CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
CHINA MERCHANTS PORT GROUP CO., LTD.
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
CONTENTS Pages
AUDITOR'S REPORT 1-6
THE CONSOLIDATED AND COMPANY'S BALANCE SHEETS 7 - 10
THE CONSOLIDATED AND COMPANY'S INCOME STATEMENTS 11 - 12
THE CONSOLIDATED AND COMPANY'S CASH FLOW STATEMENTS 13 - 14
THE CONSOLIDATED AND COMPANY'S STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY 15 - 18
NOTES TO ITEMS OF THE FINANCIAL STATEMENTS 19 - 176
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (21) No. P02174
(Page 1 of 6)
To all the shareholders of China Merchants Port Group Co., Ltd.,
I. Audit Opinion
We have audited the accompanying financial statements of China Merchants Port Group Co., Ltd.
(hereinafter referred to as "the Company"), which comprise the consolidated and company balance
sheets as at 31 December 2020, and the consolidated and company's income statements, the
consolidated and company's cash flow statements and the consolidated and company's statements of
changes in shareholders' equity for the year then ended, and the notes to the financial statements.
In our opinion, the accompanying financial statements of the Company present fairly, in all material
respects, the consolidated and company's financial position as of 31 December 2020, the consolidated
and company's results of operations and cash flows for the year then ended in accordance with the
Accounting Standards for Business Enterprises.
II. Basis for the Opinion
We conducted our audit in accordance with the Auditing Standards for the Chinese Certified Public
Accountants. Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Company in accordance with the Auditing Standards for the Chinese Certified Public Accountants,
and we have fulfilled our other ethical responsibilities in accordance with the standards. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context of
our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We determine the followings are key audit matters that
need to be addressed in our report.
1. Subsequent measurement of long-term equity investment in associates and joint ventures
As disclosed in Notes (V) 13 to the consolidated financial statements, on December 31, 2020, the book
value of China Merchants Port Group’s long-term equity investment in associates amounted to RMB
57,371,179,717.36, accounting for 54% of the total shareholder’s equity. In 2020, the investment
income from associates recognized by the equity method amounts to RMB 3,630,921,407.38,
accounting for 66% of the consolidated net profit. Since the amount of investment income recognized
by China Merchants Port Group for associates this year is significant, and its correctness depends on
the financial status and operating results of the investee, we determine the above-mentioned
subsequent measurement of the long-term equity investment in associates as a merger key audit
matters of financial statements.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (21) No. P02174
(Page 2 of 6)
III. Key Audit Matters - continued
1. Subsequent measurement of long-term equity investment in associates and joint ventures -
continued
Principal audit procedures we performed for key audit matters are as follows:
(1) Understood the certified public accountants of major associates/joint ventures and evaluated
their independence and professional competence;
(2) Identified and assessed the risk of material misstatement in the financial statements of the major
associates/joint ventures from the perspective of auditing the consolidated financial statements
of the Company by reading the financial statements of the major associates/joint ventures and
discussing with the management the financial performance of the major associates/joint
ventures and the significant judgments and estimates made in the preparation of the financial
statements;
(3) Discussed with the component certified public accountants of the major associates/joint
ventures their assessment of the component audit risk, the identification of key audit areas and
the implementation of the corresponding audit procedures to evaluate whether the audit of the
component certified public accountants was appropriate;
(4) Evaluated whether the audit evidence obtained by the component certified public accountants
was sufficient and appropriate by reviewing the audit documents of the component certified
public accountants of the major associates/joint ventures when we deemed necessary.
(5) Verified whether the accounting policies and accounting periods adopted by the associates/joint
ventures were consistent with the Company's. If not, checked whether the financial statements
of the associates/joint ventures have been adjusted according to the accounting policies and
accounting period of the Company, and recognized the amount of investment income under
equity method on that basis.
2. Goodwill impairment
As disclosed in Notes (V) 22 to the consolidated financial statements, as at 31 December 2020, the
goodwill in the consolidated financial statements of the Company was RMB 6,675,939,930.13. The
management of the Company used the net amount of fair value less costs of disposal or the present
value of the estimated future cash flows to determine the recoverable amount of the relevant asset
group when testing the goodwill for impairment, of which the fair value assessment is based on the
market approach, and the forecast of future cash flows and the calculation of the present value
included key assumptions, such as income growth rate, gross profit margin, discount rate, etc. We
identified the goodwill impairment as a key audit matter of the consolidated financial statements due
to the significant amount of goodwill and that the management needs to make significant judgments
and estimates when conducting goodwill impairment testing.
-2-
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (21) No. P02174
(Page 3 of 6)
III. Key Audit Matters - continued
2. Goodwill impairment - continued
Principal audit procedures we performed for key audit matters are as follows:
(1) Assessed reasonability of division of asset group and combination of asset group management
made by management;
(2) Referred to industry practice to assess whether the management's approach in cash flows
forecast is appropriate and whether the assumptions used are reasonable;
(3) Compared the data used in cash flow forecast with historical data and budget data approved by
the management, and assessed the reasonableness of the data used;
(4) Compared the growth rate of the business volume in the forecast period with the growth rate of
the historical business volume and evaluated its appropriateness.
(5) Understood the basis for management to determine the growth rate of the business in the
subsequent forecast period and assessed its appropriateness;
(6) Assessed the appropriateness of the discount rate adopted by the management in combination
with market risk-free interest rates, risk factors, etc.;
(7) Use the work of internal evaluation experts to evaluate the appropriateness of management's
assessment method of the recoverable amount of the asset group, and evaluate the
reasonableness of the discount rate used by the management in predicting the present value of
the cash flow and the growth rate of the subsequent forecast period.
(8) Reviewed whether the calculation of the present value of future cash flows was correct.
(9) Reviewed whether the method used to assess the fair value less costs of disposal was
appropriate.
(10) Assess the adequacy and appropriateness of the disclosure of the goodwill impairment test.
IV. Other Information
The Company is responsible for the other information. The other information comprises the
information included in the 2020 annual report, but does not include the consolidated financial
statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion.
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (21) No. P02174
(Page 4 of 6)
IV. Other Information - continued
In combination with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the audit work performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged with Governance for the
Financial Statements
The management of the Company is responsible for the preparation of the financial statements that
give a true and fair view in accordance with Accounting Standards for Business Enterprises, and for
the design, performance and maintenance of such internal control that is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the management is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the management either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
These charged with governance are responsible for overseeing the Company's financial reporting
process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes an
audit opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Auditing Standards for the Chinese Certified Public Accountants will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could expected influence the
economic decisions taken based on these financial statements by reasonable users.
As part of an audit in accordance with Auditing Standards for the Chinese Certified Public
Accountants, we exercise professional judgment and maintain professional skepticism throughout the
audit. We also:
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AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (21) No. P02174
(Page 5 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
(1) Identified and assessed the risks of material misstatement of the financial statements, whether
due to fraud or error, designed and performed audit procedures responsive to those risks, and
obtained audit evidence that was sufficient and appropriate to form our opinion. The risk of not
detecting a material misstatement resulting from fraud was higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
(2) Understood audit-related internal control in order to design audit procedures that were
appropriate in the circumstances.
(3) Evaluated the appropriateness of accounting policies applied and the reasonableness of
accounting estimates and related disclosures made by the management.
(4) Concluded on the appropriateness of the directors' application of the going concern basis of
accounting. Based on audit evidence obtained, concluded on whether the material uncertainty of
events or conditions that may cause cast significant doubt on the Company's ability to continue
as a going concern existed. If we concluded that a material uncertainty existed, we were
required to draw attention in our auditor's report to the related disclosures in the financial
statements or to modify our opinion, if such disclosures were inadequate. Our conclusions were
based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluated the overall presentation (including the disclosures), structure and content of the
financial statements, and whether the financial statements represented the underlying
transactions and events in a manner that achieved fair presentation.
(6) Obtained sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Company to express an opinion on the financial statements. We
were responsible for the direction, supervision and performance of the group audit. We
remained solely responsible for our audit opinion.
We communicated with those charged with governance over audit scope, time arrangement and
significant audit findings, including any significant deficiencies of internal control that we identified
through audit.
We also provided those charged with governance with a statement that we had complied with relevant
ethical requirements of independence, and communicated with those charged with governance over all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
-5-
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (21) No. P02174
(Page 6 of 6)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
From the matters communicated with those charged with governance, we determined those matters
that were of most significance in the audit of the financial statements of the current year and were
therefore the key audit matters. We described these matters in our auditor's report unless law or
regulation precluded public disclosure about the matter or when, in extremely rare circumstances, we
determined that a matter should not be addressed in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Deloitte Touche Tohmatsu CPA LLP Chinese Certified Public Accountant
(Engagement Partner)
Shanghai, China
Li Weihua
Chinese Certified Public Accountant
Zhang Min
30 March 2021
The auditor’s report and the accompanying financial statements are English translations of the
Chinese auditor’s report and statutory financial statements prepared under accounting principles and
practices generally accepted in the People’s Republic of China. These financial statements are not
intended to present the financial position and results of operations and cash flows in accordance with
accounting principles and practices generally accepted in other countries and jurisdictions. In case
the English version does not conform to the Chinese version, the Chinese version prevails.
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CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2020
Consolidated Balance Sheet
RMB
Item Notes Closing balance Opening balance
Current Assets:
Cash and bank balances (V) 1 11,791,424,734.63 7,734,948,210.26
Held-for-trading financial assets (V) 2 850,165,448.59 -
Notes receivable (V) 3 3,891,994.84 38,192,250.02
Accounts receivable (V) 4 1,372,650,236.16 1,356,460,129.90
Receivables financing (V) 5 217,449,966.41 260,760,537.45
Prepayments (V) 6 49,220,850.11 55,034,019.81
Other receivables (V) 7 3,557,195,461.26 2,129,378,252.50
Inventories (V) 8 211,366,458.88 163,980,192.08
Assets held for sale (V) 9 337,442,757.28 188,404,228.34
Non-current assets due within one year (V) 10 67,692,473.44 808,893,013.06
Other current assets (V) 11 433,666,201.42 2,298,792,661.70
Total current assets 18,892,166,583.02 15,034,843,495.12
Non-current Assets:
Long-term receivables (V) 12 3,887,949,993.10 1,098,831,799.90
Long-term equity investments (V) 13 66,231,923,423.45 57,916,539,383.26
Investments in other equity instruments (V) 14 181,467,057.74 163,561,272.00
Other non-current financial assets (V) 15 910,807,452.56 2,385,363,537.39
Investment properties (V) 16 5,558,755,275.21 5,760,262,674.40
Fixed assets (V) 17 29,471,583,624.56 27,519,962,529.29
Construction in progress (V) 18 5,381,430,606.18 6,334,141,441.88
Right-of-use assets (V) 19 9,087,215,717.60 9,633,325,390.46
Intangible assets (V) 20 18,766,092,163.81 19,693,715,554.10
Development expenditure (V) 21 64,237,735.23 37,399,092.28
Goodwill (V) 22 6,675,939,930.13 8,023,659,694.81
Long-term prepaid expenses (V) 23 874,842,472.68 711,911,011.67
Deferred tax assets (V) 24 420,731,058.30 300,435,502.27
Other non-current assets (V) 25 2,138,468,683.64 2,082,965,467.04
Total non-current assets 149,651,445,194.19 141,662,074,350.75
TOTAL ASSETS 168,543,611,777.21 156,696,917,845.87
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CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2020
Consolidated Balance Sheet - continued
RMB
Item Notes Closing balance Opening balance
Current liabilities:
Short-term borrowings (V) 26 10,483,775,548.93 9,439,099,793.47
Notes payable (V) 27 7,081,772.32 76,455,949.01
Accounts payable (V) 28 599,112,028.98 591,112,466.39
Receipts in advance (V) 29 39,510,127.90 28,826,687.37
Contract liabilities (V) 30 148,044,541.70 85,831,002.52
Employee benefits payable (V) 31 712,085,622.15 634,718,784.64
Taxes payable (V) 32 2,368,662,556.37 1,898,076,342.74
Other payables (V) 33 2,456,700,897.60 2,223,754,677.96
Non-current liabilities due within one year (V) 34 3,564,465,137.37 6,104,339,856.79
Other current liabilities (V) 35 2,383,668,985.94 885,956,581.63
Total current liabilities 22,763,107,219.26 21,968,172,142.52
Non-current Liabilities:
Long-term borrowings (V) 36 7,406,322,693.80 6,313,735,540.33
Bonds payable (V) 37 21,090,545,845.56 20,930,681,967.19
Including: Preferred shares - -
Perpetual bonds - -
Lease liabilities (V) 38 1,327,423,748.05 1,647,129,968.61
Long-term payables (V) 39 1,228,461,573.69 1,935,245,003.21
Long-term employee benefits payable (V) 40 507,714,699.46 471,482,138.63
Provisions (V) 41 100,406,745.66 76,242,559.95
Deferred income (V) 42 1,112,887,683.90 1,147,752,857.17
Deferred tax liabilities (V) 24 4,347,553,142.73 3,961,752,749.17
Other non-current liabilities (V) 43 2,982,220,894.03 3,254,515,306.85
Total non-current liabilities 40,103,537,026.88 39,738,538,091.11
TOTAL LIABILITIES 62,866,644,246.14 61,706,710,233.63
Shareholders' equity:
Share capital (V) 44 1,922,365,124.00 1,922,365,124.00
Capital reserve (V) 45 22,805,069,335.49 22,296,485,467.35
Other comprehensive income (V) 46 -826,697,303.06 -355,944,565.91
Special reserve (V) 47 10,201,178.30 12,386,734.70
Surplus reserve (V) 48 890,690,322.28 630,345,307.43
Unappropriated profit (V) 49 12,316,177,395.17 11,467,166,351.85
Total shareholders' equity attributable to shareholders of
37,117,806,052.18 35,972,804,419.42
the parent
Minority interests 68,559,161,478.89 59,017,403,192.82
TOTAL SHAREHOLDERS' EQUITY 105,676,967,531.07 94,990,207,612.24
TOTAL LIABILITIES AND
168,543,611,777.21 156,696,917,845.87
SHAREHOLDERS' EQUITY
The accompanying notes form part of the financial statements.
The financial statements on pages 7 to 176 were signed by the following:
Bai Jingtao Lu Yongxin Sun Ligan
____________________ ____________________ ____________________
Legal Representative Chief Financial Officer Head of Accounting Department
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CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2020
Balance Sheet of the Company
RMB
Item Notes Closing balance Opening balance
Current Assets:
Cash and bank balances 753,590,556.77 690,685,211.42
Held-for-trading financial assets 800,000,000.00 -
Prepayments 32,236.27 -
Other receivables (XV) 1 1,102,712,752.04 805,534,763.27
Other current assets 2,574,148.83 1,107,292,458.33
Total current assets 2,658,909,693.91 2,603,512,433.02
Non-current Assets:
Long-term receivables 8,667,950.38 61,004,284.75
Long-term equity investments (XV) 2 37,236,798,123.55 30,266,376,582.23
Investments in other equity instruments 155,610,830.00 155,688,635.00
Other non-current financial assets - -
Fixed assets 748,147.75 672,842.27
Construction in progress 3,502,416.12 5,803,169.37
Intangible assets 56,760,723.98 54,692,581.18
Long-term prepaid expenses 1,572,660.89 -
Deferred tax assets 1,846,793.34 928,465.21
Total non-current assets 37,465,507,646.01 30,545,166,560.01
TOTAL ASSETS 40,124,417,339.92 33,148,678,993.03
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CHINA MERCHANTS PORT GROUP CO., LTD.
AT 31 DECEMBER 2020
Balance Sheet of the Company - continued
RMB
Item Notes Closing balance Opening balance
Current Liabilities:
Short-term borrowings 2,174,486,432.93 300,378,812.50
Employee benefits payable 27,085,844.52 6,000,000.00
Taxes payable 208,459,425.46 209,282,889.78
Other payables 460,457,238.16 628,013,119.77
Non-current liabilities due within one year 33,040,000.00 35,832,000.00
Other current liabilities 2,224,519,555.57 715,766,708.20
Total current liabilities 5,128,048,496.64 1,895,273,530.25
Non-current Liabilities:
Bonds payable 2,000,000,000.00 -
Deferred tax liabilities 43,419,526.51 35,164,858.75
Total non-current liabilities 2,043,419,526.51 35,164,858.75
TOTAL LIABILITIES 7,171,468,023.15 1,930,438,389.00
SHAREHOLDERS' EQUITY
Share capital 1,922,365,124.00 1,922,365,124.00
Capital reserve 27,591,847,402.73 27,576,242,527.73
Other comprehensive income 105,536,222.50 105,594,576.25
Surplus reserve 890,690,322.28 630,345,307.43
Unappropriated profit 2,442,510,245.26 983,693,068.62
TOTAL SHAREHOLDERS' EQUITY 32,952,949,316.77 31,218,240,604.03
TOTAL LIABILITIES AND SHAREHOLDERS'
40,124,417,339.92 33,148,678,993.03
EQUITY
The accompanying notes form part of the financial statements.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated Income Statement
RMB
Amount incurred Amount incurred
Item Notes in the current in the prior
period period
I. Operating income (V) 50 12,618,529,996.02 12,123,829,423.74
Less: Operating costs (V) 50 7,873,749,854.85 7,648,920,919.71
Taxes and surcharges (V) 51 151,196,943.57 172,556,579.92
Administrative expenses (V) 52 1,584,882,935.02 1,509,520,581.66
Research and development expenses 156,024,113.54 123,853,344.29
Financial expenses (V) 53 1,232,729,624.82 1,936,269,737.53
Including: Interest expense 1,949,882,376.69 2,089,837,594.54
Interest income 325,387,744.56 252,060,018.58
Add: Other income (V) 54 204,965,113.28 162,101,113.10
Investment income (V) 55 4,905,975,438.22 4,619,173,755.42
Including: Income from investments in associates and joint ventures (V) 55 3,988,916,963.08 3,727,850,763.22
Gains from changes in fair value (Loss is marked with "-" ) (V) 56 -411,508,773.58 66,483,266.48
Gains from impairment of credit (Loss is marked with "-" ) (V) 57 -458,595,661.31 -50,249,409.77
Gains from impairment of assets (Loss is marked with "-" ) (V) 58 -551,370,042.53 25,051.16
Gains on disposal of assets (Loss is marked with "-" ) (V) 59 1,489,206,502.32 4,794,562,782.79
II. Operating profit 6,798,619,100.62 10,324,804,819.81
Add: Non-operating income (V) 60 81,639,060.54 553,103,360.41
Less: Non-operating expenses (V) 61 79,003,740.77 70,452,012.40
III. Gross profit 6,801,254,420.39 10,807,456,167.82
Less: Income tax expenses (V) 62 1,275,686,369.83 2,640,538,894.62
IV. Net profit 5,525,568,050.56 8,166,917,273.20
(I) Categorization by continuity of operation
1. Net profit from continuing operation 5,525,568,050.56 8,166,917,273.20
2. Net profit from discontinued operation - -
(II) Categorization by attribution of ownership
1. Net profit attributable to shareholders of the parent 2,065,322,969.66 2,898,192,168.84
2. Profit or loss attributable to minority shareholders 3,460,245,080.90 5,268,725,104.36
V. Other comprehensive income, net of tax (V) 64 -1,849,656,940.86 -1,096,285,894.51
Other comprehensive income attributable to owners of the parent, net of tax -470,752,737.15 -443,076,984.15
(I) Other comprehensive income that will not be reclassified to profit or loss -1,552,867.01 9,090,184.52
1. Changes from remeasurement of the defined benefit plan 10,248,546.35 1,069,722.83
2. Other comprehensive income that cannot be reclassified to profit or loss
-11,817,008.06 4,830,921.62
under the equity method
3. Fair value changes of investments in other equity instruments 15,594.70 3,189,540.07
(II) Other comprehensive income that will be reclassified subsequently to profit
-469,199,870.14 -452,167,168.67
or loss
1. Other comprehensive income that can be reclassified to profit or loss
90,675,445.06 -59,050,164.54
under the equity method
2. Translation differences of financial statements denominated in foreign
-559,875,315.20 -393,117,004.13
currencies
Other comprehensive income attributable to minority interests, net of tax -1,378,904,203.71 -653,208,910.36
VI. Total comprehensive income attributable to: 3,675,911,109.70 7,070,631,378.69
Shareholders of the parent 1,594,570,232.51 2,455,115,184.69
Minority shareholders 2,081,340,877.19 4,615,516,194.00
VII. Earnings per share
(I) Basic earnings per share 1.07 1.59
(II) Diluted earnings per share 1.07 1.59
The accompanying notes form part of the financial statements.
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CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Income Statement of the Company
RMB
Amount incurred Amount incurred
Item Notes in the current in the prior
period period
I. Operating income (XV) 3 6,653,002.66 92,042,598.05
Less: Operating costs (XV) 3 2,265,959.64 76,084,023.73
Taxes and surcharges 2,520,271.63 1,839,217.71
Administrative expenses 133,748,040.20 60,487,851.03
Financial expenses 59,313,221.11 41,936,976.49
Including: Interest expense 87,576,683.75 42,810,942.02
Interest income 38,511,845.95 15,909,363.66
Add: Other income 355,292.70 955,987.32
Investment income (XV) 4 2,975,643,847.56 1,306,222,961.66
Including: Income from investments in associates and joint ventures (XV) 4 57,647,049.81 70,092,131.84
Gains (losses) from changes in fair value 33,096,476.05 -
II. Operating profit 2,817,901,126.39 1,218,873,478.07
Add: Non-operating income 5,001.83 57,049.23
Less: Non-operating expenses - 81,092.18
III. Gross profit 2,817,906,128.22 1,218,849,435.12
Less: Income tax expenses 214,455,979.69 187,155,447.57
IV. Net profit 2,603,450,148.53 1,031,693,987.55
V. Other comprehensive income, net of tax -58,353.75 2,956,451.25
(I) Other comprehensive income that cannot be reclassified to profit or loss -58,353.75 2,956,451.25
1. Changes from remeasurement of the defined benefit plan - -
2. Other comprehensive income that cannot be reclassified to profit or loss
- -
under the equity method
3. Fair value changes of investments in other equity instruments -58,353.75 2,956,451.25
(II) Other comprehensive income that will be reclassified to profit or loss - -
1. Other comprehensive income that can be reclassified to profit or loss
- -
under the equity method
2. Translation differences of financial statements denominated in foreign
- -
currencies
VI. Total comprehensive income 2,603,391,794.78 1,034,650,438.80
The accompanying notes form part of the financial statements.
- 12 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated Cash Flow Statement
RMB
Amount incurred in Amount incurred in
Item Notes
the current period the prior period
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services 12,701,740,372.72 12,294,529,982.73
Receipts of tax refunds 42,485,481.75 23,569,265.92
Other cash receipts relating to operating activities (V) 65(1) 815,916,787.26 1,165,710,845.18
Sub-total of cash inflows 13,560,142,641.73 13,483,810,093.83
Cash payments for goods purchased and services received 3,470,983,798.59 3,593,786,248.69
Cash payments to and on behalf of employees 2,778,912,137.24 2,621,068,087.09
Payments of various types of taxes 1,062,476,005.92 957,382,790.97
Other cash payments relating to operating activities (V) 65(2) 751,969,782.97 809,699,551.14
Sub-total of cash outflows 8,064,341,724.72 7,981,936,677.89
Net Cash Flows from Operating Activities (V) 66(1) 5,495,800,917.01 5,501,873,415.94
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery of investments 9,137,020,345.82 -
Cash receipts from investments income 1,551,111,503.37 1,804,725,809.65
Net cash receipts from disposal of fixed assets, intangible assets
389,937,931.20 6,274,482,747.66
and other long-term assets
Net cash receipts from disposal of subsidiaries and other
- 1,000,000.00
operating units
Other cash receipts relating to investing activities (V) 65(3) 1,453,513,215.71 3,535,967,030.93
Sub-total of cash inflows 12,531,582,996.10 11,616,175,588.24
Cash payments to acquire or construct fixed assets, intangible
2,728,598,026.38 3,515,540,735.97
assets and other long-term assets
Cash payments to acquire investments 13,686,331,715.60 7,898,674,384.09
Net cash payments for acquisitions of subsidiaries and other
(V) 65(4) - -
business units
Other cash payments relating to investing activities (V) 65(5) 3,009,770,350.62 2,138,951,129.78
Sub-total of cash outflows 19,424,700,092.60 13,553,166,249.84
Net Cash Flows from Investing Activities -6,893,117,096.50 -1,936,990,661.60
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 5,347,041,408.13 2,213,530,171.90
Including: Cash receipts from capital contributions from
5,347,041,408.13 27,255,000.00
Minority shareholder of subsidiary
Cash receipts from borrowings 24,095,846,198.30 14,306,287,000.87
Cash receipts from issue of bonds 6,197,833,243.33 -
Other cash receipts relating to financing activities (V) 65(6) 1,937,954,936.36 1,713,327,483.01
Sub-total of cash inflows 37,578,675,786.12 18,233,144,655.78
Cash repayments of borrowings 26,923,924,070.90 15,402,220,794.12
Cash payments for distribution of dividends or profits or
4,417,717,782.78 4,022,043,402.10
settlement of interest expenses
Including: Payments for distribution of dividends or profits to
1,586,039,122.85 1,745,724,195.29
Minority shareholder of subsidiary
Other cash payments relating to financing activities (V) 65(7) 842,561,469.96 42,583,797.55
Sub-total of cash outflows 32,184,203,323.64 19,466,847,993.77
Net Cash Flows from Financing Activities 5,394,472,462.48 -1,233,703,337.99
IV. Effect of Foreign Exchange Rate Changes on Cash and
60,305,024.35 9,697,074.77
Cash Equivalents
V. Net Increase in Cash and Cash Equivalents 4,057,461,307.34 2,340,876,491.12
Add: Opening balance of Cash and Cash Equivalents (V) 66(2) 7,714,157,995.87 5,373,281,504.75
VI. Closing Balance of Cash and Cash Equivalents (V) 66(2) 11,771,619,303.21 7,714,157,995.87
The accompanying notes form part of the financial statements.
- 13 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Cash Flow Statement of the Company
RMB
Amount incurred in Amount incurred in
Item Notes
the current period the prior period
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services - 104,722,961.87
Other cash receipts relating to operating activities 88,581,495.56 246,055,628.30
Sub-total of cash inflows 88,581,495.56 350,778,590.17
Cash payments for goods purchased and services received - 36,211,750.68
Cash payments to and on behalf of employees 56,294,477.30 85,120,511.18
Payments of various types of taxes 211,434,912.21 20,158,391.66
Other cash payments relating to operating activities 61,598,017.83 53,795,218.14
Sub-total of cash outflows 329,327,407.34 195,285,871.66
Net Cash Flows from Operating Activities -240,745,911.78 155,492,718.51
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery of investments 2,950,000,000.00 -
Cash receipts from investment income 1,530,980,750.04 57,727,526.33
Other cash receipts relating to investing activities 297,303,477.07 612,722,414.48
Sub-total of cash inflows 4,778,284,227.11 670,449,940.81
Cash payments to acquire or construct fixed assets, intangible 8,035,563.48
1,526,872.01
assets and other long-term assets
Cash payments to acquire investments 5,567,604,695.27 8,000,000.00
Net cash payments for acquisitions of subsidiaries and other 386,159,390.00
3,006,793,109.07
business units
Other cash payments relating to investing activities 436,450,231.63 2,060,171,330.96
Sub-total of cash outflows 9,012,374,907.98 2,462,366,284.44
Net Cash Flows from Investing Activities -4,234,090,680.87 -1,791,916,343.63
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions - 2,186,275,171.90
Cash receipts from borrowings 2,372,563,339.18 2,160,000,000.00
Cash receipts from issue of bonds 6,197,833,243.33 -
Other cash receipts relating to financing activities 544,400,000.00 -
Sub-total of cash inflows 9,114,796,582.51 4,346,275,171.90
Cash repayments of borrowings 3,233,786,000.00 2,167,116,843.58
Cash payments for distribution of dividends or profits or 239,800,502.62
905,286,543.64
settlement of interest expenses
Other cash payments relating to financing activities 437,554,375.82 1,593,549.44
Sub-total of cash outflows 4,576,626,919.46 2,408,510,895.64
Net Cash Flows from Financing Activities 4,538,169,663.05 1,937,764,276.26
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash -497,294.65
-427,725.05
Equivalents
V. Net Increase in Cash and Cash Equivalents 62,905,345.35 300,843,356.49
Add: Opening Balance of Cash and Cash Equivalents 690,685,211.42 389,841,854.93
VI. Closing Balance of Cash and Cash Equivalents 753,590,556.77 690,685,211.42
The accompanying notes form part of the financial statements.
- 14 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated Statement of Changes in Shareholders' Equity
RMB
2020
Equity attributable to shareholders of the parent
Item Other Total shareholders'
Minority interests
Share capital Capital reserve comprehensive Unappropriated equity
income Special reserve Surplus reserve profit
I. Closing balance of the preceding year 1,922,365,124.00 22,296,485,467.35 -355,944,565.91 12,386,734.70 630,345,307.43 11,467,166,351.85 59,017,403,192.82 94,990,207,612.24
Add: Changes in accounting policies - - - - - - - -
Corrections of prior period errors - - - - - - - -
Business combination involving
- - - - - - - -
enterprises under common control
Others - - - - - - - -
II. Opening balance of the year 1,922,365,124.00 22,296,485,467.35 -355,944,565.91 12,386,734.70 630,345,307.43 11,467,166,351.85 59,017,403,192.82 94,990,207,612.24
III. Changes for the year - 508,583,868.14 -470,752,737.15 -2,185,556.40 260,345,014.85 849,011,043.32 9,541,758,286.07 10,686,759,918.83
(I) Total comprehensive income - - -470,752,737.15 - - 2,065,322,969.66 2,081,340,877.19 3,675,911,109.70
(II) Owners' contributions and reduction in
- 508,583,868.14 - - - - 9,813,153,124.68 10,321,736,992.82
capital
1. Ordinary shares contributed by
- - - - - - - -
shareholders
2. Capital contribution from holders of
- - - - - - 5,347,041,408.13 5,347,041,408.13
other equity instruments
3. Share-based payment recognized in
- 10,096,607.62 - - - - 9,116,783.96 19,213,391.58
shareholders' equity
4. Others - 498,487,260.52 - - - - 4,456,994,932.59 4,955,482,193.11
(III) Profit distribution - - - - 260,345,014.85 -1,217,861,842.98 -2,342,313,102.40 -3,299,829,930.53
1. Transfer to surplus reserve - - - - 260,345,014.85 -260,345,014.85 - -
2. Transfer to general risk reserve - - - - - - - -
3. Distributions to shareholders - - - - - -884,287,957.04 -2,241,431,859.76 -3,125,719,816.80
4. Others - - - - - -73,228,871.09 -100,881,242.64 -174,110,113.73
(IV) Transfers within shareholders' equity - - - -1,549,916.64 - 1,549,916.64 - -
1. Capitalization of capital reserve - - - - - - - -
2. Capitalization of surplus reserve - - - - - - - -
3. Loss offset by surplus reserve - - - - - - - -
4. Others - - - -1,549,916.64 - 1,549,916.64 - -
(V) Special reserve - - - -635,639.76 - - -10,422,613.40 -11,058,253.16
1. Transfer to special reserve in the
- - - 57,538,524.86 - - 49,446,114.15 106,984,639.01
period
2. Amount utilized in the period - - - -58,174,164.62 - - -59,868,727.55 -118,042,892.17
(VI) Others - - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 22,805,069,335.49 -826,697,303.06 10,201,178.30 890,690,322.28 12,316,177,395.17 68,559,161,478.89 105,676,967,531.07
- 15 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated Statement of Changes in Shareholders' Equity - continued
RMB
2019
Equity attributable to shareholders of the parent
Item Other Total shareholders'
Minority interests
Share capital Capital reserve comprehensive Unappropriated equity
income Special reserve Surplus reserve profit
I. Closing balance of the preceding year 1,793,412,378.00 19,426,912,957.05 88,925,978.57 8,231,080.43 527,175,908.67 8,915,817,110.21 49,656,450,459.88 80,416,925,872.81
Add: Changes in accounting policies - - - - - -41,018,077.68 -80,367,183.77 -121,385,261.45
Corrections of prior period errors - - - - - - - -
Business combination involving
- - - - - - - -
enterprises under common control
Others - - - - - - - -
II. Opening balance of the year 1,793,412,378.00 19,426,912,957.05 88,925,978.57 8,231,080.43 527,175,908.67 8,874,799,032.53 49,576,083,276.11 80,295,540,611.36
III. Changes for the year 128,952,746.00 2,869,572,510.30 -444,870,544.48 4,155,654.27 103,169,398.76 2,592,367,319.32 9,441,319,916.71 14,694,667,000.88
(I) Total comprehensive income - - -443,076,984.15 - - 2,898,192,168.84 4,615,516,194.00 7,070,631,378.69
(II) Owners' contributions and reduction in
128,952,746.00 2,869,572,510.30 - - - - 6,867,048,857.78 9,865,574,114.08
capital
1. Ordinary shares contributed by
128,952,746.00 2,058,595,347.69 - - - - 27,255,000.00 2,214,803,093.69
shareholders
2. Capital contribution from holders of
- - - - - - - -
other equity instruments
3. Share-based payment recognized in
- - - - - - - -
shareholders' equity
4. Others - 810,977,162.61 - - - - 6,839,793,857.78 7,650,771,020.39
(III) Profit distribution - - - - 103,169,398.76 -307,618,409.85 -2,040,721,489.06 -2,245,170,500.15
1. Transfer to surplus reserve - - - - 103,169,398.76 -103,169,398.76 - -
2. Transfer to general risk reserve - - - - - - - -
3. Distributions to shareholders - - - - - -204,449,011.09 -2,040,721,489.06 -2,245,170,500.15
4. Others - - - - - - - -
(IV) Transfers within shareholders' equity - - -1,793,560.33 - - 1,793,560.33 - -
1. Capitalization of capital reserve - - - - - - - -
2. Capitalization of surplus reserve - - - - - - - -
3. Loss offset by surplus reserve - - - - - - - -
4. Others - - -1,793,560.33 - - 1,793,560.33 - -
(V) Special reserve - - - 4,155,654.27 - - -523,646.01 3,632,008.26
1. Transfer to special reserve in the
- - - 108,062,435.41 - - 115,436,394.98 223,498,830.39
period
2. Amount utilized in the period - - - -103,906,781.14 - - -115,960,040.99 -219,866,822.13
(VI) Others - - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 22,296,485,467.35 -355,944,565.91 12,386,734.70 630,345,307.43 11,467,166,351.85 59,017,403,192.82 94,990,207,612.24
The accompanying notes form part of the financial statements.
- 16 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Statement of Changes in Shareholders' Equity of the Company
RMB
2020
Item Other comprehensive Total shareholders'
Share capital Capital reserve income Special reserve Surplus reserve Unappropriated profit equity
I. Closing balance of the preceding year 1,922,365,124.00 27,576,242,527.73 105,594,576.25 - 630,345,307.43 983,693,068.62 31,218,240,604.03
Add: Changes in accounting policies - - - - - - -
Corrections of prior period errors - - - - - - -
Others - - - - - - -
II. Opening balance of the year 1,922,365,124.00 27,576,242,527.73 105,594,576.25 - 630,345,307.43 983,693,068.62 31,218,240,604.03
III. Changes for the year - 15,604,875.00 -58,353.75 - 260,345,014.85 1,458,817,176.64 1,734,708,712.74
(I) Total comprehensive income - - -58,353.75 - - 2,603,450,148.53 2,603,391,794.78
(II) Owners' contributions and reduction in
- 15,604,875.00 - - - - 15,604,875.00
capital
1. Ordinary shares contributed by
- - - - - - -
shareholders
2. Share-based payment recognized in
- 15,604,875.00 - - - - 15,604,875.00
shareholders' equity
3. Others - - - - - - -
(III) Profit distribution - - - - 260,345,014.85 -1,144,632,971.89 -884,287,957.04
1. Transfer to surplus reserve - - - - 260,345,014.85 -260,345,014.85 -
2. Transfer to general risk reserve - - - - - - -
3. Distributions to shareholders - - - - - -884,287,957.04 -884,287,957.04
4. Others - - - - - - -
(IV) Transfers within shareholders' equity - - - - - - -
1. Capitalization of capital reserve - - - - - - -
2. Capitalization of surplus reserve - - - - - - -
3. Loss offset by surplus reserve - - - - - - -
4. Others - - - - - - -
(V) Special reserve - - - - - - -
1. Transfer to special reserve in the period - - - - - - -
2. Amount utilized in the period - - - - - - -
(VI) Others - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 27,591,847,402.73 105,536,222.50 - 890,690,322.28 2,442,510,245.26 32,952,949,316.77
- 17 -
CHINA MERCHANTS PORT GROUP CO., LTD.
FOR THE YEAR ENDED 31 DECEMBER 2020
Statement of Changes in Shareholders' Equity of the Company - continued
RMB
2019
Item Other comprehensive Total shareholders'
Share capital Capital reserve income Special reserve Surplus reserve Unappropriated profit equity
I. Closing balance of the preceding year 1,793,412,378.00 25,517,647,180.04 102,638,125.00 470,465.59 527,175,908.67 259,943,085.16 28,201,287,142.46
Add: Changes in accounting policies - - - - - -325,594.24 -325,594.24
Corrections of prior period errors - - - - - - -
Others - - - - - - -
II. Opening balance of the year 1,793,412,378.00 25,517,647,180.04 102,638,125.00 470,465.59 527,175,908.67 259,617,490.92 28,200,961,548.22
III. Changes for the year 128,952,746.00 2,058,595,347.69 2,956,451.25 -470,465.59 103,169,398.76 724,075,577.70 3,017,279,055.81
(I) Total comprehensive income - - 2,956,451.25 - - 1,031,693,987.55 1,034,650,438.80
(II) Owners' contributions and reduction in
128,952,746.00 2,058,595,347.69 - - - - 2,187,548,093.69
capital
1. Ordinary shares contributed by
128,952,746.00 2,058,595,347.69 - - - - 2,187,548,093.69
shareholders
2. Share-based payment recognized in
- - - - - - -
shareholders' equity
3. Others - - - - - - -
(III) Profit distribution - - - - 103,169,398.76 -307,618,409.85 -204,449,011.09
1. Transfer to surplus reserve - - - - 103,169,398.76 -103,169,398.76 -
2. Transfer to general risk reserve - - - - - - -
3. Distributions to shareholders - - - - - -204,449,011.09 -204,449,011.09
4. Others - - - - - - -
(IV) Transfers within shareholders' equity - - - - - - -
1. Capitalization of capital reserve - - - - - - -
2. Capitalization of surplus reserve - - - - - - -
3. Loss offset by surplus reserve - - - - - - -
4. Others - - - - - - -
(V) Special reserve - - - -470,465.59 - - -470,465.59
1. Transfer to special reserve in the period - - - 919,167.67 - - 919,167.67
2. Amount utilized in the period - - - -1,389,633.26 - - -1,389,633.26
(VI) Others - - - - - - -
IV. Closing balance of the year 1,922,365,124.00 27,576,242,527.73 105,594,576.25 - 630,345,307.43 983,693,068.62 31,218,240,604.03
The accompanying notes form part of the financial statements.
- 18 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(I) GENERAL INFORMATION OF THE COMPANY
China Merchants Port Group Company Limited was a stock limited company incorporated in
Shenzhen, Guangdong Province, on 16 January 1993.
The headquarters of the Company is located in Shenzhen, Guangdong Province. The Company
and its subsidiaries (collectively the "Group") are principally engaged in the rendering of port
service, bonded logistics service and other businesses such as property development and
investment.
The Company's and consolidated financial statements have been approved by the Board of
Directors on 29 March 2021.
See Notes (VII) "Equity in Other Entities" for details of the scope of consolidated financial
statements in the current year. See Note (VI) "Changes in Scope of Consolidation" for details of
changes in the scope of consolidated financial statements in the current period.
(II) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
Basis of preparation of financial statements
The Group has adopted the Accounting Standards for Business Enterprises ("ASBE") issued by
the Ministry of Finance ("MoF"). In addition, the Group has disclosed relevant financial
information in accordance with Information Disclosure and Presentation Rules for Companies
Offering Securities to the Public No. 15 - General Provisions on Financial Reporting (Revised in
2014).
Going concern
As at 31 December 2020, the Group had total current liabilities in excess of total current assets of
RMB 3,870,940,636.24. On 31 December 2020, the Group had available and unused line of
credit amounting to RMB 45,605,365,637.62, which is greater than the balance of the net current
liabilities. The Group can obtain financial support from the available line of credit when needed.
Therefore, the financial statements have been prepared on a going concern basis.
Basis of accounting and principle of measurement
The Group has adopted the accrual basis of accounting. Except for certain financial instruments
which are measured at fair value, the Group adopts the historical cost as the principle of
measurement of the financial statements. Upon being restructured into a stock company, the fixed
assets and intangible assets initially contributed by the state-owned shareholders are recognized
based on the valuation amounts confirmed by the state-owned assets administration department.
Where assets are impaired, provisions for asset impairment are made in accordance with the
relevant requirements.
- 19 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(II) BASIS OF PREPARATION OF FINANCIAL STATEMENTS - continued
Basis of accounting and principle of measurement - continued
Where the historical cost is adopted as the measurement basis, assets are recorded at the amount
of cash or cash equivalents paid or the fair value of the consideration given to acquire them at the
time of their acquisition. Liabilities are recorded at the amount of proceeds or assets received or
the contractual amounts for assuming the present obligation, or, at the amounts of cash or cash
equivalents 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 an
orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using valuation technique. Fair value measurement
and/or disclosure in the financial statements are determined according to the above basis.
Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that
the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
All the following significant accounting policies and accounting estimates are based on the
Accounting Standards for Business Enterprises ("ASBE").
1. Statement of compliance with the ASBE
The financial statements of the Company have been prepared in accordance with the ASBE, and
present truly and completely, the Company’s and consolidated financial position as of 31
December 2020, and the Company’s and consolidated results of operations, the Company’s and
consolidated shareholders' equity and cash flows for the year then ended.
2. Accounting period
The Group has adopted the calendar year as its accounting year, e.g. from 1 January to 31
December.
- 20 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
3. Operating cycle
An operating cycle refers to the period since when an enterprise purchases assets for processing
purpose till the realization of those assets in cash or cash equivalents. The Group are principally
engaged in the rendering of port service, bonded logistics service and other businesses such as
property development and investment with one year being an operating cycle.
4. Functional currency
Renminbi ("RMB") is the currency of the primary economic environment in which the Company
and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries
choose RMB as their functional currency. The Company's subsidiaries choose their functional
currency on the basis of the primary economic environment in which they operate. The Company
adopts RMB to prepare its financial statements.
5. The accounting treatment of business combinations involving or not involving
enterprises under common control
Business combinations are classified into business combinations involving enterprises under
common 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 in
which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded
by the combining entities at the date of the combination. The difference between the carrying
amount of the net assets obtained and the carrying amount of the consideration paid for the
combination is adjusted to the share premium in capital reserve. If the share premium is not
sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in
which 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
combination in which all of the combining enterprises are not ultimately controlled by the same
party or parties before and after the combination.
- 21 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. The accounting treatment of business combinations involving or not involving
enterprises under common control - continued
5.2 Business combinations not involving enterprises under common control and goodwill -
continued
The cost of combination is the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for
control of the acquire. Where a business combination not involving enterprises under common
control is achieved in stages that involve multiple transactions, the cost of combination is the sum
of the consideration paid at the acquisition date and the fair value at the acquisition date of the
acquirer's previously held interest in the acquiree. The intermediary expenses (fees in respect of
auditing, legal services, valuation and consultancy services, etc.) and other administrative
expenses attributable to the business combination are recognized in profit or loss in the periods
when they are incurred.
The acquiree's identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a
business combination that meet the recognition criteria shall be measured at fair value at the
acquisition date.
When a business combination contract provides for the acquirer's recovery of consideration
previously paid contingent on one or multiple future event(s), the Group recognises the contingent
consideration provided in the contract as an asset, as part of the consideration transferred in the
business combination, and includes it in the cost of business combination at the fair value at the
acquisition date. Within 12 months after the acquisition, where the contingent consideration needs
to be adjusted as new or further evidences are obtained in respect of the circumstances existed at
the acquisition date, the adjustment shall be recognised and the amount originally recognised in
goodwill or non-operating income shall be adjusted. A change in or adjustment to the contingent
consideration under other circumstances shall be accounted for in accordance with Accounting
Standard for Business Enterprise No. 22 - Financial Instruments: Recognition and Measurement
and Accounting Standard for Business Enterprises No. 13 - Contingencies. Any change or
adjustment is included in profit or loss for the current period.
Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree's
identifiable net assets, the difference is treated as an asset and recognized as goodwill, which is
measured at cost on initial recognition. Where the cost of combination is less than the acquirer's
interest in the fair value of the acquiree's identifiable net assets, the acquirer reassesses the
measurement of the fair values of the acquiree's identifiable assets, liabilities and contingent
liabilities and measurement of the cost of combination. If after that reassessment, the cost of
combination is still less than the acquirer's interest in the fair value of the acquiree's identifiable
net assets, the acquirer recognizes the remaining difference immediately in profit or loss for the
current period.
- 22 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
5. The accounting treatment of business combinations involving or not involving
enterprises under common control - continued
5.2 Business combinations not involving enterprises under common control and goodwill - continued
If either the fair values of identifiable assets, liabilities and contingent liabilities acquired in a
combination or the cost of business combination can be determined only provisionally by the end
of the period in which the business combination was effected, the acquirer recognises and
measures the combination using those provisional values. Any adjustments to those provisional
values within twelve months after the acquisition date are treated as if they had been recognised
and measured on the acquisition date.
Goodwill arising on a business combination is measured at cost less accumulated impairment
losses, and is presented separately in the consolidated financial statements.
6. Preparation method of consolidated financial statements
6.1 Preparation method of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. Control exists when the investor has power over the investee; is exposed, or has rights, to
variable returns from its involvement with the investee; and has the ability to use its power over
the investee to affect its returns. The Group reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes of the above elements of the definition of
control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiaries and
ceases when the Group loses control of the subsidiary.
For a subsidiary already disposed of by the Group, the operating results and cash flows before the
date of disposal (the date when control is lost) are included in the consolidated income statement
and consolidated statement of cash flows, as appropriate.
For subsidiaries acquired through a business combination involving enterprises not under
common control, the operating results and cash flows from the acquisition date (the date when
control is obtained) are included in the consolidated income statement and consolidated statement
of cash flows, as appropriate.
No matter when the business combination occurs in the reporting period, subsidiaries acquired
through a business combination involving enterprises under common control or the party being
absorbed under merger by absorption are included in the Group's scope of consolidation as if they
had been included in the scope of consolidation from the date when they first came under the
common control of the ultimate controlling party. Their operating results and cash flows from the
date when they first came under the common control of the ultimate controlling party are included
in the consolidated income statement and consolidated statement of cash flows, as appropriate.
