractual payment time.The Group recognizes contract revenue based on the progress of the contract. The contractliabilities will be recognized as income after the Group fulfills its performance obligations.
(5) Revenue recognized in the current period and included in the opening book value of contract
liabilities
An amount of RMB 79,764,653.59 included in the book value of contract liabilities at thebeginning of the period has been recognized as revenue in the current period, includingcontract liabilities arising from settled but unfinished construction resulting from thecontract of receipt of port charges in advance amounting to RMB 50,007,516.99, contractliabilities arising from settled but unfinished construction resulting from the contract ofreceipt of service fee in advance amounting to RMB 18,149,183.51, contract liabilitiesarising from settled but unfinished construction resulting from the contract of receipt ofwarehousing fee in advance amounting to RMB 2,595,963.53 as well as contract liabilitiesarising from settled but unfinished construction resulting from other contracts amounting toRMB 9,011,989.56.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Employee benefits payable
(1) Presentation of employee benefits payable
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 31/12/2022 | Increase for the period | Decrease for the period | 30/6/2023 |
| 1. Short-term benefits | 921,533,425.99 | 1,591,769,249.50 | 1,767,176,376.38 | 746,126,299.11 |
| 2. Post-employment benefits - defined contribution plan | 13,383,514.93 | 178,335,264.80 | 181,832,454.28 | 9,886,325.45 |
| 3. Termination benefits | 2,423,282.78 | 2,438,601.81 | 4,861,884.59 | - |
| 4. Other benefits due within one year | - | 1,676,396.07 | 1,676,396.07 | - |
| 5. Others | -505,505.57 | 856,597.71 | 1,024,103.34 | -673,011.20 |
| Total | 936,834,718.13 | 1,775,076,109.89 | 1,956,571,214.66 | 755,339,613.36 |
(2) Presentation of short-term benefits
| Item | 31/12/2022 | Increase for the period | Decrease for the period | 30/6/2023 |
| 1. Wages and salaries, bonuses, allowances and subsidies | 897,442,262.83 | 1,294,623,152.06 | 1,472,900,805.38 | 719,164,609.51 |
| 2. Staff welfare | - | 68,343,118.38 | 65,056,692.94 | 3,286,425.44 |
| 3. Social security contributions | 10,545,539.44 | 95,162,511.21 | 96,039,256.25 | 9,668,794.40 |
| Including: Medical insurance | 8,631,543.96 | 81,077,005.05 | 82,369,868.54 | 7,338,680.47 |
| Work injury insurance | 53,916.77 | 8,223,902.44 | 8,276,494.06 | 1,325.15 |
| Others | 1,860,078.71 | 5,861,603.72 | 5,392,893.65 | 2,328,788.78 |
| 4. Housing funds | -95,060.47 | 100,325,318.42 | 100,142,141.26 | 88,116.69 |
| 5. Union running costs and employee education costs | 13,642,129.96 | 25,673,626.92 | 25,940,647.51 | 13,375,109.37 |
| 6. Other short-term benefits | -1,445.77 | 7,641,522.51 | 7,096,833.04 | 543,243.70 |
| Total | 921,533,425.99 | 1,591,769,249.50 | 1,767,176,376.38 | 746,126,299.11 |
(3) Defined benefit plans
| Item | 31/12/2022 | Increase for the period | Decrease for the period | 30/6/2023 |
| 1. Basic pension | 9,761,086.14 | 132,436,195.05 | 134,210,130.62 | 7,987,150.57 |
| 2. Unemployment insurance | 49,026.91 | 2,680,913.92 | 2,728,520.16 | 1,420.67 |
| 3. Enterprise annuity contribution | 3,573,401.88 | 43,218,155.83 | 44,893,803.50 | 1,897,754.21 |
| Total | 13,383,514.93 | 178,335,264.80 | 181,832,454.28 | 9,886,325.45 |
The Company and its domestic subsidiaries participate in the pension insurance and unemploymentinsurance plans established by government institutions as required. According to such plans, theGroup contributes to the plans at the ratio set by local government. The Group has establishedannuity system and pays annuity according to the annuity systems of the Company and its domesticsubsidiaries. In addition to the above-mentioned contributions, the Group undertakes no furtherpayment obligations. The relevant expenditures are included in the current profit and loss or thecost of related assets when incurred.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
32. Taxes payable
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Enterprise income tax | 882,542,845.77 | 804,846,345.79 |
| VAT | 26,587,696.43 | 30,032,002.80 |
| Others | 114,236,420.22 | 83,054,820.50 |
| Total | 1,023,366,962.42 | 917,933,169.09 |
33. Other payables
(1) Summary of other payables
| Item | 30/6/2023 | 31/12/2022 |
| Dividends payable | 1,453,247,032.09 | 92,374,921.29 |
| Other payables | 1,712,152,062.25 | 1,663,510,336.97 |
| Total | 3,165,399,094.34 | 1,755,885,258.26 |
(2) Dividends payable
| Item | 30/6/2023 | 31/12/2022 |
| Ordinary share dividends | 1,453,247,032.09 | 92,374,921.29 |
| Including: External parties | 683,157,956.17 | - |
| China Merchants Union （BVI） Limited | 495,615,718.43 | - |
| Sinomart Kts Development Limited | 124,474,409.72 | - |
| China Merchants Zhangzhou Development Zone Co., Ltd. (Note) | 40,000,000.00 | 20,000,000.00 |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | 34,598,645.00 | 41,400,234.06 |
| Dalian Port Container Development Co., Ltd. ("Dalian Port Container") (Note) | 27,160,696.61 | 14,000,000.00 |
| China Merchants Investment Development (Hong Kong) Limited | 13,036,489.20 | - |
| Dalian City Investment Holding Group Co., Ltd. | 11,648,655.69 | 3,527,787.23 |
| Dalian Port Jifa Logistics Co., Ltd. ("Jifa Logistics") | 11,575,104.42 | 3,000,000.00 |
| Yingkou Port Group Co., Ltd. ("Yingkou Port Group") | 5,372,456.78 | - |
| Qingdao Qingbao Investment Holding Co., Ltd. | 4,950,000.07 | - |
| Orienture Holdings Company Limited | 1,656,900.00 | - |
| Sri Lanka Ports Authority | - | 10,446,900.00 |
Note: As at 30 June 2023, the significant balance of dividends payable aged over one year includes
dividends of RMB 20,000,000.00 due to China Merchants Zhangzhou Development ZoneCo., Ltd. and dividends of RMB 11,000,000.00 due to Dalian Port Container, representingthe dividends not yet received by the investors.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(3) Other payables
(a) Presentation of other payables by nature
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Construction cost and quality warranty | 595,613,589.84 | 643,816,817.51 |
| Deposits | 238,328,795.96 | 221,628,920.81 |
| Customer discount (Note) | 161,226,173.64 | 164,622,341.62 |
| Accrued expenses | 158,156,770.10 | 190,048,988.98 |
| Investment by minority shareholders | 107,188,200.00 | - |
| Port construction and security fee | 30,690,945.02 | 36,697,168.04 |
| Balance of land use rights transfer | - | 11,295,700.00 |
| Others | 420,947,587.69 | 395,400,400.01 |
| Total | 1,712,152,062.25 | 1,663,510,336.97 |
Note: Refer to Note (VIII) 51 (3) for details.
(b) Significant other payables with aging over 1 year
| Name of entities | Amount owed | Aging | Reason for being outstanding |
| Bureau of Communications of Shenzhen Municipality (Ports Administration of Shenzhen Municipality) | 79,639,296.08 | Within 1 year, 2 - 3 years and over 3 years | To be paid upon confirmation by both parties |
| CCCC Water Transportation Consultants Co., Ltd. | 58,666,012.94 | Within 1 year, 1 - 2 years and over 3 years | Contractual criteria for settlement not yet satisfied |
| Shanghai Zhenhua Heavy Industries Co., Ltd. | 38,019,307.07 | Within 1 year and over 3 years | Contractual criteria for settlement not yet satisfied |
| Shantou Transportation Bureau | 31,358,355.47 | Over 3 years | To be paid upon confirmation by both parties |
| CCCC Fourth Navigation Engineering Bureau Co., Ltd. | 28,041,859.09 | Within 1 year, 1 - 2 years and 2 - 3 years | To be paid upon confirmation by both parties |
| Guangdong Jiaye Reserve Logistics Co., Ltd. | 25,000,000.00 | Over 3 years | To be paid upon confirmation by both parties |
| Guangdong Province Planning & Design Institute for Water Transportation Co., Ltd. | 17,712,952.93 | Within 1 year, 1 - 2 years | To be paid upon confirmation by both parties |
| Dalian Huarui Heavy Industry Group Co., Ltd. | 12,163,435.90 | 2 - 3 years | To be paid upon confirmation by both parties |
| China First Metallurgical Group Co., Ltd. | 10,133,596.36 | 2 - 3 years | Contractual criteria for settlement not yet satisfied |
| Wuxi Huadong Heavy Machinery Co., Ltd. | 10,090,410.68 | 1 - 2 years | Contractual criteria for settlement not yet satisfied |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | 10,079,369.00 | Over 3 years | To be paid upon confirmation by both parties |
| Guangdong New Groton Group Co., Ltd. (Formerly known as "Guangdong Hengtai Guotong Industrial Co., Ltd.") | 10,000,000.00 | Over 3 years | Contractual criteria for settlement not yet satisfied |
| Shantou Municipal Finance Bureau | 10,000,000.00 | Over 3 years | To be paid upon confirmation by both parties |
| CCCC Guangzhou Dredging Co., Ltd. | 9,473,367.45 | Within 1 year and 2 - 3 years | Contractual criteria for settlement not yet satisfied |
| Shenzhen Penglilong Industrial Co., Ltd. | 8,158,000.00 | 1 - 2 years, 2 - 3 years and over 3 years | To be paid upon confirmation by both parties |
| Shanxi Nonferrous Construction Co., Ltd. | 7,880,134.55 | 1 - 2 years and 2 - 3 years | To be paid upon confirmation by both parties |
| Suhua Construction Group Co. Ltd. | 7,423,728.26 | 1 - 2 years | Contractual criteria for settlement not yet satisfied |
| CCCC Third Harbor Engineering Co., Ltd. | 7,389,710.80 | 1 - 2 years and over 3 years | Contractual criteria for settlement not yet satisfied |
| Shenzhen Aohua Zhongmao Industry Co., Ltd. | 6,158,000.00 | 1 - 2 years, 2 - 3 years and over 3 years | To be paid upon confirmation by both parties |
| Maersk Supply Chain Management (Guangdong) Co. Ltd. | 5,133,642.80 | Within 1 year, 1 - 2 years, 2 - 3 years and over 3 years | To be paid upon confirmation by both parties |
| Total | 392,521,179.38 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
34. Held-for-sale liabilities
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Book value at 30/6/2023 | Fair value at 30/6/2023 | Estimated costs of disposal | Disposal date |
| Held-for-sale disposal group (Note) | 681,983,479.70 | 681,983,479.70 | 1,762,730.00 | 8 August 2023 |
| Book value | 681,983,479.70 |
Note: Details are set out in Note (VIII) 9.
35. Non-current liabilities due within one year
| Item | 30/6/2023 | 31/12/2022 |
| Long-term borrowings due within one year (Note (VIII) 37) | 1,814,982,837.14 | 2,313,191,859.96 |
| Including: Credit borrowings | 1,305,069,818.27 | 1,368,934,869.99 |
| Guaranteed borrowings | 224,663,564.89 | 219,564,028.82 |
| Mortgage and pledged borrowings | 285,249,453.98 | 724,692,961.15 |
| Bonds payable due within one year (Note (VIII) 38) | 10,977,033,748.51 | 8,668,651,537.27 |
| Lease liabilities due within one year (Note (VIII) 39) | 271,617,997.07 | 306,942,164.80 |
| Long-term payables due within one year (Note (VIII) 40) | 170,057,437.21 | 155,665,725.85 |
| Long-term employee benefits payable due within one year (Note (VIII) 41) | 54,069,377.57 | 54,414,877.57 |
| Other non-current liabilities due within one year (Note (VIII) 44) | 134,713,435.00 | 142,357,523.50 |
| Total | 13,422,474,832.50 | 11,641,223,688.95 |
36. Other current liabilities
| Item | 30/6/2023 | 31/12/2022 |
| Short-term bonds payable | 4,017,249,315.07 | 3,017,713,424.64 |
| Short-term finance lease payments (Note) | 359,485,676.59 | - |
| Accrued professional agency fee | 120,246,462.98 | 124,799,040.22 |
| Others | 3,249,859.12 | 18,635,061.10 |
| Total | 4,500,231,313.76 | 3,161,147,525.96 |
Note: The Company's subsidiary CICT signed the sale and leaseback finance lease contract with
Ocean Driller III Limited on 6 April 2023.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Other current liabilities - continued
Changes in short-term bonds payable:
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of bond
| Name of bond | Face value | Date of issue | Term of the bond | Amount of issue | 31/12/2022 | Amount issued in the current period | Interest accrued based on par value | Discount or premium amortization | Repayment in the current period | 30/6/2023 |
| 2.35% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2023-3-1 | 180 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 15,452,054.80 | - | - | 2,015,452,054.80 |
| 2.05% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2023-6-14 | 180 days | 2,000,000,000.00 | - | 2,000,000,000.00 | 1,797,260.27 | - | - | 2,001,797,260.27 |
| 1.93% RMB 2 billion Super & Short-term Commercial Paper | 2,000,000,000.00 | 2022-9-8 | 180 days | 2,000,000,000.00 | 2,012,055,890.40 | - | 6,979,725.60 | - | 2,019,035,616.00 | - |
| 1.75% RMB 1 billion Super & Short-term Commercial Paper | 1,000,000,000.00 | 2022-9-1 | 270 days | 1,000,000,000.00 | 1,005,657,534.24 | - | 7,287,671.24 | - | 1,012,945,205.48 | - |
| Total | 7,000,000,000.00 | 7,000,000,000.00 | 3,017,713,424.64 | 4,000,000,000.00 | 31,516,711.91 | - | 3,031,980,821.48 | 4,017,249,315.07 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Long-term borrowings
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 30/6/2023 | 31/12/2022 | Range of period-end interest rate |
| Credit borrowings | 15,285,297,084.99 | 12,319,883,867.05 | 1.20%-4.20% |
| Guaranteed borrowings (Note 1) | 912,663,564.89 | 1,020,670,858.02 | 1.20%-12.78% |
| Mortgage and pledged borrowings (Note 2) | 1,700,628,445.86 | 1,362,736,312.74 | 3.20%-6.18% |
| Total | 17,898,589,095.74 | 14,703,291,037.81 | |
| Less: Long-term borrowings due within one year | 1,814,982,837.14 | 2,313,191,859.96 | |
| Including: Credit borrowings | 1,305,069,818.27 | 1,368,934,869.99 | |
| Guaranteed borrowings | 224,663,564.89 | 219,564,028.82 | |
| Mortgage and pledged borrowings | 285,249,453.98 | 724,692,961.15 | |
| Long-term borrowings due after one year | 16,083,606,258.60 | 12,390,099,177.85 |
Note 1: The borrowings are guaranteed by Magang Godown & Wharf, China Merchants Port
(Shenzhen) Co., Ltd., China Merchants Port Holdings Company Limited and Zhanjiang PortLogistics.
Note 2: At 30 June 2023, the Group obtained long-term borrowings of RMB 1,700,628,445.86 (31
December 2022: RMB 1,362,736,312.74) by pledging all its equity in Thesar MaritimeLimited ("TML"), the land use rights, fixed assets and construction in progress held by YidePort, and the land use rights of Shenzhen Haixing Harbor Development Co., Ltd.("Shenzhen Haixing") as well as the land use rights of Guangdong Shunkong PortDevelopment and Construction Co., Ltd. ("Shunkong Port").
Details of mortgage and pledged borrowings are as follows:
| Company name | 30/6/2023 | 31/12/2022 | Mortgages and pledges |
| Bank of China Qianhai Shekou Branch | 1,294,970,617.81 | 280,013,198.30 | Land use rights of Shenzhen Haixing |
| China Construction Bank Shunde Branch | 221,448,905.92 | 236,479,995.32 | Land use rights, fixed assets and construction in progress of Yide Port |
| International Finance Corporation | 65,706,976.53 | 123,849,460.76 | The Group's entire equity in TML |
| African Development Bank | 30,170,374.80 | 56,864,864.36 | |
| Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. | 24,860,911.78 | 46,859,749.65 | |
| The Opec Fund For International Development | 21,296,984.62 | 40,139,904.25 | |
| Societe de Promotion et de Participation pour la Cooperation Economique S.A. | 21,311,742.67 | 40,170,265.09 | |
| Deutsche Investitions-und Entwicklungsgesellschaft MBH | 17,747,210.06 | 33,449,920.21 | |
| Bank of Communications Guangdong Branch | 3,114,721.67 | - | Land use rights of Shunkong Port |
| China Development Bank Corporation | - | 494,997,308.55 | The Group's entire equity in CICT |
| China Mingsheng Bank Zhoushan Branch | - | 9,911,646.25 | Land use rights and fixed assets of Zhoushan RoRo |
| Total | 1,700,628,445.86 | 1,362,736,312.74 |
Note: See Note (VIII) 63 for the above mortgages and pledges.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Bonds payable
(1) Bonds payable
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| 4.375%, USD 900 million corporate bond | 6,600,668,078.86 | 6,371,347,105.64 |
| 5.000%, USD 600 million corporate bond | 4,378,503,545.01 | 4,227,154,465.35 |
| 4.750%, USD 500 million corporate bond | 3,668,358,452.85 | 3,542,544,662.47 |
| 4.000%, USD 500 million corporate bond | 3,605,706,452.74 | 3,482,186,896.02 |
| 2.690% RMB 3 billion corporate bond | 3,067,434,246.55 | 3,027,415,890.40 |
| 2.450% RMB 3 billion corporate bond | 3,060,008,219.16 | 3,023,560,273.97 |
| 3.360%, RMB 2 billion corporate bond | 2,065,911,232.86 | 2,032,587,397.25 |
| 3.520%, RMB 2 billion corporate bond | 2,014,658,630.13 | 2,050,147,945.19 |
| Total | 28,461,248,858.16 | 27,756,944,636.29 |
| Less: Bonds payable due within one year | 10,977,033,748.51 | 8,668,651,537.27 |
| Bonds payable due after one year | 17,484,215,109.65 | 19,088,293,099.02 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Bonds payable - continued
(2) Changes in bonds payable
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of bond
| Name of bond | Face value | Date of issue | Term of the bond | Amount of issue | 31/12/2022 | Amount issued in the current period | Interest accrued based on par value | Discount or premium amortization | Repayment in the current period | Effect of translation of financial statements denominated in foreign currencies | 30/6/2023 |
| 4.375%, USD 900 million corporate bond | USD 900,000,000.00 | 2018-08-06 | 5 years | USD900,000,000.00 | 6,371,347,105.64 | - | 135,133,582.13 | 5,842,950.26 | 136,124,163.00 | 224,468,603.83 | 6,600,668,078.86 |
| 5.000%, USD 600 million corporate bond | USD 600,000,000.00 | 2018-08-06 | 10 years | USD600,000,000.00 | 4,227,154,465.35 | - | 103,416,062.23 | 2,757,811.68 | 103,713,648.00 | 148,888,853.75 | 4,378,503,545.01 |
| 4.750%, USD 500 million corporate bond | USD 500,000,000.00 | 2015-08-03 | 10 years | USD500,000,000.00 | 3,542,544,662.47 | - | 81,949,338.44 | 1,291,412.59 | 82,193,668.69 | 124,766,708.04 | 3,668,358,452.85 |
| 4.000%, USD 500 million corporate bond | USD 500,000,000.00 | 2022-06-01 | 5 years | USD500,000,000.00 | 3,482,186,896.02 | - | 68,789,349.01 | 1,262,840.14 | 69,127,421.00 | 122,594,788.57 | 3,605,706,452.74 |
| 2.690%, RMB 3 billion corporate bond | RMB 3,000,000,000.00 | 2022-08-29 | 3 years | RMB 3,000,000,000.00 | 3,027,415,890.40 | - | 40,018,356.15 | - | - | - | 3,067,434,246.55 |
| 2.450%, RMB 3 billion corporate bond | RMB 3,000,000,000.00 | 2022-09-05 | 2 years | RMB 3,000,000,000.00 | 3,023,560,273.97 | - | 36,447,945.19 | - | - | - | 3,060,008,219.16 |
| 3.360%, RMB 2 billion corporate bond | RMB 2,000,000,000.00 | 2020-07-07 | 3 years | RMB 2,000,000,000.00 | 2,032,587,397.25 | - | 33,323,835.61 | - | - | - | 2,065,911,232.86 |
| 3.520%, RMB 2 billion corporate bond | RMB 2,000,000,000.00 | 2021-04-14 | 3 years | RMB 2,000,000,000.00 | 2,050,147,945.19 | - | 34,910,684.94 | - | 70,400,000.00 | - | 2,014,658,630.13 |
| Total | 27,756,944,636.29 | - | 533,989,153.70 | 11,155,014.67 | 461,558,900.69 | 620,718,954.19 | 28,461,248,858.16 | ||||
| Less: Bonds payable due within one year | 8,668,651,537.27 | 10,977,033,748.51 | |||||||||
| Bonds payable due after one year | 19,088,293,099.02 | 17,484,215,109.65 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Lease liabilities
(1) Lease liabilities
CHINA MERCHANTS PORT GROUP CO., LTD.Category
| Category | 30/6/2023 | 31/12/2022 |
| Lease payments | 1,886,298,589.12 | 1,963,098,776.36 |
| Unrecognized financing cost | -703,582,182.39 | -707,805,697.52 |
| Total | 1,182,716,406.73 | 1,255,293,078.84 |
| Less: Lease liabilities due within one year | 271,617,997.07 | 306,942,164.80 |
| Lease liabilities due after one year | 911,098,409.66 | 948,350,914.04 |
(2) Maturity of lease liabilities
| Item | 30/6/2023 |
| Minimum lease payments under non-cancellable leases: | |
| 1st year subsequent to the balance sheet date | 327,019,170.03 |
| 2nd year subsequent to the balance sheet date | 121,058,197.10 |
| 3rd year subsequent to the balance sheet date | 57,729,132.27 |
| Subsequent years | 1,380,492,089.72 |
| Total | 1,886,298,589.12 |
The Group is not exposed to any significant liquidity risk associated with lease liabilities.
