China Merchants Port Group Co., Ltd. Annual Report 2018
CHINA MERCHANTS PORT GROUP CO., LTD.
ANNUAL REPORT 2018
Date of Disclosure: 30 March 2019
China Merchants Port Group Co., Ltd. Annual Report 2018
Chairman’s Statement
Dear shareholders,
I hereby present to you the annual report of China Merchants Port Group Co., Ltd. and its
subsidiaries (the “Company”) for the year ended 31 December 2018. On behalf of the Board, I
would like to express my sincere gratitude to all of you for your long-term support to the Company.
On 26 December 2018, the Company completed the assets restructuring, the change of
company name and its listing on the SZSE. Following the change of name to “China Merchants
Port Group Co., Ltd.”, its strategic positioning underwent remarkable transformation and
enhancement, and it evolved from a port operator in Chiwan Wharf, West Shenzhen Port Zone, to a
globally leading port developer, investor and operator. As a result of the restructuring, the Company
became a crucial vehicle for CMG to implement the “Belt and Road” Initiative promoted by China
and the “Guangdong-Hong Kong-Macao Greater Bay Area” strategy. Serving not only as the
headquarters of CMG’s port sector, the Company is also the operating and management platform
for the port assets and tier one capital of CMG, hence playing a key role in the consolidation and
synergistic development of CMG’s port assets.
Looking ahead, the Company aims to become a world-class integrated port service provider.
With a focus on core port businesses, it will take part in international port investment, development
and operation under the development model for the port ecosystem. Meanwhile, it will continue to
expand along the value chain and establish an integrated port network service system that connects
the world, so as to achieve scientific planning and balanced development on a global level. By
offering top-notch and professional solutions, it will become customers’ partner of choice for
cooperation, which will create greater value for the Company, enhance return for shareholders,
support local economies and global trade, and contribute to the healthy development of the port
industry.
Review for the year
Since 2018, the global economy has in general maintained its growth momentum but on a
shaky ground. The economic and political conditions have been increasingly complicated. Trade
frictions provoked by the United States against numerous countries and regions worldwide have
impacted corporate operating environment and financial market confidence, threatening the
development of global economy and trade. In view of the macroeconomic condition with growing
uncertainties over the development of global economy and trade, the Company has adhered to its
China Merchants Port Group Co., Ltd. Annual Report 2018
strategic directives, acted under the overall operation philosophy of “enhancing core capability,
insisting on both quality and efficiency, capitalising on opportunities of this era and striving to
become a global leading enterprise”, focused on the “five key priorities”, namely, homebase port
development, ports consolidation, overseas expansion, integration of industry and finance and
business innovation, pursued various designated tasks in a comprehensive and pragmatic manner,
and basically achieved its operating indicators formulated at the beginning of last year.
In 2018, the overall operating performance of the Company was satisfactory with steady
growth of business. In terms of port operation, the port projects of the Company delivered a
container throughput totalled 109.73 million TEUs, up 6.6% over last year. Looking into the
regional performance, container throughput handled by the Group’s ports in Mainland China totaled
81.39 million TEUs, up 5.5% year-on-year. Ports in Hong Kong and Taiwan handled a combined
container throughput of 7.67 million TEUs, up 2.5% year-on-year, while overseas operations
delivered a container throughput of 20.66 million TEUs, up 12.9% year-on-year. Bulk cargo volume
handled by the Group’s ports increased by 1.5% year-on-year to 540 million tonnes, among which
the Group’s ports in Mainland China handled a total bulk cargo volume of 530 million tonnes,
representing an increase of 1.6% year-on-year, while that of overseas ports decreased by 7.7% from
2017 to 4.99 million tonnes. Among the major ports, SIPG handled a container throughput of 42.01
million TEUs, representing a year-on-year increase of 4.4%, making it the largest port in the world
for the ninth consecutive year. Container throughput handled in West Shenzhen Port Zone was
11.35 million TEUs, up 1.5% year-on-year. In the overseas arena, Colombo International Container
Terminals Limited (“CICT”) in Sri Lanka delivered a year-on-year growth of 12.0% by handling a
container throughput of 2.68 million TEUs. Lomé Container Terminal S.A. (“LCT”) in Togo
handled a container throughput of 1.05 million TEUs, representing a growth of 18.3% year-on-year.
Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim irketi (“Kumport”) in Turkey
handled a container throughput of 1.26 million TEUs, representing a growth of 18.3% year-on-year.
Terminal Link SAS acquired the port of Thessaloniki in Greece at the beginning of this year and it
handled a container throughput of 13.64 million TEUs in the year, up 8.6% year-on-year. From
March to December 2018, TCP Participaes S.A. (“TCP”) in Brazil, the transaction of which was
completed in February 2018, handled a container throughput of 0.69 million TEUs.
In terms of key priorities, significant progress has been made in overseas expansion. The
delivery of overseas port projects, including TCP in Paranaguá, Brazil and Port of Newcastle in
Australia (the “Newcastle Port”), has been completed. The Djibouti International Free Trade Zone
has successfully opened and garnered positive feedbacks. The consolidation of domestic ports has
achieved remarkable breakthroughs. The Company has completed restructuring and is listed under a
China Merchants Port Group Co., Ltd. Annual Report 2018
new name. It has also been entrusted for the management of Liaoning Port Group Limited *(辽宁港
口集团有限公司), which opened up for further in-depth cooperation in various aspects. The
Company has been pursuing innovation development on multiple fronts as well. With regard to
business innovation, the establishment of phase II of “E-port” has been completed and the
commencement of various platforms integration and service building, such as the Electronic Data
Interchange (“EDI”) platform system, call center , the big data platform and visualization platform,
has enabled the full coverage of shipping companies, ship agents, customs brokers and tractor
drivers. For technology innovation, the Company has been actively pushing forward projects,
including RTG remote control, digitalized port construction and big data analysis for global
containers. These projects have further improved the technological edges of the port industry. With
respect to the cooperation between the industrial and financial sectors, the Company planned the
establishment of the China Port Innovation Investment Fund (中国港口创新投资基金) which
aimed to coordinate with the domestic influential port groups, innovate cooperation model for the
industrial and financial sectors, and explore new technologies, models and mechanisms for the port
ecosystem, thereby achieving collaboration and financial resource matching between various port
groups and industries.
Outlook
In 2019, CMPort will commence the journey to become a world-class enterprise from a new
starting point. The Company will firmly maintain a steady growth and at the same time achieve
improvement with the focus on the strategic principle of “leveraging on its long-term strategy,
tapping the current edges, driving through technology and embracing changes”. It will strengthen
synergic cooperation externally and accelerate integrated development internally, make efforts to
enhance various capabilities, improve risk prevention and control, establish quality development
models and stay committed to becoming a globally leading enterprise. In 2019, the Company will
focus on the following tasks:
Firstly, for the construction of homebase port, the Company will continue to strengthen its
efforts in the construction of domestic and overseas homebase ports, striving to build the West
Shenzhen homebase port into a world-class leading port. Furthermore, the Company will accelerate
the enhancement of the hardware and software environment of its homebase port, plus the CMG’s
internal and external resources, to establish a comprehensive service platform for the Pearl River
Delta, thus strengthening the construction of fully automated and intelligent port. In addition, the
Company will further promote the integration of operations with a view to improving quality and
efficiency effectively and enhancing cost management. In terms of overseas homebase port, the
China Merchants Port Group Co., Ltd. Annual Report 2018
Company will leverage the synergic advantages of CICT and Hambantota port to create a leading
regional port and international shipping centre in South Asia.
Secondly, for the consolidation of domestic ports, the Company will actively incorporate
national strategies in its operation, with emphasis on opportunities brought about by the “Belt and
Road” initiative, the coordinated development of Beijing, Tianjin and Hebei Province, the
Yangtze River Economic Belt, the Guangdong-Hong Kong-Macao Greater Bay Area, the opening
up of Hainan, the revitalization of Northeast China and the integrated development of the Yangtze
River Delta Zone.
Thirdly, for overseas business layout, the Company will strictly comply with assessment
dimensions and principles for overseas ports projects. The Company will set out clear project
priorities and conduct studies on its overseas network along the “East-West route, South-North
route, regions along the Belt and Road Initiative”. It will continue to put more efforts in the study of
global regional market and to establish and improve the regional market development and research
database for East Africa, West Africa, South Asia, Europe, Latin America and Southeast Asia. It will
also tap into the growth of the “China+” industry after shifting to the “Port-Park-City” model.
Fourthly, for comprehensive port development, the Company will actively push ahead with the
transformation from a terminal operator to a comprehensive port service provider. It will step up its
efforts in promoting the “Port-Park-City” business model, and actively push forward the
construction and development of the Djibouti International Free Trade Zone. The Company will
continue to proactively explore the relevant comprehensive development cooperation projects in
Togo; while for the Hambantota industrial port project, the Company will facilitate the preliminary
work in relation to the introduction of investment and capital based on the improvement of the park
development plan. Capitalizing development opportunities arising from of the Guangdong-Hong
Kong-Macao Greater Bay Area, the Company will actively make progress on its land preparatory
works in the Qianhai-Shekou Free Trade Zone by participating in the overall development thereof.
Fifthly, for technology innovation, the Company will attach further importance to the unique
role and fundamental position of technology-driven and innovation-oriented development. Also, the
Company will create a top-tier port innovation ecosystem. Smart upgrade of terminals of which the
Company is a controlling shareholder will be gradually achieved through technological innovation,
enabling the Company to formulate a proposal for implementation of “RTG Remote Control” with
its own features so as to support the transformation of Shenzhen Haixing Harbor Development Co.,
Ltd. ("Haixing")and smart upgrade of various terminals in the future.
Sixthly, for active quality and efficiency enhancement, the Company will continuously
optimize its internal procedures and mechanisms to promote management reform and process
China Merchants Port Group Co., Ltd. Annual Report 2018
reengineering. The Company will focus its efforts on enhancing the level of refined operation and
management of terminals of which it is a controlling shareholder, increasingly benchmarking its
terminal management, reducing cost and improving efficiency, and generating income by saving
costs, thereby creating values for shareholders.
In 2019, the risk of declining cyclical recovery momentum of the global economy will increase.
Due to trade investment policies on “ reverse globalization” and macroeconomic policy
adjustments such as interest rate hike and tax reduction in developed countries, the growth of global
trade will be under the intensifying pressure of an overall slowdown in the future. The Company
will respond positively to challenges like the downshift of growth in global container seaborne
freight volume, the subdued profitability of domestic ports, the increased competition for
investment between the ports in emerging countries. Moreover, it will seize the opportunities
presented by the Chinese government’s support for import, accelerating consumption upgrade, the
continuous promotion of policies regarding the development of the Guangdong-Hong Kong-Macao
Greater Bay Area and the free trade port, the growth in regional trade, the relocation of the
“China+” industry and port consolidation. By the above means, the Company will spare no effort to
enhance operating results and reward shareholders with better investment return.
Fu Gangfeng
Chairman
China Merchants Port Group Co., Ltd. Annual Report 2018
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of China Merchants Port Group Co., Ltd. (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Bai Jingtao, the Company’s legal representative, Wen Ling, the Company’s Chief Financial
Officer, and Sun Ligan, the person-in-charge of the accounting organ hereby guarantee that
the financial statements carried in this Report are factual, accurate and complete.
This Report has been approved at the 5th Meeting of the 9th Board of Directors of the
Company. Due to other company affairs, Vice Chairman of the Board Deng Renjie and
Director Song Dexing did not attend the meeting in person. But they have expressed their
consent to this Report and authorized Director Bai Jingtao to attend the meeting on behalf of
them, as well as to express opinion and sign the relevant documents.
Possible risks faced by the Company and countermeasures have been explained in “Part IV
Operating Performance Discussion and Analysis” herein, which investors are kindly reminded
to pay attention to. Any forward-looking statements such as future plans or development
strategies mentioned herein shall not be considered as the Company’s promises to investors.
And investors are reminded to exercise caution when making investment decisions.
Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn have been designated by the
Company for information disclosure. And all information about the Company shall be subject
to what’s disclosed on the aforesaid media. Investors are reminded to exercise caution when
making investment decisions.
The Board has approved a final dividend plan as follows: based on the Company’s total
shares of 1,793,412,378, a cash dividend of RMB1.14 (tax inclusive) per 10 shares is to be
distributed to shareholders, with no bonus issue from either profit or capital reserves.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
China Merchants Port Group Co., Ltd. Annual Report 2018
Table of Contents
Chairman’s Statement ................................................................................................ 1
Part I Important Notes, Table of Contents and Definitions .................................... 6
Part II Corporate Information and Key Financial Information ............................ 4
Part III. Business Highlights .................................................................................... 10
PART IV Performance Discussion and Analysis .................................................... 19
Part V Significant Events .......................................................................................... 45
Part VI Share Changes and Shareholder Information ........................................ 103
Part VII Preferred Shares ...................................................................................... 114
Part VIII Directors, Supervisors, Senior Management and Staff ...................... 114
Part IX Corporate Governance ............................................................................. 128
Part X Corporate Bonds ......................................................................................... 144
Section XI. Auditor’s Report (See attached)......................................................... 145
Section XII. Documents Available for Reference ................................................. 146
1
China Merchants Port Group Co., Ltd. Annual Report 2018
Definitions
Term Definition
China Merchants Port Group Co., Ltd., formerly known as
The “Company”, “CMPort” or “we”
“Shenzhen Chiwan Wharf Holdings Limited”
Shenzhen Chiwan Wharf Holdings Limited (stock name: Chiwan
Chiwan Wharf
Wharf, Chiwan Wharf-B; stock code: 000022, 200022)
CMG China Merchants Group Co., Limited
China Merchants Group (H.K.) Limited, a CMG wholly-owned
CMG Hong Kong
subsidiary in Hong Kong
CMID China Merchants Investment Development Company Limited
CMPort Holdings China Merchants Port Holdings Company Limited (00144.HK)
CMU China Merchants Union(BVI) Limited
Broadford Global Limited, a wholly-owned subsidiary of CMG
Broadford Global
Hong Kong
China Merchants Gangtong Development (Shenzhen) Co., Ltd., a
CMGD
Broadford Global wholly-owned subsidiary in Shenzhen
CND Group China Nanshan Development (Group) Inc.
CMSK China Merchants Shekou Industrial Zone Holdings Co., Ltd.
Malai Storage Shenzhen Malai Storage Co., Ltd.
KFEL Keen Field Enterprises Limited
China Merchants Port (Zhoushan) RoRo Logistics Co., Ltd., with the
Zhoushan RoRo name changed from “Zhoushan Archipelago New Area SinoTrans &
CSC RoRo Logistics Co., Ltd.” on 29 August 2018
Xinghai Terminal Zhoushan Archipelago New Area Xinghai RoRo Terminal Co., Ltd.
SIPG Shanghai International Port (Group) Co., Ltd.
Chiwan Container Terminal Co., Ltd., a majority-owned subsidiary
CCT
of the Company
Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim
Kumport
irketi
TCP TCP Participaes S.A.
CICT Colombo International Container Terminals Ltd.
HIPG Hambantota International Port Group
Haixing Harbor Shenzhen Haixing Harbor Development Co., Ltd.
The “Assets Purchase via Share Offering” Chiwan Wharf’s purchase of 1,313,541,560 ordinary CMPort
or the “Acquisition” Holdings shares from CMID via share offering
The transaction plan includes three parts: (1) Chiwan Wharf intends
to issue A-shares to CMID for the acquisition of the 1,313,541,560
CMPort Holdings ordinary shares that CMID holds (approximately
39.51% of CMPort Holdings’ outstanding ordinary shares). (2) CMG
The “Transaction” or “Restructuring”
Hong Kong and Chiwan Wharf signs an Acting in Concert
Agreement. According to the agreement, upon the completion of the
assets purchase via share offering, CMG Hong Kong shall vote
according to Chiwan Wharf’s opinion unconditionally on matters to
2
China Merchants Port Group Co., Ltd. Annual Report 2018
be voted on at CMPort Holdings’ general meetings in regard with the
voting right of the 753,793,751 CMPort Holdings ordinary shares
(approximately 22.67% of CMPort Holdings’ outstanding ordinary
shares) that CMG Hong Kong has been entrusted to exercise. (3)
Chiwan Wharf intends to raise matching funds of no more than
RMB4 billion from no more than 10 certain investors via an offering
of no more than 128,952,746 A-shares through enquiry.
State-Owned Assets Supervision and Administration Commission of
SASAC of the State Council
the State Council
CSRC China Securities Regulation Commission
Shenzhen CSRC Shenzhen Bureau of China Securities Regulatory Commission
SZSE Shenzhen Stock Exchange
The “Company Law” The Company Law of the People’s Republic of China
The “Securities Law” The Securities Law of the People’s Republic of China
The “Articles of Association” The Articles of Association of China Merchants Port Group Co., Ltd.
The “Stock Listing Rules” The Stock Listing Rules of the Shenzhen Stock Exchange
The cninfo website www.cninfo.com.cn
RTG Rubber Tyre Gantry
E-Port The unified electronic customer service platform
EDI Electronic Data Interchange
The “Reporting Period” or “Current Period” The period from 1 January 2018 to 31 December 2018
TEU Twenty Foot Equivalent Unit
3
China Merchants Port Group Co., Ltd. Annual Report 2018
Part II Corporate Information and Key Financial Information
I Corporate Information
CM Port Group, CM Port
Stock name Stock code 001872, 201872
Group B
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 招商局港口集团股份有限公司
Abbr. 招商港口
Company name in English (if any) China Merchants Port Group Co., Ltd.
Abbr. (if any) CMPort
Legal representative Bai Jingtao
23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang
Registered address
Street, Nanshan, Shenzhen, PRC
Zip code 518067
23-25/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang
Office address
Street, Nanshan, Shenzhen, PRC
Zip code 518067
Company website http://www.cmp1872.com
Email address Cmpir@cmhk.com
II Contact Information
Board Secretary Securities Representative
Name Huang Chuanjing Hu Jingjing and Chen Dan
24/F, China Merchants Port Plaza, 1 Gongye 3rd Road, Zhaoshang Street,
Address
Nanshan, Shenzhen, PRC
Tel. +86 755 26828888 +86 755 26828888
Fax +86 755 26886666 +86 755 26886666
Email address Cmpir@cmhk.com Cmpir@cmhk.com
III Media for Information Disclosure and Place where this Report Is Lodged
Newspapers designated by the Company for information
Securities Times, Ta Kung Pao
disclosure
Website designated by CSRC for publication of this Report http://www.cninfo.com.cn
Place where this Report is lodged Board Office
4
China Merchants Port Group Co., Ltd. Annual Report 2018
IV Change to Company Registered Information
Unified social credit code 91440300618832968J
On 14 December 2018, the Company changed its business scope registered with the
industrial and commercial administration. The new business scope includes:
construction, management and operation of ports and wharves; bonded warehousing
of various goods for import and export; development, construction and operation of
supporting parks in ports; loading, unloading, transshipment, warehousing and
transportation of international and domestic goods and processing of goods;
devanning and LCL operations, cleaning, repair, manufacturing and leasing of
containers; international freight forwarding; vehicle and ship leasing; the provision
Change to principal of ship and port services including the provision of fuels, supplies and daily
activity of the Company necessities for ships; ship towing (no operation using foreign ships); leasing and
since going public (if
repair services of port facilities, equipment and machinery; import and export of
any)
various goods and technologies on a self-operation or agency basis, excluding the
goods and technologies restricted or forbidden for import and export by the state;
port logistics and port information technology consulting services; technical
development and services in respect of modern logistics information systems; supply
chain management and related services; design of logistics plans; engineering project
management; development, research and consulting services in respect of port
engineering technologies. (In respect of any operations that require approval
according to law, the approval must be obtained before operation).
1. On 8 June 2018, as the ownership of 209,687,067 Chiwan Wharf shares formerly
held by CND Group and 161,190,933 Chiwan Wharf shares formerly held by Malai
Storage was officially transferred to CMGD, CMGD, holding 57.52% of the
Company’s outstanding share capital, became the controlling shareholder of the
Company. Meanwhile, CMG remains the actual controller of the Company.
Every change of
controlling shareholder 2. On 26 December 2018, the Company issued RMB-denominated ordinary shares
since incorporation (if (A-shares) at RMB21.46/share to CMID for the acquisition of the 1,313,541,560
any) CMPort Holdings ordinary shares that it held. Upon the Acquisition, the Company’s
total share capital has become 1,793,412,378 shares. Meanwhile, as Broadford
Global controls an 87.81% aggregated voting right in the Company (direct interests
and interests through CMID and CMGD), it is the direct controlling shareholder of
the Company. Meanwhile, CMG remains the actual controller of the Company.
5
China Merchants Port Group Co., Ltd. Annual Report 2018
V Other Information
The independent audit firm hired by the Company:
Name Deloitte Touche Tohmatsu Certified Public Accountants LLP
Office address 30/F, 222 Yan An Road East, Huangpu District, Shanghai, P.R.C.
Accountants writing
Huang Yue and Jiang Qishen
signatures
The independent sponsor hired by the Company to exercise constant supervision over the Company
in the Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the
Company in the Reporting Period:
Name CITIC Securities Co., Ltd.
19/F, CITIC Securities Tower, 8 Zhongxin 3rd Road, Futian District, Shenzhen,
Office address
China
Participant representative Chen Jianjian, Yang Jun and Huang Zihua
Period of supervision From 26 December 2018 to 31 December 2019
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
The retrospective restatements in the table below are caused by changes to the accounting policies
and a business combination under common control. For further information, please refer to “VI YoY
Changes to Accounting Policies, Estimates and Methods” and “VIII YoY Changes to the Scope of
the Consolidated Financial Statements” under “Part V Significant Events” in this Report.
2018-over-201
2018 2017 2016
7 change
Original Restated Original Restated Restated Original Restated
Operating revenue
2,274,934,530.82 9,703,394,622.58 2,456,218,834.63 7,544,635,284.96 28.61% 2,381,483,399.94 6,828,528,929.02
(RMB)
Net profit attributable
to the listed
403,711,043.83 1,090,418,910.77 504,495,064.39 2,365,214,907.45 -53.90% 532,376,492.97 2,041,683,125.35
company’s
shareholders (RMB)
6
China Merchants Port Group Co., Ltd. Annual Report 2018
Net profit attributable
to the listed
company’s
510,911,565.95 516,155,803.81 497,361,340.01 498,373,377.67 3.57% 529,198,593.98 526,660,998.71
shareholders before
exceptional items
(RMB)
Net cash generated
from/used in operating 737,784,730.57 4,288,575,424.84 1,162,281,754.31 3,475,037,036.28 23.41% 1,121,032,625.07 3,049,363,117.24
activities (RMB)
Basic earnings per
0.63 0.61 0.782 1.32 -53.79% 0.826 1.14
share (RMB/share)
Diluted earnings per
0.63 0.61 0.782 1.32 -53.79% 0.826 1.14
share (RMB/share)
Weighted average
8.82% 3.88% 10.45% 10.24% -6.36% 11.57% 9.21%
return on equity (%)
Change of 31
December
31 December 2018 31 December 2017 2018 over 31 31 December 2016
December
2017
Original Restated Original Restated Restated Original Restated
Total assets (RMB) 8,036,053,848.17 128,018,084,415.68 7,975,470,563.32 109,135,164,260.01 17.30% 7,792,570,272.01 91,437,459,066.10
Equity attributable to
the listed company’s 4,831,911,547.56 30,760,475,412.93 4,922,969,405.92 28,474,748,165.25 8.03% 4,736,680,543.81 22,680,840,458.42
shareholders (RMB)
The total share capital at the end of the last trading session before the disclosure of this Report:
Total share capital at the end of the last trading session before the
1,793,412,378
disclosure of this Report (share)
Fully diluted earnings per share based on the latest total share capital
0.608
above (RMB/share)
Indicate by tick mark whether there are corporate bonds.
□ Yes √ No
Indicate by tick mark whether the past two years have both seen a deficit.
□ Yes √ No
7
China Merchants Port Group Co., Ltd. Annual Report 2018
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
No difference for the Reporting Period.
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,172,750,441.44 2,499,587,599.28 2,589,330,353.39 2,441,726,228.47
Net profit attributable to the listed
381,903,088.64 238,135,317.01 276,846,536.50 193,533,968.62
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 129,600,674.09 187,764,097.52 135,978,133.47 62,812,898.73
exceptional items
Net cash generated from/used in
488,161,711.35 1,312,573,007.36 1,315,345,336.41 1,172,495,369.72
operating activities
The quarterly financial data in the table above or their summations differ from what have been
disclosed in the Company’s Q1, interim and Q3 reports, primarily because the financial data in
those reports have been restated due to a business combination under common control.
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2018 2017 2016 Note
Gain or loss on disposal of non-current assets
6,512,480.64 324,387.87 -123,667.77
(inclusive of impairment allowance write-offs)
Government subsidies charged to current profit
or loss (exclusive of government subsidies
given in the Company’s ordinary course of 14,050,544.16 1,843,431.75 1,046,444.12
business at fixed quotas or amounts as per the
government’s uniform standards)
8
China Merchants Port Group Co., Ltd. Annual Report 2018
Current profit or loss on subsidiaries obtained in Effect of a
business combinations involving enterprises business
2,685,592,888.44 4,928,289,403.49 4,127,265,578.70
under common control from the combination under
period-beginning to combination dates, net common control
Reversed portion of impairment allowance for
accounts receivable which are tested 4,238,993.78
individually for impairment
Non-operating income and expense other than
-3,767,817.73 1,002,589.66 1,487,253.84
the above
Restructuring
Other gains and losses that meet the definition
-121,311,211.59 costs in the
of exceptional gain/loss
Current Period
Less: Income tax effects 3,010,149.89 802,116.53 595,892.67 --
Non-controlling interests effects (net of
2,003,803,627.07 3,068,055,160.24 2,614,057,589.58
tax)
Total 574,263,106.96 1,866,841,529.78 1,515,022,126.64 --
For the Reporting Period, the Company does not reclassify as recurrent any exceptional gain/loss
item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items.
9
China Merchants Port Group Co., Ltd. Annual Report 2018
Part III. Business Highlights
I. Main business of the Company during the reporting period
1. Main business scope and business models
The Company is principally engaged in the handling, warehousing and transportation of
containers and bulk cargoes, as well as the provision of other ancillary services. It principally
operates 24 container berths and 15 bulk cargo berths in the ports in West Shenzhen, 9
multi-purpose berths, 2 container berths, 2 bulk cargo berths and a berth for roll-on-roll-off vessels
in Shantou Port, 4 multi-purpose berths in Shunde Port, 2 container berths and 6 bulk cargo berths
in Zhangzhou Port, Xiamen, 3 container berths in Port of Colombo, Sri Lanka, 4 multi-purpose
berths, 2 oil berths and 4 container berths in Hambantota Port, 3 container berths in Port of Lomé,
Togo, and 3 container berths in Paranaguá Port, Brazil. Moreover, the Company invests in container
hubs in Shanghai and Ningbo and expands its layout to ports in South Asia, Africa, Europe, South
America and Oceania.
The major business segments of China Merchants Port Group Co., Ltd. are as follows:
Business Applications
segments
Container handling and warehousing: the Company provides ship berthing,
loading and unloading services to ship companies, offers container storage
service to ship companies and cargo owners and provides overhead box
services to tractor companies. The Company also engages in the businesses of
Cargo
division or merger of cargoes in containers, container leasing and container
handling and
maintenance;
warehousing
Bulk cargo handling and warehousing: the Company is engaged in bulk cargo
handling and transportation in port zones, as well as storage services in yards.
The major types of cargoes handled include food, steel, woods and
sandstones.
The ancillary port-related services of the Company mainly include tugboat
Ancillary
berthing assistance and barge services at the arrival of ships to the ports,
port-related
tallying in the course of cargo handling, and supply of shore power and
services
freshwater for vessels.
10
China Merchants Port Group Co., Ltd. Annual Report 2018
The Company provides various services for clients (including logistics
Bonded companies, trading companies or cargo owners), for example, warehouse/yard
logistics leasing, loading and unloading in warehouses/yards, customs clearance and
operations division or merger of cargoes at terminals. It also provides documentation
services for tractors arriving or leaving the bonded logistics parks.
2. Development stage and cyclical characteristic of the industry in which the Company
operates and its industry position during the reporting period
The port industry is a crucial cornerstone for national economic and social progress, and is
closely linked to global economic and trade development. In 2018, the global economy maintained
its growth in general. Nonetheless, the Company faced challenges arising from the divergence in
recovery between various countries, trade frictions aggravated by trade protectionism, restructuring
of global trade pattern, the slowdown in growth of global container shipping, the downshift of
domestic port business, intensifying market competition, severe competition for investment in
emerging markets overseas, technology advancement in the port and shipping industry and evolving
business models.
In light of the increasing uncertainty in the global economic and trade environment, the growth
of global container throughput slowed down in 2018. According to the statistics of Clarkson
Research Services Limited, a maritime consulting firm, the global container throughput for coastal
ports amounted to 201 million TEUs in 2018, representing a year-on-year increase of 4.46%, which
was down 0.66 percentage points as compared with 2017. Growing uncertainties in global trade
development and rising fuel costs in general reduced the profitability of shipping companies. The
performance of different shipping routes varied. The shipping volume of Asia-Europe routes
decreased slightly due to the sluggish economies in the United Kingdom and other European
countries. The Sino-US trade friction resulted in cargo delivery before schedule and supported the
rapid growth of shipping volume of Trans-Pacific routes at 5.88%. Driven by booming economic
development in emerging Asian economies, the shipping volume of routes in the region maintained
a relatively remarkable year-on-year increase of 6.45%. With concentrated delivery of large vessels,
the average scale of single ship expanded continuously. While Asia-Europe routes were dominated
by the three largest shipping alliances, the container feeder market saw development opportunities.
The growth rate of global port container throughput declined in 2018. According to the
11
China Merchants Port Group Co., Ltd. Annual Report 2018
statistics of Drewry Shipping Consultants Ltd., a maritime consulting firm, the global container port
throughput amounted to 7.86 billion TEUs in 2018, up 5.3% year-on-year, while the growth rate
decreased by 1.2percentage points as compared with 2017. In terms of market share by container
throughput, the top 3 regions in order are China (including Hong Kong), Europe and Southeast Asia,
and the top 3 fastest growing regions in order are South Asia, Southeast Asia and Oceania. The
growth rate of PRC container port throughput decreased and the development of different ports
varied. According to the statistics from National Bureau of Statistics of China, the container
throughput handled by PRC ports of significant scale was 249.55 million TEUs in 2018,
representing a growth of 5.2% compared with the same period last year , growing slower than the
same period in 2017.
The Company is the largest global leading port developer, investor and operator in the PRC,
with a comprehensive port network at major hub locations along coastal China. It has also
established presence in South Asia, Africa, Europe, Mediterranean, Oceania and South America. By
its proactive, sound and efficient operating style, the Company capitalises on its global port
portfolio, professional management experience, the self-developed state-of-the-art terminal
operation system and integrated logistics management platform for exports and imports, thereby
providing its customers with timely and efficient port and maritime logistics services along with
comprehensive and modern integrated logistics solutions. In addition, the Company also invests in
bonded logistics operation and launches integrated park development business for the extension of
the port value chain, which allows it to create greater value through the synergies of the existing
terminal network.
12
China Merchants Port Group Co., Ltd. Annual Report 2018
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets Main reason for significant changes
1. On 26 January 2018, the Second Extraordinary Meeting of the Ninth Board of Directors of
the Company approved the Proposal on Capital Increase to Zhoushan Archipelago New Area
SinoTrans & CSC RoRo Logistics Co., Ltd. On the same day, the Company together with
Zhoushan Blue Ocean Investment Co., Ltd. (hereafter referred to as “Blue Ocean
Investment”), CSC RoRo Logistics Company Limited (hereafter referred to as “CSC”),
China Merchants Port (Zhoushan) RoRo Logistics Co., Ltd. (hereafter referred to as
“Zhoushan RoRo”) and Zhoushan Archipelago New Area Xinghai RoRo Terminal Co., Ltd.