- 23 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Preparation method of consolidated financial statements - continued
6.1 Preparation method of consolidated financial statements - continued
The significant accounting policies and accounting periods adopted by the subsidiaries are
determined based on the uniform accounting policies and accounting periods set out by the
Company.
Where the accounting policies / accounting periods adopted by subsidiaries are inconsistent with
those of the Company, appropriate adjustments are made to the subsidiaries' financial statements
in accordance with the accounting policies of the Company.
All significant intra-group balances and transactions are eliminated on consolidation.
The portion of subsidiaries' equity that is not attributable to the parent is treated as minority
interests and presented as "minority interests" in the consolidated balance sheet under
shareholders' equity. The portion of net profits or losses of subsidiaries for the period attributable
to minority interests is presented as "minority interests" in the consolidated income statement
under the "net profit" line item.
When the amount of loss for the period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders' portion of the opening balance of shareholders' equity of the
subsidiary, the excess amount is still allocated against minority interests.
Acquisition of minority interests or disposals of interests in a subsidiary that do not result in the
loss of control over the subsidiary are accounted for as equity transactions. The carrying amounts
of the parent's interests and minority interests are adjusted to reflect the changes in their relative
interests in the subsidiary. The difference between the amount by which the minority interests are
adjusted and the fair value of the consideration paid or received is adjusted to capital reserve. If
the capital reserve is not sufficient to absorb the difference, the excess are adjusted against
retained earnings.
For the stepwise acquisition of equity interest till acquiring control after a few transactions and
leading to business combination not involving enterprises under common control, this should be
dealt with based on whether this belongs to 'package deal': if it belongs to 'package deal',
transactions will be dealt as transactions to acquire control. If it does not belong to 'package deal',
transactions to acquire control on acquisition date will be under accounting treatment, the fair
value of acquirees' shares held before acquisition date will be revalued, and the difference
between fair value and book value will be recognized in profit or loss of the current period; if
acquirees' shares held before acquisition date involve in changes of other comprehensive income
and other equity of owners under equity method, this will be transferred to income of acquisition
date.
- 24 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
6. Preparation method of consolidated financial statements - continued
6.1 Preparation method of consolidated financial statements - continued
When the Group loses control over a subsidiary due to disposal of equity investment or other
reasons, any retained interest is re-measured at its fair value at the date when control is lost. The
difference between (i) the aggregate of the consideration received on disposal and the fair value of
any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated
from the acquisition date according to the original proportion of ownership interests is recognized
as investment income in the period in which control is lost, and the goodwill is offset accordingly.
Other comprehensive income associated with investment in the former subsidiary is reclassified to
investment income in the period in which control is lost.
When the Group loses control of a subsidiary in two or more arrangements (transactions), terms
and conditions of the arrangements (transactions) and their economic effects are considered. One
or more of the following indicate that the Group shall account for the multiple arrangements as a
'package deal': (i) they are entered into at the same time or in contemplation of each other; (ii)
they form a complete transaction designed to achieve an overall commercial effect; (iii) the
occurrence 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
considered together with other transactions. Where the transactions of disposal of equity
investments in a subsidiary until the loss of control are assessed as a package deal, these
transactions are accounted for as one transaction of disposal of a subsidiary with loss of control.
Before losing control, the difference of consideration received on disposal and the share of net
assets of the subsidiary continuously calculated from acquisition date is recognized as other
comprehensive income. When losing control, the cumulated other comprehensive income is
transferred to profit or loss of the period of losing control. If the transactions of disposal of equity
investments in a subsidiary are not assessed as a package deal, these transactions are accounted
for as unrelated transactions.
7. Classification of joint arrangements and the accounting treatments of joint
operations
There are two types of joint arrangements - joint operations and joint ventures. The classification
of joint arrangements under is determined based on the rights and obligations of parties to the
joint arrangements by considering the structure, the legal form of the arrangements, the
contractual terms agreed by the parties to the arrangement. A joint operation is a joint
arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint
arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement.
Investments in joint ventures are accounted for using the equity method by the Group, which is
detailed in Notes (III) 16.3.2, "Long-term equity investments accounted for using the equity
method".
- 25 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
7. Classification of joint arrangements and the accounting treatments of joint
operations - continued
The Group as a joint operator recognizes the following items in relation to its interest in a joint
operation: (1) its solely-held assets, including its share of any assets held jointly; (2) its solely-
assumed liabilities, including its share of any liabilities incurred jointly; (3) its revenue from the
sale of its share of the output arising from the joint operation; (4) its share of the revenue from the
sale of the output by the joint operation; and (5) its solely-incurred expenses, including its share of
any expenses incurred jointly. The Group accounts for the recognized assets, liabilities, revenues
and expenses relating to its interest in a joint operation in accordance with the requirements
applicable to the particular assets, liabilities, revenues and expenses.
8. Recognition criteria of cash and cash equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents 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 are
subject 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 exchange
rate on the date of the transaction.
At the balance sheet date, foreign currency monetary items are translated into functional currency
using the spot exchange rates at the balance sheet date. Exchange differences arising from the
differences between the spot exchange rates prevailing at the balance sheet date and those on
initial recognition 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 foreign currency that qualify for capitalization are capitalized as part of the cost of the
qualifying asset during the capitalization period; (2) exchange differences related to hedging
instruments for the purpose of hedging against foreign currency risks are accounted for using
hedge accounting; (3) exchange differences arising from changes in the carrying amounts (other
than the amortised cost) of monetary items at fair value through other comprehensive income are
recognised as other comprehensive income.
When the consolidated financial statements include foreign operation(s), if there is foreign
currency monetary item constituting a net investment in a foreign operation, exchange difference
arising from changes in exchange rates are recognized as "exchange differences arising on
translation of financial statements denominated in foreign currencies " in other comprehensive
income, and in profit and loss for the period upon disposal of the foreign operation.
- 26 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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 in
functional currency at the spot exchange rates on the dates of the transactions; the amounts in
functional currency remain unchanged. Foreign currency non-monetary items measured at fair
value are re-translated at the spot exchange rate on the date the fair value is determined.
Difference between the re-translated functional currency amount and the original functional
currency amount is treated as changes in fair value (including changes of exchange rate) and is
recognized in profit and loss or as other comprehensive income.
9.2 Translation of financial statements denominated in foreign currencies
For the purpose of preparing the consolidated financial statements, financial statements of a
foreign operation are translated from the foreign currency into RMB using the following method:
assets and liabilities on the balance sheet are translated at the spot exchange rate prevailing at the
balance sheet date; shareholders' equity items except for unappropriated profit are translated at the
spot exchange rates at the dates on which such items arose; all items in the income statement as
well as items reflecting the distribution of profits are translated at the average exchange rates of
the accounting period of the consolidated financial statements; the opening balance of
unappropriated profit is the translated closing balance of the previous year's unappropriated profit;
the closing balance of unappropriated profit is calculated and presented on the basis of each
translated income statement and profit distribution item. The difference between the translated
assets and the aggregate of liabilities and shareholders' equity items is recognized as other
comprehensive income and included in shareholders' equity.
Cash flows arising from a transaction in foreign currency and the cash flows of a foreign
subsidiary are translated at average exchange rate during the accounting period of consolidated
financial statements. The effect of exchange rate changes on cash and cash equivalents is regarded
as a reconciling item and presented separately in the cash flow statement as "effect of exchange
rate changes on cash and cash equivalents".
The closing balances and the comparative figures of previous year are presented at the translated
amounts in the previous year's financial statements.
On disposal of the Group's entire interest in a foreign operation, or upon a loss of control over a
foreign operation due to disposal of certain interest in it or other reasons, the Group transfers the
accumulated exchange differences arising on translation of financial statements of this foreign
operation attributable to the owners' equity of the Company and presented under owners' equity,
to profit or loss in the period in which the disposal occurs.
- 27 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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 a disposal of part equity investments or other reason leading to lower interest
percentage in foreign operations but does not result in the Group losing control over a foreign
operation, the exchange differences arising from the translation of foreign currency financial
statements related to this disposed part are re-attributed to minority interests and are not
recognized in profit and loss. For partial disposals of equity interests in foreign operations which
are associates or joint ventures, the proportionate share of the accumulated exchange differences
arising on translation of financial statements of foreign operations is reclassified to profit or loss.
10. Financial instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to the
contractual provisions of a financial instrument.
All regular way purchases or sales of financial assets are recognized and derecognized on a trade
date basis.
Financial assets and financial liabilities are initially measured at fair value. For financial assets
and financial liabilities at fair value through profit or loss, relevant transaction costs are directly
recognized in profit or loss; transaction costs relating to other categories of financial assets and
financial liabilities are included in the value initially recognized. For accounts receivable
recognized that do not contain a significant financing component or a financing component
included in the contracts less than one year which are not considered by the Group, which are
within the scope of Accounting Standard for Business Enterprises No.14 - Revenue (hereinafter
referred to as "revenue standards"), transaction prices defined in the standards shall be adopted on
initial recognition.
The effective interest method is a method that is used in the calculation of the amortized cost of a
financial asset or a financial liability and in the allocation of the interest income or interest
expense in profit or loss over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash flows through the
expected life of the financial asset or financial liability to the gross carrying amount of a financial
asset or to the amortized cost of a financial liability. When calculating the effective interest rate,
the Group estimates future cash flows by considering all the contractual terms of the financial
asset or financial liability (for example, prepayment, extension, call option or similar options) but
shall not consider the expected credit losses.
- 28 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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 a
financial liability initially recognized net of principal repaid, plus or less the cumulative amortized
amount arising from amortization of the difference between the amount initially recognized and
the amount at the maturity date using the effective interest method, net of cumulative credit loss
allowance (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
subsequently measured at amortized cost, at fair value through other comprehensive income or at
fair value through profit or loss.
If contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding, and the financial asset is
held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows, such asset is classified into financial assets measured at amortized cost,
which include cash and bank balances, notes receivable, accounts receivable, other receivables,
debt investments, and long-term receivables and etc.
Financial assets that meet the following conditions are subsequently measured at fair value
through other comprehensive income ("FVTOCI"): the financial asset is held within a business
model whose objective is achieved by both collecting contractual cash flows and selling; and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. Financial assets at
FVTOCI are presented as other debt investments. Other debt investments due within one year
(inclusive) since the balance sheet date are presented as non-current assets due within one year.
Other debt investments due within one year (inclusive) upon acquisition are presented as other
current assets.
On initial recognition, the Group may irrevocably designate non-trading equity instruments, other
than contingent consideration recognized through business combination not involving enterprises
under common control, as financial assets at FVTOCI on an individual basis. Such financial
assets at FVTOCI are presented as other equity instrument.
A financial asset is classified as held for trading if one of the following conditions is satisfied:
It has been acquired principally for the purpose of selling in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that the
Group manages together and there is objective evidence that the Group has a recent actual
pattern of short-term profit-taking; or
It is a derivative that is not a financial guarantee contract or designated and effective as a
hedging instrument.
- 29 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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
as financial assets at FVTPL and those designated as financial assets at FVTPL.
Any financial assets that does not qualify for amortized cost measurement or measurement
at FVTOCI or designated at FVTOCI are classified into financial assets at FVTPL.
Upon initial recognition, in order to eliminate or significantly reduce accounting mismatch
and qualified hybrid financial instrument combines financial asset with embedded
derivatives, the Group will irrevocably designated it as financial liabilities at FVTPL.
Financial assets at FVTPL assets other than derivative financial assets are presented as "held-for-
trading financial assets". Such financial assets at FVTPL which may fall due more than one year
(or without fixed term) since the balance sheet date and will be held more than one year are
presented as other non-current financial assets.
10.1.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost are subsequently measured at amortized cost using
the effective interest method. Gain or loss arising from impairment or derecognition is recognized
in profit or loss.
For financial assets measured at amortized cost, the Group recognizes interest income using
effective interest method. The Group calculates and recognizes interest income through book
value of financial assets multiplying effective interest, except for the following circumstances:
For purchased or originated credit-impaired financial assets with credit impairment, the
Group calculates and recognizes its interest income based on amortized cost of the financial
asset and the effective interest through credit adjustment since initial recognition.
10.1.2 Financial assets at FVTOCI
Impairment losses or gains related to financial assets at FVTOCI, interest income measured using
effective interest method and exchange gains or losses are recognized into profit or loss for the
current period, except for the above circumstances, changes in fair value of the financial assets are
included in other comprehensive income. Amounts charged to profit or loss for every period equal
to the amount charged to profit or loss as it is measured at amortized costs. When the financial
asset is derecognized, the cumulative gains or losses previously recognized in other
comprehensive income shall be removed from other comprehensive income and recognized in
profit or loss.
- 30 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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 FVTOC I - continued
Changes in fair value of non-trading equity instrument investments designated as financial assets
at FVTOCI are recognized in other comprehensive income, and the cumulative gains or losses
previously recognized in other comprehensive income allocated to the part derecognized are
transferred and included in retained earnings. During the period in which the Group holds the
non-trading equity instrument, revenue from dividends is recognized in profit or loss for the
current period when (1) the Group has established the right of collecting dividends; (2) it is
probable that the associated economic benefits will flow to the Group; and (3) the amount of
dividends can be measured reliably.
10.1.3 Financial assets at FVTPL
Financial assets at FVTPL are subsequently measured at fair value. Gain or loss arising from
changes in fair values and dividends and interests related to the financial assets are recognized in
profit or loss.
10.2 Impairment of financial instruments
The Group makes accounting treatment on impairment and recognizes loss allowance for
expected credit losses ("ECL") on financial assets measured at amortized cost, financial assets
classified as at FVTOCI, lease receivables, contract assets, loan commitments that are not
financial liabilities at FVTPL, financial liabilities not measured at FVTPL, financial guarantee
contracts arising from transfer of financial assets which does not satisfy derecognition criteria or
continuing involvement of transferred financial assets.
The Group makes a loss allowance against amount of lifetime ECL of the contract assets, notes
receivable and accounts receivable arising from transactions adopting the Revenue Standard as
well as lease receivables arising from transactions adopting ASBE No. 21- Leases.
For other financial instrument, other than purchased or originated credit-impaired financial assets,
the Group assesses changes in credit risks of the relevant financial asset since initial recognition at
each balance sheet date. If the credit loss of the financial instrument has been significantly
increased since initial recognition, the Group will make a loss allowance at an amount of expected
credit loss during the whole life; if not, the Group will make a loss allowance for the financial
instrument at an amount in the future 12-month expected credit losses. Except for the financial
assets classified as at FVTOCI, increase in or reversal of credit loss allowance is included in profit
or loss as loss/gain on impairment. For the financial assets classified as at FVTOCI, the Group
recognizes credit loss allowance in other comprehensive income and recognizes the loss/gain on
impairment in profit or loss, while the Group does not decrease the carrying amount of such
financial assets in the balance sheet.
- 31 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
The Group has makes a loss allowance against amount of expected credit losses during the whole
life in the prior accounting period. However, at the balance sheet date, the credit risk on a
financial instrument has not increased significantly since initial recognition; the Group will
measure the loss allowance for that financial instrument at an amount in the future 12-month
expected credit losses. Reversed amount of loss allowance arising from such circumstances shall
be included in profit or loss as impairment gains.
10.2.1 Significant increase of credit risk
In assessing whether the credit risk has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial instrument as at the reporting date with
the risk of a default occurring on the financial instrument as at the date of initial recognition. For
loan commitments, the date that the Group becomes a party to the irrevocable commitment is
considered to be the date of initial recognition in the application of criteria related to the financial
instrument for impairment.
In particular, the following information is taken into account when assessing whether credit risk
has increased significantly:
(1) Significant changes in internal price indicators of credit risk as a result of a change in
credit risk;
(2) Other changes in the rates or terms of an existing financial instrument that would be
significantly different if the instrument was newly originated or issued at the balance sheet
date (such as more stringent covenants, increased amounts of collateral or guarantees, or
higher income coverage).
(3) Significant changes in external market indicators of credit risk for a particular financial
instrument or similar financial instruments with the same expected life. These indicators
include the credit spread, the credit swap prices for the borrower, the length of time or the
extent to which the fair value of a financial asset has been less than its amortized cost and
other market information related to the borrower, such as changes in the price of a
borrower’s debt and equity instruments.
(4) Significant changes in actual or expected external credit rating for the financial
instruments;
(5) An actual or expected internal credit rating downgrade for the borrower
(6) Adverse changes in business, financial or economic conditions that are expected to cause a
significant change in the debtor’s ability to meet its debt obligations;
(7) An actual or expected significant change in the operating results of the debtor;
(8) Significant increases in credit risk on other financial instruments of the same borrower;
(9) Significant adverse change in the regulatory, economic, or technological environment of
the debtor;
- 32 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.1 Significant increase of credit risk - continued
(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’s economic incentive to make scheduled contractual payments or to otherwise have
an effect on the probability of a default occurring.
(11) Significant changes in circumstances expected to reduce the debtor’s economic incentive
to make scheduled contractual payments;
(12) Expected changes in the loan documentation including an expected breach of contract that
may lead to covenant waivers or amendments, interest payment holidays, interest rate
step-ups, requiring additional collateral or guarantees, or other changes to the contractual
framework of the financial instrument;
(13) Significant changes in the expected performance and behavior of the debtor;
(14) Changes in the entity’s credit management approach in relation to the financial instrument;
(15) Past due of contract payment.
The Group assumes that the credit risk on a financial instrument has not increased significantly
since initial recognition if the financial instrument is determined to have lower credit risk at the
balance sheet date. A financial instrument is determined to have lower credit risk if: i) it has a
lower risk of default, ii) the borrower has a strong capacity to meet its contractual cash flow
obligations in the near term and iii) adverse changes in economic and business conditions in the
longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its
contractual cash flow obligations.
10.2.2 Credit-impaired financial assets
When the Group expected occurrence of one or more events which may cause adverse impact on
future cash flows of a financial asset, the financial asset will become a credit-impaired financial
assets. Objective evidence that a financial asset is impaired includes but not limited to the
following observable events:
(1) Significant financial difficulty of the issuer or debtor;
(2) A breach of contract by the debtor, such as a default or delinquency in interest or principal
payments;
(3) The creditor, for economic or legal reasons relating to the debtor’s financial difficulty,
granting a concession to the debtor;
(4) It becoming probable that the debtor will enter bankruptcy or other financial reorganizations;
(5) The disappearance of an active market for that financial asset because of financial
difficulties of the issuer or the debtor;
(6) Purchase or originate a financial asset with a large scale of discount, which reflects facts
of credit loss incurred.
- 33 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.3 Determination of expected credit loss
Lease receivables are assessed for ECL individually by the Group. In addition, the Group uses
provision matrix to calculate ECL for notes receivable, accounts receivable, other receivables,
contract assets, debt investments and other debt investments based on a portfolio basis. The Group
classifies financial instruments into different groups based on common risk characteristics.
Common credit risk characteristics include credit risk rating, the date of initial recognition,
remaining contractual maturity, industry of borrower and geographical location of the borrower
etc.
The Group determines expected credit losses of relevant financial instruments using the following
methods:
For a financial asset, a credit loss is the present value of the difference between the
contractual cash flows that are due to the Group under the contract and the cash flows that
the Group expects to receive;
For a lease receivable, a credit loss is the present value of the difference between the
contractual cash flows that are due to the Group under the contract and the cash flows that
the Group expects to receive;
For undrawn loan commitments (refer to Note III, 10.4.1.3 for the detail of accounting
policies), the ECL is the present value of the difference between the contractual cash flows
that are due to the Group if the holder of the loan commitments draws down the loan, and
the cash flows that the Group expects to receive if the loan is drawn down. The Group's
estimation of the ECL for loan commitments is consistent with its expectation of the loan
commitments drawn down.
For a financial guarantee contract (refer to Note III, 10.4.1.3 for the detail of accounting
policies ), the expected losses is the present value of the expected payments to reimburse the
holder for a credit loss that it incurs less any amounts that the Group expects to receive from
the holder, the debtor or any other party.
For a financial asset with credit-impaired at the balance sheet date, but not purchased or
originated credit-impaired, a credit losses is the difference between the asset’s gross
carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s original effective interest rate.
The factors reflected in methods of measurement of expected credit losses include an unbiased
and probability-weighted amount that is determined by evaluating a range of possible outcomes;
time value of money; reasonable and supportable information about past events, current
conditions and forecasts on future economic status at balance sheet date without unnecessary
additional costs or efforts.
- 34 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial instruments - continued
10.2.4 Write-down of financial assets
When the Group will no longer reasonably expect that the contractual cash flows of financial
assets can be collected in aggregate or in part, the Group will directly write down the carrying
amount 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) the
contractual rights to the cash flows from the financial asset expire; (ii) the financial asset has been
transferred and substantially all the risks and rewards of ownership of the financial asset is
transferred to the transferee; or (iii) although the financial asset has been transferred, the Group
neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset 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 a
financial asset, and it retains control of the financial asset, the Group will recognize the financial
asset to the extent of its continuing involvement in the transferred financial asset and recognize an
associated liability. The Group will measure relevant liabilities as follows:
For transferred financial assets carried at amortized cost, the carrying amount of relevant
liabilities is the carrying amount of financial assets transferred with continuing involvement
less amortized cost of the Group's retained rights (if the Group retains relevant rights upon
transfer of financial assets) with addition of amortized cost of obligations assumed by the
Group (if the Group assumes relevant obligations upon transfer of financial assets). Relevant
liabilities 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
involvement less fair value of the Group's retained rights (if the Group retains relevant rights
upon transfer of financial assets) with addition of fair value of obligations assumed by the
Group (if the Group assumes relevant obligations upon transfer of financial assets).
Accordingly, the fair value of relevant rights and obligations shall be measured on an
individual basis.
- 35 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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
difference between (1) the carrying amount of the financial asset transferred and (2) the sum of
the consideration received from the transfer and accumulated changes in fair value initially
recorded in other comprehensive income is recognized in profit or loss. For the non-tradable
equity instrument designated as financial assets at FVTOCI, cumulative gain or loss that has been
recognized in other comprehensive income should be removed from other comprehensive income
but be recognized in retained earnings.
For a part of transfer of a financial asset that satisfies the derecognition criteria, the carrying
amount of the transferred financial asset is allocated between the part that is derecognized and the
part that is continuously involved, based on the respective fair values of those parts on transfer
date. The difference between (1) the sum of the consideration received for the part derecognized
and any cumulative gain or loss allocated to the part derecognized which has been previously
recognized in other comprehensive income; and (2) the carrying amount allocated to the part
derecognized on derecognition date; is recognized in profit or loss. For the non-tradable equity
instrument designated as financial assets at FVTOCI, cumulative gain or loss that has been
recognized in other comprehensive income should be removed from other comprehensive income
but be recognized in retained earnings.
For a transfer of a financial asset in its entirety that does not satisfy the derecognition criteria, the
Group will continuously recognize the transferred financial asset in its entirety. Considerations
received due to transfer of assets should be recognized as a liability upon receipts.
10.4 Classification of financial liabilities and equity instruments
Financial instruments issued by the Group are classified into financial liabilities or equity
instruments on the basis of the substance of the contractual arrangements and the economic nature
not only its legal form, together with the definition of financial liability and equity instruments on
initial recognition.
10.4.1 Classification, recognition and measurement of financial liabilities
On initial recognition, financial liabilities are classified into financial liabilities at FVTPL and
other financial liabilities.
10.4.1.1 Financial liabilities at FVTPL
Financial liabilities at FVTPL consist of financial liabilities held for trading (including derivatives
classified as financial liabilities) and those designated as at FVTPL. Except for derivative
financial liabilities presented separately, the financial liabilities at FVTPL are presented as held-
for-trading financial liabilities.
- 36 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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 acquired principally for the purpose of repurchasing in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that the
Group manages together and there is objective evidence that the Group has a recent actual
pattern of short-term profit-taking; or
It is a derivative that is not a financial guarantee contract or designated and effective as a
hedging instrument.
A financial liability may be designated as at FVTPL on initial recognition when one of the
following conditions 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, in accordance with the Group's formally documented risk management or investment
strategy, and reports to key management personnel on that basis. (iii) The qualified hybrid
financial instrument combines financial asset with embedded derivatives.
Transaction financial liabilities are subsequently measured at fair value. Any gains or losses
arising from changes in the fair value and any dividend or interest expenses paid on the financial
liabilities are recognized in profit or loss.
The amount of change in the fair value of the financial liability that is attributable to changes in
the credit risk of that liability shall be presented in other comprehensive income, other changes in
fair values are included in profit or loss for the current period. Upon the derecognition of such
liability, the accumulated amount of change in fair value that is attributable to changes in the
credit risk of that liability, which is recognized in other comprehensive income, is transferred to
retained earnings. Any dividend or interest income earned on the financial liabilities are
recognized in profit or loss. If the impact of the change in credit risk of such financial liability
dealt with in the above way would create or enlarge an accounting 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.
Financial liabilities are measured at FVTPL when the financial liabilities is arising from
contingent consideration recognized by the Group as an acquirer in a business combination not
involving enterprises under common control.
- 37 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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 from
transfer of financial assets that do not meet the derecognition criteria or those arising from
continuing involvement in the transferred financial assets, other financial liabilities are
subsequently measured at amortized cost, with gain or loss arising from derecognition or
amortization recognized in profit or loss.
That the Group and its counterparty modify or renegotiate the contract does not result in
derecognition of a financial liability subsequently measured at amortized cost but result in
changes in contractual cash flows, the Group will recalculate the carrying amount of the financial
liability, with relevant gain or loss recognized in profit or loss. The Group will determine carrying
amount of the financial liability based on the present value of renegotiated or modified contractual
cash flows discounted at the financial liability's original effective interest rate. For all costs or
expenses arising from modification or renegotiation of the contract, the Group will adjust the
modified carrying amount of the financial liability and make amortization during the remaining
term of the modified financial liability.
10.4.1.3 Financial guarantee contracts and loan commitments
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder of the contract for a loss it incurs because a specified debtor fails to make
payment 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 financial
liabilities at fair value through profit or loss or financial liabilities arising from transfer of
financial assets that do not meet the derecognition criteria or those arising from continuing
involvement in the transferred financial assets, and loan commitments to provide a loan at a
below-market interest rate, 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 amortization amount determined based on the revenue standard.
10.4.2 Derecognition of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation
(or part of it) is discharged. An agreement between the Group (the debtor) and the creditor to
replace the original financial liability with a new financial liability with substantially different
terms is accounted for as an extinguishment of the original financial liability and the recognition
of a new financial liability.
- 38 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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
between the carrying amount of the financial liability (or part of the financial liability)
derecognized and the consideration paid (including any non-cash assets transferred or 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 Group
after deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased,
sold and cancelled by the Group are recognized as changes of equity. Changes of fair value of
equity instruments is not recognized by the Group. Transaction costs related to equity transactions
are deducted 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 foreign
exchange options, etc. Derivatives are initially measured at fair value at the date when the
derivative contracts are entered into and are subsequently re-measured at fair value.
Derivatives embedded in hybrid contracts with a financial asset host are not separated by the
Group. The hybrid contract shall apply to the relevant accounting standards regarding the
classification of financial assets as a whole.
Derivatives embedded in hybrid contracts with hosts that are not financial assets are separated and
treated as separate derivatives by the Group when they meet the following conditions:
(1) the economic characteristics and risks of the embedded derivative are not closely related to
those of the host contract;
(2) a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative.
(3) the hybrid contracts are not measured at fair value through profit or loss.
- 39 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.5 Derivatives and embedded derivatives - continued
For the embedded derivative separated from the host contracts, the Group accounts for the host
contracts in the hybrid contracts with applicable accounting standards. When the embedded
derivatives whose fair value cannot be measured reliably by the Group according to the terms and
conditions of the embedded derivatives, the fair value of such derivatives are measured at the
difference between the fair value of the hybrid contracts and the fair value of the host contracts.
By adopting the above method, if the embedded derivative cannot be measured on a stand-alone
basis at the time when acquired or at subsequent balance sheet dates, the hybrid instrument is
designated as financial instruments at fair value through profit or loss as a whole.
10.6 Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognized financial
assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial
asset and settle the financial liability simultaneously, a financial asset and a financial liability shall
be 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 shall
not be offset.
10.7 Reclassification of financial instruments
When the Group changes the business model to manage the financial assets, the financial assets
affected 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
date of reclassification (i.e. the first date of the initial reporting period after the business model of
which the financial assets are reclassified by the enterprise is changed).
Where a financial asset at amortised cost is reclassified as a financial assets at fair value through
profit or loss ("FVTPL") by the Group, such financial asset is measured at fair value at the date of
reclassification and the difference between the original carrying amount and the fair value is
recognized in profit or loss for the period.
Where a financial asset at amortised cost is reclassified as a financial asset at fair value through
other comprehensive income ("FVTOCI") by the Group, such financial asset is measured at the
fair value at the date of reclassification, and the difference between the original amount and the
fair value is recognized in other comprehensive income.
- 40 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
10. Financial instruments - continued
10.7 Reclassification of financial instruments- continued
Where a financial asset at FVTOCI is reclassified as a financial asset at amortised cost by the
Group, the accumulated gains or losses previously recognized in other comprehensive income are
transferred out and the fair value is adjusted as the fair value at the date of reclassification. The
adjusted fair value is recognized as the new carrying amount, as if the financial asset had been
measured at amortised cost.
Where a financial asset at FVTOCI is reclassified as a financial asset at FVTPL by the Group,
such financial asset continues to be accounted for at fair value. At the same time, the accumulated
gains or losses previously recognized in other comprehensive income are transferred to profit or
loss for the period.
Where a financial asset at FVTPL is reclassified as a financial asset at amortised cost by the
Group, the fair value at the date of reclassification is recognized as the new account balance.
Where a financial asset at FVTPL is reclassified as a financial asset at FVTOCI by the Group,
such financial asset continues to be measured at fair value.
Where a financial asset at FVTPL is reclassified, the effective interest rate is determined on the
basis of the fair value of the financial asset at the date of reclassification.
11. Accounts receivable
The Group makes internal credit ratings on customers and determines expected losses rate of
notes receivable, accounts receivable and other receivables. Basis for determining ratings and the
expected losses rates are as follows:
Internal credit Average expected loss
Basis for determining portfolio
rating rate (%)
Customers can make repayments within credit term
and have good credit records based on historical
A experience. The probability of default on payment of 0.00-0.10
due amounts is extremely low in the foreseeable
future.
The customer may have overdue payment based on
B 0.10-0.30
historical experience but they can make repayments.
The evidences indicate that the overdue credit risks
C of the customer are significantly increased and there 0.30-50.00
is probability of default on payment.
The evidences indicate that the accounts receivable
are impaired or the customer has significant financial
D 50.00-100.00
difficulty. The amounts cannot be recovered in the
foreseeable future.
- 41 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
12. Receivables financing
Notes receivable classified to hedging instruments for the purpose of hedging, should be listed as
receivables financing within one year (including one year). If the term above one year, it should
be listed as other investment on bonds. Related accounting policies refer to Note III, 10.
13. Inventories
13.1 Categories of inventories
Inventories include raw materials, merchandise and others. Inventories are initially measured at
cost. Cost of inventories comprises all costs of purchase, costs of conversion and other
expenditures incurred in bringing the inventories to their present location and condition.
13.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
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. If
the cost of inventories is higher than the net realizable value, a provision for decline in value of
inventories is made. Net realizable value is the estimated selling price in the ordinary course of
business less the estimated 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 into consideration the purposes of inventories being held and effect of post balance sheet
events.
Provision for decline in value of other inventories is made based on the excess of cost of
inventory over its net realizable value on an item-by-item basis.
After the provision for decline in value of inventories is made, if the circumstances that
previously caused inventories to be written down below cost no longer exist so that the net
realizable value of inventories is higher than their cost, the original provision for decline in value
is reversed and the reversal is included in profit or loss for the period.
13.4 Inventory count system
The perpetual inventory system is maintained for stock system.
- 42 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
13. Inventories - continued
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 the
immediate 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
that the Group has transferred to a customer, and such right depends on factors other than the
passage of time. The Group's unconditional right (only the passage of time is required) to
consideration from the customer is separately presented as " accounts receivable".
14.2 Determination and accounting treatments of expected credit losses ("ECL") for contract
assets
Refer to Note III,10.2 " Impairment of financial instruments" for determination and accounting
treatments of expected credit losses for contract assets.
15. Assets held for sale
When the Group withdraw the book value of certain assets or disposal group mainly through
disposal instead of continual application, the assets should be classified as held-for-sale assets.
Assets or disposal group classified as held-for-sale assets should meat following conditions: (1)
The current status is available for immediate distribution according to similar transactions of this
category of assets or disposal group; (2) The transaction is likely to occur, i.e. the Group has made
its resolution over the distribution arrangements and acquired purchase commitment. Also the
distribution is going to be fulfilled within a year.
If the holding company loses control of its subsidiary for reasons like subsidiary disposal, in
regardless of whether the holding company still keeps part of equity investment, once the
proposed investment disposal meets the requirements of being classified as available for sale
assets in the holding company's individual statement, all assets and liabilities of the subsidiary
should be classified as held-for-sale in consolidated financial statement.
- 43 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
15. Assets held for sale - continued
The group's non-current assets and disposal group are measured at the lower of book value and
the net value of fair value less costs to sell. Once the book value is higher than the net value of
fair value less costs to sell, the book value should be adjusted to the net value and the excess
should be recognized as impairment losses and provision for held-for-sale assets impairment
should be made. A gain and a reverse in the previous provision for held-for-sale assets impairment
can be recognized for any increase in fair value less costs to sell at subsequent balance sheet dates,
to the extent that it is not in excess of the cumulative impairment loss that has been recognized.
Asset impairment losses recognized before such assets are classified as held for sale will not be
reversed.
Non-current held-for-sale assets is not subject to depreciation and amortization. The creditor
interest and other expenses of disposal group classified as held-for-sale asset should still be
recognized.
Once the associate or joint venture equity investment is completely or partly classified as held-
for-sale assets, the classified part of the investment is not subject to equity method measurement.
If an asset or a disposal group has been classified as held for sale but the recognition criteria for
non-current assets held for sale are no longer met, the Group shall cease to classify the asset or
disposal group as held for sale. It shall be measured at the lower of (1) the carrying amount before
the asset or disposal group was classified as held for sale, adjusted for any depreciation,
amortisation or impairment that would have been recognised had the asset or disposal group not
been classified as held for sale; and (2) the recoverable amount at the date of the decision not to
sell.
For equity investments in associates or joint ventures that are classified as held for sale but the
recognition for non-current assets held for sale are no longer met, such investments are accounted
for retrospectively using the equity method from the date when they classified as held for sale.
The financial statements for the held-for-sale period are adjusted accordingly.
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 variable
returns from its involvement with the investee; and has the ability to use its power to affect its
returns. Joint control is the contractually agreed sharing of control over an economic activity, and
exists only when the strategic financial and operating policy decisions relating to the activity
require the unanimous consent of the parties sharing control. Significant influence is the power to
participate in the financial and operating 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 significant influence over an investee, the effect of potential voting rights of the
investee (for example, warrants and convertible debts) held by the investing enterprises or other
parties that are currently exercisable or convertible shall be considered.
- 44 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.2 Determination of initial investment cost
For a long-term equity investment acquired through a business combination involving enterprises
under common control, the investment cost of the long-term equity investment is the attributable
share of the carrying amount of the shareholders' equity of the acquiree at the date of combination.
The difference between the initial investment cost and the carrying amount of cash paid, non-cash
assets transferred and liabilities assumed shall be adjusted to capital reserve. If the balance of
capital reserve is not sufficient, any excess shall be adjusted to retained earnings. If the
consideration of the combination is satisfied by the issue of equity securities, the initial
investment cost of the long-term equity investment shall be the share of party being absorbed of
the owners' equity in the consolidated financial statements of the ultimate controlling party at the
date of combination. The aggregate face value of the shares issued shall be accounted for as share
capital. The difference between the initial investment cost and the aggregate face value of the
shares issued shall be adjusted to capital reserve. If the balance of capital reserve is not sufficient,
any excess shall be adjusted to retained earnings. Where equity interests in an acquiree are
acquired in stages through multiple transactions ultimately constituting a business combination
involving entities under common control, the acquirer shall determine if these transactions are
considered to be a "package deal". If yes, these transactions are accounted for as a single
transaction where control is obtained. If no, the initial investment cost of the long-term equity
investment is the share of book value of owners' equity of the acquired entity in the ultimate
controlling party's consolidated financial statements at the date of combination. The difference
between the initial investment cost and the sum of carrying amount of equity investments
previously held in the acquiree and the new investment cost is adjusted to capital reserve. If the
balance of capital reserve is not sufficient to absorb the difference, any excess is adjusted to
retained earnings. Other comprehensive income recognized for the previously held equity
investments by accounting treatment of equity method or available-for-sale financial assets is not
subject to accounting treatment temporarily.
For a long-term equity investment acquired through business combination not involving
enterprises under common control, the investment cost of the long-term equity investment
acquired is the cost of acquisition.
The absorbing party's or purchaser's intermediary expenses (fees in respect of auditing, legal
services, valuation and consultancy services, etc.) and other administrative expenses attributable
to the business combination are recognized in profit or loss in the periods when they are incurred.
The long-term equity investment acquired otherwise than through a business combination is
initially measured at its cost. When the entity is able to exercise significant influence or joint
control (but not control) over an investee due to additional investment, the cost of long-term
equity investments is the sum of the fair value of previously-held equity investments determined
in accordance with Accounting Standard for Business Enterprises No.22 - Financial Instruments:
Recognition and Measurement (ASBE No. 22) and the additional investment cost.
- 45 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
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 the
Company's separate financial statements. A subsidiary is an investee that is controlled by the
Group.
Under the cost method, a long-term equity investment is measured at initial investment cost.
Additional or withdrawing investment would affect the cost of long-term equity investment.
Investment income is recognized in the period in accordance with the attributable share of cash
dividends or profit distributions declared by the investee.
16.3.2 Long-term equity investments accounted for using the equity method
Except associate and joint venture investment completely or partly classified as available for sale,
and The Group accounts for investment in associates and joint ventures using the equity method.
An associate is an entity over which the Group has significant influence and a joint venture is a
joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint arrangement.
Under the equity method, where the initial investment cost of a long-term equity investment
exceeds the 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 than the 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 equity investment is adjusted accordingly.
- 46 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.3 Subsequent measurement and recognition of profit or loss - continued
16.3.2 Long-term equity investments accounted for using the equity method - continued
Under the equity method, the Group recognizes its share of the other comprehensive income and
net profit or loss of the investee for the period as other comprehensive income and investment
income or loss respectively for the period, and the carrying amount of the long-term equity
investment is adjusted accordingly. The carrying amount of the investment shall be reduced by the
portion of any profit distributions or cash dividends declared by the investee that is distributed to
the investing enterprise. The investing enterprise shall adjust the carrying amount of the long-term
equity investment for other changes in owners' equity of the investee (other than net profits or
losses, other comprehensive income and profit distribution), and include the corresponding
adjustment in capital reserve. The Group recognizes its share of the investee's net profit or loss
based on the fair value of the investee's individually identifiable assets at the acquisition date after
making appropriate adjustments. Where the accounting policies and accounting period adopted by
the investee are different from those of the investing enterprise, the investing enterprise shall
adjust the financial statements of the investee to conform to its own accounting policies and
accounting period, and recognize other comprehensive income and investment income or losses
based on the adjusted financial statements. Unrealized profits or losses resulting from the Group's
transactions and assets invested or sold that are not recognized as business transactions with its
associates and joint ventures are recognized as investment income or loss to the extent that those
attributable to the Group's, equity interest are eliminated. However, unrealized losses resulting
from the Group's transactions with its associates and joint ventures which represent impairment
losses on the transferred assets are not eliminated.
The Group discontinues recognizing its share of net losses of the investee after the carrying
amount of the long-term equity investment together with any long-term interests that in substance
form part of its net investment in the investee are reduced to zero. Except that if the Group has
incurred obligations to assume additional losses, a provision is recognized according to the
obligation expected, and recorded in the investment loss for the period. Where net profits are
subsequently made by the investee, the Group resumes recognizing its share of those profits only
after its share of the profits exceeds the share of losses previously not recognized.
16.4 Disposal of long-term equity investments
On disposal of a long-term equity investment, the difference between the proceeds actually
received and receivable and the carrying amount is recognized in profit or loss for the period.
For long-term equity investments accounted for using the equity method, if the remaining interest
after disposal is still accounted for using the equity method, other comprehensive income
previously recognized for using the equity method is accounted for on the same basis as would
have been required if the investee had directly disposed of related assets or liabilities, and
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 net profit or loss, other comprehensive
income and profit distribution) is transferred to profit or loss for the period on a pro rata basis.
- 47 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
16. Long-term equity investments - continued
16.4 Disposal of long-term equity investments - continued
For long-term equity investments accounted for using the cost method, if the remaining interest
after disposal is still accounted for using the cost method, other comprehensive income previously
recognized for using the equity method or in accordance with the standards for the recognition
and measurement of financial instruments before obtaining the control over the investee, is
accounted for on the same basis as would have been required if the investee had directly disposed
of related assets or liabilities, and transferred to profit or loss for the period on a pro rata basis;
changes in other owners' equity in the investee's net assets recognized under the equity method
(other than net profit or loss, other comprehensive income and profit distribution) is transferred to
profit or loss for the period on a pro rata basis.
17. Investment properties
Investment property is property held to earn rentals or for capital appreciation or both. It includes
a land use right that is leased out; a land use right held for transfer upon capital appreciation; and
a building that is leased out.
An investment property is measured initially at cost. Subsequent expenditures incurred for such
investment property are included in the cost of the investment property if it is probable that
economic benefits associated with an investment property will flow to the Group and the
subsequent expenditures can be measured reliably, other subsequent expenditures are recognized
in profit or loss in the period in which they are incurred.
The Group uses the cost model for subsequent measurement of investment property, and adopts a
depreciation or amortization policy for the investment property which is consistent with that for
buildings or land use rights.
An investment property is derecognized upon disposal or when the investment property is
permanently withdraw from use and no future economic benefits are expected from the disposal.
When an investment property is sold, transferred, retired or damaged, the Group recognizes the
amount of any proceeds on disposal net of the carrying amount and related taxes in profit or loss
for the period.
- 48 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
18. Fixed assets
18.1 Recognition criteria for fixed assets
Fixed assets are tangible assets that are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes, and have useful lives of more than
one accounting year. A fixed asset is recognized only when it is probable that economic benefits
associated with the asset will flow to the Group and the cost of the asset can be measured reliably.
Fixed assets are initially measured at cost. Upon being restructured into a stock company, the
fixed assets initially contributed by the state-owned shareholders are recognized based on the
valuation 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 and
if it is probable that economic benefits associated with the asset will flow to the Group and the
subsequent expenditures can be measured reliably. Meanwhile the carrying amount of the
replaced part is derecognized. Other subsequent expenditures are recognized in profit or loss in
the period in which they are incurred.
18.2 Depreciation method
A fixed asset is depreciated over its useful life using the straight-line method starting from the
month subsequent to the one in which it is ready for intended use. The useful life, estimated net
residual value rate and annual depreciation rate of each category of fixed assets are as follows:
Estimated Estimated Annual
Category
useful lives residual value (%) depreciation rate (%)
Port and terminal facilities 5-50 years 5.00 1.90-19.00
Buildings and structures 10-50 years 5.00 1.90-9.50
Machinery and equipment, furniture and
3-20 years 5.00 4.75-31.67
fixture and other equipment
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
currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the
asset were already of the age and in the condition expected at the end of its useful life.
18.3 Other explanations
If a fixed asset is upon disposal or no future economic benefits are expected to be generated from
its use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired
or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and
related taxes is recognized in profit or loss for the period.
The Group reviews the useful life and estimated net residual value of a fixed asset and the
depreciation method applied at least once at each financial year-end, and account for any change
as a change in an accounting estimate.
- 49 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
19. Construction in progress
Construction in progress is measured at its actual costs. The actual costs include various
construction expenditures during the construction period, borrowing costs capitalized before it is
ready for intended use and other relevant costs. Construction in progress is not depreciated.
Construction in progress is transferred to a fixed asset when it is ready for intended use.
20. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
asset are capitalized when expenditures for such asset and borrowing costs are incurred and
activities relating to the acquisition, construction or production of the asset that are necessary to
prepare the asset for its intended use or sale have commenced. Capitalization of borrowing costs
ceases when the qualifying asset being acquired, constructed or produced becomes ready for its
intended use or sale. Capitalization of borrowing costs is suspended during periods in which the
acquisition, construction or production of a qualifying asset is interrupted abnormally and when
the interruption is for a continuous period of more than 3 months. Capitalization is suspended
until the acquisition, construction or production of the asset is resumed. Other borrowing costs are
recognized 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 be
capitalized is the actual interest expense incurred on that borrowing for the period less any bank
interest earned from depositing the borrowed funds before being used on the asset or any
investment income 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
such borrowings by applying a capitalization rate to the weighted average of the excess of
cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The
capitalization rate is the weighted average of the interest rates applicable to the general-purpose
borrowings. During the capitalization period, exchange differences related to a specific-purpose
borrowing denominated in foreign currency are all capitalized. Exchange differences in
connection with general-purpose borrowings are recognized in profit or loss in the period in
which they are incurred.
21. Intangible assets
21.1 Valuation method and useful life of intangible assets
An intangible asset is measured initially at cost. Upon being restructured into a stock company,
the intangible assets initially contributed by the state-owned shareholders are recognized based 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 for use, its
original cost is amortized over its estimated useful life The terminal operating rights are amortized
using the output method, that is, amortized through periods according to the ratio of the estimated
minimum guaranteed throughput to the estimated minimum guaranteed total throughput during
the operation period. When the estimated minimum guaranteed throughput cannot be measured
reliably, the straight-line method will be used for amortization. An intangible asset with uncertain
useful life will not be amortized. The amortization method, useful life and estimated net residual
value of various intangible assets are as follows:
- 50 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
21. Intangible assets - continued
21.1 Valuation method and useful life of intangible assets - continued
Category Amortization Method Useful Life (year) Residual value (%)
Land use rights Straight-line method 40-50 -
Terminal operating right Output/Straight-line method 30-35 -
Others Straight-line method 5-50 -
For an intangible asset with a finite useful life, the Group reviews the useful life and amortization
method at the end of the year, and makes adjustments when necessary.
21.2 Internal research and development expenditure
Expenditure during the research phase is recognised as an expense in the period in which it is
incurred.
Expenditure during the development phase that meets all of the following conditions at the same
time is recognised as intangible asset. Expenditure during development phase that does not meet
the following conditions is recognised in profit or loss for the period.
(1) it is technically feasible to complete the intangible asset so that it will be available for use
or sale;
(2) the Group has the intention to complete the intangible asset and use or sell it;
(3) the Group can demonstrate the ways in which the intangible asset will generate economic
benefits, including the evidence of the existence of a market for the output of the
intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness
of the intangible asset;
(4) the availability of adequate technical, financial and other resources to complete the
development and the ability to use or sell the intangible asset; and
(5) the expenditure attributable to the intangible asset during its development phase can be
reliably measured.