40. Long-term payables
(1) Summary of long-term payables
| Category | 30/6/2023 | 31/12/2022 |
| Long-term payables | 4,091,933,479.34 | 3,698,632,219.45 |
| Special payables | 5,248,996.06 | 8,349,096.71 |
| Total | 4,097,182,475.40 | 3,706,981,316.16 |
| Less: Long-term payables due within one year | 170,057,437.21 | 155,665,725.85 |
| Long-term payables due after one year | 3,927,125,038.19 | 3,551,315,590.31 |
(2) Long-term payables
| Category | 30/6/2023 | 31/12/2022 |
| Terminal management rights (Note 1) | 4,050,735,426.35 | 3,657,579,951.15 |
| Finance lease payable (Note 2) | 41,198,052.99 | 41,052,268.30 |
| Total | 4,091,933,479.34 | 3,698,632,219.45 |
| Less: Long-term payables due within one year | 170,057,437.21 | 155,665,725.85 |
| Long-term payables due after one year | 3,921,876,042.13 | 3,542,966,493.60 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Long-term payables - continued
(2) Long-term payables - continued
Note 1: As at 12 August 2011, the Group reached a 35-year agreement of building, operation and
transfer (hereinafter referred to as "BOT") with Sri Lanka Port Authority through asubsidiary CICT, on the building, operation, management and development of the ColomboPort South Container Terminal. The purchase amount of above-mentioned terminaloperating rights is determined by discounting the amount to be paid in the future using theprevailing market interest rate according to the BOT agreement. As of 30 June 2023, theamount payable for the purchase of terminal operation rights is RMB 869,281,376.60.
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 "APPA"). The agreement provides an initial term of 25 years for theconcessions. In April 2016, TCP and APPA entered into a supplemental agreement, whichextended the period to 50 years and will be expired in October 2048.
As at 9 September 2021, TCP, a subsidiary of the Company, entered into a supplementalagreement to the Lease Agreement with APPA for the concessions of the Ports of Paranaguáand Antonina. Pursuant to which, the base figure for the calculation of royalties for the Portsof Paranaguá and Antonina was adjusted from the Brazil IGP-M Inflation Index ("IGP-Mindex") to the Extended National Consumer Price Index ("IPCA index") of the BrazilianInstitute of Geography and Statistics ("IBGE"). In November 2021, TCP readjusted theroyalties using the IPCA index. As at 30 June 2023, the amount of royalty payable was RMB3,181,454,049.75.
Note 2: The Company's subsidiary Zhoushan RoRo signed the sale and leaseback finance lease contract
with China Merchants Finance Lease (Tianjin) Co., Ltd. on 15 June 2022.
(3) Special payables
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 31/12/2022 | Increase for the period | Decrease for the period | 30/6/2023 | Reason |
| Employee housing fund | 5,126,641.68 | 122,354.38 | - | 5,248,996.06 | Note |
| Model worker innovation studio | 3,222,455.03 | - | 3,222,455.03 | - | |
| Total | 8,349,096.71 | 122,354.38 | 3,222,455.03 | 5,248,996.06 |
Note: This represents the repairing fund for public areas and public facilities and equipment
established after the Group's selling the public-owned house on the collectively allocatedland to employees. The fund is contributed by all the employees having ownership of thehouse according to the rules, and is specially managed and used for specific purpose.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41. Long-term employee benefits payable
(1) Long-term employee benefits payable
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Post-employment benefits - net liabilities of defined benefits plan | 521,164,946.43 | 516,950,669.03 |
| Termination benefits | 58,939,138.66 | 64,274,552.96 |
| Others (Note) | 98,312,058.16 | 112,285,587.01 |
| Total | 678,416,143.25 | 693,510,809.00 |
| Less: Long-term employee benefits payable due within one year | 54,069,377.57 | 54,414,877.57 |
| Long-term employee benefits payable due after one year | 624,346,765.68 | 639,095,931.43 |
Note: It is the employee resettlement cost related to land acquisition and reserve of Shantou Port,
a subsidiary of the Company.
(2) Changes in defined benefits plan
Present value of defined benefit plan obligation:
| Item | Current period | Prior period |
| I. Opening balance | 516,950,669.03 | 463,858,274.44 |
| II. Defined benefit cost included in profit or loss for the period | 10,350,000.04 | 10,819,999.96 |
| 1. Current service cost | 2,730,200.04 | 3,684,999.98 |
| 2. Past service cost | - | - |
| 3. Interest adjustment | 7,619,800.00 | 7,134,999.98 |
| III. Defined benefits cost included in other comprehensive income | 789,488.92 | -4,486.41 |
| 1. Actuarial gains (losses) | - | - |
| 2. Effect of exchange rate changes | 789,488.92 | -4,486.41 |
| IV. Other changes | -6,925,211.56 | -14,830,848.32 |
| 1. Benefits paid | -6,925,211.56 | -14,830,848.32 |
| V. Closing balance | 521,164,946.43 | 459,842,939.67 |
The Company's subsidiaries provide registered retirees and in-service staff with supplementarypost-employment benefit plans.
The Group hired a third-party actuary to estimate the present value of its above-mentionedretirement benefit plan obligations in an actuarial manner based on the expected cumulative welfareunit method. The Group recognizes its 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.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
42. Provisions
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 31/12/2022 | Increase for the period | Decrease for the period | Effect of translation of financial statements denominated in foreign currencies | 30/6/2023 | Reason |
| Pending litigation | 35,365,156.43 | 5,253,270.76 | 7,242,757.26 | 4,070,336.03 | 37,446,005.96 | Note |
| Sales discount | - | 54,133,163.40 | 54,133,163.40 | - | - | |
| Total | 35,365,156.43 | 59,386,434.16 | 61,375,920.66 | 4,070,336.03 | 37,446,005.96 |
Note: This represents the estimated compensation amount that the Company's subsidiary TCP may
need to pay due to the pending litigation.
43. Deferred income
| Item | 31/12/2022 | Increase for the period | Decrease for the period | 30/6/2023 |
| Government grants | 1,031,273,189.74 | 11,800,000.00 | 24,115,933.58 | 1,018,957,256.16 |
| Total | 1,031,273,189.74 | 11,800,000.00 | 24,115,933.58 | 1,018,957,256.16 |
Items involving government grants are as follows:
| Government grants | 31/12/2022 | Increase | Recognized in other comprehensive income | 30/6/2023 | Related to assets /related to income |
| Refund from marine reclamation land | 317,122,316.63 | - | 9,674,583.96 | 307,447,732.67 | Related to assets |
| Tonggu channel widening project (Note) | 255,256,506.12 | - | 3,528,891.78 | 251,727,614.34 | Related to assets |
| Special subsidy for facilities and equipment | 222,967,600.39 | 3,300,000.00 | 4,779,227.32 | 221,488,373.07 | Related to assets |
| Public channel widening project in west port area (Note) | 203,221,719.30 | - | 2,719,858.14 | 200,501,861.16 | Related to assets |
| Government subsidies for intelligent system | 12,936,438.51 | - | 1,120,747.05 | 11,815,691.46 | Related to assets |
| Refund of land transfer charges | 6,034,266.57 | - | 133,600.02 | 5,900,666.55 | Related to assets |
| Others | 13,734,342.22 | 8,500,000.00 | 2,159,025.31 | 20,075,316.91 | Related to assets |
| Total | 1,031,273,189.74 | 11,800,000.00 | 24,115,933.58 | 1,018,957,256.16 |
Note: Refer to Note (VIII) 23 for details.
44. Other non-current liabilities
| Item | 30/6/2023 | 31/12/2022 |
| Actuarial expenses for difference in pension benefits of staff in Public Security Bureau (Note 1) | 170,012,177.67 | 175,742,813.67 |
| Third party borrowings (Note 2) | 139,273,435.00 | 143,755,523.50 |
| Berth priority call right (Note 3) | 1,922,598.07 | 4,480,217.05 |
| Related party borrowings | - | 3,162,000.00 |
| Others | 2,096,824.80 | 1,600,086.28 |
| Total | 313,305,035.54 | 328,740,640.50 |
| Less: Other non-current liabilities due within one year | 134,713,435.00 | 142,357,523.50 |
| Including: Actuarial expenses for difference in pension benefits of staff in Public Security Bureau (Note 1) | 15,440,000.00 | 15,440,000.00 |
| Third party borrowings | 119,273,435.00 | 123,755,523.50 |
| Related party borrowings | - | 3,162,000.00 |
| Other non-current liabilities due after one year | 178,591,600.54 | 186,383,117.00 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Other non-current liabilities - continued
Note 1: This represents the difference between the pension benefits borne by Zhanjiang Port under
original standards and the pension benefits of policeman of Zhanjiang City. Zhanjiang Porthas recognized related liabilities of RMB 170,012,177.67 according to the actuarial results.
Note 2: This represents the principal and interest of borrowings obtained by the Company's
subsidiary Shunkong Port from Guangdong Shunkong Transportation Investment Co., Ltd.,a related party of its minority shareholder Guangdong Shunkong City Investment RealEstate Co., Ltd.
Note 3: This represents the berth priority call right as agreed in the contract entered into with the
customers in 2003, with total amount of USD 14,000,000.00. The Group must give priorityto the berthing requirements of the contracted customers during the contract period. TheGroup amortized the berth priority right over 20 years using straight-line method. For theperiod from 1 January to 30 June 2023, the amount included in operating income is RMB2,557,618.98.
45. Share capital
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 31/12/2022 | Changes for the period | 30/6/2023 | ||||
| New issue of share | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
| For the period from 1 January to 30 June 2023 | |||||||
| I. Restricted tradable shares | |||||||
| 1. State-owned shares | - | - | - | - | - | - | - |
| 2. State-owned legal person shares | 576,709,537.00 | - | - | - | - | - | 576,709,537.00 |
| 3. Other domestic shares | 7,366.00 | - | - | - | - | - | 7,366.00 |
| 4. Foreign shares | - | - | - | - | - | - | - |
| Total restricted tradable shares | 576,716,903.00 | - | - | - | - | - | 576,716,903.00 |
| II. Non-restricted tradable shares | |||||||
| 1. Ordinary shares denominated in RMB | 1,742,468,718.00 | - | - | - | - | - | 1,742,468,718.00 |
| 2. Foreign capital shares listed domestically | 179,889,040.00 | - | - | - | - | - | 179,889,040.00 |
| 3. Foreign capital shares listed overseas | - | - | - | - | - | - | - |
| 4. Others | - | - | - | - | - | - | - |
| Total non-restricted tradable shares | 1,922,357,758.00 | - | - | - | - | - | 1,922,357,758.00 |
| III. Total shares | 2,499,074,661.00 | - | - | - | - | - | 2,499,074,661.00 |
| Item | 12/31/2021 | Changes for the period | 31/12/2022 | ||||
| New issue of share | Bonus issue | Capitalization of surplus reserve | Others | Sub-total | |||
| For the year ended 31 December 2022 | |||||||
| I. Restricted tradable shares | |||||||
| 1. State-owned shares | - | - | - | - | - | - | - |
| 2. State-owned legal person 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 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Capital reserve
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Opening balance | Increase | Decrease | Closing balance |
| For the period from 1 January to 30 June 2023 | ||||
| Capital premium | 34,208,812,963.50 | 366,783,906.99 | - | 34,575,596,870.49 |
| 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 | 366,783,906.99 | - | 2,532,207,721.01 |
| Others | 1,671,635,666.41 | - | - | 1,671,635,666.41 |
| Other capital reserve | 542,827,871.75 | 859,840.86 | 48,909,049.82 | 494,778,662.79 |
| 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 | 859,840.86 | - | 6,451,242.86 |
| Other changes in owners' equity of the investee under the equity method other than changes in net profit or loss, profit distribution and other comprehensive income | 540,017,602.75 | - | 48,909,049.82 | 491,108,552.93 |
| Total | 34,751,640,835.25 | 367,643,747.85 | 48,909,049.82 | 35,070,375,533.28 |
| 2022 | ||||
| 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 |
| 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 the 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 Company and its subsidiary, Port Development (Hong Kong) Co., Ltd., increased the
holding of ordinary shares in CM Port, resulting in an increase of RMB 366,783,906.99 incapital reserve in the current year. Refer to Note (X) 2 for details.
Note 2: Refer to Note (XIV) 2 for details.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47. Other comprehensive income
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Opening balance | Amount incurred in the period | Less: Other changes | Closing balance | ||||
| Pre-tax amount for the period | Less: Amount included in other comprehensive income in the prior periods transferred to profit or loss this period | Less: Income tax expense | Post-tax income attributable to owners of the Company | Post-tax income attributable to minority shareholders | ||||
| For the period from 1 January to 30 June 2023: | ||||||||
| I. Other comprehensive income that will not be reclassified subsequently to profit or loss | 51,014,303.06 | 64,821,997.20 | - | - | 29,979,361.65 | 34,842,635.55 | - | 80,993,664.71 |
| Including: Changes arising from remeasurement of defined benefits plan | -10,189,712.88 | - | - | - | - | - | - | -10,189,712.88 |
| Other comprehensive income that can't be transferred to profit or loss under the equity method | -8,907,673.34 | 64,821,997.20 | - | - | 29,979,361.65 | 34,842,635.55 | - | 21,071,688.31 |
| Changes in fair value of investments in other equity instruments | 70,111,689.28 | - | - | - | - | - | - | 70,111,689.28 |
| II. Other comprehensive income that will be reclassified subsequently to profit or loss | -740,567,922.92 | 1,362,351,707.87 | - | - | 308,838,022.14 | 1,053,513,685.73 | - | -431,729,900.78 |
| Including: Other comprehensive income that may be transferred to profit or loss under the equity method | -60,762,188.43 | 38,907,509.63 | - | - | 18,341,346.24 | 20,566,163.39 | - | -42,420,842.19 |
| Translation differences of financial statements denominated in foreign currencies | -679,805,734.49 | 1,323,444,198.24 | - | - | 290,496,675.90 | 1,032,947,522.34 | - | -389,309,058.59 |
| Total other comprehensive income | -689,553,619.86 | 1,427,173,705.07 | - | - | 338,817,383.79 | 1,088,356,321.28 | - | -350,736,236.07 |
| 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 benefits plan | 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 transferred to profit or loss under the 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 investments in 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 transferred to profit or loss under the 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 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
48. Special reserve
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 31/12/2022 | Increase | Decrease | 30/6/2023 |
| Safety production costs | 26,358,259.97 | 31,106,449.65 | 13,580,359.97 | 43,884,349.65 |
49. Surplus reserve
| Item | 31/12/2022 | Increase | Decrease | 30/6/2023 |
| Statutory surplus reserve | 1,001,917,449.15 | - | - | 1,001,917,449.15 |
Note: According to the Company Law of the Peoples Republic of China and the Articles of
Association of the Company, the Company makes appropriation to statutory surplus reserveat 10% of the net profit for the year. The appropriation may be ceased when the accumulatedamount of statutory surplus reserve reaches 50% of the registered capital. The statutorysurplus reserve may be used to make up for losses or increase the share capital upon approval.The amount of appropriation to discretionary surplus reserve is proposed by the board ofdirectors and approved by the shareholders meeting. The discretionary surplus reserve maybe used to make up for losses of previous years or increase the share capital upon approval.
50. Unappropriated profit
| Item | Amount | Proportion of appropriation or allocation |
| For the period from 1 January to 30 June 2023 | ||
| Unappropriated profit at the end of prior period before adjustment | 16,679,688,347.09 | |
| Add: Adjustment of unappropriated profit at the beginning of the period | 22,299,954.05 | |
| Including: Changes in accounting policies | 22,299,954.05 | |
| Unappropriated profit at the beginning of period after adjustment | 16,701,988,301.14 | |
| Add: Net profit attributable to shareholders of the Company for the period | 1,902,334,759.43 | |
| Less: Appropriation to statutory surplus reserve | - | |
| Appropriation to discretionary surplus reserve | - | |
| Appropriation to general risk reserve | - | |
| Ordinary shares' dividends payable | 1,124,583,597.45 | Note |
| Difference in pension benefits | - | |
| Others | - | |
| Unappropriated profit at the end of the period | 17,479,739,463.12 | |
| Item | Amount | Proportion of appropriation or allocation |
| For the year ended 31 December 2022 (restated) | ||
| Unappropriated profit at the end of prior year before adjustment | 14,205,879,106.49 | |
| Add: Adjustment of unappropriated profit at the 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 attributable to shareholders of the Company for the year | 3,338,693,816.70 | |
| Transfer of other comprehensive income | 7,513,669.91 | |
| Less: Appropriation to statutory surplus reserve | 40,734,887.15 | |
| Appropriation to discretionary surplus reserve | - | |
| Appropriation to general risk reserve | - | |
| Ordinary shares' dividends payable | 826,617,003.32 | |
| Difference in pension benefits | 3,798,761.66 | |
| Others | - | |
| Unappropriated profit at the end of the year | 16,701,988,301.14 | |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Unappropriated profit - continued
Note : According to the resolution of 2022 shareholders meeting held on 22 May 2023, the
Company distributed cash dividends of RMB 4.50 (inclusive of tax) for every 10 shares,totaling up to RMB 1,124,583,597.45 on the basis of the total shares of 2,499,074,661 sharesat the end of 2022.