( hereafter referred to as “Xinghai Terminal”) signed the Agreement on Capital Increase to
Zhoushan Archipelago New Area SinoTrans & CSC RoRo Logistics Co., Ltd.. According to
the agreement, the Company contributed RMB149.7098 million in cash to hold 51% equity
in Zhoushan RoRo, and the registered capital of Zhoushan RoRo increased from RMB60
million to RMB173.0786 million, and Zhoushan RoRo owned 100% stake of Xinghai
Terminal, which made Xinghai Terminal a wholly owned subsidiary of Zhoushan RoRo. In
May 2018, the Company paid all the increased capital to Zhoushan RoRo. On 29 August
2018, Zhoushan RoRo completed the formalities for the change of its directors, supervisors
and senior management with the industrial and commercial administration. As such,
Zhoushan RoRo has officially become a majority-owned subsidiary of the Company. For
Equity assets
further information, see the Announcement on an External Investment & Related-Party
Transaction (Announcement No.: 2018-007) published on the Securities Times, Ta Kun Pao
(HK) and www.cninfo.com.cn on 27 January 2018.
2. On 5 February 2018, the Proposal on Signing the Supplementary Agreement II to the
Media Port Investments Limited Shareholder Agreement was approved at the 3rd
Extraordinary Meeting of the Company’s 9th Board of Directors of 2018. On the same day,
the Supplementary Agreement II was signed by Chiwan Wharf, CMPort Holdings, Fatten
Investments Limited and Media Port Investments Limited as a further supplement to the
Media Port Investments Limited Shareholder Agreement signed on 30 September 2002.
According to the Supplementary Agreement II, upon the completion of the transfer of a
combined stake of 66.10% in Chiwan Wharf from CND Group, Malai Storage and KFEL to
CMGD and Broadford Global, the Company’s control over Media Port Investments Limited
will cease. On 8 June 2018, when the relevant equity transfer formalities were completed, the
Company excluded Shenzhen Mawan Port Services Co., Ltd., Shenzhen Mawan Wharf Co.,
Ltd. and Shenzhen Mawan Warehouse & Terminals Co., Ltd. from its consolidated financial
statements. The announcement (No. 2018-013) on the related-party transactions arising from
the signed Supplementary Agreement II has been disclosed on Securities Times, Ta Kung Pao
13
China Merchants Port Group Co., Ltd. Annual Report 2018
and www.cninfo.com.cn on 7 February 2018.
3. On 6 February 2018, CMPort Holdings, China Merchants Union (BVI) Limited (“CMU”,
a major shareholder of CMPort Holdings and the liaison of CMG) and Gold Newcastle
Property Pty Holding Limited (“Gold Newcastle”, a wholly-owned subsidiary of CMU)
entered into an acquisition agreement. According to the agreement, CMU and Gold
Newcastle agreed to sell, for the total consideration of AUD607.5 million (approximately
HK$3.809 billion), their aggregate interests of 50% in the Port of Newcastle (including
shareholder loans of AUD162.5 million) to CMPort Holdings or its wholly-owned subsidiary.
And the remaining 50% interest in the Port of Newcastle would be held by a third-party, TIF
Investment Trust.
4. On 13 December 2018, the Proposal on the Incorporation of China Merchants Hainan
Development & Investment Co., Ltd. together with Related Parties was approved at the
Second Extraordinary General Meeting of 2018. Chiwan Wharf Holdings (Hong Kong)
Limited (a wholly-owned subsidiary of the Company), together with related parties of China
Merchants Holdings (Hong Kong) Company Limited, Jumbo Pacific Holdings Limited,
China Merchants Expressway Network Technology Holdings Co., Ltd., China Merchants
Industry Investment Limited and SinoTrans (HK) Logistics Limited, incorporated China
Merchants Hainan Development & Investment Co., Ltd. as an important investment platform
in the Hainan Province for all the parties. The new joint venture has a registered capital of
RMB3.5 billion, of which Chiwan Wharf Holdings (Hong Kong) Limited subscribes for
RMB525 million, representing a stake of 15%.
5. On 24 December 2018, the Company disclosed the Report on the Implementation Progress
of the Assets Purchase via Share Offering and the Matching Fund Raising & the
Related-Party Transaction & the Listing of the New Shares. The Company issued A-shares to
CMID for the acquisition of the 1,313,541,560 ordinary CMPort Holdings shares that it held
(accounting for approximately 39.45% of CMPort Holdings’ outstanding ordinary shares),
with the transaction price being RMB24.65 billion. According to the offering price of
RMB21.46/share, the Company issued a total of 1,148,648,648 A-shares to CMID. On 26
December, the Company held the Restructuring & Name Change Ceremony at the Shenzhen
Stock Exchange, changing its stock name from “Chiwan Wharf, Chiwan Wharf-B” to “CM Port
Group, CM Port Group B”, its stock code from “000022, 200022” to “001872, 201872”.
Construction in progress amounted to RMB5.499 billion as at 31 December 2018, up by
RMB3.191 billion from the beginning amount of RMB2.308 billion, primarily driven by the
Construction adding of new subsidiaries to the consolidated financial statements and a higher expense on
in progress wharf projects. To be specific, the HIPG wharf construction project contributed an increase of
RMB1.334 billion, the TCP berth expansion project contributed RMB0.59 billion and the
Shantou Port Guangdong-Macau Phase II project RMB0.524 billion.
Entrusted 1. On 23 August 2017, the Proposal on Signing The Agreement on Equity Management
14
China Merchants Port Group Co., Ltd. Annual Report 2018
assets Entrustment with China Merchants Port Holdings Company Limited (CMPort Holdings) was
approved at the 2nd Meeting of the 9th Board of Chiwan Wharf. On the same day, the
agreement was signed to let Chiwan Wharf manage, in CMPort Holdings’ trust, part of the
shareholder and other rights in relation to the 80% stake in Mega Shekou Container
Terminals Limited, which is held directly by CMPort Holdings. As CMPort Holdings has
ceased its control over Chiwan Wharf from 8 June 2018, as per the aforesaid entrustment
agreement, Chiwan Wharf’s custodianship of the shareholder and other rights in relation to
the 80% stake in Mega Shekou Container Terminals Limited has automatically ended. The
announcement (No. 2017-035) on the related transaction arising from the signed entrustment
contract has been disclosed on Securities Times, Ta Kung Pao and www.cninfo.com.cn on 25
August 2017.
2. On 13 December 2018, the Proposal on the Company and China Merchants (Liaoning)
Port Development Co., Ltd. Signing the Custody Agreement Regarding Equity Interests in
Liaoning Port Group Co., Ltd. was approved at the 10th Extraordinary Meeting of the 9th
Board of Directors of 2018 of the Company. As such, the Company was agreed to sign the
said agreement with China Merchants (Liaoning) Port Development Co., Ltd., an indirectly
wholly-owned subsidiary of CMG. According to the agreement, the Company will manage,
in the trust of China Merchants (Liaoning) Port Development Co., Ltd., the 49.9% interest in
Liaoning Port Group Co., Ltd. that China Merchants (Liaoning) Port Development Co., Ltd.
is currently holding.
2. Major Assets Overseas
Mana
Control Return As % of Material
geme
Asset value Locati measures to generated the impairm
Asset Source nt
(RMB’0,000) on protect asset (RMB’0,00 Company’ ent risk
mode
safety 0) s equity (yes/no)
l
Majo
Appointing
Acquir rity-o
directors,
ed via wned
Equity Hong supervisors
share 12,236,421.18 by 650,649.71 93.16% No
assets Kong and senior
offerin the
managemen
g Com
t
pany
Other
inform N/A
ation
15
China Merchants Port Group Co., Ltd. Annual Report 2018
III. Core competitiveness analysis
1.Active implementation of the key “Belt and Road” initiative with leverage on its global port
network
As an important carrier for domestic and overseas port investment and operation of CMG, the
Company seized the policy opportunities of the key elopment Co., Ltd., an indirectly o actively
build a global port network and make investments in global resources. In recent years, through
mergers, acquisitions and restructuring, along with the renovation of old ports and construction of
new ports, the Company has become a modern port chain with global coverage and actively pushed
forward the establishment of the “Silk Road Economic Belt” and “21st-Century Maritime Silk
Road”.
After years of overseas development, CMPort has developed the port industries across Southeast
Asia, South Asia, Africa, Europe, Oceania, etc. Among which, its port network spreads over 18
countries with most ports locating in important port areas of countries along the “Belt and Road”
initiative.
The Company aims at eas development, CMPort has developed the port iive continents”. As both
the shipping and port sectors gradually shifted to forming alliances, the Company actively
integrated its domestic and overseas port assets and capitalised on its relatively complete global port
network to provide customers with comprehensive port logistics service solutions, which created its
unique competitive strength. At the same time, the diversified investment and operation of port
assets have also effectively enhanced its capabilities to resist risks of industry fluctuations and trade
fictions.
2. Sound shareholder background
CMG is a key state-owned enterprise under the direct administration of the PRC central government.
Headquartered in Hong Kong, it is an integrated enterprise with diversified businesses and one of
the four major Chinese enterprises in Hong Kong. Currently, CMG is mainly engaged in three core
industries namely transportation, finance and real estate, while focusing on four key sectors
including infrastructure and equipment manufacturing, logistics and shipping, integrated finance
and comprehensive development of cities and parks. CMG has been rated as a Grade A enterprise in
16
China Merchants Port Group Co., Ltd. Annual Report 2018
the Operating Results Assessment of the State-owned Assets Supervision and Administration
Commission of the State Council for 14 consecutive years and is a central state-owned enterprise
that owns two Fortune 500 companies.
Being a crucial player and facilitator of the national State-owned Assets Supervision and
Administration Commission of the State Council for 14 consecutive years atively complete network
of overseas port, logistics, finance and park business. The sound shareholder background and ample
domestic and overseas resources of CMG have provided strong support to CMPort for creating a
global port cooperation platform with international vision and global expansion capabilities.
3. Innovative business development model
Taking port business as the core and leveraging the synergy of different port zones as well as
city-industry integration, the Company is actively exploring and facilitating the comprehensive port
development model of “Port-Park-City”. Based on the traditional loading and unloading and
ancillary services for ports, the Company further expanded various value-added port services to the
ports and port cities in which it operates. By gathering talents, information, funds and commodities,
the Company continued to expand its business development and regional coverage, thereby driving
urban upgrade and development.
Currently, the Company has participated in and pushed forwarded integrated regional development
and construction in various overseas regions under the port-oriented approach, where it has made
some progress with initial achievements. The innovative business development model helps foster
new profit growth points for the Company.
4. Extensive experience in professional port management with sound and efficient operating style
The Company always adheres to the proactive, sound and efficient operating style. Capitalising on
its global portfolio for port asset and resource allocation, it is committed to providing customers
with timely and efficient port and maritime logistics services and thus becoming an important
gateway for the country’s foreign trade. At the same time, the Company also made an extensive
investment in bonded logistics business to expand its port value chain. Taking advantages of the
synergies of its existing terminal network, the Company created values for both its customers and
17
China Merchants Port Group Co., Ltd. Annual Report 2018
shareholders.
The Company has earned itself good reputation across the industry by leveraging the professional
management experience accumulated for years, its self-developed global leading port operating
system and integrated logistics management platform for import and export, its extensive maritime
logistics support system and all-rounded modern integrated logistics solutions, its high-quality
engineering management and reliable service offerings.
18
China Merchants Port Group Co., Ltd. Annual Report 2018
PART IV Performance Discussion and Analysis
I. Summary
1. External Environment Analysis
In 2018, the global economy continued to grow at a moderate pace. However, the growth rates
of major economies have almost peaked while certain emerging markets and countries were facing
financial instability, demonstrating intensified uneven growth trend among different economies.
Currently, with the setback in multilateral trading system, the landscape of international trade is
restructuring, which has facilitated rapid development of regional trade agreements. According to
the latest “atest , the global economy continued to grow at a mornational Monetary Fund (“IMF”
MFest , the global economy continued to grow at a mornational Monetary Fund (“growth rates of
major economies have almost peaked while certain emerging markets and countries were facing f,
down by 0.1 percentage point as compared to that of 2017, while emerging markets and developing
economies grew at 4.6%, respectively, down by 0.1 percentage point as compared to that of 2017.
Total global trade volume (including goods and services) grew by 4.0%, representing a decrease of
1.3 percentage points as compared to that of 2017.
In 2018, China’s economic growth was 6.6%, representing a decrease of 0.2 percentage point
over 2017. Despite the complicated international environment, China insisted on pursuing progress
while maintaining stability and the overall economic development remained stable within a
reasonable range. While strenuously promoting the supply-side structural reform, the PRC
government continued to innovate and improve its macroeconomic control policies, striving to
cultivate and develop innovative industries. The Chinese economy has shifted from the rapid
growth phase to quality development phase with the driving force of innovation further increased
and the upgrade and development of consumption and industry structures progressed at a faster pace.
Amid the overall global trade growth, according to the statistics of the General Administration of
Customs, China’s total foreign trade import and export value amounted to RMB30.51 trillion in
2018, representing a year-on-year increase of 9.7%, among which the total export value was
RMB16.42 trillion, indicating a 7.1% year-on-year increase, while total import value was
RMB14.09 trillion, reflecting a year-on-year increase of 12.9%. In particular, the potential of trade
cooperation between China and those countries along the “Belt and Road” initiative is unleashing,
leading to an increase in import and export value of 13.3%, which is higher than the overall growth
rate.
19
China Merchants Port Group Co., Ltd. Annual Report 2018
Driven by the growth in global economy and trade, the global port business generally showed
moderate growth in 2018; and the growth rate of port business in China remained steady since the
first quarter. According to the data published by National Bureau of Statistics of China, the
container throughput handled by Chinese ports of significant scale totalled 250 million TEUs in
2018, representing an increase of 5.2% year-on-year.
2. Port Business Review
In 2018, the Company’ ports handled a total container throughput of 109.73 million TEUs, up
by 6.6% year-on-year, among which the ports in Mainland China contributed container throughput
of 81.39 million TEUs, indicating an increase of 5.5% year-on-year, which was mainly driven by
steady recovery of the Mainland China’s economy and improvement of import and export trade.
The Company’s operations in Hong Kong and Taiwan contributed an aggregate container
throughput of 7.67 million TEUs, representing a growth of 2.5% as compared with the same period
last year. Benefited from the rapid growth of the ports operation of CICT in Sri Lanka, LCT in
Togo and Kumport in Turkey, a total container throughput handled by the Company’s overseas
ports grew by 12.9% year-on-year to 20.66 million TEUs. Bulk cargo volume handled by the
Group’ ports increased by 1.5% year-on-year to 504 million tonnes, of which the Group’ ports in
Mainland China handled a total bulk cargo volume of 530 million tonnes, representing an increase
of 1.6% year-on-year.
Pearl River Delta region
In the Pearl River Delta region, the Group’s terminals in West Shenzhen Port Zone handled a
container throughput of 11.35 million TEUs, up by 1.5% year-on-year. Chu Kong River Trade
Terminal Co., Ltd. handled a total container throughput of 1.17 million TEUs, down by 13.3%
year-on-year. Bulk cargo volume handled by the West Shenzhen Port Zone amounted to 18.03
million tonnes, down by 17.3% year-on-year, mainly due to the decrease in business volume as a
result of the upgrade and renovation project of Haixing Port. With further release of production
capacity, Dongguan Machong Terminal handled bulk cargo volume of 13.23 million tonnes during
the period, representing an increase of 3.4% year-on-year.
Yangtze River Delta region
Shanghai International Port (Group) Co., Ltd. (eSIPG”IPGghai International Port (Group) Co.,
Ltd. (eon TEUs, up by 4.4% year-on-year, which was mainly driven by the increase in number of
shipping routes due to reorganisation of shipping companies’ alliances, and the release of
production capacity from the commencement of operation of phase IV of SIPG’s fully automated
port in Yangshan since December 2017. Bulk cargo volume handled during the year decreased by
20
China Merchants Port Group Co., Ltd. Annual Report 2018
8.3% year-on-year to 150 million tonnes, mainly attributed to the decrease in coal unloaded amount
after adjustments made against the structure of bulk cargo source by SIPG. Ningbo Daxie China
Merchants International Terminals Co., Ltd. handled a container throughput of 3.16 million TEUs,
representing an increase of 5.1% year-on-year, which was mainly benefited from the adjustment of
certain shipping routes.
Bohai Rim region
Dalian Port (PDA) Company Limited handled a container throughput of 11.11 million TEUs
and bulk cargo volume of 135 million tonnes, representing an increase of 3.3% and 4.3%
year-on-year respectively. Qingdao Qianwan United Container Terminal Co., Ltd. handled a
container throughput of 6.93 million TEUs, representing an increase of 11.1% year-on-year.
Qingdao Qianwan West Port United Terminal Co., Ltd. handled bulk cargo volume of 15.54 million
tonnes, representing an increase of 18.4% year-on-year. Qingdao Port Dongjiakou Ore Terminal
Co., Ltd. handled bulk cargo volume of 57.36 million tonnes, indicating an increase of 3.6%
year-on-year. Laizhou Harbour Affairs (莱州港务) handled bulk cargo volume of 22.75 million
TEUs, representing an increase of 4.7% year-on-year. Tianjin Five Continents International
Container Terminals Co., Ltd. handled a total container throughput of 2.72 million TEUs,
representing an increase of 3.4% year-on-year.
South-East region of Mainland China
Zhangzhou China Merchants Port Co., Ltd. (“ZCMP”), located in Xiamen Bay Economic Zone,
handled a container throughput of 0.457 million TEUs, increased by 13.9% year-on-year, which
was mainly benefited from the increase in domestic shipping routes. With the recovery of the
production capacity of wood processing and iron ore fines industries in the hinterland of ZCMP,
bulk cargo volume handled by ZCMP amounted to 14.32 million tonnes, up by 37.4% year-on-year.
Shantou China Merchants Port Group Co., Ltd., which was acquired in August 2017, handled a
container throughput of 1.29 million TEUs and bulk cargo volume of 9.23 million tonnes.
South-West region of Mainland China
Zhanjiang Port (Group) Co., Ltd. handled a container throughput of 0.98 million TEUs, up by
9.7% year-on-year; and a bulk cargo volume of 91.87 million tonnes, up by 1.8% year-on-year.
Hong Kong and Taiwan
The total container throughput handled by ports in Hong Kong dropped by 5.7% year-on-year,
of which the container throughput handled by the ports in Kwai Tsing area decreased by 4.7%
year-on-year. Modern Terminals Limited and China Merchants Container Services Limited
delivered an aggregate container throughput of 5.93 million TEUs, up by 2.5% year-on-year, which
21
China Merchants Port Group Co., Ltd. Annual Report 2018
outperformed the overall market of Hong Kong. Kao Ming Container Terminal Corporation in
Kaohsiung handled a total container throughput of 1.75 million TEUs, representing an increase of
2.8% year-on-year.
Overseas operation
In 2018, a total container throughput handled by the Company’ overseas operations increased
by 12.9% year-on-year to 20.66 million TEUs, among which container throughput handled by CICT
in Sri Lanka rose by 12.0% year-on-year to 2.68 million TEUs. Container throughput handled by
LCT in Togo increased by 18.3% year-on-year to 1.05 million TEUs. Container throughput handled
by Tin-Can Island Container Terminal Limited (referred to as TICT) in Nigeria was 0.48 million
TEUs, representing an increase of 2.4% year-on-year. Container throughput handled by Port de
Djibouti S.A. (referred to as PDSA) in Djibouti amounted to 0.86 million TEUs, down by 7.5%
year-on-year, mainly attributed to the decrease in transshipment volume to Ethiopia. Terminal Link
SAS, which acquired the port of Thessaloniki in Greece at the beginning of the year, handled
container throughput of 13.64 million TEUs, representing an increase of 8.6% year-on year.
Container throughput handled by Kumport in Turkey increased by 18.3% year-on-year to 1.26
million TEUs. In February 2018, the acquisition of TCP in Brazil was officially completed. TCP
handled a container throughput of 0.69 million TEUs from March to December.
3. Implementation of business plan during the reporting period
During the reporting period, adhering to the working principles of “farsighted and
down-to-earth” and “establishing integrated systems and building core competitiveness”, the
Company continued to maintain its strategic strength and remained committed to the strategic focus
of domestic and overseas development and innovation and achieved major breakthroughs in five
aspects, namely the development of homebase port, port consolidation, overseas expansion,
comprehensive development and business innovation. Over the past year, the Company actively
implemented its key tasks and maintained a steady growth in the core business and operating results
of the Company’s ports.
Regarding the development of its homebase ports, Tonggu Channel project in West Shenzhen
Port Zone was completed which enabled 200,000-tonnes mega vessels to call. Moreover, the
renovation project of Haixing Port progressed as scheduled while the construction proposal of
“Smart Port” has been proved and already entered into the implementation stage. In accordance
with the concept of “strong synergy for high throughput”, the Group has facilitated the cooperation
between West Shenzhen Port Zone and river terminals in the Pearl River Delta and achieved
22
China Merchants Port Group Co., Ltd. Annual Report 2018
preliminary results.
In terms of port consolidation, the Company has established a strategic layout with a focus on
one was completed which enang Kong-Macao Bay Area, connecting regions along Belt and Road
Initiatives with a broad global network coverage” through strategic reconstruction, which has
become the platform for managing the CMG’s port business and capital operation. In Bohai Rim,
the entrusted management arrangement of Liaoning Port Group was completed.
As for overseas expansion, by seizing the opportunities arising from the major initiative of
“Belt and Road” and the transfer of international production, the Company actively grasped the
investment opportunities in ports, logistics and related infrastructure. The Company completed the
acquisitions of TCP Terminal in Brazil, South America and Port of Newcastle in Australia, Oceania
in 2018, realising its full coverage in six continents and further optimising its global port network.
In terms of comprehensive development, the Company actively explored and promoted the
“Port-Park-City” comprehensive development model and achieved milestone progress. Djibouti
International Free Trade Zone was officially opened in July 2018 and received good response. The
comprehensive development project of Hambantota Port in Sri Lanka has completed the initial
overall conceptual planning and has been actively developing the wheeled and bulk cargo business,
demonstrating a sound business development trend.
With regard to innovative development, the Group actively pushed forward the “digitalised
strategy” through the philosophy of “bringing influence through technology innovation, facilitating
expansion by business innovation, enhancing quality and efficiency by integration innovation, and
planning future by mechanism innovation” in exploring the construction of the port ecosystem. In
2018, the Company completed the E-Port project, RTG Remote Control project and Pearl River
Delta (“PRD”) NETWORK project in West Shenzhen Port Zone with the utilisation of digital port
technology, automated terminal technology, artificial intelligence application and big data analysis
application. In terms of integrated cooperation model of industry with elements of finance, the
Company planned for the establishment of the China Port Innovation Investment Fund (中国港口
创新投资基金) which aimed to coordinate with the domestic influential port groups, innovate
integrated cooperation model of industry with elements of finance, and explore new technologies,
models and mechanisms for the port ecosystem, thereby achieving collaboration and resource
matching between various port groups and the invested industries.
23
China Merchants Port Group Co., Ltd. Annual Report 2018
II Core Business Analysis
1. Overview
Changes in key financial indicators in the Reporting Period are as follows:
Unit: RMB
Change
Item 2018 2017 Reason for the change
(%)
The adding of CMPort Holdings to
Operating revenue 9,703,394,622.58 7,544,635,284.96 28.61% the consolidated financial statements
for the current year
The adding of CMPort Holdings to
Cost of sales 5,739,241,395.87 4,710,312,660.51 21.84% the consolidated financial statements
for the current year
The restructuring costs and the adding
of CMPort Holdings to the
Administrative expense 1,251,865,675.45 853,900,889.90 46.61%
consolidated financial statements for
the current year
A higher interest expense as a result
of more interest-bearing debt, as well
Finance costs 1,643,418,102.95 955,406,648.46 72.01%
as a greater exchange loss, net caused
by exchange rate fluctuations
Net cash generated
from/used in operating 4,288,575,424.84 3,475,037,036.28 23.41% -
activities
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2018 2017
As % of total As % of total
Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 9,703,394,622.58 100% 7,544,635,284.96 100% 28.61%
By operating division
Port operations 9,184,527,309.09 94.65% 7,105,017,045.51 94.17% 29.27%
Bonded logistics service 386,269,027.02 3.98% 355,133,637.25 4.71% 8.77%
Other 132,598,286.47 1.37% 84,484,602.20 1.12% 56.95%
By operating segment
Mainland China, Hong Kong
6,635,924,788.34 68.39% 6,036,330,920.53 80.01% 9.93%
and Taiwan
Other countries and regions 3,067,469,834.24 31.61% 1,508,304,364.43 19.99% 103.37%
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of
Operating Revenue or Operating Profit
Unit: RMB
Gross YoY change YoY change YoY change in
Operating revenue Cost of sales profit in operating in cost of gross profit
margin revenue (%) sales (%) margin (%)
By operating division
24
China Merchants Port Group Co., Ltd. Annual Report 2018
Port operations 9,184,527,309.09 5,303,286,893.31 42.26% 29.27% 23.38% 5.81%
By operating segment
Mainland China, Hong Kong 6,635,924,788.34 4,216,939,216.81 36.45% 9.93% 6.56% 2.90%
and Taiwan
Other countries and regions 3,067,469,834.24 1,522,302,179.06 50.37% 103.37% 102.15% 0.30%
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
□ Yes √ No
(4) Execution Progress of Major Signed Sales Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB
2018 2017
Change
Operating division Item As % of total cost As % of total cost
Cost of sales Cost of sales (%)
of sales (%) of sales (%)
Loading
and
Port operations 5,303,286,893.31 92.40% 4,298,197,269.65 91.25% 23.38%
unloading
services
Logistics
Bonded logistics service 214,495,776.55 3.74% 201,919,562.78 4.29% 6.23%
service
Other Properties 221,458,726.01 3.86% 210,195,828.08 4.46% 5.36%
Total 5,739,241,395.87 100.00% 4,710,312,660.51 100.00% 21.84%
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
China Merchants Port (Zhoushan) RoRo Logistics Co., Ltd. has been added to the consolidated
financial statements of the Reporting Period due to an asset purchase via capital increase; China
Merchants Port Holdings Company Limited (“CMPort Holdings”) has been added as a result of a
business combination under common control involving the Company; TCP has been added due to a
business combination not under common control involving CMPort Holdings, a subsidiary of the
Company; and Shenzhen Haixing Onoda Logistics Development Co., Ltd. has been added due to an
asset purchase of CMPort Holdings.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 2,771,538,285.20
Total sales to top five customers as % of total sales of the Reporting Period 28.56%
(%)
Total sales to related parties among top five customers as % of total sales 0%
25
China Merchants Port Group Co., Ltd. Annual Report 2018
of the Reporting Period (%)
Top five customers:
Sales revenue contributed
No. Customer for the Reporting Period As % of total sales revenue (%)
(RMB)
1 Customer A 1,185,119,294.05 12.21%
2 Customer B 468,009,461.45 4.82%
3 Customer C 454,654,929.72 4.69%
4 Customer D 362,165,543.53 3.73%
5 Customer E 301,589,056.45 3.11%
Total -- 2,771,538,285.20 28.56%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 969,354,243.89
Total purchases from top five suppliers as % of total purchases of the
21.47%
Reporting Period (%)
Total purchases from related parties among top five suppliers as % of total
0%
purchases of the Reporting Period (%)
Top five suppliers:
Purchase in the Reporting
No. Supplier As % of total purchases (%)
Period (RMB)
1 Supplier A 345,775,896.27 7.66%
2 Supplier B 338,102,927.61 7.49%
3 Supplier C 113,117,715.82 2.51%
4 Supplier D 88,859,558.97 1.97%
5 Supplier E 83,498,145.22 1.85%
Total -- 969,354,243.89 21.47%
Other information about major suppliers:
□ Applicable √ Not applicable
26
China Merchants Port Group Co., Ltd. Annual Report 2018
3. Expense
Unit: RMB
2018 2017 Change (%) Reason for any significant change
The restructuring costs and the
Administrati adding of CMPort Holdings to the
1,251,865,675.45 853,900,889.90 46.61%
ve expense consolidated financial statements for
the current year
A higher interest expense as a result
of more interest-bearing debt, as well
Finance costs 1,643,418,102.95 955,406,648.46 72.01%
as a greater exchange loss, net caused
by exchange rate fluctuations
R&D Higher expenses on various R&D
121,989,097.82 95,247,274.67 28.08%
expense projects
4. R&D Expense
In 2018, adhering to the strategic principle of “Have a Long-Term Vision and Grasp Current
Opportunities”, the Company made great efforts to promote standardization, digitization and
automation in port operations, which has produced certain results and laid a solid foundation for the
building of intelligent ports with China Merchants’ characteristics.
The progress of the Company’s major R&D projects in the Reporting Period is as follows: The
E-Port system has started running upon the completion of construction and acceptance; the
Shenzhen Western Ports Command and Control Center has been upgraded comprehensively; the
Mawan Wharf has successfully completed the remote control modification of all the 36 RTG, with
the handling volume exceeding 1 million TEU; and the global container AI project, the AI-based
port decision-making system and the intra-port driverless vehicle project have been launched and on
track.
Details about R&D expense:
2018 2017 Change (%)
Number of R&D personnel 428 425 0.71%
R&D personnel as % of total employees 4.47% 5.29% -0.82%
R&D expense (RMB) 121,989,097.82 95,247,274.67 28.08%
R&D expense as % of operating revenue 1.26% 1.26% 0.00%
Capitalized R&D expense (RMB) - -
Capitalized R&D expense as % of total
0.00% 0.00%
R&D expense
27
China Merchants Port Group Co., Ltd. Annual Report 2018
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
Item 2018 2017 Change (%)
Subtotal of cash generated from
10,551,620,379.77 8,121,339,982.14 29.92%
operating activities
Subtotal of cash used in operating
6,263,044,954.93 4,646,302,945.86 34.80%
activities
Net cash generated from/used in
4,288,575,424.84 3,475,037,036.28 23.41%
operating activities
Subtotal of cash generated from
1,989,829,350.62 9,831,224,130.57 -79.76%
investing activities
Subtotal of cash used in investing
17,138,391,838.98 7,747,352,982.62 121.22%
activities
Net cash generated from/used in
-15,148,562,488.36 2,083,871,147.95 -826.94%
investing activities
Subtotal of cash generated from
36,557,170,707.26 10,486,329,575.00 248.62%
financing activities
Subtotal of cash used in financing
27,681,971,449.91 11,274,819,013.90 145.52%
activities
Net cash generated from/used in
8,875,199,257.35 -788,489,438.90 1225.60%
financing activities
Effect of exchange rate fluctuations
-371,390,771.83 -294,425,747.23 26.14%
on cash
Net increase in cash and cash
-2,356,178,578.00 4,475,992,998.10 -152.64%
equivalents
Explanation of why any of the data above varies significantly on a year-on-year basis:
Subtotal of cash generated from operating activities rose 29.92% year-on-year, primarily driven by
higher proceeds from sale of commodities and rendering of services.
Subtotal of cash used in operating activities rose 34.80% year-on-year, primarily driven by more
payments for commodities and services and more cash used in other operating activities.
Subtotal of cash generated from investing activities declined 79.76% year-on-year, primarily driven
by a smaller amount of net proceeds from disposal of subsidiaries or other business units.
Subtotal of cash used in investing activities rose 121.22% year-on-year, primarily driven by a
higher amount of net payments for acquisition of subsidiaries and other business units.
Net cash generated from investing activities declined 826.94% year-on-year, primarily driven by
28
China Merchants Port Group Co., Ltd. Annual Report 2018
less cash generated from and more cash used in investing activities.
Subtotal of cash generated from financing activities rose 248.62% year-on-year, primarily driven by
a higher amount of borrowings obtained.
Subtotal of cash used in financing activities rose 145.52% year-on-year, primarily driven by a
higher amount of repayments of borrowings.
Net cash generated from financing activities rose 1225.60% year-on-year, primarily driven by a
higher amount of net inflow calculated by borrowings obtained minus repayments of borrowings.