If the expenditures cannot be distinguished between the research phase and development phase,
the Group recognises all of them in profit or loss for the period. The costs of intangible assets
generated by the internal research only include the total expenditure incurred for the period from
the time point of capitalization to the intangible assets are ready for intended use. For the identical
intangible asset, the expenditures recorded as expenses before they qualify for capitalization
during the development process are not adjusted.
- 51 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
22. Impairment of long-term assets
The Group assesses at the balance sheet date whether there is any indication that the long-term
equity investments, investment properties measured at cost method, construction in progress,
fixed assets, right-of-use assets and intangible assets with a finite useful life 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 and intangible assets not yet available for
use are tested for impairment annually, irrespective of whether there is any indication that the
assets may be impaired.
Recoverable amount is estimated on individual basis. If it is not practical to estimate the
recoverable amount of an individual asset, the recoverable amount of the asset group to which the
asset belongs will be estimated. The recoverable amount of an asset is the higher of its fair value
less costs of disposal and the present value of the future cash flows expected to be derived from
the asset.
If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit
is accounted for as an impairment loss and is recognized in profit or loss.
Goodwill is tested for impairment at least at the end of each year. For the purpose of impairment
testing, goodwill is considered together with the related assets groups, i.e., goodwill is reasonably
allocated to the related assets groups or each of assets groups expected to benefit from the
synergies of the combination. In testing an assets group with goodwill for impairment, an
impairment loss is recognized if the recoverable amount of the assets group or sets of assets
groups (including goodwill) is less than its carrying amount. The impairment loss is firstly
allocated to reduce the carrying amount of any goodwill allocated to such assets group or sets of
assets groups, and then to the other assets of the group pro-rata basis on the basis of the carrying
amount of each asset (other than goodwill) in the group.
Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in any
subsequent period.
23. Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized over
the current and subsequent periods (together of more than one year). Long-term prepaid expenses
are 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
for which the Group has received consideration (or an amount of consideration is due) from the
customer. A contract asset and a contract liability relating to the same contract are accounted for
and presented on a net basis.
- 52 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits
25.1 Accounting treatment of short-term employee benefits
Actually occurred short-term employee benefits are recognized as liabilities, with a corresponding
charge to the profit or loss for the period or in the costs of relevant assets in the accounting period
in which employees provide services to the Group. Staff welfare expenses incurred by the Group
are recognized in profit or loss for the period or the costs of relevant assets based on the actually
occurred amounts when it actually occurred. Non-monetary staff welfare expenses are measured
at fair value.
Payment made by the Group of social security contributions for employees such as premiums or
contributions on medical insurance, work injury insurance and maternity insurance, etc. and
payments of housing funds, as well as union running costs and employee education costs provided
in accordance with relevant requirements, are calculated according to prescribed bases and
percentages in determining the amount of employee benefits and recognized as relevant liabilities,
with a corresponding charge to the profit or loss for the period or the costs of relevant assets in the
accounting period in which employees provide services.
25.2 Accounting treatment of post-employment benefits
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
During the accounting period of rendering service to employees of the Group, amount which
should be paid according to defined contribution plans is recognized as liabilities, and recognized
in profit or loss or related costs of assets.
For defined benefit plans, the Group calculates defined benefit plan obligations using projected
unit credit method and the service cost resulting from employee service in the current period is
recorded in profit or loss or the cost of related assets. Defined benefit costs are categorized as
follows:
Service cost (including current service cost, past service cost, as well as gains and losses on
settlements);
Net interest of net liabilities or assets of defined benefit plan (including interest income of
planned assets, interest expenses of defined benefit plan liabilities and effect of asset ceiling);
and
Changes arising from remeasurement of net liabilities or net assets of defined benefit plans.
- 53 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
25. Employee benefits - continued
25.2 Accounting treatment of post-employment benefits - continued
Service costs and net interest of net liabilities and net assets of defined benefit plans are
recognized in profit or loss of current period or costs of related assets. Remeasurement of the net
defined benefit liability (asset) (including actuarial gains and losses, the return on plan assets,
excluding amounts included in net interest on the net defined benefit liability (asset), and any
change in the effect of the asset ceiling, excluding amounts included in net interest on the net
defined benefit liability (asset)) are recognized in other comprehensive income.
25.3 Accounting treatment of termination benefits
When the Group provides termination benefits to employees, employee benefit liabilities are
recognized for termination benefits, with a corresponding charge to the profit or loss for the
period at the earlier of: (1) when the Group cannot unilaterally withdraw the offer of termination
benefits because of the termination plan or a curtailment proposal; and (2) when the Group
recognizes costs or expenses related to restructuring that involves the payment of termination
benefits.
26. Provisions
Provisions are recognized when the Group has a present obligation related with contingencies, it
is probable that the Group will be required to settle that obligation causing an outflow of
economic benefits, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle
the present obligation at balance sheet date, taking into account the risks, uncertainties and time
value of money surrounding the obligation. When a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash
flows where the effect of the time value of money is material.
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognized as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable should not exceed the carrying
amount of provisions.
27. Revenue
The Group's revenue is mainly from the following business types:
(1) Port service;
(2) Bonded logistics service
(3) Other business such as property development and investment.
- 54 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue - continued
The Group recognizes revenue based on the transaction price allocated to such performance
obligation when a performance obligation is satisfied, i.e. when "control" of the goods or services
underlying the particular performance obligation is transferred to the customer. A performance
obligation represents the commitment that a good and service that is distinct shall be transferred
by the Group to the customer. Transaction price refers to the consideration that the Group is
expected to charge due to the transfer of goods or services to the customer, but it does not include
payments received on behalf of third parties and amounts that the Group expects to return to the
customer.
If one of the following criteria is met and it is a performance obligation performed over time, the
Group recognizes the revenue within a certain period of time according to the progress of the
performance: (1) the customer simultaneously receives and consumes the benefits provided by
the Group's performance as the Group performs; (2) the customer is able to control the goods
under construction in the course of the Group's performance; (3) the goods produced by the Group
during the performance of the contract are irreplaceable and the Group has the right to charge for
the accumulated part of the contract that has been performed so far during the whole contract
period. Otherwise, the Group recognizes revenue at a certain point in time when "control" of the
goods or services is transferred to the customer.
The Group adopts output method, i.e. the value of goods or services transferred to customers to
determine the appropriate progress of performance. Where the progress cannot be determined
reasonably, the revenue is recognized based on the amount of cost that is expected to be
compensated based on the cost already incurred, until the progress of performance is reasonably
determined.
If the contract includes two or more performance obligations, at contract inception, the Group
allocates the transaction price to single performance obligation according to relative proportion of
the stand-alone selling prices of the goods or services promised by single performance obligation.
However, where there is conclusive evidence that the contract discount or variable consideration
is only related to one or more (not all) performance obligations in the contract, the Group shall
allocate the contract discount or variable consideration to relevant one or more performance
obligations. The stand-alone selling price is the price at which the Group would sell a promised
good or service separately to a customer. If a stand-alone selling price is not directly observable,
the Group shall consider all information that is reasonably available to the Group and maximize
the use of observable inputs and apply estimates methods consistently in similar circumstances.
For contracts that contain variable consideration (e.g. sales discount), the Group estimates the
amount of consideration using either the expected value or the most likely amount. The
transaction price that includes variable consideration is only to the extent that it is highly probable
that such an inclusion will not result in a significant revenue reversal in the future when the
uncertainty is subsequently resolved. At the end of each reporting period, the Group reevaluates
the variable consideration included in the transaction price.
- 55 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
27. Revenue - continued
For non-cash consideration from customer, the Group recognizes the transaction price based on
the fair value of the non-cash consideration. Where the fair value of the non-cash consideration
cannot be reasonably estimated, the Group recognizes the transaction price indirectly by reference
to the stand-alone price of the promised goods or services promised transferred to the customer.
If the contract includes significant financing component, the Group determines the transaction
price based on the amount payable under the assumption that the customer pays that amount
payable in cash when "control" of the goods or services is obtained by the customer. The
difference between the transaction price and the contract consideration shall be amortized within
the contract period using effective interest rate. If the Group expects, at contract inception, that the
period between when the Group transfers a promised good or service to a customer and when the
customer pays for that good or service will be one year or less, the Group needs not to consider
the significant financing component.
The Group determines whether it is a principal or an agent at the time of the transaction based on
whether it owns the "control" of the goods or services before the transfer of such goods or
services to the customer. The Group is a principal if it controls the specified good or service
before that good or service is transferred to a customer, and the revenue shall be recognized based
on the total consideration received or receivable; otherwise, the Group is an agent, and the
revenue shall be recognized based on the amount of commission or handling fee that is expected
to be charged, and such amount is determined based on the net amount of the total consideration
received or receivable after deducting the prices payable to other related parties or according to
the established commission amount or proportion.
Where payment is received in advance, the advance payment received shall be recorded as a
liability and recognized as revenue when the relevant performance obligation is satisfied. The
above amount will be recognized as revenue proportionately in accordance with the model of
contractual rights exercised by the customer if (1) the Group's advance payment does not need to
be returned, (2) the customer may waive all or part of its contractual rights, and (3) the Group
expects to be entitled to the amount related to the contractual rights waived by the customer.
Otherwise, the balance of the liabilities is recognized as revenue by the Group only when the
possibility of the customer requesting the satisfaction of the remaining performance obligations is
extremely remote.
28. Contract costs
28.1 Costs to fulfill a contract
If the costs incurred in fulfilling a contract are not within the scope of other standard other than
the revenue standard, the Group shall recognized an asset from the costs incurred to fulfill a
contract only if those costs meet all of the following criteria: (1) the costs relate directly to a
contract or to an anticipated contract that the Group can specifically identify; (2) the costs
generate or enhance resources 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 that is consistent with the transfer to the customer of the goods or services to
which the asset relates and recognized in profit or loss for the period.
- 56 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
28. Contract costs - continued
28.2 Impairment of contract costs
In determination of impairment losses of assets related to contract costs, firstly impairment losses
of other assets related to the contract recognized based on other relevant accounting standards;
secondly, the Group shall recognized an impairment loss to the extent that the carrying amount of
an asset exceeds: (1) the remaining amount of consideration that the Group expects to receive in
exchange for the goods or services to which the asset relates; (2) the estimated costs that relate to
providing those goods or services.
The Group shall, after the impairment has been provided, recognized in profit or loss a reversal of
some or all of an impairment loss previously recognized when the impairment conditions no
longer exist or have improved. The increased carrying amount of the asset shall not exceed the
carrying amount that would have been determined if no impairment loss had been recognized
previously.
29. Types and accounting treatments of government grants
Government grants are transfer of monetary assets or non-monetary assets from the government to
the Group at no consideration. A government grant is recognized only when the Group can
comply with the conditions attached to the grant and the Group will receive the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount
received or receivable.
29.1 Accounting treatment of government grants related to assets
Government grants, such as special funds for modern logistics project and special funds for
energy-saving and emission reduction of transportation, are government grants related to assets as
they are all related to the construction and use of assets.
A government grant related to an asset is recognized as deferred income, and evenly amortized to
profit or loss over the useful life of the related asset.
29.2 Accounting treatment of government grants related to income
The Group's government grant, such as financial support funds of business tax converted to VAT
and reward for energy saving, if used to compensate the related expenses or losses to be incurred
in subsequent periods, is determined to be government grant relating to income.
A government grant relating to income, if used to compensate the related cost, expenses or losses
to be incurred in subsequent periods, is determined as deferred income and recognized in profit or
loss over the periods in which the related costs are recognized; if used to compensate the related
cost, expenses or losses already incurred, is recognized immediately in profit or loss for the period.
- 57 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
29. Types and accounting treatments of government grants - continued
29.2 Accounting treatment of government grants related to income - continued
A government grant relating to the Group's daily activities, is recognized in other income in line
with the nature of economic transaction. A government grant not relating to the Group's daily
activities, is recognized in non-operating income.
30. Deferred tax assets/ deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
30.1 Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods
are measured at the amount expected to be paid (or recovered) according to the requirements of
tax laws.
30.2 Deferred tax assets and deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their
tax base, or between the nil carrying amount of those items that are not recognized as assets or
liabilities and their tax base that can be determined according to tax laws, deferred tax assets and
liabilities are recognized using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred
tax assets for deductible temporary differences are recognized to the extent that it is probable that
taxable 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 the
initial recognition of an asset or liability arising from a transaction, which is not a business
combination that affects neither the accounting profit nor taxable profits (or deductible losses) at
the time of transaction, no deferred tax asset or liability is recognized.
For deductible losses and tax credits that can be carried forward, deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against
which the deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the Group
is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only
recognized to the extent that it is probable that there will be taxable profits against which to utilize
the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
- 58 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) 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
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates
applicable in the period in which the asset is realized or the liability is settled according to tax
laws.
Current and deferred tax expenses or income are recognized in profit or loss for the period, except
when they arise from transactions or events that are directly recognized in other comprehensive
income or in equity, in which case they are recognized in other comprehensive income or in
equity, and when they arise from business combinations, in which case they adjust the carrying
amount of goodwill.
At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced if it
is no longer probable that sufficient taxable profits will be available in the future to allow the
benefit of deferred tax assets to be utilized. Any such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
30.3 Income tax offsetting
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis
or to realize the assets and settle the liabilities simultaneously, current tax assets and current tax
liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle
current 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 expected
to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net
basis.
31. Leases
Lease is a contract that conveys the right to use an asset for a period of time in exchange for
consideration.
For contracts that are signed or modified after the date of initial application, at
inception/modification of the contracts, the Group assesses whether the contract is, or contains, a
lease. Unless the terms and conditions of the contract are changed, the Group does not reassess
whether a contract is, or contains, a lease.
- 59 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
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
allocates the consideration in the contract to each lease component on the basis of the relative
stand-alone price 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 the
commencement date of the lease, the Group recognises a right-of-use assets. The commencement
date of the lease is the date on which a lessor makes an underlying asset available for use by the
Group. The Group measures the right-of-use assets at cost. The cost of the right-of-use assets
comprises:
the amount of the initial measurement of the lease liabilities;
any lease payments made at or before the commencement date, less any lease incentives;
any initial direct costs incurred by the Group;
an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease.
Right-of-use assets are depreciated by the Group in accordance with the ASBE No.4 Fixed Assets.
If the Group is reasonably certain, that the lease will transfer ownership of the underlying asset to
the Group by the end of the lease term, the right-of-use assets is depreciated from the
commencement date to the end of the useful life of the underlying asset. Otherwise, the right-of-
use assets is depreciated from the commencement date to the earlier of the end of the useful life of
the right-of-use assets or the end of the lease term.
The Group applies ASBE No. 8 Impairment of Assets, to determine whether the right-of-use
assets are impaired and to account for any impairment loss identified.
31.1.3 Lease liabilities
Except for short-term leases and leases for which the underlying asset is of low value, at the
commencement date of the lease, the Group measures the lease liabilities at the present value of
the lease payments that are not paid at that date. If the interest rate implicit in the lease cannot be
readily determined, 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 the
underlying asset during the lease term:
- 60 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.3 Lease liabilities - continued
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 option
to 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
or rate as at the commencement date. Variable lease payments not included in the measurement of
the lease liabilities, are recognised in profit or loss, or in the cost of relevant assets, in the period
of those payments.
Interest on the lease liabilities in each period during the lease term is calculated by a constant
periodic rate of interest on the remaining balance of the lease liabilities and recognized in the
current profit and loss or the cost of the relevant assets.
After the commencement date, if one of the following occurs, the lease liability is remeasured by
the Group with the adjustment to the right-of-use asset. If the carrying amount of the right-of-use
asset is reduced to zero and there is further reduction in the measurement of the lease liability, the
remaining remeasurement should be recognized in profit or loss.
there is a change in the lease term, or in the assessment of an option to purchase the
underlying asset, the Group remeasures the lease liabilities, on the basis of the revised lease
term and the revised discount rate;
there is a change in the amounts expected to be payable under a residual value guarantee, or
in future lease payments resulting from a change in an index or a rate used to determine
those payments, the Group remeasures the lease liabilities, on the basis of the revised lease
payments and the unchanged discount rate, unless the change in the lease payments results
from a change in floating interest rates, in which case a revised discount is applied to the
present value.
- 61 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.1 The Group as Lessee - continued
31.1.4 Short-term leases and leases for which the underlying asset is of low value
The Group elects not to recognise right-of-use assets or lease liabilities for short-term leases and
leases for which the underlying asset is of low value, i.e. port and terminal facilities, buildings,
machinery and equipment, furniture and fixture and other equipment, motor vehicles and cargo
ships, other short-term leases and leases for which the underlying asset is of low value. A shorts-
term lease is a lease that, at the commencement date, has a lease term of 12 months or less. A
lease for which the underlying asset is of low value is that, the value of the underlying asset is low
when it is new. For short-term leases and leases for which the underlying asset is of low value, the
Group recognises the lease payments associated with those leases as an expense or cost of
relevant asset on a straight-line basis over the lease term.
31.1.5 Lease modifications
A lease modification should be accounted for as a separate lease if both of the following apply:
the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and
the consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope and any appropriate adjustments to that stand-alone price
according to the circumstances of the particular contract
For a lease medication that is not accounted for as a separate lease, at the effective date of the
lease modification, the Group should allocate the consideration in the modified contract,
determine the lease term of the modified lease and remeasure the lease liability by discounting the
revised payments using a revised discount rate.
For lease modifications that decrease the scope of the lease or narrow the term of the lease, the
Group should decrease the carrying amount of the right-of-use asset with any gain or loss relating
to the partial or full termination of the lease should be recognized in profit or loss. For
remeasurement of lease liabilities from all other lease modifications, a corresponding adjustment
is made to the carrying amount of the right-of-use asset.
31.2.1 Separating components of a lease
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership. All other leases are classified as operating leases.
- 62 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.2 Classification of leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership. All other leases are classified as operating leases.
31.2.2.1 The Group as lessor under operating leases
The Group recognises lease payments from operating leases as income on a straight-line basis.
The Group capitalises initial direct costs incurred in obtaining an operating lease and recognises
those costs as an expense over the lease term on the same basis as the lease income.
Variable lease receipts relating to an operating lease not included in the lease receipts are
recognized in profit or loss by the Group when incurred.
31.2.2.2 The Group as lessor under finance leases
At the commencement date, the Group recognizes a finance lease receivable at the amount equal
to the net investment in the lease with finance lease assets derecognized. The net investment in the
lease is the sum of any unguaranteed residual value and lease payments receivable from the
commencement date, discounted at the interest rate implicit in the lease.
The amount of the lease payments receivable refers to the amount that the Group should collect
from the lessee for the purpose of transferring the leased assets during the lease term, including:
fixed payments (including in-substance fixed payments) paid by the lessee, less any lease
incentives;
variable lease payments that depend on an index or a rate;
the exercise price of a purchase option, provided that it is reasonably determined that the
lessee will exercise the option;
the lessee exercises the amount to be paid for the termination of the lease option, provided
that the lease term reflects the lessee's exercise of the option to terminate the lease;
the residual value of the guarantee provided by the lessee, the party concerned with the
lessee and the independent third party with the financial ability to perform the guarantee
obligation.
- 63 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.2 Classification of leases - continued
31.2.2.2 The Group as lessor under finance leases - continued
Variable payments receivable not included in the net investment in the lease are recognized in
profit or loss when they arise.
Interest income for each period over the lease term is recognized by the Group at the fixed
periodic rate.
31.2.3 Subleases
As a lessor of the sublease, the Group accounts for the original lease contract and the sublease
contract as two separate contracts. The Group classifies the subleases based on the right-of-use
assets 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 date
of the modification, considering any lease advances or receivables relating to the original lease as
the lease receipts for the new lease.
The Group should account for a modification to a finance lease as a separate lease if both:
the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and
the consideration for the lease increases by an amount commensurate with the stand-alone
price for the increase in scope with any appropriate adjustment to that stand-alone price
For a modification to a finance lease that is not accounted for as a separate lease, the Group
should account for the modification as follows:
if the lease would have been classified as an operating lease had the modification been effect
at the inception date, the Group should account for the lease modification as a new lease
from the effective date of the modification, and measure the carrying amount of the
underlying asset as the net investment in the lease before the effective date of the lease
modification.
If the lease would have been classified as an operating lease if the modification had been in
effect at the inception date, the Group should apply the requirements of contract
modification and renegotiation under the ASBE No. 22 Financial Instruments: Recognition
and Measurement.
- 64 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Leases - continued
31.2 The Group as Lessor - continued
31.2.5 Sale and leaseback transactions
31.2.5.1 The Group as the seller-lessee
The Group applies the requirements of the revenue standard to determine whether the transfer of
an asset is accounted for as a sale of that asset. If the transfer of an asset does not constitute a sale,
the Group should continue to recognize the transferred assets and should recognize a financial
liability equal to the transfer proceeds applying ASBE No. 22 Financial Instruments: Recognition
and Measurement. If the transfer of an asset is a sale, the Group should measure the right-of-use
asset arising from the leaseback at the proportion of the previous carrying amount of the asset that
relates to the right of use, and recognize only the amount of any gain or loss that relates to the
rights transferred to the lessor.
32. Exchange of Non-Monetary Assets
Where a non-monetary assets transaction satisfies the following conditions at the same time, it
should calculated based on fair value. The transaction is commercial in nature and the fair value
of the assets received or surrendered can be measured reliably. The fair value of the assets
surrendered and relevant payable taxes shall be regarded as the transaction cost of the assets
received. For assets surrendered, the difference between the fair value and the carrying value of
the asset surrendered shall be recorded into the profit or loss of the current period. If any exact
evidence showing that the fair value of the assets received is more reliable, the cost of assets
received and surrendered shall be calculated as different way. For assets received, its cost shall be
calculated based on fair value of assets received and relevant payable taxes. For the assets
surrendered, the difference between the fair value of the assets received and the carrying value of
the asset surrendered shall be recorded into the profit or loss of the current period.
Where a non-monetary assets transaction does not meet the conditions as prescribed, the carrying
value and relevant payable taxes of the assets surrendered shall be the cost of the assets received
and no profit or loss is recognized.
33. Discontinued Operation
Discontinued operation refers to the separately identifiable components that have been disposed
of or classified as held for sale and meet one of the following conditions: :
(1) The component represents an independent main business or a major business area;
(2) This component is a part of a related plan that intends to dispose an independent main
business or a separate main operating area;
(3) This component is a subsidiary acquired exclusively for resale.
- 65 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
33. Discontinued Operation - continued
Profits or losses from discontinued operations are presented separately in the income statement
from continuing operations. Profits and losses from operations or disposals (e.g. impairment
losses and reversals of discontinued operations) are presented under discontinued operations. For
discontinued operations presented in the current period, the information previously under
continuing operations is presented under discontinued operations by the Group in the financial
statements for the comparable accounting period.
34. Safety Production Cost
According to the Administrative Rules on Provision and Use of Enterprise Safety Production Cost
jointly issued by the Ministry of Finance and the State Administration of Work Safety on 14
February 2012 (filed as Cai Qi [2012] No. 16), safety production cost set aside by the Group is
directly included in the cost of relevant products or recognized in profit or loss for the period, as
well as the special reserve. When safety production cost set aside is utilized, if the costs incurred
can be categorized as expenditure, the costs incurred should be charged against the special reserve.
If the costs set aside are used to build up fixed assets, the costs should be charged to construction
in progress, and reclassified to fixed assets when the safety projects are ready for intended use.
Meantime, expenditures in building up fixed assets are directly charged against the special reserve
with the accumulated depreciation recognized at the same amount. Depreciation will not be made
in the future period on such fixed assets.
35. Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates
In the application of accounting policies as set out in Note (III), the Company is required to make
judgments, estimates and assumptions about the carrying amounts of items in the financial
statements that cannot be measured accurately, due to the internal uncertainty of the operating
activities. These judgments, estimates and assumptions are based on historical experiences of the
Company's management as well as other factors that are considered to be relevant. Actual results
may differ from these estimates.
The Company regularly reviews the judgments, estimates and assumptions on a going concern
basis. Changes in accounting estimates which only affect the current period should be recognized
in current period; changes which not only affect the current but the future periods should be
recognized in current and future periods. At the balance sheet date, key assumptions and
uncertainties that are likely to lead to significant adjustments to the book values 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 the
assets group or portfolio including goodwill shall be calculated, and such expected future cash
flows shall be estimated. Meantime, a pre-tax rate shall be determined that should reflect the time
value of money on the current market and the specific interest risks.
- 66 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
35. Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates - continued
Recognition of deferred income tax
The Group calculates and makes provision for deferred tax liabilities according to the profit
distribution plan of subsidiaries, associates and the joint ventures subject to the related law. For
retained earnings which are not allocated by the investment company, since the profits will be
used to invest the company's daily operation and future development, no deferred tax liabilities
are recognized. If the actually distributed profits in the future are more or less than those expected,
corresponding deferred tax liabilities will be recognized or reversed at the earlier of profits
distribution date and the declaration date, in the profit and loss of the current period.
Deferred tax assets are recognized based on the deductible temporary difference and the
corresponding tax rate, to the extent that it has become probable that future taxable profit will be
available for the deductible temporary difference. If in the future the actual taxable income does
not coincide with the amount currently expected, the deferred tax assets resulting will be
recognized or reversed in the period when actually incurred, in profit or loss.
(1) Changes in accounting estimates and reasons
The Proposal on the Change in Accounting Estimates of Depreciation Periods of Certain Fixed
Assets is deliberated and adopted at the 7th session of the 9th Board of Directors and the 7th
session of the 9th Board of Supervisor held on 14 April 2020. The Company has reviewed the
estimated useful lives of fixed assets based on their current performance and usage conditions. In
order to more objectively and fairly reflect the Group's financial position and results of operations,
the Company has decided to change the accounting estimates for the depreciation periods of
certain fixed assets, with the main adjustments as follows:
1) The depreciation period of port and channel facilities in port and terminal facilities is
changed from 40 years to 40-50 years, and the depreciation period of railway lines is
changed from 50 years to 40 years.
2) The depreciation period of civil support facilities in houses and buildings is changed from
10 years to 25 years.
3) The depreciation period of electromechanical equipment in machinery equipment,
furniture & fixtures and other equipment is changed from 5 years to 5 years, 8 years or 10
years.
4) The depreciation period of special operation ships in motor vehicles and cargo ships is
changed from 20 years to 18 years, and that of special operation auxiliary ships is changed
from 20 years to 20 years.
- 67 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
35. Critical judgments in applying accounting policies and key assumptions and
uncertainties in accounting estimates - continued
Recognition of deferred income tax - continued
(2) Impact of changes in accounting estimates
The above adjustments to depreciation periods of fixed assets are implemented from 1 April 2020.
According to "Accounting Standards for Business Enterprises No. 28 - Changes in Accounting
Policies and Accounting Estimates and Corrections of Errors", the adjustment to the depreciation
periods of fixed assets is a change in accounting estimate, which should be dealt with using the
prospective application method without retrospective adjustment and will not have any impact on
the financial position and results of operations of the Group in previous years.
As a result of the above change in accounting estimates, the Group's depreciation expense of fixed
assets increased by RMB20.29 million, net profit attributable to the parent company decreased by
RMB5.19 million and shareholders' equity attributable to the parent company decreased by
RMB5.19 million for the year 2020. The above changes in accounting estimates have no impact
on the Company.
36. Changes in significant accounting estimates
(1) Changes in accounting estimates and reasons
The Proposal on the Change in Accounting Estimates of Depreciation Periods of Certain Fixed
Assets is deliberated and adopted at the 7th session of the 9th Board of Directors and the 7th
session of the 9th Board of Supervisor held on 14 April 2020. The Company has reviewed the
estimated useful lives of fixed assets based on their current performance and usage conditions. In
order to more objectively and fairly reflect the Group's financial position and results of operations,
the Company has decided to change the accounting estimates for the depreciation periods of
certain fixed assets, with the main adjustments as follows:
1) The depreciation period of port and channel facilities in port and terminal facilities is
changed from 40 years to 40-50 years, and the depreciation period of railway lines is
changed from 50 years to 40 years.
2) The depreciation period of civil support facilities in houses and buildings is changed from
10 years to 25 years.
3) The depreciation period of electromechanical equipment in machinery equipment,
furniture & fixtures and other equipment is changed from 5 years to 5 years, 8 years or 10
years.
4) The depreciation period of special operation ships in motor vehicles and cargo ships is
changed from 20 years to 18 years, and that of special operation auxiliary ships is changed
from 20 years to 20 years.
The above changes in the depreciation periods of fixed assets are within the scope of the Group's
accounting policy on depreciation of fixed assets.
- 68 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
36. Changes in significant accounting estimates - continued
(2) Financial impact of changes in accounting estimates
The above adjustments to depreciation periods of fixed assets are implemented from 1 April 2020.
According to "Accounting Standards for Business Enterprises No. 28 - Changes in Accounting
Policies and Accounting Estimates and Corrections of Errors", the adjustment to the depreciation
periods of fixed assets is a change in accounting estimate, which should be dealt with using the
prospective application method without retrospective adjustment and will not have any impact on
the financial position and results of operations of the Group in previous years.
As a result of the above change in accounting estimates, the Group's depreciation expense of fixed
assets increased by RMB20.29 million, net profit attributable to the parent company decreased by
RMB5.19 million and shareholders' equity attributable to the parent company decreased by
RMB5.19 million for the year 2020. The above changes in accounting estimates have no impact
on the Company.
37. Changes in significant accounting policies
(1) Interpretation of the Accounting Standards for Business Enterprises No. 13
On 10 December 2019, the Ministry of Finance issued Interpretation of the Accounting Standards
for Business Enterprises No. 13 in Cai Kuai [2019] File No. 21 (hereinafter referred to as "
Interpretation No. 13"). Question 1 of Interpretation No. 13 further supplemented the Accounting
Standards for Business Enterprises No. 36- Related Party Disclosure and clarified that the
following constitute related parties: (1) An enterprise and the joint venture or associated enterprise
of any other member unit of the enterprise group to which the enterprise is affiliated (including the
parent company and subsidiaries); (2) An enterprise's joint venture and the enterprise's any other
joint venture or associated enterprise. Question 2 of Interpretation No. 13 modified the
Accounting Standards for Business Enterprises No. 20 - Business Combinations, which provided
the definition of business and added guidance on whether the processing process is material, and
introduced an optional concentration test to simplify the assessment purpose. The aforesaid
provisions have no significant impact on the financial statements of the Group and the Company
for 2020.
- 69 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(III) SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
37. Changes in significant accounting policies - continued
(2) Provisions on the Accounting Treatment of the COVID-19 Pandemic-related Rental
Concessions
On 19 June 2020, the Ministry of Finance issued Provisions on the Accounting Treatment of the
COVID-19 Pandemic-related Rental Concessions in Cai Kuai [2020] File No.10 (hereinafter
referred to as "File No.10"). It's specified in File No. 10 that, for rental concessions, provided that
certain conditions are satisfied, an enterprise can conduct accounting treatment according to
Accounting Standards for Business Enterprises No. 21—Leases, or adopt the simplified method
specified in File No.10. Where the enterprise adopts the simplified method, it's unnecessary to
assess whether there is lease changes or re-assess the lease classifications. The enterprise shall
apply the option to all the similar lease contracts and shall not change it arbitrarily.
The Group determined to adopt the simplified method for all the rental concessions that fall into
the applicable scope. The relevant rental concessions handled with the simplified method have no
impact on the Company's profits and losses in the current period of 2020, and it's impact on the
Group's profits or losses of 2020 is shown as below:
RMB
Item 2020
Operating income -22,310,378.46
Operating cost -293,348.62
Administrative expenses -85,515.23
Non-operating income -4,940,601.35
Income tax expenses -6,320,851.75
Net profit -20,551,264.21
Total comprehensive income -20,551,264.21
(IV) TAXES
1. Major taxes and tax rates
Taxes Tax basis Tax rate
Taxable income 16.5%-34% (Note 1)
Enterprise income tax
Dividend income tax 5%,10%,25% (Note 2)
Income from sale of goods 9%-13%
Income from transportation, loading and unloading business
Value-added Tax 6%
and part of modern service industries
("VAT") (Note 3)
Income from sale of real estate, property management, real
5%
estate lease, etc.
Social contribution tax
Income 0.65%-7.6%
(Note 4)
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
VAT paid 1%-7%
construction tax
Education surtax VAT paid 3%
- 70 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(IV) TAXES - continued
1. Major taxes and tax rates - continued
Note 1: The Group's enterprise income tax is calculated based on the current tax rate stipulated
by local tax laws. Among them, the Company are subject to an enterprise income tax
rate of 25%, the subsidiaries set up in Hong Kong are subject to an enterprise income tax
rate of 16.5%, the majority of subsidiaries set up in China are subject to an enterprise
income tax rate of 25% and certain others are subject to the preferential tax rate for small
and micro enterprises of 20%, and the other overseas subsidiaries are subject to
enterprise income tax rates between 28% and 34%.
Note 2: Foreign investors who receive dividends of profits from Chinese subsidiaries in 2008
and thereafter generally shall pay withholding income tax at a rate of 10% in accordance
with the relevant provisions of the PRC enterprise income tax. For companies
incorporated in certain regions (including Hong Kong and Singapore), if the companies
are actual owners holding more than 25% interest in the subsidiaries in China, they will
enjoy a preferential tax rate of 5%.
The Company obtains dividends distributed by overseas subsidiaries and should pay
enterprise income tax at a rate of 25% in accordance with relevant Chinese tax laws. The
Company obtains taxable income outside of China, and the amount of income tax that
has been paid abroad can be offset with the current taxable amount. The credit limit is
the taxable amount calculated in accordance with the provisions of the Enterprise
Income Tax Law.
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
rate stipulated in the relevant tax laws of China.
Note 4: The social contribution tax is the tax paid by the overseas subsidiaries of the Group to
the local government.
2. Tax preference
Some subsidiaries of the Group in China are recognized as high-tech enterprises or encouraged
industrial enterprises in the region and are subject to an enterprise income tax rate of 15%. The
Group's subsidiaries outside China may be subject to enterprise income tax preference in
accordance with relevant local tax policies.
The Company and some of its subsidiaries were exempted from paying house property tax and
urban land use tax, etc. for the first quarter of 2020 in accordance with the Notice on the Issuance
of Several Measures to Respond to the COVID-19 Pandemic and Support Enterprises in
Weathering Hard Times issued by local people's governments.
- 71 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
Item Closing balance Opening balance
Cash 570,307.93 331,305.65
RMB 31,555.69 122,990.39
USD 146,078.94 55,429.82
HKD 24,653.41 28,354.40
BRL 5,997.01 8,872.81
Others 362,022.88 115,658.23
Bank deposit (Note1) 11,420,083,598.40 7,423,112,193.18
RMB 7,458,567,108.92 4,868,888,181.56
USD 817,495,062.65 1,597,545,919.28
EUR 770,193,517.95 528,103,576.51
BRL 273,701,827.77 310,275,686.79
HKD 2,076,664,153.73 76,041,665.91
AUD 557,797.36 -
Others 22,904,130.02 42,257,163.13
Other cash and bank balances (Note 2) 370,770,828.30 311,504,711.43
RMB 370,726,535.43 311,504,711.43
HKD 44,292.87 -
Total 11,791,424,734.63 7,734,948,210.26
Including: The total amount of funds deposited
5,313,591,920.43 3,511,266,717.03
overseas
Note 1: The bank deposits of the Group deposited overseas and restricted for remittance to China
at the end of the year totalled nil (at the end of the previous year: nil).
Note 2: The structured deposits in other cash and bank balances that can be readily withdrawn on
demand at the end of the year totalled RMB 357,120,261.94, the restricted deposit
totalled RMB 11,528,570.90, and the balance of the securities margin account was RMB
2,121,995.46.
2. Held-for-trading financial assets
Item Closing balance Opening balance
Financial assets at FVTPL 850,165,448.59 -
Including: Debt investment instruments - -
Equity investment instruments 165,448.59 -
Structural deposits 850,000,000.00 -
Total 850,165,448.59 -
- 72 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Notes receivable
(1) Category of notes receivable
Category Closing balance Opening balance
Bank acceptance 745,000.16 13,290,478.02
Commercial acceptance 3,146,994.68 24,901,772.00
Total 3,891,994.84 38,192,250.02
Less: Provision for credit losses (Note) - -
Carrying amount 3,891,994.84 38,192,250.02
Note: The Group believes that the acceptor of its bank acceptance and commercial acceptance
have high credit ratings with no significant credit risks; therefore, no provision for credit
loss is made.
(2) As at 31 December 2020, there are no notes receivable pledged.
(3) As at 31 December 2020, there are no notes receivable endorsed or discounted which are
not yet due at the balance sheet date.
(4) As at 31 December 2020, there are no notes reclassified to accounts receivable due to the
drawers' inability to settle the note.
(5) The Group has no notes receivable written off in 2020.
4. Accounts receivable
(1) Accounts receivable disclosed by aging
Closing balance
Aging Accounts Provision for
Proportion (%)
receivable credit loss
Within 1 year 1,329,489,121.52 18,744,736.21 1.41
More than 1 year but not exceeding 2 years 75,815,966.83 16,737,219.64 22.08
More than 2 years but not exceeding 3 years 2,782,945.61 474,387.92 17.05
More than 3 years 39,639,520.65 39,120,974.68 98.69
Total 1,447,727,554.61 75,077,318.45
(2) Disclosure of accounts receivable by categories
Expected Closing balance Opening balance
Credit
credit loss Carrying Provision for Carrying Provision for
rating Book value Book value
rate (%) amount credit loss amount credit loss
A 0.00-0.10 659,544,396.52 301,903.39 659,242,493.13 552,947,162.60 236,251.00 552,710,911.60
B 0.10-0.30 520,087,318.71 639,654.91 519,447,663.80 730,397,420.98 2,106,455.92 728,290,965.06
C 0.30-50.00 207,630,761.65 23,911,382.65 183,719,379.00 70,292,155.38 1,703,501.79 68,588,653.59
D 50.00-100.00 60,465,077.73 50,224,377.50 10,240,700.23 101,658,746.76 94,789,147.11 6,869,599.65
Total 1,447,727,554.61 75,077,318.45 1,372,650,236.16 1,455,295,485.72 98,835,355.82 1,356,460,129.90
- 73 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Accounts receivable - continued
(3) Changes in provision for credit loss of accounts receivable
Lifetime expected Lifetime expected
Item credit loss (not credit loss (credit- Total
credit-impaired) impaired)
At 1 January 2020 4,046,208.71 94,789,147.11 98,835,355.82
Carrying amount of accounts receivable at 1 January 2020
-- Transferred to credit-impaired accounts receivables - - -
-- Reversed to not credit-impaired accounts receivable - - -
Provision for the year 22,198,343.29 12,592,586.51 34,790,929.80
Reversal for the year -870,975.22 -53,139,001.51 -54,009,976.73
Transfer-out from derecognition of financial
- -3,287,015.26 -3,287,015.26
assets(including direct write-down)
Other changes -520,635.83 -731,339.35 -1,251,975.18
At 31 December 2020 24,852,940.95 50,224,377.50 75,077,318.45
(4) Accounts receivable written off in the year
Written-off
Item
amount
Yantai Jinquan International Shipping Agency LLC Shenzhen Branch 289,193.50
Shandong Province Yantai International Marine Shipping Company Shenzhen Branch 2,997,821.76
Total 3,287,015.26
(5) The top five balances of accounts receivable at the end of the year classified by debtor
Proportion of
the amount to Closing balance
Closing
Name of entity Aging the total of provision for
balance
accounts credit loss
receivable (%)
Within 1 year, more than 1 year but not
Client A 213,605,473.08 exceeding 2 years, more than 2 year but 14.75 213,605.47
not exceeding 3 years, more than 3 years
Client B 78,767,592.24 Within 2 years 5.44 13,358,983.64
Client C 63,238,786.43 Within 1 year 4.37 63,238.79
Client D 56,326,325.71 Within 1 year 3.89 56,326.33
Client E 34,581,743.22 Within 2 years 2.39 5,865,063.65
Total 446,519,920.68 30.84 19,557,217.88
5. Receivables financing
(1) Receivables financing classification
Opening
Items Closing balance
balance
Bank acceptance measured by fair value 217,449,966.41 260,760,537.45
- 74 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Receivables financing - continued
(2) On 31 December 2020, the Group has no pledged receivables financing.
(3) On 31 December 2020, The Group has endorsed or discounted and has not yet matured the
financing of receivables on the balance sheet date.
Closing balance Opening balance
Item
Derecognized Recognized Derecognized Recognized
Bank acceptance measured by fair value 129,866,604.18 - 129,391,886.08 -
6. Prepayments
(1) Aging analysis of prepayment
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 48,508,252.83 98.55 50,341,341.46 91.47
More than 1 year but not exceeding 2 years 581,084.82 1.18 4,533,596.99 8.24
More than 2 years but not exceeding 3 years - - - -
More than 3 years 131,512.46 0.27 159,081.36 0.29
Total 49,220,850.11 100.00 55,034,019.81 100.00
(2) As at 31 December 2020, the Group has no significant prepayments aged more than one
year.
(3) The top five balances of prepayments at the end of the year classified by entities
Proportion of the
Relationship with closing balance to
Name of entity 31 December 2020
the Company the total
prepayments (%)
Saham Assurance Togo S.A. Non-related party 11,437,000.52 23.23
Chubb Seguros Brasil S.A. Non-related party 2,671,202.65 5.43
Uptime Group Non-related party 1,997,591.63 4.06
Fairfax Brasil Seguros Corporativos S.A. Non-related party 1,964,254.53 3.99
CCCC First Harbour Consultants Co.,
Non-related party 1,614,912.75 3.28
Ltd.
Total 19,684,962.08 39.99
7. Other receivables
7.1 Summary of other receivables
Item Closing balance Opening balance
Interest receivable - 159,794.48
Dividend receivable 258,137,208.69 459,352,522.24
Other receivables 3,299,058,252.57 1,669,865,935.78
Total 3,557,195,461.26 2,129,378,252.50
- 75 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.2 Interest receivable
(1) Classification of interest receivable
Item Closing balance Opening balance
Interest receivable from related parties - 159,954.43
Total - 159,954.43
Less: Provision for credit loss - 159.95
Book value - 159,794.48
(2) As at 31 December 2020, the Group has no significant overdue interest.
7.3 Dividend receivable
(1) Presentation of dividend receivable
Name of investee Closing balance Opening balance
China Nanshan Development (Group) Incorporation ("Nanshan
210,831,000.00 313,435,420.00
Group")
Tin-Can Island Container Terminal Ltd 33,289,037.77 82,625,546.31
Qingdao Qianwan United Container Terminal Co., Ltd. - 50,000,000.00
Others 14,275,566.52 13,751,368.26
Total 258,395,604.29 459,812,334.57
Less: Provision for credit loss 258,395.60 459,812.33
Book value 258,137,208.69 459,352,522.24
(2) Significant dividend receivable aged more than 1 year
Closing balance
Closing
Name of investee Aging Why unrecovered of provision for
balance
credit losses
Undergoing relevant
More than 1 year
formalities and expected to
Nanshan Group 140,554,000.00 but not exceeding 140,554.00
be recovered at the end of
2 years
2021
- 76 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.3 Dividend receivable - continued
(3) Changes in provision for credit loss of dividends receivable
Stage 1 Stage 2 Stage 3
Lifetime expected Lifetime expected
Item Expected credit Total
credit loss (not credit- credit loss (credit-
loss in 12 months
impaired) impaired)
At 1 January 2020 459,812.33 - - 459,812.33
Carrying amount of dividends receivable at 1 January 2020
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
-- Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provision for the year - - - -
Reversal for the year -201,416.73 - - -201,416.73
Transfer-out on derecognition of
financial assets( including direct - - - -
write-down)
Other changes - - - -
At 31 December 2020 258,395.60 - - 258,395.60
7.4 Other receivables
(1) Other receivables disclosed by aging
Closing balance
Aging
Other receivables Provision for credit loss Proportion (%)
Within 1 year 2,490,939,969.22 833.00 -
More than 1 year but not exceeding 2 years 966,120,027.06 306,461,787.82 31.72
More than 2 years but not exceeding 3 years 13,122,683.91 81,664.02 0.62
More than 3 years 350,606,928.00 215,187,070.78 61.38
Total 3,820,789,608.19 521,731,355.62
(2) Disclosure of other receivables by nature
Item Closing balance Opening balance
Land compensation (Note 1) 2,742,032,000.00 521,246,000.00
Operation compensation (Note 2) 687,057,815.03 669,121,539.36
Temporary payments 159,559,495.82 334,617,193.32
Compensation for profit or loss on transition 38,312,376.24 35,317,035.66
Deposits 20,162,834.12 21,309,320.77
Others 173,665,086.98 124,618,962.15
Total 3,820,789,608.19 1,706,230,051.26
Less: Provision for credit loss 521,731,355.62 36,364,115.48
Book value 3,299,058,252.57 1,669,865,935.78
- 77 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.4 Other receivables - continued
(2) Disclosure of other receivables by nature - continued
Note 1: On 5 November 2019, Shantou China Merchants Port Group Co., Ltd. (hereinafter
referred to as "Shantou Port") entered into the Contract for the Acquisition of State-
Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant to the
contract, the land and attached buildings of approximately 370.96 mu located in Zhuchi
Deepwater Port on the south of Zhongshan East Road of Shantou should be returned to
Shantou Land Reserve Center by Shantou Port, which is amounting to
RMB1,558,032,000.00. Among them, 183.63 mu of land have been transferred in
2020and attached buildings were transferred in 2019, and the remaining 187.33 mu of
land and attached buildings has been transferred in 2020, with the carrying amount of
RMB188,404,228.34 and the consideration of compensation of approximately
RMB786,786,000.00. After deduction of transaction costs, the gains on compensation
were recognized in RMB561,650,519.31. As at 31 December 2020, the land
compensation totalling RMB1,208,032,000.00 has not yet been recovered.
On 21 August 2020, Shantou Port entered into the Contract for the Acquisition of State-
Owned Land Use Rights in Shantou with Land Reserve Center of Shantou Haojiang
District. Pursuant to the contract, the land and attached buildings of approximately
152.34 mu located in Yutianwen, Queshi, Haojiang District, Shantou, should be returned
to Land Reserve Center of Shantou Haojiang District by Shantou Port, which is
amounting to RMB250,000,000.00. The transfer of above-mentioned land and attached
buildings was completed before 31 December 2020, with the net book value of
RMB163,735,397.39. After deduction of transaction costs, the gains on compensation
were recognized in RMB57,521,085.00. As at 31 December 2020, the land
compensation totalling RMB200,000,000.00 has not yet been recovered.
On 22 December 2020, Shantou Port entered into the Contract for the Acquisition of
State-Owned Land Use Rights in Shantou with Shantou Land Reserve Center. Pursuant
to the contract, the land and attached buildings of approximately 648.78 mu located in
Zhuchi Deepwater Port of Shantou should be returned to Shantou Land Reserve Center
by Shantou Port, which is amounting to RMB2,724,876,000.00. Among them, 320 mu
of land and attached buildings were transferred by 31 December 2020, with the carrying
amount of RMB356,612,428.85 and the consideration of compensation is
RMB1,344,000,000.00. After deduction of transaction costs, the gains on compensation
were recognized in RMB912,690,740.68. As at 31 December 2020, the land
compensation totalling RMB1,334,000,000.00 has not yet been recovered, and the
remaining 328.78 mu of land and attached buildings have not been transferred, which
are presented as assets held for sale by the Group.