51. Operating income and operating costs
(1) Operating income and operating costs
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Current period | Prior period | ||
| Income | Cost | Income | Cost | |
| Principal operation | 7,708,854,212.85 | 4,408,430,226.61 | 8,082,386,860.84 | 4,522,454,260.85 |
| Other operations | 86,407,358.14 | 111,513,527.18 | 68,075,506.35 | 114,914,620.80 |
| Total | 7,795,261,570.99 | 4,519,943,753.79 | 8,150,462,367.19 | 4,637,368,881.65 |
(2) Revenue from contracts
| Categories of contracts | Ports operation | Bonded logistics operation | Other operation | Total |
| Mainland China, Hong Kong and Taiwan region | 5,293,340,883.37 | 245,225,754.19 | 86,407,358.14 | 5,624,973,995.70 |
| - Pearl River Delta | 3,097,351,341.64 | 170,943,597.08 | 86,407,358.14 | 3,354,702,296.86 |
| - Yangtze River Delta | 454,417,897.17 | - | - | 454,417,897.17 |
| - Bohai Rim | 34,005,738.63 | 74,282,157.11 | - | 108,287,895.74 |
| - Other regions | 1,707,565,905.93 | - | - | 1,707,565,905.93 |
| Other countries | 2,150,550,737.41 | 19,736,837.88 | - | 2,170,287,575.29 |
| Total | 7,443,891,620.78 | 264,962,592.07 | 86,407,358.14 | 7,795,261,570.99 |
(3) Description of performance obligations
The Group provides wharf services, bonded logistics services and other services. These services areobligations satisfied over time. For wharf services, as the handling time for containers and bulkcargos is short, the management believes that it is an appropriate method to recognize the fulfillmentof performance obligation and revenue upon the completion of the services. For bonded logisticsservices and other services, the customers evenly obtain and consume economic benefits from theGroup's performance of contract, meanwhile charging rules as agreed in contract terms usuallyadopt daily/month/yearly basis. During the process of rendering services, the Group recognizesrevenue using the straight-line method.
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 rates or discounts. Atthe end of the period, as the business quantity finally realized within the contract period is uncertain,the contract consideration is subject to variable factors. The management includes this part ofdiscount in other payables and provisions, rather than including it in the transaction prices. At theend of the period, the variable considerations arising from sales discount are set out in Note (VIII)33 (3) and Note (VIII) 42.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
52. Taxes and levies
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Current period | Prior period |
| Property tax | 37,043,349.16 | 36,445,186.60 |
| Land use tax | 21,497,609.30 | 18,256,154.56 |
| City construction and maintenance tax | 3,574,919.14 | 4,410,503.24 |
| Education surcharges and local education surcharges | 2,755,664.80 | 3,271,326.62 |
| Stamp duty | 1,784,831.65 | 2,171,053.36 |
| Others (Note) | 75,120,958.39 | 70,960,315.69 |
| Total | 141,777,332.44 | 135,514,540.07 |
Note: Others mainly represent the Program of Social Integration and Contribution for the
Financing of Social Security and Tax on Services, with total amount of BRL 50,576,365.39(equivalent to RMB 68,998,672.97) assumed by Company's subsidiary TCP in the currentperiod.
53. Administrative expenses
| Item | Current period | Prior period |
| Employee benefits | 588,853,219.14 | 602,477,006.88 |
| Depreciation expenses | 37,022,009.61 | 39,373,984.62 |
| Amortization of intangible assets | 28,171,677.17 | 28,961,337.07 |
| Fees paid to agencies | 17,093,174.16 | 35,451,603.67 |
| Others | 119,776,074.57 | 106,238,728.31 |
| Total | 790,916,154.65 | 812,502,660.55 |
54. Financial expenses
| Item | Current period | Prior period |
| Interest expenses | 967,915,432.19 | 941,760,614.15 |
| Less: Capitalized interest expenses | 22,358,449.22 | 14,559,885.48 |
| Less: Interest income | 248,901,354.18 | 212,820,789.37 |
| Interest expenses of terminal management rights (Note) | 135,914,691.46 | 175,512,351.90 |
| Exchange differences | 93,018,282.35 | 409,143,801.31 |
| Interest expenses of lease liabilities | 31,418,935.49 | 38,284,349.10 |
| Handling fee | 2,299,754.36 | 12,011,540.57 |
| Others | 1,142,449.45 | 2,613,065.49 |
| Total | 960,449,741.90 | 1,351,945,047.67 |
Note: Details are set out in Note (VIII) 40.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
55. Other income
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Current period | Prior period |
| Transfer from deferred income (Note (VIII) 43) | 24,115,933.58 | 22,802,653.80 |
| Weighted deduction of VAT | 14,133,305.35 | 14,149,044.01 |
| Subsidy for business development | 10,065,510.04 | 31,566,099.04 |
| Subsidy for business operation | 6,146,204.98 | 8,918,543.30 |
| Subsidy for job stabilization | 1,607,911.86 | 4,738,985.48 |
| Others | 6,488,077.46 | 5,305,499.02 |
| Total | 62,556,943.27 | 87,480,824.65 |
56. Investment income
(1) Details of investment income
| Item | Current period | Prior period |
| Gains from long-term equity investments under the equity method | 3,095,294,518.20 | 4,211,173,480.05 |
| Including: Gains from long-term equity investments in associates under the equity method | 2,925,319,084.66 | 4,013,474,427.71 |
| Including: Gains from long-term equity investments in joint ventures under the equity method | 169,975,433.54 | 197,699,052.34 |
| Investment income on held-for-trading financial assets | 42,382,509.61 | 143,904,101.39 |
| Investment income on other non-current financial assets | 40,991,190.59 | - |
| Dividend income on investments in other equity instruments | 8,824,500.00 | 240,001.47 |
| Investment income from disposal of long-term equity investment | - | -43,817.42 |
| Total | 3,187,492,718.40 | 4,355,273,765.49 |
(2) Details of gains from long-term equity investments under the equity method
| Investee | Current period | Prior period | Reason for changes |
| SIPG | 2,053,880,439.55 | 2,960,021,044.89 | Changes in net profit of investee |
| Ninbo Zhoushan | 486,448,025.41 | 125,568,457.33 | Changes in net profit of investee |
| Terminal Link SAS | 123,523,209.71 | 198,772,626.71 | Changes in net profit of investee |
| Nanshan Group | 113,853,548.75 | 50,936,344.06 | Changes in net profit of investee |
| Liaoning Port | 71,442,863.94 | 83,953,806.32 | Changes in net profit of investee |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 65,204,791.15 | 56,430,615.96 | Changes in net profit of investee |
| Euro-Asia Oceangate S.à r.l. | 52,892,617.53 | 48,659,755.96 | Changes in net profit of investee |
| Port De Djibouti S.A | 46,389,947.52 | 511,374,203.72 | Changes in net profit of investee |
| Modern Terminals Limited | 24,704,316.27 | 67,145,545.55 | Changes in net profit of investee |
| Shenzhen China Merchants Qianhai Industrial Development Co., Ltd. | 21,312,200.00 | 13,281,800.00 | Changes in net profit of investee |
| Yantai Port Group Laizhou Port Co., Ltd. | 20,672,709.37 | 22,069,427.08 | Changes in net profit of investee |
| Others | 14,969,849.00 | 72,959,852.47 | Changes in net profit of investee |
| Total | 3,095,294,518.20 | 4,211,173,480.05 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
57. Gains (losses) from changes in fair value
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Current period | Prior period |
| Held-for-trading financial assets | 29,660,173.93 | 8,456,691.77 |
| Other non-current financial assets | 113,377,129.75 | -46,482,804.35 |
| Including: Financial assets at FVTPL | 113,377,129.75 | -46,482,804.35 |
| Total | 143,037,303.68 | -38,026,112.58 |
58. Gains (losses) on impairment of credit
| Item | Current period | Prior period |
| I. Gains (losses) on impairment of credit of accounts receivable | -6,091,772.24 | 2,604,456.88 |
| II. Gains (losses) on impairment of credit of other receivables | -848,166.66 | 449,134.32 |
| III. Gains (losses) on impairment of credit of long-term receivables | -355,682.40 | -171,178.59 |
| Total | -7,295,621.30 | 2,882,412.61 |
59. Gains (losses) on disposal of assets
| Item | Current period | Prior period | Amount included in non-recurring profit or loss for the current period |
| Gains (losses) on disposal of non-current assets | 352,045.75 | -207,276.37 | 352,045.75 |
| Including: Gains (losses) on disposal of fixed assets | 332,086.56 | -723,828.56 | 332,086.56 |
| Other income | 19,959.19 | 516,552.19 | 19,959.19 |
60. Non-operating income
| Item | Current period | Prior period | Amount included in non-recurring profit or loss for the current period |
| Liquidated damages received | 11,941,072.67 | 3,789,301.53 | 11,941,072.67 |
| Management service fee and directors' remuneration | 7,244,883.79 | 5,397,021.58 | 7,244,883.79 |
| Relocation compensation received | 4,301,000.00 | - | 4,301,000.00 |
| Land rent relief | 2,687,908.22 | 2,655,624.40 | 2,687,908.22 |
| Gains from damage or retirement of non-current assets | 1,501,585.40 | 1,440,232.40 | 1,501,585.40 |
| Including: Gains from from damage or retirement of fixed assets | 1,495,213.72 | 1,440,232.40 | 1,495,213.72 |
| Government grants | 51,161.13 | 1,261,712.56 | 51,161.13 |
| Exempted current accounts | 15,000.00 | 4,634,628.05 | 15,000.00 |
| Insurance compensation received | 12,234.79 | 375,097.87 | 12,234.79 |
| Others | 8,828,638.46 | 639,308.00 | 8,828,638.46 |
| Total | 36,583,484.46 | 20,192,926.39 | 36,583,484.46 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
61. Non-operating expenses
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Current period | Prior period | Amount included in non-recurring profit or loss for the current period |
| Losses on retirement of non-current assets | 8,552,288.98 | 2,984,083.67 | 8,552,288.98 |
| Including: Losses on damage or retirement of fixed assets | 8,552,288.98 | 2,984,083.67 | 8,552,288.98 |
| Compensation, liquidated damages and penalties | 1,008,437.74 | - | 1,008,437.74 |
| External donations | 196,195.88 | 231,477.20 | 196,195.88 |
| Litigation losses | - | 16,732,991.55 | - |
| Others | 322,080.73 | 318,905.87 | 322,080.73 |
| Total | 10,079,003.33 | 20,267,458.29 | 10,079,003.33 |
62. Income tax expenses
| Item | Current period | Prior period (restated) |
| Current tax expenses | 526,429,958.55 | 553,914,215.26 |
| Deferred tax expenses | 86,789,894.01 | 65,218,762.89 |
| Total | 613,219,852.56 | 619,132,978.15 |
Reconciliation of income tax expenses to the accounting profit is as follows:
| Item | Current period |
| Gross profit | 4,673,846,473.26 |
| Income tax expenses calculated at 25% | 1,168,461,618.32 |
| Effect of non-deductible cost, expenses and losses | 104,920,871.30 |
| Accrued income tax expenses | 174,637,852.83 |
| Effect of deductible temporary differences or deductible losses for which the deferred tax assets are not recognized in current period | 84,278,964.30 |
| Effect of tax-free income (Note) | -544,413,512.91 |
| Effect of tax incentives and changes in tax rate | -230,326,665.55 |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | -124,623,839.20 |
| Effect of utilizing deductible losses for which the deferred tax assets were not recognized in prior period | -15,451,288.66 |
| Effect of adjustments to prior-year income tax | -18,575,796.97 |
| Others | 14,311,649.10 |
| Income tax expenses | 613,219,852.56 |
Note: This mainly represents the tax effect on investment income from joint ventures and
associates.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
63. Assets with restricted ownership or use right
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Equity investment in TML (Note 1) | 1,133,181,949.12 | 1,047,063,416.30 |
| Fixed assets (Note 2) | 753,008,833.33 | 341,870,382.84 |
| Intangible assets (Note 2) | 474,487,529.49 | 222,040,259.68 |
| Construction in progress (Note 2) | 7,120,027.83 | 4,298,598.50 |
| Cash and bank balances (Note 3) | 3,545,619.20 | 9,309,145.94 |
| Equity investment in CICT (Note 1) | - | 2,115,796,097.99 |
| Total | 2,371,343,958.97 | 3,740,377,901.25 |
Note 1: Details of mortgaged equity and interests are set out in Note (VIII) 37.
Note 2: Details of pledged borrowings are set out in Note (VIII) 26 and Note (VIII) 37. Details of
sale and leaseback transactions are set out in Note (VIII) 36 and Note (VIII) 40.
Note 3: Details of restricted cash and bank balances are set out in Note (VIII) 1.
64. Other comprehensive income, net of tax
Details are set out in Note (VIII) 47.
65. Items in cash flow statement
(1) Other cash receipts relating to operating activities
| Item | Current period | Prior period |
| Interest income | 158,498,388.26 | 92,837,488.11 |
| Government grants | 37,471,669.54 | 42,016,594.20 |
| Guarantees and deposits | 30,744,990.97 | 26,742,477.96 |
| Rentals | 6,510,750.65 | 2,869,149.16 |
| Insurance compensation | 1,998,402.38 | 1,210,988.68 |
| Others | 138,575,220.13 | 282,982,833.45 |
| Total | 373,799,421.93 | 448,659,531.56 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(2) Other cash payments relating to operating activities
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Current period | Prior period |
| Advances payment | 93,657,548.56 | 188,969,753.65 |
| Operating expenses such as operating costs and administration expenses | 125,945,130.98 | 110,138,728.88 |
| Guarantees and deposits | 13,258,231.38 | 15,253,990.79 |
| Harbor dues on cargo | 6,085,935.98 | 6,923,999.90 |
| Rentals | 23,988,105.53 | 13,157,361.39 |
| Port charges | 2,639,938.00 | 3,234,003.82 |
| Others | 123,054,086.20 | 73,444,972.12 |
| Total | 388,628,976.63 | 411,122,810.55 |
(3) Other cash receipts relating to investing activities
| Item | Current period | Prior period |
| Receipt of interest on project advances | 87,390,340.59 | 81,787,395.95 |
| Others | 15,768,702.30 | 12,778,782.74 |
| Total | 103,159,042.89 | 94,566,178.69 |
(4) Other cash payments relating to investing activities
| Item | Current period | Prior period |
| Disposal costs of retired assets | 7,340,158.92 | 1,419,567.81 |
| Taxes on land acquisition and reserve paid by Antongjie Wharf Warehousing Service (Shenzhen) Co., Ltd. ("ATJ") | - | 947,523,385.44 |
| Staff relocation cost in respect of land acquisition and reserve paid by Shantou Port | - | 18,761,552.44 |
| Others | 6,146.71 | 8,228.73 |
| Total | 7,346,305.63 | 967,712,734.42 |
(5) Other cash receipts relating to financing activities
| Item | Current period | Prior period |
| Receipt of sale and leaseback payment | 322,200,480.00 | 50,000,000.00 |
| Others | 160,820.44 | 2,897,609.21 |
| Total | 322,361,300.44 | 52,897,609.21 |
(6) Other cash payments relating to financing activities
| Item | Current period | Prior period |
| Payment for the Company's acquisition of minority interests of CM Port | 302,638,065.73 | 74,787,051.66 |
| Payments of rental expenses | 168,480,367.22 | 129,259,179.22 |
| Payment of financing costs | 1,314,920.07 | 16,628,834.22 |
| Others | 2,422,683.83 | 4,302,053.94 |
| Total | 474,856,036.85 | 224,977,119.04 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
CHINA MERCHANTS PORT GROUP CO., LTD.
Supplementary information
| Supplementary information | Current period | Prior period (restated) |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 4,060,626,620.70 | 4,886,494,162.50 |
| Add: Provision for impairment losses of assets | -65,324.84 | - |
| Provision for impairment losses of credit | 7,295,621.30 | -2,882,412.61 |
| Depreciation of fixed assets | 1,019,376,080.32 | 993,740,407.62 |
| Depreciation of investment property | 91,173,671.26 | 92,083,960.88 |
| Depreciation of right-of-use assets | 173,399,908.80 | 174,019,155.17 |
| Amortization of intangible assets | 357,373,882.88 | 319,604,700.15 |
| Amortization of long-term prepaid expenses | 43,553,304.87 | 37,291,473.18 |
| Losses (gains) on disposal of fixed assets, intangible assets and other long-term assets | -352,045.75 | 207,276.37 |
| Losses on retirement of fixed assets, intangible assets and other long-term assets | 7,050,703.58 | 1,543,851.27 |
| Losses (gains) on changes in fair value | -143,037,303.68 | 38,026,112.58 |
| Financial expenses | 1,091,936,549.51 | 1,456,795,942.93 |
| Investment losses (gains) | -3,187,492,718.40 | -4,355,273,765.49 |
| Decrease (increase) in deferred tax assets | 22,271,600.81 | -3,364,145.57 |
| Increase in deferred tax liabilities | 64,518,293.20 | 68,582,908.46 |
| Decrease (increase) in inventories | -27,601,948.90 | -24,682,369.59 |
| Decrease (increase) in operating receivables | -1,087,893,594.91 | -487,958,209.89 |
| Increase (decrease) in operating payables | -181,287,994.79 | 27,022,129.13 |
| Net cash flows from operating activities | 2,310,845,305.96 | 3,221,251,177.09 |
| 2. Significant investing and financing activities that do not involve cash receipts and payments: | ||
| Conversion of debt into capital | - | - |
| Convertible bonds due within one year | - | - |
| Fixed assets held under finance leases | - | - |
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 14,556,330,454.28 | 14,123,520,754.66 |
| 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 | 989,020,982.66 | 1,396,165,516.30 |
(2) Cash and cash equivalents
| Item | 30/6/2023 | 31/12/2022 |
| I. Cash | 14,556,330,454.28 | 13,567,309,471.62 |
| Including: Cash on hand | 5,239,515.56 | 726,960.10 |
| Bank deposits available for payment at any time | 14,248,343,177.54 | 13,045,336,190.09 |
| Other monetary funds available for payment at any time | 175,363,071.85 | 521,246,321.43 |
| Cash and bank balances corresponding to the transfer of Ningbo Daxie to held-for-sale category | 127,384,689.33 | - |
| II. Cash equivalents | - | - |
| III. Closing balance of cash and cash equivalents | 14,556,330,454.28 | 13,567,309,471.62 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Foreign currency monetary items
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Foreign currency balance at 30/6/2023 | Exchange rate | Balance in RMB at 30/6/2023 |
| Cash and bank balances | 1,824,290,197.00 | ||
| Including: HKD | 21,872,665.74 | 0.9205 | 20,133,788.81 |
| USD | 190,091,806.99 | 7.2098 | 1,370,523,910.04 |
| EUR | 31,014,214.28 | 7.8773 | 244,308,270.15 |
| RMB | 189,324,228.00 | 1.0000 | 189,324,228.00 |
| Accounts receivable | 555,416,907.52 | ||
| Including: HKD | 423,566.91 | 0.9205 | 389,893.34 |
| USD | 5,683,083.17 | 7.2098 | 40,973,893.04 |
| EUR | 65,257,527.47 | 7.8773 | 514,053,121.14 |
| Other receivables | 1,277,212,760.76 | ||
| Including: HKD | 68,373,407.85 | 0.9205 | 62,937,721.93 |
| USD | 22,819.80 | 7.2098 | 164,526.19 |
| EUR | 5,515,917.29 | 7.8773 | 43,450,535.27 |
| RMB | 1,170,659,977.37 | 1.0000 | 1,170,659,977.37 |
| Long-term receivables | 205,820,084.52 | ||
| Including: EUR | 26,128,252.64 | 7.8773 | 205,820,084.52 |
| Other non-current assets | 30,930,742.61 | ||
| Including: EUR | 3,926,566.54 | 7.8773 | 30,930,742.61 |
| Short-term borrowings | 2,343,078,000.00 | ||
| Including: USD | 110,000,000.00 | 7.2098 | 793,078,000.00 |
| RMB | 1,550,000,000.00 | 1.0000 | 1,550,000,000.00 |
| Accounts payable | 27,024,927.97 | ||
| Including: HKD | 1,310,537.99 | 0.9205 | 1,206,350.22 |
| EUR | 3,277,592.29 | 7.8773 | 25,818,577.75 |
| Other payables | 453,014,922.60 | ||
| Including: HKD | 33,545,375.26 | 0.9205 | 30,878,517.93 |
| USD | 39,765,925.33 | 7.2098 | 286,704,368.44 |
| EUR | 16,985,975.26 | 7.8773 | 133,803,622.92 |
| RMB | 1,628,413.31 | 1.0000 | 1,628,413.31 |
| Non-current liabilities due within one year | 7,447,686,725.37 | ||
| Including: USD | 938,863,965.69 | 7.2098 | 6,769,021,419.83 |
| RMB | 678,665,305.54 | 1.0000 | 678,665,305.54 |
| Long-term borrowings | 4,838,784,035.00 | ||
| Including: EUR | 22,950,000.00 | 7.8773 | 180,784,035.00 |
| RMB | 4,658,000,000.00 | 1.0000 | 4,658,000,000.00 |
| Bonds payable | 11,484,215,109.68 | ||
| Including: USD | 1,592,861,814.43 | 7.2098 | 11,484,215,109.68 |
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Government grants
(1) New government grants for the period
CHINA MERCHANTS PORT GROUP CO., LTD.