Explanation of why net cash generated from/used in operating activities varies significantly from
net profit of the Reporting Period:
√ Applicable □ Not applicable
For the Reporting Period, net cash generated from operating activities was RMB4,288,575,424.84,
while net profit was RMB2,885,914,753.96. The gap was primarily caused by the changes in the
fair value of financial assets as a result of the adoption of the new accounting standards governing
financial instruments for the current year.
III Analysis of Non-Core Businesses
The non-core business operations with a significant impact on the Company’s profit are as follows:
Unit: RMB
Exceptional or
Amount As % of total profit Main source/reason
recurrent
Share of the profit of joint
Investment income 3,967,828,149.48 109.78% ventures and associates, Recurrent
mainly Shanghai Port
Loss on changes in the fair
Gain/loss on changes
-1,074,406,837.68 -29.73% value of trading financial Exceptional
in fair value
assets
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2018 1 January 2018
Change in Reason for any
As % of percentage significant
As % of
Amount Amount total (%) change
total assets
assets
Monetary
7,070,308,704.75 5.52% 7,729,460,082.75 7.08% -1.56% -
capital
Accounts 1,109,230,503.08 0.87% 892,415,771.49 0.82% 0.05% -
29
China Merchants Port Group Co., Ltd. Annual Report 2018
receivable
The adding of
new subsidiaries
to the
Inventory 108,567,270.02 0.08% 82,789,282.22 0.08% 0.00%
consolidated
financial
statements
Investment
5,890,146,989.51 4.60% 6,060,625,982.13 5.55% -0.95% -
property
Long-term
equity 50,176,577,263.40 39.19% 43,160,849,807.48 39.55% -0.36% -
investments
Fixed assets 22,994,190,880.43 17.96% 23,167,393,454.86 21.23% -3.27% -
The adding of
new subsidiaries
to the
consolidated
Construction in
5,499,426,090.06 4.30% 2,308,007,330.50 2.11% 2.19% financial
progress
statements and a
higher wharf
construction
expense
Short-term
3,425,291,312.62 2.68% 2,580,000,000.00 2.36% 0.32% -
borrowings
Long-term
6,971,479,842.18 5.45% 7,670,516,491.15 7.03% -1.58% -
borrowings
2. Assets and Liabilities at Fair Value
Unit: RMB
Impairmen
Gain/loss on Cumulative t Purchase Sold in
fair-value changes fair-value allowance d in the the
Item Beginning amount Ending amount
in the Reporting changes charged for the Reportin Reportin
Period to equity Reporting g Period g Period
Period
Financial assets
Financial assets at fair value
through profit or loss
2,982,466,950.23 -948,440,538.45 - - - - 2,087,872,081.94
(exclusive of derivative
financial assets) (note)
Investments in other equity
233,483,968.79 - 10,304,221.16 - - - 247,848,314.30
instruments (note)
30
China Merchants Port Group Co., Ltd. Annual Report 2018
Subtotal of financial assets 3,215,950,919.02 -948,440,538.45 10,304,221.16 - - - 2,335,720,396.24
Total of the above 3,215,950,919.02 -948,440,538.45 10,304,221.16 - - - 2,335,720,396.24
Financial liabilities - - - - - - -
Note: The Company adopts the new accounting standards governing financial instruments starting from 1 January
2018, transferring certain equity instrument investments recorded in available-for-sale financial assets at the end
of last year to financial assets at fair value through profit or loss.
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
There are structured deposits at the carrying amount of RMB1,697,027,200.00 that are kept
overseas with restricted repatriation and are not withdrawable on demand; fixed assets in financial
leases at the carrying amount of RMB5,516,393,451.13 and fixed assets as bank loan mortgages at
the carrying amount of RMB308,813,888.44; construction in progress as bank loan mortgages at the
carrying amount of RMB43,352,104.92; intangible assets as bank loan mortgages at the carrying
amount of RMB161,408,030.71; and equities and interests as bank loan mortgages at the carrying
amount of RMB2,293,573,691.13.
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Amount in 2018 (RMB) Amount in 2017 (RMB) Change (%)
Equity investments 13,015,203,804.01 4,177,797,893.03 211.53%
Non-equity investments 2,437,080,643.74 2,511,160,012.03 -2.95%
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB’0,000
Investm
Return
ent Any
The Type on
Way of Term of progress legal Disclos
Principal Investmen Compa Funding Joint of investme Index to disclosed
Investee investm investm as at the matter ure
activity t amount ny’s source investor produ nt in the information
ent ent balance involv date
interest cts Reportin
sheet ed
g Period
date
CMPort Operation Self-ow Zhoushan Equity 27 Refer to
Capital Perman Equit
(Zhousha of freight 14,970.98 51% ned Lanhai has -212.42 Not January http://www.cninfo.
increase ent y
n) RoRo station funds Investme been 2018 com.cn for details
31
China Merchants Port Group Co., Ltd. Annual Report 2018
Logistics (yard) nt Co., transferr of relevant
Co., Ltd. (freight Ltd., ed announcement on
forwardin CSC resolutions
g and RoRo (announcement
storage Logistics No. 2018-007)
and Company
tallying) Limited,
Zhoushan
Archipela
go New
Area
SinoTran
s & CSC
RoRo
Logistics
Co., Ltd.
and
Zhoushan
Archipela
go New
Area
Xinghai
RoRo
Terminal
Co., Ltd.
China
Refer to
Merchant
China http://www.cninfo.
s Equity
Merchant com.cn for details
Additio Investme has
s Port Port Acquisit 2,465,000. Perman Equit 256,681 21 June of relevant
39.45% nal nt been Not
Holdings operations ion 00 ent y .31 2018 announcement on
shares Develop transferr
Company resolutions
ment ed
Limited (announcement
Company
No. 2018-062)
Limited
Land China
China
developm Merchant Refer to
Merchant
ent, s Group http://www.cninfo.
s Hainan
operation (H.K.) 1 com.cn for details
Develop Self-ow
of parks New Limited, Perman Equit Establis Decem of relevant
ment & 52,500.00 15% ned - Not
and set up Jumbo ent y hed ber announcement on
Investme funds
properties Pacific 2018 resolutions
nt Co.,
, Holdings (announcement
Ltd.
constructi Limited, No. 2018-108)
on and China
32
China Merchants Port Group Co., Ltd. Annual Report 2018
investmen Merchant
t of s
municipal Expressw
infrastruct ay
ure, water Network
and &
power Technolo
supply for gy
parks, Holdings
urban Co., Ltd.,
renewal, China
investmen Merchant
t and s
managem Industrial
ent of Investme
projects, nt Co.,
etc. Ltd. and
Sinotrans
(HK)
Logistics
Limited
2,532,470. 233,071.
Total -- -- -- -- -- -- -- -- -- -- --
98 89
3. Major Non-Equity Investments Ongoing in the Reporting Period
Unit: RMB’0,000
Accumu
lative
Fixed Input Estimate Accumulati
Way Industr actual
assets amount d return ve realized
of y input Capital
Item investm in the Progress on revenues as
invest involve amount resources
ent or Reportin investme of the
ment d as of the
not g Period nt period-end
period-e
nd
Suppor
t The civil work completed
Self-owne
activiti 30%, the purchase and
Machong Self-b Not carry
Yes es of 4,200 4,231 d funds 10.5%
III silo uild installment of equipment over
water
and loans
transpo completed the bid.
rtation
Building Suppor Not yet start and is
of t
Shantou Self-b activiti Self-owne working out the Not carry
Yes 5 5 10.0%
Port’s uild es of d funds construction plan with over
headquart water
ers transpo China Merchants Shekou
33
China Merchants Port Group Co., Ltd. Annual Report 2018
rtation Industrial Zone Holdings
Co., Ltd.
Suppor
Bulk
t
grain Self-owne Has been completed and
activiti
vertical Self-b Not carry
Yes es of 3,163 24,096 d funds put into operation in June 8.0%
silo in uild over
water
Machong and loans 2018
transpo
Terminal
rtation
Suppor
Project of
t
berth in Self-owne The physical construction
activiti
Xiamen Self-b Not carry
Yes es of 11,459 99,083 d funds of the project has been 8.0%
Port uild over
water
Houshi and loans basically completed
transpo
Port
rtation
The physical construction
Suppor
Building of the project has been
t
project of Self-owne
activiti basically completed and
Legeshan Self-b Not carry
Yes es of 4,743 51,889 d funds 8.1%
terminal uild currently in the settlement over
water
in shunde, and loans
transpo process of each item of
Foshan
rtation
the project
Construction of the
Transform hydraulic channel reactor
Suppor
ation completed 41.1%. The
t
project of Self-owne
activiti supporting equipment will
Mawan Self-b Not carry
Yes es of 18,642 71,286 d funds 8.4%
Smart uild be landed in late 2019 and over
water
Port of and loans
transpo early 2020. It is expected
Haixing
rtation
Harbor to be completed by June
2020
Suppor
Shantou
t
Port Self-owne Expected to be completed
activiti
Guangao Self-b Not carry
Yes es of 71,904 150,228 d funds and put into operation on 8.8%
Port uild over
water
Phase II and loans 30 June 2019
transpo
project
rtation
Djibouti
Suppor
internatio Has been completed and
t
nal Free
activiti Self-owne currently in the process of
Trade Self-b Not carry
Yes es of 33,714 34,514 14.2%
Zone uild d funds handling the certificate of over
water
Phase I
transpo land
Warehous
rtation
e
At the present stage, the
Suppor main construction content
t
of the project is 50.86
activiti Self-owne
Machong Self-b Not carry
Yes es of 378 90,901 meters of shoreline and 22.8%
Project II uild d funds over
water
rear construction, and
transpo
rtation 85% of the wharf has been
backfilled.
TCP Self-b Yes Suppor 91,993 91,993 Self-owne The overall project was 10.0% Not carry
34
China Merchants Port Group Co., Ltd. Annual Report 2018
expansion uild t d funds completed 66% ahead of over
project activiti
es of schedule, with equipment
water 36% completed
transpo
rtation
Total -- -- -- 240,201 618,226 -- -- -- --
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Cumul
Gain/loss ative
Purcha
Account on fair fair Sold
Variet Code Initial sed in Gain/loss
ing Beginning value value in the Ending Accoun Capital
y of of Name of the in the
measure carrying changes in change Repor carrying ting resourc
securi securi securities investmen Report Reportin
ment value the s ting value item es
ties ties t cost ing g Period
model Reporting recorde Period
Period
Period d into
equity
Trading
Fair
60101 Ningbo 592,183,0 2,164,404,44 -873,891,271 32,107,779 1,361,414,47 financi Self-o
Stock value 9.06 .63
0 0 0
.07 4.58
8 Port 95.14 al wned
method
assets
Trading
Fair
Qingdao 124,405,1 180,609,703. 190,401,046. financi Self-o
Stock 06198 value 14
1,043,921.18 0 0 0 0
01
Port 38.80 al wned
method
assets
Other
equity
Jiangsu Fair
60037 1,120,000 -50,000. instrum Self-o
Stock Express value 9,850,000.00 0
00
0 0 440,000.00 9,800,000.00
7 .00 ent wned
way method
invest
ment
Other
equity
Fair
40003 Petroche 3,500,000 instrum Self-o
Stock value 382,200.00 0 0 0 0 0 382,200.00
2 mical A1 .00 ent wned
method
invest
ment
Other
equity
Fair
40000 Guang instrum Self-o
Stock 27,500.00 value 17,000.00 0 0 0 0 0 17,000.00
9 Jian 1 ent wned
method
invest
ment
35
China Merchants Port Group Co., Ltd. Annual Report 2018
721,235,7 2,355,263,35 -872,847,350 -50,000. 32,547,779 1,562,014,72
Total -- 2.20 .45 00
0 0
.07 0.59
-- --
33.94
(2) Investments in Derivative Financial Instruments
No such cases in the Reporting Period.
5. Use of Funds Raised
No such cases in the Reporting Period
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
On 5 February 2018, China Merchants Gangtong Development (Shenzhen) Co., Ltd., the subsidiary
of China Merchants Group Co., Limited, and its persons acting in concert Broadford Global
Limited, Shenzhen Malai Storage Co., Ltd. and Keen Field Enterprises Limited (all wholly-owned
subsidiaries of China Merchants Port Holdings Company Limited) and China Nanshan
Development (Group) Inc. signed the share transfer agreement. China Merchants Gangtong
Development (Shenzhen) Co., Ltd. would receive 209,687,067 Chiwan Wharf A-shares held by
China Nanshan Development (Group) Inc. by agreement at RMB25.47 per share and 161,190,933
Chiwan Wharf A-shares held by China Merchants Port Holdings Company Limited via Shenzhen
Malai Storage Co., Ltd., for which all shares involved totaled 370,878,000, accounting for 57.52%
of the total outstanding shares of Shenzhen Chiwan Wharf Holdings Limited with total amount
involved of RMB9,446,262,660. Broadford Global Limited would receive 55,314,208 Chiwan
Wharf-B shares held by China Merchants Port Holdings Company Limited via Keen Field
Enterprises Limited, accounting for a stake of 8.58%, at HKD13.35 per share by agreement with
total amount involved of HKD738,444,676.80. The transfer procedure for above-mentioned shares
has been completed on 8 June 2018.
VII Major Subsidiaries
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10%
effect on the Company’s net profit
36
China Merchants Port Group Co., Ltd. Annual Report 2018
Unit: RMB
Relationship Principal Registered Operating Operating
Name with the activity Total assets Net assets Net profit
capital revenue profit
Company
China Port
Merchants business,
Port bonded HKD39,070, 122,364,211, 76,860,856,8 8,573,857,38 7,652,557,34 6,506,497,08
Subsidiary
Holdings logistics and 126,258.00 826.33 23.59 4.94 8.82 6.15
Company property
Limited investment
Business
Shanghai
related to RMB23,173,
International Joint stock 144,367,034, 82,350,314,4 38,042,544,6 14,261,140,5 11,472,021,1
port, 674,650.00
Port (Group) company 015.90 50.25 21.37 83.93 03.16
container and
Co., Ltd.
terminal
China
Nanshan Joint stock Holding via RMB900,000 45,189,124,2 15,431,558,3 13,783,861,9 4,441,542,81 2,853,690,74
Development company investment ,000.00 67.24 64.91 95.28 4.51 4.34
(Group) Inc.
Dalian Port
(PDA) Joint stock port and RMB12,894, 35,315,583,1 20,860,237,2 6,754,444,90 859,395,678. 681,981,351.
Company company logistics 535,999.00 72.89 06.45 2.38 83 02
Limited
Subsidiaries obtained or disposed in the Reporting Period
How subsidiary was obtained or Effects on overall operations and
Subsidiary
disposed in the Reporting Period operating performance
China Merchants Port Holdings Business combination under the
Business integration
Company Limited same control
Shenzhen Haixing Onoda Logistics Cooperate with berth transformation
Obtained by other method
Development Co., Ltd. of the wharf
Business combination not under the
TCP Participaes S.A. Container terminal newly added
same control
Newly added services of loading and
CMPort (Zhoushan) RoRo Logistics
Obtained by other method unloading at ro-ro terminal and
Co., Ltd.
warehousing
There is no information on major holding companies and joint stock companies for the Company to
disclose during the Reporting Period.
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
37
China Merchants Port Group Co., Ltd. Annual Report 2018
IX. Outlook of the Companyblelled by the Compan
1. Outlook and trends of the industry
Looking forward to 2019, after the strong recovery in the last two years, the global economy will
face the risk of slower growth. Trade protectionism will lead to more friction in the circulation of
key elements and geopolitical issues will continue to dampen global recovery. With the weakening
marginal utility of the stimulation policies, coupled with the effect of continuous interest rate hike,
the United States will be facing increased debt and financial pressure; while the European
economies will continue to recover at a slow pace with the prevailing uncertainties associated with
political risks. Meanwhile, as affected by capital outflow, currency depreciation and geopolitical
issues, the emerging and developing economies demonstrated diverging growth trends. According
to IMF, it is expected that the global economy will grow at a lower rate of 3.5% in 2019, down 0.2
percentage point as compared to that of 2018, among which, developed economies are expected to
grow by 2.0%, down 0.3 percentage point as compared to that of 2018; emerging and developing
economies will grow by 4.5%, down 0.1 percentage point as compared to that of 2018, and the total
global trade volume (including goods and services) will grow by 4.0%, flat with 2018.
Chinang forward to 2019, after the strong recovery in the last two years, the global economy will
face the risk of slower growth. Trade protectionism will lead to gradually stabilise under more
vigorous fiscal expansion whilst income tax reform will help to stabilise consumption. The constant
promulgation of supportive policies for private enterprises will restore the confidence of the
enterprises. Fiscal and monetary policies aiming to stabilise overall demand will be more relaxed,
and a more moderate and flexible approach will be adopted in addressing complicated international
issues such as Sino-US trade friction. All of the above will be conducive to economic and trade
growth. According to the IMF, China’s economy is projected to grow by 6.2% in 2019, down 0.4
percentage point over 2018.
Affected by the trade investment policy of 019, down 0.4 percentage point over 2018. economy will
face the risk of slower growtt rate hike and tax reduction of developed countries, the risk of
declining cyclical recovery momentum of the global economy will increase. In 2019, the global
container transportation market will be under recovery and adjustment with the pressure of
overcapacity. Under the influence of the Sino-US trade friction, the centralized export in 2018 by
certain cargo owners of Trans-Pacific shipping routes will have a certain impact on their seaborne
volume in 2019; while the shipping price of Asia-Europe shipping routes is under pressure as
affected by the economic slowdown in Europe. However, the industrial transfer will bring more
38
China Merchants Port Group Co., Ltd. Annual Report 2018
rooms for the development of shipping routes in Southeast Asia. Meanwhile, under the influence of
trade friction and industrial transfer, the port investment of emerging economies will be facing
intensified competition. The port price of developed countries continued to rise, creating great
pressure for the acquisition and expansion strategy of port operators.
The current policies in China encouraging imports and acceleration of consumption upgrade will
drive the growth of domestic import. Through measures such as organizing Import Expo, the
Chinese government has been vigorously driving consumption. In the future, the government will
focus on both export and import in China and the consumption import market will certainly provide
great support for the port operation in China. The continued implementation of Guangdong-Hong
Kong-Macao Greater Bay Area and free-trade port policy is expected to promote port development.
With enhancing trading activities in the region, there will be opportunities for the development of
regional shipping hubs. The integration of domestic regional ports has also brought opportunities to
tap into major coastal cities and realise comprehensive development. Under the new development
trend of domestic and overseas economy and trade as well as ports and the shipping industry, the
Company will be playing an increasingly important role as a major player among global
comprehensive port service providers.
2. Development strategy of the Company
The Company is striving to become a world imports and acceleration of consumption upgrade will
drive the growth of domestic import. Through measures such as organizing Import
Expo,ology-driven and flexible” and the goal of quality development to accelerate the
technology-powered innovation, thereby realizing a scientific global layout with balanced
development, providing first-class professional solutions and seeking more returns for shareholders,
which will in turn support the development of local economy and industries and promote positive
development of the port industry.
Firstly, in respect of domestic strategies, the Company will, by seizing the opportunity arising from
the supply-side reform and based on “regional consolidation and enhancement of synergy”, seek for
opportunities for consolidation and cooperation on an ongoing basis across the five main coastal
regions with a view to further expanding and improving the ports network layout within China. The
Group will lead a new direction for the consolidation of regional ports with a key focus on
constantly improving the quality of port development with its best efforts. Secondly, in respect of
overseas strategies, the Company will continue to capitalize on the opportunities arising from the
“Belt and Road” initiative promoted by China and the international industrial transfers, at the same
time adapting to the trend of deploying mega-vessels and forming shipping alliances. Emphasis will
be placed on the development of global major hub ports and gateway ports as well as areas with
39
China Merchants Port Group Co., Ltd. Annual Report 2018
high market potential, fast-growing economy and promising development prospect. The Company
will grasp opportunities in port, logistics and related infrastructures investment for the on-going
enhancement of its global port network.
Thirdly, in respect of innovation strategies, the Company will adhere to dhere tony will ct of
innovation strategies, ogistics and related infrastructuresze on the opportunitiesnnovation and
holding the technology high ground. By means of technological innovation and innovative
management, it will significantly enhance the efficiency and effectiveness of port operation and
become a leading enterprise in the automation transformation of traditional ports. It will also enrich
the comprehensive port services through business model innovation.
3. Business plans for 2019
In 2019, under the strategic principle of being del innovation.ted infrastructuresze on the
opportunitiesnnovatioCompany will strengthen synergic cooperation externally and accelerate
integrated development internally, make efforts to enhance various capabilities, improve risk
prevention and control, establish quality development models and be committed to the vision of
being a “will strengthen synergic cooperation externally and.
Regarding the development of homebase port, the Company will promote the West Shenzhen Port
Zone as a world-class leading port by pushing forward the dredging project of West Shenzhen Port
Zone and the completion and acceptance of the Tonggu Channel project as soon as possible and
thus offering protection to the mega vessels to call at West Shenzhen Port Zone. Meanwhile, the
Company will strengthen the construction of smart ports, facilitate the construction of “PRD
NETWORK” platform, expand the network scope and resource docking depth of the Pearl River
Delta, enhance the transformation of the smart safety monitoring and on-shore smart container
identification system of CCT Port Zone by the use of various technologies such as LBS system,
Internet of Things, big data, etc. and therefore contributing to the construction of smart ports. In
addition, accelerating the promotion of innovative applications, implementation of innovative
projects including ngystem for safety protection and operation support in RTGs” and “RTG Remote
Control” will improve operational efficiency, reduce operating costs, strengthen trade facilitation
and improve the overall competitiveness of the homebase port. In terms of overseas homebase port,
the Company will leverage the synergic advantages of CICT and Hambantota port to create a
leading regional port and international shipping centre in South Asia.
Regarding overseas expansion, the Company will further improve its global ports network, focus on
gateway ports and conduct in-depth research regarding its overseas layout. Also, the Company will
identify priorities in strict compliance with assessment dimensions and principles for overseas ports
projects. The Group will conduct studies on its overseas network along the “East-West route,
40
China Merchants Port Group Co., Ltd. Annual Report 2018
South-North route, regions along the Belt and Road Initiatives”. Furthermore, the Company will
continue to put more efforts in the study of global regional market to establish and improve the
regional market development and research database for the East Africa, West Africa, South Asia,
Europe, Latin America and Southeast Asia.
In terms of comprehensive development, leveraging the opportunities brought by the shift towards
ve the regional market devel will step up its efforts in promoting the “Port-Park-City” business
model, and actively push forward the construction and development of the Djibouti Free Trade
Zone for the comprehensive development project in Djibouti. For the comprehensive development
project in Togo, the Group will continue to proactively promote the relevant comprehensive
development cooperation projects; while for the Hambantota Port project, the Group will facilitate
the preliminary work in relation to introduction of investment and capital based on the improvement
of the park development plan. Capitalizing development opportunities arising from of the
Guangdong-Hong Kong-Macao Greater Bay Area, the Company will actively make progress on its
land preparatory works in the Qianhai-Shekou Free Trade Zone by participating in the overall
development thereof.
Regarding operation management, the Company will continuously optimise internal procedures and
mechanisms to promote management reform and process reengineering. The Company will focus
its efforts on enhancing the level of refined operation and management of terminals for which it is a
controlling shareholder, benchmarking its terminal management, reducing cost and improving
efficiency, and generating income by saving costs so as to establish a governance structure of
globalised operation and management headquarter, optimise overall management system and enable
operating mechanism to be in line with project operation. The Company will also enhance its
investment management and amend and improve relevant systems and procedures.
In terms of M&A integration, the Company will actively incorporate national strategies in its
operation, with a focus on the policy opportunities arising from the Belt and Road Initiativei,
coordinated development of Beijing, Tianjin and Hebei Province, the Yangtze River Economic Belt,
the Guangdong-Hong Kong-Macao Greater Bay Area, the opening-up of Hainan trade zone, the
revitalisation of Northeast China and the integrated development of the Yangtze River Delta Zone.
The Company will also form a set of effective operational procedures to develop world-class M&A
integration capability. Moreover, when the Company manages the assets of Liaoning Port, it will
explore the potential for integration, focus on its core business and implement the integration of
operational models through optimising the port zone layout, thereby creating business synergies.
Regarding innovative development, the Company will continue to enhance informatisation, upgrade
and promote its core IT products, i.e. “TOS” series. Taking “E-Port” as a pivot, the Company will
41
China Merchants Port Group Co., Ltd. Annual Report 2018
set up the establishment of top-tier port platform for providing excellent customer services. On the
one hand, the Company will attach further importance to the unique role and fundamental position
of technology-driven and innovation-oriented development. Also, the Company will create a
top-tier port innovation ecosystem. Smart upgrade of controlling terminals of the Company will be
gradually achieved through technological innovation. The Company will learn from the experience
of implementing to enhance informatisation, upgrade and promote its core IT products, i.e. “TOS”
series. Taking “E-Port” as a pivot, the Company will set up the establishment of top-tier port
platform for providif various terminals in the future.
Capital needs and use plan
In 2019, the Company will formulate capital expenditure plans according to business development needs.
Key investment projects include Haixing Harbor upgrading and reconstruction project, Machong Port bulk
grain project, Zhanjiang Port Xiashan Port General Terminal Project, Shantou Port Guangao Port Phase II
project and TCP terminal expansion project, etc.
4. Possible risks and counter measures
(1)External risks
The external risks mainly come from the combined impact of international political environment
and consolidation of domestic port groups. As for international political risks, the rise of populism
around the globe has led to challenges in the globalization trend. The change in geopolitical and
economy trade landscape, as highlighted by Sino-US trade friction, has caused changes in global
trade structure and resulted in certain impacts on global economy trade and port shipping sector.
Shipping routes in various regions across the globe may be affected and changed accordingly,
causing adverse impacts on containers and bulk cargo businesses of the Company. As for
consolidation of domestic port groups, with an ever-deepening consolidation of various regions in
China, the port competition landscape will change correspondingly, causing uncertainty to the
business and operation earnings of the Company.
By enhancing the build-up of risk identification, warning and mitigation ability, the Company has
prevented, controlled and reduced external risks. The Company has continued to pay attention to
changes in external policies and market environment specific to international political environment
risk, especially Sino-US trade friction. On one hand, the Company can improve risk warning and
monitoring measures and ensure proper work on customer credit status so as to reduce the risk of
accounts receivable. On the other hand, the Company can notice the changes in the trade market
structure and flow of resources, formulate and adjust strategies for business development in time so
as to enhance collaboration and close connection between ports at home and abroad, improve
service quality and related services, and stabilize import and export business and customer base.
42
China Merchants Port Group Co., Ltd. Annual Report 2018
(2) Internal risks
The internal risks mainly come from the risks of shortage of outsourced labour, increased cost and
legal compliance of overseas investment projects. In the context of economic transformation and
upgrade in Shenzhen, wharf operation as a traditional industry faced significant labour shortage for
the outsourced business due to the current working conditions and remuneration packages.
Remarkable trends such as staff turnover and aging staff will affect production efficiency and posed
safety risks. When the Company expands its overseas business, the requirement on compliance with
legal policies in invested countries will pose the risk of uncertainty on the investment and operation
of the Company.
The Company has proactively studied the outsourced staffing policy and formulated corresponding
responsive strategies to diminish the impacts of outsourced staffing risk on the business of the
Company, including enhancing the working environment of outsourced staff and improving their
remuneration packages by increasing labor productivity, accelerating technological upgrade and
innovation of techniques to raise the level of mechanization, reduce manual labor input and lower
the use of manpower. Regarding the legal compliance risk of overseas investment projects, the
Company will step up its efforts in establishing and enforcing compliance management system and
ensure proper work on management and control throughout the process, i.e. before, during, and
after overseas investment project investment and operation, so as to strictly prevent legal
compliance risks.
X Communications with the Investment Community such as Researches, Inquiries and
Interviews
1. During the Reporting Period
Way of Type of
Date Index to main information communicated
communication communication party
4 January 2018 One-on-one meeting Institution
6 February 2018 One-on-one meeting Institution Main discussion: basic business condition,
12 March 2018 One-on-one meeting Institution investments and financial condition of the
10 May 2018 One-on-one meeting Institution Company; Materials provided: brochure of
25 May 2018 One-on-one meeting Institution the Company;
Index: SZSE EasyIR
13 November 2018 One-on-one meeting Institution
(http://irm.cninfo.com.cn/ssessgs/S001872
By phone or written /index.html)
1 January 2018-31
inquiry (EasyIR Individual
December 2018
platform of SZSE)
Times of communications 195
Number of institutions communicated with 7
43
China Merchants Port Group Co., Ltd. Annual Report 2018
Number of individuals communicated with 188
Number of other communication parties 0
Tip-offs or leakages of substantial supposedly-confidential information
No
during communications
2. Period-end to Disclosure Date
Type of
Way of
Date communication Index to main information communicated
communication
party
By phone or Main discussion: basic business condition,
written inquiry investments and financial condition of the Company;
1 January 2019-30
(EasyIR Individual Materials provided: brochure of the Company;
March 2019
platform of Index: SZSE EasyIR
SZSE) (http://irm.cninfo.com.cn/ssessgs/S001872/index.html)
Times of communications 55
Number of institutions communicated with 0
Number of individuals communicated with 55
Number of other communication parties 0
Tip-offs or leakages of substantial supposedly-confidential
No
information during communications
44
China Merchants Port Group Co., Ltd. Annual Report 2018
Part V Significant Events
I Profit Distributions to Ordinary Shareholders (in the Form of Cash and/or Stock)
Formulation, execution or adjustments of profit distribution policy for ordinary shareholders,
especially cash dividend policy, in Reporting Period
Pursuant to the CSRC Guideline for Listed Companies No.3-Cash Dividends of Listed Companies
and the Notice of CSRC on Further Implement ting Matters Related to Cash Dividends of Listed
Companies, the Articles of Association clarifies the specific profit distribution policy,
decision-making procedures and mechanism, adjustment of profit distribution policy,
implementation of profit distribution plan and profit distribution for foreign shares. During the
Reporting Period, the Company executed the profit distribution policy in strict compliance with the
Articles of Association.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and resolution of general meeting Yes
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and played their due role Yes
Non-controlling interests are able to fully express their opinion and desire and their legal rights
Yes
and interests are fully protected
In case of adjusting or changing the cash dividend policy, the conditions and procedures involved
Yes
are in compliance with applicable regulations and transparent
The profit distributions to ordinary shareholders, either in the form of cash or stock, in the
past three years (including the Reporting Period) are summarized as follows:
1. Dividend Payout Plan for 2016
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the
Company as the parent for 2016 stood at RMB195,474,231.11, and the cumulative distributable
profit at RMB634,765,399.86.
(1) According to the Company Law and the Articles of Association of the Company, the Company
may stop making statutory surplus reserve when its accumulative amount reaches 50% of the
registered capital. The accumulative statutory surplus reserve of the Company as the parent stood at
RMB520,074,434.56 for 2016, equal to 80.66% of the registered capital. Therefore, the Company
did not plan to draw surplus reserve from retained earnings for 2016;
45
China Merchants Port Group Co., Ltd. Annual Report 2018
(2) Based on the total 644,763,730 shares as at the end of 2016, a cash dividend of RMB4.96 (tax
included) was to be distributed for every 10 shares, with a total of RMB319,802,810.08 being
distributed.
The Board of Directors of the Company published the implementation announcement on dividend
payout for 2016 on Securities Times and Ta Kung Pao (HK) dated 25 July 2017, and completed the
dividend payout for the A-share and B-share holders on 1 August 2017 and 3 August 2017
respectively.
2. Dividend Payout Plan for 2017
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the net profit of the
Company as the parent for 2017 stood at RMB731,510,588.25 and the cumulative distributable
profit at RMB1,046,473,178.03.
(1) According to the Company Law and the Articles of Association of the Company, the Company
may stop making statutory surplus reserve when its accumulative amount reaches 50% of the
registered capital. The accumulative statutory surplus reserve of the Company as the parent stood at
RMB520,074,434.56 for 2017, equal to 80.66% of the registered capital. Therefore, the Company
intends not to draw surplus reserve from retained earnings for 2017.