- 78 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.4 Other receivables - continued
(2) Disclosure of other receivables by nature - continued
Note 2: It is the operation compensation amounting to RMB687,057,815.03 that the subsidiaries
of the Company should collect from the holding companies of minority shareholders.
The aforesaid amount has been overdue. Therefore, the Group made a corresponding
credit impairment loss of RMB477,037,952.97.
(3) Provision for credit loss on other receivables
As part of the Group's credit risk management, the Group conducts internal credit ratings for its
customers and determines the expected loss rate for other receivables for each rating. Such
expected average loss rates are based on actual historical impairments and taking into account the
current and future economic conditions.
- 79 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.4 Other receivables - continued
(3) Provision for credit loss on other receivables - continued
As at 31 December 2020, the credit risk and expected credit loss of other receivables of each category of customers are presented as below:
Closing balance Opening balance
Lifetime
Expected credit Lifetime Lifetime
Credit rating Lifetime expected Expected credit expected
loss rate (%) Expected credit expected credit expected credit
credit loss (credit- Total loss in 12 credit loss Total
loss in 12 months loss (not credit- loss (not credit-
impaired) months (credit-
impaired) impaired)
impaired)
A 0.00-0.10 3,098,532,380.95 - - 3,098,532,380.95 1,669,968,696.05 - - 1,669,968,696.05
B 0.10-0.30 - - - - - - - -
C 0.30-50.00 - - - - - - - -
D 50.00-100.00 - - 722,257,227.24 722,257,227.24 - - 36,261,355.21 36,261,355.21
Account balance 3,098,532,380.95 - 722,257,227.24 3,820,789,608.19 1,669,968,696.05 - 36,261,355.21 1,706,230,051.26
Provision for credit loss 95,128.38 - 521,636,227.24 521,731,355.62 102,760.27 - 36,261,355.21 36,364,115.48
Book value 3,098,437,252.57 - 200,621,000.00 3,299,058,252.57 1,669,865,935.78 - - 1,669,865,935.78
- 80 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
7. Other receivables - continued
7.4 Other receivables - continued
(4) Changes in provision for credit loss of other receivables
Stage 1 Stage 2 Stage 3
Expected credit Lifetime expected Lifetime expected
Item Total
loss in 12 credit loss (not credit loss (credit-
months credit-impaired) impaired)
At 1 January 2020 102,760.27 - 36,261,355.21 36,364,115.48
Carrying amount of other receivables at 1 January 2020
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 -17,528.45 - 17,528.45 -
-- Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provision for the year 66,893.25 - 477,037,952.97 477,104,846.22
Reversal for the year -56,996.69 - -1,081,532.21 -1,138,528.90
Transfer-out on derecognition of
financial assets( including direct write- - - - -
down)
Other changes - - 9,400,922.82 9,400,922.82
At 31 December 2020 95,128.38 - 521,636,227.24 521,731,355.62
(5) In the period from 1 January 2020 to 31 December 2020, the Group has no other
receivables written off.
(6) The top five balances of other receivables at the end of the year classified by debtor
Proportion of the
Provision for credit
amount to the
Name of entity Nature Closing balance Aging loss at the end of
other receivable
the year
(%)
Within 1 year, more
Entity 1 Land compensation 2,542,032,000.00 than 1 year but not 66.53 39,052.09
exceeding 2 years
more than 1 year but not
Operation
Entity 2 687,057,815.03 exceeding 2 years, more 17.98 486,432,815.03
compensation
than 3 years
Entity 3 Land compensation 200,000,000.00 Within 1 year 5.23 3072.51
Entity 4 Temporary payments 57,607,520.00 More than 3 years 1.51 5,760.75
Entity 5 Temporary payments 43,551,875.85 More than 5 years 1.14 4,355.19
Total 3,530,249,210.88 92.39 486,485,055.57
- 81 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Inventories
(1) Categories of inventories
Closing balance Opening Balance
Provision for Provision for
Item Carrying Carrying
decline in value Book value decline in value Book value
amount amount
of inventories of inventories
Raw materials 168,127,613.81 884,061.15 167,243,552.66 147,548,980.01 1,918,890.33 145,630,089.68
Finished goods 31,606,387.22 - 31,606,387.22 4,944,593.66 - 4,944,593.66
Revolving
- - - - - -
materials
Others 12,516,519.00 - 12,516,519.00 13,405,508.74 - 13,405,508.74
Total 212,250,520.03 884,061.15 211,366,458.88 165,899,082.41 1,918,890.33 163,980,192.08
(2) Provision for decline in value of inventories
Decrease
Item 1 January 2020 Provision 31 December 2020
Reversal Write-off
Raw materials 1,918,890.33 - 947,694.12 87,135.06 884,061.15
(3) As at 31 December 2020, the Group has no capitalized borrowing cost in the balance of
inventories.
9. Assets held for sale
Carrying amount Fair value at Estimated disposal
Item Schedule
at closing balance closing balance expenses
Long-term assets held for sale 337,442,757.28 1,380,876,000.00 5,608,306.69 Before 30 June 2021
Less: Provision for
impairment of assets held for -
sale
Carrying amount 337,442,757.28
Note: Refer to Note (V) 7.4(2) for details.
10. Non-current assets due within one year
Item Closing balance Opening balance
Long-term receivables due within one year 67,760,233.67 809,702,715.78
Less: Provision for credit loss 67,760.23 809,702.72
Carrying amount 67,692,473.44 808,893,013.06
- 82 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
11. Other current assets
(1) Categories of other current assets
Item Closing balance Opening balance
Structural deposits 102,749,431.10 2,000,298,176.18
Including: Principal 100,000,000.00 1,991,000,000.00
Interest receivable 2,749,431.10 9,298,176.18
Prepaid taxes 47,556,756.97 31,612,381.68
Others(Note) 283,360,013.35 266,882,103.84
Total 433,666,201.42 2,298,792,661.70
Less: Provision for credit loss - -
Book value 433,666,201.42 2,298,792,661.70
Note: It's mainly the VAT credits of domestic subsidiaries.
12. Long-term receivables
(1) Details of long-term receivables
Closing balance Opening balance
Item Provision for Provision for
Account balance Book value Account balance Book value
credit loss credit loss
Principal and interest of
286,330,144.62 286,330.14 286,043,814.48 1,025,631,435.87 1,025,631.44 1,024,605,804.43
receivables for cooperation
Advances to shareholders (Note) 3,663,271,923.98 3,663,271.92 3,659,608,652.06 869,503,011.54 869,503.01 868,633,508.53
Financing lease deposits 10,000,000.00 10,000.00 9,990,000.00 14,500,000.00 14,500.00 14,485,500.00
Total 3,959,602,068.60 3,959,602.06 3,955,642,466.54 1,909,634,447.41 1,909,634.45 1,907,724,812.96
Less: Long-term receivables due
67,760,233.67 67,760.23 67,692,473.44 809,702,715.78 809,702.72 808,893,013.06
within 1 year
Long-term receivables due over 1
3,891,841,834.93 3,891,841.83 3,887,949,993.10 1,099,931,731.63 1,099,931.73 1,098,831,799.90
year
Note: The addition this year is mainly the payment made by Direct Achieve Investments Limited,
a subsidiary of the Company, for the acquisition of the terminal, on the behalf of its
associate, Terminal Link SAS. As at 31 December 2020, the total principal and interest are
equivalent to RMB2,797,354,060.41, please refer to Note (V) 13 for details.
- 83 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Long-term receivables - continued
(2) Provision for credit loss on long-term receivables
Stage 1 Stage 2 Stage 3
Item Lifetime expected credit Total
Expected credit loss Lifetime expected credit
loss (not credit-
in 12 months loss (credit-impaired)
impaired)
At 1 January 2020 1,909,634.45 - - 1,909,634.45
Carrying amount of other current assets at 1 January 2020
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
-- Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provision for the year 2,791,910.10 - - 2,791,910.10
Reversal for the year -741,942.49 - - -741,942.49
Transfer-out on derecognition of
financial assets( including direct - - - -
write-down)
Other changes - - - -
At 31 December 2020 3,959,602.06 - - 3,959,602.06
(3) As at 31 December 2020, there are no long-term receivables derecognized due to the
transfer of financial assets.
(4) There are no assets and liabilities arising from the transfer or continuing involvement of
long-term receivables at 31 December 2020.
- 84 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments
Changes for the year
Effect of
Accou Reconciling Closing
Provisi translation of
nting Investment items from Cash dividends or 31 December balance of
Investees 1 January 2020 Other equity on for financial
metho Increase Decrease profit under other profits announced Others 2020 provision for
movements impair statements
d equity method comprehensiv of issuance impairment
ment denominated in
e income
foreign currencies
I. Joint ventures
Equity
Euro-Asia Oceangate S.àr.l. 2,635,767,875.28 - - 71,938,690.26 - - - - - -174,410,003.58 2,533,296,561.96 -
method
Equity
Port of Newcastle 2,199,996,246.66 - - -7,767,864.73 5,561,700.43 - -106,920,517.08 - - 58,179,379.39 2,149,048,944.67 -
method
Qingdao Qianwan United Equity
1,504,764,906.58 - - 102,594,175.95 - - -100,000,000.00 - - - 1,507,359,082.53 -
Container Terminal Co., Ltd. method
Ningbo Daxie Merchants
International Terminals Co., Ltd. Equity
853,995,291.23 - - 112,101,331.18 - 3,703,504.36 - -969,800,126.77 - - - -
(hereinafter referred to as method
"Ningbo Daxie") (Note 1)
Yantai Port Group Laizhou Port
Co., Ltd. (formerly known as Equity
792,062,228.58 - - 24,750,032.44 - - -33,980,174.52 - - - 782,832,086.50 -
"China Overseas Harbour Affairs method
(Laizhou) Co., Ltd.")
Fujian Zhaohang Logistics
Management Partnership (limited Equity
- 450,000,000.00 - 2,283,105.00 - - - - - - 452,283,105.00 -
partnership) ("Zhaohang method
Logistics") (Note 2
Equity
Others 1,405,640,017.89 - - 52,096,085.60 19,869,062.92 -1,978.10 -20,835,178.59 - - -20,844,084.29 1,435,923,925.43 -
method
Subtotal 9,392,226,566.22 450,000,000.00 - 357,995,555.70 25,430,763.35 3,701,526.26 -261,735,870.19 -969,800,126.77 - -137,074,708.48 8,860,743,706.09 -
II. Associates
Shanghai International Port Equity
23,918,042,867.55 - - 2,234,593,249.98 142,216,652.43 -37,597,358.33 -899,371,516.97 - - 3,899,286.75 25,361,783,181.41 -
(Group) Co., Ltd. method
Equity
Nanshan Group 5,090,137,515.66 - - 424,745,838.41 -18,284,905.75 -31,623,552.67 -74,028,000.00 - - - 5,390,946,895.65 -
method
Equity
Terminal Link SAS(Note 3) 4,212,404,575.41 2,746,841,398.03 - 312,427,210.29 -33,697,616.56 - - - - -434,422,522.26 6,803,553,044.91 -
method
Liaoning Port Co., Ltd. (formerly
known as " Dalian Port (PDA) Equity
3,293,260,555.78 - - 169,692,898.03 2,865,701.41 7,108,981.80 -57,009,456.00 - - 40,045,832.60 3,455,964,513.62 621,818,684.80
Company Limited" and renamed method
on 28 January 2021)
Shenzhen China Merchants
Equity
Qianhai Industrial Development 6,841,066,224.12 - - 335,639,784.43 - - - - - - 7,176,706,008.55 -
method
Co., Ltd.
Ningbo Zhoushan Port Company Equity
- - - - - - - 3,098,292,286.95 - - 3,098,292,286.95 -
Limited (Note 4) method
China Merchants Northeast Asia
Equity
Development & Investment Co., - 1,000,000,000.00 - 7,786,285.71 - - - - - - 1,007,786,285.71 -
method
Ltd. (Note 5)
Equity
Others 5,169,401,078.52 70,665,700.00 -92,584,800.00 146,036,140.53 70,804,284.42 72,409,190.38 -75,291,321.55 - - -285,292,771.74 5,076,147,500.56 -
method
Subtotal 48,524,312,817.04 3,817,507,098.03 -92,584,800.00 3,630,921,407.38 163,904,115.95 10,297,261.18 -1,105,700,294.52 3,098,292,286.95 - -675,770,174.65 57,371,179,717.36 621,818,684.80
Total 57,916,539,383.26 4,267,507,098.03 -92,584,800.00 3,988,916,963.08 189,334,879.30 13,998,787.44 -1,367,436,164.71 2,128,492,160.18 - -812,844,883.13 66,231,923,423.45 621,818,684.80
- 85 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Long-term equity investments - continued
Note 1: Refer to Note (VI) 1 for details.
Note 2: In September 2020, the Company entered into limited partnership agreements with
AVIC Trust Co., Ltd., Quanzhou Transportation Development Property Investment Co.,
Ltd etc. Under these agreements, the Company invested RMB 450 million to participate
in the establishment of Zhaohang Logistics. As a limited partner, the Company can
appoint one of the five members of the management committee. According to the
provisions of the limited partnership agreement, Zhaohang Logistics will be controlled
by all the partners jointly.
Note 3: On 25 November 2019, the subsidiary of the Company, China Merchants Port Holdings
Company ("CMPort") has signed the shareholders’ agreement with the associate
Terminal Link SAS and its shareholder CMA CGM S.A. According to this agreement,
CMPort intends to subscribe for mandatory convertible bonds of USD468 million and
grant a loan facility of USD500 million to Terminal Link SAS in order to support
Terminal Link SAS' acquisition plan of 10 target terminals. On 26 March 2020, the
Company subscribed mandatory convertible bonds, equivalent to RMB2,746,841,398.03.
Meanwhile, Direct Achieve Investments Limited, a subsidiary of the Company, provided
a long-term loan to Terminal Link SAS for the terminal acquisition project and charged
interest to Terminal Link SAS at an interest rate of 6%. As of 31 December 2020, the
Company's long-term receivable of aggregate principal and interest from Terminal Link
SAS, equivalent to RMB2,797,354,060.41.
Note 4: The Company acquired 383 million shares of Ningbo Zhoushan Port Company Limited
with its own funds through centralized bidding on the Shanghai Stock Exchange during
the year. As of 31 December 2020, the Company and China Merchants International
Terminals (Ningbo) Co., Ltd., a subsidiary of the Company, held a total of 5% equity
interest in Ningbo Zhoushan Port Company Limited and could appoint one director
among the 12 members of the board of directors. Therefore, the Company has significant
influence on Ningbo Zhoushan Port Company Limited And the company would change
its equity investment in Ningbo Zhoushan from other equity instrument investment to
long-term equity investment in associates
Note 5: On 3 April 2020, the Company entered into a joint investment agreement with Liaoning
Port Group Co., Ltd. and China Merchants Shekou Holdings Co., Ltd., pursuant to
which the Company invested RMB1 billion to participate in the establishment of China
Merchants Northeast Asia Development & Investment Co., Ltd., with a 22.22%
shareholding, and may appoint one director among the five members of the board of
directors.
- 86 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Investments in other equity instruments
(1) Details of investments in other equity instruments
Investees Closing balance Opening balance
China Ocean Shipping Agency (Shenzhen) Co., Ltd. 144,424,830.00 144,069,435.00
Others 37,042,227.74 19,491,837.00
Total 181,467,057.74 163,561,272.00
(2) Details of non-trading equity instruments
Amounts Why
transferred to transferred to
Dividends income retained retained
Accumulated Why designated as
Item recognized for earnings from earnings from
gains/losses FVTOIC
the year other other
comprehensive comprehensive
income income
The intention of
China Ocean Shipping Agency holding is neither for
7,891,500.00 130,914,830.00 - N/A
(Shenzhen) Co., Ltd. sale nor profits in
short-term
The intention of
holding is neither for
Others 676,750.21 9,199,796.00 - N/A
sale nor profits in
short-term
Total 8,568,250.21 140,114,626.00 -
15. Other non-current financial assets
Item Closing balance Opening balance
Financial assets at FVTPL 910,807,452.56 2,385,363,537.39
Including: Investments in equity instruments 910,807,452.56 2,385,363,537.39
Including: Ningbo Zhoushan Port Co., Ltd. (Note) - 1,548,914,671.20
Qingdao Port International Co., Ltd. 886,385,139.77 820,263,917.11
Others 24,422,312.79 16,184,949.08
Note: Refer to Note (V) 13 for details.
- 87 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Investment properties
(1) Investment properties measured under cost method
Buildings and
Item Land use rights Total
structures
I. Total original carrying amount
1. Balance at 1 January 2020 105,727,492.82 6,291,738,452.02 6,397,465,944.84
2. Increase for the year - 206,574.38 206,574.38
(1) Purchase - 206,574.38 206,574.38
3. Decrease for the year - 13,724,755.35 13,724,755.35
(1) Disposal - 1,071,645.35 1,071,645.35
(2) Transfer to held-for-sale - 12,653,110.00 12,653,110.00
4. Balance at 31 December 2020 105,727,492.82 6,278,220,271.05 6,383,947,763.87
II. Accumulated depreciation and amortisation
1. Balance at 1 January 2020 31,252,512.29 605,950,758.15 637,203,270.44
2.Increase for the year 2,282,103.95 187,672,206.29 189,954,310.24
(1) Provision for the year 2,282,103.95 187,672,206.29 189,954,310.24
3. Decrease for the year - 1,965,092.02 1,965,092.02
(1) Disposal - 489,845.42 489,845.42
(2) Transfer to held-for-sale - 1,475,246.60 1,475,246.60
4. Balance at 1 January 2020 33,534,616.24 791,657,872.42 825,192,488.66
III. Impairment provision
1. Balance at 1 January 2020 - - -
2. Increase for the year - - -
3. Decrease for the year - - -
4. Balance at 31 December 2020 - - -
IV. Book value
1. At 31 December 2020 72,192,876.58 5,486,562,398.63 5,558,755,275.21
2. At 1 January 2020 74,474,980.53 5,685,787,693.87 5,760,262,674.40
(2) Investment properties without ownership certificates
Item Closing balance Opening balance
Buildings, structures, and land use rights 19,256,400.05 40,255,588.09
17. Fixed assets
17.1 Summary of fixed assets
Item Closing balance Opening balance
Fixed assets 29,469,832,876.56 27,519,109,906.41
Disposal of fixed assets 1,750,748.00 852,622.88
Total 29,471,583,624.56 27,519,962,529.29
- 88 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets - continued
17.2 Fixed assets
(1) Details of fixed assets
Machinery and
equipment,
Port and terminal Buildings and Motor vehicles
Item furniture and Total
facilities structures and cargo ships
fixture and other
equipment
I. Total original carrying amount
1.Balance at 1 January 2020 26,835,227,578.81 1,619,692,941.54 13,688,077,920.51 2,039,216,861.04 44,182,215,301.90
2.Increase for the year 4,524,798,470.75 369,350,604.72 2,213,225,703.62 164,937,079.91 7,272,311,859.00
(1)Purchase 71,684,688.10 700,802.12 114,357,577.13 13,029,518.26 199,772,585.61
(2)Transfer from development expenditure 1,408,916.16 - - - 1,408,916.16
(3)Transfer from construction in progress 1,754,888,222.69 142,301,793.67 476,726,701.65 106,199,438.61 2,480,116,156.62
(4) Transfer from right-of-use assets - - 307,458,506.08 38,350,000.00 345,808,506.08
(5) Effect of changes in the scope of
2,696,816,643.80 226,348,008.93 1,314,682,918.76 7,358,123.04 4,245,205,694.53
consolidation
3.Decrease for the year 718,395,304.50 47,101,576.44 380,761,375.46 28,965,159.53 1,175,223,415.93
(1) Disposal or retirement 445,859,279.24 15,456,387.45 295,286,035.68 28,965,159.53 785,566,861.90
(2) Transfer to construction in progress 50,622,456.67 31,645,188.99 83,619,288.11 - 165,886,933.77
(3) Transfer to held for sale assets (Note) 221,913,568.59 - 1,856,051.67 - 223,769,620.26
4. Reclassification 33,350,877.05 -84,290,946.10 50,940,069.05 - -
5. Effect of changes in foreign exchange -817,227,476.73 -11,017,342.84 -340,786,841.33 -44,002,772.02 -1,213,034,432.92
6.Balance at 31 December 2020 29,857,754,145.38 1,846,633,680.88 15,230,695,476.39 2,131,186,009.40 49,066,269,312.05
II. Accumulated depreciation
1.Balance at 1 January 2020 7,595,730,173.47 398,455,580.82 7,776,172,621.82 835,082,151.24 16,605,440,527.35
2.Increase for the year 1,717,137,050.23 112,325,736.21 1,917,530,741.07 141,926,361.56 3,888,919,889.07
(1) Provision 834,686,032.22 66,028,685.87 803,408,657.69 107,037,420.27 1,811,160,796.05
(2) Transfer from right-of-use assets - - 170,414,913.99 29,164,345.13 199,579,259.12
(3) Effect of changes in the scope of
882,451,018.01 46,297,050.34 943,707,169.39 5,724,596.16 1,878,179,833.90
consolidation
3.Decrease for the year 344,308,285.21 23,249,291.57 259,760,512.01 27,358,236.10 654,676,324.89
(1) Disposal or retirement 211,350,460.07 4,417,031.71 258,199,762.47 27,358,236.10 501,325,490.35
(2) Transfer to construction in progress 24,461,742.42 18,832,259.86 - - 43,294,002.28
(3) Transfer to held for sale assets (Note) 108,496,082.72 - 1,560,749.54 - 110,056,832.26
4. Reclassification -5,413,861.57 -17,320,060.74 22,733,922.31 - -
5. Effect of changes in foreign exchange -130,349,585.98 -2,208,633.67 -158,886,817.90 -9,330,036.71 -300,775,074.26
6. Balance at 31 December 2020 883,2795,490.94 468,003,331.05 9,297,789,955.29 940,320,239.99 19,538,909,017.27
III. Impairment provision
1. Balance at 1 January 2020 57,419,468.96 - 245,399.18 - 57,664,868.14
2. Increase for the year - - - - -
3. Disposal or retirement for the year - - -137,449.92 - -137,449.92
4. Reclassified amount for the year - 63,906.47 -63,906.47 - -
5. Balance at 31 December 2020 57,419,468.96 63,906.47 44,042.79 - 57,527,418.22
IV. Book value
1. Book value at 31 December 2020 20,967,539,185.48 1,378,566,443.36 5,932,861,478.31 1,190,865,769.41 29,469,832,876.56
2. Book value at 1 January 2020 19,182,077,936.38 1,221,237,360.72 5,911,659,899.51 1,204,134,709.80 27,519,109,906.41
Note: Refer to Note (V) 7.4 for details.
(2) The Group has no fixed assets that are temporarily idle as at 31 December 2020.
- 89 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
17. Fixed assets - continued
17.2 Fixed assets - continued
(3) Fixed assets leased out under operating leases
Book value at 31 Book value at 31
Item
December 2020 December 2019
Buildings and structures 291,567,507.17 312,602,129.37
Port and terminal facilities 79,578,478.13 12,233,139.52
Machinery and equipment, furniture and fixture and
8,646,797.33 63,964.98
other equipment
Commercial housing 4,757,652.18 -
Motor vehicles and cargo ships - 17,754.72
Total 384,550,434.81 324,916,988.59
(4) Fixed assets without ownership certificates
Book value at 31 Book value at 31
Item
December 2020 December 2019
Buildings, structures, port and terminal facilities 1,751,680,587.08 1,652,483,135.07
(5) Other issues
Item Amount Remark
Cost of fixed assets fully depreciated but still in use at
3,939,760,874.98
the end of the year
Cost of fixed assets temporarily idle at the end of the
-
year
Fixed assets disposed and retired in the year
Cost of fixed assets disposed and retired in the year 785,566,861.90
Net value of fixed assets disposed and retired in the
284,103,921.63
year
Loss on disposal or retirement of fixed assets in the
-45,180,168.60
year
17.3 Disposal of fixed assets
Item Closing balance Opening balance
Machinery and equipment, furniture and fixture and
1,216,187.48 848,410.93
other equipment
Motor vehicles and cargo ships 17,000.05 4,211.95
Port and terminal facilities 517,560.47 -
Total 1,750,748.00 852,622.88
- 90 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress
18.1 Summary of construction in progress
Item Closing balance Opening balance
Construction in progress 5,366,181,331.72 6,318,389,715.70
Materials for construction of fixed assets 15,249,274.46 15,751,726.18
Total 5,381,430,606.18 6,334,141,441.88
18.2 Construction in progress
(1) Details of construction in progress
Closing balance Opening balance
Item Carrying Provision for Carrying Provision for
amount impairment Book value amount impairment Book value
Port and terminal
4,662,213,617.98 - 4,662,213,617.98 5,713,564,853.28 787,181.96 5,712,777,671.32
facilities
Berths and yards 336,353,712.35 - 336,353,712.35 296,933,093.52 - 296,933,093.52
Infrastructure 197,699,601.64 - 197,699,601.64 175,423,610.37 - 175,423,610.37
Ship under
58,674,526.32 - 58,674,526.32 80,042,167.50 - 80,042,167.50
construction
Others 111,239,873.43 - 111,239,873.43 53,213,172.99 - 53,213,172.99
Total 5,366,181,331.72 - 5,366,181,331.72 6,319,176,897.66 787,181.96 6,318,389,715.70
- 91 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
18.2 Construction in progress - continued
(2) The top ten balances of construction in progress
Proportion of
Interest
accumulated Amount of Including:
Other Effect of changes Constructio capitalizatio
Increase for the Transfer to fixed construction accumulated capitalized
Item Budget amount 1 January 2020 decreases for in foreign 31 December 2020 n progress n rate for Capital source
year assets investment in capitalized interest for the
the year exchange (%) the current
budget interest year
year (%)
(%)
Reconstruction project of container, oil
2,851,020,136.97 1,058,989,758.99 485,237,057.61 - - - 1,544,226,816.60 54.16 54.16 40,818,524.04 35,011,773.08 4.13 Self-funding and loan
terminal and tank area, HIPG
Hydraulic structure engineering for the
reconstruction project of Berth 1# - 4#, 2,639,607,386.75 1,407,055,802.30 143,384,534.55 85,936,753.07 405,379,918.39 -72,157,673.43 986,965,991.96 56.00 56.00 537,530.59 537,530.59 2.55 Self-funding and loan
Haixing Terminal
Phase III project for the bulk grain
warehouses at Berth 2# and 3#, Mayong 620,000,000.00 321,198,858.46 165,851,858.79 - - - 487,050,717.25 78.56 78.56 2,552,884.46 2,535,928.90 4.38 Self-funding and loan
Port Area
General cargo terminal project at Donghai
737,792,300.00 234,308,909.02 230,330,096.08 - - - 464,639,005.10 62.98 62.98 14,018,717.36 11,153,244.13 4.79 Self-funding and loan
Island Port Area of Zhanjiang Port
Universal terminal project at Xiashan Port
905,348,400.00 254,545,729.28 112,037,664.03 - - - 366,583,393.31 40.49 40.49 31,484,883.79 10,995,102.59 4.79 Self-funding and loan
Area of Zhanjiang Port
Phase I reconstruction project for the old
tank area of the Petrochemical Department 218,378,500.00 178,983,632.92 3,485,964.32 - - - 182,469,597.24 83.56 83.56 5,024,262.73 - - Self-funding and loan
of Zhanjiang Port
Phase I expansion project for the container
terminal at Baoman Port Area, Zhanjiang 2,412,810,000.00 155,695,498.79 316,981.13 - - - 156,012,479.92 6.47 6.47 964,740.46 - - Self-funding and loan
Port
Phase I project for the stuffing and
destuffing service area of Baoman Port 606,521,505.83 134,029,761.00 3,045,453.56 - - - 137,075,214.56 22.60 22.60 16,689,500.56 - - Self-funding and loan
Area, Zhanjiang Port
Reconstruction project for Yard 16# of the
120,120,000.00 1,492,394.31 97,845,222.36 - - - 99,337,616.67 82.70 82.70 - - - Self-funding
bulk cargo terminal, Zhanjiang Port
Berth #1 project for Shantou Guang'ao
190,000,000.00 - 68,846,809.70 - - - 68,846,809.70 36.24 36.24 298,799.22 298,799.22 4.79 Self-funding and loan
Port Area
Total 11,301,598,229.55 3,746,300,345.07 1,310,381,642.13 85,936,753.07 405,379,918.39 -72,157,673.43 4,493,207,642.31 112,389,843.21 60,532,378.51
- 92 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Construction in progress - continued
18.3 Materials for construction of fixed assets
Closing balance Opening balance
Item Carrying Provision for Carrying Provision for
amount impairment Book value amount impairment Book value
Materials for construction
15,249,274.46 - 15,249,274.46 15,751,726.18 - 15,751,726.18
of fixed assets
19. Right-of-use assets
(1) Details of right-of-use assets
Machinery and
equipment,
Motor
Port and terminal Buildings and furniture and
Item vehicles and Others Total
facilities structures fixture and
cargo ships
other
equipment
I. Cost
1. Balance at 1 January
6,689,402,526.61 186,206,419.38 767,725,299.95 45,970,740.24 2,846,079,467.04 10,535,384,453.22
2020
2. Increase for the year 484,770,470.31 11,433,840.25 7,672,321.67 - 2,673,929.81 506,550,562.04
(1) Purchase 484,770,470.31 11,433,840.25 7,672,321.67 - 2,673,929.81 506,550,562.04
3. Decrease for the year 23,874,770.86 28,210,371.94 309,391,492.48 38,350,000.00 4,302,156.07 404,128,791.35
(1) Termination of lease 23,874,770.86 28,210,371.94 309,391,492.48 38,350,000.00 4,302,156.07 404,128,791.35
4. Effect of changes in
-377,928,574.94 -8,767,271.15 2,616.89 - -182,308,916.92 -569,002,146.12
foreign exchange
5.Balance at 31 December
6,772,369,651.12 160,662,616.54 466,008,746.03 7,620,740.24 2,662,142,323.86 10,068,804,077.79
2020
II. Accumulated
depreciation
1.Balance at 1 January
378,840,364.31 36,980,701.16 231,571,742.64 30,948,956.19 223,717,298.46 902,059,062.76
2020
2.Increase for the year 238,125,255.25 19,582,502.81 50,762,871.87 1,958,694.54 45,315,531.18 355,744,855.65
(1) Provision 238,125,255.25 19,582,502.81 50,762,871.87 1,958,694.54 45,315,531.18 355,744,855.65
3. Decrease for the year 7,197,030.47 25,070,374.43 172,347,900.39 29,164,345.13 4,159,351.13 237,939,001.55
(1) Termination of lease 7,197,030.47 25,070,374.43 172,347,900.39 29,164,345.13 4,159,351.13 237,939,001.55
4. Effect of changes in
-21,008,481.15 -1,077,275.10 -682,790.90 - -15,508,009.52 -38,276,556.67
foreign exchange
5.Balance at 31 December
588,760,107.94 30,415,554.44 109,303,923.22 3,743,305.60 249,365,468.99 981,588,360.19
2020
III. Impairment provision
1. Balance at 1 January
- - - - - -
2020
2. Increase for the year - - - - - -
3. Decrease for the year - - - - - -
4. Balance at 31 December
- - - - - -
2020
IV. Book value
1. Book value at 31
6,183,609,543.18 130,247,062.10 356,704,822.81 3,877,434.64 2,412,776,854.87 9,087,215,717.60
December 2020
2. Book value at 1 January
6,310,562,162.30 149,225,718.22 536,153,557.31 15,021,784.05 2,622,362,168.58 9,633,325,390.46
2020
- 93 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
19. Right-of-use assets - continued
(2) Amount recognized in profit or loss
Category Amount incurred in the year
Depreciation expenses of right-of-use assets (Note 1) 355,744,855.65
Interest expenses on lease liabilities (Note 2) 99,173,836.07
Expenses for short-term leases 63,007,327.53
Expenses for leases of low value assets 139,397.25
Variable lease payments not included in the measurement of lease liabilities
-
(Note 3)
Revenue from sublease of right-of-use assets 19,006,077.17
Note 1: In 2020, no depreciation expenses of right-of-use assets is capitalized.
Note 2: In 2020, no interest expenses of lease liabilities are capitalized.
Note 3: In 2020, no variable lease payments were included in the measurement of lease liabilities.
(3) The total cash outflows in relation to leases for the current year amount to RMB
512,864,681.32.
(4) The lease terms of the lease assets of the Group are as follows:
Category Lease term
Port and terminal facilities 1-99 years
Buildings and structures 1-5 years
Machinery and equipment, furniture and fixture and other equipment 1-6 years
Motor vehicles and cargo ships 5 years
Others 1-35 years
(5) The Group has an option to purchase port and terminal facilities, machinery and
equipment and cargo ships at the end of the extension period at a rate that is below market
rates.
- 94 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets
(1) Details of intangible assets
Land use rights Terminal
Items Others Total
(Note 2) management rights
I. Total original carrying amount
1.Balance at 1 January 2020 13,324,673,654.68 10,223,755,868.87 1,148,257,126.44 24,696,686,649.99
2.Increase for the year 1,242,316,513.14 103,112,803.75 121,314,553.21 1,466,743,870.10
(1) Purchase 588,985.17 103,112,803.75 61,993,003.31 165,694,792.23
(2) Effect of changes in the scope of
1,241,727,527.97 - 46,191,467.18 1,287,918,995.15
consolidation
(3) Other increase - - 13,130,082.72 13,130,082.72
3.Decrease for the year 621,368,889.28 7,368,180.44 2,304,520.38 631,041,590.10
(1) Disposal 376,891,493.94 - 2,165,163.07 379,056,657.01
(2) Transfer to held-for-sale assets (Note 1) 243,458,641.73 - - 243,458,641.73
(3) Other decrease 1,018,753.61 7,368,180.44 139,357.31 8,526,291.36
4.Effect of changes in foreign
-20,217,599.85 -1,323,287,930.95 -166,921,137.02 -1,510,426,667.82
exchange
5.Balance at 31 December 2020 13,925,403,678.69 8,996,212,561.23 1,100,346,022.25 24,021,962,262.17
II. Accumulated amortization
1.Balance at 1 January 2020 3,161,151,683.32 1,481,484,521.65 360,334,890.92 5,002,971,095.89
2.Increase for the year 326,872,826.32 230,075,828.24 94,373,946.52 651,322,601.08
(1) Provision 310,861,507.98 230,075,828.24 68,603,128.84 609,540,465.06
(2) Effect of changes in the scope of
16,011,318.34 - 25,770,817.68 41,782,136.02
consolidation
(3) Other increase - - - -
3.Decrease for the year 79,084,466.90 - 2,220,063.91 81,304,530.81
(1) Disposal 47,911,526.84 - 2,165,163.07 50,076,689.91
(2) Transfer to held-for-sale assets (Note 1) 30,906,535.82 - - 30,906,535.82
(3) Other decrease 266,404.24 - 54,900.84 321,305.08
4.Effect of changes in foreign
-9,473,349.26 -267,559,789.29 -40,085,929.25 -317,119,067.80
exchange
5.Balance at 31 December 2020 3,399,466,693.48 1,444,000,560.60 412,402,844.28 5,255,870,098.36
III. Impairment provision
1.Balance at 1 January 2020 - - - -
2.Increase for the year - - - -
3.Decrease for the year - - - -
4.Balance at 31 December 2020 - - - -
IV. Book value
1. Book value at 31 December 2020 10,525,936,985.21 7,552,212,000.63 687,943,177.97 18,766,092,163.81
2. Book value at 1 January 2020 10,163,521,971.36 8,742,271,347.22 787,922,235.52 19,693,715,554.10
Note 1: Refer to Note (V) 7.4 for details.
Note 2: The Group obtained the land use rights of berths and yards covering an area of
1,049,946.00 m2 in Chiwan Port Area from Nanshan Group (the plot is within Chiwan
watershed, including a land of 2.2 km2 invested by the shareholder of Nanshan Group--
Shenzhen Investment Holdings Co., Ltd. in Nanshan Group as its contribution, and the
plot formed from marine reclamation by Nanshan Group), whose original cost is
RMB 1,400,288,984.00 and useful life is 20-50 years. Among them, the land use rights
for an area of 270,692.00 m2 (whose original cost is RMB 122,623,476.00) were
invested Nanshan Group in the Company as its contribution and the rest land use rights
were acquired by the Group from Nanshan Group through long-term lease.
- 95 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
20. Intangible assets - continued
(1) Details of intangible assets - continued
Note 2: - continued
At present, since Nanshan Group haven't obtained the land use rights of the land within
the Chiwan watershed, including the land provided by Nanshan Group through
investment contribution and lease, the Group cannot obtain the ownership certificates for
the relevant land and the buildings and structures on the aforesaid land.
On 20 March 2001, 18 June 2003, 29 September 2004, and 2 July 2020, Nanshan Group
made the following commitments for all the land use rights that it had obtained on the
dates: Nanshan Group will irrevocably and unconditionally agree that, such land use
rights belong to the Group. If the Group suffer any loss, or shall bear expenses and
liabilities, or is subject to any claim for compensation, or is involved in any lawsuit due
to any actual or potential illegality and unenforceability of any land use agreement that is
signed or will be signed by the Group, Nanshan Group undertakes that, the transferees of
such land use rights and their successors shall be sufficiently held harmless. Therefore,
the management of the Company holds that the relevant assets have no significant
impairment risk although the relevant ownership certificates are not obtained and the
Group will not have any major contingent liabilities because of that.
The management of the Company has been aware of that Nanshan Group is actively
negotiating with the relevant government authorities about the outstanding issues of the
related land. Currently, the date when the Group can obtain the ownership certificates
for the relevant land and buildings and structures on the land cannot be reliably
estimated.
As at 31 December 2020, the lease agreement for the land use rights of 194,293.90 m2
land among the aforesaid land (the original cost of which is RMB137,749,984.16) has
expired.
(2) Land use rights without ownership certificates on 31 December 2020:
Book value at this Book value at last
Item
year end year end
Land use rights 1,051,555,795.12 1,163,098,978.96
- 96 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Development expenses
Decrease in the current year
Increase in the Transfer to Transfer to
Item 1/1/2020 Transfer to 31.12/2020
current year intangible profit or loss
fixed assets
assets for the year
CTOS upgrading - 71,725,843.56 - - 71,725,843.56 -
Development and application of automatic
control systems for heavy oil, diesel, gasoline, 4,834,850.03 14,855,085.10 - - - 19,689,935.13
and methanol processes
"China Merchants Chip" ICT integrated R&D
for the automatic and semi-automatic container - 14,440,326.99 - - 14,440,326.99 -
terminal (subsystem of the Haixing Project)
Customs Clearance Platform for Combined
- 16,886,500.00 - - 16,886,500.00 -
Ports of Shenzhen
The R&D and implementation project for the
"China Merchants Chip" Cloud Smart Platform - 5,021,649.98 - - 5,021,649.98 -
V1.0 (for bulk cargos)
Key technical research for the device used to
15,830,956.74 4,825,168.41 - - - 20,656,125.15
load crude oil to a train
Dust suppression device for bulk grains
- 3,152,932.65 - - 3,152,932.65 -
(RD201904)
Others 16,733,285.51 53,364,165.96 - 1,408,916.16 44,796,860.36 23,891,674.95
Total 37,399,092.28 184,271,672.65 - 1,408,916.16 156,024,113.54 64,237,735.23
22. Goodwill
(1) Carrying amount of goodwill
Amount of
Investee 1/1/2020 Increase Decrease changes in 31/12/2020
foreign exchange
TCP Participaes S.A.
3,546,466,476.18 - - -983,899,222.44 2,562,567,253.74
("TCP")
Mega Shekou Container Terminals
1,815,509,322.42 - - - 1,815,509,322.42
Limited
China Merchants Port Holdings 993,992,000.00 - - - 993,992,000.00
Shantou Port 552,317,736.65 - - - 552,317,736.65
Zhanjiang Port (Group) Co., Ltd.
418,345,307.68 - - - 418,345,307.68
("Zhanjiang Port")
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 8,023,659,694.81 188,497,194.41 - -983,899,222.44 7,228,257,666.78
Note: The addition in this year represents the goodwill arising from the Group's acquisition of
Ningbo Daxie not under common control in November 2020, as detailed in Note (VI) 1.
(2) Provisions for goodwill impairments
Effect of changes in
Investee 1/1/2020 Increase Decrease 31/12/2020
foreign exchange
Shantou Port - 552,317,736.65 - - 552,317,736.65
- 97 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
22. Goodwill - continued
(3) Information of assets group or portfolio of assets group to which the goodwill belongs
The Group takes the ability to independently generate cash inflows, manage the way of
production and operation activities (mainly by geographic areas) and unified decision on the use
and disposal of the assets as the criteria to determine assets group or portfolio of assets group, and
performs impairment test of goodwill for the assets group or portfolio of assets group as
determined. As at 31 December 2020, 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.; CMPort; Shantou Port; Zhanjiang port; Shenzhen
Mawan Project, including Shenzhen Mawan Port Waterway Co., Ltd., Shenzhen Magang
Godown & Wharf Co., Ltd. (hereinafter referred to as "Magang Godown & Wharf"); Ningbo
Daxie.
(4) Impairment test of goodwill and key parameters
When testing the goodwill for impairment, the Group compares the carrying amount of related
assets group and portfolio of assets group (including goodwill) with the recoverable amount. If the
recoverable amount is less than the carrying amount, the difference is included in profit or loss for
the period. The Group determines the recoverable amount of the assets group and portfolio of
assets group that generate goodwill at fair value less cost of disposal or at present value of
expected future cash flows. The fair value is determined using market approach. The present
value of cash flows is estimated based on the forecast of cash flows for 5 years to 28 years
detailed forecast period and subsequent forecast period. The estimated future cash flows for the
detailed forecast period are based on the business plan established by the management; the
expected future cash flows for the subsequent forecast period are determined in conjunction with
the level of the final year of the detailed forecast period, combined with the Group's business
plans, industry trends and inflation rates. The growth rate adopted will not exceed the long-term
average growth rate of the country where the assets group and portfolio of assets group are
located. The key assumptions used by the Group in estimating the present value of future cash
flows include growth rate and discount rate etc. The pre-tax discount rate and the growth rate for
subsequent forecasted period adopted in 2020 are around 11.19% - 16.78% and 2.7%-3.0%
respectively. The parameters of key assumptions determined by the Group's management are in
line with the Group's historical experience or external source of information.
(5) Effect of impairment test of goodwill
During the year, the Group assessed the recoverable amount of the asset group or set of asset
groups which including the goodwill and determined that the goodwill of Shantou Port was
impaired by an amount of RMB552,317,736.65.
- 98 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Long-term prepaid expenses
Effect of
changes in the Increase for the Amortization in
Item 1/1/2020 Other changes 31/12/2020
scope of year the year
consolidation
Tonggu channel widening
525,516,089.84 - - 23,656,287.85 -10,012,815.00 491,846,986.99
project (Note 1)
Relocation project of Nanhai
39,049,767.97 - 1,780,994.09 1,061,913.76 - 39,768,848.30
Rescue Bureau
Expenditures for the
improvement of leased fixed 17,778,884.18 - 1,255,355.00 1,555,016.15 - 17,479,223.03
assets
West public channel
widening project, West port 80,470,088.60 - 161,697,157.65 2,965,546.15 10,012,815.00 249,214,515.10
area (Note 2)
Others 49,096,181.08 9,924,686.56 34,146,022.07 16,243,578.85 -390,411.60 76,532,899.26
Total 711,911,011.67 9,924,686.56 198,879,528.81 45,482,342.76 -390,411.60 874,842,472.68
Note 1: This represent the Group's actual expenses on the Shenzhen Western Port Area Tonggu
Channel 210-270 Meters Widening Project. According to relevant resolutions of
Shenzhen Municipal Government, the expenses incurred for the 210-240M widening
project are born by the enterprise and government on 60% to 40% principle, and the
expenses incurred for the 240-270M 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 channel in the item of "long-term prepaid expenses", and
amortized such expenses over the expected useful lives of two widening projects of 35
and 40 years using straight-line method since the completion of each project in 2008 and
2019, respectively.
Note 2: This represent the Group's actual expenses on the Shenzhen Western Port Area Public
Channel Widening Project, of which the widening of 240-270 meters in the first section
was completed on 1 June 2019 and the widening of 240-270 meters in the second and
third sections was completed on 5 November 2020. According to relevant resolutions of
Shenzhen Municipal Government, the expenses incurred for the project are born by the
enterprise and government on 50% to 50% principle. The Company's subsidiary has
included the expenses on deepening the channel in the item of "long-term prepaid
expenses", and amortized such expenses over the expected useful life of 40 years using
straight-line method since the completion of each section of the channel widening
project.
- 99 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Closing balance Opening balance
Item Deductible Deductible
temporary Deferred tax assets temporary Deferred tax assets
differences differences
Unrealized profit 782,637,004.71 190,978,844.60 805,528,482.59 196,545,362.77
Depreciation of fixed assets 121,474,197.24 30,363,658.82 108,244,052.41 27,227,981.18
Deductible losses 375,133,696.59 121,834,055.80 79,034,267.56 19,758,566.89
Provision for credit loss 43,779,732.38 11,029,547.41 71,636,378.50 17,881,386.96
Provisions 83,415,919.34 22,408,962.33 60,976,862.88 16,601,394.38
Deferred income 40,760,480.40 9,289,713.04 40,272,757.15 9,737,699.40
Amortization of computer software 11,007,022.11 2,751,755.53 13,630,227.66 3,407,556.91
Organization costs 8,436,714.76 2,109,178.68 10,905,997.08 2,726,499.27
Provision for impairment losses of assets 884,061.15 221,015.29 1,918,890.31 479,722.58
Others 121,790,935.17 29,744,326.80 29,120,031.36 6,069,331.93
Total 1,589,319,763.85 420,731,058.30 1,221,267,947.50 300,435,502.27
(2) Deferred tax liabilities without offsetting
Closing balance Opening balance
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Withholding dividend income tax 28,188,540,389.01 1,925,457,143.90 24,219,415,080.67 1,735,339,232.65
Fair value adjustment of assets acquired
8,566,522,113.13 1,925,197,755.69 7,989,044,772.81 1,812,240,254.17
by business combination
Changes in fair value of other non-current
1,625,996,080.95 225,877,441.96 1,434,338,833.65 186,123,245.82
financial assets
Depreciation of fixed assets 826,231,081.71 217,461,491.73 731,584,120.16 166,830,773.03
Changes in fair value of investments in
140,581,630.00 35,145,407.50 140,659,435.00 35,164,858.75
other equity instruments
Others 87,206,887.29 18,413,901.95 110,838,382.96 26,054,384.75
Total 39,435,078,182.09 4,347,553,142.73 34,625,880,625.25 3,961,752,749.17
(3) Deferred tax assets or liabilities that are presented at the net amount after offsetting
Balance of deferred Balance of deferred
Offset amount of Offset amount of
tax assets or tax assets or
deferred tax assets deferred tax assets
Item liabilities after liabilities after
and liabilities at the and liabilities at the
offsetting at the end offsetting at the end
end of the year end of last year
of this year of last year
Deferred tax assets - 420,731,058.30 - 300,435,502.27
Deferred tax liabilities - 4,347,553,142.73 - 3,961,752,749.17
(4) Details of unrecognized deferred tax assets
Item Closing balance Opening balance
Deductible temporary differences 428,572,235.55 503,037,805.60
Deductible losses 2,512,461,574.84 2,289,500,649.57
Total 2,941,033,810.39 2,792,538,455.17
- 100 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Deferred tax assets and deferred tax liabilities - continued
(4) Details of unrecognized deferred tax assets - continued
The Group recognizes deferred income tax assets to the extent of future taxable income that is
likely to be obtained to offset the deductible temporary differences and deductible losses. For the
excess of deductible temporary differences and deductible losses over future taxable income, no
deferred tax assets is recognized.