Type
| Type | Amount | Item | Account | Amount included in profit or loss for the period |
| Related to income | 10,065,510.04 | Subsidy for business development | Other income | 10,065,510.04 |
| Related to assets | 8,500,000.00 | Others | Deferred income | 1,600,000.03 |
| Related to income | 6,146,204.98 | Subsidy for business operation | Other income | 6,146,204.98 |
| Related to assets | 3,300,000.00 | Special subsidies for facilities and equipment | Deferred income | 36,263.74 |
| Related to income | 1,607,911.86 | Subsidy for job stabilization | Other income | 1,607,911.86 |
| Related to income | 4,652,775.90 | Others | Other income | 4,652,775.90 |
| Related to income | 51,161.13 | Others | Non-operating income | 51,161.13 |
| Total | 34,323,563.91 | 24,159,827.68 |
69. Leases
(1) Lessor under operating leases
| Item | Amount |
| I. Revenue | |
| Lease income | 156,011,442.22 |
| 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 | 183,997,926.53 |
| 2nd year | 135,817,724.79 |
| 3rd year | 113,599,395.19 |
| 4th year | 97,394,090.85 |
| 5th year | 60,264,411.35 |
| Over 5 years | 185,727,124.72 |
Note: The operating leases where the Group as the lessor are related to port and terminal facilities,
machinery and equipment, motor vehicles, land and buildings, with lease terms rangingfrom 0.5 year to 50 years and an option to renew the leases of port and terminal facilities,machinery equipment, land and buildings. The Group considers that as the leased assets areproperly used, unguaranteed balance of such assets does not constitute material risk of theGroup.
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(VIII) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
69. Leases - continued
(2) Lessee
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Amount |
| Interest expense on lease liabilities | 31,418,935.49 |
| 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 | 27,727,081.54 |
| Expenses on lease of low-value assets (exclusive of expenses on short-term lease of low-value assets) that are accounted for using simplified approach and included in cost of related assets or profit or loss for the period | - |
| 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 | 5,446,966.10 |
| Total cash outflows relating to leases | 185,790,438.60 |
| Profit (loss) arising from sale and leaseback transactions | -33,565,846.07 |
| Cash inflows from sale and leaseback transactions | 322,200,480.00 |
| Cash outflows from sale and leaseback transactions | 97,155,869.70 |
| Others | - |
(IX) CHANGES IN SCOPE OF CONSOLIDATION
1. Business combination not involving enterprises under common control
The Group has no business combination not involving enterprises under common control inthe current period.
2. Business combination involving enterprises under common control
The Group has no business combination involving enterprises under common control in thecurrent period.
3. Reverse purchase
The Group has no reverse purchase in the current period.
4. Disposal of subsidiary
There is no loss of control over subsidiary due to the Group's disposal of investment in thesubsidiary in the current period.
5. Changes in scope of consolidation for other reasons
The Group has no changes in scope of consolidation for other reasons other than theestablishment of new subsidiaries in the current period.
- 124 -
(X) EQUITY IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group - Major subsidiaries
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the subsidiary
| Name of the subsidiary | Principal place of business | Place of incorporation | Nature of business | Registered capital (RMB'0000, unless otherwise specified) | Shareholding ratio (%) | Acquisition method | |
| Direct | Indirect | ||||||
| Shenzhen Chiwan International Freight Agency Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 550.00 | 100.00 | - | Established through investment |
| Chiwan Wharf Holdings (Hong Kong) Ltd. ("Wharf Holdings Hong Kong") | HK China | HK China | Investment holding | HKD 1,000,000 | 100.00 | - | Established through investment |
| Dongguan Shenchiwan Port Affairs Co., Ltd. | Dongguan China | Dongguan China | Logistics support services | 45,000.00 | 85.00 | - | Established through investment |
| Dongguan Shenchiwan Wharf Co., Ltd. | Dongguan China | Dongguan China | Logistics support services | 40,000.00 | 100.00 | - | Established through investment |
| Shenzhen Chiwan Harbor Container Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 28,820.00 | 100.00 | - | Business combination involving enterprises under common control |
| Shenzhen Chiwan Port Development Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 10,000.00 | 100.00 | - | Business combination involving enterprises under common control |
| Chiwan Container Terminal Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | USD 95,300,000 | 55.00 | 20.00 | Business combination involving enterprises under common control |
| Shenzhen Chiwan Tugboat Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 2,400.00 | 100.00 | - | Business combination involving enterprises under common control |
| Chiwan Shipping (Hong Kong) Limited | HK China | HK China | Logistics support services | HKD 800,000 | 100.00 | - | Business combination involving enterprises under common control |
| CM Port (Note 1) | HK China | HK China | Investment holding | HKD 46,668,174,000 | 0.37 | 46.10 | Business combination involving enterprises under common control |
| China Merchants Bonded Logistics Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 70,000.00 | 40.00 | 60.00 | Business combination involving enterprises under common control |
| China Merchants Holdings (International) Information Technology Co., Ltd. ("CM International Tech") | Shenzhen China | Shenzhen China | IT service | 8,784.82 | 13.18 | 43.74 | Business combination involving enterprises under common control |
| Dalian Port Logistics Network Co., Ltd. | Liaoning China | Liaoning China | IT service | 3,200.00 | - | 79.03 | Business combination involving enterprises under common control |
| Gangxin Technology | Liaoning China | Liaoning China | IT service | 800.00 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International (China) Investment Co., Ltd. | Shenzhen China | Shenzhen China | Investment holding | USD 67,400,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International Container Terminal (Qingdao) Co., Ltd. | Qingdao China | Qingdao China | Logistics support services | USD 206,300,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants Container Services Limited | HK China | HK China | Logistics support services | HKD 500,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants Port (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 55,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Haiqin Project Management Co., Ltd. | Shenzhen China | Shenzhen China | Engineering supervision service | 1,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| ATJ | Shenzhen China | Shenzhen China | Preparation for the warehousing project | HKD 100,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| ASJ | Shenzhen China | Shenzhen China | Preparation for the warehousing project | HKD 100,000,000 | - | 100.00 | Business combination involving enterprises under common control |
| China Merchants International Terminal (Qingdao) Co., Ltd. | Qingdao China | Qingdao China | Logistics support services | USD 44,000,000 | - | 90.10 | Business combination involving enterprises under common control |
| CICT | Sri Lanka | Sri Lanka | Logistics support services | USD 150,000,100 | - | 85.00 | Business combination involving enterprises under common control |
| Magang Godown & Wharf | Shenzhen China | Shenzhen China | Logistics support services | 33,500.00 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Mawan Port Services Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 20,000.00 | - | 100.00 | Business combination involving enterprises under common control |
| Zhangzhou China Merchants Tugboat Co., Ltd. | Zhangzhou China | Zhangzhou China | Logistics support services | 1,500.00 | - | 70.00 | Business combination involving enterprises under common control |
| Zhangzhou China Merchants Port Co., Ltd. | Zhangzhou China | Zhangzhou China | Logistics support services | 116,700.00 | - | 60.00 | Business combination involving enterprises under common control |
| Zhangzhou Investment Promotion Bureau Xiamenwan Port Affairs Co., Ltd. ("Xiamenwan Port Affairs") (Note 2) | Zhangzhou China | Zhangzhou China | Logistics support services | 44,450.00 | - | 31.00 | Business combination involving enterprises under common control |
| Shekou Container Terminals Ltd. | Shenzhen China | Shenzhen China | Logistics support services | HKD 618,201,200 | - | 100.00 | Business combination involving enterprises under common control |
| Shenzhen Lianyunjie Container Terminals Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 60,854.90 | - | 100.00 | Business combination involving enterprises under common control |
| Anxunjie Container Terminals (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 127,600.00 | - | 100.00 | Business combination involving enterprises under common control |
| Anyunjie Port Warehousing Service (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Preparation for the warehousing project | 6,060.00 | - | 80.00 | Business combination involving enterprises under common control |
| 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 |
- 125 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the subsidiary
| Name of the subsidiary | Principal place of business | Place of incorporation | Nature of business | Registered capital (RMB'0000, unless otherwise specified) | Shareholding ratio (%) | Acquisition method | |
| Direct | Indirect | ||||||
| Yide Port | Foshan China | Foshan China | Logistics support services | 21,600.00 | 51.00 | - | Business combination involving enterprises under common control |
| Mega Shekou Container Terminals Limited | BVI | BVI | Investment holding | USD 120.00 | - | 80.00 | Business combination involving enterprises under common control |
| Lome Container Terminal S.A. (Note 3) | Republic of Togo | Republic of Togo | Logistics support services | XOF 200,000,000 | - | 35.00 | Business combination involving enterprises under common control |
| Gainpro Resources Limited | BVI | BVI | Investment holding | USD 1.00 | - | 76.50 | 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 | Business combination involving enterprises under common control |
| Juzhongzhi Investment (Shenzhen) Co., Ltd. | Shenzhen China | Shenzhen China | Investment consulting | 4,000.00 | - | 75.00 | Business combination involving enterprises under common control |
| Shenzhen Lianda Tugboat Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 200.00 | - | 60.29 | Business combination involving enterprises under common control |
| China Ocean Shipping Tally Zhangzhou Co., Ltd. | Zhangzhou China | Zhangzhou China | Logistics support services | 200.00 | - | 84.00 | Business combination involving enterprises under common control |
| China Merchants Holdings (Djibouti) FZE | Djibouti | Djibouti | Logistics support services | USD 38,140,000 | - | 100.00 | Business combination involving enterprises under common control |
| Xinda Resources Limited | BVI | BVI | Investment holding | USD 107,620,000 | - | 77.45 | Business combination involving enterprises under common control |
| Kong Rise Development Limited | HK China | HK China | Investment holding | USD 107,620,000 | - | 100.00 | Business combination involving enterprises under common control |
| TCP | Brazil | Brazil | Logistics support services | BRL 68,851,600 | - | 100.00 | Business combination not involving enterprises under common control |
| Direcet Achieve Investments Limited | HK China | HK China | Investment holding | USD 814,781,300 | - | 100.00 | Business combination involving enterprises under common control |
| Zhoushan RoRo | Zhoushan China | Zhoushan China | Logistics support services | 17,307.86 | 51.00 | - | Asset acquisition |
| Shenzhen Haixing Logistics Development Co., Ltd. | Shenzhen China | Shenzhen China | Logistics support services | 7,066.79 | - | 67.00 | Asset acquisition |
| Zhanjiang Port | Zhanjiang China | Zhanjiang China | Logistics support services | 587,420.91 | 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 |
| Zhanjiang Port Haichuan Trading Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 200.00 | - | 100.00 | Business combination not involving enterprises under common control |
| Guangdong Zhanjiang Port Longteng Shipping Co., Ltd. | Zhanjiang China | Zhanjiang China | Logistics support services | 9,000.00 | - | 51.00 | Business combination not involving enterprises under common control |
| Ningbo Daxie (Note 5) | Ningbo China | Ningbo China | Logistics support services | 120,909.00 | - | 45.00 | Business combination not involving enterprises under common control |
| Shantou Harbor Towage Service Co., Ltd. | Shantou China | Shantou China | Logistics support services | 1,000.00 | - | 100.00 | Established through investment |
| Sanya Merchants Port Development Co., Ltd. | Sanya China | Sanya China | Logistics support services | 1,000.00 | 51.00 | - | Established through investment |
| Malai Warehousing (Shenzhen) Co., Ltd | Shenzhen China | Shenzhen China | Owning China Qianhai property | HKD 1,600,000,000 | - | 100.00 | Business combination not involving enterprises under common control |
| Ports Development (Hong Kong) Limited | Hong Kong China | Hong Kong China | Investment holding | 2,768,291.56 | 100.00 | - | Established through investment |
| Shunkong Port | Foshan China | Foshan China | Property development and management | 6,122.45 | 51.00 | - | Asset acquisition |
- 126 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - Major subsidiaries - continued
Note 1: As at 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 the first half of 2023, the Ports Development (Hong Kong) Limited acquired the ordinaryshares of CM Port, totaling to 31,098,000 shares, from the secondary market. Uponcompletion of the aforesaid acquisition, the ratio of ordinary shares held by the Group intotal issued ordinary shares of CM Port changed from 45.69% to 46.47%, and CMHK held
22.42% of total issued ordinary shares of CM Port. Therefore, the Company had total 68.89%voting power and can 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 29.00% equity of ZCMG to the Group foroperation and management. Therefore, the Group has 60.00% voting power of ZCMG andincludes it in 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 in thescope of consolidation of the consolidated financial statements.
Note 4: The Group holds 50.00% 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: Cyber Chic Company Limited, a subsidiary of the Company, entered into a cooperation
agreement with Ningbo Zhoushan. According to the cooperation agreement, Cyber ChicCompany Limited and Ningbo Zhoushan will negotiate and communicate to reach aunanimous action before exercising their shareholder rights over Ningbo Daxie. If theparties to the agreement fail to reach a consensus on matters such as the operation andmanagement of Ningbo Daxie, the decision will be based on the opinion of Cyber ChicCompany Limited. After the signing of the Cooperation Agreement, Cyber Chic CompanyLimited and Ningbo Zhoushan together own more than 50.00% of the voting rights inNingbo Daxie. As a result, the Group is able to exercise control over Ningbo Daxie andincludes it in the scope of consolidation of the consolidated financial statements.
- 127 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(2) Significant non-wholly-owned subsidiaries
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the subsidiary
| Name of the subsidiary | Proportion of ownership interest held by the minority shareholders (%) | Profit or loss attributable to minority shareholders in the current period | Dividends distributed to minority shareholders declared in the current period | Balance of minority interests at the end of the current period |
| CM Port | 53.53 | 2,083,878,816.30 | 128,046,891.56 | 69,526,390,590.61 |
- 128 -
(X) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Significant financial information of significant non-wholly-owned subsidiaries
CHINA MERCHANTS PORT GROUP CO., LTD.Name of thesubsidiary
| Name of the subsidiary | 30/6/2023 | 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 | 17,574,781,518.74 | 137,615,842,268.21 | 155,190,623,786.95 | 18,368,245,736.04 | 27,748,657,412.58 | 46,116,903,148.62 | 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 | Current period | Prior period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | Operating income | Net profit | Total comprehensive income | Cash flows from operating activities | |
| CM Port | 5,194,887,619.90 | 3,414,374,406.15 | 4,971,619,164.12 | 1,737,702,226.98 | 5,454,127,408.32 | 4,517,046,368.18 | 5,248,402,438.99 | 2,560,440,425.29 |
- 129 -
(X) EQUITY IN OTHER ENTITIES - continued
2. Transactions resulting in changes in ownership interests in subsidiaries without losing
control over the subsidiaries
(1) Description of changes in ownership interests in subsidiaries
Details are set out in Note (X) 1 (1).
(2) Effect of on minority interests and owners' equity attributable to the Company
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | CM Port |
| Purchase cost | |
| - Cash | 315,490,758.22 |
| - Non-cash assets | - |
| Total purchase cost | 315,490,758.22 |
| Less: Share of net assets of subsidiaries calculated according to the proportion of equity acquired | 682,274,665.21 |
| Difference | -366,783,906.99 |
| Including: Adjusted capital reserve | 366,783,906.99 |
| Adjusted surplus reserve | - |
| Adjusted undistributed profit | - |
3. Interests in joint ventures or associates
(1) Significant joint ventures or associates
| Investees | Principal place of business | Place of registration | Nature of business | Shareholding ratio of the Group (%) | Accounting method of investments in associates | |
| Direct | Indirect | |||||
| Associates | ||||||
| Shanghai International Port (Group) Co., Ltd. | Shanghai, PRC | Shanghai, PRC | Port and container terminal business | - | 28.05 | Equity method |
| Ningbo Zhoushan | Ningbo PRC | Ningbo PRC | Water transport | 20.98 | 2.10 | Equity method |
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(X) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of significant associates
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | 30/6/2023/ Current period | 31/12/2022/ Prior period | |
| SIPG | Ningbo Zhoushan (Note) | SIPG | |
| Current assets | 52,474,978,601.95 | 25,812,218,000.00 | 46,525,054,810.02 |
| Including: Cash and cash equivalents | 32,950,527,813.29 | 12,382,499,000.00 | 26,843,326,028.04 |
| Non-current assets | 140,513,833,339.80 | 84,485,781,000.00 | 135,276,650,788.84 |
| Total assets | 192,988,811,941.75 | 110,297,999,000.00 | 181,801,705,598.86 |
| Current liabilities | 23,271,988,342.86 | 22,619,439,000.00 | 25,863,891,496.14 |
| Non-current liabilities | 43,742,185,804.09 | 10,190,878,000.00 | 34,770,765,671.21 |
| Total liabilities | 67,014,174,146.95 | 32,810,317,000.00 | 60,634,657,167.35 |
| Minority interests | 9,789,122,305.98 | 4,997,761,000.00 | 8,839,640,972.54 |
| Equity attributable to shareholders of the Company | 116,185,515,488.82 | 72,489,921,000.00 | 112,327,407,458.97 |
| Share of net assets calculated based on the proportion of ownership interests | 32,590,037,094.61 | 16,730,673,766.80 | 31,507,837,792.24 |
| Adjustments | |||
| - Goodwill | 2,427,508,397.27 | 1,231,115,756.87 | 2,427,508,397.27 |
| - Others | 235,771,877.55 | 97,347,806.80 | 236,552,011.66 |
| Book value of equity investments in associates | 35,253,317,369.43 | 18,059,137,330.47 | 34,171,898,201.17 |
| Fair value of publicly quoted equity investments in associates | 34,289,392,436.25 | 15,219,317,690.55 | 34,877,210,592.30 |
| Operating income | 16,111,541,335.25 | 12,227,049,000.00 | 20,094,438,005.89 |
| Net profit | 7,738,322,182.71 | 2,467,948,000.00 | 11,182,647,136.56 |
| Other comprehensive income | -25,369,452.55 | 37,289,000.00 | -375,283,422.31 |
| Total comprehensive income | 7,712,952,730.16 | 2,505,237,000.00 | 10,807,363,714.25 |
| Dividends received from associates in the current year | 914,383,798.30 | 390,875,794.33 | 1,240,949,440.54 |
Note: The financial data of Ningbo Zhoushan is accurate to thousand.
5. Summarized financial information of insignificant associates and joint ventures
| 30/6/2023/ Current period | 31/12/2022/ Prior period | |
| Joint ventures: | ||
| Total carrying amount of investments | 9,933,027,211.85 | 9,716,793,055.72 |
| Aggregate of following items calculated based on the proportion of ownership interest | ||
| - Net profit | 169,975,433.54 | 197,699,052.34 |
| - Other comprehensive income | -1,446,746.71 | - |
| - Total comprehensive income | 168,528,686.83 | 197,699,052.34 |
| Associates: | ||
| Total carrying amount of investments | 31,730,788,256.37 | 48,475,602,662.16 |
| Aggregate of following items calculated based on the proportion of ownership interest | ||
| - Net profit | 384,990,619.70 | 1,053,453,382.82 |
| - Other comprehensive income | 100,418,506.79 | -96,067,083.31 |
| - Total comprehensive income | 485,409,126.49 | 957,386,299.51 |
6. The investees where the Group holds long-term equity investments are not restricted
to transfer funds to the Group.