(2) Based on the total 644,763,730 shares as at the end of 2017, a cash dividend of RMB13.19 (tax
included) was to be distributed for every 10 shares, with a total of RMB850,443,359.87 being
distributed.
The Board of Directors of the Company published the implementation announcement on dividend
payout for 2017 on Securities Times and Ta Kung Pao (HK) dated 16 May 2018, and completed the
dividend payout for the A-share and B-share holders on 23 May 2018 and 25 May 2018
respectively.
3. Dividend Payout Plan for 2018
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net
profit attributable to the Company as the parent for 2018 stood at RMB1,090,418,910.77 and the net
profit of the Company as the parent at RMB71,014,741.10.
(1) According to the Company Law and the Articles of Association of the Company, the Company
withdrew RMB7,101,474.11 of profit as statutory reserve. The accumulative distributable profit of
46
China Merchants Port Group Co., Ltd. Annual Report 2018
the Company as the parent at the end of 2018 was RMB259,943,085.16.
(2) Base on the total 1,793,412,378 shares as at the end of 2018, a cash dividend of RMB1.14 (tax
included) is to be distributed for every 10 shares, totaling RMB204,449,011.09.
After the above-mentioned distribution, the retained earnings of the Company as the parent will be
RMB55,494,074.07.
The above profit distribution plan still needs to be submitted to the 2018 Annual General Meeting
for approval.
Cash dividend for ordinary shareholders in the past three years (including the Reporting
Period)
Unit: RMB
Net profit attributable to Cash
dividends in
ordinary shareholders of other forms C as % of
Cash dividends
Year the listed company in A as % of B (%) (such as
(tax inclusive) (A) share B (%)
consolidated statements
repurchase)
for the year (B) (C)
2018 204,449,011.09 1,090,418,910.77 18.75% 0 0%
2017 850,443,359.87 504,495,064.39 168.57% 0 0%
2016 319,802,810.08 532,376,492.97 60.07% 0 0%
The net profit attributable to the ordinary shareholders of the listed company in the 2018
consolidated statement is the data of the Company after the retrospective adjustment for business
combination under the same control. The net profit attributable to the ordinary shareholders of the
listed company in the 2016 and 2017 consolidated statements is the data of the Company before the
retrospective adjustment for business combination under the same control.
II Final Dividend Plan for the Reporting Period
Cash dividend/10 shares (RMB) (tax inclusive) 1.14
Bonus issue from capital reserves (share/10 shares) 0
Share base (share) 1,793,412,378
Total cash dividends (RMB) (tax inclusive) 204,449,011.09
Distributable profits (RMB) 259,943,085.16
Cash dividends as % of total profits to be distributed (%) 100%
Details about the final dividend plan
47
China Merchants Port Group Co., Ltd. Annual Report 2018
As audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the consolidated net profit attributable
to the Company as the parent for 2018 stood at RMB1,090,418,910.77 and the net profit of the Company as the
parent at RMB71,014,741.10.
1. According to the Company Law and the Articles of Association of the Company, the Company withdrew
RMB7,101,474.11 of profit as statutory reserve. The accumulative distributable profit at the end of 2018 was
RMB259,943,085.16.
2. Base on the total 1,793,412,378 shares as at the end of 2018, a cash dividend of RMB1.14 (tax included) is to be
distributed for every 10 shares, totaling RMB204,449,011.09.
After the above-mentioned distribution, the retained earnings of the Company as the parent will be
RMB55,494,074.07.
The above profit distribution plan still needs to be submitted to the 2018 Annual General Meeting for approval.
48
China Merchants Port Group Co., Ltd. Annual Report 2018
III Fulfillment of Commitments
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and other Entities
Fulfilled in the Reporting Period or Ongoing at the Period-end
Type of Date of
Promiso Term of
Commitment commitme Details of commitment commitment Fulfillment
r commitment
nt making
Fulfilled
On 8 June 2018, China Nanshan
Development (Group) Inc.
transferred 209,687,067 shares
of Chiwan Wharf held by it to
In order to enhance the shareholding confidence of tradable Effective until CMGD. For relevant details,
China shareholders, and encourage the core management and key personnel no-longer to please refer to the
Nanshan so that the interests of the management and all the shareholders can be the Announcement on Completion of
Commitment Other shareholder of Share Transfer of Shareholders
Develop coincide, CND Group made a commitment to entrust, through the
s made in commitme 5 April 2006 the Company
ment general meeting of the Company, the Board of Directors of the and Changes in Controlling
share reform nt
(Group) Company to formulate and carry out an equity incentive plan at a Shareholders (announcement
Inc. proper timing after the completion of the share division reform No.: 2018-060) disclosed on
according to applicable laws and regulations. cninfo.com.cn on 12 June 2018.
The above commitment is
effective until China Nanshan
Development (Group) Inc. no
longer holds shares of the
Company.
Commitment CMPort Commitme 1. Commitment on share custody 17 Effective until Fulfilled
s made in Holding nts on 2. Commitment on safeguarding independence of CMPort September 16 September On 5 February 2018, China
acquisition s horizontal 3. Commitment on horizontal competition 2012 2020 for Nanshan Development (Group)
49
China Merchants Port Group Co., Ltd. Annual Report 2018
documents competitio 4. Commitment on regulating related-party transactions commitment Inc. signed the Termination
or n, on horizontal Agreement on the Share Custody
shareholding related-part competition Agreement of Shenzhen Chiwan
alteration y and CMPort Wharf Holdings Limited with
documents transaction is the CMPort Holdings; the aforesaid
and capital controlling termination agreement of share
occupation shareholder of custody agreement was
the Company; approved on the general meeting
effective in of CMPort Holdings on 19
the share March 2018. So far, CMPort
custody term Holdings would no longer be
for other three entrusted to manage shares of
commitments Chiwan Wharf held by China
Nanshan Development (Group)
Inc. For more details, please
refer to the relevant
announcement disclosed by the
Company on 3 May 2018. On 8
June 2018, Malai Storage and
KFEL transferred their shares of
Chiwan Wharf respectively to
CMGD and Broadford Global.
For more details, please refer to
the Announcement on
Completion of Share Transfer of
Shareholders and Changes in
Controlling Shareholders
(announcement No.:2018-060)
disclosed on cninfo.com.cn by
the Company on 12 June 2018.
50
China Merchants Port Group Co., Ltd. Annual Report 2018
So far, CMPort Holdings was no
longer the controlling
shareholder of the Company and
the terms of above commitments
were ended.
Fulfilled
On 8 June 2018, Malai Storage
transferred 161,190,933 shares
Commitme of Chiwan Wharf held by it to
Commitment nts on CMGD. For relevant details,
s made in horizontal please refer to the
Effective until
acquisition competitio Announcement on Completion of
1. Commitment on safeguarding independence of CMPort 27 no-longer to
documents Malai n, Share Transfer of Shareholders
2. Commitment on horizontal competition December be the
or Storage related-part and Changes in Controlling
3. Commitment on regulating related-party transactions 2012 shareholder of
shareholding y Shareholders (announcement
the Company
alteration transaction No.: 2018-060) disclosed on
documents and capital cninfo.com.cn on 12 June 2018.
occupation The above commitment is
effective until Malai Storage no
longer holds shares of the
Company.
Commitme Commitment on safeguarding independence of CMPort made by The
Commitment
nts on CMGD and its person acting in concert Broadford Global: to commitment
s made in
CMGD horizontal safeguard the independence of finance, institutions, business and on
acquisition
and competitio personnel of CMPort as well as independence and integrity of assets safeguarding
documents 15 March
Broadfo n, of CMPort independence Ongoing
or 2018
rd related-part of CMPort is
shareholding
Global y effective for a
alteration
transaction long time; the
documents
and capital commitment
51
China Merchants Port Group Co., Ltd. Annual Report 2018
occupation on regulating
related-party
transactions is
effective
during the
period when
CMGD and
its persons
acting in
concert
possess
control power
over the
Company
Commitment on regulating related-party transaction made by CMGD The
and corresponding persons acting in concert- Broadford Global: commitment
1. CMGD/Broadford Global will make a great effort to reduce on
Commitme related-party transaction between CMGD/Broadford Global and its safeguarding
Commitment nts on related parties as well as CMPort. Inevitable business dealings or independence
s made in horizontal transactions shall be conducted as per marketization principle and fair of CMPort is
CMGD
acquisition competitio price and the obligation of information disclosure shall be fulfilled effective for a
and
documents n, pursuant to provisions; 15 March long time; the
Broadfo Ongoing
or related-part 2. CMGD/Broadford Global and its related parties ensure they will 2018 commitment
rd
shareholding y strictly observe related stipulations of laws, regulations, normative on regulating
Global
alteration transaction documents and Articles of Association of CMPort and equally related-party
documents and capital execute shareholders' rights and fulfill shareholders' obligations transactions is
occupation together with other shareholders in line with legal program as well as effective
won't seek improper interest with actual controller's status or damage during the
legitimate interest of CMPort and other shareholders; period when
3. The above commitment is continuously effective during the period CMGD and
52
China Merchants Port Group Co., Ltd. Annual Report 2018
when CMGD/Broadford Global has the right to control CMPort. In its persons
case of losses incurred by CMGD/Broadford Global failing to fulfill acting in
the above commitment to CMPort, CMGD will bear corresponding concert
compensation responsibility. possess
control power
over the
Company
Commitment on regulating related-party transaction:
1. China Merchants Group will try its best to reduce related-party
transaction between it and its related parties and CMPort. Inevitable
business dealings or transactions shall be conducted as per
Commitme marketization principle and fair price and the obligation of
Commitment nts on information disclosure shall be fulfilled pursuant to provisions;
s made in horizontal 2. China Merchants Group ensure they will strictly observe related
Effective until
acquisition competitio stipulations of laws, regulations, normative documents and Articles of
no-longer to
documents n, Association of CMPort and equally execute shareholders' rights and 15 March
CMG be the actual Ongoing
or related-part fulfill shareholders' obligations together with other shareholders in 2018
controller of
shareholding y line with legal program as well as won't seek improper interest with
the Company
alteration transaction actual controller's status or damage legitimate interest of CMPort and
documents and capital other shareholders;
occupation 3. The above commitment is continuously effective during the period
when China Merchants Group has the right to control CMPort. In
case of losses incurred by China Merchants Group failing to fulfill
the above commitment to CMPort, China Merchants Group will bear
corresponding compensation responsibility.
Commitment Commitme Commitment on horizontal competition: Fulfilled
s made in nts on 1. On account of horizontal competition in the aspect of port business On 26 December 2018, the
15 March 16 September
acquisition CMG horizontal between China Merchants Group and CMPort, China Merchants Company purchased
2018 2020
documents competitio Group promises to completely solve horizontal competition problem 1,313,541,560 ordinary shares of
or n, by asset restructuring before 16 September 2020; CMPort Holdings held by CMID
53
China Merchants Port Group Co., Ltd. Annual Report 2018
shareholding related-part 2. China Merchants Group confirms the commitment letter is aimed and CMPort Holdings starts to
alteration y at guaranteeing rights and interests of all the shareholders of CMPort be involved into the combination
documents transaction as well as such clauses and commitments are reasonable. China financial statements of the
and capital Merchants Group won't carry out operation activities damaging Company. The commitment was
occupation benefits of CMPort and all the shareholders from China Merchants fulfilled.
Group based on its control against CMPort.
3. Each commitment carried in his commitment letter shall be
independently executed by China Merchants Group confirmed. It
shall not influence the effectiveness of the other commitments in case
any commitment is deemed invalid or terminated;
4. Provision, explanation, fulfillment and execution of the
commitment letter apply to provisions of related laws and regulations
of the People's Republic of China (excluding Hong Kong Special
Administrative Region, Macao Special Administrative Region and
Taiwan for the purpose of the commitment letter);
5. The commitment letter takes effect as of the date of official
signature by China Merchants Group;
6. Above-mentioned various promises are continuously effective
during the period when China Merchants Group controls CMPort.
1. CMPort shares obtained by purchasing assets with shares issued
this time are forbidden to be transferred or transacted in the market
before the latter one between the date arising 36 months after the date
Commitme when CMPort shares gained by CMID based on this transaction are
Commitment
nt on registered under the name of CMID and the date when fulfillment of 26
s made in
CMID restriction compensation obligations set forth in the Impairment Compensation December 25 June 2022 Ongoing
time of asset
on share Agreement for Issuing Shares To Purchase Assets signed by and 2018
restructuring
trading between CMID and CMPort, separately and its supplementary
agreement (if any) is over (except for repurchasing or presenting
shares pursuant to Impairment Compensation Agreement for Issuing
Shares To Purchase Assets and its supplementary agreement (if any));
54
China Merchants Port Group Co., Ltd. Annual Report 2018
2. In case of closing price of CMPort stocks being lower than issue
price for consecutive 20 transaction days within 6 months after
completion of the transaction or such closing price being lower than
issue price at the end of the 6th month after completion of the
transaction, the lockup period of CMPort stocks held by CMID will
be automatically lengthened for at least 6 months;
3. CMPort shares which derive from consideration shares obtained by
CMID based on the transaction during the lockup period due to
CMPort distributing stock dividend and capital reserve converted into
increased capital shall be subject to the commitment regarding the
above restricted stock trade period;
4. In case that the transaction is placed on file for investigation and
prosecution by judiciary authorities as well as registered and
investigated by CSRC because false record, misleading statement or
important omission happens to provided or disclosed information,
CMID won't transfer its shares with rights and interests at CMPort
before case investigation conclusion is drawn;
5. In case that lockup period set forth in the commitment is
inconsistent with regulatory opinions from securities market
supervision department or lockup period required by related
provisions, CMID shall adjust the above lockup period pursuant to
regulatory opinions from relevant securities market supervision
department and related provisions.
6. After the above lockup period expires, CMID Port shall observe
provisions of laws and regulations, related rules of Shenzhen Stock
Exchange as well as Articles of Association of CMPort in case of
reducing shares held by it.
Commitment CMGD Commitme 1. Before completion of the transaction, CMPort shares held by 26
25 December
s made in and nt on CMGD and Broadford Global (include increased shares because December Ongoing
2019
time of asset Broadfo restriction allotment of shares, giving bonus and capital reserve converted into 2018
55
China Merchants Port Group Co., Ltd. Annual Report 2018
restructuring rd on share increased capital occurs to CMPort) shall not be transferred within 12
Global trading months as of the date when the transaction is over (the registration
date of new shares by purchasing assets with shares issued this time);
2. In case that lockup period set forth in the commitment is
inconsistent with regulatory opinions from securities market
supervision department or lockup period required by related
provisions, CMGD shall adjust the above lockup period pursuant to
regulatory opinions from relevant securities market supervision
department and related provisions.
3. In case that the transaction is placed on file for investigation and
prosecution by judiciary authorities as well as registered and
investigated by CSRC because false record, misleading statement or
important omission happens to provided or disclosed information,
CMGD and Broadford Global won't transfer its shares with rights and
interests at CMPort before case investigation conclusion is drawn.
In case of losses incurred by CMGD and Broadford Global violate
fulfill the above promise to CMPort, CMGD will bear corresponding
compensation responsibility.
Share reduction plan during the period from the date of resumption of
trading of CMPort to the date of completing reorganization;
1. CMGD and Broadford Global have no share reduction plan during
CMGD
Commitment Commitme the period from the date of resumption of trading of the transaction to Effective until
and
s made in nt on the date of completing the transaction; 26 July completion of
Broadfo Fulfilled
time of asset shareholdin 2. Above-mentioned shares include original CMPort shares held by 2018 the asset
rd
restructuring g reduction CMGD and Broadford Global as well as shares deriving from restructuring
Global
original shares held during the above period due to participation in
profit and presenting shares by CMPort as well as capital reserve
converted into increased capital.
Commitment Commitme Commitment on avoiding horizontal competition: 26 July Effective until
CMID Ongoing
s made in nts on 1. CMID and other enterprise controlled by CMID fail to engage in or 2018 no-longer to
56
China Merchants Port Group Co., Ltd. Annual Report 2018
time of asset horizontal participate in business or activity which is similar with and be the largest
restructuring competitio constitutes or likely constitutes competitive relation with main shareholder of
n, business conducted by CMPort and the enterprise controlled by it the Company
related-part now;
y 2. CMID will try its best to promote CMID and other enterprise
transaction controlled by CMID not to directly or indirectly engage in or
and capital participate in or assist to engage in or participate in any business or
occupation activity which constitutes or likely constitutes competitive relation
with main business conducted by CMPort and the enterprise
controlled by it now and in the future independently or together with
others;
3. In case of discovering any new business opportunity which
constitutes or likely constitutes direct or indirect competitive relation
with main business of CMPort or the enterprise controlled by it,
CMID or CMID and other enterprise controlled by it will
immediately notify CMPort in written as well as make a great effort
to promote such business opportunity to be provided to CMPort or
the enterprise controlled by it firstly according to reasonable and fair
terms and conditions;
4. In case of CMPort or the enterprise controlled by it waiving such
competitive new business opportunity and CMID or/and other
enterprise controlled by it engaging in such competitive business,
CMPort or the enterprise controlled by it will have the right to
purchase any stock rights, assets or other rights and interests in the
above competitive business from CMID or/and other enterprise
controlled by it once or several times at any moment, or CMPort will
select entrusted operation, leasing or contract operation of assets or
businesses of CMID or/and other enterprise controlled by it in the
above competitive business as per the mode permitted by national
laws and regulations;
57
China Merchants Port Group Co., Ltd. Annual Report 2018
5. When CMID and other enterprise controlled by it plans to transfer,
sell, rent out, conduct licensed use of or transfer or allow to use assets
and businesses which constitutes or likely constitutes direct or
indirect competitive relationship with main business of CMPort or the
enterprise controlled by it in other way, CMID and other enterprise
controlled by it will provide the right of priority assignment to
CMPort or the enterprise controlled by it and promise to make a great
effort to promote other enterprise controlled by CMID provide
CMPort or the enterprise controlled by it with the right of priority
assignment under the above situation;
6. As of the date when the commitment letter is provided, CMID
promises to compensate all actual losses, damages and expenses
arising from violation of any clause in the commitment letter by
CMID or the enterprise controlled by it to CMPort or the enterprise
controlled by it.
Commitment on regulating related-party transaction:
1. CMID and other enterprise controlled by it will make a great effort
to avoid and reduce related-party transaction between CMPort and
Commitme
economic entity controlled by it;
nts on
2. CMID and other enterprise controlled by it will exercise
horizontal
stockholder's rights in accordance with related provisions of relevant Effective until
Commitment competitio
laws and regulations as well as Articles of Association of CMPort and no-longer to
s made in n, 26 July
CMID fulfill the obligation of vote avoidance at the moment of voting for be the largest Ongoing
time of asset related-part 2018
related-party transactions involved by CMID and other enterprise shareholder of
restructuring y
controlled by it at the stockholders' meeting; the Company
transaction
3. As for related-party transaction which is inevitable or occurs due to
and capital
reasonable reason, CMID will carry out transaction pursuant to the
occupation
principle of openness, fairness and justice for market transaction and
based on fair and reasonable market price, perform related-party
transaction decision-making process and legally fulfill information
58
China Merchants Port Group Co., Ltd. Annual Report 2018
disclosure obligation to safeguard benefits of CMPort and other
shareholders of CMPort in line with provisions of laws, regulations,
normative documents and Articles of Association of CMPort;
4. It's ensured that no legitimate interest of CMPort and other
shareholders of CMPort is damaged by related-party transaction
based on status and influence of CMPort;
5. CMID will promote other enterprise controlled by it to observe the
commitment of Subparagraph 1-4;
6. In case of CMID and other enterprise controlled by it violating the
above commitment, causing rights and interests of CMPort and its
shareholders are damaged, CMID will take corresponding
compensation responsibility according to law.
Commitment about keeping independence of CMPort:
1. After the transaction is completed, CMID will strictly observe
related provisions regarding independence of listed Companies from
CSRC and won't violate standard operating procedures of CMPort
Commitme based on the first majority shareholder, conduct excessive
nts on intervention of operation and management activities of CMPort and
horizontal its subsidiary, embezzle benefits of CMPort and its subsidiary or
Effective until
Commitment competitio damage legitimate interest of CMPort and other shareholders;
no-longer to
s made in n, 2. CMID will ensure CMPort is independent from CMID and related 26 July
CMID be the largest Ongoing
time of asset related-part parties in the aspects of business, asset, finance, personnel and 2018
shareholder of
restructuring y institution;
the Company
transaction 3. CMID ensures independence of CMPort, CMID and other
and capital enterprise controlled by it fail to occupy capitals and resources of
occupation CMPort based on violation in any way and will strictly observe
provisions of rules and regulations for avoiding occupation of related
party funds from CMPort as well as related laws, regulations and
normative documents;
4. The commitment letter takes effect as of the signature date of
59
China Merchants Port Group Co., Ltd. Annual Report 2018
CMID as well as is legally binding upon CMID. CMID ensures it will
strictly fulfill various commitments in the commitment letter and will
take corresponding legal responsibility for losses incurred to CMPort
due to violation of related commitment.
Commitment on avoiding horizontal competition:
1. China Merchants Group and the enterprise controlled by it
(excluding CMPort Holdings and the enterprise controlled it) fail to
engage in or participate in any business or activity which is similar
with and constitutes or likely constitute direct or indirect competitive
relationship with main business conducted by CMPort and the
enterprise controlled by it now;
2. China Merchants Group will try its best to promote enterprises
Commitme controlled by it(except for CMPort and the enterprise controlled by it)
nts on not to directly or indirectly engage in or participate in or assist to
horizontal engage in or participate in any business or activity which constitutes
Effective until
Commitment competitio or likely constitutes competitive relation with main business
no-longer to
s made in n, conducted by CMPort and the enterprise controlled by it now and in 26 July
CMG be the actual Ongoing
time of asset related-part the future independently or together with others; 2018
controller of
restructuring y 3. In case of discovering any new business opportunity which
the Company
transaction constitutes and likely constitutes direct or indirect competitive
and capital relation with main business of CMPort or the enterprise controlled by
occupation it, China Merchants Group or enterprise controlled by it(except for
CMPort and the enterprise controlled by it) will immediately notify
CMPort in written as well as make a great effort to promote such
business opportunity to be provided to CMPort or the enterprise
controlled by it firstly according to reasonable and fair terms and
conditions;
4. In case of CMPort or the enterprise controlled by it waives such
competitive new business opportunity and China Merchants Group or
the enterprise controlled by it (except for CMPort and the enterprise
60
China Merchants Port Group Co., Ltd. Annual Report 2018
controlled by it) engaging in such competitive business, CMPort or
the enterprise controlled by it will be entitled to purchase any
equities, assets and other rights and interests in the above competitive
business from China Merchants Group or the enterprise controlled by
it (except for CMPort and the enterprise controlled by it) once or
several times at any moment or CMPort will select entrusted
operation, leasing or contract operation of assets or businesses of
China Merchants Group or the enterprise controlled by it (except for
CMPort and the enterprise controlled by it) in the above competitive
business according to the mode permitted by national laws and
regulations;
5. When China Merchants Group and the enterprise controlled by it
(except for CMPort and the enterprise controlled by it) plans to
transfer, sell, lease, allow to use or transfer or allow to use asset and
business which constitutes or likely constitutes direct or indirect
competitive relationship with main business of CMPort or the
enterprise controlled by it in other way, China Merchants Group and
the enterprise controlled by it (except for CMPort and the enterprise
controlled by it) will provide the right of priority assignment for
CMPort or the enterprise controlled by it and promise to make a great
effort to promote the enterprise controlled by China Merchants Group
to provide the of priority assignment for CMPort or the enterprise
controlled by it under the above situation;
6. As of the date when the commitment letter is provided, China
Merchants Group promises to compensate all actual losses, damages
and expenses arising from violation of any clause in the commitment
letter by China Merchants Group or the enterprise controlled by it to
CMPort or the enterprise controlled by it.
Commitment Commitme Commitment on regulating related-party transaction: 26 July Effective until
CMG Ongoing
s made in nts on 1. China Merchants Group and other enterprise controlled by it will 2018 no-longer to
61
China Merchants Port Group Co., Ltd. Annual Report 2018
time of asset horizontal make a great effort to avoid and reduce related-party transaction be the actual
restructuring competitio between CMPort and economic entity controlled by it; controller of
n, 2. China Merchants Group and other enterprise controlled by it will the Company
related-part exercise stockholder's rights in accordance with related provisions of
y relevant laws and regulations as well as Articles of Association of
transaction CMPort and fulfill the obligation of vote avoidance at the moment of
and capital voting for related-party transactions involved by CMID and other
occupation enterprise controlled by it at the stockholders' meeting;
3. As for related transaction which is inevitable or occurs due to
reasonable reason, China Merchants Group will carry out transaction
pursuant to the principle of openness, fairness and justice for market
transaction and based on fair and reasonable market price, perform
related-party transaction decision-making process and legally fulfill
information disclosure obligation to safeguard benefits of CMPort
and other shareholders of CMPort in line with provisions of laws,
regulations, normative documents and Articles of Association of
CMPort;
4. It's ensured that no legitimate interest of CMPort and other
shareholders of CMPort is damaged by related-party transaction
based on status and influence of CMPort;
5. China Merchants Group promotes other enterprise controlled by it
to observe the commitment set forth in Subparagraph 1-4 above;
6. In case of China Merchants Group and other enterprise controlled
by it violating the above commitment, causing rights and interests of
CMPort and its shareholders are damaged, China Merchants Group
will take corresponding compensation responsibility according to
law.
Commitment Commitme Commitment about keeping independence of CMPort: Effective until
26 July
s made in CMG nts on 1. After the transaction is completed, China Merchants Group will no-longer to Ongoing
2018
time of asset horizontal strictly observe related provisions regarding independence of listed be the actual
62
China Merchants Port Group Co., Ltd. Annual Report 2018
restructuring competitio companies from CSRC and won't violate standard operating controller of
n, procedures of CMPort based on actual controller's status, conduct the Company
related-part excessive intervention of operation and management activities of
y CMPort and its subsidiary, embezzle benefits of CMPort and its
transaction subsidiary or damage legitimate interest of CMPort and other
and capital shareholders;
occupation 2. China Merchants Group will ensure CMPort is independent from
China Merchants Group and related parties in the aspects of business,
asset, finance, personnel and institution;
3. China Merchants Group ensures independence of CMPort, China
Merchants Group and other enterprise controlled by it fail to occupy
capitals and resources of CMPort based on violation in any way and
will strictly observe provisions of rules and regulations for avoiding
occupation of related party funds from CMPort as well as related
laws, regulations and normative documents;
4. The commitment letter takes effect as of the signature date of
China Merchants Group as well is legally binding upon China
Merchants Group. China Merchants Group ensures it will strictly
fulfill various commitments in the commitment letter and will take
corresponding legal responsibility for losses incurred to listed
Company due to violation of related commitment.
1. Before completion of the transaction, CMPort shares held by or
Commitme indirectly controlled by China Merchants Group (include increased
nts on shares because allotment of shares, giving bonus and capital reserve
Commitment
lock-up of converted into increased capital occurs to CMPort) shall not be
s made in 26 July 25 December
CMG shares and transferred within 12 months as of the date when the transaction is Ongoing
time of asset 2018 2019
shareholdin over (the registration date of new shares by purchasing assets with
restructuring
g reduction shares issued this time);
plan 2. In case that lockup period set forth in the commitment is
inconsistent with regulatory opinions from securities market
63
China Merchants Port Group Co., Ltd. Annual Report 2018
supervision department or lockup period required by related
provisions, China Merchants Group shall adjust the above lockup
period pursuant to regulatory opinions from relevant securities
market supervision department and related provisions.
3. In case that the transaction is placed on file for investigation and
prosecution by judiciary authorities as well as registered and
investigated by CSRC because false record, misleading statement or
important omission happens to provided or disclosed information,
China Merchants Group won't transfer its shares with rights and
interests at listed Company before case investigation conclusion is
drawn;
4. During the period from the date of resumption of trading of the
transaction to the date when the transaction is over, China Merchants
Group has no share reduction plan. The above shares include original
CMPort shares directly held or indirectly controlled by China
Merchants Group as well as derivative shares of original shares
directly held or indirectly controlled during the above period due to
participation in profit and presenting shares by CMPort as well as
capital reserve converted into increased capital.
Commitment letter about perfecting the property ownership
certificate for land and house property of CMPort Holdings and the
enterprise subordinate to it:
1. China Merchants Group will spare no effort to assist, promote and Effective until
Commitment
Other drive CMPort Holdings and the enterprise subordinate to it to no-longer to
s made in 26 July
CMG commitme standardize, perfect and solve ownership defects of properties such as be the actual Ongoing
time of asset 2018
nt land and house property; controller of
restructuring
2. The following situations happen to CMPort Holdings and the the Company
enterprise subordinate to it before completion of the transaction: (1)
Land use right of ownership certificate which is being handled, the
house property failing to be timely handled (except for results
64
China Merchants Port Group Co., Ltd. Annual Report 2018
incurred by force majeure, law, policy, government administration
behavior and change in planned use of the land instead of CMPort
Holdings and the enterprise subordinate to it); Or (2) Land use right
of ownership certificate, the property ownership certificate failing to
be handled (except for results incurred by force majeure, law, policy,
government administration behavior and change in planned use of the
land of CMPort Holdings and the enterprise subordinate to it); Or (3)
In case of nonstandard other land use right and house property
(except for results incurred by force majeure, law, policy, government
administration behavior and change in planned use of the land instead
of CMPort Holdings and the enterprise subordinate to it) and
encountering actual losses (including but not limited to
compensation, fine, expenditure and benefit lost), China Merchants
Group will timely and fully compensate CMPort.
Commitment letter about real estate leased by CMPort Holdings and
the enterprise subordinate to it:
In case of nonstandard situation of the leased property significantly
influencing use of CMPort Holdings and the Company subordinate to
it to engage in operation of normal business, China Merchants Group
will actively take effective measures (including but not limited to
Effective until
Commitment arranging to provide the property with identical or similar conditions
Other no-longer to
s made in to be used for operation of related Company) to promote business 26 July
CMG commitme be the actual Ongoing
time of asset operation of related Company to be conducted normally and alleviate 2018
nt controller of
restructuring or eliminate adverse effect; In case of nonstandard of the leased
the Company
property causing CMPort Holdings and the enterprise subordinate to
it produce actual additional expenditures or losses (such as third-party
compensation), China Merchants Group will actively coordinate and
negotiate with other related party to support normal operation of
CMPort Holdings and the enterprise subordinate to it to the great
extent and avoid or control continuous enlargement of the damage; At
65
China Merchants Port Group Co., Ltd. Annual Report 2018
the same time, China Merchants Group agrees compensate CMPort
Holdings and the enterprise subordinate to it in cash for actual losses
incurred to CMPort Holdings and the enterprise subordinate to it for
this reason to relieve or eliminate adverse effect.
Commitment letter about allotted land of the enterprise subordinate to
China Merchants Port Holdings Company Limited from China
Merchants Group:
In case that the above allotted land is withdrawn or needs to be
translated into assignment land due to policy adjustment in the future
after the transaction is completed, China Merchants Group will
actively coordinate with CMPort and related companies such as Effective until
Commitment
Other China Merchants Group International Port (Qingdao) Co., Ltd. and no-longer to
s made in 26 July
CMG commitme Shantou CMPort Group Co., Ltd. to handle the transfer procedure or be the actual Ongoing
time of asset 2018
nt take other feasible countermeasures. In case of any actual loss controller of
restructuring
(excluding land-transferring fees or rent, fees paid for taking rural the Company
land, ownership registration fees, taxes and dues and other related
expenses to be paid by Chiwan Wharf or above-mentioned related
companies according to provisions of laws and regulations) incurred
to CMPort or above-mentioned related companies for this reason,
China Merchants Group will timely and fully compensate actual loss
incurred to CMPort or above-mentioned related companies.