(5) Deductible losses for unrecognized deferred tax assets will be expired in the following
years:
Year Closing balance Opening balance
2020 - 182,809,604.33
2021 244,394,853.17 244,394,853.17
2022 628,805,890.89 615,440,669.35
2023 793,817,471.45 745,889,729.49
2024 507,534,486.68 500,926,253.51
2025 337,871,725.27 -
No expiration date 37,147.38 39,539.72
Total 2,512,461,574.84 2,289,500,649.57
25. Other non-current assets
Item Closing balance Opening balance
Dachanwan port area Phase II land replacement
916,884,222.49 916,884,222.49
payment (Note 1)
Advances for the channel project (Note 2) 940,472,488.75 896,848,920.76
Prepayments for land use rights 132,334,704.86 132,334,704.86
Prepayments for fixed assets 32,623,333.85 90,186,071.12
Prepayments for terminal franchise 31,113,113.10 30,356,842.78
Others 85,040,820.59 16,354,705.03
Total 2,138,468,683.64 2,082,965,467.04
Note 1: It is the lands located in Shenzhen Qianhaiwan Logistics Park which has been returned
to government in 2019 by the Company’s subsidiaries Antongjie Terminal Services
(Shenzhen) Co., Ltd. (“ATJ”) and Ansujie Terminal Services (Shenzhen) Co., Ltd.
(“ASJ”). Qianhai Administration replaces 55% land and corresponding shoreline (with a
land area of approximately 531,300 square meters) included in the total areas of T102-
0166 and T102-0167 held by ATJ and ASJ to Dachanwan Port Area Phase II. As at 31
December 2020, the change of land use rights of Dachanwan Port Area Phase II has not
been completed.
Note 2: This represent that the Company's subsidiary Zhanjiang Port, upon its reorganization
into a joint stock company in 2007, signed the Channel Arrangement Agreement with
State-owned Assets Supervision and Administration Commission of Zhanjiang
("Zhanjiang SASAC") and China Merchants International Terminal (Zhanjiang) Co., Ltd.
According to the agreement, the channel belongs to Zhanjiang SASAC, therefore the
Group included the advances of channel project that should be repaid by Zhanjiang
SASAC in other non-current assets.
- 101 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. Short-term borrowings
(1) Classification of short-term borrowings
Item Closing balance Opening balance
Credit loan 8,976,788,882.26 9,439,099,793.47
Guaranteed loan (Note 1) 1,506,986,666.67 -
Total 10,483,775,548.93 9,439,099,793.47
Note 1: The Company provided guarantee for the loan.
(2) At 31 December 2020, the Group has no short-term borrowings that were overdue.
27. Notes payable
Category Closing balance Opening balance
Bank acceptance 1,600,100.00 2,529,389.61
Commercial acceptance 5,481,672.32 73,926,559.40
Total 7,081,772.32 76,455,949.01
28. Accounts payable
(1) Details of accounts payable are as follows:
Item Closing balance Opening balance
Service fee 146,212,519.71 133,134,547.67
Construction fee 114,557,864.74 173,811,112.97
Material purchase 144,277,086.08 146,969,853.48
Rental fee 7,494,989.48 13,897,329.66
Equipment payments 16,905,379.88 15,947,499.80
Others 169,664,189.09 107,352,122.81
Total 599,112,028.98 591,112,466.39
(2) Significant accounts payable aged more than one year
Carrying amount at the Reason for outstanding
Name
end of the year or carry-forward
The government planning
project has not been
Shenzhen Land and Resources Bureau 21,642,795.50 completed, and the
ownership certificate is
not handled
- 102 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Receipts in advance
(1) Summary of receipts in advance
Item Closing balance Opening balance
Equity transfer fee received in advance 20,492,849.00 -
Management fee received in advance 10,350,161.96 -
Ship transfer fee received in advance 3,450,560.00 -
Rental fee received in advance 2,715,835.65 13,409,679.80
Service fee received in advance - 10,500,836.06
Others 2,500,721.29 4,916,171.51
Total 39,510,127.90 28,826,687.37
(2) There is no significant receipts in advance aged more than one year at the end of the year
30. Contract liabilities
(1) Summary of contract liabilities
Item Closing balance Opening balance
Port charges received in advance 78,789,466.29 63,954,147.44
Warehousing fee received in advance 18,460,680.90 -
Service fee received in advance 48,813,245.81 17,396,130.82
Others 1,981,148.70 4,480,724.26
Total 148,044,541.70 85,831,002.52
(2) There was no significant change in the book value of contract liabilities during the year.
(3) There is no significant contract liabilities aged more than one year at the end of the year.
(4) Qualitative and quantitative analysis of contract liabilities
The contract liability mainly represents the amount received by the Group to provide port services
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 contract liabilities will be
recognized as income after the Group fulfills its performance obligations.
- 103 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Contract liabilities - continued
(5) Revenue recognized in the year and included in the carrying amount of contract liabilities
at the beginning of the year
An amount of RMB 70,660,631.25 included in the book value of contract liabilities at the
beginning of 2020 has been recognized as revenue in the current year, including contract
liabilities arising from settled but unfinished construction resulting from the contract of receipt of
service fee in advance amounting to RMB 5,296,400.84, contract liabilities arising from settled
but unfinished construction resulting from the contract of receipt of port charges in advance
amounting to RMB 61,515,581.17 , and contract liabilities arising from settled but unfinished
construction resulting from other contracts amounting to RMB 3,848,649.24.
31. Employee benefits payable
(1) Employee benefits payable
Effect of changes
Increase in the Decrease in the
Item 1/1/2020 in the scope of 31/12/2020
current year current year
consolidation
1. Short-term benefits 630,356,614.44 42,603,096.98 2,683,167,538.71 2,649,640,006.43 706,487,243.70
2. Post-employment benefits -
5,015,323.78 1,908,108.13 165,280,891.31 165,986,638.38 6,217,684.84
defined contribution plan
3. Termination benefits - - 24,658,398.01 24,658,398.01 -
4. Other benefits due within a
- - 4,387,916.25 4,387,916.25 -
year
5. Others -653,153.58 -3,982.30 4,751,405.94 4,713,576.45 -619,306.39
Total 634,718,784.64 44,507,222.81 2,882,246,150.22 2,849,386,535.52 712,085,622.15
(2) Short-term benefits
Effect of changes
Increase in the Decrease in the
Item 1/1/2020 in the scope of 31/12/2020
current year current year
consolidation
I. Wages and salaries, bonuses, 604,864,369.83 39,288,352.03 2,221,370,860.93 2,191,143,734.26 674,379,848.53
allowances and subsidies
II. Staff welfare - - 126,699,782.20 126,699,782.20 -
III. Social insurance charges 9,636,773.03 2,788,350.45 129,801,742.05 126,132,738.79 16,094,126.74
Including: Medical insurance 8,317,044.95 2,750,575.62 105,632,132.49 101,834,602.65 14,865,150.41
Work injury insurance - 6,287.60 9,007,542.06 9,007,571.52 6,258.14
Maternity insurance - 31,487.23 6,094,575.77 6,095,261.41 30,801.59
Others 1,319,728.08 - 9,067,491.73 9,195,303.21 1,191,916.60
IV. Housing funds - -454,068.00 156,097,308.32 156,133,562.21 -490,321.89
V. Labor union and employee 15,855,471.56 980,462.50 40,068,412.17 40,400,755.91 16,503,590.32
education funds
VI. Other short-term benefits 0.02 - 9,129,433.04 9,129,433.06 -
Total 630,356,614.44 42,603,096.98 2,683,167,538.71 2,649,640,006.43 706,487,243.70
- 104 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Employee benefits payable - continued
(3) Defined contribution plan - continued
Effect of changes
Increase in the Decrease in the
Item 1/1/2020 in the scope of 31/12/2020
current year current year
consolidation
I. Basic pension 4,900,268.87 1,912,600.29 82,978,065.44 83,677,975.96 6,112,958.64
II. Unemployment insurance 0.01 64,354.90 1,260,949.37 1,261,276.04 64,028.24
III. Enterprise annuity 115,054.90 -68,847.06 81,041,876.50 81,047,386.38 40,697.96
Total 5,015,323.78 1,908,108.13 165,280,891.31 165,986,638.38 6,217,684.84
The Company and its subsidiaries participates in the social security contributions and the
unemployment insurance plan established by government institutions as required. According to
such plans, the Group contributes in proportion to the local government. Except for the above-
mentioned deposit fees, the Group have no outstanding contributions to be paid to the social
security contributions and the unemployment insurance plan. The corresponding expenses are
included in the current profit and loss or the cost of related assets when incurred.
32. Taxes payable
Item Closing balance Opening balance
Enterprise income tax 2,319,560,340.66 1,843,381,355.01
VAT 12,385,746.69 11,377,223.08
Other taxes 36,716,469.02 43,317,764.65
Total 2,368,662,556.37 1,898,076,342.74
33. Other payables
(1) Summary of other payables
Item Closing balance Opening balance
Interest payable - -
Dividends payable 54,255,854.79 150,286,550.81
Other payables 2,402,445,042.81 2,073,468,127.15
Total 2,456,700,897.60 2,223,754,677.96
(2) Dividends payable
Item Closing balance Opening balance
Ordinary share dividends 54,255,854.79 150,286,550.81
Including: Sri Lanka Ports Authority 34,255,854.79 31,392,997.47
China Merchants Zhangzhou Development Zone
20,000,000.00 -
Co., Ltd.
Yihai Kerry Golden Arowana Cereals, Oils and
- 37,402,426.09
Foodstuffs Co., Ltd.
Soifer Participaes Societárias S.A. - 14,141,088.03
Pattac Empreendimentos e Participaes S.A. - 4,597,020.40
Tuc Participacoes Portuarias S.A. - 4,597,018.82
Modern Terminals Limited - 58,156,000.00
As at 31 December 2020, the Group has no dividend payable with aging over one year.
- 105 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Other payables - continued
(3) Other payables
(a) Disclosure of other payables by nature
Item Closing balance Opening balance
Amount payable for construction and quality warranty 1,044,197,364.04 1,053,340,753.66
Deposits 359,957,933.44 162,460,889.01
Customer discount 119,368,121.44 117,736,418.62
Prepaid expenses 229,817,005.45 110,741,377.48
Port construction and security fee 55,085,280.96 58,732,330.62
Balance of land use rights transfer 11,295,700.00 14,538,738.00
Others 582,723,637.48 555,917,619.76
Total 2,402,445,042.81 2,073,468,127.15
(b) Significant other payables with aging over 1 year
Company name Closing balance Reason for outstanding or carry-forward
Transport Commission of Shenzhen Municipality 60,152,353.49 To be paid upon confirmation by both parties
The contracted settlement condition has not been
China First Metallurgical Group Co., Ltd. 47,280,549.63
reached
Wuxi Huadong Heavy Machinery Co., Ltd. 44,295,045.47 To be paid upon confirmation by both parties
Shanghai Zhenhua Heavy Industries Co., Ltd. 35,382,190.55 To be paid upon confirmation by both parties
The contracted settlement condition has not been
CCCC Fourth Harbor Engineering Co., Ltd. 34,845,078.73
reached
Shantou Transportation Bureau 31,358,355.47 To be paid upon confirmation by both parties
The contracted settlement condition has not been
CCCC-FHDI Engineering Co.,Ltd. 21,878,790.74
reached
Qingdao Maritime Bureau 20,713,982.12 To be paid upon confirmation by both parties
Zhanjiang Transportation Bureau 17,524,972.24 To be paid upon confirmation by both parties
The contracted settlement condition has not been
Suhua Construction Group Co., Ltd. 14,483,683.52
reached
Quality warranty, the contracted settlement condition
China Merchants Real Estate (Shenzhen) Co., Ltd. 14,305,122.78
has not been reached
The contracted settlement condition has not been
CCCC Third Harbor Engineering Co., Ltd. 12,663,285.33
reached
Shenzhen Municipal Special Fund for Development of
12,238,226.14 To be paid upon confirmation by both parties
Bulk Cement
Shantou Finance Bureau 10,000,000.00 To be paid upon confirmation by both parties
Jiangmen Southern Transport Machinery Engineering The contracted settlement condition has not been
7,890,163.70
Co., Ltd. reached
The contracted settlement condition has not been
Harman Technology (Shenzhen) Co., Ltd. 5,917,392.48
reached
Total 390,929,192.39
- 106 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
34. Non-current liabilities due within one year
Item Closing balance Opening balance
Long-term loans due within one year 2,074,906,728.26 2,954,701,198.90
Including: Credit loan 749,046,479.86 1,294,054,756.85
Guaranteed loan 739,805,701.02 1,119,153,332.94
Mortgage loan 586,054,547.38 541,493,109.11
Bonds payable due within one year 1,042,773,072.37 1,889,505,167.46
Long-term payable due within one year 3,562,994.44 61,107,722.82
Long-term employee benefits payable due within one
36,811,951.00 31,950,000.00
year
Lease liabilities due within one year 322,827,694.67 341,240,327.95
Other non-current liabilities due within one year 83,582,696.63 825,835,439.66
Total 3,564,465,137.37 6,104,339,856.79
35. Other current liabilities
Item Closing balance Opening balance
Short-term bonds payable 2,215,478,001.40 712,345,315.07
Accrued professional agency fee 138,158,158.51 143,346,356.53
Others 30,032,826.03 30,264,910.03
Total 2,383,668,985.94 885,956,581.63
- 107 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Other current liabilities - continued
Changes of short-term bonds payable:
Amount issued Interest Amortization of
Term of the Repayment in
Name of bond Face value Date of issue Amount of issue 1/1/2020 in the current accrued based premiums or 31/12/2020
bond the current year
year on par value discounts
1.50% RMB 1.3 billion Super &
1,300,000,000.00 29/4/2020 180 days 1,300,000,000.00 - 1,300,000,000.00 9,616,438.36 - 1,309,616,438.36 -
Short-term Commercial Paper
1.99% RMB1 billion Super &
1,000,000,000.00 5/6/2020 270 days 1,000,000,000.00 - 1,000,000,000.00 11,418,032.80 - - 1,011,418,032.80
Short-term Commercial Paper
2.50% RMB700 million Super &
700,000,000.00 26/2/2020 266 days 700,000,000.00 - 700,000,000.00 12,718,579.23 - 712,718,579.23 -
Short-term Commercial Paper
3.08% RMB700 million Super &
700,000,000.00 4/6/2019 270 days 700,000,000.00 712,345,315.07 - 3,559,602.96 - 715,904,918.03 -
Short-term Commercial Paper
2.50% RMB1.2 billion Super &
1,200,000,000.00 13/11/2020 180 days 1,200,000,000.00 - 1,200,000,000.00 4,059,968.60 - - 1,204,059,968.60
Short-term Commercial Paper
Total 4,900,000,000.00 4,900,000,000.00 712,345,315.07 4,200,000,000.00 41,372,621.95 - 2,738,239,935.62 2,215,478,001.40
- 108 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Long-term borrowings
(1) Classification of long-term borrowings
Item Closing balance Opening balance
Credit borrowings 5,258,127,800.86 3,368,772,302.71
Guaranteed borrowings (Note 1) 1,629,960,889.64 2,857,916,427.60
Mortgage borrowings (Note 2) 2,593,140,731.56 3,041,748,008.91
Total 9,481,229,422.06 9,268,436,739.22
Less: Long-term borrowings due within one year 2,074,906,728.26 2,954,701,198.89
Including: Credit borrowings 749,046,479.86 1,294,054,756.85
Guaranteed borrowings 739,805,701.02 1,119,153,332.93
Mortgage borrowings 586,054,547.38 541,493,109.11
Long-term borrowings due after one year 7,406,322,693.80 6,313,735,540.33
During the year, the annual interest rate of the borrowing ranges from 1.20% to 5.78%.
Note 1: The loan was guaranteed by Shenzhen Magang Godown & Wharf Co., Ltd., China
Merchants Port Service (Shenzhen) Co., Ltd, and CMPort.
Note 2: As at 31 December 2020, the Group obtained the long-term loan of RMB
2,593,140,731.56 (31 December 2019: RMB 3,041,748,008.91) with its entire equity in
Colombo International Container Terminals Limited (hereinafter referred to as "CICT"),
and the entire equity in Thesar Maritime Limited, (hereinafter referred to as "TML"),
and the land use rights, fixed assets and construction in progress held by Guangdong
Yide Port Co., Ltd. (hereinafter referred to as "Yide Port"), the land use rights of
Shenzhen Haixing Harbor Development Co., Ltd. (hereinafter referred to as "Shenzhen
Haixing"), as well as the sea area use rights of Dongguan Chiwan Port Service Co., Ltd.
(hereinafter referred to as "Chiwan Port"), mortgaged as collaterals.
Details of mortgage borrowings are as follows:
Opening
Company name Closing balance Collateral
balance
The Group's entire equity in Colombo
China Development Bank Corporation 1,027,981,472.96 1,358,129,654.07
International Container Terminals Limited
International Finance Corporation 364,480,624.59 449,103,214.20
African Development Bank 167,372,490.13 206,294,203.06
Nederlandse Financierings-Maatschappij voor
137,905,387.30 169,887,745.22
Ontwikkelingslanden N.V.
The Group's entire equity in Thesar Maritime
The Opec Fund For International Development 118,146,703.89 145,656,886.91
Limited
Societe de Promotion et de Participation pour
118,218,277.06 145,613,216.49
la Cooperation Economique S.A.
Deutsche Investitions-und
98,452,963.64 121,392,394.29
Entwicklungsgesellschaft MBH
Land use rights of Shenzhen Haixing Harbor
Bank of China Qianhai Shekou Branch 241,370,822.05 241,388,867.03
Development Co., Ltd (see note (V) 63)
Land use rights, fixed assets and construction in
China Construction Bank Shunde Branch 210,178,757.55 184,264,872.07
progress of Yide Port (see note (V) 63)
Sea area use rights of Dongguan Chiwan Warf
China Merchants Bank Dongguan Branch 109,033,232.39 20,016,955.57
Co., Ltd. (see note (V) 63)
Total 2,593,140,731.56 3,041,748,008.91
- 109 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable
(1) Bonds payable
Item Closing balance Opening balance
4.375%, USD 900 million corporate bond 5,948,107,858.02 6,349,018,876.27
5.000%, USD 600 million corporate bond 3,950,488,734.13 4,218,874,981.43
4.750%, USD 500 million corporate bond 3,314,305,348.22 3,541,255,065.51
5.000%, USD 500 million corporate bond 3,280,606,167.04 3,500,281,169.59
4.890% RMB 2.5 billion corporate bond 2,585,407,534.25 2,585,072,602.74
3.360% RMB 2 billion corporate bond 2,033,040,000.00 -
IPCA + 7.8164% BRL428 million corporate bond 620,162,618.74 810,150,534.24
4.980% RMB 400 million corporate bond 401,200,657.53 401,200,657.53
3.500% USD 200 million corporate bond - 1,414,333,247.34
Total 22,133,318,917.93 22,820,187,134.65
Less: Bonds payable due within one year 1,042,773,072.37 1,889,505,167.46
Bonds payable due after one year 21,090,545,845.56 20,930,681,967.19
- 110 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
37. Bonds payable - continued
(2) Changes of bonds payable
Amount issued Interest accrued Amortization of
Term of Repayment in the Effect of changes
Name of bonds Face value Date of issue Amount of issue 1/1/2020 in the current based on par premiums or 31/12/2020
the bond current year in foreign exchange
year value discounts
4.375%, USD 900 million
USD 900,000,000.00 2018-8-6 5 years USD 900,000,000.00 6,349,018,876.27 - 271,646,628.75 10,416,483.30 271,646,628.75 -411,327,501.55 5,948,107,858.02
corporate bond
5.000%, USD 600 million
USD 600,000,000.00 2018-8-6 10 years USD 600,000,000.00 4,218,874,981.43 - 206,968,860.00 4,815,463.94 206,968,860.00 -273,201,711.24 3,950,488,734.13
corporate bond
4.750%, USD 500 million
USD 500,000,000.00 2015-8-3 10 years USD 500,000,000.00 3,541,255,065.51 - 163,850,347.57 2,259,134.10 163,850,347.50 -229,208,851.46 3,314,305,348.22
corporate bond
5.000%, USD 500 million
USD 500,000,000.00 2012-5-4 10 years USD 500,000,000.00 3,500,281,169.59 - 172,474,050.00 6,760,030.70 172,474,050.00 -226,435,033.25 3,280,606,167.04
corporate bond
4.890% RMB 2.5 billion
RMB 2,500,000,000.00 2017-4-21 5 years RMB 2,500,000,000.00 2,585,072,602.74 - 122,584,931.51 - 122,250,000.00 - 2,585,407,534.25
corporate bond
3.360% RMB2
RMB 2,000,000,000.00 2020-7-8 3 years RMB 2,000,000,000.00 - 2,000,000,000.00 33,040,000.00 - - - 2,033,040,000.00
billioncorporate bond
IPCA + 7.8164% BRL428 5 years/6
BRL 428,047,000.00 2016-11-7 BRL 428,047,000.00 810,150,534.24 - 88,607,823.56 9,446,052.30 56,605,942.56 -231,435,848.80 620,162,618.74
million corporate bond years
4.980% RMB 400 million
RMB 400,000,000.00 2018-12-10 3 years RMB 400,000,000.00 401,200,657.53 - 19,920,000.00 - 19,920,000.00 - 401,200,657.53
corporate bond
3.500% USD 200 million
USD 200,000,000.00 2015-8-3 5 years USD 200,000,000.00 1,414,333,247.34 - 28,573,196.35 1,230,286.37 1,428,085,134.00 -16,051,596.06 -
corporate bond
Total 22,820,187,134.65 2,000,000,000.00 1,107,665,837.74 34,927,450.71 2,441,800,962.81 -1,387,660,542.36 22,133,318,917.93
Less: Bonds payable due
1,889,505,167.46 1,042,773,072.37
within one year
Bonds payable due after one
20,930,681,967.19 21,090,545,845.56
year
- 111 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Lease liabilities
Category Closing balance Opening balance
Lease payment 2,452,042,889.87 2,934,104,267.67
Unrecognized financing cost -801,791,447.15 -945,733,971.11
Total 1,650,251,442.72 1,988,370,296.56
Less: Lease liabilities due within one year 322,827,694.67 341,240,327.95
Lease liabilities due after one year 1,327,423,748.05 1,647,129,968.61
39. Long-term payables
(1) Summary of long-term payables
Item Closing balance Opening balance
Long-term payables 1,192,028,415.01 1,447,802,228.74
Special payables 39,996,153.12 548,550,497.29
Total 1,232,024,568.13 1,996,352,726.03
Less: Long-term payables due within one year 3,562,994.44 61,107,722.82
Long-term payables due after one year 1,228,461,573.69 1,935,245,003.21
(2) Long-term payables
Item Closing balance Opening balance
Terminal management rights (Note 1) 749,658,074.16 881,239,309.85
Payable to Minority shareholder of subsidiary (Note 2) 437,238,325.33 407,092,971.69
Borrowings from related parties (Note 3) - 150,000,000.00
Others 5,132,015.52 9,469,947.20
Total 1,192,028,415.01 1,447,802,228.74
Less: Long-term payables due within one year 3,562,994.44 61,107,722.82
Long-term payables due after one year 1,188,465,420.57 1,386,694,505.92
Note 1: As at 12 August 2011, the Group reached a 35-year building, operation and transfer agreement
through the subsidiary Colombo International Container Terminals Limited and the Sri Lanka
Port Authority on the building, operation, management and development of the Colombo Port
South Container Terminal (hereinafter referred to as for "BOT"). The above-mentioned
terminal operating rights purchase amount is determined by discounting the amount to be paid
in the future using the prevailing market interest rate according to the BOT agreement. As at
31 December 2020, the amount is RMB 749,658,074.16.
Note 2: It is an unsecured loan from minority shareholder of Thesar Maritime Limited, a
subsidiary of the Company, with an annual interest rate of 4.65%.
- 112 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Long-term payables - continued
(2) Long-term payables - continued
Note 3: At 9 December 2019, Xiamen Bay Port Affairs (hereinafter referred to as "ZCMG"), a
subsidiary of the Company, and China Merchants Finance Lease (Tianjin) Co., Ltd.
entered into a 72-month sale-and-leaseback agreement in respect of the sale-and-
leaseback assets, with a consideration of RMB 150,000,000.00. ZCMG is the seller and
lessee of the leased assets. As China Merchants Finance Lease (Tianjin) Co., Ltd. has no
control over the leased assets, the transfer of assets in the sale-and-leaseback transaction
is not a sale and the cash receipts are accounted for as financial liabilities, i.e.
borrowings from related parties. According to the agreement, the interest rate for the
borrowings is 4.75% and the borrowing period is 72 months. ZCMG have repaid the
aforesaid borrowings in July 2020.
(3) Special payables
Effect of
Increase in the changes in the Decrease in the
Item 1/1/2020 31/12/2020 Reason
current year scope of current year
consolidation
Refunds of port
545,346,468.32 - - 511,074,910.02 34,271,558.30 Note 1
construction fee
Employee housing
3,204,028.97 648,796.63 - - 3,852,825.60 Note 2
fund
Innovation workshop
- 773,274.28 1,098,494.94 - 1,871,769.22
for model workers
Total 548,550,497.29 1,422,070.91 1,098,494.94 511,074,910.02 39,996,153.12
Note 1: This represents the refund of the construction fee received by the Group from the
Ministry of Transport, Shenzhen Municipal Transportation Bureau. According to the
"Port Construction Fee Management Measures" promulgated by the Ministry of Finance,
this payment is dedicated to the construction of water transport infrastructure. The
decrease in the year is mainly caused by the transfer of port construction fee refund for
the Company's subsidiary Zhanjiang Port, amounting to RMB510,107,118.35, to capital
reserve.
Note 2: This represent the repairing fund for public areas and public facilities and equipment
established after the Group's selling the public-owned house on the collectively allocated
land to employees. The fund is contributed by all the employees having ownership of the
house according to the rules, and is specially managed and used for specific purpose.
- 113 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Long-term employee benefits payable
(1) Long-term employee benefits payable
Item Closing balance Opening balance
Post-employment benefits - net liabilities of defined benefits plan 429,830,989.42 454,383,940.25
Termination benefits 40,939,305.56 49,048,198.38
Others (Note) 73,756,355.48 -
Total 544,526,650.46 503,432,138.63
Less: Long-term employee benefits payable due within one year 36,811,951.00 31,950,000.00
Long-term employee benefits payable due after one year 507,714,699.46 471,482,138.63
Note: It's the employee setting cost of the Company's subsidiary Shantou Port in connection with
land acquisition and reservation.
(2) Changes of defined benefits plan
Present value of defined benefits plan obligation:
Item 2020 2019
I. Opening balance 454,383,940.25 385,323,310.21
II. Defined benefits cost included in profit or loss for 25,714,051.83
35,512,520.40
the period
1. Current service cost 19,803,282.73 10,244,780.50
2. Past service cost - -180,000.00
3. Interest adjustment 15,709,237.67 15,649,271.33
III. Defined benefits cost included in other -1,513,131.31
-35,245,220.38
comprehensive income
1. Actuarial gains (losses) -35,016,155.14 -1,552,580.61
2. Effect of exchange rate changes -229,065.24 39,449.30
IV. Other changes -24,820,250.85 44,859,709.52
1. Benefits paid -24,820,250.85 -31,910,290.48
2. Changes in the scope of consolidation - 76,770,000.00
V. Closing balance 429,830,989.42 454,383,940.25
The Company's subsidiaries provide the registered retirees and in-service staff with
supplementary post-employment benefit plans.
The Group hired a third-party actuary to estimate the present value of its above-mentioned
retirement benefit plan obligations in an actuarial manner based on the expected cumulative
welfare unit method. The Group recognizes the Group's liabilities based on the actuarial results.
The relevant actuarial gains or losses are included in other comprehensive income and cannot be
reclassified into profit or loss in the future. Past service costs are recognized in profit or loss for
the period in which the plan is revised. The net interest is determined by multiplying the defined
benefit plan net debt or net assets by the appropriate discount rate.
- 114 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41. Provisions
Item Closing balance Opening balance Reason
Estimated expenses on land acquisition and
66,138,336.08 45,897,100.00
reservation for Shangtou Port
Pending litigation (Note) 17,277,583.26 15,079,762.88 Note
Sales discount 16,990,826.32 15,265,697.07
Total 100,406,745.66 76,242,559.95
Note: This represent the estimated compensation amount that the Company's subsidiary TCP
may need to pay due to the pending litigation.
42. Deferred income
Increase in the Decrease in the
Item 1/1/2020 31/12/2020
current year current year
Government grants 1,146,325,779.95 5,015,833.38 39,362,069.29 1,111,979,544.04
Unrealized sale-and-
1,427,077.22 - 518,937.36 908,139.86
leaseback income
Total 1,147,752,857.17 5,015,833.38 39,881,006.65 1,112,887,683.90
Items involving government grants are as follows:
New Recognized in Related to assets
Liabilities 1/1/2020 31/12/2020
subsidies other income /related to income
Refund from marine reclamation land 375,169,820.39 - 19,349,167.92 355,820,652.47 Related to assets
Channel widening project 493,050,681.48 - 9,577,456.38 483,473,225.10 Related to assets
Special subsidies for facilities and equipment 245,274,225.80 1,440,000.00 6,486,652.82 240,227,572.98 Related to assets
Government subsidies for intelligent system 13,171,314.54 3,575,833.38 2,236,545.82 14,510,602.10 Related to assets
Refund of land transfer charges 6,680,000.00 - 111,333.35 6,568,666.65 Related to assets
Green low carbon port project 982,730.02 - 421,170.00 561,560.02 Related to assets
Others 11,997,007.72 - 1,179,743.00 10,817,264.72 Related to assets
Total 1,146,325,779.95 5,015,833.38 39,362,069.29 1,111,979,544.04
43. Other non-current liabilities
Item Closing balance Opening balance
TCP operating rights liability (Note 1) 2,888,395,641.53 3,326,952,857.86
Actuarial cost for the calculation of pension benefits difference for
162,810,000.00 -
the public security bureau staff (Note 2)
Berth priority call right (Note 3) 14,597,949.13 20,664,537.64
Obligation to minority shareholders due to acquisition - 732,733,351.01
Total 3,065,803,590.66 4,080,350,746.51
Less: Other non-current liabilities due within one year 83,582,696.63 825,835,439.66
Including: TCP operating rights liability 67,272,696.63 93,102,088.65
Actuarial cost for the calculation of pension benefits
16,310,000.00 -
difference for the public security bureau staff (Note 2)
Obligation to minority shareholders due to acquisition - 732,733,351.01
Other non-current liabilities due after one year 2,982,220,894.03 3,254,515,306.85
- 115 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
43. Other non-current liabilities - continued
Note 1: As at 23 February 2018, CMPort, a subsidiary of the Company, acquired a 90% stake in
TCP and incorporate it into the consolidated financial statements of the Group. TCP has
operation right the port of Paranagua up to 2048. At 31 December 2020, the payment to
acquire the port operation rights is calculated based on local comprehensive price index.
Note 2: Refer to Note (V) 49 for details.
Note 3: This represents the berth priority call right as agreed in the contract entered into with the
clients in 2003, with total amount of USD 14 million. The Group must give priority to
the berthing requirements of the contracted customers during the contract period. The
Group amortized the berth priority right within 20 years using straight-line method. In
2020, the amount included in operating income is RMB 6,066,588.51.
44. Share capital
Changes for the year
Item Opening balance Capitalizatio Closing balance
New issue of Bonus
n of surplus Others Sub-total
share (note) issue
reserve
2020
I. Restricted tradable
shares
1. State-owned shares - - - - - - -
2. State-owned legal -
128,952,746.00 - - - -128,952,746.00 -
person shares 128,952,746.00
3. Other domestic shares 169,602.00 - - - -160,106.00 -160,106.00 9,496.00
4. Foreign shares 1,148,648,648.00 - - - - - 1,148,648,648.00
Total restricted tradable -
1,277,770,996.00 - - - -129,112,852.00 1,148,658,144.00
shares 129,112,852.00
II. Non-restricted tradable
shares
1. Ordinary shares
464,858,324.00 - - - 128,961,746.00 128,961,746.00 593,820,070.00
denominated in RMB
2. Foreign capital shares
179,735,804.00 - - - 151,106.00 151,106.00 179,886,910.00
listed domestically
3. Foreign capital shares
- - - - - - -
listed overseas
4. Others - - - - - - -
Total non-restricted
644,594,128.00 - - - 129,112,852.00 129,112,852.00 773,706,980.00
tradable shares
III. Total shares 1,922,365,124.00 - - - - - 1,922,365,124.00
- 116 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
44. Share capital - continued
Changes for the year
Opening Capitalization
Item New issue of Bonus Closing balance
balance of surplus Others Sub-total
share (note) issue
reserve
2019
I. Restricted tradable
shares
1. State-owned shares - - - - - - -
2. State-owned legal
- 128,952,746.00 - - - 128,952,746.00 128,952,746.00
person shares
3. Other domestic shares 212,156.00 - - - -42,554.00 -42,554.00 169,602.00
4. Foreign shares 1,148,648,648.00 - - - - - 1,148,648,648.00
Total restricted tradable
1,148,860,804.00 128,952,746.00 - - -42,554.00 128,910,192.00 1,277,770,996.00
shares
II. Non-restricted tradable
shares
1. Ordinary shares
464,855,324.00 - - - 3,000.00 3,000.00 464,858,324.00
denominated in RMB
2. Foreign capital shares
179,696,250.00 - - - 39,554.00 39,554.00 179,735,804.00
listed domestically
3. Foreign capital shares
- - - - - - -
listed overseas
4. Others - - - - - - -
Total non-restricted
644,551,574.00 - - - 42,554.00 42,554.00 644,594,128.00
tradable shares
III. Total shares 1,793,412,378.00 128,952,746.00 - - - 128,952,746.00 1,922,365,124.00
45. Capital Reserve
Item Opening balance Increase Decrease Closing balance
2020
Capital premium 22,183,597,895.33 731,489,964.17 218,667,827.13 22,696,420,032.37
Including: Capital contributed by investors 7,012,992,483.94 - - 7,012,992,483.94
Differences arising from business
combination involving enterprises under 13,311,099,845.41 - - 13,311,099,845.41
common control
Differences arising from acquisition of
419,130,116.03 514,196,692.81 218,667,827.13 714,658,981.71
minority interests (Note 1)
Others (Note 2) 1,440,375,449.95 217,293,271.36 - 1,657,668,721.31
Other capital Reserve 112,887,572.02 10,096,607.62 14,334,876.52 108,649,303.12
Including: Transfer from capital reserve under the
-2,781,133.00 - - -2,781,133.00
previous accounting system
Unexercised share-based payment - 10,096,607.62 - 10,096,607.62
Other changes of owners' equity of the
investee under equity method other than
changes in net profit or loss, profit 115,668,705.02 - 14,334,876.52 101,333,828.50
distribution and other comprehensive
income
Total 22,296,485,467.35 741,586,571.79 233,002,703.65 22,805,069,335.49
2019
Capital premium 19,429,694,090.05 2,770,861,727.22 16,957,921.94 22,183,597,895.33
Including: Capital contributed by investors 4,954,397,136.25 2,058,595,347.69 - 7,012,992,483.94
Differences arising from business
combination involving enterprises under 13,311,099,845.41 - - 13,311,099,845.41
common control
Others 1,164,197,108.39 712,266,379.53 16,957,921.94 1,859,505,565.98
Other capital Reserve -2,781,133.00 129,059,971.90 13,391,266.88 112,887,572.02
Including: Transfer from capital reserve under the
-2,781,133.00 - - -2,781,133.00
previous accounting system
Other changes of owners' equity of the
investee under equity method other than
changes in net profit or loss, profit - 129,059,971.90 13,391,266.88 115,668,705.02
distribution and other comprehensive
income
Total 19,426,912,957.05 2,899,921,699.12 30,349,188.82 22,296,485,467.35
- 117 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Capital Reserve - continued
Note 1: Changes for the year include:
(1) The Company chose to acquire the dividends attributable to CMPort in lieu of shares,
which increased the capital reserve by RMB376,103,644.71. Refer to Note (VII) 2 for
details.
(2) The Company's subsidiary CMPort acquired 10% of the equity of TCP through its
controlling subsidiary Kong Rise Development Limited. The difference of the payment
made for the equity acquisition after deducting the share of the subsidiary's net assets
calculated by the acquired proportion of equity and the fair value of the relevant put
options and their changes was RMB534,509,477.23. The Company reduced its capital
reserve according to its shareholding in CMPort by RMB218,667,827.13. Refer to Note
(VII) 2 for details.
(3) The Company's subsidiary CMPort transferred 23.5294% of the equity of its subsidiary
Gainpro Resources Limited (hereinafter referred to as "Gainpro") to Fujian
Transportation Maritime Silk Road Investment and Management Co. Limited (hereinafter
referred to as "Fujian Transportation Maritime Silk Road"). The difference of the
received cash consideration after deducting the share of the subsidiary's net assets
calculated by the proportion of transferred equity was RMB 332,114,112.80. The
Company increased its capital reserve according to its shareholding in CMPort by
RMB138,093,048.10. Refer to Note (VII) 2 for details.
Note 2: The increase for the year is mainly the transfer of the refunded port construction fund of
the Company's subsidiary Zhanjiang Port from the special payables to the capital reserve.
The Company increased its capital reserve according to its shareholding in the subsidiary
by RMB216,138,382.34.
- 118 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income
2020
Less: Amount
included in Less: Other
other comprehensive
Post-tax income Post-tax income income carried
Item Opening balance comprehensive Closing balance
Pre-tax amount Less: Income attributable to attributable to forward to
income in the
for the year tax expense the parent minority retained
prior periods
company owner shareholders earnings
transferred to
profit or loss in
this period
2020
I. Other comprehensive income that will not be reclassified subsequently
82,969,758.27 6,911,190.88 - -33,528.75 -1,552,867.01 8,497,586.64 - 81,416,891.26
to profit or loss
Including: Changes arising from remeasurement of defined benefits plan 1,069,722.83 35,016,155.14 - - 10,248,546.35 24,767,608.79 - 11,318,269.18
Other comprehensive income that can't be transferred to profit
4,830,921.62 -28,307,578.26 - - -11,817,008.06 -16,490,570.20 - -6,986,086.44
or loss under equity method
Changes in fair value of other equity instruments 77,069,113.82 202,614.00 - -33,528.75 15,594.70 220,548.05 - 77,084,708.52
II. Other comprehensive income that will be reclassified subsequently to
-438,914,324.18 -1,856,601,660.49 - - -469,199,870.14 -1,387,401,790.35 - -908,114,194.32
profit or loss
Including: Other comprehensive income that may be transferred to profit
-58,950,164.54 217,642,457.56 - - 90,675,445.06 126,967,012.50 - 31,725,280.52
or loss under equity method
Translation differences of financial statements denominated in
-379,964,159.64 -2,074,244,118.05 - - -559,875,315.20 -1,514,368,802.85 - -939,839,474.84
foreign currencies
Total other comprehensive income -355,944,565.91 -1,849,690,469.61 - -33,528.75 -470,752,737.15 -1,378,904,203.71 - -826,697,303.06
- 119 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
46. Other comprehensive income - continued
2019
Less: Amount
included in Less: Other
other comprehensive
Post-tax income Post-tax income income carried
Item Opening balance comprehensive Closing balance
Pre-tax amount Less: Income attributable to attributable to forward to
income in the
for the year tax expense the parent minority retained
prior periods
company owner shareholders earnings
transferred to
profit or loss in
this period
2019
I. Other comprehensive income that will not be reclassified subsequently
75,673,134.08 19,605,662.56 - 985,483.75 9,090,184.52 9,529,994.29 1,793,560.33 82,969,758.27
to profit or loss
Including: Changes arising from remeasurement of defined benefits plan - 1,552,580.61 - - 1,069,722.83 482,857.78 - 1,069,722.83
Other comprehensive income that can't be transferred to profit
- 13,161,546.95 - - 4,830,921.62 8,330,625.33 - 4,830,921.62
or loss under equity method
Changes in fair value of other equity instruments 75,673,134.08 4,891,535.00 - 985,483.75 3,189,540.07 716,511.18 1,793,560.33 77,069,113.82
II. Other comprehensive income that will be reclassified subsequently to
13,252,844.49 -1,114,906,073.32 - - -452,167,168.67 -662,738,904.65 - -438,914,324.18
profit or loss
Including: Other comprehensive income that may be transferred to profit
100,000.00 -146,982,017.86 - - -59,050,164.54 -87,931,853.32 - -58,950,164.54
or loss under equity method
Translation differences of financial statements denominated in
13,152,844.49 -967,924,055.46 - - -393,117,004.13 -574,807,051.33 - -379,964,159.64
foreign currencies
Total other comprehensive income 88,925,978.57 -1,095,300,410.76 - 985,483.75 -443,076,984.15 -653,208,910.36 1,793,560.33 -355,944,565.91
- 120 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
47. Special reserve
Opening
Item Increase Decrease Closing balance
balance
2020
Production safety reserve 12,386,734.70 57,538,524.86 59,724,081.26 10,201,178.30
2019
Production safety reserve 8,231,080.43 108,062,435.41 103,906,781.14 12,386,734.70
48. Surplus reserve
Item Opening balance Increase Decrease Closing balance
2020
Statutory surplus reserve 630,345,307.43 260,345,014.85 - 890,690,322.28
2019
Statutory surplus reserve 527,175,908.67 103,169,398.76 - 630,345,307.43
49. Unappropriated profit
Proportion of
Item Amount appropriation or
allocation
2020
Unappropriated profit at the end of last year 11,467,166,351.85
Add: Net profit of the year attributable to shareholders
2,065,322,969.66
of the parent
Pension Benefits -73,228,871.09 Note 1
Others 1,549,916.64
Less: Appropriation to statutory surplus reserve 260,345,014.85
Appropriation to discretionary surplus reserve -
Appropriation to general risk reserve -
Ordinary shares' dividends payable 884,287,957.04 Note 2
Ordinary shares' dividends converted into share
-
capital
Unappropriated profit at the end of the year 12,316,177,395.17
- 121 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Unappropriated profit - continued
Proportion of
Item Amount appropriation or
allocation
2019
Unappropriated profit at the end of prior year before
8,915,817,110.21
adjustment
Adjustment of total unappropriated profit at the
-41,018,077.68
beginning of year
Unappropriated profit at the beginning of year after
8,874,799,032.53
adjustment
Add: Net profit attributable to shareholders of the
2,898,192,168.84
Company for the year
Others 1,793,560.33
Less: Appropriation to statutory surplus reserve 103,169,398.76
Appropriation to discretionary surplus reserve -
Appropriation to general risk reserve -
Ordinary shares' dividends payable 204,449,011.09
Ordinary shares' dividends converted into share
-
capital
Unappropriated profit at the end of the year 11,467,166,351.85
Note 1: In accordance with the Notice on Issuing the Plan for Deeping Administration System
Reform of Port & Channel Public Security Authorities (No.327 [2017], State
Commission Office of Public Sectors Reform) and the Notice on Issuing the
Implementation Plan for Deeping Administration System Reform of Port & Channel
Public Security Authorities (No.221 [2018], Guangdong Commission Office of Public
Sectors Reform), in 2020, Zhanjiang Port, a subsidiary of the Company, transferred the
Zhanjiang Port Public Security Bureau to Zhanjiang Municipal Government, which are
fully taken over by the Zhanjiang Municipal Public Security Bureau. The relevant assets
of the former Zhanjiang Port Public Security Bureau, totalling RMB11,372,339.22, were
transferred to Zhanjiang Municipal Government, the police in-service were transitioned
to civil servants in accordance with national regulations, the retired police were included
in the jurisdiction of the pension insurance of state organs and public institutions, and
the difference between the original standard of pension benefits and the retirement
benefits of the Zhanjiang municipal police (hereinafter referred to as the "pension
benefits difference") shall be borne by Zhanjiang Port. Zhanjiang Port engaged Towers
Watson Consulting (Shenzhen) Co., Ltd. to perform actuarial calculations on the
difference in pension benefits of retired police, and accrued relevant liabilities of
RMB162,810,000.00 on the actuarial results. In accordance with Notice by the Ministry
of Finance on Financial Management Issues Relating to the Separation of Social
Functions of Enterprises (No. 62 [2005], Cai Qi), the above-mentioned matters resulted
in a total elimination of RMB174,110,113.73 from the unappropriated profit of
Zhanjiang Port for the year, and a corresponding elimination of RMB73,228,871.09
from the unappropriated profit of the Company in proportion to the Company's equity
interest in Zhanjiang Port.
- 122 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Unappropriated profit - continued
Note 2: According to the resolution of shareholders meeting on 22 May 2020, the Company
distributes cash dividends of RMB 4.60 (inclusive of tax) for every 10 shares, totalling
to RMB884,287,957.04 on the basis of the total shares of 1,922,365,124 shares at the
end of 2019.
Note 3: Profit distribution after the balance sheet date
According to the profit distribution plan for 2020, approved by the [10 th] board of
directors at the [3th] meeting on 29/03/2021, the Company, based on the total shares of
1,922,365,124 on the 31 December 2020, would distribute cash dividends at an amount
of RMB730,498,747.12. The above profit distribution plan has yet been approved by
shareholders meeting.