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(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
1. Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. TheGroup's exposure to the currency risk is primarily associated with HKD, USD and EUR. Except forpart of the purchases and sales, the Group's other principal activities are denominated and settled inRMB. As at 30 June 2023, the balance of the Group's assets and liabilities are both denominated infunctional currency or the currency that has pegged exchange rate against the functional currency,except that the assets and liabilities set out below are recorded using the currency that is neitherfunctional currency nor currency that has pegged exchange rate against the functional currency.Currency risk arising from the foreign currency balance of assets and liabilities may have impacton the Group's performance.
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Cash and bank balances | 294,222,461.72 | 799,833,569.05 |
| Accounts receivable | 41,958,030.12 | 29,766,083.42 |
| Other receivables | 1,237,917,013.99 | 360,531,571.16 |
| Long-term receivables | 204,770,635.01 | - |
| Short-term borrowings | 1,550,000,000.00 | 4,090,000,000.00 |
| Accounts payable | 1,243,429.31 | 2,372,883.60 |
| Other payables | 63,467,778.16 | 246,131,122.92 |
| Non-current liabilities due within one year | 678,665,305.54 | 670,000,000.00 |
| Long-term borrowings | 4,658,000,000.00 | 3,669,000,000.00 |
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, management considers it is unlikely that the exchange rate changes in the future oneyear will result in significant loss to the Group.
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges andhedges of a net investment in a foreign operation are highly effective. On the basis of the aboveassumption, where all other variables are held constant, the reasonably possible changes in theforeign exchange rate may have the following pre-tax effect on the profit or loss for the period andshareholders' equity:
| Item | Changes in exchange rate | The current period | The prior period | ||
| Effect on profits | Effect on shareholders' equity | Effect on profits | Effect on shareholders' equity | ||
| All foreign currencies | 5% increase against RMB | -276,673,157.63 | -276,673,157.63 | -142,170,160.72 | -142,170,160.72 |
| All foreign currencies | 5% decrease against RMB | 276,673,157.63 | 276,673,157.63 | 142,170,160.72 | 142,170,160.72 |
| All foreign currencies | 5% increase against USD | 4,281,779.89 | 4,281,779.89 | 5,174,284.81 | 5,174,284.81 |
| All foreign currencies | 5% decrease against USD | -4,281,779.89 | -4,281,779.89 | -5,174,284.81 | -5,174,284.81 |
| All foreign currencies | 5% increase against HKD | 2,568,826.80 | 2,568,826.80 | -208,703,403.25 | -208,703,403.25 |
| All foreign currencies | 5% decrease against HKD | -2,568,826.80 | -2,568,826.80 | 208,703,403.25 | 208,703,403.25 |
| All foreign currencies | 5% increase against EUR (including FCFA) | 11,197,132.33 | 11,197,132.33 | 319,495.78 | 319,495.78 |
| All foreign currencies | 5% decrease against EUR (including FCFA) | -11,197,132.33 | -11,197,132.33 | -319,495.78 | -319,495.78 |
- 132 -
(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
2. Interest rate risk - changes in cash flows
Risk of changes in cash flows of financial instruments arising from interest rate changes is mainlyrelated to bank loans with floating interest rate. (See Note (VIII) 26 and Note (VIII) 37). The Groupcontinuously and closely monitors the impact of interest rate changes on the Group's interest raterisk. The Group's policy is to maintain these borrowings at floating rates. Presently, the Group hasno arrangement such as interest rate swaps etc.
Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the following assumptions:
? Fluctuations of market interest rate can affect the interest income or expense of a financialinstrument with floating interest rate;? For a financial instrument at fair value with fixed interest rate, the fluctuations of market interest ratecan only affect its interest income or expense;? For a derivative financial instrument designated as hedging instrument, the fluctuations of marketinterest rate affects its fair value, and all interest rate hedging are expected to be highly effective;? The changes in fair value of derivative financial instruments and other financial assets and liabilities
are 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:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Changes in interest rate | The current period | The prior period | ||
| Effect on profits | Effect on shareholders' equity | Effect on profits | Effect on shareholders' equity | ||
| Short-term borrowings and long-term borrowings | 1% increase | -218,624,405.40 | -218,624,405.40 | -206,916,565.57 | -206,916,565.57 |
| Short-term borrowings and long-term borrowings | 1% decrease | 218,624,405.40 | 218,624,405.40 | 206,916,565.57 | 206,916,565.57 |
3. Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and cashequivalents deemed adequate by the management to finance the Group's operations and mitigatethe effects of fluctuations in cash flows. The management monitors the utilization of bankborrowings and ensures compliance with loan covenants.
As at 30 June 2023, the Group had total current liabilities in excess of total current assets of RMB1,400,548,100.60. At 30 June 2023, the Group had available and unused line of credit and bondsamounting to RMB 67,024,496,484.81, which is greater than the balance of the net current liabilities,and may obtain fund support within the line of credit and bonds as necessary. Therefore, the Group'smanagement believes that the Group has no significant liquidity risk.
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(XI) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS - continued
3. Liquidity risk - continued
The following is the maturity analysis for financial assets and financial liabilities held by the Groupwhich is based on undiscounted remaining contractual obligations:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Carrying amount | Gross amount | Within 1 year | 1 to 5 years | Over 5 years |
| Short-term borrowings | 4,980,452,166.69 | 4,999,000,302.03 | 4,999,000,302.03 | - | - |
| Notes payable | 39,276,000.00 | 39,276,000.00 | 39,276,000.00 | - | - |
| Accounts payable | 531,218,999.62 | 531,218,999.62 | 531,218,999.62 | - | - |
| Other payables | 3,165,399,094.34 | 3,165,399,094.34 | 3,165,399,094.34 | - | - |
| Non-current liabilities due within one year | 13,352,965,454.93 | 14,585,327,619.79 | 14,585,327,619.79 | - | - |
| Other current liabilities | 4,500,231,313.76 | 4,523,438,051.61 | 4,523,438,051.61 | - | - |
| Long-term borrowings | 16,083,606,258.60 | 17,365,388,360.36 | - | 14,677,028,731.77 | 2,688,359,628.59 |
| Bonds payable | 17,484,215,109.65 | 19,115,516,441.30 | - | 14,797,858,995.11 | 4,317,657,446.19 |
| Lease liabilities | 911,098,409.66 | 1,559,279,419.09 | - | 235,516,609.13 | 1,323,762,809.96 |
| Other non-current liabilities | 20,000,000.00 | 20,126,123.29 | - | 20,126,123.29 | - |
| Long-term payables | 3,921,876,042.13 | 3,923,378,023.26 | - | 685,702,684.83 | 3,237,675,338.43 |
(XII) DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
| Item | Fair value at 30/6/2023 | |||
| Level 1 | Level 2 | Level 3 | Total | |
| Measurement at fair value continuously | ||||
| Held-for-trading financial assets | - | 4,645,336,576.09 | - | 4,645,336,576.09 |
| Other non-current financial assets | 943,850,357.04 | - | 27,865,811.69 | 971,716,168.73 |
| Investments in other equity instruments | - | - | 154,256,180.28 | 154,256,180.28 |
| Total assets measured at fair value continuously | 943,850,357.04 | 4,645,336,576.09 | 182,121,991.97 | 5,771,308,925.10 |
2. Basis for determining the market price of items continuously measured at level 1 fair
value
The market prices of held-for- other non-current financial assets are determined at the closing priceof the equity instrument at Stock Exchange on 30 June 2023.
3. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 2 fair value
| Item | Fair value at the end of the period | Valuation techniques | Inputs |
| Held-for-trading financial assets | 4,645,336,576.09 | 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 rate of return asthe input.
- 134 -
(XII) DISCLOSURE OF FAIR VALUE - continued
4. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 3 fair value
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Fair value at the end of the period | Valuation techniques | Inputs |
| Other equity instrument investments | 154,256,180.28 | Net worth method | Carrying amount |
| Other non-current financial assets | 2,000,000.00 | Cash flow discounting | Discount rate |
| Other non-current financial assets | 723,955.24 | Net worth method | Carrying amount |
| Other non-current financial assets | 25,141,856.45 | Listed company comparison approach | Share price |
The fair value of non-listed equity instruments included in equity instruments at fair value throughprofit or loss or other comprehensive income is determined using the valuation techniques such ascash flow discounting method, net worth method, listed company comparison approach etc. Duringthe valuation, the Group needs to make estimates in respect of the future cash flows, credit risk,market volatility and relevance etc., select appropriate discount rate and take into consideration ofadjustment of discount and premium.
5. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and liabilities not measured at fair value mainly include: notes receivable,accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable,other payables, long-term borrowings, bonds payable and long-term payables etc.
The Group's management believes that the carrying amounts of financial assets and financialliabilities at amortized cost in the financial statements approximate their fair values.
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
| Name of the parent | Related party relationship | Type of the entity | Place of registration | Nature of business | Issued share capital | Proportion of the Company's ownership interests held by the parent (%) | Proportion of the Company's voting power held by the parent (%) |
| Broadford Global Limited | Parent company | Private limited company (share limited) | Hong Kong | Investment holding | HKD 21,120,986,262 | 2.21 | 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 MerchantsGangtong Development (Shenzhen) Co., Ltd. and China Merchants Port InvestmentDevelopment Co., Ltd. respectively.
The ultimate controlling shareholder of the Company is China Merchants Group.
- 135 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in Note (X) 1.
3. Associates and joint ventures of the Company
Details of the Company's significant joint ventures and associates are set out in Note (X) 3.
Other joint ventures or associates that have related party transactions with the Group in the currentperiod, or formed balances of related party transactions with the Group in the prior period are asfollows:
CHINA MERCHANTS PORT GROUP CO., LTD.Name of joint ventures or associates
| Name of joint ventures or associates | 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 |
| Antong Holdings and its subsidiaries | Associate |
| Great Horn Development Company 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 |
| Lac Assal Investment Holding Company Limited | Associate |
| CM Port Chuangrong (Shenzhen) Technology Co., Ltd. | Associate |
| Ningbo Port Container Transportation Co., Ltd. | Associate |
| Shenzhen Chiwan Oriental Logistics Co., Ltd. | Associate |
| New Land-Sea Corrodor Operation (Zhanjiang) Co., Ltd. | Associate |
| Liaoning Port and its subsidiaries | Associate, controlled by the same ultimate controlling shareholder |
- 136 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
CHINA MERCHANTS PORT GROUP CO., LTD.Name of other related parties
| Name of other related parties | Relationship with the Company |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | Minority shareholder of subsidiary |
| Zhoushan Blue Ocean Investment Co., Ltd. | Minority shareholder of subsidiary |
| Sri Lanka Ports Authority | Minority shareholder of subsidiary |
| Guangdong Shunkong City Investment Real Estate Co., Ltd. | Minority shareholder of subsidiary |
| Baosteel Zhanjiang Iron & Steel Co., Ltd. | Minority shareholder of subsidiary |
| China Merchants Union （BVI） Limited | Minority shareholder of subsidiary |
| China Marine Shipping Agency Guangdong Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Hoi Tung (Shanghai) Company Limited | Controlled by the same ultimate controlling shareholder |
| 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 |
| 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 |
| 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 |
| China Marine Shipping Agency Guangdong Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Ocean Shipping Tally Shenzhen Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans Central China Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans (HK) Shipping Limited | Controlled by the same ultimate controlling shareholder |
| Sinoway Shipping Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Heavy Industry (Jiangsu) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Sinotrans Shantou Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants Apartment Development (Shenzhen) Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Merchants 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 and its subsidiaries | Controlled by the same ultimate controlling shareholder |
| Liaoning Port Group Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| China Yangtze River Shipping 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 |
| Jifa Logistics | Controlled by the same ultimate controlling shareholder |
| Dalian Port Communications Engineering Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Dalian Jifa South Coast International Logistics Co., Ltd. | Controlled by the same ultimate controlling shareholder |
- 137 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
CHINA MERCHANTS PORT GROUP CO., LTD.Name of other related parties
| Name of other related parties | Relationship with the Company |
| Dalian Jifa Port Logistics 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 Investment Development (Hong Kong) Limited | Controlled by the same ultimate controlling shareholder |
| Ocean Driller III Limited | Controlled by the same ultimate controlling shareholder |
| Orienture Holdings Company Limited | Controlled by the same ultimate controlling shareholder |
| Shenzhen Zhonghang Buildings Technology Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| Dalian Bonded Zone Yongdexin Real Estate Development & Construction Co., Ltd. | Controlled by the same ultimate controlling shareholder |
| 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 |
| Shenzhen Wanhai Building Management Co., Ltd. | Significantly influenced by the ultimate controlling shareholder |
5. Related party transactions
(1) Rendering and receipt of services
| Related parties | Content of transaction | Pricing method and decision-making process of related transactions | Current period | Prior period |
| Receipt of services: | ||||
| China Merchants Bank Co., Ltd. | Purchase of structured deposits | Negotiation | 2,080,000,000.00 | 1,000,000,000.00 |
| Shenzhen Bay Electricity Industry Co., Ltd. | Service expenditure | Negotiation | 26,554,647.89 | 27,561,760.64 |
| Shenzhen Nanyou (Holdings) Ltd. | Service expenditure | Negotiation | 18,821,945.88 | - |
| China Merchants Group Finance Company Limited | Interest payments | Negotiation | 12,606,686.11 | 44,331,121.77 |
| China Merchants (Shenzhen) Power Supply Co., Ltd. | Property utilities | Negotiation | 8,840,100.79 | - |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Service expenditure | Negotiation | 7,940,246.77 | 8,365,470.62 |
| China Merchants Bank Co., Ltd. | Interest payments | Negotiation | 7,939,144.17 | 4,008,117.76 |
| Ningbo Zhoushan and its subsidiaries | Service expenditure | Negotiation | 6,331,246.17 | 7,859,747.95 |
| China Merchants Property Management (Shenzhen) Co., Ltd. | Service expenditure | Negotiation | 5,330,755.99 | 1,921,021.77 |
| Shenzhen West Port Security Service Co., Ltd. | Service expenditure | Negotiation | 5,307,294.72 | 5,661,635.33 |
| Sinoway Shipping Ltd. | Service expenditure | Negotiation | 4,177,670.01 | - |
| Yiu Lian Dockyards Limited | Service expenditure | Negotiation | 4,119,568.07 | 3,807,933.17 |
| Shenzhen Chiwan Oriental Logistics Co., Ltd. | Service expenditure | Negotiation | 3,506,393.15 | 4,263,289.81 |
| Nanshan Group and its subsidiaries | Service expenditure | Negotiation | 2,819,999.34 | 9,105,672.16 |
| China Merchants Zhangzhou Development Zone Power Supply Co., Ltd. | Service expenditure | Negotiation | 2,689,704.35 | 2,443,269.20 |
| Hoi Tung (Shanghai) Company Limited | Service expenditure | Negotiation | 2,045,941.84 | 3,971,930.07 |
| Yingkou Port Group and its subsidiaries | Service expenditure | Negotiation | 1,779,632.70 | 2,043,787.06 |
| Shenzhen Zhonghang Buildings Technology Co., Ltd. | Service expenditure | Negotiation | 1,309,197.64 | - |
| China Marine Shipping Agency Shenzhen Co., Ltd. | Service expenditure | Negotiation | 1,146,792.55 | 1,323,605.65 |
| China Ocean Shipping Tally Shenzhen Co., Ltd. | Service expenditure | Negotiation | 852,794.75 | 1,182,219.25 |
| Liaoning Port and its subsidiaries | Service expenditure | Negotiation | 742,931.66 | - |
| COSCO Logistics (Zhanjiang) Co., Ltd. | Service expenditure | Negotiation | 465,252.15 | 1,278,998.39 |
| China Marine Shipping Guangdong Co., Ltd. | Service expenditure | Negotiation | 6,037.73 | 2,578,833.07 |
| China Merchant Food (China) Co., Ltd. | Service expenditure | Negotiation | - | 219,125.15 |
| Other related parties | Service expenditure | Negotiation | 6,533,670.99 | 6,018,119.16 |
| Total | 2,211,867,655.42 | 1,137,945,657.98 | ||
- 138 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of services - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Related parties
| Related parties | Content of transaction | Pricing method and decision-making process of related transactions | Current period | Prior period |
| Rendering of services: | ||||
| COSCO Logistics (Zhanjiang) Co., Ltd. | Service revenue | Negotiation | 110,744,402.53 | 93,854,144.35 |
| Terminal Link SAS | Interest income | Negotiation | 88,397,856.38 | 81,787,132.97 |
| Antong Holdings Co., Ltd. and its subsidiaries | Service revenue | Negotiation | 17,464,158.08 | 57,252,837.30 |
| China Ocean Shipping Agency (Zhanjiang) Co., Ltd. | Service revenue | Negotiation | 34,373,990.47 | 29,767,054.90 |
| Liaoning Port and its subsidiaries | Service revenue | Negotiation | 29,653,667.27 | 50,771,513.32 |
| China Merchants Bank Co., Ltd. | Interest income | Negotiation | 29,498,613.99 | 23,990,575.31 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Service revenue | Negotiation | 28,810,177.52 | 27,999,029.61 |
| Port of Newcastle and its subsidiaries | Interest income | Negotiation | 24,964,528.83 | 30,137,869.75 |
| China Merchants Group Finance Company Limited | Interest income | Negotiation | 14,717,409.20 | 10,308,105.49 |
| China Marine Shipping Agency Guangdong Co., Ltd. | Service revenue | Negotiation | 14,170,082.79 | 28,379,378.60 |
| Yingkou Port Group and its subsidiaries | Service revenue | Negotiation | 13,685,712.13 | 26,048,896.47 |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | Service revenue | Negotiation | 13,335,734.13 | 14,952,848.57 |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Service revenue | Negotiation | 8,873,051.78 | 2,006,982.68 |
| Yiu Lian Dockyards (Shekou) Limited | Service revenue | Negotiation | 6,049,745.64 | 7,624,158.50 |
| Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Service revenue | Negotiation | 5,930,892.23 | 3,183,820.61 |
| CM Port Chuangrong (Shenzhen) Technology Co., Ltd. | Service revenue | Negotiation | 5,399,572.64 | 4,622,170.92 |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | Service revenue | Negotiation | 5,122,531.86 | 1,055,634.00 |
| Shenzhen Baohong Technology Co., Ltd. | Service revenue | Negotiation | 4,665,334.02 | 1,051,551.12 |
| Sinotrans Container Lines Co., Ltd. | Service revenue | Negotiation | 4,361,180.07 | 4,203,154.01 |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Service revenue | Negotiation | 3,573,112.10 | 2,053,124.00 |
| China Ocean Shipping Agency Shenzhen | Service revenue | Negotiation | 3,530,714.66 | 2,841,490.56 |
| Sinotrans Central China Co., Ltd. | Service revenue | Negotiation | 3,529,371.64 | 4,226,183.28 |
| New Land-Sea Corrodor Operation (Zhanjiang) Co., Ltd. | Service revenue | Negotiation | 3,141,567.23 | - |
| China Merchant Food (China) Co., Ltd. | Service revenue | Negotiation | 2,910,341.70 | - |
| China Traffic Import and Export Co., Ltd. | Service revenue | Negotiation | 2,736,536.28 | - |
| EuroAsia Dockyard Enterprise and Development Limited | Service revenue | Negotiation | 2,687,908.22 | - |
| China Marine Shipping Agency Shenzhen Co., Ltd. | Service revenue | Negotiation | 2,560,367.14 | 2,397,694.66 |
| Qingdao Sinotrans Mining Technology Co., Ltd. | Service revenue | Negotiation | 2,375,278.56 | - |
| Sinoway Shipping Ltd. | Service revenue | Negotiation | 2,310,227.52 | 6,695,198.11 |
| Liaoning Port Group Co., Ltd. | Service revenue | Negotiation | 2,238,202.80 | 4,971,803.76 |
| China Yangtze River Shipping Co.,Ltd. | Service revenue | Negotiation | 1,981,380.75 | 2,750,508.20 |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | Service revenue | Negotiation | 1,762,582.00 | - |
| Qingdao Qianwan New United Container Terminal Co., Ltd. | Service revenue | Negotiation | 1,569,368.32 | 1,538,691.31 |
| China Merchants Port Investment Development Company Limited | Service revenue | Negotiation | 1,554,377.36 | 1,327,585.66 |
| Qingdao Wutong Century Supply Chain Co., Ltd. | Service revenue | Negotiation | 1,341,694.24 | - |
| China Merchants Securities Co., Ltd. | Service revenue | Negotiation | 1,333,059.69 | - |
| Sinotrans Container Lines (Hong Kong) Company Limited | Service revenue | Negotiation | 1,245,082.16 | 1,694,057.81 |
| Nanshan Group and its subsidiaries | Service revenue | Negotiation | 1,125,136.47 | - |
| Yantai Port Group Laizhou Port Co., Ltd. | Service revenue | Negotiation | 1,037,735.84 | 1,037,735.84 |
| Shantou Zhonglian Tally Co., Ltd | Service revenue | Negotiation | 944,703.77 | 1,177,326.80 |
| Shantou International Container Terminals Limited | Service revenue | Negotiation | 541,094.54 | 481,962.75 |
| China Merchants Heavy Industry (Jiangsu) Co., Ltd. | Service revenue | Negotiation | 444,576.29 | 299,871.32 |
| Sinotrans Shantou Co., Ltd. | Service revenue | Negotiation | 374,736.65 | - |
| China Marine Shipping Guangdong Co., Ltd. | Service revenue | Negotiation | 274,751.81 | 263,547.18 |
| Guizhou East Land Port Operation Co., Ltd. | Service revenue | Negotiation | 229,699.99 | 423,517.06 |
| South China Sinotrans Supply Chain Management Co., Ltd. | Service revenue | Negotiation | 2,983.02 | 886,573.85 |
| China Marine Shipping Agency Ningbo Co., Ltd. | Service revenue | Negotiation | - | 106,096,787.01 |
| Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. | Service revenue | Negotiation | - | 1,447,018.87 |
| Sinotrans (HK) Shipping Limited | Service revenue | Negotiation | - | 66,202.55 |
| Other related parties | Service revenue | Negotiation | 10,917,789.91 | 5,978,857.08 |
| Other related parties | Interest income | Negotiation | 609,957.55 | 777,053.20 |
| Total | 519,102,979.77 | 648,429,649.34 |
- 139 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties
The Group as the lessor:
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the lessee
| Name of the lessee | Type of leased assets | Pricing method and decision-making process of related transactions | Lease income recognized in the current period | Lease income recognized in the prior period |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | Port and terminal facilities | Negotiation | 6,848,492.44 | 5,069,188.08 |
| Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Co., Ltd. | Port and terminal facilities | Negotiation | 3,449,293.79 | 1,914,400.91 |
| China Merchant Food (China) Co., Ltd. | Buildings | Negotiation | 2,910,341.70 | 2,773,119.96 |
| China Traffic Import and Export Co., Ltd. | Buildings | Negotiation | 2,736,536.28 | 2,736,536.28 |
| Qingdao Sinotrans Mining Technology Co., Ltd. | Port and terminal facilities | Negotiation | 2,375,278.56 | 2,375,278.56 |
| Qingdao Qianwan United Container Terminal Co., Ltd. | Buildings | Negotiation | 1,661,969.04 | 1,453,403.34 |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | Port and terminal facilities | Negotiation | 1,444,859.56 | 561,911.99 |
| CM Port Chuangrong (Shenzhen) Technology Co., Ltd. | Port and terminal facilities | Negotiation | 1,430,912.28 | - |
| Qingdao Wutong Century Supply Chain Co., Ltd. | Port and terminal facilities | Negotiation | 1,341,694.24 | - |
| China Merchants Securities Co., Ltd. | Buildings | Negotiation | 1,333,059.69 | 1,270,897.29 |
| Nanshan Group and its subsidiaries | Buildings | Negotiation | 1,125,136.47 | 1,135,355.02 |
| Yiu Lian Dockyards (Shekou) Limited | Buildings | Negotiation | 1,122,531.42 | 1,091,340.94 |
| Other related parties | Buildings, port and terminal facilities | Negotiation | 4,228,541.56 | 3,151,714.13 |
| Total | 32,008,647.03 | 23,533,146.50 |
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(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as lessee:
CHINA MERCHANTS PORT GROUP CO., LTD.