Commitment letter about undertaking the accreditation fees of
property ownership certificate for the perfection of the land and
house property of CMPort Holdings and the enterprise subordinate to Effective until
Commitment
Other it: 14 no-longer to
s made in
CMG commitme In case of defective land use right and house property involved by the September be the actual Ongoing
time of asset
nt Company subordinate to CMPort Holdings on account of operation 2018 controller of
restructuring
(namely land use right and house property of the Company the Company
subordinate to CMPort Holdings without complete ownership
certificate existing before the transaction is completed), incurring
66
China Merchants Port Group Co., Ltd. Annual Report 2018
registration fees such as taxes and dues, compensation and fine in the
process of perfecting legal procedures of defective land use right and
house property by the subordinate to CMPort Holdings, China
Merchants Group will timely and fully compensate to the Company
subordinate to CMPort Holdings for undertaking.
Commitment letter about related matters of CMPort after the
transaction is completed:
After the transaction is completed, Chiwan Wharf will become port
business asset management headquarters and domestic capital Three to five
operation platform of China Merchants Group, deeply participate in years and
integration of domestic regional port assets and enlarge the scale of CMG is the
Commitment actual
Other domestic listed assets to make net profit of CMPort Holdings 30
s made in controller of Ongoing
CMG commitme (00144.HK) enjoyed as per the rights and interests in the consolidated September
time of asset the Company
nt statement of listed Company in recent one fiscal year fail to exceed 2018
restructuring
50% net profit of consolidated statement of the listed Company and
net asset of CMPort Holdings (00144.HK) enjoyed in light of rights
and interests in the consolidated statement of listed Company in
recent one fiscal year fail to exceed 30% net asset in the consolidated
statement of the listed Company within 3-5 years after the transaction
is completed.
China Merchants Group and all its directors, supervisors and
administrative officers ensure the transaction report, its abstract, other
information provided for the transaction and application document
Commitment are true, accurate and complete without false record, misleading
Other
s made in statement or important omission as well as take individual and joint 26 July Effective
CMG commitme Ongoing
time of asset legal liability for false record, misleading statement or important 2018 continuously
nt
restructuring omission.
If the information provided or disclosed by this transaction is
suspected of false records, misleading statements or major omissions,
and is investigated by the judicial authorities or investigated by the
67
China Merchants Port Group Co., Ltd. Annual Report 2018
China Securities Regulatory Commission (CSRC), the directors,
supervisors or senior managers of China Merchants Group do not
transfer the shares that have interests in listed Company, and submit
the written application and stock account of the suspension of the
transfer to the Board of Directors of the CMPort within two trading
days after receiving the filing inspection notice, and the Board of
Directors shall apply for lock-up on behalf of the CMG Hong Kong
to the Stock Exchange and Registration and Settlement Company.
In case of failing to file a locking application within two transaction
days and after the Board of Directors is authorized for verification,
identity information and account information on directors,
supervisors or administrative officers of China Merchants Group will
be directly submitted to Stock Exchange and Registration and
Settlement Company with locking applied; In case of Board of
Directors failing to submit identity information and account
information on directors, supervisors or administrative officers of
China Merchants Group to Stock Exchange and Registration and
Settlement Company, Stock Exchange and Registration and
Settlement Company will be authorized to directly lock related
shares. In case that the situation of violating laws and rules is found
upon investigation conclusion, directors, supervisors or
administrative officers of China Merchants Group promise locked
shares are voluntarily used for compensating related investors.
Share reduction plan during the period from the date of resumption of
trading of CMPort to the date of completing reorganization;
Commitment Commitme Effective until
CMG 1. CMG Hong Kong and Broadford Global have no share reduction
s made in nt on 26 July completion of
Hong plan during the period from the date of resumption of trading of the Fulfilled
time of asset shareholdin 2018 the asset
Kong transaction to the date of completing the transaction;
restructuring g reduction restructuring
2. Above-mentioned shares include original CMPort shares held by
CMG Hong Kong as well as shares deriving from original shares held
68
China Merchants Port Group Co., Ltd. Annual Report 2018
during the above period due to participation in profit and presenting
shares by CMPort as well as capital reserve converted into increased
capital.
1. CMG Hong Kong ensures related information provided for the
transaction is true, accurate and complete without false record,
misleading statement or important omission;
2. CMG Hong Kong ensures the data provided to CMPort and all
intermediary organs participating in the transaction is true, accurate
and complete original written data or data copy. Data copy is
consistent with original data and signature and seal of all the
documents are true. The signatory of such documents is legally
authorized and effectively signs such documents without any false
record, misleading statement or important omission;
3. CMG Hong Kong ensures descriptions and confirmations issued
for the transaction is true, accurate and complete without false record,
Commitment
CMG Other misleading statement or important omission;
s made in 26 July Effective
Hong commitme 4. CMG Hong Kong ensures that statutory disclosure and report Ongoing
time of asset 2018 continuously
Kong nt obligation has been performed, and no contracts, agreements,
restructuring
arrangements or miscellaneous that should have been disclosed
exists;
5. The CMG Hong Kong made the commitment that if the
information provided or disclosed by this transaction is suspected of
false records, misleading statements or major omissions, and is
investigated by the judicial authorities or investigated by the China
Securities Regulatory Commission (CSRC), it does not transfer the
shares that have interests in listed Company, and submit the written
application and stock account of the suspension of the transfer to the
Board of Directors of the CMPort within two trading days after
receiving the filing inspection notice, and the Board of Directors shall
apply for lock-up on behalf of the CMG Hong Kong to the Stock
69
China Merchants Port Group Co., Ltd. Annual Report 2018
Exchange and Registration and Settlement Company. In case of
failing to file a locking application within two transaction days and
after the Board of Directors is authorized for verification, identity
information and account information on CMG Hong Kong will be
directly submitted to Stock Exchange and Registration and
Settlement Company with locking applied; In case of Board of
Directors failing to submit identity information and account
information on CMG Hong Kong to Stock Exchange and Registration
and Settlement Company, Stock Exchange and Registration and
Settlement Company will be authorized to directly lock related
shares. If the investigation finds that there is a violation of the law,
CMG Hong Kong committed to lock the shares voluntarily for the
relevant investor compensation;
6. If CMG Hong Kong promises to related document, data and
information provided in the reorganization process aren't true,
accurate or complete or are with false record, misleading statement or
important omission, CMG Hong Kong is willing to legally bear
corresponding legal responsibility;
7. In case of CMG Hong Kong violating the above promise, incurring
losses to CMPort, CMG Hong Kong will take corresponding
compensation responsibility.
1.CMID ensures related information provided for the transaction is
true, accurate and complete without false record, misleading
statement or important omission;
Commitment
Other 2. CMID ensures the data provided to CMPort and all intermediary
s made in 26 July Effective
CMID commitme organs participating in the transaction is true, accurate and complete Ongoing
time of asset 2018 continuously
nt original written data or data copy. Data copy is consistent with
restructuring
original data and signature and seal of all the documents are true. The
signatory of such documents is legally authorized and effectively
signs such documents without any false record, misleading statement
70
China Merchants Port Group Co., Ltd. Annual Report 2018
or important omission;
3. CMID ensures description and confirmation provided for the
transaction are true, accurate and complete without any false record,
misleading statement or important omission;
4. CMID ensures that statutory disclosure and report obligation has
been performed, and no contracts, agreements, arrangements or
miscellaneous that should have been disclosed exists;
5. The CMID made the commitment that if the information provided
or disclosed by this transaction is suspected of false records,
misleading statements or major omissions, and is investigated by the
judicial authorities or investigated by the China Securities Regulatory
Commission (CSRC), it does not transfer the shares that have
interests in CMPort, and submit the written application and stock
account of the suspension of the transfer to the Board of Directors of
the CMPort within two trading days after receiving the filing
inspection notice, and the Board of Directors shall apply for lock-up
on behalf of the CMG Hong Kong to the Stock Exchange and
Registration and Settlement Company. If the application for lock-up
is not submitted within two transaction days, the Board of Directors
is authorized to verify and submit the identity information and
account information of CMID directly to the Stock Exchange and
Registration and Settlement Company and apply for lock-up; If the
Board of Directors fails to submit the identity information and
account information of the CMID to the Stock Exchange and
Registration and Settlement Company, then the Stock Exchange and
Registration and Settlement Company shall be authorized to directly
lock the relevant shares. If the investigation finds that there is a
violation of the law, CMID committed to lock the shares voluntarily
for the relevant investor compensation;
6. If CMID promises to related document, data and information
71
China Merchants Port Group Co., Ltd. Annual Report 2018
provided in the reorganization process aren't true, accurate or
complete or are with false record, misleading statement or important
omission, CMID is willing to legally bear corresponding legal
responsibility;
7. In case of CMID violating the above commitment, incurring losses
to CMPort, CMID will take corresponding compensation
responsibility.
1.CMID ensures related information provided for the transaction is
true, accurate and complete without false record, misleading
statement or important omission;
2. CMID ensures the data provided to CMPort and all intermediary
organs participating in the transaction is true, accurate and complete
original written data or data copy. Data copy is consistent with
original data and signature and seal of all the documents are true. The
signatory of such documents is legally authorized and effectively
signs such documents without any false record, misleading statement
or important omission;
Commitment
CMPort Other 3. CMID ensures description and confirmation provided for the
s made in 26 July Effective
Holding commitme transaction are true, accurate and complete without any false record, Ongoing
time of asset 2018 continuously
s nt misleading statement or important omission;
restructuring
4. CMID ensures that statutory disclosure and report obligation has
been performed, and no contracts, agreements, arrangements or
miscellaneous that should have been disclosed exists;
5. The CMID made the commitment that if the information provided
or disclosed by this transaction is suspected of false records,
misleading statements or major omissions, and is investigated by the
judicial authorities or investigated by the China Securities Regulatory
Commission (CSRC), it does not transfer the shares that have
interests in CMPort, and submit the written application and stock
account of the suspension of the transfer to the Board of Directors of
72
China Merchants Port Group Co., Ltd. Annual Report 2018
the CMPort within two trading days after receiving the filing
inspection notice, and the Board of Directors shall apply for lock-up
on behalf of the CMG Hong Kong to the Stock Exchange and
Registration and Settlement Company. If the application for lock-up
is not submitted within two transaction days, the Board of Directors
is authorized to verify and submit the identity information and
account information of CMID directly to the Stock Exchange and
Registration and Settlement Company and apply for lock-up; If the
Board of Directors fails to submit the identity information and
account information of the CMID to the Stock Exchange and
Registration and Settlement Company, then the Stock Exchange and
Registration and Settlement Company shall be authorized to directly
lock the relevant shares. If the investigation finds that there is a
violation of the law, CMID committed to lock the shares voluntarily
for the relevant investor compensation;
6. If CMID promises to related document, data and information
provided in the reorganization process aren't true, accurate or
complete or are with false record, misleading statement or important
omission, CMID is willing to legally bear corresponding legal
responsibility;
7. In case of CMID violating the above commitment, incurring losses
to CMPort, CMID will take corresponding compensation
responsibility.
1. China Merchants Group ensures related information provided for
the transaction is true, accurate and complete without false record,
Commitment
Other misleading statement or important omission;
s made in 26 July Effective
CMG commitme 2. China Merchants Group ensures the data provided to CMPort and Ongoing
time of asset 2018 continuously
nt all intermediary organs participating in the transaction is true,
restructuring
accurate and complete original written data or data copy. Data copy is
consistent with original data and signature and seal of all the
73
China Merchants Port Group Co., Ltd. Annual Report 2018
documents are true. The signatory of such documents is legally
authorized and effectively signs such documents without any false
record, misleading statement or important omission;
3. China Merchants Group ensures descriptions and confirmations
issued for the transaction is true, accurate and complete without false
record, misleading statement or important omission;
4. China Merchants Group ensures that statutory disclosure and
report obligation has been performed, and no contracts, agreements,
arrangements or miscellaneous that should have been disclosed
exists;
5. China Merchants Group made the commitment that if the
information provided or disclosed by this transaction is suspected of
false records, misleading statements or major omissions, and is
investigated by the judicial authorities or investigated by the China
Securities Regulatory Commission (CSRC), it does not transfer the
shares that have interests in CMPort, and submit the written
application and stock account of the suspension of the transfer to the
Board of Directors of the CMPort within two trading days after
receiving the filing inspection notice, and the Board of Directors shall
apply for lock-up on behalf of the CMG Hong Kong to the Stock
Exchange and Registration and Settlement Company. In case of
failing to file a locking application within two transaction days and
after the Board of Directors is authorized for verification, identity
information and account information of China Merchants Group will
be directly submitted to Stock Exchange and Registration and
Settlement Company with locking applied; In case of Board of
Directors failing to submit identity information and account
information of China Merchants Group to Stock Exchange and
Registration and Settlement Company, Stock Exchange and
Registration and Settlement Company will be authorized to directly
74
China Merchants Port Group Co., Ltd. Annual Report 2018
lock related shares. If the investigation finds that there is a violation
of the law, China Merchants Group committed to lock the shares
voluntarily for the relevant investor compensation;
6. If China Merchants Group promises to related document, data and
information provided in the reorganization process aren't true,
accurate or complete or are with false record, misleading statement or
important omission, China Merchants Group is willing to legally bear
corresponding legal responsibility;
In case of China Merchants Group violating the above promise,
incurring losses to CMPort, China Merchants Group will take
corresponding compensation responsibility.
Chiwan Wharf and all its directors, supervisors and administrative
officers ensure the transaction report, its abstract, other information
provided for the transaction and application document are true,
accurate and complete without false record, misleading statement or
important omission as well as take individual and joint legal liability
Chiwan
for false record, misleading statement or important omission.
Wharf
If the information provided or disclosed by this transaction is
and all
suspected of false records, misleading statements or major omissions,
Commitment directors
Other and is investigated by the judicial authorities or investigated by the
s made in , 26 July Effective
commitme China Securities Regulatory Commission (CSRC), the directors, Ongoing
time of asset supervis 2018 continuously
nt supervisors, or senior managers of Chiwan Wharf do not transfer the
restructuring ors and
shares that have interests in listed Company, and submit the written
senior
application and stock account of the suspension of the transfer to the
manage
Board of Directors of the CMPort within two trading days after
ment
receiving the filing inspection notice, and the Board of Directors shall
apply for lock-up on behalf of the CMG Hong Kong to the Stock
Exchange and Registration and Settlement Company. In case of
failing to file a locking application within two transaction days and
after the Board of Directors is authorized for verification, identity
75
China Merchants Port Group Co., Ltd. Annual Report 2018
information and account information on directors, supervisors or
administrative officers of Chiwan Wharf will be directly submitted to
Stock Exchange and Registration and Settlement Company with
locking applied; In case of Board of Directors failing to submit
identity information and account information on directors,
supervisors or administrative officers of Chiwan Wharf to Stock
Exchange and Registration and Settlement Company, Stock
Exchange and Registration and Settlement Company will be
authorized to directly lock related shares. In case that the situation of
violating laws and rules is found upon investigation conclusion,
directors, supervisors or administrative officers of Chiwan Wharf
promise locked shares are voluntarily used for compensating related
investors
Chiwan Share reduction plan during the period from the date of resumption of
Wharf trading of CMPort to the date of completing reorganization;
and all 1. I have no share reduction plan during the period from the date of
Commitment directors Commitme resumption of trading of the transaction to the date when the Effective until
s made in , nt on transaction is over. 26 July completion of
Fulfilled
time of asset supervis shareholdin 2. Above-mentioned shares include original shares of listed Company 2018 the asset
restructuring ors and g reduction held by me as well as derivative shares of original shares caused by restructuring
senior participation in profit and presenting shares by listed Company as
manage well as capital reserve converted into increased capital during the
ment above period.
China Nanshan Development(group) Incorporation will irrevocably
China 20 March
Other and unconditionally agrees it will ensure transferee of such land use
Nanshan 2001, 18
commitment Other right and its successor and assignee will be fully exempted from
Develop June 2003, Effective
s made to commitme responsibility for the above matters in case of CMPort encountering Ongoing
ment 29 continuously
minority nt losses, needing to bear expenses and liabilities, undergoing claim for
(Group) September
shareholders compensation or needing to file a lawsuit due to any actual or
Inc. 2004
potential illegal and unenforceable issues incurred by land use
76
China Merchants Port Group Co., Ltd. Annual Report 2018
agreement and relevant documents signed and to be signed by it.
Specific
reasons for
failing to
fulfill
commitment N/A
s on time and
plans for
next step
(if any)
2. Where there Had Been an Earnings Forecast for an Asset or Project and the Reporting Period Was still within the Forecast Period,
Explain why the Forecast Has Been Reached for the Reporting Period.
□Applicable √ Not applicable
77
China Merchants Port Group Co., Ltd. Annual Report 2018
IV Occupation of the Company’s Capital by the Controlling Shareholder or Its Related
Parties for Non-Operating Purposes
During the Reporting Period, the controlling shareholder or its related parties did not occupy capital
for non-operating purposes or repay such capital. Deloitte Touche Tohmatsu Certified Public
Accountants LLP issued the “Special Report on Capital Occupation by the Controlling Shareholder
and Other Related Parties of China Merchants Port Group Co., Ltd. For the detailed report, see the
website www.cninfo.com.cn.
V Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Methods
The changes in accounting policies of the Company are as follows: on 31 March 2017, the Ministry
of Finance issued Accounting Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments (hereinafter referred to as “Revised Standards No.22”),
Accounting Standards for Business Enterprises No.23-Transfer of Financial Assets (hereinafter
referred to as “Revised Standards No.23”), Accounting Standards for Business Enterprises
No.24-Hedge Accounting (hereinafter referred to as “Revised Standards No.24”); on 2 May 2017,
the Ministry of Finance issued Accounting Standards for Business Enterprises No.37-Presentation
of Financial Instruments (hereinafter referred to as “Revised Standards No.37”); on 5 July 2017, the
Ministry of Finance issued Accounting Standards for Business Enterprises No.14-Income
(hereinafter referred to as “Revised Standards No.14”). The Company starts to implement the
Revised Standards No.22, No.23, No.24, No.37 and No.14 in accordance with requirements
stipulated in documents of the Ministry of Finance since 1 January 2018. For more details, please
refer to the Announcement on Changes in Accounting Policies (announcement No.: 2018-025)
disclosed on cninfo.com.cn by the Company on 7 March 2018.
On 27 November 2018, the Company held the 8th Extraordinary Meeting of the 9th Directors of the
78
China Merchants Port Group Co., Ltd. Annual Report 2018
Board in 2018 and the 5th Extraordinary Meeting of the 9th Supervisory Committee in 2018, on
which the Proposal on Changes in Accounting Estimate of Fixed Assets was reviewed and approved.
In line with the Accounting Standards for Business Enterprises No.4-Fixed Assets and relevant
regulations of the Company, the Company rechecked the estimated useful life and expected net
residual value of fixed assets based on the current performance and service condition of fixed assets
and decided to adjust the depreciation life of partial fixed assets and net residual value of total fixed
assets so as to make it more reasonable and reflect the Company’s financial condition and operating
results more objectively and fairly. For more details, please refer to the Announcement on Changes
in Accounting Estimate of Fixed Assets (announcement No.: 2018-104) disclosed on cninfo.com.cn
by the Company on 28 November 2018.
For further information, please refer to (III) Changes in Main Accounting Policies and Estimates in
Part XI Financial Statements for details.
VII Retrospective Restatements due to Correction of Material Accounting Errors in the
Reporting Period
No such cases in the Reporting Period.
VIII YoY Changes to the Scope of the Consolidated Financial Statements
During the year under review, the Company acquired a 51% interest in China Merchants Port
(Zhoushan) RoRo Logistics Co., Ltd. (“Zhoushan RoRo”). Zhoushan RoRo changed its directors,
supervisors and senior management with the industrial and commercial administration on 29 August
2018 and officially became a majority-owned subsidiary of the Company. From that day on, the
Company includes Zhoushan RoRo into the consolidated financial statements. The
above-mentioned acquisition fits the definition of an assets acquisition, and does not constitute
business or a business combination. Thus, it is recognized as a change to the consolidation scope
caused by other reasons.
The Company and China Merchants Investment Development Company Limited (hereinafter
referred to as “CMID”) signed the Agreement on Asset Acquisition through the Issue of Shares on
19 June 2018, which was approved by China Securities Regulatory Commission through the Reply
on the Approval of the Issue of Shares by Shenzhen Chiwan Wharf Holdings Limited to China
79
China Merchants Port Group Co., Ltd. Annual Report 2018
Merchants Investment Development Company Limited for Asset Acquisition and Raising of
Supporting Funds (ZJXK [2018] No. 1750). The Company issued shares to CMID to acquire
1,313,541,560 ordinary shares (hereinafter referred to as “the target assets”) of China Merchants
Port Holdings Company Limited (hereinafter referred to as CMPort Holdings) held by CMID.
According to the transaction bills affixed with the stamp duty of Hong Kong dated 15 November
2018 and the Daily Settlement Book of Chiwan Wharf’s stock account produced on 16 November
2018 by China Merchants Securities (HK) Co., Ltd., the stock agent in Hong Kong, the
1,313,541,560 CMPort Holdings ordinary shares have been registered under the name of the
Company, marking that the procedures for the registration of the ownership transfer in respect of
the target assets has been completed. As at 25 December 2018, the procedures for the registration of
the shares issued by the Company to the counterparty CMID had been completed in CSDCC
Shenzhen. Thus, the Company has controlled and consolidated CMPort Holdings. For more details,
please refer to the Announcement of Shenzhen Chiwan Wharf Holdings Limited on the Issue of
Shares to Acquire Assets and Raise Supporting Funds and the Attainment of the Approval from
CSRC for Related-party Transactions (Announcement No. 2018-094), and the Report of China
Merchants Port Group Co., Ltd. on the Issue of Shares to Acquire Assets and Raise Supporting
Funds and the Implementation of Related-party Transactions and the Listing of New Shares
published on CNINFO (http://www.cninfo.com.cn) on 1 November 2018 and 24 December 2018
respectively.
On 25 December 2018, the Company completed the issue of shares to the counterparty CMID and
achieved the control over CMPort Holdings in form and nature. In accordance with the related
provisions in the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial
Statements, the Company started to consolidate the financial statements of CMPort Holdings from
December 2018, and adjusted the beginning and last year data in the comparative financial
statements according to the rules governing business combinations under common control.
IX Engagement and Disengagement of Independent Auditor
Current independent auditor
Deloitte Touche Tohmatsu Certified Public Accountants
Name of the domestic independent auditor
LLP
80
China Merchants Port Group Co., Ltd. Annual Report 2018
The Company’s payment to the domestic independent
1,236.25
auditor (RMB’0,000)
How many consecutive years the domestic independent
7
auditor has provided audit service for the Company
Names of the certified public accountants from the
domestic independent auditor writing signatures on the Huang Yue and Jiang Qishen
auditor’s report
How many consecutive years the certified public
accountants have provided audit service for the 2
Company
Name of the overseas independent auditor (if any) Deloitte Touche Tohmatsu
The Company’s payment to the overseas independent
945.63
auditor (RMB’0,000) (if any)
How many consecutive years the overseas independent
auditor has provided audit service for the Company (if 7
any)
Names of the certified public accountants from the
overseas independent auditor writing signatures on the Zhong Zhiwen
auditor’s report (if any)
How many consecutive years the certified public
accountants have provided audit service for the 2
Company (if any)
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
Approved by the 2017 Annual General Meeting of the Company, the Company was allowed to
continuously engage Deloitte Touche Tohmatsu Certified Public Accountants LLP as the 2018
independent auditor for the audit of annual financial statements and internal control in the current
year. The audit price for 2018 annual financial statements was RMB1.64 million and the price for
internal control was RMB0.3 million. The total expense on aforesaid two audit work was RMB1.94
million.
Since the business consolidation under the same control occurred for the Company in 2018, the
consolidation scope increased CMPort Holdings whose financial statements of 2018 were audited
by Deloitte Touche Tohmatsu. The total audit expenses (including financial statements audit of
subsidiaries) were RMB1,2,201,800, among which, RMB9,456,300 paid for Deloitte Touche
81
China Merchants Port Group Co., Ltd. Annual Report 2018
Tohmatsu, and RMB2,745,500 for Deloitte Touche Tohmatsu Certified Public Accountants LLP.
Considering the asset restructuring occurring in 2018, the Company needs to engage the agency to
audit the financial statements for the Company with 31 March 2018 as the base date for companies
involved in the restructuring. As for the audit expenses on engagement of independent auditors,
RMB7.677 million was paid to Deloitte Touche Tohmatsu Certified Public Accountants LLP,
RMB1.46 million to Ernst & Young Global Limited, RMB3.7 million to BDO China Shu Lun Pan
Certified Public Accountants LLP, RMB163,300 to Klynveld Peat Marwick Goerdeler (KPMG)
and Price waterhouse Coopers (PWC).
The expenses on financial advisors was RMB49 million for engagement of CITIC Securities Co.,
Ltd. and China Merchants Securities Co. Ltd.
X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
XI Insolvency and Reorganization
□ Applicable √ Not applicable
XII Major Legal Matters
□ Applicable √ Not applicable
XIII Punishments and Rectifications
□ Applicable √ Not applicable
XIV Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
for Employees
□ Applicable √ Not applicable
82
China Merchants Port Group Co., Ltd. Annual Report 2018
XVI Major Related-Party Transactions
1. Continuing Related-Party Transactions
Unit: RMB’0,000
As % Obtai
of Over nable
Relati
total Appr the marke
onship Type Speci Pricin Tota Meth
Trans value oved appr t price Discl Index to
Relate with of fic g l od of
action of all transa oved for osure disclosed
d party the transa transa princi valu settle
price same- ction line same- date information
Comp ction ction ple e ment
type line or type
any
transa not transa
ctions ctions
China
Merch
ants
Port
Origin
Holdin
al Servi Settle
gs Refer to
shareh ces Bilate d
Compa 7 Announceme
older Servi relate ral 6,887. 6,88 17.37 10,00 accor 6,887. Febru
ny No nt on Forecast
of ces d to negot 75 7.75 % 0.00 ding 75 ary
Limite 2018 of
Chiwa termi iation to
d and Related-party
n nal times
its Transactions
Wharf
affiliat for 2018
ed (Announceme
compa nt No.
nies 2018-012)
China published on
Nansha http://www.cn
n info.com.cn
Affilia Bilate Settle
Develo 7 for details.
ted Land ral 6,523. 6,52 40.02 7,500. d 6,523. Febru
pment Lease No
legal lease negot 02 3.02 % 00 mont 02 ary
(Group 2018
person iation hly
)
Incorp
oration
13,4
17,50
Total -- -- 10.7 -- -- -- -- -- --
0.00
7
Large-amount sales return in detail N/A
Give the actual situation in the N/A
83
China Merchants Port Group Co., Ltd. Annual Report 2018
Reporting Period (if any) where an
estimate had been made for the
total value of continuing
related-party transactions by type
to occur in the Reporting Period
Reason for any significant
difference between the transaction
N/A
price and the market reference
price (if applicable)
* The original director of the Company Zhang Jianguo (left for less than 12 months) is the vice general manager and CFO of China
Nanshan Development (Group) Inc.. In line with provisions of Shenzhen Stock Exchange Stock Listing Regulations, China Nanshan
Development (Group) is the affiliated legal person of the Company.
Related-party transaction of providing daily operation of labor service between CMPort Holdings
(00144.HK) and related party-QQCTU occurs and actual amount is RMB59.87 million. Besides,
the daily related-party transaction of leased land between CMPort Holdings and CMSK happens
and actual amount is RMB43.46 million. Related-party transactions such as providing labor service
and accepting labor service as well as providing lease and accepting lease between CMPort
Holdings and other related parties occur and actual amount is RMB0.336 billion. As for
related-party transactions occurring before reorganization of CMPort Holdings and the Company,
corresponding procedures have been completed in accordance with rules of stock exchange
Company. (Note: small total of above-mentioned other related parties covers labor service provided
by related parties such as China Ocean Shipping Tally Shenzhen Co., Ltd., Merchants Property
Management (Qingdao) Co., Ltd. and CM Houlder Insurance Brokers Limited to the Company as
well as related parties (including Qingdao Sinotrans Supply Chain Management Co., Ltd.,
Guangzhou Hangshang International Shipping Agency Co., Ltd. and China Overseas Harbour
Affairs (Laizhou) Co., Ltd. accepting the labor service provided by the Company; Related parties
such as Youlian Dockyards (Shekou) Ltd., Nanyou (Holdings), CIESCO Shenzhen, and Shenzhen
Branch of China Communications Import & Export Co., Ltd. lease the house from the Company;
Related parties such as Shenzhen Merchants Venture Co., Ltd., China Merchants Commercial
Property Investment (Shenzhen) Co., Ltd. and CMGWT provide the rental service for the Company.
Based on the above, no situation that transaction amount exceeds 0.5% of audited net asset of the
Company during the last period occurs to single related party. Combination and listing are
84
China Merchants Port Group Co., Ltd. Annual Report 2018
conducted here due to small amount and large quantity. )
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
In 2018, CMPort Holdings (00144.HK) made the related-party transaction on equity investment
with CMGD with actual amount of RMB3.346 billion.
For details about the related-party transaction on the Company’s capital increase in CMPort
(Zhoushan) RoRo Logistics Co., Ltd., please refer to 2. Major Equity Investments Made in the
Reporting Period in V Investment Made in Part IV Operating Performance Discussion and Analysis.
3. Related Transactions Regarding Joint Investments in Third Parties
Unit: RMB’0,000
Registere
Related Total Net Net
d capital
Joint investors relation investee Principal activities of investee assets of assets of profit of
of
ship investee investee investee
investee
China Merchants
Group (H.K.)
Limited, Jumbo
Pacific Holdings
China
Limited, China
Merchan Land development, operation of
Merchants The
ts parks and properties, construction
Expressway same
Hainan and investment of municipal
Network & ultimat
Develop infrastructure, water and power 350,000 350,000 350,000 -191
Technology e actual
ment & supply for parks, urban renewal,
Holdings Co., Ltd., control
Investm investment and management of
China Merchants ler
ent Co., projects, etc.
Industrial
Ltd.
Investment Co.,
Ltd. and Sinotrans
(HK) Logistics
Limited
Progress of major programs
in progress of investee (if N/A
any)
4. Credits and Liabilities with Related Parties
√ Applicable □ Not applicable
85
China Merchants Port Group Co., Ltd. Annual Report 2018
Credits receivable with related parties
Whether
Increased in Interest in
there is
Beginning the Recovered in the Ending
occupation
Related Related Forming balance Reporting the Reporting Interest Reporting balance
on
party relationship reason (RMB’0,00 Period Period rate Period (RMB’0,000
non-operati
0) (RMB’0,00 (RMB’0,000) (RMB’0,00 )
ng capital or
0) 0)
not
Under
China
common
Merchants
control of Bank
Group Not 60,540.28 975,653.97 986,781.13 2.37% 1,404.25 49,413.12
ultimate deposits
Finance
controlling
Co., Ltd.
shareholder
The
ultimate
China controlling
Bank 1,615,797.3
Merchants shareholder Not 92,893.47 1,581,237.14 1.84% 3,462.95 127,453.65
deposits 2
Bank has major
influence
on it
Effects of credits with
related parties on the
The above credits receivable with related parties were mainly deposits in financial institutions which has
Company’s operating
no major influence on the Company’s operating results and financial conditions.
results and financial
conditions
Liabilities payable with related parties
Increased in Recovered in Interest in
Beginning Ending
Related Forming the Reporting the Reporting the Reporting
Related party balance Interest rate balance
relationship reason Period Period Period
(RMB’0,000) (RMB’0,000)
(RMB’0,000) (RMB’0,000) (RMB’0,000)
Under
China common
Merchants control of
Borrowing 189,000.00 104,500.00 216,000.00 4.54% 5,157.41 77,500.00
Group Finance ultimate
Co., Ltd. controlling
shareholder
The ultimate
China
controlling
Merchants Borrowing 4,000.00 - 4,000.00 4.35% 10.44 -
shareholder
Bank
has major
86
China Merchants Port Group Co., Ltd. Annual Report 2018
influence on
it
Effects of liabilities with
related parties on the The above liabilities payable with related parties were mainly financial institution loans which had
Company’s operating results no major influence on the Company’s operating results and financial conditions.
and financial conditions
The interest rate of the above claims and debts shall be the average interest rate.