50. Operating income and operating costs
(1) Operating income and operating costs
Amount incurred in the current period Amount incurred in the prior period
Item
Income Cost Income Cost
Principal operation 12,465,115,944.45 7,652,480,534.91 11,958,482,255.05 7,425,898,430.33
Other operations 153,414,051.57 221,269,319.94 165,347,168.69 223,022,489.38
Total 12,618,529,996.02 7,873,749,854.85 12,123,829,423.74 7,648,920,919.71
(2) Revenue from contracts
Bonded logistics
Categories of contracts Ports operation Other operations Total
operation
Mainland China, Hong Kong
8,572,810,408.71 391,346,440.50 153,414,051.57 9,117,570,900.78
and Taiwan area
- Pearl River Delta 5,103,018,820.66 266,096,953.36 153,414,051.57 5,522,529,825.59
- Yangtze River Delta 73,413,401.10 - - 73,413,401.10
- Bohai Rim 62,661,236.23 125,249,487.14 - 187,910,723.37
- Other areas 3,333,716,950.72 - - 3,333,716,950.72
Other countries 3,474,914,093.88 26,045,001.36 - 3,500,959,095.24
Total 12,047,724,502.59 417,391,441.86 153,414,051.57 12,618,529,996.02
- 123 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Operating income and operating costs - continued
(3) Description of performance obligations
The Group provides wharf service, bonded logistics service and other services. These services are
obligations performed over a period of time. For wharf services, as the handling time for
containers and bulk cargos is short, the management believes that it is not necessary to recognize
revenue according to the progress towards the completion of contract and it is an appropriate
method to recognize the fulfilment of performance obligation and revenue upon the completion of
the service. For bonded logistics service and other services, the customers evenly obtains and
consumes the economic benefits from the Group's performance of contract, meanwhile the
charging rules as agreed in the contract terms usually adopt daily/month/yearly basis. During the
process of rendering services, the Group recognizes revenue using straight-line method. Part of
the Group's handling contracts are established with discount terms, i.e. the customers whose
business volume reaches agreed level, are granted with preferential charge rate or discount. At the
end of the year, as the business quantity finally realized within the contract period is uncertain, the
contract consideration is subject to variable factors. The management included this part of
discount in provisions. Details are set out in Note (V) 41. The Group's revenue contract does not
have significant financing components.
(4) At the end of the year, the variable consideration of RMB16,990,826.32 (31 December
2019: RMB15,265,697.07) arising from sales discount is not included in the transaction
price due to the restriction requirements relating to variable considerations.
51. Taxes and surcharges
Amount incurred in the Amount incurred in the
Item
current period prior period
Property tax 57,039,293.40 45,998,786.01
Land use tax 33,997,061.02 32,116,936.18
Stamp duty 7,540,714.68 4,948,743.36
City construction and maintenance tax 6,960,172.96 6,188,074.98
Education surcharges and local education surcharges 5,198,771.63 4,866,915.60
Others (Note) 40,460,929.88 78,437,123.79
Total 151,196,943.57 172,556,579.92
Note: Others mainly represent (1) Program of Social Integration and Contribution for the
Financing of Social Security (tax on enterprise income) and Tax on Services (tax based on
services rendered) borne by TCP, a subsidiary of the Company, totalled
BRL23,076,661.64 (equivalent to RMB34,531,567.04) for the year. (2) The environmental
protection tax borne by Zhanjiang Port, a subsidiary of the Company, amounted to
RMB5,357,096.48 for the year.
- 124 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
52. Administrative expenses
Amount incurred in Amount incurred in
Item
the current period the prior period
Employee's salary 1,089,142,762.24 980,074,507.53
Depreciation expenses 83,029,752.43 74,954,306.82
Fees paid to agencies 72,867,327.15 55,258,915.07
Amortization of intangible assets 63,903,389.47 58,414,351.33
Others 275,939,703.73 340,818,500.91
Total 1,584,882,935.02 1,509,520,581.66
53. Financial expenses
Amount incurred in Amount incurred in
Item
the current period the prior period
Interest expense 1,915,963,616.06 2,018,175,947.65
Less: Capitalized interest expenses 65,255,075.44 35,175,196.89
Less: Interest income 325,387,744.56 252,060,018.58
Exchange differences 99,173,836.07 106,836,843.78
Handling fee 19,293,388.81 56,876,221.78
Others -415,864,228.16 37,236,030.34
Interest expenses of lease liabilities 4,805,832.04 4,379,909.45
Total 1,232,729,624.82 1,936,269,737.53
54. Other income
Amount incurred in Amount incurred in
Item
the current period the prior period
Central special financial fund for the development of the rental
73,356,900.00 -
housing market
Transferred from allocation of deferred income 39,362,069.29 37,903,296.88
Additional deduction of VAT 17,977,697.02 13,268,318.27
Government subsidies for business development 16,666,657.00 71,492,270.22
Refund of unemployment insurance premium 13,701,836.63 -
Special fund for innovation 11,662,568.44 9,802,600.00
Subsidies for preventing epidemics 6,670,018.69 -
Facility construction fund 5,799,000.00 5,448,613.20
Special fund for operation 4,530,545.00 8,402,815.28
Steady post subsidies 4,286,036.86 1,985,363.23
Refund of withholding taxes 2,655,040.88 6,903,526.71
Air environment quality improvement subsidy 1,544,768.00 -
Value-added tax levied and immediately returned for software
1,438,961.78 -
products
Special fund for promoting high-quality development of
- 1,000,000.00
economy
Others 5,313,013.69 5,894,309.31
Total 204,965,113.28 162,101,113.10
- 125 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
55. Investment income (loss is marked with "-")
(1) Details of investment income:
Amount incurred Amount incurred
Item in the current in the prior
period period
Long-term equity investments income under equity method 3,988,916,963.08 3,727,850,763.22
Including: Long-term equity investments income of associates under
3,630,921,407.38 3,259,151,741.65
equity model
Including: Long-term equity investments income of joint venture under
357,995,555.70 468,699,021.57
equity model
Gains from remeasurement of previously held equity at fair value upon
753,988,749.80 845,432,476.22
obtaining the control(Note)
Investment income on held-for-trading financial assets 10,181,238.09 -
Investment income on other non-current financial assets 83,138,043.43 127,790,790.54
Investment income on disposal of other non-current financial assets
1,850,600.00 -407,903.18
(loss is marked with "-")
Dividend income on other equity instruments 8,568,250.21 10,942,760.11
Interest income on debt investments 59,331,593.61 20,352,987.67
Others - -112,788,119.16
Total 4,905,975,438.22 4,619,173,755.42
Note: Refer to Note (VI) 1 for details.
(2) Details of long-term equity investments income under equity method
Amount incurred Amount incurred
Investee in the current in the prior Reason for changes
period period
Shanghai International Port (Group) Co.,
2,234,593,249.98 2,425,921,985.71 Changes in net profit of investee
Ltd.
Nanshan Group 424,745,838.41 242,285,185.34 Changes in net profit of investee
Shenzhen China Merchants Qianhai
335,639,784.43 -5,514,066.49 Changes in net profit of investee
Industrial Development Co., Ltd.
Terminal Link SAS 312,427,210.29 280,560,341.83 Changes in net profit of investee
Liaoning Port Co., Ltd. 169,692,898.03 148,347,321.32 Changes in net profit of investee
Ningbo Daxie 112,101,331.18 120,498,548.83 Changes in net profit of investee
Qingdao Qianwan United Container
102,594,175.95 142,602,575.17 Changes in net profit of investee
Terminal Co., Ltd.
Modern Terminals Limited 79,503,339.53 65,866,911.57 Changes in net profit of investee
Euro-Asia Oceangate, S.a` r.l. 71,938,690.26 71,820,758.28 Changes in net profit of investee
Zhanjiang Merchants Port City Investment
47,450,708.28 -8,749,223.97 Changes in net profit of investee
Co., Ltd.
Others 98,229,736.74 244,210,425.63 Changes in net profit of investee
Total 3,988,916,963.08 3,727,850,763.22
- 126 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
56. Gains on changes in fair value (loss is marked with "-")
Amount incurred Amount incurred
Item in the current in the prior
period period
Held-for-trading financial assets -226,508.15 -
Other non-current financial assets 269,099,721.85 431,344,898.81
Including: Financial assets at fair value through profit or loss 269,099,721.85 431,344,898.81
Other non-current liabilities -680,381,987.28 -364,861,632.33
Including: Financial liabilities at fair value through profit or loss -680,381,987.28 -364,861,632.33
Total -411,508,773.58 66,483,266.48
57. Gains on impairment of credit (loss is marked with "-")
Amount incurred Amount incurred
Item in the current in the prior
period period
I. Gains on impairment of credit of accounts receivable (loss is marked
19,219,046.93 -51,878,244.38
with "-")
II. Gains on impairment of credit of other receivables (loss is marked
-475,764,740.63 1,682,076.71
with "-")
III. Gains on impairment of credit of long-term receivables (loss is
-2,049,967.61 -1,082,720.15
marked with "-")
IV. Others - 1,029,478.05
Total -458,595,661.31 -50,249,409.77
58. Gains from impairment of assets (loss is marked with "-")
Amount incurred Amount incurred
Item in the current in the prior
period period
Gains from decline in value of inventories 947,694.12 25,051.16
Losses on goodwill impairments -552,317,736.65 -
Total -551,370,042.53 25,051.16
59. Gains on disposal of assets (loss is marked with "-")
Amount included in
Amount incurred Amount incurred
non-recurring profit
Item in the current in the prior
or loss for the
period period
current year
Gains on disposal of non-current assets (Note) 1,489,206,502.32 4,794,562,782.79 1,489,206,502.32
Including: Gains on disposal of fixed assets (loss
-50,184,379.22 6,759,787.47 -50,184,379.22
is marked with "-")
Gains on disposal of intangible assets 1,480,715,445.14 1,108,671,001.98 1,480,715,445.14
Gains on disposal of construction in progress 59,164,336.00 47,902,373.19 59,164,336.00
Others -488,899.60 3,631,229,620.15 -488,899.60
Note: It mainly represents the compensation gains of RMB1,531,862,344.99 from land
acquisition and reservation of Shantou Port, a subsidiary of the Company. Please refer to
Note (V) 7 for details.
- 127 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
60. Non-operating income
Amount included in
Amount incurred Amount incurred
non-recurring profit
Item in the current in the prior
or loss for the
period period
current year
Government subsidy 53,884,602.38 485,929.28 53,884,602.38
Insurance compensation received 3,548,709.63 - 3,548,709.63
Gains from the retirement of damaged non-
3,272,216.69 3,431,545.27 3,272,216.69
current assets
Compensation received for contracts violation 3,074,739.23 14,444,165.81 3,074,739.23
Exempted account currents 2,603,213.36 2,026,044.81 2,603,213.36
Operation compensation - 488,492,798.26 -
Others 15,255,579.25 44,222,876.98 15,255,579.25
Total 81,639,060.54 553,103,360.41 81,639,060.54
61. Non-operating expenses
Amount included in
Amount incurred Amount incurred
non-recurring profit
Item in the current in the prior
or loss for the
period period
current period
Donations 29,768,154.87 31,344,046.81 29,768,154.87
Stability maintenance housing subsidy 13,500,000.00 - 13,500,000.00
Losses on retirement of non-current assets 11,905,789.11 24,459,845.75 11,905,789.11
Compensation, liquidated damages and penalties 9,131,029.28 5,574,036.67 9,131,029.28
Litigation loss 7,992,269.39 438,712.24 7,992,269.39
Others 6,706,498.12 8,635,370.93 6,706,498.12
Total 79,003,740.77 70,452,012.40 79,003,740.77
62. Income tax expenses
Amount incurred Amount incurred
Item in the current in the prior
period period
Current income tax expenses 1,303,748,401.73 2,308,373,316.21
Deferred income tax expenses -28,062,031.90 332,165,578.41
Total 1,275,686,369.83 2,640,538,894.62
- 128 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
62. Income tax expenses - continued
Reconciliation of income tax expenses to the accounting profit is as follows:
Amount incurred
Item in the current
period
Gross profit 6,801,254,420.39
Income tax expenses calculated at 25% 1,700,313,605.10
Effect of non-deductible cost, expenses and losses 452,645,594.53
Accrued income tax expenses 757,856,918.42
Effect of deductible temporary differences and deductible losses for which the deferred tax
79,218,381.58
assets are not recognized in current period
Effect of tax-free income (Note) -1,048,022,499.09
Effect of tax incentives and changes of tax rate -309,332,989.66
Effect of different tax rates of subsidiaries operating in other jurisdictions -262,775,668.86
Effect of utilizing deductible losses for which the deferred tax assets were not recognized
-33,602,540.09
in prior period
Effect of adjustments to prior-year income tax -22,647,137.52
Changes in the opening balance of deferred tax assets/ liabilities due to tax adjustments -12,996,277.16
Others -24,971,017.42
Income tax expenses 1,275,686,369.83
Note: This mainly represents the tax effect on investment income from joint venture and
associates.
63. Assets with restricted ownership or use right
Item Closing balance Opening balance
Cash and bank balances (Note 1) 11,528,570.90 15,648,978.15
Equity investment in Colombo International Container Terminals
1,626,554,439.58 1,591,452,920.23
Limited (Note 2)
Equity investment in Thesar Maritime Limited (Note 2) 859,148,327.98 799,684,707.77
Fixed assets (Note 3) 341,931,071.09 349,612,960.23
Intangible assets (Note 3) 218,825,477.36 345,131,760.52
Construction in progress (Note 3) 43,751,101.60 23,840,920.42
Total 3,101,738,988.51 3,125,372,247.32
Note 1: Details of restricted cash and bank balances are set out in Note (V) 1.
Note 2: Details of mortgaged equity and interests are set out in Note (V) 36.
Note 3: Yide Port mortgaged its land use rights, fixed assets and construction in progress to
obtain bank borrowings; Shenzhen Haixing Harbor Development Co., Ltd.
mortgaged its land use rights to obtain bank borrowings; Dongguan Chiwan Warf
Co., Ltd. mortgaged its sea area use right to obtain bank borrowings. Details of
mortgage borrowings are set out in Note (V) 36.
- 129 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
64. Other comprehensive income
Details are set out in Note (V) 46.
65. Items in cash flow statement
(1) Other cash receipts relating to operating activities:
Amount incurred Amount incurred
Item in the current in the prior
period period
Government grants 203,870,741.85 614,567,707.23
Interest income 196,435,428.56 212,679,224.25
Guarantees and deposits 64,688,970.41 30,791,091.36
Insurance indemnities 11,043,593.46 4,565,218.67
Rentals 10,735,793.35 16,310,934.86
Refund of port construction fee and service charges 1,660,916.38 2,803,216.00
Compensation from contracts - 13,860,280.30
Others 327,481,343.25 270,133,172.51
Total 815,916,787.26 1,165,710,845.18
(2) Other cash payments relating to operating activities
Amount incurred Amount incurred
Item in the current in the prior
period period
Operating expenses such as operating costs and
183,167,316.54 201,645,233.00
administration expense etc.
Advance payment 139,587,590.26 177,076,380.78
Guarantees and deposits 34,084,841.10 20,638,334.19
Rentals 23,217,510.11 31,228,253.07
Port construction fee 11,661,727.63 26,478,534.06
Port charges 7,481,400.21 8,187,025.59
Harbor dues on cargo - 3,138,152.55
Others 352,769,397.12 341,307,637.90
Total 751,969,782.97 809,699,551.14
- 130 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(3) Other cash receipts relating to investing activities
Amount incurred Amount incurred
Item in the current in the prior
period period
Recovered principal for the advances of the project 825,670,000.00 -
Net cash receipts by acquiring subsidiaries and other
317,470,188.12 845,457,228.45
business entities (Note)
Received compensation for the transition period of
87,104,514.28 -
Zhanjiang Port
Recovered lendings 33,282,119.52 1,018,695,828.48
Zhanjiang Port Transition Compensation 3,803,477.07 -
Recovered restricted deposits in the acquisition of the
- 1,001,472,400.00
Hambantota Port
Recovered principal of structural deposits that cannot
- 314,000,000.00
be withdrawn at any time
Receipt from credit assignment - 356,137,574.00
Others 186,182,916.72 204,000.00
Total 1,453,513,215.71 3,535,967,030.93
Note: Refer to Note (V) 65(4) for details.
(4) Net cash receipts for acquiring subsidiaries and other operating units
Amount incurred
Item in the current
period
Cash and cash equivalents paid for business combination in the current year -
Including: Ningbo Daxie -
Less: Cash and cash equivalents held by subsidiaries at the acquisition date 317,470,188.12
Including: Ningbo Daxie 317,470,188.12
Net cash payments for acquisition of subsidiaries -317,470,188.12
Including: Ningbo Daxie -317,470,188.12
(5) Other cash payments relating to investing activities
Amount incurred Amount incurred
Item in the current in the prior
period period
Structured deposit that is not readily for withdrawal - 1,610,000,000.00
Debt transfer payment - 356,137,574.00
Related party borrowings 3,009,744,121.38 104,390,000.00
Supplementary payment of tax on significant assets
- 68,423,555.78
restructuring
Others 26,229.24 -
Total 3,009,770,350.62 2,138,951,129.78
- 131 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
65. Items in cash flow statement - continued
(6) Other cash receipts relating to financing activities
Amount incurred Amount incurred
Item in the current in the prior
period period
Proceeds of CMPort from disposal of part of equity of
1,851,325,647.36 1,713,327,483.01
subsidiaries
Equity capital recovered from minority shareholders for
82,129,289.00 -
Shantou Port
Recovered financing lease deposits 4,500,000.00 -
Total 1,937,954,936.36 1,713,327,483.01
(7) Other cash payments relating to financing activities
Amount incurred Amount incurred
Item in the current in the prior
period period
Amount paid by CMPort for the acquisition of minority
755,398,999.97 -
shareholders' equities
Payments for the liquidation of Shantou Port's
82,129,289.00 -
subsidiaries
Bonds issuance cost - 6,600,000.00
Repayment of advances of shareholders - 1,592,783.29
Others 5,033,180.99 34,391,014.26
Total 842,561,469.96 42,583,797.55
- 132 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
66. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Amount incurred Amount incurred
Supplementary information in the current in the prior
period period
1. Reconciliation of net profit to cash flows from operating
activities:
Net profit 5,525,568,050.56 8,166,917,273.20
Add: Provision for impairment losses of assets 551,370,042.53 -25,051.16
Provision for impairment losses of credit 458,595,661.31 50,249,409.77
Depreciation of fixed assets 1,811,160,796.05 1,681,007,226.50
Depreciation of investment property 189,954,310.24 190,418,170.86
Depreciation of right-of-use assets 355,744,855.65 328,886,210.72
Amortization of intangible assets 609,540,465.06 632,626,770.16
Amortization of long-term prepaid expenses 45,482,342.76 31,586,968.21
Losses on disposal of fixed assets, intangible assets and other
long-term assets (gain is marked with "-")
-1,489,206,502.32 -4,794,562,782.79
Losses on retirement of fixed assets, intangible assets and other
8,633,572.42 24,459,845.75
long-term assets
Losses on changes in fair value (gain is marked with "-") 411,508,773.58 -66,483,266.48
Financial expenses 1,305,513,925.66 2,127,073,624.88
Investment loss (gain is marked with "-") -4,905,975,438.22 -4,619,173,755.42
Decrease in deferred tax assets (increase is marked with "-") -120,295,556.03 -191,905,933.39
Increase in deferred tax liabilities 92,233,524.13 524,071,511.80
Decrease in inventories (increase is marked with "-") -38,670,837.40 -11,704,381.63
Decrease in operating receivables (increase is marked with "-") -449,965,094.91 -2,391,266,937.99
Increase in operating payables 1,134,608,025.94 3,819,698,512.95
Net cash flows from operating activities 5,495,800,917.01 5,501,873,415.94
2. Significant investing and financing activities that do not involve
cash receipts and payments:
Conversion of debt into capital - -
Convertible bonds due within one year - -
Fixed assets acquired under finance leases - -
3. Net changes in cash and cash equivalents:
Closing balance of cash 11,771,619,303.21 7,714,157,995.87
Less: Opening balance of cash 7,714,157,995.87 5,373,281,504.75
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase in cash and cash equivalents 4,057,461,307.34 2,340,876,491.12
(2) Cash and cash equivalents
Item Closing balance Opening balance
I. Cash 11,771,619,303.21 7,714,157,995.87
Including: Cash on hand 570,307.93 331,305.65
Bank deposits available for payment at any time 11,418,758,567.44 7,422,490,058.00
Other monetary funds available for payment at any
352,290,427.84 291,336,632.22
time
II. Cash equivalents - -
III. Balance of cash and cash equivalents at the end of the year 11,771,619,303.21 7,714,157,995.87
- 133 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
67. Foreign currency monetary items
Closing balance of
Item Exchange rate Closing amount in RMB
foreign currency
Cash and bank balances 1,905,475,474.78
Including: HKD 56,199,956.09 0.8416 47,297,883.05
USD 56,276,436.51 6.5249 367,198,120.58
EUR 45,659,283.84 8.0250 366,415,752.82
RMB 1,124,563,718.33 1.0000 1,124,563,718.33
Accounts receivable 203,448,369.46
Including: HKD 3,821,664.96 0.8416 3,216,313.23
USD 4,757,977.91 6.5249 31,045,330.06
EUR 21,082,458.09 8.0250 169,186,726.17
Other receivables 1,065,027,108.18
Including: HKD 30,806,619.51 0.8416 25,926,850.98
USD 9,905,236.96 6.5249 64,630,680.64
EUR 94,429,498.59 8.0250 757,796,726.18
RMB 216,672,850.38 1.0000 216,672,850.38
Non-current assets due within one year 51,286,674.10
Including: USD 7,860,147.14 6.5249 51,286,674.10
Long-term receivables 2,746,067,386.31
Including: USD 420,859,689.24 6.5249 2,746,067,386.31
Short-term borrowings 1,320,810,000.00
Including: HKD 200,000,000.00 0.8416 168,320,000.00
USD 100,000,000.00 6.5249 652,490,000.00
RMB 500,000,000.00 1.0000 500,000,000.00
Accounts payable 30,525,030.58
Including: HKD 4,562,063.34 0.8416 3,839,432.51
USD 31,136.44 6.5249 203,162.16
EUR 3,299,260.30 8.0250 26,476,563.91
RMB 5,872.00 1.0000 5,872.00
Other payables 766,503,180.60
Including: HKD 40,249,878.84 0.8416 33,874,298.03
USD 78,182,967.43 6.5249 510,136,044.18
EUR 16,901,281.16 8.0250 135,632,781.31
RMB 86,860,057.08 1.0000 86,860,057.08
Non-current liabilities due within one
426,641,874.26
year
Including: USD 6,821,555.12 6.5249 44,509,965.01
EUR 36,975,000.00 8.0250 296,724,375.00
RMB 85,407,534.25 1.0000 85,407,534.25
Long-term borrowings 3,170,840,790.00
Including: USD 229,600,000.00 6.5249 1,498,117,040.00
EUR 124,950,000.00 8.0250 1,002,723,750.00
RMB 670,000,000.00 1.0000 670,000,000.00
Bonds payable 18,720,930,378.52
Including: USD 2,486,004,441.22 6.5249 16,220,930,378.52
RMB 2,500,000,000.00 1.0000 2,500,000,000.00
Long-term payables 1,188,465,420.57
Including: EUR 54,484,576.49 8.0250 437,238,325.33
USD 115,132,353.79 6.5249 751,227,095.24
- 134 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
68. Government grants
Amount included in
Presentation
Type Amount Item profit or loss for the
account
period
Special central budget for the development of the rental housing
Related to income 73,356,900.00 Other income 73,356,900.00
market
Related to income Non-operating
52,970,000.00 Subsidiaries of introducing investment 52,970,000.00
income
Related to income 16,666,657.00 Government subsidies for business development Other income 16,666,657.00
Related to income 13,701,836.63 Refund of unemployment insurance premium Other income 13,701,836.63
Related to income 11,662,568.44 Special fund for innovation Other income 11,662,568.44
Related to income 6,670,018.69 Subsidies for preventing epidemics Other income 6,670,018.69
Related to income 5,799,000.00 Subsidies for the construction of shore-to-ship power supply system Other income 5,799,000.00
Deferred
Related to income 5,015,833.38 Subsidies of intelligent system and facilities and equipment -
income
Related to income 4,530,545.00 Special fund for operation Other income 4,530,545.00
Related to income 4,286,036.86 Steady post subsidies Other income 4,286,036.86
Related to income 1,544,768.00 Air environment quality improvement subsidy Other income 1,544,768.00
value-added tax levied and immediately returned for software
Related to income 1,438,961.78 Other income 1,438,961.78
products
Related to income 5,313,013.69 Others Other income 5,313,013.69
Non-operating
Related to income 914,602.38 Others 914,602.38
income
Total 203,870,741.85 198,854,908.47
69. Lease
Undiscounted lease receipts subsequent to the balance sheet date are as follows:
Maturity analysis of undiscounted lease receipts 31/12/2020
1st year subsequent to the balance sheet date 286,233,247.28
2nd year subsequent to the balance sheet date 136,732,886.83
3rd year subsequent to the balance sheet date 95,628,740.71
4th year subsequent to the balance sheet date 79,209,529.00
5th year subsequent to the balance sheet date 72,940,772.30
Subsequent years 317,212,150.30
Total 987,957,326.42
Note 1: The operating leases where the Group as the lessor are related to port and terminal
facilities, machinery equipment, vehicles, land and buildings, with lease terms ranging
from 1 month to 50 years and option to renew the lease of port and terminal facilities,
machinery equipment, land and buildings. The Group considers that as the leased assets
are properly used, the unguaranteed balance of such assets does not constitutes material
risk of the Group.
Note 2: For 2020, the revenue relating to operating lease amounts to RMB 366,100,557.24; there
is no revenue relating to variable lease payment that is not included in lease receipts.
- 135 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VI) CHANGES IN SCOPE OF CONSOLIDATION
1. Business combination not involving enterprises under common control for the year
Basis for Acquiree's Acquiree's net
Date on which
Proportion of determining income from profit from
the Acquisition
Name of acquiree Acquisition cost equity Acquisition date the acquisition date acquisition date
investment is method
acquired (%) acquisition to the end of the to the end of the
acquired year year
date
19 November Concerted action Transfer of de
Ningbo Daxie 1,723,788,876.57 45.00 19 November 2020 73,403,212.42 27,286,541.83
2020 agreement facto control
Note: On 19 November 2020, Cyber Chic Company Limited, the subsidiary of the Company
and the other shareholders of Ningbo Daxie China Merchants International Terminals
Co. Ltd. ( Ningbo Zhoushan and CITIC Port Investmetn Co.,Ltd) establish the Budget
Committee through resolutions of shareholder meeting, and entered into a Cooperation
Agreement with Ningbo Zhoushan Port Company Limited ("Ningbo Port"),
The Budget Committee consists of three directors, one nominated by each shareholder to
be a member of the Budget Committee and the director nominated by Cyber Chic
Company Limited to be the Chairman.The Budget Committee is mainly responsible for
the examination and approval of Ningbo Daxie's annual business plan, annual financial
budget and final accounts, and after-tax profit distribution plan.Any matter considered
by the Budget Committee shall be approved by a two-thirds majority.
Pursuant to the cooperation agreement, Cyber Chic Company Limited and Ningbo
Zhoushan will consult and communicate to reach a common action prior to the exercise
of shareholder rights.If both parties fail to reach a consensus on the operation and
management of Ningbo Daxie, it will be decided according to the opinion of Cyber Chic
Company Limited.No consideration will be paid by either party under the Cooperation
Agreement.
After the signing of the cooperation agreement, Cyber Chic Company Limited and
Ningbo Zhoushan jointly own more than 50% of the shares of Ningbo Daxie.Therefore,
as of November 19, 2020, the Group will include Ningbo Daxie into the consolidated
scope of consolidated financial statements, Ningbo Daxie will also be transformed from
a joint venture company of the Group into a subsidiary of the Group, with the same
shareholding ratio.
2. Combination cost and goodwill
Combination cost Ningbo Daxie
Cash -
Fair value of previously held equity at acquisition date 1,723,788,876.57
Others -
Total combination cost 1,723,788,876.57
Less: Share of fair value of net identifiable assets 1,535,291,682.16
Goodwill 188,497,194.41
- 136 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
3. Business combination not involving enterprises under common control
(1) Identifiable assets, liabilities of the acquiree at acquisition date
Ningbo Daxie
Fair value at acquisition Carrying amount at
date acquisition date
Assets:
Current assets 452,190,770.34 452,190,770.34
Investments in other equity instruments 17,689,094.74 17,744,912.00
Fixed assets 2,367,025,860.63 1,762,938,008.76
Construction in progress 22,262,821.75 22,262,821.75
Intangible assets 1,246,136,859.13 174,638,339.40
Long-term prepaid expenses 9,924,686.56 9,924,686.56
Liabilities:
Current liabilities 283,489,650.27 283,489,650.27
Special payables 1,098,494.94 1,098,494.94
Deferred tax liabilities 418,882,654.24 -
Net assets 3,411,759,293.70 2,155,111,393.60
Less: Minority interests - -
Net assets acquired 3,411,759,293.70 2,155,111,393.60
(2) Operating results and net cash flows of the acquiree from the acquisition date to the end of
the year of business combination
Acquisition date to the
end of the year of
Item
business combination
Ningbo Daxie
Operating income 73,403,212.42
Operating cost and expenses 42,281,862.79
Gross profit 32,101,813.91
Net profit 27,286,541.83
Net cash flows from operating activities 36,940,631.77
Net cash flows from investing activities -3,002,033.17
Net cash flows from financing activities -117,688,708.33
Net increase in cash and cash equivalents (decrease is marked with "-") -83,750,109.73
(3) Gains or losses from remeasurement of equity held prior to acquisition date at fair value
Gains or losses Method of Amount transferred from
Carrying
Fair value of from determining the fair other comprehensive
amount of
Name of the previously held remeasurement value of previously income to investment
previously held
acquiree equity at the of previously held equity at income in respect of the
equity at the
acquisition date held equity at acquisition date and equity held prior to the
acquisition date
fair value key assumptions acquisition date
Asset-based
Ningbo Daxie 969,800,126.77 1,723,788,876.57 753,988,749.80 -
valuation
- 137 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group
Proportion of
Principal Registered capital
Place of ownership Interest
Name of the subsidiary place of Nature of business (RMB'0000, unless Acquisition method
incorporation (%)
business otherwise specified)
Direct Indirect
Shenzhen Chiwan International Freight Agency Shenzhen, Logistics support Established through
Shenzhen, PRC 550 100.00 -
Co., Ltd. PRC services investment
Hong Kong, Hong Kong, Established through
Chiwan Wharf Holdings (Hong Kong) Ltd. Investment holding HKD1,000,000 100.00 -
PRC PRC investment
Dongguan, Dongguan, Logistics support Established through
Dongguan Shenchiwan Port Affairs Co., Ltd. 45,000.00 85.00 -
PRC PRC services investment
Dongguan, Dongguan, Logistics support Established through
Dongguan Shenchiwan Wharf Co., Ltd. 40,000.00 100.00 -
PRC PRC services investment
Business combination
Shenzhen, Logistics support
Shenzhen Chiwan Harbor Container Co. Ltd. Shenzhen, PRC 28,820.00 100.00 - involving enterprises under
PRC services
common control
Business combination
Shenzhen, Logistics support
Shenzhen Chiwan Port Development Co., Ltd. Shenzhen, PRC 1,500.00 100.00 - involving enterprises under
PRC services
common control
Business combination
Shenzhen, Logistics support
Chiwan Container Terminal Co., Ltd. Shenzhen, PRC USD95,300,000 55.00 20.00 involving enterprises under
PRC services
common control
Business combination
Shenzhen, Logistics support
Shenzhen Chiwan Tugboat Co., Ltd. Shenzhen, PRC 2,400.00 100.00 - involving enterprises under
PRC services
common control
Business combination
Hong Kong, Hong Kong, Logistics support
Chiwan Shipping (Hong Kong) Limited HKD80,0000 100.00 - involving enterprises under
PRC PRC services
common control
Business combination
Hong Kong, Hong Kong,
CMPort(Note 1) Investment holding 41.85 - involving enterprises under
PRC PRC HKD42,521,339,900
common control
Business combination
Shenzhen, Logistics support
China Merchants Bonded Logistics Co., Ltd. Shenzhen, PRC 70,000.00 40.00 60.00 involving enterprises under
PRC services
common control
China Merchants Holdings (International)
Business combination
Information Technology Company Limited Shenzhen,
Shenzhen, PRC IT services 5,000.00 23.16 76.84 involving enterprises under
(hereinafter referred to as "International PRC
common control
Information Technology Company")
Business combination
China Merchants International (China) Shenzhen,
Shenzhen, PRC Investment holding USD30,000,000 - 100.00 involving enterprises under
Investment Co., Ltd. PRC
common control
Business combination
China Merchants International Container Qingdao, Logistics support
Qingdao, PRC USD206,300,000 - 100.00 involving enterprises under
Terminal (Qingdao) Co., Ltd. PRC services
common control
Business combination
Hong Kong, Hong Kong, Logistics support
China Merchants Container Services Limited HKD500,000 - 100.00 involving enterprises under
PRC PRC services
common control
Business combination
Shenzhen, Logistics support
China Merchants Port (Shenzhen) Co., Ltd. Shenzhen, PRC 55,000.00 - 100.00 involving enterprises under
PRC services
common control
Project supervision Business combination
Shenzhen,
Shenzhen Haiqin Project Management Co., Ltd. Shenzhen, PRC services 300 - 100.00 involving enterprises under
PRC
common control
Preparation for the Business combination
Shenzhen,
ATJ Shenzhen, PRC warehousing project HKD100,000,000 - 100.00 involving enterprises under
PRC
common control
Preparation for the Business combination
Shenzhen,
ASJ Shenzhen, PRC warehousing project HKD1,000,000 - 100.00 involving enterprises under
PRC
common control
Business combination
China Merchants International Terminal Qingdao, Logistics support
Qingdao, PRC USD44,000,000 - 90.10 involving enterprises under
(Qingdao) Co., Ltd. PRC services
common control
Business combination
Colombo International Container Terminals Logistics support
Sri Lanka Sri Lanka USD150,000,100 - 85.00 involving enterprises under
Limited services
common control
Business combination
Shenzhen, Logistics support
Magang Godown & Wharf (Note 2) Shenzhen, PRC 33,500.00 - 100.00 involving enterprises under
PRC services
common control
Business combination
Shenzhen, Logistics support
Shenzhen Mawan Port Services Co., Ltd. Shenzhen, PRC 20,000.00 - 100.00 involving enterprises under
PRC services
common control
Business combination
Zhangzhou, Zhangzhou, Logistics support
Zhangzhou China Merchants Tugboat Co., Ltd. 1,500.00 - 100.00 involving enterprises under
PRC PRC services
common control
Business combination
Zhangzhou, Zhangzhou, Logistics support
Zhangzhou China Merchants Port Co., Ltd. 100,000.00 - 60.00 involving enterprises under
PRC PRC services
common control
Business combination
Zhangzhou, Zhangzhou, Logistics support
ZCMG (note 2) 44,450.00 - 31.00 involving enterprises under
PRC PRC services
common control
Business combination
Shenzhen, Logistics support
Shekou Container Terminals Ltd. Shenzhen, PRC HKD618,201,200 - 100.00 involving enterprises under
PRC services
common control
- 138 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Proportion of
Principal Registered capital
Place of ownership Interest
Name of the subsidiary place of Nature of business (RMB'0000, unless Acquisition method
incorporation (%)
business otherwise specified)
Direct Indirect
Business combination
Shenzhen Lianyunjie Container Terminals Co., Shenzhen, Logistics support
Shenzhen, PRC 60,854.90 - 100.00 involving enterprises under
Ltd. PRC services
common control
Business combination
Anxunjie Container Terminals (Shenzhen) Co., Shenzhen, Logistics support
Shenzhen, PRC 127,600.00 - 100.00 involving enterprises under
Ltd. PRC services
common control
Business combination
Anyunjie Port Warehousing Service (Shenzhen) Shenzhen, Preparation for the
Shenzhen, PRC 6,060.00 - 100.00 involving enterprises under
Co., Ltd. PRC warehousing project
common control
Business combination
Shenzhen Haixing Harbor Development Co., Shenzhen, Logistics support
Shenzhen, PRC 53,072.92 - 67.00 involving enterprises under
Ltd PRC services
common control
Business combination
Shenzhen, Logistics support
Shenzhen Lianyongtong Terminal Co., Ltd. Shenzhen, PRC USD7,000,000 - 100.00 involving enterprises under
PRC services
common control
Business combination
Foshan, Logistics support
Yide Port Foshan, PRC 21,600.00 - 51.00 involving enterprises under
PRC services
common control
Business combination
British
Mega Shekou Container Terminals Limited British Virgin Investment holding USD120.00 - 80.00 involving enterprises under
Virgin
common control
Business combination
Thesar Maritime Limited Cyprus Cyprus Investment holding EUR5,000.00 - 100.00 involving enterprises under
common control
The Business combination
The Republic Logistics support
Lome Container Terminal S.A. Republic of XOF200,000,000 - 100.00 involving enterprises under
of Togo services
Togo common control
Business combination
British
Gainpro British Virgin Investment holding USD1.00 - 76.47 involving enterprises under
Virgin
common control
Business combination
Hambantota International Port Group Logistics support
Sri Lanka Sri Lanka USD794,000,000 - 85.00 involving enterprises under
(Private)Limited services
common control
Business combination
Shantou, Logistics support
Shantou port Shantou, PRC 12,500 - 60.00 involving enterprises under
PRC services
common control
Business combination
Shenzhen, Property lease
JYRT Shenzhen, PRC 80,000 - 100.00 involving enterprises under
PRC service, etc.
common control
Business combination
Shenzhen, Property lease
QHW Shenzhen, PRC 20,000 - 100.00 involving enterprises under
PRC service, etc.
common control
Business combination
Shenzhen, Investment
Juzhongzhi Investment (Shenzhen) Co., Ltd. Shenzhen, PRC 4,000 - 75.00 involving enterprises under
PRC consultation
common control
Business combination
Shenzhen, Logistics support
Shenzhen Lianda Tugboat Co., Ltd. Shenzhen, PRC 200 - 60.29 involving enterprises under
PRC services
common control
Business combination
China Ocean Shipping Tally Zhangzhou Co., Zhangzhou, Zhangzhou, Logistics support
200 - 84.00 involving enterprises under
Ltd. PRC PRC services
common control
Business combination
Logistics support
China Merchants Holdings (Djibouti) FZE Djibouti Djibouti USD38,140,000 - 100.00 involving enterprises under
services
common control
Business combination
Xinda Resources Limited (hereinafter referred British
British Virgin Investment holding USD107,620,000 - 77.45 involving enterprises under
to as "Xinda") Virgin
common control
Business combination
Hong Kong, Hong Kong,
Kong Rise Development Limited Investment holding USD107,620,000 - 100.00 involving enterprises under
PRC PRC
common control
Business combination not
Logistics support
TCP Brazil Brazil BRL 68,851,600 - 100.00 involving enterprises under
services
common control
Business combination
Hong Kong, Hong Kong,
Direcet Achieve Investments Limited Investment holding USD814,781,300 - 100.00 involving enterprises under
PRC PRC
common control
Zhoushan, Logistics support
CMPort (Zhoushan) RoRo Logistics Co., Ltd. Zhoushan, PRC 17,307.86 51.00 - Assets acquisition
PRC services
Shenzhen Haixing Logistics Development Co., Shenzhen, Logistics support
Shenzhen, PRC 7,066.79 - 67.00 Assets acquisition
Ltd. PRC services
Business combination not
Zhanjiang, Zhanjiang, Logistics support
Zhanjiang Port 587,420.91 3.42 54.93 involving enterprises under
PRC PRC services
common control
Business combination not
Zhanjiang Port International Container Terminal Zhanjiang, Zhanjiang, Logistics support
60,000.00 - 80.00 involving enterprises under
Co., Ltd. PRC PRC services
common control
- 139 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Proportion of
Principal Registered capital
Place of ownership Interest
Name of the subsidiary place of Nature of business (RMB'0000, unless Acquisition method
incorporation (%)
business otherwise specified)
Direct Indirect
Business combination not
Zhanjiang Port Petrochemical Terminal Co., Zhanjiang, Zhanjiang, Logistics support
18,000.00 - 50.00 involving enterprises under
Ltd. PRC PRC services
common control
Business combination not
China Ocean Shipping Tally Co., Ltd., Zhanjiang, Zhanjiang, Logistics support
300 - 84.00 involving enterprises under
Zhanjiang PRC PRC services
common control
Business combination not
Zhanjiang Port Donghaidao Bulk Cargo Zhanjiang, Zhanjiang, Logistics support
5,000.00 - 100.00 involving enterprises under
Terminal Co., Ltd. PRC PRC services
common control
Business combination not
Zhanjiang Port Bonded Service Co., Ltd., Zhanjiang, Zhanjiang, Logistics support
300 - 100.00 involving enterprises under
Guangdong PRC PRC services
common control
Business combination not
Zhanjiang, Zhanjiang, Logistics support
Guangdong Zhanjiang Port Logistics Co., Ltd. 10,000.00 - 100.00 involving enterprises under
PRC PRC services
common control
Business combination not
Zhanjiang, Zhanjiang, Logistics support
Zhanjiang Port Haichuan Trading Co., Ltd. 200 - 100.00 involving enterprises under
PRC PRC services
common control
Business combination not
Guangdong Zhanjiang Port Longteng Shipping Zhanjiang, Zhanjiang, Logistics support
9,000.00 - 70.00 involving enterprises under
Co., Ltd. PRC PRC services
common control
Business combination
Ningbo, Logistics support
Ningbo Daxie (Note 4) Ningbo, PRC 120,909.00 - 45.00 involving enterprises under
PRC services
common control
Shantou, Logistics support Established through
Shantou Harbor Towage Service Co., Ltd. Shantou, PRC 1,000.00 - 100.00
PRC services investment
Note 1: On 19 June 2018, the Company and China Merchants Group (Hong Kong) Co., Ltd.
("CMHK") entered into "Agreement of Concerted Action on China Merchants Port
Holdings Company Limited". According to the agreement, CMHK unconditionally
keeps consistent with the Company when voting for the matters discussed at the general
shareholders meeting of CMPort in respect of its voting power of CMPort as entrusted,
and performs the voting as per the Company's opinion.
For July and October 2020, CMPort respectively distributed 2019 dividends and 2020
interim dividends to shareholders. The shareholders may select to receive the dividends
all in cash or shares, or receive the dividends part in cash and part in new shares. The
Company and CMHK select to receive all its share of dividends from the shareholding in
CMPort in the form of scrip dividends. Upon the completion of above distribution of
CMPort, the Company's share in CMPort increased from 1,411,014,033 shares to
1,532,248,957 shares, accounting for 41.85% (previously 40.91%) of the total issued
shares of CMPort. The proportion of shares held by CMHK changed from 21.86% to
22.36%. Therefore, the Company has total 64.21% voting power of CMPort and has
control over CMPort.
- 140 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Note 2: At the shareholders' meeting held on 17 July 2020, Magang Godown&Wharf a
subsidiary of the Company, approved an absorption agreement with Shenzhen Mawan
Port Services Co., Ltd., ("Mawan Port Services"), another subsidiary of the Company.
According to the agreement, Mahaang Warehouse Code continues as a going concern by
absorbing Mawan Port Services which was cancelled with the settlement date 30
November 2020.
On 22 July 2020, Magang Godown&Wharf and Mawan Port Services, subsidiaries of
the Company, published separate announcements in Shenzhen Special Zone Daily to
explain the debt settlement or debt guarantee of Magang Godown&Wharf and Mawan
Port Services, and the debts of both parties before the merger will continue to be repaid
by the existing Magang Godown&Wharf after the merger.
On 13 November 2020, the registration modification with the administration for industry
and commerce of Magang Godown&Wharf and the registration cancellation with the
administration for industry and commerce of Mawan Port Services, subsidiaries of the
Company, were completed.
Note 3: The Group and China Merchants Zhangzhou Development Zone Co., Ltd. entered into
"Equity Custody Agreement", according to which China Merchants Zhangzhou
Development Zone Co., Ltd. entrusted its 29% equity of ZCMG to the Group for
operation and management. Therefore, the Group has 60% voting power of ZCMG and
includes it in the scope of consolidation of the consolidated financial statements.
Note 4: Details are set out in Note (VI) 1.
(2) Material non-wholly-owned subsidiaries
Profit or loss
Dividends distributed Balance of
Proportion of ownership attributable to
Name of the to minority minority interests
interest held by the minority
subsidiary shareholders in the at the end of the
minority shareholders (%) shareholders in the
current year year
current year
CMPort 58.15 3,290,341,491.53 1,271,963,608.20 63,082,766,307.07
- 141 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Significant financial information of material non-wholly-owned subsidiaries
Closing balance Opening balance
Name of the
Non-current Current Non-current Non-current Current Non-current
subsidiary Current assets Total assets Total liabilities Current assets Total assets Total liabilities
assets liabilities liabilities assets liabilities liabilities
CMPort 14,625,774,694.50 125,425,081,030.94 140,050,855,725.44 13,055,907,214.63 34,087,468,137.34 47,143,375,351.97 11,159,452,476.24 119,576,502,129.38 130,735,954,605.62 13,858,924,526.23 35,059,524,441.90 48,918,448,968.13
2020 2019
Name of the subsidiary Total Cash flows from Total Cash flows from
Operating income Net profit Operating income Net profit
comprehensive income operating activities comprehensive income operating activities
CMPort 7,956,928,250.59 5,064,412,321.79 3,204,689,765.86 3,629,199,456.13 7,845,242,646.62 7,421,484,985.59 6,327,276,475.35 3,944,044,766.09
- 142 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES - continued
2. Transactions resulting in changes in ownership interests in subsidiaries without
losing control over the subsidiaries
(1) Description of changes in ownership interests in subsidiaries
During the year, the Group's ownership interests in CMPort changed from 40.91% to 41.85%.
Details are set out in Note (VII) 1 (1).
In February 2018, China Merchants Port Holdings, a subsidiary of the Company, through its
controlling subsidiary Kong Rise Development Limited, acquired a 90% equity interest in TCP.
Under the agreement, the minority shareholder of TCP holds an option to sell its 10% equity
interest in TCP to Kong Rise Development Limited, a subsidiary of the Group and the controlling
shareholder of TCP, at the higher of the market price or BRL 320 million (the "Put Option"). On
23 February 2020, the minority shareholders of TCP gave notice of exercise to Kong Rise
Development Limited, after which China Merchants Port Holdings increased its capital to Xinda,
the wholly-owned controlling shareholder of Kong Rise Development Limited, by USD107
million, Xinda increased its capital to Kong Rise Development Limited by USD107 million, and
Kong Rise Development Limited paid the minority shareholder of TCP the full amount of
USD107 million for the equity acquisition of approximately RMB755,398,999.97. As of 31
December 2020, the relevant equity transaction has been completed. Upon completion of this
transaction, the shareholding of Kong Rise Development Limited in TCP changed from 90% to
100% and the shareholding of China Merchants Port Holdings in Xinda changed from 74.9485%
to 77.4536%.
In June 2020, China Merchants Port Holdings, a subsidiary of the Company, as seller, Fujian
Transportation Maritime Silk Road, as buyer, and Fujian Provincial Transportation Group Co.,
Ltd., as guarantor, entered into the "Contract for Share Transfer of GAINPRO RESOURCES
LIMITED", under which China Merchants Port Holdings transferred about 23.53% of equity in its
wholly-owned subsidiary Gainpro and 23.53% of the shareholder loans it provided to Gainpro to
Fujian Transportation Maritime Silk Road with a transaction consideration of
USD268,000,000.00. As of 31 December 2020, the relevant equity transaction has been
completed. After the completion of this transaction, the shareholding of China Merchants Port
Holdings in Gainpro changed from 100% to 76.47%.