Name of the lessor
| Name of the lessor | Type of leased assets | Rent for short-term leases and leases of low-value assets that is accounted for using simplified approach | Variable lease payment not included in the measurement of lease liabilities | Rent paid | Interest expenses on lease liabilities assumed | Increase in right-of-use assets | |||||
| Amount incurred in current period | Amount incurred in prior period | Amount incurred in current period | Amount incurred in prior period | Amount incurred in current period | Amount incurred in prior period | Amount incurred in current period | Amount incurred in prior period | Amount incurred in current period | Amount incurred in prior period | ||
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Port and terminal facilities | 1,984,330.20 | - | - | - | 2,103,390.00 | - | - | - | - | - |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Land use rights | 1,984,330.20 | - | - | - | 1,984,330.19 | - | - | - | - | - |
| Shenzhen Nanyou (Holdings) Ltd. | Land use rights | 997,776.60 | 997,776.60 | - | - | 997,776.60 | 873,054.50 | - | - | - | - |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Port and terminal facilities | 148,500.00 | - | - | - | 946,881.45 | 29,492,822.34 | 21,273.00 | 3,317,801.93 | - | - |
| China Merchants Apartment Development (Shenzhen) Co., Ltd. | Buildings | 72,331.43 | - | - | - | 71,337.15 | 29,249,729.17 | - | 4,141,464.12 | - | - |
| China Merchants International Cold Chain (Shenzhen) Company Limited | Buildings | - | 3,262,409.54 | - | 1,729,077.06 | - | 1,729,077.06 | - | - | - | - |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | Buildings | - | 188,604.84 | - | - | 3,190,516.56 | 199,921.13 | 277,944.19 | - | 4,809,924.03 | - |
| Dalian Port Group Corporation Limited | Buildings | - | 71,337.12 | - | 71,337.12 | 40,000.00 | 74,904.00 | 3,316.24 | - | - | - |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | Port and terminal facilities | - | 11,040.00 | - | - | 19,394,624.82 | 242,028.00 | 2,195,437.17 | 3,915,561.44 | - | 81,529,585.77 |
| Nanshan Group and its subsidiaries | Others | - | - | - | - | 33,509,385.63 | 32,049,532.79 | 2,551,815.97 | 2,248,991.92 | - | - |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | Port and terminal facilities | - | - | - | - | 29,151,135.25 | - | 1,841,875.41 | 5,682.95 | - | - |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | Machinery and equipment, port and terminal facilities | - | - | - | - | 28,924,934.03 | 1,773,985.94 | 2,720,974.54 | 141,650.14 | - | 1,079,443.53 |
| China Merchants Tongshang Finance Lease Co., Ltd. | Machinery and equipment | - | - | - | - | 23,190,959.27 | 1,097,438.83 | 905,080.70 | 127,512.83 | - | 2,377,742.19 |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Port and terminal facilities | - | - | - | - | 15,292,027.67 | - | 588,203.18 | 32,692.70 | - | - |
| EuroAsia Dockyard Enterprise and Development Limited | Port and terminal facilities | - | - | - | - | 7,571,928.07 | 18,076,245.95 | 332,056.61 | 2,033,491.49 | - | - |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | Land use rights | - | - | - | - | 3,057,533.64 | 7,943,326.82 | 195,881.64 | 298,580.40 | - | - |
| Baosteel Zhanjiang Iron & Steel Co., Ltd. | Machinery and equipment | - | - | - | - | 1,800,000.00 | - | 23,339.88 | - | 5,119,357.99 | - |
| Nanshan Group and its subsidiaries | Buildings | - | - | - | - | 1,381,953.01 | - | 47,911.96 | 4,862.54 | 33,834.89 | - |
| Shenzhen Wanhai Building Management Co., Ltd. | Buildings | - | - | - | - | 610,722.00 | - | 33,840.58 | - | - | - |
| Dalian Bonded Zone Yongdexin Real Estate Development&Construction Co.,Ltd. | Buildings | - | - | - | - | 206,927.36 | - | - | - | - | - |
| Nanshan Group and its subsidiaries | Port and terminal facilities | - | - | - | - | 54,039.19 | - | 4,069.43 | 299,721.13 | - | 17,330,062.14 |
| Dalian Port Communications Engineering Co., Ltd. | Buildings | - | - | - | - | 25,000.00 | 3,356,220.00 | 4,842.09 | 125,995.63 | - | - |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | Buildings | - | - | - | - | - | - | - | - | - | 66,214,506.44 |
| Total | 5,187,268.43 | 4,531,168.10 | - | 1,800,414.18 | 173,505,401.89 | 126,158,286.53 | 11,747,862.59 | 16,694,009.22 | 9,963,116.91 | 168,531,340.07 | |
- 141 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Related party guarantees
The Group as the guarantor:
CHINA MERCHANTS PORT GROUP CO., LTD.
Secured party
| Secured party | Credit line | Guaranteed amount | Commencement date | Maturity date | Has the guarantee been completed or not |
| For the period from 1 January to 30 June 2023 | |||||
| Khor Ambado FZCo (Note 1) | 208,103,040.00 | 124,232,980.55 | 24 May 2019 | 2032 | No |
| Terminal Link SAS (Note 2) | 116,841,186.00 | 116,841,186.00 | 25 January 2023 | 2030 | No |
| Terminal Link SAS (Note 2) | 68,978,915.47 | 68,978,915.47 | 11 June 2013 | 2033 | No |
| Total | 393,923,141.47 | 310,053,082.02 | |||
| For the period from 1 January to 30 June 2022 | |||||
| Khor Ambado FZCo | 192,528,000.00 | 115,901,056.33 | 24 May 2019 | 2032 | No |
| Terminal Link SAS | 68,508,952.47 | 68,508,952.47 | 11 June 2013 | 2033 | No |
| Total | 261,036,952.47 | 184,410,008.80 | |||
Note 1: Khor Ambado FZCo is a related company of the Group's common ultimate controlling
shareholder. The Group provides guarantee for its bank loan financing and other liabilities,with actual guaranteed amount of RMB 124,232,980.55 as at 30 June 2023.
Note 2: 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 loan financing to the associate Terminal Link SAS and otherliabilities to the extent of the Group's 49% ownership interest in the associate. The actualguaranteed amount is RMB 185,820,101.47 as at 30 June 2023. If any guarantee liabilityoccurs, the Group will compensate CMA CGM S.A.
(4) Borrowings and loans with related parties
| Related parties | Amount | Commencement date | Maturity date | Description |
| For the period from 1 January to 30 June 2023 | ||||
| Borrowings | ||||
| Ocean Driller III Limited | 345,115,822.78 | Actual borrowing date | Agreed repayment date | Other current liabilities |
| China Merchants Group Finance Company Limited | 199,584,899.98 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| China Merchants Group Finance Company Limited | 113,176,240.10 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| China Merchants Bank Company Limited | 40,035,555.56 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| China Merchants Bank Company Limited | 30,026,666.67 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| China Merchants Bank Company Limited | 30,024,583.33 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
| China Merchants Group Finance Company Limited | 22,279,250.01 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
| China Merchants Group Finance Company Limited | 15,248,987.50 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
| China Merchants Bank Company Limited | 10,010,138.88 | Actual borrowing date | Agreed repayment date | Short-term borrowings |
| China Merchants Group Finance Company Limited | 4,400,000.00 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| China Merchants Group Finance Company Limited | 1,037,232.14 | Actual borrowing date | Agreed repayment date | Long-term borrowings |
| Total | 810,939,376.95 | |||
- 142 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions – continued
(5) Compensation for key management personnel
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Current period | Prior period |
| Compensation for key management personnel | 8,972,032.11 | 7,241,617.16 |
6. Amounts due from/to related parties
(1) Amounts due from related parties
| Item | Related parties | 30/6/2023 | 31/12/2022 |
| Cash and bank balances | China Merchants Bank Co., Ltd. | 3,456,133,319.05 | 3,387,973,124.59 |
| China Merchants Group Finance Company Limited | 913,608,945.27 | 1,841,698,554.32 | |
| Total | 4,369,742,264.32 | 5,229,671,678.91 | |
| Held-for-trading financial assets | China Merchants Bank Co., Ltd. | 200,045,205.48 | 900,061,111.11 |
| Accounts receivable | Ningbo Zhoushan and its subsidiaries | 37,804,919.25 | 20,289,988.06 |
| Antong Holdings and its subsidiaries | 32,409,055.59 | 8,395,245.04 | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 23,945,432.88 | 4,045,734.88 | |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | 11,913,130.47 | 3,749,064.99 | |
| Liaoning Port and its subsidiaries | 4,184,092.39 | 3,680,900.00 | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 6,806,195.28 | 1,729,380.01 | |
| Dalian Container Terminal Co., Ltd. | 5,242,584.00 | 1,957,840.00 | |
| China Marine Shipping Agency Guangdong Co., Ltd. | 4,030,535.11 | 17,505,768.03 | |
| Sinoway Shipping Ltd. | 3,864,727.49 | 4,564,389.71 | |
| Yiu Lian Dockyards (Shekou) Limited | 3,406,789.70 | 3,554,521.60 | |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | 3,360,052.88 | 1,530,505.68 | |
| Khor Ambado FZCo | 3,218,054.14 | 3,108,610.49 | |
| Qingdao Sinotrans Mining Technology Co., Ltd. | 2,494,042.50 | - | |
| Liaoning Port Group Co., Ltd. | 1,741,331.00 | 1,821,581.00 | |
| China Ocean Shipping Agency Shenzhen Co. Ltd. | 1,884,463.67 | 758,113.05 | |
| Sinotrans Container Lines Co., Ltd. | 1,876,052.25 | 1,287,851.75 | |
| Dalian Jifa South Coast International Logistics Co., Ltd. | 1,412,854.00 | 1,839,478.79 | |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | 1,318,977.83 | - | |
| China Marine Shipping Agency Shenzhen Co., Ltd. | 1,142,726.73 | - | |
| Nanshan Group and its subsidiaries | 1,128,726.86 | 1,404,627.23 | |
| Yingkou Port Group and its subsidiaries | 905,891.08 | 160,491.00 | |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | 824,921.08 | - | |
| Dandong Port Group Co., Ltd. | 699,129.77 | - | |
| Sinotrans (HK) Shipping Limited | 696,710.99 | 375,748.78 | |
| Dalian Jifa Port Logistics Co., Ltd. | 237,340.00 | 2,220,941.63 | |
| Great Horn Development Company FZCo | - | 2,157,859.50 | |
| 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 | |
| Other related parties | 10,909,930.40 | 13,549,055.64 | |
| Total | 167,458,667.34 | 102,283,282.02 |
- 143 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Related parties | 30/6/2023 | 31/12/2022 |
| Dividends receivable | SIPG | 914,383,798.30 | - |
| Nanshan Group and its subsidiaries | 240,591,000.00 | 240,591,000.00 | |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 50,000,000.00 | 50,000,000.00 | |
| Liaoning Port and its subsidiaries | 47,754,255.87 | - | |
| Merchants Port City | 41,847,044.77 | 41,847,044.77 | |
| Tin-Can Island Container Terminal Ltd | 32,242,479.35 | 65,121,449.40 | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 18,449,001.16 | 18,449,001.16 | |
| Other related parties | 983,074.53 | 232,047.23 | |
| Total | 1,346,250,653.98 | 416,240,542.56 | |
| Other receivables | Shenzhen Nanyou (Holdings) Ltd. | 30,639,652.92 | 6,725,260.86 |
| PORT DE DJIBOUTI S.A. | 25,682,093.92 | 24,808,664.70 | |
| Ocean Driller III Limited | 17,664,009.99 | - | |
| Shenzhen Qianhai Shekou Free Trade Investment Development Co. Ltd. | 6,310,000.00 | 6,310,000.00 | |
| Zhoushan Blue Ocean Investment Co., Ltd. | 4,996,989.39 | 4,996,989.39 | |
| China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. | 2,899,163.95 | 2,899,163.95 | |
| Nanshan Group and its subsidiaries | 1,625,476.17 | 1,009,839.70 | |
| EuroAsia Dockyard Enterprise and Development Limited | 1,556,035.29 | 1,510,055.76 | |
| Liaoning Port and its subsidiaries | 1,242,721.60 | - | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 1,166,408.40 | 1,132,846.40 | |
| Yingkou Port Group and its subsidiaries | 721,626.07 | - | |
| Dalian Port Group Corporation Limited | 151,000.00 | - | |
| Liaoning Port Group Co., Ltd. | 45,000.00 | - | |
| Chu Kong River Trade Terminal Co., Ltd. | - | 36,053,588.00 | |
| Other related parties | 5,198,438.65 | 3,550,453.73 | |
| Total | 99,898,616.35 | 88,996,862.49 | |
| Prepayments | Nanshan Group and its subsidiaries | - | 9,000.00 |
| Other related parties | 19,146.00 | 6,351.75 | |
| Total | 19,146.00 | 15,351.75 | |
| Non-current assets due within one year | Terminal Link SAS | 49,092,591.98 | 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 | 59,092,591.98 | 903,128,422.35 | |
| Long-term receivables | Terminal Link SAS | 3,239,076,603.34 | 2,931,108,250.96 |
| Port of Newcastle and its subsidiaries | 897,930,437.13 | - | |
| Tianjin Haitian Bonded Logistics Co., Ltd. | 34,300,000.00 | 34,300,000.00 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 678,959.27 | 659,515.88 | |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | - | 6,200,000.00 | |
| Total | 4,171,985,999.74 | 2,972,267,766.84 |
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(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Related parties | 30/6/2023 | 31/12/2022 |
| Short-term borrowings | China Merchants Group Finance Company Limited | 50,041,666.68 | 413,453,629.50 |
| China Merchants Bank Co., Ltd. | 55,048,888.87 | 15,015,583.33 | |
| Total | 105,090,555.55 | 428,469,212.83 | |
| Other current liabilities | Ocean Driller III Limited | 359,485,676.59 | - |
| China Merchants Group Finance Company Limited | - | 10,056,575.34 | |
| Total | 359,485,676.59 | 10,056,575.34 | |
| Accounts payable | Antong Holdings and its subsidiaries | 16,948,161.45 | 16,948,161.45 |
| Ningbo Zhoushan and its subsidiaries | 14,691,952.29 | 16,725,206.29 | |
| Shenzhen Bay Electricity Industry Co., Ltd. | 13,411,684.81 | 4,920,501.06 | |
| Qingdao Qianwan West Port United Wharf Co., Ltd. | 10,951,732.69 | 8,007,474.16 | |
| Nanshan Group and its subsidiaries | 6,475,661.69 | 4,259,215.79 | |
| EuroAsia Dockyard Enterprise and Development Limited | 3,176,882.16 | 2,363,408.70 | |
| Ningbo Port Container Transportation Co., Ltd. | 2,729,528.00 | - | |
| China Merchants Port Investment Development Company Limited | 1,160,252.40 | 1,203,536.99 | |
| Hoi Tung (Shanghai) Company Limited | 950,288.08 | - | |
| Yiu Lian Dockyards Limited | 746,718.81 | 792,077.94 | |
| Sinoway Shipping Ltd. | - | 4,886,700.00 | |
| China Marine Shipping Agency Shenzhen Co., Ltd. | - | 248,149.17 | |
| Other related parties | 3,176,891.79 | 4,212,603.81 | |
| Total | 74,419,754.17 | 64,567,035.36 | |
| Receipts in advance | China Merchants Port Investment Development Company Limited | 7,075,471.70 | - |
| Qingdao Qianwan United Container Terminal Co., Ltd. | 1,520,491.45 | - | |
| Qingdao Wutong Century Supply Chain Co., Ltd. | 285,725.30 | 196,301.30 | |
| Other related parties | 80,300.02 | 160,600.00 | |
| Total | 8,961,988.47 | 356,901.30 | |
| Contract liabilities | Liaoning Port and its subsidiaries | 11,980,719.61 | - |
| Antong Holdings and its subsidiaries | 5,999,790.00 | 1,468,616.91 | |
| Liaoning Port Group Co., Ltd. | 5,175,924.46 | - | |
| COSCO Logistics (Zhanjiang) Co., Ltd. | 1,505,816.58 | 1,275,397.28 | |
| China Merchants International Shipping Agency (Shenzhen) Co., Ltd. | 837,801.45 | - | |
| 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 | |
| Qingdao Sinotrans Supply Chain Management Co., Ltd. | - | 368,484.60 | |
| Other related parties | 2,954,444.57 | 2,508,480.44 | |
| Total | 28,454,496.67 | 22,215,071.59 |
- 145 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Related parties | 30/6/2023 | 31/12/2022 |
| Dividends payable | China Merchants Union （BVI） Limited | 495,615,718.43 | - |
| China Merchants Zhangzhou Development Zone Co., Ltd. | 40,000,000.00 | 20,000,000.00 | |
| Zhanjiang Infrastructure Construction Investment Group Co., Ltd. | 34,598,645.00 | 41,400,234.06 | |
| Dalian Port Container | 27,160,696.61 | 14,000,000.00 | |
| China Merchants Investment Development (Hong Kong) Limited | 13,036,489.20 | - | |
| Jifa Logistics | 11,575,104.42 | 3,000,000.00 | |
| Yingkou Port Group and its subsidiaries | 5,372,456.78 | - | |
| Orienture Holdings Company Limited | 1,656,900.00 | - | |
| Sri Lanka Ports Authority | - | 10,446,900.00 | |
| Total | 629,016,010.44 | 88,847,134.06 | |
| Other payables | Lac Assal Investment Holding Company Limited | 65,465,131.55 | 47,359,371.46 |
| China Merchants Real Estate (Shenzhen) Co., Ltd. | 10,079,369.00 | 10,079,369.00 | |
| China Merchants Port Investment Development Company Limited | 3,367,817.67 | 12,730,734.37 | |
| Zhanjiang Xiagang United Development Co., Ltd. | 3,089,624.74 | 4,130,081.82 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 2,468,481.60 | 1,439,753.57 | |
| Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. | 1,668,710.30 | 3,750,000.03 | |
| China Merchant Food (China) Co., Ltd. | 1,069,017.00 | 1,628,515.12 | |
| China Traffic Import and Export Co., Ltd. | 1,055,975.76 | 1,069,017.00 | |
| Hoi Tung (Shanghai) Company Limited | 901,185.39 | - | |
| Shenzhen Baohong Technology Co., Ltd. | 749,269.39 | 3,263,853.86 | |
| Antong Holdings and its subsidiaries | 62,532.00 | - | |
| China Merchants Real Estate Co., Ltd. | - | 6,420,820.68 | |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | - | 749,269.39 | |
| Other related parties | 5,480,784.29 | 6,732,058.14 | |
| Total | 95,457,898.69 | 99,352,844.44 | |
| Non-current liabilities due within one year | China Merchants Group Finance Company Limited | 314,129,814.17 | 110,838,087.45 |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | 102,770,924.39 | 103,236,707.51 | |
| Nanshan Group and its subsidiaries | 65,457,241.76 | 65,165,836.97 | |
| China Merchants Finance Lease (Tianjin) Co., Ltd. | 32,122,756.22 | 32,339,542.44 | |
| China Merchants Tongshang Finance Lease Co., Ltd. | 22,829,945.85 | 45,115,824.42 | |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | 21,660,807.10 | 37,012,422.69 | |
| China Merchants Bank Co., Ltd. | 11,349,279.17 | 11,362,639.43 | |
| EuroAsia Dockyard Enterprise and Development Limited | 7,450,087.55 | 14,255,883.08 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 6,154,654.29 | - | |
| Baosteel Zhanjiang Iron & Steel Co., Ltd. | 1,651,756.23 | - | |
| China Merchants International Cold Chain (Shenzhen) Company Limited | 881,354.93 | 1,050,270.17 | |
| Guangdong Shunkong City Investment Real Estate Co. Ltd. | - | 3,162,000.00 | |
| Other related parties | 1,460,695.52 | 1,962,815.09 | |
| Total | 587,919,317.18 | 425,502,029.25 |
- 146 -
(XIII) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Related parties | 30/6/2023 | 31/12/2022 |
| Other non-current liabilities | Nanshan Group and its subsidiaries | 1,135,387.64 | - |
| Lease liabilities | Nanshan Group and its subsidiaries | 33,064,089.35 | 65,431,073.09 |
| China Merchants Finance Lease (Shanghai) Co., Ltd. | 25,000,000.00 | 75,833,546.45 | |
| China Merchants Commercial Property Investment (Shenzhen) Co., Ltd. | 3,235,085.58 | - | |
| China Merchants Shekou Industrial Zone Holdings Co., Ltd. | 3,024,175.27 | 5,993,041.70 | |
| 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 | 248,727.97 | 803,148.25 | |
| Total | 64,572,078.17 | 164,147,575.19 | |
| Long-term borrowings | China Merchants Group Finance Company Limited | 547,218,656.91 | 445,490,692.58 |
| China Merchants Bank Co., Ltd. | 351,500,000.00 | 325,000,000.00 | |
| Total | 898,718,656.91 | 770,490,692.58 | |
| Long-term payables | China Merchants Finance Lease (Tianjin) Co., Ltd. | 41,198,052.99 | 41,052,268.30 |
(XIV) SHARE-BASED PAYMENTS
1. Summary of share-based payments
| Total number of the Company's equity instruments granted during the period | None |
| Total number of the Company's equity instruments vested during the period | None |
| Total number of the Company's equity instruments lapsed during the period | None |
| Range of exercise prices and remaining contractual life of the Company's share options outstanding at the end of the period | Exercise price is RMB 14.28 to RMB 16.53; remaining contractual life is 43 months |
| Range of exercise prices and remaining contractual life of the Company's other equity instruments outstanding at the end of the period | None |
- 147 -
(XIV) SHARE-BASED PAYMENTS - continued
2. Equity-settled share-based payments
CHINA MERCHANTS PORT GROUP CO., LTD.