5. Other Major Related-Party Transactions
Refer to the Notes to financial statements.
XVII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
On 13 December 2018, the Company held the 10th Extraordinary Meeting of the 9th Directors of the
Board, on which the Proposal on Signing Custody Agreement of Equity of Liaoning Port Group Co.,
Ltd. between the Company and China Merchants (Liaoning) Port Development Co., Ltd. was
reviewed and approved. The Company was allowed to sign the Custody Agreement of Equity of
Liaoning Port Group Co., Ltd. with China Merchants (Liaoning) Port Development Co, Ltd., the
indirect wholly-owned subsidiary of CMG, and made an appointment that China Merchants
(Liaoning) Port Development entrusted all 49.9% shares of Liaoning Port Group Co., Ltd. held by it
as of 13 December 2018 to the Company for management.
Project which generates profit or loss reaching over 10% of total profits of the Company during the
Reporting Period
□ Applicable √ Not applicable
(2) Contracting
□ Applicable √ Not applicable
(3) Leases
There were no leases with a 10% or greater impact on the Company’s gross profit in the Reporting
Period.
87
China Merchants Port Group Co., Ltd. Annual Report 2018
2. Major guarantees
(1) Guarantees
Unit: RMB’0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
Disclosur
Guaran
e date of
tee for
the Actual Actual Having
Line of Type of Term of a
Obligor guarantee occurrence guarantee expired
guarantee guarantee guarantee related
line date amount or not
party
announce
or not
ment
General About 6
CMA CGM SA N/A 11 June 2013 No Not
2,498.21 1,224.12 guarantee years
General About 20
CMA CGM SA N/A 11 June 2013 No Not
8,219.58 8,219.58 guarantee years
PORT DE General About 3
N/A 34,316.0 14 June 2016 No Yes
DJIBOUTI S.A., 2,419.28 guarantee years
0
Total approved line for such Total actual amount of
guarantees in the Reporting - such guarantees in the -
Period (A1) Reporting Period (A2)
Total actual balance of
Total approved line for such
such guarantees at the
guarantees at the end of the 45,033.79 11,862.98
end of the Reporting
Reporting Period (A3)
Period (A4)
Guarantee between the company to its subsidiaries
Disclosure
date of the Guarantee
Actual Actual Having
guarantee Line of Type of Term of for a
Obligor occurrence guarantee expired or
line guarantee guarantee guarantee related
date amount not
announcem party or not
ent
Total approved line for such Total actual amount of
guarantees in the Reporting 0 such guarantees in the 0
Period (B1) Reporting Period (B2)
Total actual balance of
Total approved line for such
such guarantees at the
guarantees at the end of the 0 0
end of the Reporting
Reporting Period (3)
Period (B4)
Guarantees provided between subsidiaries
Disclosur Actual Actual Having Guaran
Line of Type of Term of
Obligor e date of occurrence guarantee expired tee for
guarantee guarantee guarantee
the date amount or not a
88
China Merchants Port Group Co., Ltd. Annual Report 2018
guarantee related
line party
announce or not
ment
China Merchants
International 10,000.0 General
N/A N/A - N/A No No
Terminal (Qingdao) 0 guarantee
Co., Ltd.
Shenzhen Jinyu
Rongtai Investment 80,000.0 12 January Joint-liabil About 10
N/A 50,000.00 No No
Development Co., 0 2017 ity years
Ltd.
Shenzhen Jinyu
Rongtai Investment 50,000.0 Joint-liabil About 5
N/A 25 June 2014 37,800.00 No No
Development Co., 0 ity years
Ltd.
China Merchants
International Joint-liabil About 10
N/A 2,500.00 30 June 2016 2,500.00 No No
(China) Investment ity years
Co., Ltd.
China Merchants
343,160. General About 10
Finance Company N/A 4 May 2012 343,160.00 No No
00 guarantee years
Limited
China Merchants
343,160. General About 10
Finance Company N/A 3 August 2015 343,160.00 No Not
00 guarantee years
Limited
China Merchants
137,264. General About 5
Finance Company N/A 3 August 2015 137,264.00 No No
00 guarantee years
Limited
CMHI Finance 617,688. General About 5
N/A 6 August 2018 617,688.00 No No
(BVI) Co., Ltd 00 guarantee years
CMHI Finance 411,792. General About 10
N/A 6 August 2018 411,792.00 No No
(BVI) Co., Ltd 00 guarantee years
COLOMBO
INTERNATIONAL
240,143. 16 September General About 13
CONTAINER N/A 15,456.61 No No
37 2012 guarantee years
TERMINALS
LIMITED
COLOMBO
INTERNATIONAL
10,294.8 16 September General
CONTAINER N/A 10,294.80 Infinite No No
0 2012 guarantee
TERMINALS
LIMITED
COLOMBO N/A 17,158.0 16 September 17,158.00 General Infinite No No
89
China Merchants Port Group Co., Ltd. Annual Report 2018
INTERNATIONAL 0 2012 guarantee
CONTAINER
TERMINALS
LIMITED
Lome Container General About 9
N/A 7,847.30 1 June 2015 2,004.99 No No
Terminal Co., Ltd. guarantee years
Lome Container General About 9
N/A 7,847.30 1 June 2015 2,004.99 No No
Terminal Co., Ltd. guarantee years
Lome Container General About 9
N/A 7,847.30 1 June 2015 2,004.99 No No
Terminal Co., Ltd. guarantee years
China Merchants
Port Development 320,000. Joint-liabil About 5
N/A 31 July 2017 218,000.00 No No
(Shenzhen) Co., 00 ity years
Ltd.
TCP - TERMINAL
DE
53,169.0 General About 6
CONTElNERES N/A 19 April 2018 47,437.38 No No
0 guarantee years
DE PARANAGUA
S/A.
TCP - TERMINAL
DE
75,862.7 General About 6
CONTElNERES N/A 19 Nov7 2016 75,862.77 No No
7 guarantee years
DE PARANAGUA
S/A.
Total approved line for such Total actual amount of
guarantees in the Reporting 1,082,649.00 such guarantees in the 1,076,917.38
Period (C1) Reporting Period (C2)
Total actual balance of
Total approved line for such
such guarantees at the
guarantees at the end of the 2,735,733.84 2,333,588.52
end of the Reporting
Reporting Period (C3)
Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in Total actual guarantee
the Reporting Period 1,082,649.00 amount in the Reporting 1,076,917.38
(A1+B1+C1) Period (A2+B2+C2)
Total actual guarantee
Total approved guarantee line at
balance at the end of the
the end of the Reporting Period 2,704,904.86 2,345,451.50
Reporting Period
(A3+B3+C3)
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
76.25%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders, actual
controller and their related parties (D)
90
China Merchants Port Group Co., Ltd. Annual Report 2018
Balance of debt guarantees provided directly or indirectly for
2,202,879.11
obligors with an over 70% debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of
807,427.73
the Company’s net assets (F)
Total of the three amounts above (D+E+F) 3,010,306.84
Joint responsibilities possibly borne in the Reporting Period for
None
undue guarantees (if any)
Provision of external guarantees in breach of the prescribed
None
procedures (if any)
The above-mentioned guarantees are provided before CMPort Holdings and its subsidiaries being
involved into the consolidated financial statements of the Company. And CMPort Holdings has
performed all procedures regarding aforesaid guarantees completely as required by HKEX.
(2) Irregularities in Provision of Guarantees
No such cases in the Reporting Period.
3. Cash Entrusted to Other Entities for Management
(1) Cash Entrusted for Wealth Management
□ Applicable √ Not applicable
(2) Entrusted Loans
Overview of entrusted loans in the Reporting Period
Unit: RMB’0,000
Amount Capital resources Undue balance Overdue amount
3,430.00 Self-owned funds 3,430.00
Particulars of cash entrusted for wealth management with single significant amount or low security,
bad liquidity, and no capital preservation
□ Applicable √ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which
may cause impairment of cash entrusted for wealth management
□ Applicable √ Not applicable
4. Other Major Contracts
□ Applicable √ Not applicable
XVIII. Social responsibilities
As a responsible enterprise, the Company leverages its own professional strengths to participate in
charitable activities such as urban renewal, targeted poverty alleviation and reconstruction
assistance to disaster-stricken areas, with an aim to safeguarding the rights and interests of its
91
China Merchants Port Group Co., Ltd. Annual Report 2018
employees, attaching importance to occupational health development, promoting urban and rural
economic development and improving people’s living standards. We also actively participate in
various social organisations and political parties and strengthen our communication with the
government and the industries to make use of our well-earned influence.
1. Fulfillment of social responsibilities
The Company is always committed to take on historical missions and has a strong sense of social
responsibilities. During our journey of growth and development, we never steer away from the
original goal. We take the lead to address social problems, continue to seek for the matching point
for mutual development with the society and explore appropriate models for conducting charitable
business that meets the needs of the current generation. By leveraging our core strengths to launch
professional charitable activities, support regional development and preserve fine cultures, we will
incorporate social development needs into our daily operation activities and join hands with even
more partners to create a harmonious society and promote social progress.
In 2018, the Company adhered to the theme of “Shaping Blue Dreams Together (共铸蓝色梦想)”
for its charitable activities, striving to fulfil its corporate social responsibilities through engagement
in social charitable activities, at the same time building the charity brand of its own. Large-scaled
public welfare activities included “C Blue Summer Camp for Children(C Blue 儿童夏令营)” and
“Shaping Blue Dreams Together – C Blue Training Programme in the 21st Century (共铸蓝色梦想
－21 世纪海上丝绸之路优才计划)” (C Blue Training Programme).
The “C Blue Summer Camp for Children” charitable event invited the left-behind children of the
port’s frontline staff to reunite with their parents in Shenzhen and participate in a summer camp. A
total of 50 families of the constructors stationed in Shenzhen had joined the event. The event not
only obtained positive feedback from the society, but also created a sound corporate image of the
Company to contribute to the society on a continuous basis. This project represented China
Merchants Group in the o theedeams Together (arrvice Project Competition of State-owned
Enterprises” and was awarded the Gold Winner.
Sponsored by China Merchants Charitable Foundation and hosted by China Merchants Port, “C
Blue Training Programme (C Blue 优才计划)” is a corporate social responsibility project to practice
the mission of “promoting social progress through commercial success” extensively in countries
along the “21st Century Maritime Silk Road” by adhering to the concept of promoting value sharing
worldwide under the theme of “Shaping Blue Dreams Together (C Blue)”. The purpose of this
project is to train more leading talents in port and shipping industry for countries along the Silk
Road and to offer high-end port and shipping industry-related training courses to various countries.
92
China Merchants Port Group Co., Ltd. Annual Report 2018
The success of this programme further enhanced China Merchants’ influence on countries along the
“Belt and Road” initiative and better explicated China Merchants Port’s corporate goal of “We
Connect the World (天涯若比邻)”, at the same time deepening the school-enterprise cooperation
with Shenzhen Polytechnic. Through systematic study of theories and diversified visits and
practices, trainees will be able to utilize the extensive knowledge and experience gained to promote
the development of port and shipping industry and to strengthen the implementation of the “Belt
and Road” initiative and thus promote the economic development of their respective countries.
Environmental protection
The Company embeds environmental elements into corporate development. During the whole life
cycle of projects, the Company adheres to green ecological development philosophy and practice,
and continuously pursues sustainable development in economic, environmental and social aspects
as a whole by leveraging innovative green development models, strengthening development and
application of energy conservation technologies, optimizing green industry network and promoting
green culture among its staff. Meanwhile, the Company strives to develop a green accountability
chain and a green ecosystem with joint efforts of the community. With the concerted efforts of
various parties, the Company is able to develop innovative solutions for sustainable environmental
development and play its part in pushing forward ecocivilisation.
XIX Other Significant Events
1. Significant Events of Asset Restructuring
On 19 June 2018, the Proposal on the Company’s Plan to Issue Shares to Specific Targets to
Acquire Assets was reviewed and approved at the 5th Special Meeting of the Company’s 9th Board
of Directors of 2018.
On 28 June 2018, SASAC issued the Reply to the Issues in Respect of the Private Placement of
A-Shares by Shenzhen Chiwan Wharf Holdings Limited (GZCQ [2018] No. 360). In principle, the
approval was granted for the Company’s plan to acquire the share considerations of China
Merchants Port Holdings Co., Ltd. through a private placement of no more than 1,148,648,648
A-shares and to issue no more than 128,952,746 A-shares to raise supporting funds. On 26 July
2018, the Proposal on the Company’s Plan to Issue Shares to Specific Targets to Acquire Assets was
reviewed and approved at the 2nd Extraordinary General Meeting of 2018 of the Company.
The Company obtained the Notice on the Filing of Overseas Investment Projects (FGBWZB [2018]
No. 690) issued by NDRC and the Certificate of Corporate Overseas Investment (JWTZZ No.
N1000201800487) issued by the Ministry of Commerce respectively on 20 September 2018 and 28
September 2018.
On 30 October 2018, the transaction was approved by China Securities Regulatory Commission
through the document of ZJXK [2018] No. 1750.
93
China Merchants Port Group Co., Ltd. Annual Report 2018
On 5 November 2018, the Company received the Reply to the Filing of Changes in Foreign-Funded
Enterprises (YSWZB 201800004) issued by the Bureau of Industry and Information Technology of
Shenzhen on November 2.
On 15 November 2018, 1,313,541,560 ordinary shares of China Merchants Port Holdings Company
Limited were registered in the name of the Company and the procedures for the registration of
ownership transfer of the underlying assets were completed.
On 25 December 2018, the procedures for the registration of the shares issued by the Company to
the counterparty CMID were completed in CSDCC Shenzhen.
2. Changes in the Company’s Stock Name and Stock Code
On 27 November 2018, the Company held the 8th Special Meeting of the 9th Board of Directors of
2018. The Proposal on Changing the Company’s Name, Stock Name and Stock Code was reviewed
and approved at the Meeting. According to the Proposal, the Company’s stock name would change
from “CHIWAN WHARF/CHIWAN WHARF-B” to “CM PORT GROUP/CM PORT GROUP B”,
and its stock code would change from “000022/200022” to “001872/201872”. On 13 December
2018, the Company held the 3rd Extraordinary General Meeting of 2018, and the Proposal on
Changing the Company’s Name, Stock Name and Stock Code was reviewed and approved. In
accordance with the provisions of the Rules of Shenzhen Stock Exchange for Stock Listing and
relevant business processing requirements, the Company applied with Shenzhen Stock Exchange
and the revised stock name and code were officially applied from 26 December 2018.
3. Description of the Events of Share Trading Suspension and Resumption
Due to the planning and demonstration of the actual controller China Merchants Group on
significant events in respect of the Company, the Company’s stock was suspended from the opening
on 20 November 2017. Through the negotiation and demonstration of related parties thereafter, the
Company recognized the aforementioned significant events as significant asset reorganization, with
its stock transferred into significant asset reorganization and continuing to be suspended from 4
December 2017. During the stock suspension, the Company duly performed its obligations of
information disclosure in accordance with relevant laws and regulations and released an
announcement on the progress at least every five working days. On 9 July 2018, in accordance with
regulations, the Company disclosed the Report of Shenzhen Chiwan Wharf Holdings Limited on
the Issue of Shares to Acquire Assets and Raise Supporting Funds and Connected Transactions
(Draft) (Revision) and related announcements. On 10 July 2018, the Company’s stock was resumed
through its application.
Due to the Company’s application for changes in its stock name and stock code, the Company’s
stock was suspended consecutively for three trading days in total from 21 December 2018 to 25
December 2018 during the implementation of the changes. From 26 December 2018, trading in the
Company’s shares was resumed and traded in the revised stock name and code.
4. Information Disclosure Index
In the Reporting Period, the Company disclosed the following significant events on Securities
Times, Ta Kung Pao (HK) and www.cninfo.com.cn:
Announce
Date Title
ment No.
Announcement on the Progress of Share Trading Suspension of
2018-001 4 January 2018
Significant Assets Restructuring
94
China Merchants Port Group Co., Ltd. Annual Report 2018
Announcement on Voluntary Information Disclosure of Business
2018-002 6 January 2018
Volume Data of December 2017
Announcement on the Progress of Share Trading Suspension of
2018-003 11 January 2018
Significant Assets Restructuring
Announcement on Resolutions of the 1st Special Meeting of the
2018-004 20 January 2018
9th Board of Directors in 2018
Announcement on Application for Continuing the Suspension due
2018-005 20 January 2018
to the Expiration of Significant Assets Restructuring Delisting
Announcement on Resolutions of the 2nd Special Meeting of the
2018-006 27 January 2018
9th Board of Directors in 2018
Announcement on the Related-party Transaction regarding
2018-007 27 January 2018
Foreign Investments
Announcement on Convening Shareholders Meeting for Approval
2018-008 27 January 2018
of Matters Related to Continuous Suspension
Notice on Convening the 1st Extraordinary General Meeting of
2018-009 27 January 2018
2018
Announcement on the Progress of Share Trading Suspension of
2018-010 3 February 2018
Significant Assets Restructuring
Announcement on Resolutions of the 3rd Special Meeting of the
2018-011 7 February 2018
9th Board of Directors in 2018
Announcement on Expected Routine Related-Party Transactions
2018-012 7 February 2018
for 2018
Announcement on Related-party Transaction regarding Signing
2018-013 7 February 2018 Supplementary Agreement to the MEDIA PORT INVESTMENTS
LIMITED Shareholder Agreement II
2018-014 7 February 2018 Reminder of Changes in Controlling Shareholders
Reminder of Convening the 1st Extraordinary General Meeting of
2018-015 7 February 2018
2018
Announcement on Voluntary Information Disclosure of Business
2018-016 8 February 2018
Volume Data of January 2018
Announcement on the Progress of Share Trading Suspension of
2018-017 10 February 2018
Significant Assets Restructuring
Announcement on Resolutions of the 1st Extraordinary General
2018-018 14 February 2018
Meeting of 2018
Announcement on Application for Continuing the Suspension due
2018-019 14 February 2018
to the Expiration of Significant Assets Restructuring Delisting
Announcement on the Progress of Share Trading Suspension of
2018-020 28 February 2018
Significant Assets Restructuring
Announcement on Resolutions of the 3rd Meeting of the 9th Board
2018-021 7 March 2018
of Directors
Announcement on Resolutions of the 3rd Meeting of the 9th
2018-022 7 March 2018
Supervisory Committee
Abstract of Annual Report 2017 of Shenzhen Chiwan Wharf
2018-023 7 March 2018
Holdings Limited
Announcement on Plan of Profit Distribution and Dividend
2018-024 7 March 2018
Payout in 2017
95
China Merchants Port Group Co., Ltd. Annual Report 2018
2018-025 7 March 2018 Announcement on Changes in Accounting Policy
Announcement on Termination of Joint Investment in Haixing
2018-026 7 March 2018
Onoda Project with Related Parties
2018-027 7 March 2018 Notice of Convening the 2017 Annual General Meeting
Announcement on the Progress of Share Trading Suspension of
2018-028 7 March 2018
Significant Assets Restructuring
Announcement on Voluntary Information Disclosure of Business
2018-029 8 March 2018
Volume Data of February 2018
2018-030 8 March 2018 Correction Notice
Announcement on the Progress of Share Trading Suspension of
2018-031 14 March 2018
Significant Assets Restructuring
Reminder of the Progress of Changes in Controlling
2018-032 20 March 2018
Shareholders
2018-033 21 March 2018 Reminder of Convening the 2017 Annual General Meeting
Announcement on the Progress of Share Trading Suspension of
2018-034 21 March 2018
Significant Assets Restructuring
2018-035 27 March 2018 Reminder of the Progress of Changes in Controlling Shareholders
Announcement on the Progress of Share Trading Suspension of
2018-036 28 March 2018
Significant Assets Restructuring
Announcement on Resolutions of the 2017 Annual General
2018-037 29 March 2018
Meeting
Announcement on the Progress of Share Trading Suspension of
2018-038 4 April 2018
Significant Assets Restructuring
Announcement on Voluntary Information Disclosure of Business
2018-039 10 April 2018
Volume Data of March 2018
Announcement on the Progress of Share Trading Suspension of
2018-040 13 April 2018
Significant Assets Restructuring
Announcement on the Progress of Share Trading Suspension of
2018-041 20 April 2018
Significant Assets Restructuring
Reminder of Issuance of 2018 Phase I Super-short-term Financing
2018-042 24 April 2018
Bonds
Announcement on Resolutions of the 4th Special Meeting of the
2018-043 27 April 2018
9th Board of Directors in 2018
2018-044 27 April 2018 The Text of the First Quarter Report 2018
Announcement on the Progress of Share Trading Suspension of
2018-045 27 April 2018
Significant Assets Restructuring
Announcement on Issue Results of 2018 Phase I Super-short-term
2018-046 28 April 2018
Financing Bonds
Announcement on China Securities Regulatory Commission’s
2018-047 3 May 2018 Consent for the Exemption of China Merchants Gangtong
Development (Shenzhen) Co., Ltd. and its Acting-in-concert
96
China Merchants Port Group Co., Ltd. Annual Report 2018
Parties from the Tender Offer Obligation
Announcement on the Progress of Share Trading Suspension of
2018-048 8 May 2018
Significant Assets Restructuring
Announcement on Voluntary Information Disclosure of Business
2018-049 9 May 2018
Volume Data of April 2018
Announcement on the Progress of Share Trading Suspension of
2018-050 15 May 2018
Significant Assets Restructuring
Announcement on Convening Investor Conference regarding
2018-051 15 May 2018
Significant Assets Restructuring
2018-052 17 May 2018 Announcement on the Execution of the 2017 Dividend Plan
Announcement on Application for Continuing the Suspension due
2018-053 18 May 2018
to the Expiration of Significant Assets Restructuring Delisting
Announcement on Particulars of Investors Conference Convened
2018-054 19 May 2018
regarding Significant Assets Restructuring
Announcement on the Due Payment of 2017 Phase I
2018-055 22 May 2018
Super-short-term Financing Bonds
Announcement on the Progress of Share Trading Suspension of
2018-056 25 May 2018
Significant Assets Restructuring
Announcement on the Progress of Share Trading Suspension of
2018-057 1 June 2018
Significant Assets Restructuring
Announcement on the Progress of Share Trading Suspension of
2018-058 8 June 2018
Significant Assets Restructuring
Announcement on Voluntary Information Disclosure of Business
2018-059 9 June 2018
Volume Data of May 2018
Announcement on Completion of Share Transfer and Changes in
2018-060 12 June 2018
Controlling Shareholders
Announcement on the Progress of Share Trading Suspension of
2018-061 15 June 2018
Significant Assets Restructuring
Announcement on Resolutions of the 5th Special Meeting of the
2018-062 21 June 2018
9th Board of Directors in 2018
Announcement on Resolutions of the 2nd Special Meeting of the
2018-063 21 June 2018
9th Supervisory Committee in 2018
Announcement on Related-party Transaction regarding Signing
2018-064 21 June 2018 Supplementary Agreement to the Financial Service Agreement
with China Merchants Group Finance Co., Ltd.
Announcement on Disclosure of Related-party Transaction Report
2018-065 21 June 2018 on Assets Purchase via Share Offering and Matching Fund
Raising and on Temporary not Resumption
2018-066 21 June 2018 Reminder of General Risk of Significant Assets Restructuring
Announcement on the Progress of Share Trading Suspension of
2018-067 28 June 2018
Significant Assets Restructuring
97
China Merchants Port Group Co., Ltd. Annual Report 2018
Announcement on Approval of Relevant Issues of Significant
2018-068 4 July 2018 Assets Restructuring by State-owned Assets Supervision and
Administration Commission
Announcement on the Delay in Reply to the Enquiry Letter of
2018-069 5 July 2018 Restructuring of Shenzhen Stock Exchange and Continuous Share
Trading Suspension
Announcement on Voluntary Information Disclosure of Business
2018-070 7 July 2018
Volume Data of June 2018
Announcement on Resolutions of the 6th Special Meeting of the
2018-071 10 July 2018
9th Board of Directors in 2018
Announcement on Resolutions of the 3rd Special Meeting of the
2018-072 10 July 2018
9th Supervisory Committee in 2018
Announcement on Signing Termination of Agreement to the
2018-073 10 July 2018 Financial Service Agreement with China Development Finance
Company Ltd.
Notice on Convening the 2nd Extraordinary General Meeting of
2018-074 10 July 2018
2018
Announcement on the Share Trading Resumption of Significant
2018-075 10 July 2018
Assets Restructuring
Reminder of Convening the 2nd Extraordinary General Meeting of
2018-076 19 July 2018
2018
Announcement on Execution of 2017 Equities Distribution from
the Company’s Significant Assets Restructuring of Intending to
2018-077 24 July 2018
Purchase the Target Company China Merchants Port Holdings
Company Limited
Announcement on Resolutions of the 2nd Extraordinary General
2018-078 27 July 2018
Meeting of 2018
Announcement on the Assets Purchase Offering and Matching
Fund Raising of Shenzhen Chiwan Wharf Holdings Limited and
2018-079 9 August 2018
the Revision of Relevant Documents of Related-Party
Transactions
Announcement on Voluntary Information Disclosure of Business
2018-080 10 August 2018
Volume Data of July 2018
Announcement on Receiving the Acceptance Form of Application
2018-081 11 August 2018 for Administrative license of China Securities Regulatory
Commission
Announcement on Resolutions of the 4th Meeting of the 9th Board
2018-082 31 August 2018
of Directors
2018-083 31 August 2018 Abstract of Interim Report 2018
Announcement on the Progress of Foreign Investment and
2018-084 31 August 2018
Related-party Transactions
Announcement on Receiving a Feedback Notification of Project
2018-085 6 September 2018
Review for Administrative license of China Securities Regulatory
98
China Merchants Port Group Co., Ltd. Annual Report 2018
Commission
Announcement on Voluntary Information Disclosure of Business
2018-086 11 September 2018
Volume Data of August 2018
Announcement on the Reply to the Feedback Notification of
2018-087 14 September 2018 Project Review for Administrative license of China Securities
Regulatory Commission
Announcement on Share Trading Suspension about the
Examination of the Company’s
Assets Purchase via Share Offering and Matching Fund Raising
2018-088 28 September 2018
and the Related-party Transactions by Audit Committee of China
Securities Regulatory Commission for Listed Companies’
acquisition and Reorganization
Announcement on Conditional Approval of the
Assets Purchase via Share Offering and Matching Fund Raising
the Related-party Transactions by Audit Committee of China
2018-089 10 October 2018
Securities Regulatory Commission for Listed Companies’
acquisition and Reorganization and the Share Trading Resumption
of the Company
Announcement on Voluntary Information Disclosure of Business
2018-090 16 October 2018
Volume Data of September 2018
Announcement on Receiving the Notification of Foreign
Investment Project Filing from National Development and
Reform Commission and Certificate for Foreign Investment of
2018-091 18 October 2018
Enterprises from Ministry of Commerce regarding the
Assets Purchase via Share Offering and Matching Fund Raising
and Related-party Transactions
Announcement on Resolutions of the 7th Special Meeting of the
2018-092 31 October 2018
9th Board of Directors in 2018
2018-093 31 October 2018 The Text of the Third Quarter Report 2018
Announcement on Receiving the Approval of China Securities
Regulatory Commission regarding the
2018-094 1 November 2018
Assets Purchase via Share Offering and Matching Fund Raising
and Related-party Transactions
Announcement on Notice for the Revision of the Report of
2018-095 1 November 2018 Assets Purchase via Share Offering and Matching Fund Raising
and Related-party Transactions
Announcement on Receiving the Reply to the Filing of Changes
in Foreign-invested Enterprises from Shenzhen Commission of
2018-096 6 November 2018 Economy and Information Technology regarding the
Assets Purchase via Share Offering and Matching Fund Raising
and Related-party Transactions
99
China Merchants Port Group Co., Ltd. Annual Report 2018
Announcement on Voluntary Information Disclosure of Business
2018-097 9 November 2018
Volume Data of October 2018
Announcement on Execution of 2018 Interim Equities
Distribution from the Company’s Significant Assets Restructuring
2018-098 20 November 2018
of Intending to Purchase the Target Company China Merchants
Port Holdings Company Limited
2018-099 21 November 2018 Announcement on Resignation of Directors
2018-100 21 November 2018 Announcement on Resignation of Supervisors
Announcement on Completion of the Transfer of Underlying
2018-101 22 November 2018 Assets regarding the Assets Purchase via Share Offering
and Matching Fund Raising and Related-party Transactions
Announcement on Resolutions of the 8th Special Meeting of the
2018-102 28 November 2018
9th Board of Directors in 2018
Announcement on Resolutions of the 5th Special Meeting of the
2018-103 28 November 2018
9th Supervisory Committee in 2018
2018-104 28 November 2018 Announcement on Accounting Estimate Change of Fixed Assets
Announcement on Related-party Transaction regarding Signing
2018-105 28 November 2018 Supplementary Agreement to the Financial Service Agreement
with China Merchants Group Finance Co., Ltd.
Notice on Convening the 3rd Extraordinary General Meeting of
2018-106 28 November 2018
2018
Announcement on Resolutions of the 9th Special Meeting of the
2018-107 1 December 2018
9th Board of Directors in 2018
Announcement on Related-party Transaction regarding Jointly
2018-108 1 December 2018 Investing and Establishing China Merchants Hainan Development
and Investment Co., Ltd with Related Parties
Announcement on Adding Temporary Proposal in the 3rd
Extraordinary General Meeting of 2018 and Supplementary
2018-109 3 December 2018
Notice on Convening the 3rd Extraordinary General Meeting of
2018
Reminder of Convening the 3rd Extraordinary General Meeting of
2018-110 6 December 2018
2018
2018-111 8 December 2018 Announcement on Resignation of Chairman of the Board
2018-112 8 December 2018 Announcement on Resignation of Senior Executives
Announcement on Voluntary Information Disclosure of Business
2018-113 8 December 2018
Volume Data of November 2018
Announcement on Resolutions of the 3rd Extraordinary General
2018-114 14 December 2018
Meeting of 2018
Announcement on Resolutions of the 10th Special Meeting of the
2018-115 14 December 2018
9th Board of Directors in 2018
100
China Merchants Port Group Co., Ltd. Annual Report 2018
Announcement on Resolutions of the 6th Special Meeting of the
2018-116 14 December 2018
9th Supervisory Committee in 2018
Announcement on Signing Trusteeship of the Stock Right
2018-117 14 December 2018 Agreement with China Merchants (Liaoning) Port Development
Co., Ltd and Related-party Transactions
Reminder of Intending to Change the Company’s Name, Stock
2018-118 14 December 2018 Name and Stock Code and Share Trading Suspension of the
Company
Announcement on Completion of Changes in Industrial and
2018-119 15 December 2018
Commercial Registration
Reminder of Share Trading Suspension of the Company and
2018-120 21 December 2018
Intending to Change Stock Name and Stock Code
Announcement on Changes in Shareholdings of Directors,
2018-121 24 December 2018 Supervisors and Senior Executives of the China Merchants Port
Group Co., Ltd.
Announcement on Commitment Made by Related Parties of
2018-122 24 December 2018
the Assets Purchase via Share Offering
Announcement on Signing the Qianhai Land Service Agreement
by the Wholly-owned Subordinate Company of Majority-owned
2018-123 25 December 2018
Subsidiary Namely China Merchants Port Holdings Company
Limited
Announcement on Share Trading Suspension of the Company and
2018-124 26 December 2018
Changes in Stock Name and Stock Code
XX Significant Events of Subsidiaries
On 25 February 2018, China Merchants Port Holdings Company Limited had purchased 90% stock
of TCP.
On 20 March 2018, Board of Directors of China Merchants Port Holdings Company Limited
announced that it appointed Mr. Fu Gangfeng as the Executive Director and Chairman of the Board
of China Merchants Port Holdings Company Limited.