- 143 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES - continued
2. Transactions resulting in changes in ownership interests in subsidiaries without
losing control over the subsidiaries - continued
(2) Effect of the transaction on minority interests and equity attributable to owners of the
Company
CMPort TCP Gainpro
Acquisition cost/disposal consideration
- Cash - 755,398,999.97 1,851,325,647.36
- Fair value of non-cash assets 974,063,967.07 - -
Less: Fair value of put options recognized at the
- 170,321,779.31 -
acquisition of TCP controlling interest
Less: Changes in the fair value of put options - 65,259,562.57 -
Less: Shareholder loans transferred to Fujian
- - 1,587,526,138.69
Transportation Maritime Silk Road
Total acquisition cost and disposal consideration 974,063,967.07 519,817,658.09 263,799,508.67
Less: Share of net assets of subsidiaries calculated based
on the proportion of equity acquired to the equity 1,350,167,611.78 -14,691,819.14 -68,314,604.13
disposed
Difference -376,103,644.71 534,509,477.23 332,114,112.80
Including: Adjustment to capital Reserve 376,103,644.71 -534,509,477.23 332,114,112.80
Adjustment to surplus reserve - - -
Adjustment to unappropriated profit - - -
3. Interests in joint ventures and associates
(1) Material joint ventures or associates
Proportion of ownership
Accounting method of
Principal place Place of interests held by the Group
Investee Nature of business investments in
of business registration (%)
associates
Direct Indirect
Associates
Shanghai International Port and container
Shanghai, PRC Shanghai, PRC - 26.77 Equity method
Port (Group) Co., Ltd. terminal business
- 144 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VII) EQUITY IN OTHER ENTITIES - continued
4. Key financial information of material associates
Shanghai International Port (Group) Co., Ltd.
Closing balance / Opening balance/
Item Amount incurred Amount incurred
in the current in the prior
period period
Current assets 43,653,716,114.59 40,399,631,516.67
Including: Cash and cash equivalents 20,689,734,592.59 17,900,365,675.69
Non-current assets 112,271,033,861.93 101,777,664,401.29
Total assets 155,924,749,976.52 142,177,295,917.96
Current liabilities 22,405,787,626.17 19,339,272,490.14
Non-current liabilities 37,539,362,699.55 32,049,165,771.78
Total liabilities 59,945,150,325.72 51,388,438,261.92
Minority interests 8,461,734,212.94 8,732,108,869.09
Equity attributable to shareholders of the parent company 87,517,865,437.86 82,056,748,786.95
Share of net assets calculated based on the proportion of
23,428,532,577.72 21,966,591,650.27
ownership interests
Adjustments
-Goodwill 2,076,585,747.12 2,076,585,747.12
-Others -143,335,143.43 -125,134,529.84
Carrying amounts of equity investments in associates 25,361,783,181.41 23,918,042,867.55
Fair value of publicly quoted equity investments in
28,345,709,190.02 35,788,783,813.22
associates
Operating income 26,119,460,820.07 36,101,631,985.21
Net profit 9,183,403,328.66 9,925,845,382.34
Other comprehensive income 657,555,565.18 -197,209,230.86
Total comprehensive income 9,840,958,893.84 9,728,636,151.48
Dividends received from associates in the current year 899,371,516.97 955,194,576.56
5. Summarized financial information of immaterial associates and joint ventures
Opening balance/
Closing balance/Amount
Item Amount accumulated
accumulated in the year
last year
Joint ventures:
Total carrying amount of investments 8,860,743,706.09 9,392,226,566.22
Aggregate of following items calculated based on the
proportion of ownership interest
- Net profit 357,995,555.70 468,699,021.57
- Other comprehensive income 25,430,763.35 -18,718,479.76
- Total comprehensive income 383,426,319.05 449,980,541.81
Associates:
Total carrying amount of investments 32,009,396,535.95 24,606,269,949.49
Aggregate of following items calculated based on the
proportion of ownership interest
- Net profit 1,396,328,157.40 833,229,755.94
- Other comprehensive income 21,687,463.52 -71,060,470.70
- Total comprehensive income 1,418,015,620.92 762,169,285.24
6. The investees where the Group holds long-term equity investments are not restricted
to transfer funds to the Group.
- 145 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
1. Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The
Group's exposure to the currency risk is primarily associated with HKD, USD and EUR. Except
for part of the purchases and sales, the Group's other principal activities are denominated and
settled in RMB. As at 31 December 2020, the balance of the Group's assets and liabilities are both
denominated in functional currency, except that the assets and liabilities set out below are
recorded using foreign currency. Currency risk arising from the foreign currency balance of assets
and liabilities may have impact on the Group's performance.
Item Closing balance Opening balance
Cash and bank balances 1,214,901,554.08 829,827,620.81
Accounts receivable 34,261,643.29 134,801,300.52
Other receivables 1,004,843,484.23 558,948,223.20
Long-term receivables - 9,800,295.76
Short-term borrowings 668,320,000.00 1,304,398,148.00
Accounts payable 4,286,809.14 30,431,392.31
Other payables 201,395,071.52 261,684,252.87
Non-current liabilities due within one year 382,131,909.25 261,401,461.04
Long-term borrowings 670,000,000.00 976,546,725.00
Bonds payable 2,500,000,000.00 2,500,000,000.00
Long-term payables 440,659,667.97 431,361,402.17
The Group closely monitors the effects of changes in the foreign exchange rates on the Group's
currency risk exposures. According to the current risk exposure and judgment of the exchange
rate movements, management considers it is unlikely that the exchange rate changes in the future
one year will result in significant loss to the Group.
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges and
hedges of a net investment in a foreign operation are highly effective. On the basis of the above
assumption, where all other variables are held constant, the reasonably possible changes in the
foreign exchange rate may have the following pre-tax effect on the profit or loss for the period
and shareholders' equity:
Closing balance Opening balance
Effect on Effect on
Item Changes in exchange rate Effect Effect
shareholders' shareholders'
on profits on profits
equity equity
All foreign currencies 5% increase against RMB -577,260.66 -577,260.66 -17,661,467.60 -17,661,467.60
All foreign currencies 5% decrease against RMB 577,260.66 577,260.66 17,661,467.60 17,661,467.60
All foreign currencies 5% increase against USD 1,578,468.63 1,578,468.63 -7,574,539.96 -7,574,539.96
All foreign currencies 5% decrease against USD -1,578,468.63 -1,578,468.63 7,574,539.96 7,574,539.96
All foreign currencies 5% increase against HKD -131,469,479.65 -131,469,186.05 -97,677,880.50 -97,677,880.50
All foreign currencies 5% decrease against HKD 131,469,479.65 131,469,186.05 97,677,880.50 97,677,880.50
All foreign currencies 5% increase against FCFA -171,067.13 -171,067.13 -41,707,232.31 -41,707,232.31
All foreign currencies 5% decrease against FCFA 171,067.13 171,067.13 41,707,232.31 41,707,232.31
- 146 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) 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 mainly
related to bank loans with floating interest rate. (See Note (V) 26 and Note (V) 36). The Group
continuously and closely monitors the impact of interest rate changes on the Group's interest rate
risk. The Group's policy is to maintain these borrowings at floating rates. Presently, the Group has
no arrangement such as interest rate swaps etc.
Sensitivity analysis of interest rate risk
Sensitivity analysis of interest rate risk is based on the following assumptions:
Fluctuations of market interest rate can affect the interest income or expense of a financial
instrument with floating interest rate;
For a financial instrument at fair value with fixed interest rate, the fluctuations of market interest
rate can only affect its interest income or expense;
For a derivative financial instrument designated as hedging instrument, the fluctuations of market
interest rate affect its fair value, and all interest rate hedging are expected to be highly effective;
The changes in fair value of derivative financial instruments and other financial assets and
liabilities are calculated using cash flow discounting method by applying the market interest rate at
balance sheet date.
On the basis of above assumptions, where the other variables held constant, the pre-tax effect of
possible and reasonable changes in interest rate on the profit or loss for the period and
shareholders' equity are as follows:
Closing balance Opening balance
Changes in Effect on Effect on
Item
interest rate Effect on profits shareholders' Effect on profits shareholders'
equity equity
Short-term borrowings and
1% increase -133,940,312.35 -133,940,312.35 -126,905,885.92 -126,905,885.92
long-term borrowings
Short-term borrowings and
1% decrease 133,940,312.35 133,940,312.35 126,905,885.92 126,905,885.92
long-term borrowings
3. Liquidity risk
In the management of the liquidity risk, the Group monitors and maintains a level of cash and
cash equivalents deemed adequate by the management to finance the Group's operations and
mitigate the effects of fluctuations in cash flows. The management monitors the utilisation of
bank borrowings and ensures compliance with loan covenants.
As of 31 December 2020, the Group had total current liabilities in excess of total current assets of
RMB3,870,940,636.24. As at 31 December 2020, the Group has available unutilized loan facility
of RMB45,605,365,637.62 which is more than current liabilities. Therefore, the Group's
management believes that the Group has no significant liquidity risk.
- 147 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(VIII) 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
Group which is based on undiscounted remaining contractual obligations:
Item Carrying amount Gross amount Within 1 year 1 to 5 years Over 5 years
Short-term borrowings 10,483,775,548.93 10,589,325,476.51 10,589,325,476.51 - -
Notes payable 7,081,772.32 7,081,772.32 7,081,772.32 - -
Accounts payable 599,112,028.98 599,112,028.98 599,112,028.98 - -
Other payables 2,456,700,897.60 2,456,700,897.60 2,456,700,897.60 - -
Non-current liabilities due
3,511,343,186.37 4,990,744,868.69 4,990,744,868.69 - -
within one year
Other current liabilities 2,383,668,985.94 2,397,840,643.47 2,397,840,643.47 - -
Long-term borrowings 7,406,322,693.80 8,295,674,700.92 - 6,597,478,594.75 1,698,196,106.17
Bonds payable 21,090,545,845.56 23,576,837,902.76 - 19,195,987,479.27 4,380,850,423.49
Lease liabilities 1,327,423,748.05 2,054,269,999.66 - 804,396,870.36 1,249,873,129.30
Long-term payables 1,188,465,420.57 1,289,219,203.17 - 26,864,969.61 1,262,354,233.56
Other non-current
2,821,122,944.90 2,821,122,944.90 - 246,057,524.18 2,575,065,420.72
liabilities
(IX) DISCLOSURE OF FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
Fair value at the end of the year
Level 1 Level 2 Level 3
Item
Measured at Measured at Measured at fair Total
fair value fair value value
Measurements at fair value
continuously
Held-for-trading financial assets 165,448.59 - 850,000,000.00 850,165,448.59
Receivables financing - 217,449,966.41 - 217,449,966.41
Other equity instrument investments 10,786,800.00 - 170,680,257.74 181,467,057.74
Other non-current financial assets 886,385,139.77 - 24,422,312.79 910,807,452.56
Total assets measured at fair value
897,337,388.36 217,449,966.41 1,045,102,570.53 2,159,889,925.30
continuously
Other non-current liabilities - - 2,888,395,641.53 2,888,395,641.53
Total liabilities measured at fair value
- - 2,888,395,641.53 2,888,395,641.53
continuously
2. Basis for determining the market price of items continuously measured at level 1 fair
value
The market prices of other equity instrument investments and other non-current financial assets
are determined at the closing price of the equity instrument at Shanghai Stock Exchange and
Hong Kong Stock Exchange at 31 December 2020.
- 148 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(IX) DISCLOSURE OF FAIR VALUE - continued
3. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 2 fair value
Fair value at the end
Item Valuation techniques Inputs
of this year
Receivables financing 217,449,966.41 Cash flow discounting Discount rate
The fair value of non-listed equity instruments included in equity instruments at fair value through
profit or loss is determined using the valuation techniques such as listed company comparison
approach etc. During the valuation, the Group needs to make estimates in respect of market
volatility and relevance etc., select appropriate discount rate and take into consideration of
adjustment of discount and premium.
4. Qualitative and quantitative information of valuation techniques and key parameters
adopted for items continuously measured at level 3 fair value
Fair value at the end
Item Valuation techniques Inputs
of this year
Held-for-trading financial assets 850,000,000.00 Cash flow discounting Discount rate
Other equity instrument investments 170,680,257.74 Net worth method Carrying amount
Other non-current financial assets 2,000,000.00 Cash flow discounting Discount rate
Other non-current financial assets 667,822.80 Net worth method Carrying amount
Listed company comparison
Other non-current financial assets 21,754,489.99 Share price
approach
Other non-current liabilities 2,888,395,641.53 Cash flow discounting Discount rate
The fair value of non-listed equity instruments included in equity instruments at fair value through
profit or loss or other comprehensive income is determined using the valuation techniques such as
cash flow discounting method, net worth method, listed company comparison approach etc.
During the valuation, the Group needs to make estimates in respect of the future cash flows, credit
risk, market volatility and relevance etc., select appropriate discount rate and take into
consideration of adjustment of discount and premium.
5. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and liabilities not measured at fair value mainly include: notes receivable,
accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable,
other payables, long-term borrowings, bonds payable, lease liabilities and long-term payables etc.
The Group's management believes that the carrying amounts of financial assets and financial
liabilities at amortized cost in the financial statements approximate their fair values.
The fair value of bonds payable traded in active market is determined at the quoted price in the
active market. The fair values of long-term borrowings, long-term payables and bonds payable
not traded in active market are determined at the present value of contractual future cash flows
discounted using the interest rate for providing nearly the same cash flows to entity with
comparable credit rating under the same conditions.
- 149 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
Proportion of the
Proportion of the
Related party Place of Company's ownership
Name of the parent Type of the entity Nature of business Issued share capital Company's voting power
relationship registration interests held by the
held by the parent (%)
parent (%)
Broadford Global Limited Parent company Private limited company (share limited) Hong Kong Investment holding HKD 21,120,986,262 2.88 81.92 (Note)
Note: Broadford Global Limited directly holds 2.88% equity of the Company, and indirectly holds 19.29% and 59.75% equity of the Company
through the subsidiaries China Merchants Gangtong Development (Shenzhen) Co., Ltd. and China Merchants Port Investment Development
Company Limited (formerly known as China Merchants Investment Development Co., Ltd.) respectively. The ultimate controlling
shareholder of the Company is China Merchants Group.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are set out in Note (VII) 1.
- 150 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
3. Associates and joint ventures of the Company
Details of the Company's significant joint ventures and associates are set out in Note (VII) 3.
Other joint ventures or joint ventures that occurred related party transactions and formed balances
with the Group this year are as follows:
Name of joint venture or associate Relationship with the Company
Port of Newcastle and its subsidiaries Joint venture
Guizhou East Land Port Operation Co., Ltd. Joint venture
Previously a joint venture
Guangdong Zhanjiang Port Longteng Shipping Co., Ltd.
(currently a subsidiary)
Previously a joint venture
Ningbo Daxie (Note 1)
(currently a subsidiary)
Qingdao Qianwan United Container Terminal Co., Ltd. Joint venture
Qingdao Qianwan West Port United Wharf Co., Ltd. Joint venture
Qingdao Qianwan New United Container Terminal Co., Ltd. Joint venture
COSCO Logistics (Zhanjiang) Co., Ltd. Joint venture
China Merchants Antong Logistics Management Company Joint venture
China Ocean Shipping Agency (Zhanjiang) Co., Ltd Joint venture
Yantai Port Group Laizhou Port Co., Ltd. Joint venture
Qingdao Wutong Century Supply Chain Co., Ltd. Joint venture
Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim irketi Joint venture
Doraleh Multi-purpose Port Associate
Great Horn Development Company FZCo Associate
International Djibouti Industrial Parks Operation FZCo Associate
Port de Djibouti S.A. Associate
Terminal Link SAS Associate
Tin-Can Island Container Terminal Ltd Associate
Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. Associate
Nanshan Group and its subsidiaries Associate
Shanghai International Port (Group) Co., Ltd. Associate
Shenzhen Baohong E-Commerce Integrated Services Co., Ltd. Associate
Tianjin Haitian Bonded Logistics Co., Ltd. Associate
Modern Terminals Limited Associate
Zhanjiang CMHK Investment Co., Ltd. Associate
Zhanjiang Xiagang United Development Co., Ltd. Associate
Zhangzhou COSCO Shipping Agency Co., Ltd. Associate
Chu Kong River Trade Terminal Co. Ltd. Associate
Dalian Port Logistics Technology Co. Ltd. Associate
China United Tally Co., Ltd. Shantou Associate
Shantou International Container Terminals Limited Associate
Shenzhen Bay Electricity Industry Co., Ltd. Associate
- 151 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
Name of other related parties Relationship with the Company
Yihai Kerry Golden Arowana Cereals, Oils and Foodstuffs Co., Minority shareholder of subsidiary
Ltd.
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
Antong Holdings Co., Ltd. and its subordinate companies (Note 2) Same related natural person
China COSCO Shipping Group and its subsidiaries (Note 2) Same related natural person
CMHK Controlled by the same ultimate controlling shareholder
Sinotrans (NZ) Limited Controlled by the same ultimate controlling shareholder
Sinotrans Guangdong Co., Ltd. Controlled by the same ultimate controlling shareholder
China Marine Shipping Agency Guangdong Co., Ltd. Controlled by the same ultimate controlling shareholder
Hoi Tung (Shanghai) Company Limited Controlled by the same ultimate controlling shareholder
South China Sinotrans Supply Chain Management Co., Ltd. Controlled by the same ultimate controlling shareholder
EuroAsia Dockyard Enterprise and Development Limited Controlled by the same ultimate controlling shareholder
Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics Controlled by the same ultimate controlling shareholder
Co., Ltd.
Qingdao Sinotrans Supply Chain Management Co., Ltd. Controlled by the same ultimate controlling shareholder
Penavico Shenzhen Warehousing Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Nanyou (Holdings) Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Qianhai Shekou Free Trade Investment Development Controlled by the same ultimate controlling shareholder
Co. Ltd.
Shenzhen West Port Security Service Company Controlled by the same ultimate controlling shareholder
China Merchants Landmark (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants International Shipping Agency (Shenzhen) Co., Controlled by the same ultimate controlling shareholder
Ltd.
China Merchants Real Estate (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants (Shenzhen) Power Supply., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Commercial Property Investment (Shenzhen) Controlled by the same ultimate controlling shareholder
Co., Ltd.
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 Houlder Insurance Consulting Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants International Cold Chain (Shenzhen) Company Controlled by the same ultimate controlling shareholder
Limited
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 Life Insurance Company Limited Controlled by the same ultimate controlling shareholder
China Merchants Finance Lease (Tianjin) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Shekou Industrial Zone Holdings Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchant Food (China) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Tongshang Finance Lease Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Logistics Group Qingdao Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Zhangzhou Development Zone Power Supply Controlled by the same ultimate controlling shareholder
Co., Ltd.
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 Merchants Your Cellar (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Marine Shipping Agency Guangdong Co., Ltd. Controlled by the same ultimate controlling shareholder
- 152 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company - continued
Name of other related parties Relationship with the Company
China Merchants Healthcare (Qichun) Co., Ltd. Controlled by the same ultimate controlling shareholder
China Ocean Shipping Tally Shenzhen Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Air Transportation Development Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Central China Co., Ltd. Controlled by the same ultimate controlling shareholder
Portx.cn Controlled by the same ultimate controlling shareholder
Sinotrans (HK) Shipping Limited Controlled by the same ultimate controlling shareholder
Sinoway Shipping Ltd. Controlled by the same ultimate controlling shareholder
China Merchants (Liaoning) Port Development Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Heavy Industry (Jiangsu) Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Shantou Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Holdings (Hong Kong) Company Limited Controlled by the same ultimate controlling shareholder
Guangzhou Hangshang Int'l Shipping Agency Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen China Merchants Shekou Asset Management Co., Ltd. Controlled by the same ultimate controlling shareholder
China Yangtze Shipping Group Wuhan Real Estate Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Apartment Development (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Wanhai Mansion Management Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Godown, Wharf & Transportation Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants-Logistics Shenzhen Co., Ltd. Controlled by the same ultimate controlling shareholder
China Merchants Zhangzhou Development Zone Co., Ltd. Controlled by the same ultimate controlling shareholder
China Ocean Shipping Agency Shenzhen Controlled by the same ultimate controlling shareholder
China Marine Shipping Agency Ningbo Co., Ltd. Controlled by the same ultimate controlling shareholder
Sinotrans Container Lines (Hong Kong) Company Limited Controlled by the same ultimate controlling shareholder
Sinotrans Container Lines Co., Ltd. Controlled by the same ultimate controlling shareholder
Hoi Tung Innotek (Shenzhen) Co., Ltd. Controlled by the same ultimate controlling shareholder
Shenzhen Science and Technology University Phase II Real Estate Original controlled by the ultimate controlling shareholder
Management Co., Ltd.
With significant influence from the ultimate controlling
Khor Ambado FZCo
shareholder
With significant influence from the ultimate controlling
Djibouti International Hotel Company
shareholder
With significant influence from the ultimate controlling
China Merchant Bank Co., Ltd.
shareholder
With significant influence from the ultimate controlling
Shenzhen China Merchants Port Trade Center for Sea-land Materials
shareholder
Note 1: Refer to Note (VI) 1. It's no longer a related party of the Group since 19 November 2020.
Note 2: The Company's former Chairman Fu Gangfeng (resigned on 31 January 2020) worked
as the director and general manager of China COSCO Shipping Corporation Limited
within 12 months after his departure. From 1 January 2020 to 27 March 2020, the
Company's deputy general manager Zheng Shaoping worked both as the senior
management personnel of the Company and as the Chairman of the Board of Antong
Holding Co., Ltd. From September 25 to October 11, 2020, the Company's Deputy
General Manager Zheng Shaoping worked as the Company's senior management and the
member of board of directors of Antong Holdings Co., Ltd. From October 12, 2020 to
December 31, 2020, the Company's Deputy General Manager Zheng Shaoping, served
both as the senior management of the company and as the chairman of Antong Holding
Co., Ltd. Therefore, the related party transactions and balances for the period in which
the aforesaid two persons were the director, senior management personnel of China
COSCO Shipping Corporation Limited and Antong Holdings Co., Ltd. and for the 12
months after such period are disclosed.
- 153 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions
(1) Rendering and receipt of service
Pricing method
and decision Amount incurred Amount incurred
Related party Content of transaction procedures of in the current in the prior
related period period
transactions
Receipt of service:
Nanshan Group and its subsidiaries Service expenditure Negotiation 29,612,136.31 59,399,028.43
Shenzhen Bay Electricity Industry Co., Ltd. Service expenditure Negotiation 29,148,667.42 -
Qingdao Qianwan West Port United Wharf Co., Ltd. Service expenditure Negotiation 16,335,069.80 18,116,312.14
Hoi Tung (Shanghai) Company Limited Service expenditure Negotiation 9,886,142.11 1,472,835.51
Yiu Lian Dockyards Limited Service expenditure Negotiation 9,274,213.41 11,822,773.93
China Merchants Commercial Property Investment (Shenzhen)
Service expenditure Negotiation 6,616,945.42 8,063,768.58
Co., Ltd.
China Merchants Property Management (Shenzhen) Co., Ltd. Service expenditure Negotiation 844,512.39 2,496,785.30
COSCO Logistics (Zhanjiang) Co., Ltd. Service expenditure Negotiation 5,078,367.51 5,302,779.67
China Merchants Zhangzhou Development Zone Power Supply
Service expenditure Negotiation 4,548,046.20 5,050,730.12
Co., Ltd.
Shenzhen West Port Security Service Company Service expenditure Negotiation 4,159,456.50 -
China Marine Shipping Agency Shenzhen Co., Ltd. Service expenditure Negotiation 2,403,262.96 2,998,142.60
China Merchants Your Cellar (Shenzhen) Co., Ltd. Service expenditure Negotiation 2,201,965.59 1,887,287.74
Djibouti International Hotel Company Service expenditure Negotiation 2,028,556.99 -
China Marine Shipping Agency Guangdong Co., Ltd. Service expenditure Negotiation 1,994,707.90 98,489.92
China Merchants Life Insurance Company Limited Service expenditure Negotiation 1,828,798.25 1,674,762.08
China Merchant Food (China) Co., Ltd. Service expenditure Negotiation 1,790,459.66 7,720.06
China Merchants Logistics Group Qingdao Co., Ltd. Service expenditure Negotiation 1,506,882.06 4,291,294.93
China Merchants Healthcare (Qichun) Co., Ltd. Service expenditure Negotiation 1,473,607.08 -
China Ocean Shipping Tally Shenzhen Co., Ltd. Service expenditure Negotiation 1,208,224.86 1,168,331.49
Dalian Port Logistics Technology Co., Ltd. Service expenditure Negotiation 1,068,592.04 -
China Merchants Houlder Insurance Consulting Co., Ltd. Service expenditure Negotiation 273,247.88 2,475,979.40
China Traffic Import and Export Co., Ltd. Service expenditure Negotiation 224,342.82 1,076,783.22
Sinotrans Air Transportation Development Co., Ltd. Service expenditure Negotiation - 1,178,932.56
China Merchants (Shenzhen) Power Supply Co., Ltd. Service expenditure Negotiation - 2,611,504.71
Other related parties Service expenditure Negotiation 5,120,243.27 5,718,581.57
China Merchants Property Management (Shenzhen) Co., Ltd. Property utilities Negotiation 7,567,376.65 19,706,450.63
Nanshan Group and its subsidiaries Property utilities Negotiation - 5,923,767.12
Other related parties Property utilities Negotiation 1,269,101.74 2,114,730.66
China Merchants Finance Lease (Tianjin) Co., Ltd. Lease service fee Negotiation - 6,447,169.81
Purchase of wealth
China Merchants Bank Co., Ltd. Negotiation 850,000,000.00 -
management products
China Merchants Group Finance Company Limited Interest expense Negotiation 40,218,054.32 42,581,045.29
China Merchant Bank Co., Ltd. Interest expense Negotiation 2,820,905.00 3,618,321.05
Port de Djibouti S.A. Interest expense Negotiation - 7,364,273.28
Total 1,040,501,886.14 224,668,581.80
- 154 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of service - continued
Pricing method
and decision Amount incurred Amount incurred
Related party Content of transaction procedures of in the current in the prior
related period period
transactions
Rendering of service:
China COSCO Shipping Group and its subsidiaries Service revenue Negotiation 473,089,186.47 128,551,617.88
COSCO Logistics (Zhanjiang) Co., Ltd. Service revenue Negotiation 138,294,236.96 142,786,686.45
Antong Holdings Co., Ltd. and its subordinate companies Service revenue Negotiation 127,713,616.40 30,031,214.77
China Marine Shipping Agency Guangdong Co., Ltd. Service revenue Negotiation 61,942,724.25 33,230,929.57
China Marine Shipping Agency Zhanjiang Co., Ltd Service revenue Negotiation 53,774,870.23 48,467,968.01
Qingdao Qianwan United Container Terminal Co., Ltd. Service revenue Negotiation 49,104,741.77 54,976,948.20
Shantou International Container Terminals Limited Service revenue Negotiation 15,018,042.39 -
China Ocean Shipping Agency Shenzhen Service revenue Negotiation 11,872,191.59 22,026,784.26
Port de Djibouti S.A. Service revenue Negotiation 10,943,478.47 -
China Merchants Ocean Shipping Agency ShenZhen Service revenue Negotiation 10,407,471.90 5,516,336.45
Shenzhen Baohong E-Commerce Integrated Services Co., Ltd. Service revenue Negotiation 9,183,840.58 7,624,557.93
Yiu Lian Dockyards (Shekou) Limited Service revenue Negotiation 6,825,979.02 5,818,220.17
China Merchants International Cold Chain (Shenzhen) Company
Service revenue Negotiation 6,781,159.20 6,487,127.00
Limited
Penavico Shenzhen Warehousing Co., Ltd. Service revenue Negotiation 6,450,089.03 424,691.17
Sinotrans Container Lines Co., Ltd. Service revenue Negotiation 5,752,204.72 4,173,590.92
South China Sinotrans Supply Chain Management Co., Ltd. Service revenue Negotiation 5,730,351.44 3,574,103.34
Sinotrans Shenzhen Qianhai Supply Chain Management Ltd. Service revenue Negotiation 5,366,080.32 1,073,773.97
China Marine Shipping Agency Shenzhen Co., Ltd. Service revenue Negotiation 4,566,415.18 7,924,860.20
Ningbo Daxie Service revenue Negotiation 4,212,324.06 3,973,305.23
Portx.cn Service revenue Negotiation 3,627,717.89 -
Sinotrans (HK) Shipping Limited Service revenue Negotiation 3,516,284.75 -
Qingdao Qianwan West Port United Wharf Co., Ltd. Service revenue Negotiation 3,403,438.43 9,297,044.19
Qingdao Qianwan United Container Terminal Co., Ltd. Service revenue Negotiation 3,147,064.19 3,165,271.40
China Marine Shipping Agency Guangdong Co., Ltd. Service revenue Negotiation 2,771,236.94 637,333.96
Sinoway Shipping Ltd. Service revenue Negotiation 2,380,557.22 101,246.40
Guizhou Qiandongnan Continental Land Port Operation Co., Ltd. Service revenue Negotiation 2,006,774.37 4,995,026.14
China Merchants (Liaoning) Port Development Co., Ltd. Service revenue Negotiation 1,886,792.45 -
China Merchants Port Investment Development Company
Service revenue Negotiation 1,870,575.47 -
Limited
Guizhou East Land Port Operation Co., Ltd. Service revenue Negotiation 1,854,382.19 5,538,484.09
Qingdao Bonded Logistics Park Sinotrans Warehousing Logistics
Service revenue Negotiation 1,777,701.97 1,855,239.95
Co., Ltd.
China Merchants Heavy Industry (Jiangsu) Co., Ltd. Service revenue Negotiation 1,771,945.79 54,339.62
Shantou Zhonglian Tally Co., Ltd. Service revenue Negotiation 1,720,385.71 -
Shanghai International Port (Group) Co., Ltd. Service revenue Negotiation 1,631,054.72 1,588,035.85
Yantai Port Group Laizhou Port Co., Ltd. Service revenue Negotiation 1,448,756.38 1,775,122.48
Doraleh Multi-purpose Port Service revenue Negotiation 1,396,158.59 1,062,268.33
Zhanjiang CMHK Investment Co., Ltd. Service revenue Negotiation 1,226,801.94 -
International Djibouti Industrial Parks Operation
Service revenue Negotiation 1,219,559.23 5,109,432.57
FZCo
Terminal Link SAS Service revenue Negotiation 1,203,144.53 1,362,717.34
Zhangzhou COSCO Shipping Agency Co., Ltd. Service revenue Negotiation 1,171,144.27 2,465,482.40
Sinotrans Central China Co., Ltd. Service revenue Negotiation 1,097,750.34 -
Sinotrans Container Lines (Hong Kong) Co., Ltd. Service revenue Negotiation 1,049,302.38 2,211,004.97
China Merchants-Logistics Shenzhen Co., Ltd. Service revenue Negotiation 1,007,155.73 1,267,111.56
Qingdao Sinotrans Supply Chain Management Co., Ltd. Service revenue Negotiation 902,612.31 1,643,202.86
Nanshan Group and its subsidiaries Service revenue Negotiation 822,683.39 1,000,829.05
Sinotrans Shantou Co., Ltd. Service revenue Negotiation 747,042.39 1,142,737.27
CMHK Service revenue Negotiation 126,500.00 1,412,000.00
Qingdao Wutong Century Supply Chain Co., Ltd. Service revenue Negotiation 99,572.06 2,061,301.86
Great Horn Development Company FZCo Service revenue Negotiation - 2,492,673.00
Khor Ambado FZCo Service revenue Negotiation - 13,593,100.08
Kumport Liman Hizmetleri ve Lojistik Sanayi ve
Service revenue Negotiation - 1,200,615.17
Ticaret Anonim irketi
Sinotrans (NZ) Limited Service revenue Negotiation - 6,191,950.42
- 155 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(1) Rendering and receipt of service - continued
Pricing method
and decision Amount incurred Amount incurred
Related party Content of transaction procedures of in the current in the prior
related period period
transactions
Rendering of service:
Guangdong Zhanjiang Port Longteng Shipping Co., Ltd. Service revenue Negotiation 4,250,943.39
Shenzhen China Merchants Shekou Asset Management Co., Ltd. Service revenue Negotiation - 2,297,545.50
Shenzhen Zhaogang Sea and Land Material Trade Center Service revenue Negotiation - 2,026,044.81
Other related parties Service revenue Negotiation 10,373,324.37 8,690,168.35
Port of Newcastle and its subsidiaries Interest income Negotiation 61,452,466.62 62,584,543.33
Zhanjiang CMHK Investment Co., Ltd. Interest income Negotiation 34,310,102.60 48,716,656.41
China Merchant Bank Co., Ltd. Interest income Negotiation 25,077,926.86 26,074,287.83
Terminal Link SAS Interest income Negotiation 130,683,767.31 56,993.75
China Merchants Group Finance Company Limited Interest income Negotiation 17,071,627.25 7,814,725.11
Tianjin Haitian Bonded Logistics Co., Ltd. Interest income Negotiation 1,507,141.63 1,394,695.28
Khor Ambado FZCo Interest income Negotiation - 18,187,714.88
Other related parties Interest income Negotiation 39,343.77 3,811.07
Total 1,334,428,800.02 761,984,416.19
(2) Leases with related parties
The Group as the lessor:
Pricing method
and decision Lease income Lease income
Name of the lessee Type of leased assets procedures of recognized in recognized in
related the current year the prior year
transactions
Qingdao Qianwan West Port United Wharf Co.,
Port and terminal facilities Negotiation 9,530,634.40 4,571,984.36
Ltd.
Qingdao Bonded Logistics Park Sinotrans
Buildings and structures Negotiation 5,246,389.08 3,816,263.45
Warehousing & Logistics Co., Ltd.
China Merchant Food (China) Co., Ltd. Buildings and structures Negotiation 4,979,293.98 5,675,752.58
China Traffic Import and Export Co., Ltd. Buildings and structures Negotiation 4,791,084.02 3,943,926.21
Qingdao Sinotrans Supply Chain Management
Buildings and structures Negotiation 3,937,228.69 2,678,324.75
Co., Ltd.
Yiu Lian Dockyards (Shekou) Limited Buildings and structures Negotiation 2,612,180.18 2,441,075.14
Nanshan Group and its subsidiaries Buildings and structures Negotiation 2,451,852.32 2,698,718.83
Qingdao Qianwan United Container Terminal
Buildings and structures Negotiation 2,402,484.55 -
Co., Ltd.
China Merchants Securities Co., Ltd. Buildings and structures Negotiation 2,364,578.34 2,330,741.02
Qingdao Wutong Century Supply Chain Co.,
Buildings and structures Negotiation 960,707.68 1,082,330.31
Ltd.
Buildings and structures, land
Other related parties Negotiation 6,612,178.37 3,441,589.35
use rights
Total 45,888,611.61 32,680,706.00
- 156 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as the lessee:
Lease term (disclose the
Other significant lease
Name of the lessor Type of leased assets Rental (year) period covered by
terms
contract)
China Merchants Finance Lease (Tianjin) Port and terminal 19 March 2018 -26
103,616,724.54 N/A
Co., Ltd. facilities March 2024
Machinery
China Merchants Finance Lease (Tianjin) 30 November 2018 -30
equipment, port and 63,602,263.89 N/A
Co., Ltd. November 2024
terminal facilities
Buildings and 1 January 2019 - 31
Nanshan Group and its subsidiaries 57,094,005.40 N/A
structures December 2023
China Merchants Tongshang Finance Machinery 31 October 2017 -27
46,381,918.54 N/A
Lease Co., Ltd. equipment October 2023
China Merchants Shekou Industrial Zone Port and terminal 1 January 2020 - 31
35,385,536.56 N/A
Holdings Co., Ltd. facilities December 2021
China Merchants Tongshang Finance Machinery 26 December 2016 -15
17,717,147.04 N/A
Lease Co., Ltd. equipment November 2022
EuroAsia Dockyard Enterprise and Port and terminal 1 January 2020 - 31
14,633,851.19 N/A
Development Limited facilities December 2020
China Merchants Shekou Industrial Zone 1 January 2020 - 31
Other 5,823,873.60 N/A
Holdings Co., Ltd. December 2020
With progressively
Shenzhen Qianhai Shekou Free Trade 1 March 2020 - 31 decreasing rent, and the
Other 4,169,811.20
Investment Development Co. Ltd. December 2020 lease terminated in
September 2020
1 January 2018 - 31 Attached with renewal
Nanshan Group and its subsidiaries Other 3,198,846.84
December 2018 option
Buildings and 1 January 2019 -31 Attached with renewal
Nanshan Group and its subsidiaries 3,101,220.22
structures December 2019 option
China Merchants Commercial Property Buildings and 1 January 2018 - 31
2,632,960.86 N/A
Investment (Shenzhen) Co., Ltd. structures December 2020
1 May 2015 -30 April
Nanshan Group and its subsidiaries Other 2,619,047.62 N/A
2020
1 January 2020 - 31
Shenzhen Nanyou (Holdings) Co., Ltd. Other 1,995,553.20 N/A
December 2020
1 January 2016 - 31 Attached with renewal
Nanshan Group and its subsidiaries Other 1,817,704.08
December 2018 option
Buildings and 1 July 2019 - 31 Attached with renewal
Nanshan Group and its subsidiaries 1,468,461.12
structures December 2019 option
China Merchants Commercial Property Buildings and 1 January 2018 - 31
1,339,191.69 N/A
Investment (Shenzhen) Co., Ltd. structures December 2020
China Merchants International Cold Chain Port and terminal 1 May 2018 – 30 April
990,257.55 N/A
(Shenzhen) Company Limited facilities 2021
China Merchants Commercial Property Buildings and 1 January 2018 - 31 Attached with renewal
877,680.00
Investment (Shenzhen) Co., Ltd. structures December 2020. option
China Merchants International Cold Chain Buildings and 22 March 2020 -28
819,000.00 N/A
(Shenzhen) Company Limited structures February 2021
China Merchants International Cold Chain Buildings and 22 March 2019 -21
777,000.00 N/A
(Shenzhen) Company Limited structures March 2020
China Merchants Commercial Property Buildings and 1 September 2018 - 31
687,796.80 N/A
Investment (Shenzhen) Co., Ltd. structures December 2020
Buildings and 1 January 2019 - 31 Attached with renewal
Nanshan Group and its subsidiaries 639,738.84
structures December 2023 option
Shenzhen Qianhai Shekou Free Trade 10 February 2020 -31
Other 485,224.52 N/A
Investment Development Co. Ltd. May 2020
- 157 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(2) Leases with related parties - continued
The Group as the lessee: - continued
Lease term (disclose the
Other significant lease
Name of the lessor Type of leased assets Rental (year) period covered by
terms
contract)
Buildings and 1 May 2019 - 31 Attached with renewal
Nanshan Group and its subsidiaries 352,656.00
structures December 2019 option
1 January 2017 -25
Nanshan Group and its subsidiaries Other 346,575.86 N/A
August 2021
China Yangtze Shipping Group Wuhan Buildings and 15 April 2019 -14 The contract has
310,196.16
Real Estate Co., Ltd. structures January 2021 terminated
1 January 2017 - 31 Attached with renewal
Nanshan Group and its subsidiaries Other 230,502.86
December 2020. option
1 January 2020 -31 The contract has
Shenzhen Nanyou (Holdings) Co., Ltd. Other 218,999.99
July 2020 terminated
China Merchants Commercial Property Buildings and 25 August 2018 - 31
218,326.32 N/A
Investment (Shenzhen) Co., Ltd. structures December 2020
Buildings and 1 May 2019 - 31 Attached with renewal
Nanshan Group and its subsidiaries 147,490.74
structures December 2019 option
China Merchants Apartment Development Buildings and 1 January 2020 - 31
133,680.00 N/A
(Shenzhen) Co., Ltd. structures December 2020
Shenzhen Wanhai Mansion Management Buildings and 15 June 2018 -14 June Progressively increasing
101,620.00
Co., Ltd. structures 2021 rent
China Merchants Landmark (Shenzhen) Buildings and 15 June 2018 -14 June Progressively increasing
101,620.00
Co., Ltd. structures 2021 rent
China Merchants Godown, Wharf & Motor vehicles and 1 January 2020 - 28
95,152.23 N/A
Transportation Co., Ltd. cargo ships February 2020
Port and terminal 1 January 2019 - 31 Attached with renewal
Nanshan Group and its subsidiaries 93,981.20
facilities December 2023 option
China Merchants Commercial Property Buildings and 25 August 2018 - 31
76,421.87 N/A
Investment (Shenzhen) Co., Ltd. structures December 2020
China Merchants-Logistics Shenzhen Co., Buildings and 1 June 2019 – 30 April
41,360.00 N/A
Ltd. structures 2020
Buildings and 1 January 2015 -31 Attached with renewal
Nanshan Group and its subsidiaries 22,080.00
structures December 2015 option
Total 374,365,478.53
(3) Related party guarantees
The Group as the guarantor
The guarantee has
Secured party Credit Line Guaranteed amount Commencement date Maturity
been completed or not
2020
Terminal Link SAS (Note 1) 71,003,968.05 71,003,968.05 1 June 2013 2033 No
Khor Ambado FZCo (Note 2) 187,917,834.24 113,125,755.69 24 May 2019 2032 No
Total 258,921,802.29 184,129,723.74
2019
Terminal Link SAS (Note 1) 24,982,114.97 12,241,236.33 1 June 2013 2019 Yes
Terminal Link SAS (Note 1) 80,305,197.15 80,305,197.15 1 June 2013 2033 No
Khor Ambado FZCo (Note 2) 200,914,560.00 118,398,397.00 24 May 2019 2032 No
Port de Djibouti S.A. 343,160,000.00 24,192,780.00 14 June 2016 14 June 2019 Yes
Total 649,361,872.12 235,137,610.48
- 158 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(3) Related party guarantees - continued
The Group as the guarantor - continued
Note 1: CMA CGM S.A. is another shareholder of Terminal Link SAS, an associate of the
Group. The Group has made a commitment to CMA CGM S.A. that the Group will
provides guarantee for its bank loan financing to the associate Terminal Link SAS and
other liabilities to the extent of the Group's 49% ownership interest in the company. The
actual guaranteed amount is RMB71,003,968.05 on 31 December 2020. If any guarantee
liability occurs, the Group will compensate CMA CGM S.A.
Note 2: Khor Ambado FZCo is a related company of the Group's common ultimate controlling
shareholder. The Group provides guarantee for its bank loans and other liabilities, the
actual amount of which as at 31 December 2020 is RMB 113,125,755.69.
(4) Borrowings and loans with related parties
Commencement
Related party Amount Maturity date Description
date
2020
Borrowings
China Merchants Group Finance Company Limited 1,301,430,000.00 22 October 2020 21 October 2021 Fixed annual interest rate of 3.6000%
China Merchants Group Finance Company Limited 672,821,155.13 28 December 2020 27 January 2021 Fixed annual interest rate of 3.4500%
China Merchants Finance Lease (Tianjin) Co., Ltd. 200,235,277.84 14 April 2020 13 April 2024 Fixed annual interest rate of 4.0500%
China Merchants Group Finance Company Limited 200,235,277.78 25 September 2020 24 September 2021 Fixed annual interest rate of 3.8500%
China Merchants Group Finance Company Limited 192,039,573.34 30 December 2020 29 December 2021 Fixed annual interest rate of 3.7100%
China Merchants Group Finance Company Limited 76,929,960.60 25 March 2020 12 March 2029 Fixed annual interest rate of 4.5050%
China Merchants Group Finance Company Limited 70,086,890.22 22 June 2020 21 June 2024 Fixed annual interest rate of 1.2000%
China Merchants Group Finance Company Limited 50,606,027.37 5 June 2020 2 March 2021 Fixed annual interest rate of 1.9900%
China Merchants Group Finance Company Limited 50,056,680.56 21 May 2020 20 May 2021 Fixed annual interest rate of 3.7100%
China Merchants Group Finance Company Limited 40,000,000.00 20 December 2020 31 October 2023 Fixed annual interest rate of 1.2000%
China Merchants Group Finance Company Limited 47,000,000.00 6 January 2020 7 October 2024 Fixed annual interest rate of 4.5125%
China Merchants Group Finance Company Limited 30,035,291.66 4 December 2020 20 May 2021 Fixed annual interest rate of 3.7100%
China Merchants Group Finance Company Limited 10,000,000.00 3 November 2020 12 May 2021 Fixed annual interest rate of 2.5000%
China Merchants Group Finance Company Limited 1,500,000.00 17 December 2020 10 December 2028 Fixed annual interest rate of 4.4100%
Total 2,942,976,134.50
Lendings
Terminal Link SAS 2,975,444,121.38 26 March 2020 26 March 2028 Fixed annual interest rate of 6.0000%
Port of Newcastle and its subsidiaries 815,144,304.00 30 May 2020 23 July 2023 Fixed annual interest rate of 8.0000%
Tianjin Haitian Bonded Logistics Co., Ltd. 34,300,000.00 3 January 2020 2 January 2023 Fixed annual interest rate of 4.7500%
Total 3,824,888,425.38
2019
Borrowings
China Merchants Group Finance Company Limited 300,378,812.51 2 December 2019 1 December 2020 Fixed annual interest rate of 4.1325%
China Merchants Group Finance Company Limited 270,548,281.28 22 April 2019 21 April 2020 Fixed annual interest rate of 4.3500%
China Merchants Financial Leasing (Tianjin) Co., Ltd. 150,000,000.00 23 December 2019 23 December 2025 Fixed annual interest rate of 4.7500%
China Merchants Group Finance Company Limited 150,000,000.00 27 August 2019 26 August 2020 Fixed annual interest rate of 4.1325%
China Merchants Group Finance Company Limited 56,483,984.71 1 July 2019 1 July 2034 Fixed annual interest rate of 4.6550%
China Merchants Group Finance Company Limited 50,061,625.00 4 June 2019 3 June 2020 Fixed annual interest rate of 4.3500%
China Merchants Group Finance Company Limited 50,000,000.00 29 July 2019 28 July 2022 Fixed annual interest rate of 4.5125%
China Merchants Group Finance Company Limited 47,000,000.00 14 October 2019 13 October 2024 Fixed annual interest rate of 4.7500%
China Merchants Group Finance Company Limited 33,052,804.00 22 July 2019 21 July 2020 Fixed annual interest rate of 4.3500%
China Merchants Group Finance Company Limited 29,000,000.00 18 October 2019 17 October 2023 Fixed annual interest rate of 4.7500%
China Merchants Group Finance Company Limited 28,000,000.00 15 January 2019 14 January 2024 Fixed annual interest rate of 4.7500%
China Merchants Group Finance Company Limited 23,000,000.00 10 June 2019 14 January 2024 Fixed annual interest rate of 4.7500%
China Merchants Group Finance Company Limited 10,000,000.00 28 December 2019 31 October 2023 Fixed annual interest rate of 1.2000%
China Merchants Group Finance Company Limited 6,000,000.00 22 July 2019 21 July 2020 Fixed annual interest rate of 4.3500%
China Merchants Group Finance Company Limited 1,000,000.00 24 December 2019 23 December 2020 Fixed annual interest rate of 4.3500%
Total 1,204,525,507.50
Lendings
China Merchants Antong Logistics Management
50,000,000.00 24 September 2019 24 September 2021 Fixed interest rate of 8.5000%
Company
- 159 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transactions - continued
(5) Asset transfer from related parties
Pricing method and Amount Amount
Content of decision procedures accumulated accumulated
Related party
transaction of related in the current in the prior
transactions period period
Hoi Tung (Shanghai) Company Limited Machinery equipment Negotiation 8,202,477.87 5,891,378.30
Hoi Tung Innotek (Shenzhen) Co., Ltd. Machinery equipment Negotiation 1,946,000.00 738,053.10
China Merchants Property Management Ordinary office
Negotiation - 710,229.95
(Shenzhen) Co., Ltd. equipment
Khor Ambado FZCo Intangible assets Negotiation - 190,885,258.20
Ordinary office
Other related parties Negotiation 83,584.00 330,810.79
equipment
Total 10,232,061.87 198,555,730.34
(6) Compensation for key management personnel
Amount incurred Amount incurred
Item in the current in the prior
period period
Compensation for key management personnel 20,552,276.50 26,856,013.14
6. Amounts due from/to related parties
(1) Amounts due from related parties
Item Related party Closing balance Opening balance
China Merchant Bank Co., Ltd. 1,899,970,131.14 1,451,996,464.50
Cash and bank balances China Merchants Group Finance Company Limited 1,568,924,175.58 890,065,186.36
Total 3,468,894,306.72 2,342,061,650.86
Held-for-trading financial
China Merchant Bank Co., Ltd. 850,000,000.00 -
assets
China COSCO Shipping Group and its subsidiaries 120,615,548.37 60,545,437.55
Antong Holdings Co., Ltd. and its subordinate companies 10,508,254.42 60,112,564.13
China Marine Shipping Agency Guangdong Co., Ltd. 7,777,640.18 3,583,505.77
China Marine Shipping Agency Ningbo Co., Ltd. 7,773,568.86 -
COSCO Logistics (Zhanjiang) Co., Ltd. 4,326,223.02 7,728,194.66
Guizhou East Land Port Operation Co., Ltd. 3,612,221.02 4,043,600.57
Khor Ambado FZCo 2,774,015.84 3,113,788.09
Shenzhen Baohong E-Commerce Integrated Services Co.,
2,641,391.12 4,643,545.31
Ltd.