The method of determining the fair value of equityinstruments at the grant date
| The method of determining the fair value of equity instruments at the grant date | The Black-Scholes model is adopted to estimate the cost of granted stock options |
| Basis for determining the number of equity instruments expected to be vested | On each balance sheet date in the vesting period, the best estimate is made and the number of equity instruments expected to be vested is revised based on the latest follow-up information such as changes in the number of vested employees. |
| Reasons for the significant difference between the estimates in the current period and that in the prior period | The vesting conditions for the second exercise period of the first batch are not satisfied The vesting conditions for the first exercise period of the reserved portion are not yet satisfied |
| Amounts of equity-settled share-based payments accumulated in capital reserve | 6,451,242.86 |
| Total expenses recognized for equity-settled share-based payments | 1,352,847.60 |
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, ([2019] No. 748, SASAC), and as deliberated and approved bythe 1st Extraordinary General Meeting of the Company in 2020 dated 3 February 2020, theCompany granted 238 incentive recipients 17,198,000 stock options on 3 February 2020 with anexercise price of RMB 17.80 per share. With a lockup period of 24 months from the grant date, theshare options are exercisable upon expiry of the 24-month lockup period in the premise that thevesting conditions are satisfied. The share options are exercisable in three batches, specifically 40%for the first batch (after 24 months but within 36 months subsequent to the grant date), 30% for thesecond batch (after 36 months but within 48 months subsequent to the grant date); 30% for the thirdbatch (after 48 months but within 84 months subsequent to the grant date); each share optionrepresents the right to subscribe a share of ordinary share 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. On 29 January 2022, the Company adjusted the exercise price of the reserved portionof stock option to RMB 14.71 per share. With a lockup period of 24 months from the grant date,the share options are exercisable upon expiry of the 24-month lockup period in the premise that thevesting conditions are satisfied. The share 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 theremaining 50% for the second batch (after 36 months but within 72 months subsequent to the grantdate); each share option represents the right to subscribe a share of ordinary share of the Company.
- 148 -
(XIV) SHARE-BASED PAYMENTS - continued
2. Equity-settled share-based payments - continued
According to Article 32 of Stock Option Incentive Plan, since the grant date of the stock option, ifthe Company distributes dividends prior to the exercise of the option, the exercise price shall beadjusted accordingly. Therefore, on 29 January 2022, the Company uniformly adjusted the exerciseprices of the first batch and reserved portion of stock option granted under stock option incentiveplan (phase I) from RMB 17.34 per share to RMB 16.96 per share and from RMB 15.09 per shareto RMB 14.71 per share respectively; On 20 January 2023, the Company uniformly adjusted theexercise prices of the first batch and reserved portion of stock option granted under stock optionincentive plan (phase I) from RMB 16.96 per share to RMB 16.53 per share and from RMB 14.71per share to RMB 14.28 per share respectively;
On 14 February 2022, the Company cancelled 6,380,000 stock options corresponding to the firstexercise period of the stock option (initially granted batch) under stock option inventive plan (phaseI) of the Company as the vesting conditions of the first exercise period of the stock option (initiallygranted batch) under stock option inventive plan (phase I) of the Company have not been satisfied.As 10 recipients to the incentive plan retired or ceased to be employed by the Company, thecorresponding 1,248,000 stock options were cancelled.
On 7 February 2023, the Company cancelled 3,886,800 stock options corresponding to the secondexercise period of the stock option (initially granted batch) under stock option inventive plan (phaseI) of the Company as the vesting conditions of the second exercise period of the stock option(initially granted batch) under stock option inventive plan (phase I) of the Company have not beensatisfied; The Company cancelled 265,000 stock options corresponding to the first exercise periodof the stock option (reserved portion) under stock option inventive plan (phase I) of the Companyas the vesting conditions of the first exercise period of the stock option (reserved portion) understock option inventive plan (phase I) of the Company have not been satisfied. As 21 recipients tothe incentive plan retired or ceased to be employed by the Company, the corresponding 1,796,400stock options were cancelled.
(XV) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 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 | 458,281,675.87 | 38,956,185.01 |
| - Commitment to acquire and construct long-term assets | 1,731,571,969.81 | 1,802,316,899.52 |
| - Commitment to invest port construction | 5,741,342.60 | 5,571,690.76 |
| - Others | 383,560.31 | 383,560.31 |
| Total | 2,195,978,548.59 | 1,847,228,335.60 |
- 149 -
(XV) COMMITMENTS AND CONTINGENCIES - continued
2. Contingencies
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | 30/6/2023 | 31/12/2022 |
| Contingent liabilities arising from litigations (Note 1) | 943,254,239.79 | 279,438,527.06 |
| Guarantees for borrowings of associates (Note 2) | 310,053,082.02 | 186,672,528.21 |
| Total | 1,253,307,321.81 | 466,111,055.27 |
Note 1: This mainly represents the significant contingent liabilities arising from the pending
litigations between TCP and its subsidiaries and the local tax authority, employee or formeremployee. According to the latest estimates of the Group's management, the possiblecompensation is RMB 943,254,239.79 but it is not likely to cause outflow of economicbenefits from the Group. Therefore, the contingent liabilities arising from the abovepending litigations are not recognized as provisions. The counter-bonification where theGroup as the beneficiary will be executed by the former TCP shareholder that disposed theshares. According to the counter-bonification agreement, the former TCP shareholder needto make counter-bonification to the Group in respect of the above contingent liabilities,with the compensation amount not exceeding pre-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 require Zhanjiang Port for compensation.
As at 31 December 2022, the claims of CCCC Water Transport Planning and DesignInstitute Co., Ltd. were inconsistent with those agreed in the contract, the relevant result ofthe litigation could not be reasonably estimated, and the management of the Group believedthat the possibility of loss was quite low, therefore, no provisions were made for the abovepending litigation.
Note 2: As of 30 June 2023, the guarantees provided by the Group to related parties are set out in
Note (XIII) 5 (3).
As of 30 June 2023, the Group's directors assessed the risk of default by related parties inrespect of above loans and other liabilities. The directors believe that the risk is immaterialand there is minor possibility of loss due to the guarantee.
As of 30 June 2023, in addition to aforesaid contingencies, the Group had no other significantguarantee or contingencies that need to be explained.
- 150 -
(XVI) EVENTS AFTER THE BALANCE SHEET DATE
1. Disposal of equity interests in Ningbo Daxie
As of 30 June 2023, the Company's subsidiary Cyber Chic Company Limited had not completedthe disposal of 45% equity interests in Ningbo Daxie. On 8 August 2023, the equity transfer wascompleted. Therefore, the Group no longer holds equity interests in Ningbo Daxie and no longerincludes it in the scope of consolidated financial statements.
2. Commitment of capital injection into the investee
On 21 April 2023, Fortune Centre Group Limited, a subsidiary of the Company, entered into ashareholders agreement (the "Shareholders Agreement") with Access Engineering PLC and SriLanka Ports Authority with respect to the establishment and governance of the project company forthe implementation of South Asia Commercial and Logistics Hub Project ("SACLH Project"). Theproject company has issued share capital of USD 84,000,000.00. Therein, Fortune Centre GroupLimited, Access Engineering PLC. And Sri Lanka Ports Authority respectively agreed to make cashcontributions of USD 58.8 million, USD 12.6 million and USD 12.6 million, accounting for 70%,15% and 15% of the total issued share capital, respectively. The Group has the rights to assign themajority of the members of the Board of Directors of the project company. Therefore, the Grouphas control over the project company and includes it in the scope of consolidated financialstatements.
In July 2023, Fortune Centre Group Limited, a subsidiary of the Company, entered into asupplementary agreement to the Shareholders Agreement with Access Engineering PLC and SriLanka Ports Authority, changing the total share capital of the project company from USD 84 millionto USD 78.9 million. As of the approval date of the financial statements, the Group has injectedcapital of USD 12 million and the capital injection has not yet been completed.
(XVII) OTHER SIGNIFICANT EVENTS
1. Segment reporting
(1) Basis for determining reporting segments and accounting policies
The key management team of the Company is regarded as the CODM, who reviews the Group'sinternal reports in order to assess performance, allocate resources and determine the operatingsegments. The CODM considers the Group's operations from the two aspects of business andgeographic segments.
The operating segments for which their individual financial information is available are identifiedby the CODM and are operated by their respective management teams. These operating segmentsare aggregated and form reporting segments of the Group.
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
The management assesses the performance of the Group's business operations including portsoperation, bonded logistics operation and other operations from the business and geographicsegments perspectives
Ports operation
Ports operation includes container terminal operation, bulk and general cargo terminal operationoperated by the Group's associates and joint ventures.
The Group's ports operation is reported as follows:
(a) Mainland China, Hong Kong and Taiwan
? Pearl River Delta? Yangtze River Delta? Bohai Rim? Others
(b) Other regionsregions 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, logistics operationsoperated by the Group's associates, and property investment operated by the Group and corporatefunction.
Each of the segments under ports operation include the operations of a number of ports in variouslocations within one geographic location. For the purpose of segment reporting, the operatingsegments with similar economic characteristics are aggregated into reporting segments ongeographic basis in order to present a more systematic and structured segment information. To givedetails of each of the operating segments, in the opinion of the directors of the Company, wouldresult in particulars of excessive length.
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(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
Other operations - continued
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 thepurpose of segment reporting, these operating segments have been aggregated into reportingsegments according to the natures of their operations to present more meaningful information.
There are no material sales or other transactions between the segments.
The revenue from a major customer of ports operation amounts to RMB 785,642,084.52representing 10.08 % (For the period from 1 January to 30 June 2022: 9.73%) of the Group'soperating income for the period from 1 January to 30 June 2023.