14 June 2018, China Merchants Port Holdings Company Limited had purchased all 50% stock of
Port of Newcastle of Australia from the shareholder of CMU. Thus the global port layout of China
Merchants Port Holdings Company Limited had covered six continents.
6 August 2018, China Merchants Port Holdings Company Limited had issued a total amount of
RMB1.5 billon guaranteed notes with fixed interests, and it was traded on the Stock Exchange of
Hong Kong Ltd.
On 24 December 2018, China Merchants Port Holdings Company Limited made land service
agreement with Shenzhen Urban Planning and Land Resources Committee, Shenzhen Qianhai
101
China Merchants Port Group Co., Ltd. Annual Report 2018
Shengang Modern Service Industry Cooperation Zone Authority, CMG, Shenzhen Qianhai Square
Park Development Co., Ltd, China Merchants Shekou Industrial Zone Holdings Co., Ltd, CMSK,
several subsidiary companies of China Merchants Shekou, and Shenzhen China Merchants Qianhai
Chidi Industry Co., Ltd to further manage the various land equities held by CMG in Qianhai,
Shenzhen, China at present.
102
China Merchants Port Group Co., Ltd. Annual Report 2018
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shar Shares
es as as
divi dividen
dend d
Percentag Percentag
Shares New issues conv convert Other Subtotal Shares
e (%) e (%)
erted ed from
from capital
profi reserve
t s
I. Restricted shares 160,106 0.02% 1,148,648,648 0 0 1,148,700,698 1,148,700,698 1,148,860,804 64.06%
1. Shares held by state 0 0.00% 0 0 0 0 0 0 0.00%
2. Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
state-owned legal person
3. Shares held by other
160,106 0.02% 0 0 0 52,050 52,050 212,156 0.01%
domestic investors
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
domestic legal person
Shares held
by domestic natural 160,106 0.02% 0 0 0 52,050 52,050 212,156 0.01%
person
4. Shares held by foreign
0 0.00% 1,148,648,648 0 0 0 1,148,648,648 1,148,648,648 64.05%
investors
Including: Shares held by
0 0.00% 1,148,648,648 0 0 0 1,148,648,648 1,148,648,648 64.05%
foreign legal person
Shares held
0 0.00% 0 0 0 0 0 0 0.00%
by foreign natural person
II. Unrestricted shares 644,603,624 99.98% 0 0 0 -52,050 -52,050 644,551,574 35.94%
464,859,300 72.10% 0 0 -3,976 -3,976 464,855,324 25.92%
1. RMB ordinary shares
2. Domestically listed
179,744,324 27.88% 0 0 0 -48,074 -48,074 179,696,250 10.02%
foreign shares
3. Overseas listed foreign
0 0.00% 0 0 0 0 0 0 0.00%
shares
0 0.00% 0 0 0 0 0 0 0.00%
4. Other
III. Total shares 644,763,730 100.00% 1,148,648,648 0 0 0 1,148,648,648 1,793,412,378 100.00%
Reasons for share changes:
1. Share issuance of the Company; 2. Changes in directors, supervisors, and senior executives of the
Company
Approval of share changes:
On 19 June and 9 July 2018, the Company held the 5th and 6th Special Meetings of the 9th Board of
Directors of 2018 respectively. The proposals in respect of the transaction were reviewed and
103
China Merchants Port Group Co., Ltd. Annual Report 2018
approved at the meetings, including the Proposal on the Company’s Eligibility for the Issue of
Shares to Acquire Assets and Raise Supporting Funds, the Proposal on the Company’s Plan to Issue
Shares to Specific Targets to Acquire Assets, the Proposal on the Company’s Entering into the
Agreement on the Concerted Action of China Merchants Port Holdings Co., Ltd. with China
Merchants Group (HK) Co., Ltd., the Proposal on the Company’s Raising of Supporting Funds, the
Proposal on the Report of Shenzhen Chiwan Wharf Holdings Limited on the Issue of Shares to
Acquire Assets and Raise Supporting Funds and Connected Transactions (Draft) and the Abstract,
the Proposal on the Entering with Specific Targets into the Agreement on the Issue of Shares to
Acquire Assets and the Agreement on the Impairment Compensation Effective with Conditions, the
Proposal on the Entering with Specific Targets into the Supplementary Agreement to the
Agreement on the Impairment Compensation of the Agreement on the Issue of Shares to Acquire
Assets Effective with Conditions, and the Proposal on the Application for the Approval of the
Company’s Annual General Meeting for the Exemption of Increased Shareholding of China
Merchants Investment Development Company Limited by Offer.
On 28 June 2018, SASAC issued the Reply to the Issues in Respect of the Private Placement of
A-Shares by Shenzhen Chiwan Wharf Holdings Limited (GZCQ [2018] No. 360). In principle, the
approval was granted for the private placement of no more than 1,148,648,648 A-shares by China
Merchants Port to acquire the share considerations of China Merchants Port Holdings Co., Ltd. and
the issue of no more than 128,952,746 A-shares to raise supporting funds.
On 26 July 2018, the issues in respect of the transaction were reviewed and approved at the 2nd
Extraordinary General Meeting of 2018, and non-related shareholders reviewed and approved the
Proposal on the Application for the Approval of the Company’s Annual General Meeting for the
Exemption of Increased Shareholding of China Merchants Investment Development Company
Limited by Offer and agreed to the exemption of increasing the holding of shares of China
Merchants Port by CMID through offer.
On 20 September 2018, pursuant to the Filing of Overseas Investment Projects (FGBWZB [2018]
No. 690) issued by NDRC, NDRC agreed to file the project of acquisition of partial equity of China
Merchants Port Holdings by China Merchants Port.
On 28 September 2018, pursuant to the Certificate of Corporate Overseas Investment (JWTZZ
No.N1000201800487) issued by the Ministry of Commerce, the filing with the Ministry of
Commerce in respect of the overseas investment involved in the acquisition was completed.
On 30 October 2018, CSRC issued the Reply on the Approval of the Issue of Shares by Shenzhen
Chiwan Wharf Holdings Limited to China Merchants Investment Development Company Limited
for Asset Acquisition and Raising of Supporting Funds (ZJXK [2018] No. 1750) to approval the
104
China Merchants Port Group Co., Ltd. Annual Report 2018
transaction.
On 2 November 2018, pursuant to the Reply to the Filing of Changes in Foreign-Funded
Enterprises (Number: YSWZB 201800004) issued by the Bureau of Industry and Information
Technology of Shenzhen, China Merchants Port completed the procedures for the filing of changes
in foreign-funded enterprises in respect of the strategic investment in listed companies by foreign
investors involved in the acquisition.
Transfer of share ownership:
On 25 December 2018, the registration of the 1,148,648,648 A-shares issued by China Merchants
Port Holdings Company Limited to CMID with China Securities Depository and Clearing Co., Ltd.
Shenzhen Branch. On 26 December 2018, some of the shares were listed for trading on Shenzhen
Stock Exchange.
Progress on any share repurchases:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to
the Company’s ordinary shareholders and other financial indicators of the prior year and the prior
accounting period, respectively:
At the beginning of the Reporting Period, the Company had 645 million capital shares, which
increased to 1,793 million upon the additional issue. Pursuant to the Information Disclosure and
Presentation Rules for Companies Making Public Offering No. 9 - Calculation and Disclosure of
Return on Net Assets and Earnings per Share, the Company used the 1,793 capital shares as the
base in the calculation of the earnings per share and net asset value per share for 2016 and 2017.
Therefore, the changes in the capital shares from the Company’s reorganization do not have any
effect on the financial indicators including earnings per share and net asset value per share
presented in the comparative financial statements.
The Company completed the asset acquisition through issue of shares on 26 December 2018, from
when the Company included China Merchants Port Holdings Company Limited into the
consolidated financial statements. Based on the net profits attributable to the listed company in the
latest restated consolidated financial statements for 2017 and the latest total capital shares, the
earnings per share was RMB1.32. The diluted earnings per share was RMB1.32, and the net asset
value per share attributable to ordinary shareholders of the Company was RMB15.88.
To provide investors with comparable financial information, the Company disclosed the financial
105
China Merchants Port Group Co., Ltd. Annual Report 2018
indicators before and after the restatement for the recent two years, including basic earnings per
share, diluted earnings per share and net assets attributable to the common shareholders of the
Company. The details can be found in “VI. Key Financial Information” under “Section II Corporate
Information and Key Financial Information”.
Other information that the Company considers necessary or is required by the securities regulator to
be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
Unit: share
Number of
restricted Number of
Number of Number of
Name of shares at released Reason for Date of restriction
increased restricted shares
shareholders the restricted restriction release
restricted shares at the period-end
period-beg shares
in
During the
Reporting Period,
the Company
issued
1,148,648,648 A
shares to CMID
China
who made the
Merchants
commitment to
Investment
0 0 1,148,648,648 1,148,648,648 restrict the shares 25 June 2022
Development
when the new
Company
shares went public.
Limited
For details, see III.
Fulfillment of
commitments in
Part V Significant
Events of this
report
Zhang Jianguo 55,712 0 18,570 74,282 12 May 2019
Yuan Yuhui 10,530 0 0 10,530 According to the -
Ni Keqin 21,909 0 0 21,909 Articles of -
Zhao Association and
48,716 0 16,238 64,954 the relevant laws 5 May 2019
Chaoxiong
and regulations
Wang Yongli 3,739 0 1,246 4,985 12 May 2019
Yao Shenglan 0 0 6,500 26,000 5 May 2019
106
China Merchants Port Group Co., Ltd. Annual Report 2018
Zheng
0 0 9,496 9,496 -
Shaoping
Total 160,106 0 1,148,700,698 1,148,860,804 --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
√ Applicable □ Not applicable
Name of stock
Issuing price Approved Expiry date
and its
Issuing date (or interest Numbers Listing date numbers for of the
derivative
rate) trading trading
securities
Stock
Issuing A 25 December RMB21.46 26 December
1,148,648,648 1,148,648,648 -
shares 2018 per share 2018
Explanation for securities (exclusive of preferred shares) issued in the Reporting Period
On 25 December 2018, the 1,148,648,648 A shares issued by the Company was registered on
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited. Those shares
was traded on Shenzhen Stock Exchange on 26 December 2018
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
The Company acquired 1,313,541,560 ordinary shares of China Merchants Port Holdings Company
Limited (approximately 39.45% of the total ordinary shares issued by China Merchants Port
Holdings Company Limited) held by CMID at a transaction amount of RMB24,650,000,000. Based
on the share price of RMB21.46/share, the number of A-shares issued by the Company to CMID
was 1,148,648,648. The registration of those shares was completed in China Securities Depository
and Clearing Co., Ltd. Shenzhen Branch on 25 December 2018 and listed on 26 December 2018.
The details can be found on the Report of China Merchants Port Group Co., Ltd. on the Issue of
Shares to Acquire Assets and Raise Supporting Funds and the Implementation of Connected
Transactions and the Listing of New Shares published on 24 December 2018.
Upon the completion of the transaction, the Company included China Merchants Port Holdings
Company Limited into the consolidation scope, which resulted in an evident increase in the asset
scale in the consolidated financial statements without changing the Company’s asset-liabilities
structure.
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
107
China Merchants Port Group Co., Ltd. Annual Report 2018
III Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Number of
preferred
Number of
35,642 (including 35,972 (including Number of preferred shareholders
Number of ordinary
24,924 25,184 shareholders with with resumed
ordinary shareholders at the
A-shareholders, A-shareholders, and resumed voting 0 voting rights at 0
shareholders at month-end prior to
and 10,718 10,788 rights at the the month-end
the period-end the disclosure of
B-shareholders) B-shareholders) period-end (if any) prior to the
this Report
disclosure of this
Report (if any)
5% or greater shareholders or top 10 shareholders
Sharehold
Increase/decrease
Nature of ing Total shares held Restricted Unrestricted Pledged or
Name of shareholder in the Reporting
shareholder percentag at the period-end shares held shares held frozen shares
Period
e
CHINA
MERCHANTS
INVESTMENT Foreign legal
64.05% 1,148,648,648 1,148,648,648 1,148,648,648 0 0
DEVELOPMENT person
COMPANY
LIMITED
CHINA
MERCHANTS Domestic
GANGTONG
general legal 20.68% 370,878,000 370,878,000 0 370,878,000 0
DEVELOPMENT
(SHENZHEN) CO., person
LTD.
BROADFORD Foreign legal
3.08% 55,314,208 55,314,208 0 55,314,208 0
GLOBAL LIMITED person
CMBLSA RE FTIF
TEMPLETON Foreign legal
2.42% 43,445,204 -4,469,750 0 43,445,204 Unknown
ASIAN GRW FD GTI person
5496
Foreign legal
NORGES BANK 0.16% 2,802,863 0 0 2,802,863 Unknown
person
CHINA
MERCHANTS State-owned
0.15% 2,641,020 514,998 0 2,641,020 Unknown
SECURITIES (HK) legal person
CO., LTD.
Domestic
MAI SHUQING 0.13% 2,361,047 122,700 0 2,361,047 Unknown
natural person
VANGUARD
EMERGING Foreign legal
0.12% 2,229,700 -387,818 0 2,229,700 Unknown
MARKETS STOCK person
INDEX FUND
108
China Merchants Port Group Co., Ltd. Annual Report 2018
CHINA
CONSTRUCTION
BANK—INVESCO
GREAT WALL
Fund, wealth
QUANTITATIVE
management 0.08% 1,495,654 735,993 0 1,495,654 Unknown
AND SELECTED
instrument, etc.
STOCK
SECURITIES
INVESTMENT
FUNDS
CANADA POST
CORPORATION Foreign legal
0.08% 1,446,906 -132,190 0 1,446,906 Unknown
REGISTERED person
PENSION PLAN
Strategic investors or general legal
person becoming top-ten shareholders N/A
due to placing of new shares (if any)
China Merchants Gangtong Development (Shenzhen) Co., Ltd. is a wholly-owned subsidiary of
Related or acting-in-concert parties Broadford Global Limited, and Broadford Global Limited is the controlling shareholder of China
among the shareholders above Merchants Investment Development Company Limited. The Company does not know whether the
other unrestricted shareholders are related parties or not.
Top 10 unrestricted shareholders
Shares by type
Name of shareholder Unrestricted shares held at the period-end
Type Shares
CHINA MERCHANTS GANGTONG DEVELOPMENT
370,878,000 A share 370,878,000
(SHENZHEN) CO., LTD.
BROADFORD GLOBAL LIMITED 55,314,208 B share 55,314,208
CMBLSA RE FTIF TEMPLETON ASIAN GRW FD GTI B share
43,445,204 43,445,204
5496
NORGES BANK 2,802,863 B share 2,802,863
CHINA MERCHANTS SECURITIES (HK) CO., LTD. 2,641,020 B share 2,641,020
MAI SHUQING 2,361,047 A share 2,361,047
VANGUARD EMERGING MARKETS STOCK INDEX B share
2,229,700 2,229,700
FUND
CHINA CONSTRUCTION BANK—INVESCO GREAT
WALL QUANTITATIVE AND SELECTED STOCK 1,495,654 A share 1,495,654
SECURITIES INVESTMENT FUNDS
CANADA POST CORPORATION REGISTERED B share
1,446,906 1,446,906
PENSION PLAN
CHEN ZEHONG 1,240,000 A share 1,240,000
Related or acting-in-concert parties among the top ten China Merchants Gangtong Development (Shenzhen) Co., Ltd. is a
unrestricted public shareholders and between the top ten wholly-owned subsidiary of Broadford Global Limited. The Company does
unrestricted public shareholders and the top ten shareholders not know whether the other unrestricted shareholders are related parties or
109
China Merchants Port Group Co., Ltd. Annual Report 2018
not.
Top ten ordinary shareholders conducting securities margin
N/A
trading (if any)
The top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company
did not conduct any promissory repo during the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a central state-owned legal person
Type of the controlling shareholder: legal person
Legal
Name of controlling representative Date of
Unified social credit code Principal activity
shareholder /person in establishment
charge
Port services,
bonded logistic and
BROADFORD GLOBAL Deng cold chain services,
27 November 2017 68550019-000-11-17-2
LIMITED Weidong property
development and
investment
Equities held by the
controlling shareholder in
other listed companies at
home or overseas by N/A
holding shares or
participating in shares
during the Reporting Period
For details about changes in all previous controlling shareholders, see IV. Changes in the registered
information in Part II Corporate Information and Key Financial Information of this report
3. Actual Controller
Nature of the actual controller: Central institution for state-owned assets management
Type of the actual controller: legal person
Legal
Name of actual representative Date of Unified social
Principal activity
controller /person in establishment credit code
charge
Lease and agency of water/land
passenger-cargo transportation, water/land
conveyance and facilities; investment and
China Merchants management of port and storage business;
Li Jianhong 14 October 1986 10000522-0
Group salvage, refloatation and tugboat; industrial
production; construction, repairing,
checking and marketing of shipping,
offshore petroleum drilling equipment;
110
China Merchants Port Group Co., Ltd. Annual Report 2018
repairing and checking of drilling platform
and drilling container; overall contracting of
water/land construction projects and the
related offshore petroleum development
projects, and their construction organization
and logistic services; procurement, supply
and sale of water/land communication and
transportation equipment; export and import
business of transportation; investment and
management of finance, insurance, trust,
securities, futures business; investment and
management of tourism, hotels, catering
services and relevant service; real estate
development, management and consultancy
of property; investment and management of
petroleum and chemical industry;
investment and operation of infrastructure of
communication; overseas assets
management. Development and
management of Shenzhen Shekou Industrial
Zone and Fujian Zhangzhou Development
Zone.
China Merchants Group holds:
62.09% shares of China Merchants Port Holdings Company Limited;
27.86% shares of China Merchants Bank Co., Ltd;
54.28% shares of China Merchants Energy Shipping Co., Ltd;
72.36% shares of China Merchants Shekou Industrial Zone Holdings Co., Ltd.;
74.35% shares of China Merchants Land Limited;
26.77% shares of Shanghai International Port (Group) Co., Ltd;
24.58% shares of China International Marine Containers (Group) Ltd;
87.81% shares of China Merchants Port Group Co., Ltd;
3.09% shares of Ningbo Zhoushan Port Company Limited;
2.54% shares of Qingdao Port International Co., Ltd;
44.09% shares of China Merchants Securities Co. Ltd.;
27.59% shares of China Merchants China Direct Investments Limited;
Equities of the
68.72% shares of China Merchants Expressway Network&Technology Holdings Co., Ltd;
other listed
16.52% shares of Heilongjiang Transport Development Co., Ltd;
companies at
14.04% shares of Jilin Expressway Co., Ltd;
home or overseas
16.02% shares of Shangdong Hi-speed Co., Ltd;
controlled by the
17.75% shares of Fujian Expressway Development Co., Ltd;
actual controller
24.05% shares of Sichuan Expressway Company Limited;
during the
29.94% shares of Anhui Expressway Company Limited;
Reporting Period
13.86% shares of Guangxi Wuzhou Communications Co., Ltd;
4.02% shares of Shenzhen Expressway Co., Ltd;
11.69% shares of Jiangsu Expressway Company Limited;
15.21% shares of Hubei Chutian Expressway Co., Ltd;
15.43% shares of Henan Zhongyuan Expressway Co., Ltd;
66.31% shares of Sinotrans Limited;
60.95% shares of Sinotrans Air Transportation Development Co., Ltd.;
68.70% shares of Sinotrans Shipping Ltd.;
7.04% shares of Xiandai Touzi Co., Ltd;
21.05% shares of Dalian Port (PDA) Company Limited;
0.37% shares of Hunan Sunward Intelligent Machine Co., Ltd;
0.16% shares of CMMB Vision Holdings Limited;
1.20% shares of Oriental Times Media Co., Ltd;
There was no change of the actual controller of the Company during the reporting period.
111
China Merchants Port Group Co., Ltd. Annual Report 2018
Ownership and control relations between the actual controller and the Company:
State-Owned Assets Supervision and Administration Commission of the State Council
100%
China Merchants Group
100%
Broadford Global Limited
3.08% 100% 74.66%
China Merchants Gangtong CMID
Development (Shenzhen) Co., Ltd.
20.68% 64.05%
5.24%
Public A-shareholders
China Merchants Port Group Co., Ltd.
Public B-shareholders
6.95%
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of
asset management.
□ Applicable √ Not applicable
4. Other 10% or Greater Corporate Shareholders
Legal
Name of corporate representative Date of Registered Business scope or management
shareholders /person in establishment capital activities
charge
China Merchants
Investment and HKD28,287,98 Investment management of equities
Fu Gangfeng 15 November 2013
Development Co., 9,241 and others
Ltd
Provision of management services for
ports (without involving special
administrative measures on the access
of foreign investment); port
information inquiries, economic
China Merchants information consultation, economic
Gangtong Deng RMB9,446 information consultation, corporate
16 January 2018
Development Weidong million management consultation, business
(Shenzhen) Co., Ltd. information consultation, brand
management consultation and
logistics information consultation
(excluding restricted items in each
case); technical development and
sales of ship machinery and
112
China Merchants Port Group Co., Ltd. Annual Report 2018
equipment; technical services in
respect of port loading and unloading
equipment; supporting businesses in
respect of the design, sales, import
and export of loading and unloading
tools, mechanical and electrical
products and non-ferrous metal
products (excluding precious metals)
(Commodities that involve state
trading, quota, license and special
administrative regulations shall be
operated through the application
pursuant to related state regulations);
technical development and technical
services in respect of modern
logistics information systems; supply
chain management and related
supporting services; design of
logistics plans; planning of corporate
image; planning of cultural exchange
activities (without involving special
administrative measures on the access
of foreign investment); marketing
planning; and planning of brand
image. (In each case, any item
forbidden by laws, administrative
regulations and the State Council
shall be excluded and restricted items
shall be operated upon the attainment
of the permission)
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual
Controller, Reorganizer and Other Commitment Makers
√ Applicable □ Not applicable
For details, see III. Fulfillment of commitments in Part V Significant Events of this report
113
China Merchants Port Group Co., Ltd. Annual Report 2018
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
Part VIII Directors, Supervisors, Senior Management and Staff
I Change in Shareholdings of Directors, Supervisors and Senior Management
Shares Decreas Other Shares
Increased
held at ed increa held at
shares of
Current/ Starting and ending dates of the shares se/dec the
Name Office title Sex Age the
former office term period-b of the rease period-e
period
egin period (share nd
(share)
(share) (share) ) (share)
Chairman of Incumbe
Fu Gangfeng the Board Male 52 December 2018 to June 2020 0 0 0 0 0
nt
Vice
Incumbe
Deng Renjie Chairman of Male 48 December 2018 to June 2020 0 0 0 0 0
the Board nt
Director Incumbe
Bai Jingtao Male 53 September 2017 to June 2020 0 0 0 0 0
nt
Director Incumbe
Yan Shuai Male 46 December 2018 to June 2020 0 0 0 0 0
nt
Director Incumbe
Su Jian Male 46 December 2018 to June 2020 0 0 0 0 0
nt
Incumbe
Song Dexing Director Male 55 December 2018 to June 2020 0 0 0 0 0
nt
Independent Incumbe
Yuan Yuhui director Male 68 June 2017 to June 2020 14,040 0 0 0 14,040
nt
Independent Incumbe
Su Qiyun director Male 55 June 2017 to June 2020 0 0 0 0 0
nt
Li Independent Incumbe
director Male 51 June 2017 to June 2020 0 0 0 0 0
Changqing nt
Chairman of
the Incumbe
Liu Yingjie Supervisory Male 46 December 2018 to June 2020 0 0 0 0 0
nt
Committee
Supervisor Incumbe
Hu Qin Female 52 December 2018 to June 2020 0 0 0 0 0
nt
Incumbe
Yang Yuntao Supervisor Male 52 December 2018 to June 2020 0 0 0 0 0
nt
Supervisor Incumbe
Ni Keqin Female 54 June 2017 to June 2020 29,211 0 0 0 29,211
nt
114
China Merchants Port Group Co., Ltd. Annual Report 2018
Zheng Supervisor Incumbe
Male 48 June 2017 to June 2020 0 0 0 0 0
Linwei nt
Incumbe
Bai Jingtao CEO Male 53 December 2018 to June 2020 0 0 0 0 0
nt
GM and Incumbe
Zhang Yi Male 48 December 2018 to June 2020 0 0 0 0 0
COO nt
Zheng Incumbe
Vice GM Male 56 December 2018 to June 2020 0 12,661 0 0 12,661
Shaoping nt
Incumbe
Yan Gang Vice GM Male 47 December 2018 to June 2020 0 0 0 0 0
nt
Vice GM
Huang Incumbe
and Board Male 36 December 2018 to June 2020 0 0 0 0 0
Chuanjing nt
Secretary
Incumbe
Lu Yongxin Vice GM Male 50 December 2018 to June 2020 0 0 0 0 0
nt
Incumbe
Li Yubin Vice GM Male 47 December 2018 to June 2020 0 0 0 0 0
nt
Incumbe
Wen Ling CFO Female 53 December 2018 to June 2020 0 0 0 0 0
nt
Chairman of September 2017 to December
Bai Jingtao the Board Former Male 53 0 0 0 0 0
2018
Vice
Zhou Chairman of Former September 2017 to December
Male 55 0 0 0 0 0
Qinghong the Board 2018
Lv Director Former Male 54 June 2017 to December 2018 0 0 0 0 0
Shengzhou
Li Yubin Director Former Male 47 June 2017 to December 2018 0 0 0 0 0
Managing
Liu Bin Director Former Male 49 June 2017 to December 2018 0 0 0 0 0
Zhang
Director Former Male 54 June 2017 to December 2018 74,282 0 0 0 74,282
Jianguo
Chairman of
the
Zhao Jianli Former Female 55 June 2017 to December 2018 0 0 0 0 0
Supervisory
Committee
Sun Ligan Supervisor Former Male 51 June 2017 to December 2018 0 0 0 0 0
Wen Ling Supervisor Former Female 54 June 2017 to December 2018 0 0 0 0 0
Zhao
Vice GM Former Male 53 June 2017 to December 2018 64,954 0 0 0 64,954
Chaoxiong
Vice GM
and
Wang Yongli Former Male 51 June 2017 to December 2018 4,985 0 0 0 4,985
Secretary of
the Board
115
China Merchants Port Group Co., Ltd. Annual Report 2018
Lin Cong Vice GM Former Male 60 June 2017 to December 2018 0 0 0 0 0
Yao September 2017 to December
CFO Former Female 52 26,000 0 0 0 26,000
Shenglan 2018
Total -- -- -- -- -- -- 432,045 0 0 0 432,045
II Change of Directors, Supervisors and Senior Management
Name Office title Type of change Date of change Reason for change
Chairman of the
Bai Jingtao Board Left 6 December 2018 Job change
Zhou Vice Chairman of Left
the Board 13 December 2018 Job change
Qinghong
Lv Shengzhou Director Left 13 December 2018 Job change
Li Yubin Director Left 13 December 2018 Job change
Managing Left
Liu Bin Director 13 December 2018 Job change
Zhang Left
Director 13 December 2018 Job change
Jianguo
Chairman of the Left
Zhao Jianli Supervisory 13 December 2018 Job change
Committee
Sun Ligan Supervisor Left 13 December 2018 Job change
Wen Ling Supervisor Left 13 December 2018 Job change
Zhao Left
Vice GM 6 December 2018 Job change
Chaoxiong
Vice GM and Left
Wang Yongli Secretary of the 13 December 2018 Job change
Board
Lin Cong Vice GM Left 6 December 2018 Job change
Yao Shenglan CFO Left 6 December 2018 Job change
III Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the
incumbent directors, supervisors and senior management:
Fu Gangfeng, Chairman of the Board, graduated from College of Highway, Chang’an University,
majoring in accounting of Department of Economics and in management engineering of
Department of Management, and obtained bachelor’s degree and master’s degree respectively. Fu
Gangfeng now holds the post of Director, General Manager of China Merchants Group Company
Limited. Fu Gangfeng holds concurrent posts of Executive Director and Chairman of the Board of
China Merchants Port Holdings Company Limited (CM Port Holdings), Vice President of China
Merchants Bank Company Limited, Chief Supervisor of China Merchants Life Insurance Company
Limited. Fu Gangfeng has successively held the posts of Staff of ShekouZhonghua Accounting
Firm, Staff of Division of Chief Accountant of Shekou Industrial Zone, Deputy Director of
ShekouZhonghua Accounting Firm, Director of Division of Chief Accountant of Shekou Industrial
116
China Merchants Port Group Co., Ltd. Annual Report 2018
Zone, Deputy Chief Accountant of Shekou Industrial Zone, Financial Controller of Shekou
Holdings, Financial Controller of Shekou Industrial Zone, General Manager of Finance Department
of China Merchants Group, Deputy Financial Controller of China Merchants Group and Chief
Accountant of China Merchants Group. Fu Gangfeng has been being the President of the Company
since December 2018.
Deng Renjie, Vice Chairman of the Board, graduated from Dalian Maritime University, majoring
in international economic law, and obtained master’s degree. Deng Renjie now holds the post of
Deputy General Manager of China Merchants Group Company Limited, President of Liaoning Port
Group Co., Ltd. Deng Renjie has successively held the posts of Researcher of General Office of
Ministry of Communications, Deputy Director of General Office of Hunan Provincial Party
Committee, Deputy Secretary General of Hunan Provincial Party Committee, Deputy Secretary
General of Party Committee of Xinjiang Autonomous Region, Assistant General Manager of China
Merchants Group Company Limited and Director of General Manager. Deng Renjie holds
concurrent posts of Executive Director, Vice Chairman of the 8th Council of China Highway and
Transportation Society. Deng Renjie has been being the Vice Chairman of the Board of the
Company since December 2018.
Bai Jingtao, Director and Chief Executive Officer, Professor Level Senior Engineer, graduated
from Department of Water Conservancy of Tianjin University and obtained bachelor’s degree in
port and waterway engineering. Later Bai Jingtao studied at Graduate School of Wuhan University
of Technology, Graduate School of Shanghai Maritime University and obtained master’s degree in
management science and engineering, doctor’s degree in transportation planning and management
respectively. Bai Jingtao now holds the post of Managing Director of China Merchants Port
Holdings Company Limited (CM Port Holdings). Bai Jingtao has successively held the posts of
Assistant Engineer of CCCC Water Transportation Consultants Co., Ltd, Principal Staff of Division
of Engineering Management and Division of Infrastructure Management of Ministry of
Communications, Deputy Director and Director of Division of Infrastructure Management and
Division of Water Transport of Ministry of Communications, Deputy General Manager of China
Merchants Zhangzhou Development Zone Co., Ltd and Director of Zhangzhou Port Authority,
Deputy Director of Xiamen Port Authority and Executive Deputy Commander of Construction
Headquarters of Xiamen Haicang Bonded Port Area, Deputy General Manager of China Merchants
International Company Limited, Secretary of the Party Committee of China Merchants Zhangzhou
Economic and Technological Development Zone and Executive Deputy Director of Management
Committee, Secretary of the Party Committee and General Manager of China Merchants
Zhangzhou Economic and Technological Development Zone Company Limited. Bai Jingtao has
been being the Director of the Company since September 2017 and Chief Executive Officer of the
Company since December 2018.
Yan Shuai, Director, graduated from Harbin Engineering University, majoring in industrial
automation, and obtained bachelor’s degree in engineering. Later Yan Huai obtained master’s
degree in management at Beijing University of Aeronautics and Astronautics. Yan Shuai now holds
the posts of Director of Human Resources Department, Director of Party Committee Office,
Director of Organization Department of Party Committee and Director of Department of
Party-Mass Work of China Merchants Group. Yan Shuai has successively held the posts of Deputy
Researcher of General Office of the State Council of the People’s Republic of China Second
Secretariat, Member of Party Committee, Deputy General Manager and Secretary of Committee of
Discipline Inspection of China Merchants Group Finance Co., Ltd., Deputy Director (principal
person) of Human Resources Department of China Merchants Group Company Limited. Yan Shuai
has been being the Director of the Company since December 2018.