Qingdao Qianwan West Port United Wharf Co., Ltd. 2,007,669.18 2,986,271.27
Port de Djibouti S.A. 1,497,611.83 1,689,447.85
Great Horn Development Company FZCo 1,427,020.52 2,771,510.50
Accounts receivable
Sinotrans Container Lines Co., Ltd. 1,148,569.75 1,746,120.89
Guizhou Qiandongnan Continental Land Port Operation
1,061,604.20 2,010,137.38
Co., Ltd.
South China Sinotrans Supply Chain Management Co.,
1,035,675.13 1,808,219.75
Ltd.
China Ocean Shipping Agency Shenzhen 843,054.75 5,609,630.60
China Marine Shipping Agency Shenzhen Co., Ltd. 322,016.25 1,058,089.50
Yantai Port Group Laizhou Port Co., Ltd. - 1,853,183.12
Zhanjiang CMHK Investment Co., Ltd. - 1,536,503.45
Qingdao Qianwan United Container Terminal Co., Ltd. - 4,424,422.68
Other related parties 8,041,402.85 5,130,480.00
Total 177,413,487.29 176,394,653.07
- 160 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
Item Related party Closing balance Opening balance
Nanshan Group and its subsidiaries 210,831,000.00 313,724,861.31
Chu Kong River Trade Terminal Co., Ltd. 57,607,520.00 61,317,510.00
Tin-Can Island Container Terminal Ltd 33,289,037.77 82,625,546.31
Zhanjiang Infrastructure Construction Investment Group
31,513,558.59 31,513,558.59
Co., Ltd.
Port de Djibouti S.A. 23,248,597.69 24,832,398.83
COSCO Logistics (Zhanjiang) Co., Ltd. 13,378,666.52 13,751,368.26
Zhoushan Blue Ocean Investment Co., Ltd. 4,996,989.39 -
Shenzhen Qianhai Shekou Free Trade Investment
4,000,000.00 -
Development Co. Ltd.
Other receivables
China Merchants Shenzhen Ro-Ro Shipping Co., Ltd. 2,899,163.95 2,899,163.95
China Merchants (Liaoning) Port Development Co., Ltd. 2,000,000.00 -
EuroAsia Dockyard Enterprise and Development Limited 1,422,660.84 1,514,281.82
China Merchants Commercial Property Investment
1,068,658.39 1,068,658.39
(Shenzhen) Co., Ltd.
Sinotrans Guangdong Co., Ltd. - 3,803,477.07
Tianjin Haitian Bonded Logistics Co., Ltd. 220,500.00 33,282,119.52
Qingdao Qianwan United Container Terminal Co., Ltd. - 50,000,000.00
Other related parties 3,961,060.53 4,199,662.93
Total 390,437,413.67 624,532,606.98
Prepayments Other related parties 244,729.25 1,414,261.04
Other current assets China Merchant Bank Co., Ltd. - 1,528,851,492.46
Terminal Link SAS 51,286,674.10 -
Non-current assets due
Port of Newcastle and its subsidiaries 16,473,559.57 809,702,715.78
within one year
Total 67,760,233.67 809,702,715.78
Terminal Link SAS 2,746,067,386.31 9,800,295.76
Port of Newcastle and its subsidiaries 815,144,304.00 -
Zhanjiang CMHK Investment Co., Ltd. 286,330,144.62 1,025,631,435.87
China Merchants Finance Lease (Tianjin) Co., Ltd. 10,000,000.00 14,500,000.00
Long-term receivables
China Merchants Antong Logistics Management
- 50,000,000.00
Company
Tianjin Haitian Bonded Logistics Co., Ltd. 34,300,000.00 -
Total 3,891,841,834.93 1,099,931,731.63
(2) Amounts due to related parties
Item Related party Closing balance Opening balance
China Merchants Group Finance Company Limited 2,646,853,256.33 841,079,404.24
Short-term borrowings China Merchant Bank Co., Ltd. - 70,093,041.67
Total 2,646,853,256.33 911,172,445.91
Other current liabilities China Merchants Group Finance Company Limited 60,606,027.37 -
Nanshan Group and its subsidiaries 9,220,434.36 10,747,794.44
Qingdao Qianwan West Port United Wharf Co., Ltd. 6,381,033.57 7,641,839.79
EuroAsia Dockyard Enterprise and Development Limited 2,994,548.16 2,974,168.52
Yiu Lian Dockyards Limited 2,271,520.48 1,676,082.11
Accounts payable
China Marine Shipping Agency Shenzhen Co., Ltd. 1,264,544.50 535,279.71
China Merchants Logistics Group Qingdao Co., Ltd. 21,834.03 1,006,844.56
Other related parties 558,566.85 3,078,887.88
Total 22,712,481.95 27,660,897.01
Port de Djibouti S.A. 10,350,122.63 -
Receipts in advance Other related parties 606,631.45 600,535.85
Total 10,956,754.08 600,535.85
Antong Holdings Co., Ltd. and its subordinate companies 6,774,086.39 521,882.13
China Marine Shipping Agency Guangdong Co., Ltd. 2,304,015.01 3,577,148.00
Contract liabilities
Other related parties 3,264,592.40 1,932,142.96
Total 12,342,693.80 6,031,173.09
- 161 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties - continued
Item Related party Closing balance Opening balance
Port de Djibouti S.A. 175,497,252.70 -
Terminal Link SAS 89,905,681.62 88,978,919.98
Sri Lanka Ports Authority 34,255,854.79 31,392,997.47
China Merchants Port Investment Development Company
26,418,918.90 -
Limited
China Merchants Zhangzhou Development Zone Co.,
20,000,000.00 -
Ltd.
China Merchants Real Estate (Shenzhen) Co., Ltd. 14,305,122.78 20,762,053.30
China Merchants Commercial Property Investment
8,447,512.23 8,947,256.82
(Shenzhen) Co., Ltd.
China Merchants Investment and Development Co., Ltd. 2,910,544.27 -
Shenzhen Baohong E-Commerce Integrated Services Co.,
2,634,014.09 199,894.69
Ltd.
Zhanjiang Xiagang United Development Co., Ltd. 1,433,730.78 1,433,990.57
Other payables China Merchant Food (China) Co., Ltd. 1,161,179.14 1,264,171.10
Penavico Shenzhen Warehousing Co., Ltd. 1,127,339.68 554,335.48
Sinotrans Shenzhen Qianhai Supply Chain Management
1,013,738.40 492,259.78
Ltd.
China Merchants Property Management (Shenzhen) Co.,
223,640.00 9,264,823.90
Ltd.
COSCO Logistics (Zhanjiang) Co., Ltd. 101,708.65 1,258,811.65
China Merchants Shekou Industrial Zone Holdings Co.,
10,000.00 11,305,700.00
Ltd.
Modern Terminals Limited - 59,038,373.05
China Merchants Finance Lease (Tianjin) Co., Ltd. - 11,250,000.00
Yihai Kerry Golden Arowana Cereals, Oils and
- 37,402,426.09
Foodstuffs Co., Ltd.
Other related parties 6,457,095.12 28,926,796.51
Total 385,903,333.15 312,472,810.39
China Merchants Finance Lease (Tianjin) Co., Ltd. 138,409,402.75 145,861,850.10
China Merchants Tongshang Finance Lease Co., Ltd. 58,348,704.99 56,146,040.22
Nanshan Group and its subsidiaries 54,030,933.00 52,656,827.70
EuroAsia Dockyard Enterprise and Development Limited 13,406,128.42 14,269,498.38
China Merchants Shekou Industrial Zone Holdings Co.,
39,512,425.01 5,454,253.54
Ltd.
Non-current liabilities due China Merchants Commercial Property Investment
- 5,579,040.25
within one year (Shenzhen) Co., Ltd.
China Merchants Landmark (Shenzhen) Co., Ltd. - 1,242,022.25
Shenzhen Science and Technology University Phase II
3,263,992.11
Real Estate Management Co., Ltd.
China Merchants Group Finance Company Limited 51,423,306.47 -
Other related parties 348,523.44 1,770,041.27
Total 355,479,424.08 286,243,565.82
Other non-current liabilities Nanshan Group and its subsidiaries 944,011.06 1,564,380.59
China Merchants Group Finance Company Limited 426,100,835.53 376,483,984.71
Long-term borrowings China Merchant Bank Co., Ltd. 109,033,232.39 20,000,000.00
Total 535,134,067.92 396,483,984.71
Long-term payables China Merchants Finance Lease (Tianjin) Co., Ltd. - 144,000,000.00
Total - 144,000,000.00
China Merchants Finance Lease (Tianjin) Co., Ltd. 358,333,616.46 491,666,949.79
Nanshan Group and its subsidiaries 114,304,842.23 167,685,128.23
China Merchants Tongshang Finance Lease Co., Ltd. 104,616,135.92 161,829,816.02
Lease liabilities China Merchants Shekou Industrial Zone Holdings Co.,
- 5,691,513.57
Ltd.
Other related parties - 1,880,637.25
Total 577,254,594.61 828,754,044.86
- 162 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XI) SHARE-BASED PAYMENTS
1. Overall share-based payments
Total equity instruments granted by the Company in the year 17,198,000
Total equity instruments exercised by the Company in the year None
Total equity instruments of the Company that became invalid in the year None
The range of the exercise price of the stock options externally issued by
Exercise price: RMB17.80;
the Company at the end of the year and the remaining term of the
The remaining term of the contract: 73 months
contract
The range of the exercise price of the other equity instruments externally
issued by the Company at the end of the year and the remaining term of None
the contract
2. Share-based payments settled by equity
The method used to determine the fair value of equity instruments on the The cost of granted stock options was estimated
day of granting using the Black Scholes Model.
On each balance sheet date in the waiting period,
the best estimate was made and the estimated
number of exercisable equity instruments was
The basis for determining the number of exercisable equity instruments
modified according to the latest changes in the
number of employees who can exercise the rights
and other subsequent information.
Reasons for the significant difference between the estimates of this year
N/A
and the estimates of last year
The aggregate amount of share-based payments settled by equity that is
10,096,607.62
included in the capital reserve
Total expenses recognized for the share-based payments settled by equity
19,213,391.58
in the year
Pursuant to the Official Reply on the Implementation of the Stock Option Incentive Plan of China
Merchants Port Group Co., Ltd. by State-owned Assets Supervision and Administration
Commission of the State Council, (No. 748 [2019], SASAC), and which was deliberated and
approved by the 1st Extraordinary General Meeting of the Company in 2020 on 3 February 2020,
the Company implemented a stock option plan with effect from 3 February 2020 to grant 238
incentive recipients 17,198,000 stock options with an exercise price of RMB17.80 per share;
subject to the fulfilment of the exercise conditions,40% of the stock options will be exercisable
two years after the grant date,30% will be exercisable three years after the grant date and 30%
will be exercisable four years after the grant date, and can be exercised to subscribe for shares of
the Company within one year, one year and three years from the exercise date, respectively; each
stock option entitles the holder to subscribe for one common share of the Company.
- 163 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XII) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
Item 31/12/2020 31/12/2019
Commitments that have been entered into but have not
been recognized in the financial statements
- Commitment to make contributions to the investees 11,500,000.00 -
- Commitment to acquire and construct long-term assets 2,682,977,514.73 3,767,236,258.74
- Commitment to invest port construction 1,004,960,692.18 6,758,563,544.21
- Others 20,831,652.14 354,959,845.19
Total 3,720,269,859.05 10,880,759,648.14
2. Contingencies
Item 31/12/2020 31/12/2019
Contingent liabilities brought by external litigations
213,109,668.45 274,299,826.26
(Note 1)
Guarantee for borrowings of related parties (Note 2) 184,129,723.74 198,703,594.15
Total 397,239,392.19 473,003,420.41
Note 1: This represents the significant contingent liabilities arising from the litigations between
TCP and its subsidiaries and local tax authority, employee or former employee of TCP
and its subsidiaries in Brazil at as the year end. According to the latest estimates of the
Group's management, the possible compensation is RMB213,109,668.45 but it is not
likely to cause outflow of economic benefits from the Group. Therefore, the contingent
liabilities arising from the above pending litigations are not recognized as provisions.
The counter-bonification where the Group as the beneficiary will be executed by the
former TCP shareholder that disposed the shares. According to the counter-bonification
agreement, the former TCP shareholder need to 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.
Note 2: Till December 31, 2020, the guarantees provided by the Group for related parties are
detailed in Note X, 5(3).
On December 31, 2020, the directors of the Group evaluated the default risks of related
companies on the above-mentioned loan financing and other liabilities, and believed that
the risks were not significant and the possibility of guaranteed payments was very small.
Except for the above-mentioned contingencies, as of December 31, 2020, the Group had
no other major guarantees and other contingencies that need to be explained.
- 164 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) EVENTS AFTER THE BALANCE SHEET
1. Coronavirus Disease 2019
Since the outbreak of coronavirus disease 2019 ("COVID-19") in China in January 2020, the
control and prevention of COVID-19have been carried out throughout the country. The Group
actively responded and implemented the regulations and requirements on COVID-19of the
government.
It is expected that COVID-19 and control measures will still have temporary influence on the
Group's production and management in 2021. However, the impact of COVID-19 on economy
depends on the progress, effectiveness and duration of our pandemic prevention and control work.
The Group continues to pay close attention to the development of COVID-19, assesses the impact
on the financial position and operating results of the Group. The Group will strengthen the
prevention and control of the pandemic and carry out normal business operations proactively and
orderly.
2. Capital increase for International Information Technology Company
On 18 December 2020, the Company and China Merchants Port Holdings, a subsidiary of the
Company, China Merchants Holdings (International) Information Technology Company Limited
("CMHIT"), a subsidiary of the Company, Dalian Port Jifa Logistics Co., Ltd. ("Jifa Logistics"),
Dalian Port Container Development Co., Ltd. ("Dalian Port Container") and Yingkou Port Group
Corporation (hereinafter referred to as "Yingkou Port Group") entered into the "Agreement on
Equity Subscription and Capital Increase" for CMHIT.
According to the "Agreement on Equity Subscription and Capital Increase", Jifa Logistics and
Dalian Port Container respectively used their shares in Dalian Port Logistics Network Co., Ltd.
(hereinafter referred to as "DPN"), making up 29.40% and 49.63%, and Yingkou Port Group used
100% shares of Yingkou Gangxin Technology Co., Ltd. (hereinafter referred to as "Gangxin
Technology") in its possession to increase the capital of CMHIT. Before and after the
combination, CMHIT, DPN, and Gangxin Technology were all under the ultimate control of the
Company's ultimate controlling shareholder China Merchants Group and such control was not
temporary.
The aforesaid capital increase has been completed on 9 February 2021. After the increase, the
Company, China Merchants Port Holdings, Jifa Logistics, Dalian Port Container, and Yingkou
Port Group respective held 13.18%, 43.74%, 13.26%, 22.38% and 7.44% of the shares of CMHIT.
CMHIT is still a holding subsidiary of the Company.
- 165 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIII) EVENTS AFTER THE BALANCE SHEET - continued
3. Liaoning Port Co., Ltd.'s merger of Yingkou Port Liability Co., Ltd. by absorption
On 6 January 2021, the merger of Yingkou Port Liability Co., Ltd. by the Company's associate
Liaoning Port Co., Ltd. by absorption was approved by the CSRC in the Reply on Approving the
Merger of Yingkou Port Liability Co., Ltd. by Liaoning Port Co., Ltd. by absorption and the
Supporting Fund Raising (No. 3690 [2020], CSRC). On 29 January 2021, Shanghai Securities
Exchange terminated the listing of the shares of Yingkou Port Liability Co., Ltd. and the new A
shares of Liaoning Port Co., Ltd. issued to the previous shareholders of Yingkou Port Liability
Co., Ltd. were listed for circulation on 9 February 2021. After the completion of the aforesaid
transaction, the shareholding of the Group in Liaoning Port Co., Ltd. is diluted from 21.05% to
12.00%, but Liaoning Port Co., Ltd. is still an associate of the Group, while the Group can
designate 2 candidates out of the 9 members of the board of directors of Liaoning Port Co., Ltd.
(XIV) 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's
internal reports in order to assess performance, allocate resources and determine the operating
segments.
The CODM manages the Group's operations by divisions from both business and geographic
perspectives.
In respect of business segments, management assesses the performance of the Group's business
operations including ports operation, bonded logistics operation and other operations.
Ports operation
Ports operation includes container terminal operation, bulk and general cargo terminal operation
operated by the Group and its associates and joint ventures. The Group's reportable segments of
the ports operation are as follows:
(a) Mainland China, Hong Kong and Taiwan
Pearl River Delta
Yangtze River Delta
Bohai Rim
Others
(b) Other locations outside of Mainland China, Hong Kong and Taiwan
- 166 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(1) Basis for determining reporting segments and accounting policies - continued
Bonded logistics operation
Bonded logistics operation includes logistics park operation, ports transportation and airport cargo
handling operated by the Group and its associates and joint ventures.
Other operations
Other operations mainly include property development and investment and construction of
modular housing operated by the Group's associates, property investment operated by the Group
and corporate function.
Each of the segments under ports operation include the operations of a number of ports in various
locations within one geographic location, each of which is considered as a separate operating
segment by the CODM. For the purpose of segment reporting, these individual operating
segments have been aggregated into reportable segments on geographic basis in order to present a
more systematic and structured segment information. To give details of each of the operating
segments, in the opinion of the directors of the Company, would result in particulars of excessive
length.
Bonded logistics operation and other operations include a number of different operations, each of
which is considered as a separate but insignificant operating segment by the CODM. For segment
reporting, these individual operating segments have been aggregated according to the natures of
their operations to give rise to more meaningful presentation.
There are no material sales or other transactions between the segments.
As at 31 December 2020, around 73% of the Group's non-current assets other than financial
instruments and deferred tax assets are located in Chinese Mainland.
- 167 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information
Segment financial information for 2020 is as follows:
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unallocated
Item Others Total
Pearl River Yangtze River Other locations Sub-total operation amount
Bohai Rim Others
Delta Delta
Operating income 5,103,018,820.66 73,413,401.10 62,661,236.23 3,333,716,950.72 3,474,914,093.88 12,047,724,502.59 417,391,441.86 153,414,051.57 - 12,618,529,996.02
Operating cost 2,868,604,331.58 40,965,225.12 48,645,796.45 2,681,846,267.01 1,767,068,217.21 7,407,129,837.37 245,350,697.54 221,269,319.94 - 7,873,749,854.85
Segment operating profit
2,234,414,489.08 32,448,175.98 14,015,439.78 651,870,683.71 1,707,845,876.67 4,640,594,665.22 172,040,744.32 -67,855,268.37 - 4,744,780,141.17
(loss is marked with "-")
Adjustments:
Taxes and surcharges 26,848,292.01 1,525,681.36 1,155,694.87 48,249,699.24 34,531,713.98 112,311,081.46 20,652,317.30 18,092,487.86 141,056.95 151,196,943.57
Administrative expense 480,217,540.48 14,189,057.25 9,379,082.71 473,751,196.10 249,846,408.69 1,227,383,285.23 42,007,434.87 1,093,821.55 314,398,393.37 1,584,882,935.02
R&D expenses 134,862,028.30 3,968,928.76 - 15,724,656.48 - 154,555,613.54 - - 1,468,500.00 156,024,113.54
Financial expenses 144,531,069.38 -14,347,282.70 -9,466,114.16 133,937,742.90 44,368,823.84 299,024,239.26 16,272,850.96 19,152,258.84 898,280,275.76 1,232,729,624.82
Other income 68,057,789.94 1,752,751.59 33,397.31 51,406,035.35 - 121,249,974.19 10,173,062.64 73,365,149.56 176,926.89 204,965,113.28
Investment income 206,990,240.85 3,122,680,492.45 351,638,093.79 103,533,080.19 357,882,216.11 4,142,724,123.39 19,641,031.91 743,610,282.92 - 4,905,975,438.22
Gains from changes in
fair value (loss is marked 33,063,464.71 150,747,337.90 77,018,544.18 8,043,866.90 -680,381,987.27 -411,508,773.58 - - - -411,508,773.58
with "-")
Impairment gains of
credit (loss is marked -6,981,966.51 1,020,000.00 - 28,130,653.65 -477,897,709.00 -455,729,021.86 -2,866,639.45 - - -458,595,661.31
with "-")
Impairment gains of
assets (loss is marked 947,694.12 - - -552,317,736.65 - -551,370,042.53 - - - -551,370,042.53
with "-")
Gains from disposal of
assets (loss is marked 5,187,792.01 507,040.19 -1,441.50 1,600,635,718.61 311,438.49 1,606,640,547.80 305,861.36 -117,707,200.00 -32,706.84 1,489,206,502.32
with "-")
Operating profit (loss is
1,755,220,574.03 3,303,819,413.44 441,635,370.14 1,219,639,007.04 579,012,888.49 7,299,327,253.14 120,361,457.65 593,074,395.86 -1,214,144,006.03 6,798,619,100.62
marked with "-")
- 168 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2020 is as follows: - continued
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics Unallocated
Item Others Total
Pearl River Yangtze River Other locations Sub-total operation amount
Bohai Rim Others
Delta Delta
Non-operating income 43,255,084.67 43,196.21 440,831.36 31,641,529.53 1,889,443.67 77,270,085.44 198,116.16 1,391,661.99 2,779,196.95 81,639,060.54
Non-operating expenses 2,960,035.34 813,550.98 25,948.75 22,767,505.78 25,707,516.11 52,274,556.96 42,000.00 - 26,687,183.81 79,003,740.77
Gross profit (loss is
1,795,515,623.36 3,303,049,058.67 442,050,252.75 1,228,513,030.79 555,194,816.05 7,324,322,781.62 120,517,573.81 594,466,057.85 -1,238,051,992.89 6,801,254,420.39
marked with "-")
Income tax expenses 601,626,798.98 169,174,798.29 62,114,619.13 493,406,817.80 -52,337,554.93 1,273,985,479.27 15,094,962.21 15,750,266.73 -29,144,338.38 1,275,686,369.83
Net profit (loss is marked
1,193,888,824.38 3,133,874,260.38 379,935,633.62 735,106,212.99 607,532,370.98 6,050,337,302.35 105,422,611.60 578,715,791.12 -1,208,907,654.51 5,525,568,050.56
with "-")
Segment assets 29,429,571,613.29 31,908,794,260.42 7,246,173,514.37 28,817,067,046.45 44,448,666,487.24 141,850,272,921.77 3,315,494,460.32 18,756,757,172.64 4,621,087,222.48 168,543,611,777.21
Total assets in the financial statements 168,543,611,777.21
Segment liabilities 14,603,582,775.85 1,603,641,824.41 143,181,803.40 8,354,597,807.60 9,659,518,990.29 34,364,523,201.55 583,644,968.76 1,372,383,302.75 26,546,092,773.08 62,866,644,246.14
Total liabilities in the financial statements 62,866,644,246.14
Supplementary
information:
Depreciation and
868,406,726.45 16,840,576.77 2,019,814.39 986,324,667.31 843,174,817.50 2,716,766,602.42 97,449,874.10 175,099,107.40 22,567,185.84 3,011,882,769.76
Amortization
Interest income 40,043,816.95 2,611,662.90 2,863,089.15 61,729,133.61 203,403,087.34 310,650,789.95 1,372,300.78 1,105,725.59 12,258,928.24 325,387,744.56
Interest expense 205,070,654.67 2,716,578.54 - 194,085,313.44 312,694,424.90 714,566,971.55 20,355,642.89 34,988,377.32 1,179,971,384.93 1,949,882,376.69
Investment income from
long-term equity
136,557,365.02 2,329,321,018.47 321,168,422.22 80,736,626.43 357,882,216.11 3,225,665,648.25 19,641,031.91 743,610,282.92 - 3,988,916,963.08
investment under equity
method
Long-term equity
investment under equity 4,141,735,655.77 28,460,075,468.21 6,275,998,231.07 604,585,694.21 13,303,915,012.11 52,786,310,061.37 736,196,163.40 12,709,417,198.68 - 66,231,923,423.45
method
Non-current assets other
than long-term equity 21,716,318,098.15 4,256,897,677.23 24,886,574.80 19,427,332,228.33 24,705,573,985.43 70,131,008,563.94 2,226,903,590.34 5,238,035,244.36 422,618,810.40 78,018,566,209.04
investment
- 169 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2019 is as follows:
Ports operation
Bonded
Mainland China, Hong Kong and Taiwan
Item logistics Others Unallocated amount Total
Pearl River Yangtze River Other locations Sub-total
Bohai Rim Others operation
Delta Delta
Operating income 5,196,613,368.06 - 65,287,182.79 3,048,109,069.32 3,237,062,565.69 11,547,072,185.86 411,410,069.19 165,347,168.69 - 12,123,829,423.74
Operating cost 3,008,092,503.04 - 54,620,318.87 2,442,406,257.78 1,680,548,644.03 7,185,667,723.72 240,230,706.61 223,022,489.38 - 7,648,920,919.71
Segment operating profit
2,188,520,865.02 - 10,666,863.92 605,702,811.54 1,556,513,921.66 4,361,404,462.14 171,179,362.58 -57,675,320.69 - 4,474,908,504.03
(loss is marked with "-")
Adjustments:
Taxes and surcharges 28,208,048.74 902,080.83 1,226,820.81 41,913,977.40 74,183,581.47 146,434,509.25 10,405,578.38 15,266,911.26 449,581.03 172,556,579.92
Administrative expense 367,421,172.07 14,629,856.34 11,286,215.13 427,071,045.26 240,768,795.97 1,061,177,084.77 40,794,239.92 1,086,063.41 406,463,193.56 1,509,520,581.66
R&D expenses 119,506,939.75 - - 4,346,404.54 - 123,853,344.29 - - - 123,853,344.29
Financial expenses 186,473,966.41 3,557,959.06 -1,031,714.93 140,511,147.67 343,853,815.52 673,365,173.73 27,521,546.75 43,602,750.59 1,191,780,266.46 1,936,269,737.53
Other income 74,072,845.73 1,224,999.96 136,812.67 53,835,650.36 - 129,270,308.72 22,545,823.25 6,361.40 10,278,619.73 162,101,113.10
Investment income 160,825,470.54 2,569,882,989.42 415,798,097.77 772,742,553.30 439,240,848.69 4,358,489,959.72 23,454,651.74 237,229,143.96 - 4,619,173,755.42
Gains from changes in
fair value (loss is marked 10,933.07 154,574,350.85 297,972,325.74 -21,212,710.87 -364,861,632.31 66,483,266.48 - - - 66,483,266.48
with "-")
Impairment gains of
credit (loss is marked -2,704,122.79 - 96,054.01 -47,117,070.21 -510,363.77 -50,235,502.76 -13,907.01 - - -50,249,409.77
with "-")
Impairment gains of
assets (loss is marked 25,051.16 - - - - 25,051.16 - - - 25,051.16
with "-")
Gains from disposal of
assets (loss is marked 4,172,962,308.96 - 13,069.99 620,155,605.55 764,083.94 4,793,895,068.44 -3,047.02 - 670,761.37 4,794,562,782.79
with "-")
Operating profit (loss is
5,892,103,224.72 2,706,592,444.00 713,201,903.09 1,370,264,264.80 972,340,665.25 11,654,502,501.86 138,441,518.49 119,604,459.41 -1,587,743,659.95 10,324,804,819.81
marked with "-")
- 170 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information for 2019 is as follows: - continued
Ports operation
Bonded
Mainland China, Hong Kong and Taiwan Unallocated
Item logistics Others Total
Pearl River Yangtze River Other locations Sub-total amount
Bohai Rim Others operation
Delta Delta
Non-operating income 15,167,367.31 - 920,329.94 19,125,548.43 512,078,201.39 547,291,447.07 458,318.63 1,086,658.83 4,266,935.88 553,103,360.41
Non-operating expenses 13,328,509.27 4,069.14 8,922.44 25,023,662.84 14,345,696.95 52,710,860.64 57,151.76 50,000.00 17,634,000.00 70,452,012.40
Gross profit (loss is
5,893,942,082.76 2,706,588,374.86 714,113,310.59 1,364,366,150.39 1,470,073,169.69 12,149,083,088.29 138,842,685.36 120,641,118.24 -1,601,110,724.07 10,807,456,167.82
marked with "-")
Income tax expenses 1,922,260,744.88 134,247,591.99 91,985,992.66 224,620,829.53 92,650,917.92 2,465,766,076.98 31,835,647.68 13,078,333.18 129,858,836.78 2,640,538,894.62
Net profit (loss is marked
3,971,681,337.88 2,572,340,782.87 622,127,317.93 1,139,745,320.86 1,377,422,251.77 9,683,317,011.31 107,007,037.68 107,562,785.06 -1,730,969,560.85 8,166,917,273.20
with "-")
Segment assets 29,586,087,542.86 26,729,937,567.14 7,140,466,913.27 26,167,362,772.28 43,499,664,358.95 133,123,519,154.50 3,343,718,019.81 17,831,744,436.63 2,397,936,234.93 156,696,917,845.87
Total assets in the financial statements 156,696,917,845.87
Segment liabilities 10,648,908,871.15 700,175,249.44 140,580,616.21 9,017,491,838.33 11,995,283,584.80 32,502,440,159.93 757,665,748.51 1,010,340,736.41 27,436,263,588.78 61,706,710,233.63
Total liabilities in the financial statements 61,706,710,233.63
Supplementary
information:
Depreciation and
900,796,294.39 - 2,052,884.92 878,442,775.96 796,377,578.73 2,577,669,534.00 92,199,834.15 174,521,673.45 20,134,304.85 2,864,525,346.45
Amortization
Interest income 42,470,222.92 257,234.76 1,203,144.96 70,701,815.50 83,372,904.82 198,005,322.96 1,266,345.18 1,469,124.45 51,319,225.99 252,060,018.58
Interest expense 183,085,034.75 2,926,671.54 - 203,657,696.95 392,724,564.47 782,393,967.71 28,245,233.91 38,016,163.44 1,241,182,229.48 2,089,837,594.54
Investment income from
long-term equity
129,628,862.78 2,530,919,159.03 347,650,565.12 19,727,531.90 439,240,848.69 3,467,166,967.52 23,454,651.74 237,229,143.96 - 3,727,850,763.22
investment under equity
method
Long-term equity
investment under equity 2,592,565,388.68 24,772,038,158.14 6,078,963,750.12 640,212,907.12 11,061,215,279.18 45,144,995,483.24 768,727,807.74 12,002,816,092.28 - 57,916,539,383.26
method
Non-current assets other
than long-term equity 21,153,911,773.00 294,462,264.01 27,181,862.66 21,955,658,532.67 28,203,528,560.52 71,634,742,992.86 2,302,277,585.20 5,405,248,897.19 455,073,380.68 79,797,342,855.93
investment
- 171 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XIV) OTHER SIGNIFICANT EVENTS - continued
1. Segment reporting - continued
(2) Segment financial information - continued
The Group's revenue by geographical areas of operations and information about its non-current
assets other than financial instruments and deferred tax assets presented based on the geographical
areas in which the assets are located as follows:
Amount incurred in Amount incurred in
Revenue from external transactions
the current period the prior period
Mainland China, Hong Kong and Taiwan 9,117,570,900.78 8,872,027,132.24
Pearl River Delta 5,522,529,825.59 5,629,472,123.72
Yangtze River Delta 73,413,401.10 -
Bohai Rim 187,910,723.37 194,445,939.20
Others 3,333,716,950.72 3,048,109,069.32
Other locations 3,500,959,095.24 3,251,802,291.50
Total 12,618,529,996.02 12,123,829,423.74
Total non-current assets Closing balance Opening balance
Mainland China, Hong Kong and Taiwan 105,086,211,442.75 96,489,027,270.44
Pearl River Delta 45,433,724,023.01 43,196,515,110.55
Yangtze River Delta 32,716,973,145.44 25,066,500,422.16
Bohai Rim 6,903,596,351.63 6,686,470,964.43
Others 20,031,917,922.67 21,539,540,773.30
Other locations 39,164,278,189.74 41,224,854,968.75
Total 144,250,489,632.49 137,713,882,239.19
(3) Degree of reliance on major customers
The total operating income derived from the top five clients of the Group is RMB
3,455,856,420.54, accounting for 27.39% of the Group's total operating income.
(XV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Other receivables
1.1 Summary of other receivables
Item Closing balance Opening balance
Interest receivable - -
Dividends receivable 311,297,793.86 207,259,421.40
Other receivables 791,414,958.18 598,275,341.87
Total 1,102,712,752.04 805,534,763.27
- 172 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.2 Dividends receivable
(1) Disclosure of dividends receivable
Company name Closing balance Opening balance
Dongguan Shenchiwan Port Affairs Co., Ltd. - 103,355,370.74
Dongguan Shenchiwan Wharf Co., Ltd. 147,233,909.98 88,196,930.66
China Merchants Bonded Logistics Co., Ltd. 15,707,120.00 15,707,120.00
Chiwan Wharf Holdings (Hong Kong) Ltd. 147,680,363.88 -
Jiangsu Expressway Company Limited 460,000.00 -
Shenzhen Petrochemical Industry (Group) Co., Ltd. 216,400.00 -
Total 311,297,793.86 207,259,421.40
Less: Provision for credit loss - -
Carrying amount 311,297,793.86 207,259,421.40
(2) Significant dividends receivable with aging over 1 year
Closing
Item Reason for outstanding Impaired or not
balance
Dongguan Shenchiwan Wharf In processing and expected to be
147,233,909.98 No
Co., Ltd. received in 2021
China Merchants Bonded In processing and expected to be
15,707,120.00 No.
Logistics Co., Ltd. received in 2021
Total 162,941,029.98
1.3 Other receivables
(1) Disclosure of other receivables by aging
Closing balance
Aging Provision for credit Proportion of
Other receivables
loss provision (%)
Within 1 year 463,637,726.23 - -
1 to 2 years 327,777,231.95 - -
2 to 3 years - - -
Over 3 years 383,456.60 383,456.60 100.00
Total 791,798,414.78 383,456.60
(2) Provision for credit loss of other receivables
As part of the Company's credit risk management, the Company performs internal credit rating on
customers, and determines the expected loss ratio of other receivables under each credit rating.
Such expected average loss ratio is based on historical actual impairment and taking into
consideration of current and expected future economic conditions.
- 173 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
1.3 Other receivables - continued
(2) Provision for credit loss of other receivables - continued
At 31 December 2020, the credit risk and expected credit loss of other receivables by categories of
customers are as follows:
Closing balance Opening balance
Expected Lifetime Lifetime
Credit rating credit loss Lifetime ECL Lifetime ECL
ECL ECL
12-month ECL (credit- Total 12-month ECL (not credit- Total
ratio (%) (not credit- (credit-
impaired) impaired)
impaired) impaired)
A 0.00-0.10 791,414,958.18 - - 791,414,958.18 598,275,341.87 - - 598,275,341.87
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 791,414,958.18 - 383,456.60 791,798,414.78 598,275,341.87 - 383,456.60 598,658,798.47
Provision for credit
- - 383,456.60 383,456.60 - - 383,456.60 383,456.60
loss
Book value 791,414,958.18 - - 791,414,958.18 598,275,341.87 - - 598,275,341.87
(3) Changes in provision for credit loss of other receivables
Stage I Stage II Stage III
Item Lifetime ECL Lifetime ECL Total
12-month ECL
(not credit-impaired) (credit-impaired)
Balance at 1 January 2020 - - 383,456.60 383,456.60
Carrying amount of other receivables at 1 January 2020
-- transfer to stage II - - - -
-- transfer to stage III - - - -
-- transfer back to stage II - - - -
-- transfer back to stage I - - - -
Provision for the year - - - -
Reversal - - - -
Transfer out due to
derecognition of financial assets - - - -
(including direct write-down)
Other changes - - - -
Balance at 31 December 2020 - - 383,456.60 383,456.60
(4) Other receivables by nature
Item Closing balance Opening balance
Amounts due from related parties 785,752,325.78 571,663,096.21
Advances 3,862,191.69 26,283,930.19
Deposits - -
Others 2,183,897.31 711,772.07
Total 791,798,414.78 598,658,798.47
Less: Provision for credit loss 383,456.60 383,456.60
Book value 791,414,958.18 598,275,341.87
(5) There is no other receivables write-off during this year.
- 174 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Other receivables - continued
(6) The top five balances of other receivables classified by debtor
Proportion of the
Closing balance of
amount to the closing
Company name Nature Closing balance Aging provision for
balance of other
credit loss
receivables (%)
Shenzhen Haixing Harbor Loan to related
785,752,325.78 Within 2 years 99.24 -
Development Co., Ltd. parties
China Merchants (Liaoning) Port Advance payments
2,000,000.00 Within 1 year 0.25 -
Development Co., Ltd. for account current
Shenzhen Shekou Local Taxation
Other 711,772.07 Above 3 years 0.09 383,456.60
Bureau
Broadford (Shenzhen) Port Advance payments
89,862.49 Within 1 year 0.01 -
Development Co., Ltd. for account current
China Merchants Apartment
Advance payments
Development (Shenzhen) Co., 14,068.00 Within 1 year - -
for account current
Ltd.
Total 788,568,028.34 99.59 383,456.60
- 175 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS - continued
2. Long-term equity investments
Changes for the year
Reconciling Closing balance
Announced
Investee 1/1/2020 Investment items from 31/12/2020 of impairment
Other equity distribution of Impairment
Increase Decrease income under other Others provision
movements cash dividends or provision
equity method comprehensive
profit
income
I. Subsidiary
Shenzhen Chiwan International Freight Agency
5,500,000.00 - - - - - - - - 5,500,000.00 -
Co., Ltd.
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 -
CWHK 1,070,000.00 - - - - - - - - 1,070,000.00 -
Shenzhen Chiwan Tugboat Co., Ltd. 24,000,000.00 - - - - - - - - 24,000,000.00 -
Chiwan Container Terminal Co., Ltd. 421,023,199.85 - - - - - - - - 421,023,199.85 -
Dongguan 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 -
Chiwan Shipping (Hong Kong) Limited 1,051,789.43 - - - - - - - - 1,051,789.43 -
CMPort (Note 1) 27,286,943,610.42 985,995,529.57 - - - - - - - 28,272,939,139.99 -
CMPort (Zhoushan) RoRo Logistics Co., Ltd. 149,709,800.00 - - - - - - - - 149,709,800.00 -
Zhanjiang port (Note 2) 371,530,912.93 3,010,294,615.59 - - - - - - - 3,381,825,528.52 -
Subtotal 29,079,558,123.72 3,996,290,145.16 - - - - - - - 33,075,848,268.88 -
II. Associate
International Information Technology Company 20,643,611.18 - - 3,190,099.79 - - - - - 23,833,710.97 -
China Merchants Bonded Logistics Co., Ltd. 365,855,724.95 - - 18,791,432.65 - - - - - 384,647,157.60 -
China Merchants Northeast Asia Development &
- 1,000,000,000.00 - 7,786,285.71 - - - - - 1,007,786,285.71 -
Investment Company(Note 3)
Ningbo Zhoushan Port Company Limited(Note 3) - - - - - - - - 1,500,464,520.87 1,500,464,520.87 -
Subtotal 386,499,336.13 1,000,000,000.00 - 29,767,818.15 - - - - 1,500,464,520.87 2,916,731,675.15 -
III. Joint venture
Yantai Port Group Laizhou Port Co., Ltd. 792,062,228.58 - - 24,750,032.44 - - -33,980,174.52 - - 782,832,086.50 -
China Merchants Antong Logistics Management
8,256,893.80 - - 846,094.22 - - - - - 9,102,988.02 -
Company
Fujian Zhaohang Logistics Management
- 450,000,000.00 - 2,283,105.00 - - - - - 452,283,105.00 -
Partnership (Limited Partnership)(Note 3)
Subtotal 800,319,122.38 450,000,000.00 - 27,879,231.66 - - -33,980,174.52 - - 1,244,218,179.52 -
Total 30,266,376,582.23 5,446,290,145.16 - 57,647,049.81 - - -33,980,174.52 - 1,500,464,520.87 37,236,798,123.55 -
Note 1: Details are set out in Note (VII) 1.
Note 2: In 2020, the Company acquired 27.35% of the shares of Zhanjiang Port, which was previously held by its subsidiary Chiwan Wharf
Holdings (Hong Kong) Ltd.
Note 3: Details are set out in Note (V) 13.
- 176 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
(Unless otherwise specified, the monetary unit shall be RMB.)
(XV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
3. Operating income and operating costs
Amount incurred in Amount incurred in
Item the current period the prior period
Revenue Cost Revenue Cost
Principal operating - - 75,207,466.30 75,438,994.71
Other operating 6,653,002.66 2,265,959.64 16,835,131.75 645,029.02
Total 6,653,002.66 2,265,959.64 92,042,598.05 76,084,023.73
4. Investment income
(1) Details of investment income
Amount incurred in Amount incurred in
Item
the current period the prior period
Income from long-term equity investments under cost method 2,871,566,529.89 1,221,470,436.60
Long-term equity investments income under equity method 57,647,049.81 70,092,131.84
Income from other equity instruments investments 8,567,900.00 10,822,585.00
Income from held-for-trading financial assets 13,161,408.95 -
Income from debt investments 24,700,958.91 3,837,808.22
Total 2,975,643,847.56 1,306,222,961.66
(2) Income from long-term equity investments under cost method
Reason for changes
Amount incurred in Amount incurred in
Investee comparing with prior
the current period the prior period
year
Changes in profit
CWHK 1,347,680,363.88 -
distribution of investee
Changes in profit
CMPort 982,379,582.35 1,116,334,395.76
distribution of investee
Changes in profit
Chiwan Container Terminal Co., Ltd. 275,313,936.56 105,136,040.84
distribution of investee
Changes in profit
Shenzhen Chiwan Harbor Container Co. Ltd. 121,071,884.15 -
distribution of investee
Changes in profit
Dongguan Shenchiwan Port Affairs Co., Ltd. 60,234,278.79 -
distribution of investee
Changes in profit
Dongguan Shenchiwan Wharf Co., Ltd. 59,036,979.32 -
distribution of investee
Changes in profit
Shenzhen Chiwan Tugboat Co., Ltd. 25,604,356.23 -
distribution of investee
Shenzhen Chiwan International Freight Changes in profit
245,148.61 -
Agency Co., Ltd. distribution of investee
Total 2,871,566,529.89 1,221,470,436.60
- 177 -
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1. BREAKDOWN OF NON-RECURRING PROFIT OR LOSS
Item Amount Remarks
Losses on disposal of non-current assets 1,480,572,929.90
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 238,216,977.76
quantities fixed in accordance with the national standard)
Money lending income earned from non-financial institutions in profit
232,906,880.87
or loss
The excess of attributable fair value of identifiable net assets over the
-
consideration paid for subsidiaries, associates and joint ventures
Gains or losses on exchange of non-monetary assets -
Gains or losses on entrusted investments or assets management -
Provision of impairment losses for each asset due to force majeure, e.g.
-
natural disasters
Gains or losses on debt restructuring -
Business restructuring expenses, e.g., expenditure for layoff of
-
employees, integration expenses, etc.
Gains or losses relating to the unfair portion in transactions with unfair
-
transaction price
Net profit or loss of subsidiaries recognized as a result of business
combination of enterprises under common control from the beginning -
of the period up to the business combination date
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 -409,658,173.58
operations, and the investment income from disposal of the above held-
for-trading financial assets/financial liabilities and other debt
investments
Reversal of provision for accounts receivable that are tested for credit
46,709,066.77
loss individually
Gains or losses on entrusted loans -
Gains or losses on changes in the fair value of investment properties
-
that are subsequently measured using the fair value model
Effects on profit or loss of one-off adjustment to profit or loss for the
period according to the requirements by tax laws and accounting laws -
and regulations
Custodian fees earned from entrusted operation 1,886,792.45
Other non-operating income or expenses other than above -42,615,710.20
Other profit or loss that meets the definition of non-recurring profit or
753,988,749.80
loss (note)
Tax effects -241,651,237.66
Effects of minority interest (after tax) -1,257,863,869.71
Total 802,492,406.40
Note: This mainly represents the gains from remeasurement of previously held equity at fair
value upon the Group's acquisition of Ningbo Daxie.
CHINA MERCHANTS PORT GROUP CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2. RETURN ON NET ASSETS AND EARNINGS PER SHARE ("EPS")
The return on net assets and EPS have been prepared by Shenzhen Chiwan Wharf Co., Ltd. in
accordance with Information Disclosure and Presentation Rules for Companies Making Public
Offering No. 9 - Calculation and Disclosure of Return on Net Assets and Earnings per Share
(revised in 2010) issued by China Securities Regulatory Commission.
Weighted average EPS
Item return on net
Basic EPS Diluted EPS
assets (%)
Net profit attributable to ordinary shareholders 5.6628 1.0744 1.0744
Net profit attributable to ordinary shareholders after
3.4625 0.6569 0.6569
deducting non-recurring profit or loss