- 153 -
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments
Segment information for the period from 1 January to 30 June 2023 is as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Ports operation | Bonded logistics operation | Others | Unallocated amount | Total | |||||
| Mainland China, Hong Kong and Taiwan | Other regions | Sub-total | ||||||||
| Pearl River Delta | Yangtze River Delta | Bohai Rim | Others | |||||||
| Operating income | 3,097,351,341.64 | 454,417,897.17 | 34,005,738.63 | 1,707,565,905.93 | 2,150,550,737.41 | 7,443,891,620.78 | 264,962,592.07 | 86,407,358.14 | - | 7,795,261,570.99 |
| Operating cost | 1,682,854,605.81 | 324,518,375.72 | 27,745,460.78 | 1,244,020,127.84 | 991,877,837.27 | 4,271,016,407.42 | 137,413,819.19 | 111,513,527.18 | - | 4,519,943,753.79 |
| Segment operating profit (loss) | 1,414,496,735.83 | 129,899,521.45 | 6,260,277.85 | 463,545,778.09 | 1,158,672,900.14 | 3,172,875,213.36 | 127,548,772.88 | -25,106,169.04 | - | 3,275,317,817.20 |
| Adjustments: | ||||||||||
| Taxes and levies | 19,526,223.00 | 753,587.52 | 750,216.83 | 23,234,524.85 | 73,010,300.82 | 117,274,853.02 | 12,504,446.59 | 11,998,032.83 | - | 141,777,332.44 |
| Administrative expense | 198,241,152.78 | 19,077,539.33 | 4,226,647.69 | 243,950,580.76 | 121,326,402.72 | 586,822,323.28 | 23,123,474.76 | 532,016.34 | 180,438,340.27 | 790,916,154.65 |
| R&D expenses | 94,730,593.45 | 19,694,430.12 | - | 6,616,287.15 | - | 121,041,310.72 | - | - | - | 121,041,310.72 |
| Financial expenses | 28,664,425.22 | 24,980,305.30 | 2,341,420.05 | 47,653,186.79 | 48,707,223.33 | 152,346,560.69 | 4,025,526.29 | 15,542,184.34 | 788,535,470.58 | 960,449,741.90 |
| Other income | 20,795,181.81 | 8,774,798.69 | 3,918.26 | 25,020,275.37 | - | 54,594,174.13 | 7,676,617.28 | 286,151.86 | - | 62,556,943.27 |
| Investment income | 31,088,848.04 | 2,576,081,993.76 | 223,213,146.95 | 20,281,271.27 | 179,713,787.90 | 3,030,379,047.92 | 16,346,214.88 | 127,311,637.93 | 13,455,817.67 | 3,187,492,718.40 |
| Gains (losses) from changes in fair value | 27,635,522.77 | - | 171,253,003.44 | -4,977,932.24 | - | 193,910,593.97 | -57,875,873.69 | 5,674,527.84 | 1,328,055.56 | 143,037,303.68 |
| Impairment gains (losses) of credit | -647,077.22 | - | - | 791,105.35 | -7,855,915.77 | -7,711,887.64 | 416,266.34 | - | - | -7,295,621.30 |
| Impairment gains of assets | 65,324.84 | - | - | - | - | 65,324.84 | - | - | - | 65,324.84 |
| Gains (losses) from disposal of assets | 656,081.83 | - | -7,362.22 | -15,292.67 | 3,645.68 | 637,072.62 | -285,026.87 | - | - | 352,045.75 |
| Operating profit (loss) | 1,152,928,223.45 | 2,650,250,451.63 | 393,404,699.71 | 183,190,625.62 | 1,087,490,491.08 | 5,467,264,491.49 | 54,173,523.18 | 80,093,915.08 | -954,189,937.62 | 4,647,341,992.13 |
- 154 -
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
Segment information for the period from 1 January to 30 June 2023 is as follows: - continued
CHINA MERCHANTS PORT GROUP CO., LTD.Item
| Item | Ports operation | Bonded logistics operation | Others | Unallocated amount | Total | |||||
| Mainland China, Hong Kong and Taiwan | Other regions | Sub-total | ||||||||
| Pearl River Delta | Yangtze River Delta | Bohai Rim | Others | |||||||
| Non-operating income | 20,290,570.27 | 202,798.18 | 50,473.44 | 2,977,967.67 | 9,780,181.63 | 33,301,991.19 | 99,471.76 | 120,985.48 | 3,061,036.03 | 36,583,484.46 |
| Non-operating expenses | 5,761,171.09 | 213,965.02 | - | 3,056,124.97 | 1,047,742.25 | 10,079,003.33 | - | - | - | 10,079,003.33 |
| Gross profit (loss) | 1,167,457,622.63 | 2,650,239,284.79 | 393,455,173.15 | 183,112,468.32 | 1,096,222,930.46 | 5,490,487,479.35 | 54,272,994.94 | 80,214,900.56 | -951,128,901.59 | 4,673,846,473.26 |
| Income tax expenses | 284,023,720.30 | 98,953,958.65 | 52,291,098.46 | 35,294,704.60 | 109,190,020.21 | 579,753,502.22 | 16,942,381.55 | 16,149,388.08 | 374,580.71 | 613,219,852.56 |
| Net profit (loss) | 883,433,902.33 | 2,551,285,326.14 | 341,164,074.69 | 147,817,763.72 | 987,032,910.25 | 4,910,733,977.13 | 37,330,613.39 | 64,065,512.48 | -951,503,482.30 | 4,060,626,620.70 |
| Segment assets | 24,077,034,824.03 | 60,067,762,451.82 | 9,816,804,596.68 | 27,625,611,169.76 | 47,152,109,689.23 | 168,739,322,731.52 | 3,971,154,263.99 | 19,585,631,808.90 | 12,632,780,604.92 | 204,928,889,409.33 |
| Total assets in the financial statements | 204,928,889,409.33 | |||||||||
| Segment liabilities | 7,030,968,571.00 | 1,976,037,523.47 | 142,578,115.06 | 7,412,483,599.88 | 7,539,593,421.93 | 24,101,661,231.34 | 382,986,037.09 | 703,952,392.58 | 48,988,629,180.92 | 74,177,228,841.93 |
| Total liabilities in the financial statements | 74,177,228,841.93 | |||||||||
| Supplementary information: | ||||||||||
| Depreciation and amortization | 639,599,877.02 | 111,508,652.47 | 441,032.34 | 429,560,132.83 | 433,516,442.65 | 1,614,626,137.31 | 44,093,152.92 | 12,278,103.04 | 13,879,454.86 | 1,684,876,848.13 |
| Interest income | 24,037,169.58 | 659,332.12 | 337,995.32 | 12,375,739.77 | 143,657,830.50 | 181,068,067.29 | 419,363.09 | 898,417.50 | 66,515,506.30 | 248,901,354.18 |
| Interest expenses | 44,714,677.00 | 6,591,958.47 | - | 58,488,953.57 | 195,722,581.32 | 305,518,170.36 | 4,367,885.32 | 9,846,807.92 | 793,157,746.32 | 1,112,890,609.92 |
| Investment income from long-term equity investment under the equity method | 29,199,934.90 | 2,540,328,464.96 | 182,221,956.36 | 20,172,521.27 | 179,713,787.90 | 2,951,636,665.39 | 16,346,214.88 | 127,311,637.93 | - | 3,095,294,518.20 |
| Long-term equity investment under equity method | 1,813,117,599.50 | 53,312,454,699.90 | 8,694,304,892.54 | 1,718,018,313.90 | 13,417,899,893.72 | 78,955,795,399.56 | 1,736,168,937.02 | 14,284,305,831.54 | - | 94,976,270,168.12 |
| Non-current assets other than long-term equity investment | 18,097,790,529.49 | 401,611,000.59 | 15,379,045.27 | 20,222,118,801.41 | 26,461,825,273.66 | 65,198,724,650.42 | 2,022,680,892.60 | 4,922,045,463.32 | 1,477,890,583.32 | 73,621,341,589.66 |
- 155 -
(XVII) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Financial information of reporting segments - continued
The Group's revenue by geographical areas of operations and information about its non-currentassets other than financial assets and deferred tax assets presented based on the geographical areasin which the assets are located is follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Revenue from external transactions
| Revenue from external transactions | Current period | Prior period |
| Mainland China, Hong Kong and Taiwan | 5,624,973,995.70 | 6,200,189,217.85 |
| Pearl River Delta | 3,354,702,296.86 | 3,622,864,022.12 |
| Yangtze River Delta | 454,417,897.17 | 649,729,096.28 |
| Bohai Rim | 108,287,895.74 | 104,952,044.58 |
| Others | 1,707,565,905.93 | 1,822,644,054.87 |
| Other regions | 2,170,287,575.29 | 1,950,273,149.34 |
| Total | 7,795,261,570.99 | 8,150,462,367.19 |
| Total non-current assets | 30/6/2023 | 31/12/2022 |
| Mainland China, Hong Kong and Taiwan | 127,678,176,348.55 | 130,723,044,577.52 |
| Pearl River Delta | 42,501,553,761.46 | 42,150,053,552.57 |
| Yangtze River Delta | 53,714,065,700.49 | 56,350,210,822.78 |
| Bohai Rim | 9,223,994,377.29 | 9,147,542,234.74 |
| Others | 22,238,562,509.31 | 23,075,237,967.43 |
| Other regions | 40,919,435,409.23 | 38,433,802,661.11 |
| Total | 168,597,611,757.78 | 169,156,847,238.63 |
(3) Degree of reliance on major customers
The total operating income derived from the top five clients of the Group is RMB 1,840,216,846.81,accounting for 23.61% of the Group's total operating income.
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Other receivables
(1) Summary of other receivables
| Item | 30/6/2023 | 31/12/2022 |
| Dividends receivable | 165,497,659.95 | 147,896,763.88 |
| Other receivables | 1,253,023,972.63 | 2,601,740,991.35 |
| Total | 1,418,521,632.58 | 2,749,637,755.23 |
- 156 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(2) Dividends receivable
(a) Presentation of dividends receivable
CHINA MERCHANTS PORT GROUP CO., LTD.Name of companies
| Name of companies | 30/6/2023 | 31/12/2022 |
| Chiwan Wharf (Hong Kong) | 147,680,363.88 | 147,680,363.88 |
| CM Port | 8,083,560.00 | - |
| CM International Tech | 9,517,336.07 | - |
| China Petroleum Sales Co., Ltd. Guangdong Shenzhen Petroleum Company | 216,400.00 | 216,400.00 |
| Total | 165,497,659.95 | 147,896,763.88 |
| Less: Provision for credit loss | - | - |
| Carrying amount | 165,497,659.95 | 147,896,763.88 |
(b) Significant dividends receivable aged over 1 year
| Item | 30/6/2023 | 31/12/2022 | Aging | Reason for outstanding | Impaired or not |
| Chiwan Wharf (Hong Kong) | 147,680,363.88 | 147,680,363.88 | 2 - 3 years | Procedures are being handled and it is expected to be recovered in 2023 | No |
(3) Other receivables
(a) Disclosure of other receivables by aging
| Aging | 30/6/2023 | ||
| Other receivables | Provision for credit loss | Proportion of provision (%) | |
| Within 1 year | 1,250,228,057.16 | - | - |
| 1 to 2 years | 2,467,600.00 | - | - |
| 2 to 3 years | - | - | - |
| Over 3 years | 711,772.07 | 383,456.60 | 53.87 |
| Total | 1,253,407,429.23 | 383,456.60 | 0.03 |
(b) Provision for credit loss of other receivables
As part of the Company's credit risk management, the Company performs internal credit rating oncustomers, and determines the expected loss ratio of other receivables under each credit rating. Suchexpected average loss ratio is based on historical actual impairment and taking into considerationof current economic conditions and forecast of future economic conditions.
- 157 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
1. Other receivables - continued
(3) Other receivables - continued
(b) Provision for credit loss of other receivables - continued
At 30 June 2023, the credit risk and expected credit loss of other receivables by categories of customers are as follows:
CHINA MERCHANTS PORT GROUP CO., LTD.Credit rating
| Credit rating | Expected credit loss ratio (%) | 30/6/2023 | 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 | 1,253,023,972.63 | - | - | 1,253,023,972.63 | 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 |
| Carrying amount | 1,253,023,972.63 | - | 383,456.60 | 1,253,407,429.23 | 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 | |
| Book value | 1,253,023,972.63 | - | - | 1,253,023,972.63 | 2,601,740,991.35 | - | - | 2,601,740,991.35 | |
- 158 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(3) Other receivables - continued
(c) Provision, recovery or reversal of credit loss of other receivables in the current period
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month ECL | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) | ||
| Balance at 1 January 2023 | - | - | 383,456.60 | 383,456.60 |
| Carrying amount of other receivables at 1 January 2023 | ||||
| -- Transfer to stage 2 | - | - | - | - |
| -- Transfer to stage 3 | - | - | - | - |
| -- Transfer back to stage 2 | - | - | - | - |
| -- Transfer back to stage 1 | - | - | - | - |
| Provision for the period | - | - | - | - |
| Reversal | - | - | - | - |
| Transfer out due to derecognition of financial assets (including direct write-down) | - | - | - | - |
| Other changes | - | - | - | - |
| Balance at 30 June 2023 | - | - | 383,456.60 | 383,456.60 |
(d) The Company has no recovery or reversal of significant credit loss allowance in the current
year.
(e) Presentation of other receivables by nature
| Item | 30/6/2023 | 31/12/2022 |
| Loans to related parties | 1,235,854,890.39 | 2,596,356,894.67 |
| Rent receivable | 9,417,444.96 | - |
| Advances | 4,933,126.00 | 2,467,600.00 |
| Others | 3,201,967.88 | 3,299,953.28 |
| Total | 1,253,407,429.23 | 2,602,124,447.95 |
| Less: Provision for credit loss | 383,456.60 | 383,456.60 |
| Book value | 1,253,023,972.63 | 2,601,740,991.35 |
(f) There is no other receivables write-off during this period.
- 159 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(3) Other receivables - continued
(g) The top five balances of other receivables classified by debtor
CHINA MERCHANTS PORT GROUP CO., LTD.Company name
| Company name | Relationship with the Company | Nature | 30/6/2023 | Aging | Proportion of the amount to the total other receivable (%) | Closing balance of provision for credit loss |
| Chiwan Wharf Holdings (Hong Kong) Ltd. | Subsidiary | Related party loans | 1,091,029,629.39 | Within 1 year | 87.05 | |
| Shunkong Port | Subsidiary | Related party loans | 144,825,261.00 | Within 1 year | 11.55 | |
| Shenzhen Chiwan Port Development Co., Ltd. | Subsidiary | Rent receivable | 7,594,959.30 | Within 1 year | 0.61 | |
| CM International Tech | Subsidiary | Advances | 2,467,600.00 | 1 - 2 years | 0.20 | |
| Shenzhen Merchants Qianhaiwan Real Estate Co., Ltd. | Related party | Rent receivable | 1,822,485.66 | Within 1 year | 0.15 | |
| Total | 1,247,739,935.35 | 99.56 |
- 160 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
CHINA MERCHANTS PORT GROUP CO., LTD.
Investee
| Investee | 01/01/2023 | Changes for the period | 30/6/2023 | Closing balance of impairment provision | |||||||
| Additional investment | Reduction in investment | Investment income under the equity method | Adjustment of other comprehensive income | Other equity movements | Announced distribution of cash dividends or profit | Impairment provision | Effect of translation of financial statements denominated in foreign currencies | ||||
| I. Subsidiary | |||||||||||
| Ports Development (Hong Kong) Limited | 29,203,045,326.23 | - | - | - | - | - | - | - | - | 29,203,045,326.23 | - |
| Zhanjiang Port | 3,381,825,528.52 | - | - | - | - | - | - | - | - | 3,381,825,528.52 | - |
| Chiwan Container Terminal Co., Ltd. | 421,023,199.85 | - | - | - | - | - | - | - | - | 421,023,199.85 | - |
| Shenzhen Chiwan Harbor Container Co. Ltd. | 250,920,000.00 | - | - | - | - | - | - | - | - | 250,920,000.00 | - |
| Shenzhen Chiwan Port Development Co., Ltd. | 206,283,811.09 | - | - | - | - | - | - | - | - | 206,283,811.09 | - |
| Dongguan Shenchiwan Port Affairs Co., Ltd. | 186,525,000.00 | - | - | - | - | - | - | - | - | 186,525,000.00 | - |
| Dongguan Shenchiwan Wharf Co., Ltd. | 175,000,000.00 | - | - | - | - | - | - | - | - | 175,000,000.00 | - |
| CM Port | 168,841,768.35 | 656,564.40 | - | - | - | - | - | - | - | 169,498,332.75 | - |
| CM Port (Zhoushan) RoRo Logistics Co., Ltd. | 149,709,800.00 | - | - | - | - | - | - | - | - | 149,709,800.00 | - |
| Yide Port | 131,866,700.00 | - | - | - | - | - | - | - | - | 131,866,700.00 | - |
| Shunkong Port | 50,000,000.00 | - | - | - | - | - | - | - | - | 50,000,000.00 | - |
| Shenzhen Chiwan Tugboat Co., Ltd. | 24,000,000.00 | - | - | - | - | - | - | - | - | 24,000,000.00 | - |
| CM International Tech | 20,561,075.02 | - | - | - | - | - | - | - | - | 20,561,075.02 | - |
| Shenzhen Chiwan International Freight Agency Co., Ltd. | 5,500,000.00 | - | - | - | - | - | - | - | - | 5,500,000.00 | - |
| Sanya Merchants Port Development Co., Ltd. | 2,040,000.00 | - | - | - | - | - | - | - | - | 2,040,000.00 | - |
| Chiwan Wharf Holdings (Hong Kong) Ltd. | 1,070,000.00 | - | - | - | - | - | - | - | - | 1,070,000.00 | - |
| Chiwan Shipping (Hong Kong) Limited | 1,051,789.43 | - | - | - | - | - | - | - | - | 1,051,789.43 | - |
| Sub-total | 34,379,263,998.49 | 656,564.40 | - | - | - | - | - | - | - | 34,379,920,562.89 | - |
| II. Associate | |||||||||||
| Ningbo Zhoushan | 16,228,879,526.87 | - | - | 450,553,881.92 | 10,596,817.21 | -20,538,794.98 | -355,122,265.53 | - | - | 16,314,369,165.49 | - |
| China Merchants Northeast Asia Development & Investment Co., Ltd. | 1,017,010,205.71 | - | - | 3,116,967.23 | - | - | - | - | - | 1,020,127,172.94 | - |
| China Merchants Bonded Logistics Co., Ltd. | 412,362,918.79 | - | - | 20,604,000.00 | - | - | - | - | - | 432,966,918.79 | - |
| Antong Holdings (Note ) | - | 892,445,435.37 | - | 10,337,508.05 | - | - | - | - | - | 902,782,943.42 | - |
| Sub-total | 17,658,252,651.37 | 892,445,435.37 | - | 484,612,357.20 | 10,596,817.21 | -20,538,794.98 | -355,122,265.53 | - | - | 18,670,246,200.64 | - |
| III. Joint venture | |||||||||||
| Yantai Port Group Laizhou Port Co., Ltd. | 794,153,389.74 | - | - | 20,672,709.37 | - | -1,476,439.54 | -28,133,178.67 | - | - | 785,216,480.90 | - |
| Fujian Zhaohang Logistics Management Partnership (Limited Partnership) | 592,134,266.75 | - | - | 8,836,887.70 | - | - | - | - | - | 600,971,154.45 | - |
| Shenzhen Gangteng Internet Technology Co., Ltd. | 9,809,165.14 | 3,750,000.00 | - | -764,032.37 | - | - | - | - | - | 12,795,132.77 | - |
| Sub-total | 1,396,096,821.63 | 3,750,000.00 | - | 28,745,564.70 | - | -1,476,439.54 | -28,133,178.67 | - | - | 1,398,982,768.12 | - |
| Total | 53,433,613,471.49 | 896,851,999.77 | - | 513,357,921.90 | 10,596,817.21 | -22,015,234.52 | -383,255,444.20 | - | - | 54,449,149,531.65 | - |
- 161 -
(XVIII) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
2. Long-term equity investments - continued
Note : Details are set out in Note (VIII) 13.
3. Operating income and operating costs
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Current period | Prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Principal operations | - | - | - | 1,132,979.70 |
| Other operations | 8,968,995.20 | 1,843,205.76 | - | - |
| Total | 8,968,995.20 | 1,843,205.76 | - | 1,132,979.70 |
4. Investment income
(1) Details of investment income
| Item | Current period | Prior period |
| Gains from long-term equity investments under the equity method | 513,357,921.90 | 136,885,266.28 |
| Gains from long-term equity investments under the cost method | 405,401,855.31 | 546,403,227.17 |
| Gains from held-for-trading financial assets | 27,032,712.34 | 79,627,913.70 |
| Gains from other equity instruments investments | 8,824,500.00 | - |
| Gains from disposal of long-term equity investments | - | -43,817.42 |
| Total | 954,616,989.55 | 762,872,589.73 |
(2) Gains from long-term equity investments under the cost method
| Investees | Current period | Prior period | Reason for changes comparing with prior period |
| 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 Chiwan Terminal Co., Ltd. | 33,386,741.74 | 37,543,998.58 | Changes in profit distribution of investee |
| Dongguan Chiwan Warf 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 |
| 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 |
| CM Port | 8,083,560.00 | 8,322,676.13 | 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 | 405,401,855.31 | 546,403,227.17 |
SUPPLEMENTARY INFORMATIONFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023(Unless otherwise specified, the monetary unit shall be RMB.)
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
CHINA MERCHANTS PORT GROUP CO., LTD.
Item
| Item | Amount | Remarks |
| Losses on disposal of non-current assets | -6,698,657.83 | |
| Tax refunds or reductions with ultra vires approval or without official approval documents | - | |
| Government grants recognized in profit or loss (except for grants that are closely related to the Company's business and are in amounts and quantities fixed in accordance with the national standard) | 46,639,497.49 | |
| Money lending income earned from non-financial institutions in profit or loss | 113,972,342.76 | |
| The excess of attributable fair value of identifiable net assets over the consideration paid for subsidiaries, associates and joint ventures | - | |
| Gains or losses on exchange of non-monetary assets | - | |
| Gains or losses on entrusted investments or assets management | - | |
| Provision of impairment losses for each asset due to force majeure, e.g. natural disasters | - | |
| Gains or losses on debt restructuring | - | |
| Business restructuring expenses, e.g., staffing expenditure, integration expenses, etc. | - | |
| Gains or losses relating to the unfair portion in transactions with unfair transaction price | - | |
| Net profit or loss of subsidiaries recognized as a result of business combination involving enterprises under common control from the beginning of the period up to the business combination date | - | |
| Gains or losses arising from contingencies other than those related to normal operating business | - | |
| Gains from changes of fair value of held-for-trading financial assets, derivative financial assets, other non-current financial assets, held-for-trading financial liabilities, derivative financial liabilities other than effective hedging operation relating to the Company's normal operations, and the investment income from disposal of the above held-for-trading financial assets/financial liabilities and other debt investments | 143,037,303.68 | |
| Reversal of provision for accounts receivable that are tested for credit loss individually | 2,371,890.55 | |
| Gains or losses on entrusted loans | - | |
| Gains or losses on changes in the fair value of investment properties that are subsequently measured using the fair value model | - | |
| Effects of one-off adjustment to profit or loss for the period according to the requirements of tax laws and accounting laws and regulations on profit or loss | - | |
| Custodian fees earned from entrusted operation | - | |
| Other non-operating income or expenses other than above | 33,504,023.58 | |
| Other profit or loss that meets the definition of non-recurring profit or loss | - | |
| Tax effects | -65,076,056.83 | |
| Effects of minority interest (after tax) | -166,808,957.12 | |
| Total | 100,941,386.28 |
SUPPLEMENTARY INFORMATIONFOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2023(Unless otherwise specified, the monetary unit shall be RMB.)
2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS")
The return on net assets and EPS have been prepared by the Company in accordance withInformation Disclosure and Presentation Rules for Companies Making Public Offering No. 9 -Calculation and Disclosure of Return on Net Assets and Earnings per Share (revised in 2010) issuedby China Securities Regulatory Commission.
CHINA MERCHANTS PORT GROUP CO., LTD.
Profit for the reporting period
| Profit for the reporting period | Weighted average return on net assets (%) | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to ordinary shareholders | 3.4343 | 0.7612 | 0.7612 |
| Net profit attributable to ordinary shareholders after deducting non-recurring profit or loss | 3.2520 | 0.7208 | 0.7208 |