Su Jian, Director, Non-Practicing Member of The Chinese Institute of Certified Public
117
China Merchants Port Group Co., Ltd. Annual Report 2018
Accountants, Intermediate Accountant, graduated from Department of Economics of Shanghai
University of Finance and Economics, and obtained bachelor’s degree in economics. Li Jian now
holds the post of Director of Finance Department (Property Right Department) of China Merchants
Group Company Limited. Li Jian has successively held the post of Financial Manager of China
Merchants International Travel Co., Ltd., Senior Manager of Finance Department of China
Merchants Shekou Industrial Zone, Senior Manager of Finance Department of China Merchants
Group Company Limited, Assistant Director of Finance Department, Deputy Director of Finance
Department, Deputy Director of Human Resources Department, Deputy Director of Party
Committee Office, Deputy Director of Organization Department of Party Committee, Deputy
Director of Property Right Department (principal person), Secretary of Party Committee, Secretary
of Committee for Discipline Inspection, Deputy General Manager of China Merchants Industrial
Group Company Limited. Li Jian has been being the Director of the Company since December
2018.
Song Dexing, Director, Senior Engineer, graduated from Department of Mechanics of Wuhan
University of Technology (former name is Wuhan Institute of Water Transportation Engineering),
and obtained bachelor’s degree in engineering. Later Song Dexing obtained master’s degree,
majoring in transportation planning at Wuhan University of Technology and doctor’s degree in
management, majoring in administrative management at Huazhong University of Science and
Technology. Song Dexing now holds the posts of Director of Transportation & Logistics Business
Department/Beijing Headquarters of China Merchants Group Company Limited, Executive Director,
General Manager, Secretary of Party Committee of SINOTRANS&CSC. Song Dexing has
successively held the posts of Secretary of Youth League Committee, Engineer of Water Transport
Planning & Design Institute of Ministry of Communications, Principal Staff of Division of
Transport of Ministry of Communications, Deputy Director, Director of Container Office of
Division of Water Transport of Ministry of Communications, Deputy Mayor of Luoyang Municipal
People’s Government (temporary post), Deputy Director of China Waterborne Transport Research
Institute, Deputy Director, Director of Yangtze Three Gorges Navigation Administration, Deputy
Director, Director of Division of Water Transport of Ministry of Communications, Director of
Bureau of Water Transport of Ministry of Transport (Director of Taiwanese Affairs Office of the
ministry), Vice President, Member of Party Committee, Deputy Secretary of Party Committee,
Secretary of Committee for Discipline Inspection of SINOTRANS&CSC, General Manager of
SINOTRANS&CSC, Director of Department of Comprehensive Logistics Business of China
Merchants Group Company Limited. Song Dexing has been being the Director of the Company
since December 2018.
Yuan Yuhui, Independent Director, MBA, now acts as the Director of Shenzhen Riland Industrial
Co., Ltd. He once acted as the Vice GM, Vice Director of China Nanshan Development (Group)
Incorporation and the Director of the Company. And he has been being the Independent Director of
the Company since August 2015.
Su Qiyun, Independent Director, graduated from Xiamen University of Department of Law with a
master degree of Civil and Commercial Law and a doctor degree of Wuhan University of Law. He
now is the founding partner of Beijing Deheng Law Office. He used to serve as Manager of
Investment Department of Ping An Insurance Company of China, as Cadres of Shenzhen Industry
and Commerce Administration. And he has been an Independent Director of the Company since
May 2014.
Li Changqing, Independent Director, graduated from Xiamen University with a doctor degree of
Accounting, and also is a CPA, an excellent talent of new century of Ministry of Department, a
prominent talent of Xiamen as well as a guide tutor of Postdoctoral Center of SSE. He now is the
Director of Senior Business Administration Education Center, professor and doctoral supervisor of
118
China Merchants Port Group Co., Ltd. Annual Report 2018
Xiamen University. And he has been being an Independent Director of the Company since May
2014.
Liu Yingjie, Chairman of the Supervisory Committee, graduated from Capital University of
Economics and Business, majoring in accounting, and obtained bachelor’s degree in economics. Liu
Yingjie now holds the post of Director of Risk Control Department/Law and Compliance
Department of China Merchants Group. Liu Yingjie has successively held the posts of Deputy
Director, Director of Division of Comprehensive Audit of Supervision Department of COSCO,
Director of Division of Computer Audit, Assistant Director, Deputy Director of Risk Control
Department/Audit Department of China Merchants Group. Liu Yingjie has been being the Chairman
of the Supervisory Committee of the Company since December 2018.
Hu Qin, Supervisor, graduated from Peking University, majoring in international law, and obtained
master’s degree in law. Later Hu Qin studied at NUS Business School and obtained master’s degree
in management. Hu Qin now holds the post of Deputy Director of Risk Control Department/Law
&Compliance of China Merchants Group. Hu Qin has successively held the posts of Deputy
General Manager of Planning Department of China Merchants Shekou Industrial Zone Company
Limited, General Manager and General Counsel of Department of Legal Affairs, General Counsel
of China Merchants Shekou Industrial Zone Holdings Co., Ltd., Deputy Director of Risk Control
Department of China Merchants Group, Deputy Director of Legal Department. Hu Qin has been
being the Supervisor of the Company Since December 2018.
Yang Yuntao, Supervisor, graduated from Jilin University, majoring in international law, and
obtained bachelor’s degree in law. Later Yang Yuntao studied at School of Law, University of
International Business and Economics, and obtained doctor’s degree in law. Yang Yuntao now holds
the posts of Deputy Director of Transportation & Logistics Business Department/Beijing
Headquarters of China Merchants Group Company Limited, Deputy General Manager and General
Counsel of SINOTRANS&CSC, Member of Party Committee. Yang Yuntao has successively held
the posts of Deputy General Manager of Port Business Department of Sino-Trans China National
Foreign Trade Transportation Corporation, General Manager of Law Department, Director, Deputy
General Manager (principal person) of SINOTRANS (Hong Kong) Group Company Limited,
Non-Executive Director of SINOTRANS Limited, General Manager of Law Department of
Sino-Trans China Foreign Trade Transportation (Group) Corporation, General Manager, Deputy
General Counsel, General Counsel of Law Department of SINOTRANS & CSC. Yang Yuntao has
been being the Supervisor of the Company since December 2018.
Ni Keqin, Supervisor, is the Deputy GM of Chiwan Container Terminal Co., Ltd. now. She took
the positions of Manager Assistant, Deputy Manager as well as Manager of the Operation
Department and GM Assistant of CCT successively. She has been being the Supervisor of the
Company since May 2008.
Zheng Linwei, Supervisor, graduated from NJAU, with a bachelor degree of Agricultural Foreign
Trade and graduated from Shanghai Maritime University with MBA in 2004. He now serves as Vice
GM of the Harbor Division, Dongguan Shenzhen Chiwan Wharf Holdings Limited and Dongguan
Shenzhen Chiwan Terminal Co., Ltd. He has been being worked at the Harbor Division of the
Company from August 1993. He once acted as Director of Operation Room of Department II of
Commercial Freight of the Harbor Division of the Company, Manager Assistant, Vice Manager, and
Manager of Department II of Commercial Freight. And he has been being the Supervisor of the
Company since May 2014.
Zhang Yi, General Manager and Chief Operational Officer, graduated from Wuhan Institute of
Water Transportation Engineering and obtained bachelor’s degree in transportation management
engineering. Later Zhang Yi obtained doctor’s degree in engineering at Wuhan University of
119
China Merchants Port Group Co., Ltd. Annual Report 2018
Technology. Zhang Yi now holds the post of Deputy General Manager of China Merchants Port
Holdings Company Limited (CM Port Holdings). Zhang Yi has successively held the posts of
Planner of Planning Division of Zhanjiang Port Authority, Deputy Director of Planning
Development Division of Zhanjiang Port Authority, Assistant Director of Zhanjiang Port Authority,
Director, President, Secretary of Party Committee of Zhanjiang Port Group Company Limited.
Zhang Yi has been being the General Manager&COO of the Company since December 2018.
Zheng Shaoping, Vice General Manager, graduated from Dalian Maritime University for
postgraduate, majoring in international maritime law. Later Zheng Shaoping obtained master’s
degree in business administration at The University of Wales. Zheng Shaoping now holds the posts
of Executive Director and Deputy General Manager of China Merchants Port Holdings Company
Limited (CM Port Holdings). Zheng Shaoping has successively held the posts of Vice President of
China Merchants Bonded Logistics Co., Ltd., President of Shekou Container Terminals Ltd.,
General Manager and President of Chiwan Container Terminal Co., Ltd. (CCT), General Manager
and President of Shenzhen Chiwan Container Co., Ltd., Managing Director and President of
Shenzhen Chiwan Wharf Holdings Limited (CWH). Zheng Shaoping has been being the Deputy
General Manager of the Company since December 2018.
Yan Gang, Vice General Manager, graduated from Xiamen University, and obtained bachelor’s
degree in international trade. Later Yan Gang obtained master’s degree in business administration
jointly run by MSM and Shanghai Maritime University. Yan Gang now holds the post of Deputy
General Manager of China Merchants Port Holdings Company Limited (CM Port Holdings). Yan
Gang has successively held the posts of Logistics General Manager in Pearl River Delta of Hong
Kong Air Cargo Terminals Limited (HACTL) dispatched by Swire Group, Deputy General Manager,
Executive Deputy General Manager, General Manager of Shekou Container Terminals Ltd., Chief
Business Officer of China Merchants Port Holdings Company Limited (CM Port Holdings). Yan
Gang has been being the Deputy General Manager of the Company since December 2018.
Huang Chuanjing, Vice General Manager and Board Secretary, graduated from the English
Department of Shandong University of Science and Technology with a bachelor’s degree in arts.
Later, he obtained a master’s degree in business administration at The University of Wales. He once
was the Director of Wharf Operation Department of China Merchants International Qingdao Wharf
Company Limited, Assistant of General Manager’s Office, Director of Administration Department
of China Merchants International Company Limited, Assistant Director of General Office of China
Merchants Group, Senior Manager, Assistant General Manager of General Office of China
Merchants Group Company Limited, Assistant Director of General Office and secretary of the
board of China Merchants Group Company Limited, Assistant Director of Board of Directors Office,
Chief of Board Secretariat of General Office, Deputy Director of Board of Directors Office of
China Merchants Group Company Limited. Huang Chuanjing has been acting as the Vice General
Manager of the Company since December 2018.
Lu Yongxin, Vice General Manager, graduated from Dalian University of Technology, and
obtained bachelor’s degree in English for science and technology. Later Lu Yongxin graduated from
Curtin University and obtained master’s degree in project management. Lu Yongxin now holds the
post of Deputy General Manager of China Merchants Port Holdings Company Limited (CM Port
Holdings). Lu Yongxin has successively held the posts of Assistant General Manager of Zhenhua
Construction Co. Ltd., Deputy Director of CHEC (Beijing) Head Office, Deputy General Manager
of Research & Development Department of China Merchants Port Holdings Company Limited (CM
Port Holdings), General Manager of Overseas Business Department, Assistant General Manager. Lu
Yongxin has been dispatched to Terminal Link in France to act as CFO and Senior Vice President.
Lu Yongxin has been as the Vice General Manager of the Company since December 2018.
120
China Merchants Port Group Co., Ltd. Annual Report 2018
Li Yubin, Vice General Manager, graduated from Tianjin University, majoring in engineering
management, and obtained master’s degree. Later Li Yubin graduated from The University of Hong
Kong and obtained doctor’s degree in real estate and construction. Li Yubin now holds the post of
Deputy General Manager of China Merchants Port Holdings Company Limited (CM Port Holdings)
and General Manager of China Merchants Bonded Logistics Co., Ltd. Li Yubin has successively
held the posts of Deputy General Manager of Road and Bridge Project of China Harbor Company in
Bangladeshi Office, Project Director of Overseas Business Department of CHEC, Assistant General
Manager of Planning and Commerce Department of China Merchants Port Holdings Company
Limited (CM Port Holdings), General Manager, Deputy General Economist of Strategy and
Operation Management Department, General Manager, Deputy General Economist of Strategy and
Operation Department, General Manager of China Merchants Bonded Logistics Co., Ltd. Li Yubin
has been acting the Vice General Manager of the Company since December 2018.
Wen Ling, Chief Financial Officer, graduated from Finance Dept. in Southwestern University of
Finance and Economics with a master degree. Wen is now the CFO of China Merchants Port
Holdings Company Limited. Wen was once the Deputy Financial Manager of China Merchants Port
Service (Shenzhen) Co., Ltd., the Financial Manager of Shenzhen Mawan Port Services Co., Ltd.
and the Vice Financial Manager, Senior Vice Financial Manager, and GM of Capital Operation Dept.
in China Merchants Port Holdings Company Limited. And Wen has been acting as the CFO of the
Company since December 2018.
Offices held concurrently in shareholding entities:
Remuneration
or allowance
Office held in the shareholding
Name Shareholding entity Term of office from the
entity
shareholding
entity
Fu China Merchants Investment and
Director August 2014 to now No
Gangfeng Development Co., Ltd
Offices held concurrently in other entities:
Remuneration or
Office held in the
Name Other entity Term of office allowance from
entity
the entity
China Merchants Shipping Co., Ltd Director August 2014 to now No
China Merchants Group (H.K.) Limited Director August 2003 to now No
Chairman of the
China Merchants Port Holdings Company Limited Board March 2018 to now No
Fu
Gangfeng Vice Chairman of
China Merchants Bank Co.,Ltd the Board August 2010 to now No
Chairman of the
China Merchants Life Insurance Co., Ltd Supervisory July 2017 to now No
Committee
Punishments imposed in the recent three years by the securities regulator on the incumbent directors,
supervisors and senior management as well as those who left in the Reporting Period:
121
China Merchants Port Group Co., Ltd. Annual Report 2018
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors,
supervisors and senior management:
Decision-making procedure for the remuneration of directors, supervisors and senior management:
Remunerations for the Company’s directors, supervisors and senior management shall be nominated
by the Board of Directors and determined upon review of the Remuneration and Appraisal
Committee. Allowance for Independent Directors is RMB100,000/year (tax included), which has
been approved at the 2016 Annual General Meeting
Determining basis for the remuneration of directors, supervisors and senior management: The
modes and amounts of the remuneration for directors, supervisors and senior management are
determined according to the market levels with the post value, responsibilities, etc. taken into
account.
Actual payment for the remuneration of directors, supervisors and senior management: Salaries and
independent director allowances were paid to directors, supervisors and senior executives on a
monthly basis. And the other bonuses were paid all at one time according to the performance of
each of them.
Unit: RMB’0,000
Total
before-tax
Incumbent/Fo Any remuneration
Name Office title Gender Age remuneratio
rmer from related party
n from the
Company
Get paid from
Chairman of
Fu Gangfeng the Board Male 52 Incumbent 0 China Merchants
Group
Vice Get paid from
Deng Renjie Chairman of Male 48 Incumbent 0 China Merchants
the Board
Group
Director and
Bai Jingtao CEO Male 53 Incumbent 247
Get paid from
Yan Shuai Director Male 46 Incumbent 0 China Merchants
Group
Get paid from
Su Jian Director Male 46 Incumbent 0 China Merchants
Group
122
China Merchants Port Group Co., Ltd. Annual Report 2018
Get paid from
Song Dexing Director Male 55 Incumbent 0 China Merchants
Group
Independent
Yuan Yuhui director Male 68 Incumbent 10
Independent
Su Qiyun director Male 55 Incumbent 10
Li Independent
director Male 51 Incumbent 10
Changqing
Chairman of
Get paid from
the
Liu Yingjie Supervisory Male 46 Incumbent 0 China Merchants
Committee Group
Get paid from
Hu Qin Supervisor Female 52 Incumbent 0 China Merchants
Group
Get paid from
Yang Yuntao Supervisor Male 52 Incumbent 0 China Merchants
Group
Ni Keqin Supervisor 54 Incumbent 124
Zheng Supervisor Male 48 Incumbent 108
Linwei
GM and
Zhang Yi Male 48 Incumbent 16
COO
123
China Merchants Port Group Co., Ltd. Annual Report 2018
Zheng
Vice GM Male 56 Incumbent 18
Shaoping
Yan Gang Vice GM Male 47 Incumbent 14
Vice GM and
Huang
Board Male 36 Incumbent 9
Chuanjing
Secretary
Lu Yongxin Vice GM Male 50 Incumbent 14
Li Yubin Vice GM Male 47 Incumbent 144
Wen Ling CFO Female 53 Incumbent 129
Vice
Zhou Chairman of Male 53 Former 162
Qinghong the Board
Lv Director Male 55 Former 140
Shengzhou
Managing
Liu Bin Director Male 47 Former 127
Get paid from
Zhang
Director Male 49 Former 0 China Nanshan
Jianguo
Development
124
China Merchants Port Group Co., Ltd. Annual Report 2018
(Group)
Incorporation
Chairman of
the
Zhao Jianli Female 54 Former 112
Supervisory
Committee
Sun Ligan Supervisor Male 55 Former 92
Zhao
Vice GM Male 53 Former 111
Chaoxiong
Vice GM and
Wang Yongli Secretary of Male 51 Former 110
the Board
Lin Cong Vice GM Male 60 Former 108
Yao
CFO Female 52 Former 79
Shenglan
Total -- -- -- -- 1,894 --
Equity incentives for directors, supervisors and senior management in the Reporting Period:
□ Applicable √ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as
284
the parent
Number of in-service employees of major subsidiaries 9284
Total number of in-service employees 9568
Total number of paid employees in the Reporting
9568
Period
125
China Merchants Port Group Co., Ltd. Annual Report 2018
Number of retirees to whom the Company as the
parent or its major subsidiaries need to pay retirement 2231
pensions
Functions
Function Employees
Production and operation 5635
Business 536
Technical 1983
Financial 455
Administrative 959
Total 9568
Educational backgrounds
Educational background Employees
Master’s degree and above 311
Bachelor’s degree 1923
Junior college 2405
Technical secondary school and below 4929
Total 9568
2. Employee Remuneration Policy
The Company observes the principle of efficiency first with the consideration given to fairness and
sustainable development for its remuneration system, determines the general remuneration level
according to its strategic goals and market competitiveness, defines the remuneration grade
according to the principles of internal fairness and performances with the priority given to
employees with excellent performance, and establishes a structured broadband remuneration system.
Based on its medium- and long-term development planning and key performance goals, the
Company dynamically adjusts its remuneration strategies and implementation policies and exerts
control over the total remuneration.
The Company keeps exploring diverse remuneration incentive mechanisms, promotes medium- and
long-term incentive schemes, enhances the motivation of remuneration, attracts and retains
excellent employees and builds a talent team matching the development of the Company.
3. Employee Training Plans
The Company is dedicated to creating a platform for the development and promotion of global port
professionals, provides domestic and foreign employees with learning opportunities, opens channels
for global career development and helps employees to keep improving themselves with the
development of the Company. Meanwhile, it provides its peers with opportunities of coming to
China for exchange to share knowledge and values. In 2018, the Company further optimized the
training system, integrated internal and external training resources, and established a series of key
training projects at different levels with different categories, including the project series on strategic
leadership of senior executive project series, the project series on enhancement of global
management and implementation of middle-level key leaders and the projects on the enhancement
of professional and general abilities for junior employees. The Company shall, based on the
network platform, develop terminal learning APP, and share training resources openly, enlarging
the learning timely and effectively at a low cost. Strengthening the communications and
126
China Merchants Port Group Co., Ltd. Annual Report 2018
collaboration between various units, it shall achieve the comprehensive integration of talents
training under the guidance of the Company. The Company actively fulfilled the social
responsibility, carrying out the “Co-creating Blue Dream-21th Century Maritime Silk Road Talents
Plan” of China Merchants Port, which cultivate professionals of port and shipping for countries
along the One Belt and One Road. As of the end of 2018, the project had cultivated 110 young
backbone talents from 19 countries on 4 continents. Meanwhile, the Company participated in
“Zhangqian project” of Hongkong sea silk association and other practical projects for students,
providing Hongkong university students with meaningful overseas internship opportunity, and
actively promoting the cooperation of the university and enterprises.
4. Labor Outsourcing
□ Applicable √ Not applicable
127
China Merchants Port Group Co., Ltd. Annual Report 2018
Part IX Corporate Governance
I General Information of Corporate Bonds
Ever since its establishment, the Company has been in strict compliance with the company
law and securities law, as well as relevant laws and regulations issued by CSRC. And it has
timely formulated and amended its relevant management rules according to the Code of
Corporate Governance for Listed Companies, which are conscientiously and carefully
executed. An effective system of internal control has thus taken shape in the Company.
Details about corporate governance within the reporting period are set out as below:
1. During the Reporting Period, the Company included Party building work in its Articles of
Incorporation pursuant to the requirements of the Notice on the Inclusion of Party Building Work
into the Articles of Incorporation issued by the superior Party committee. The revision was
reviewed and approved at the 3rd Meeting of the 9th Board of Directors held on 3 March 2018.
Subsequently, it was reviewed and approved at the Company’s 2017 Annual General Meeting held
on 28 March 2018.
2. During the Reporting Period, to further refine the Company’s governance structure and promote
standard operations within the Company, pursuant to the Stock Listing Rules of Shenzhen Stock
Exchange, the Rules of Shenzhen Stock Exchange for Stock Listing on ChiNext, the CSRC
Releases No. 3 Guideline for the Supervision of Listed Companies - Cash Dividend Distribution of
Listed Companies, the Notice on Further Implementing Matters in Respect of the Cash Dividend
Distribution of Listed Companies, the Opinions of the General Office of the State Council on
Further Strengthening the Protection of the Legitimate Rights and Interests of Minority Investors in
the Capital Market, the Rules of Annual General Meeting of Listed Companies, the Guidance
Opinions on the Establishment of the Director System in Listed Companies, the Rules on the Report
of the Use of Previously Raised Fund, the CSRC Releases No. 2 Guideline for the Supervision of
Listed Companies - Administration of Funds Raised by Listed Companies and Applicable
Supervision Requirements, the Management Rules on the Shares of the Company Held by Directors,
Supervisors and Senior Management of Listed Companies and the Changes, the Rules on Decreased
Shareholding of Shareholders, Directors, Supervisors and Senior Management of Listed Companies
and the Implementation Rules of Shenzhen Stock Exchange for Decreased Shareholding of
Shareholders, Directors, Supervisors and Senior Management of Listed Companies, the Company
revised the Articles of Incorporation, the Rules of Procedures for the Annual General Meeting, the
Rules of Procedures for the Board of Directors, the Work Policy for Independent Directors, the
Management Policies for Raised Funds, and the Management Policies for the Shares of the
Company Held by Directors, Supervisors and Senior Management and the Changes. The revisions
were reviewed and approved at the 5th Special Meeting of the 9th Board of Directors of 2018 held on
19 June 2018. The Articles of Incorporation, the Rules of Procedures for the Annual General
Meeting, the Rules of Procedures for the Board of Directors, the Work Policy for Independent
Directors and the Management Policies for Raised Funds were reviewed and approved subsequently
at the 2nd Extraordinary General Meeting of 2018 held on 26 July 2018.
3. During the Reporting Period, based on the change in the Company’s name as well as the
Company’s plan to change its address and increase the number of deputy general managers
according to the operational management requirements and pursuant to the Decision of NPSCS on
the Amendment to the Company Law of the People’s Republic of China published and
128
China Merchants Port Group Co., Ltd. Annual Report 2018
implemented on 26 October 2018, considering its actual status of development, the Company
revised the Articles of Incorporation, which was reviewed and approved at the 8th Special Meeting
of the 9th Board of Directors of 2018 held on 27 November 2018, and subsequently reviewed and
approved at the 3rd Extraordinary General Meeting of 2018 held on 13 December 2018.
4. Shareholders and shareholders’ general meeting: the Company ensures that all the shareholders,
especially minority shareholders, are equal and could enjoy their full rights. The Company called
and held shareholders’ general meeting strictly in compliance with the Rules for Shareholders’
General Meeting.
5. Relationship between the controlling shareholder and the Company: controlling shareholder of
the Company acted in line with rules during the reporting period, did not intervened the decisions,
productions or operations of the Company directly or indirectly in exceeding the authority of the
shareholders’ general meeting, and did not appropriate any funds of the Company.
6. Directors and the Board of Directors: the Company elected directors in strict accordance with the
Articles of Association. Number and composition of members of the Board were in compliance
with relevant laws and regulations; all Directors attend Board meetings and shareholders’ general
meeting in a serious and responsible manner and participated enthusiastically relevant training so as
to know better about laws and regulations as well as the rights, obligations and liabilities of
Directors. The Company The Company set up the Audit Committee as approved by The 1st
Extraordinary General Meeting of 2004 and the Nomination, Remuneration and Evaluation
Committee and Strategy Committee as approved by the 2005 Annual General Meeting, with a view
to ensuring the efficient operation and scientific decision-making of the Board of Directors.
7. Supervisors and the Supervisory Committee: number and composition of the members of the
Supervisory Committee were in compliance with the requirements of laws and regulations. The
supervisors diligently and seriously performed their duties and obligations, took responsible
attitudes to all shareholders and supervised the financial affair as well as the performance by the
Company’s Directors, managers and other senior executives of their duties in compliance with the
laws and regulations.
8. Stakeholders: the Company fully respected and safeguarded the legal rights and interests of the
banks and other creditors, staff, clients and other stakeholders so as to develop the Company in a
consistent and healthy way.
9. Information disclosure and transparency: the Company authorized the Board Secretary to take
charge of information disclosure, and the Chairman as well as related Directors to meet with
shareholders. The Company disclosed relevant information in a true, accurate, complete and timely
way in strict accordance with the requirements of laws, regulations and the Articles of Association,
formulated the Management Rules on Information Disclosure, the Management System on Inside
Information and Insiders and the Rules on the Management of Investors Relations, and designated
Securities Times, Ta Kung Pao and http://www.cninfo.com.cn as its newspaper and website for
information disclosure, so as to ensure all shareholders have equal opportunity to obtain the
information.
10. Corporate governance mechanisms and rules that the Company already established:
Articles of Association of the Company, Rules of Procedure for General Meetings, Working Articles
129
China Merchants Port Group Co., Ltd. Annual Report 2018
of Audit Committee of the Board of Directors, Working Rules of Annual Report for Audit
Committee of the Board of Directors, Working Articles for Nomination, Remuneration and
Evaluation Committee of the Board of Directors; Working Articles of Strategy Committee of the
Board of Directors, Working System for Independent Directors, Working Rules of Annual Report
for Independent Directors, Rules of Procedure for Supervisory Board, Working Articles of General
Manager, Management System for Company Shares held by Directors, Supervisors and Senior
Executives and Its Changes, Management System of Foreign Investment, Decision-making
Mechanism of Related Transactions, Management System of Fund-raising, Management Rules on
Information Disclosure, Rules of Accountability for Significant Mistakes in Annual Report
Information Disclosure, Management System on Inside Information and Insiders, Internal Audit
System, Management System of Investors’ Relations, Specific System for Engaging Accountants,
Management Method of Financial Tools, Management System on Person in Charge of Finance and
CFO, Information Disclosure Management Rules for the Inter-bank Debt Financing Instrument, etc.
There isn’t difference between the actual circumstances of the Company and all established
systems.
Since the foundation, the Company was consistently in strict accordance with Company Law and
relevant laws and regulations to make a standard operation, continued business-running in line with
relevant requirements of Corporate Governance Principle for Listed Companies and earnestly made
effort to protect profit and interests of shareholders and stakeholders.
Indicate by tick market whether there is any material incompliance with the regulatory documents
issued by the CSRC governing the governance of listed companies.
□ Yes √ No
II The Company’s Independence from Its Controlling Shareholder in Business, Personnel,
Asset, Organization and Financial Affairs
The Company is absolutely independent in business, personnel, assets, finance and organization
from its controlling shareholder. Details are set out as follows.
Separation in business: The Company has its own assets, personnel, qualifications and ability to
carry out operating activities and is able to operate independently in the market. Separation in
personnel: The Company has basically separated its staff from its controlling shareholder. No senior
management staff of the Company holds positions at controlling shareholder of the Company.
Separation in assets: The Company possesses its own self-governed assets and domicile. Separation
in organization: The Company has established and improved the corporate governance structure
according to law and has an independent and complete organizational structure. Separation in
finance: The Company has set up its own financial department as well as normative accounting
system and the financial management system on its subsidiaries. The Company has its own bank
accounts and does not share the same bank account with its controlling shareholder. The Company
has been paying tax in accordance with the laws and regulations on its own behalf.
III Horizontal Competition
□ Applicable √ Not applicable
130
China Merchants Port Group Co., Ltd. Annual Report 2018
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor
Index to disclosed
Meeting Type participati Date of the meeting Disclosure date
information
on ratio
For the resolution
The 1st
Extraordinary announcement (No.
Extraordinary
General 75.04% 13 February 2018 14 February 2018 2018-018), see
General Meeting of
Meeting http://www.cninfo.co
2018
m.cn
For the resolution
Annual announcement (No.
The 2017 Annual
General 75.49% 28 March 2018 29 March 2018 2018-037), see
General Meeting
Meeting http://www.cninfo.co
m.cn
For the resolution
The 2nd
Extraordinary announcement (No.
Extraordinary
General 75.50% 26 July 2018 27 July 2018 2018-078), see
General Meeting of
Meeting http://www.cninfo.co
2018
m.cn
For the resolution
The 3rd
Extraordinary announcement (No.
Extraordinary
General 75.22% 13 December 2018 14 December 2018 2018-114), see
General Meeting of
Meeting http://www.cninfo.co
2018
m.cn
2. Extraordinary General Meetings Convened at the Request of Preferred Shareholders with
Resumed Voting Rights
□ Applicable √ Not applicable
V Performance of Duty by Independent Directors in the Reporting Period
1. Attendance of Independent Directors at Board Meetings and General Meetings
Attendance of independent directors at board meetings and general meetings
The
Total
independent
number of Board Board
Board director
board Board meetings meetings the
meetings failed to General
Independent meetings the meetings attended by independent
attended attend two meetings
director independent attended on way of director
through a consecutive attended
director was site telecommuni failed to
proxy board
eligible to cation attend
meetings
attend
(yes/no)
Yuan Yuhui 12 4 8 0 0 No 1
131
China Merchants Port Group Co., Ltd. Annual Report 2018
Su Qiyun 12 4 8 0 0 No 4
Li Changqing 12 4 8 0 0 No 2
Why any independent director failed to attend two consecutive board meetings:
Not applicable.
2. Objections Raised by Independent Directors on Matters of the Company
No independent directors raised any objections on any matter of the Company during the Reporting
Period.
3. Other Information about the Performance of Duty by Independent Directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the
Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company:
During the reporting period, all independent directors of the Company probity and self-discipline,
fulfill their duties in line with their expertise and experience; earnestly and diligently perform their
duties. The independent directors actively known about the Company’s business and operation,
protected the interests of minority shareholders, brought their roles as independent directors into full
play by participating in discussions on reports reviewed at board sessions and other issues of the
Company, and proposed professional suggestions on standard governance and production operation
which had been adopted by the Company. They carefully reviewed and issued independent opinions
in written form on significant events such as material related-party transactions in accordance with
relevant requirements and had play a important role in scientific decision-making of the Board. In
accordance with the requirements of CSRC and Shenzhen Stock Exchange, the “Working Rules for
Independent Directors” and the “Working Rules for Independent Directors Concerning Annual
Reports, they performed their obligations with due diligence and fully oversaw the preparation and
disclosure of the Annual Report of the Company. For details of performance by independent
directors of their duties, please refer to the work report of independent directors for 2017 as
disclosed at http://www.cninfo.com.cn.
VI Performance of Duty by Specialized Committees under the Board in the Reporting Period
(I) Performance of the Audit Committee of the Board of Directors
The members of Audit Committee include independent director Li Changqing (convener), director
Su Jian, and independent director Su Qiyun. During the Reporting Period, the Audit Committee of
the Board in line with the requirements of CSRC and Shenzhen Stock Exchange, Articles of
Association, Working Rules for the Audit Committee of the Board (“Working Rules”) and the
Working Practices for the Audit Committee of the Board on Annual Report (“Working Practices”)
performed their duties, and give full play to their expertise and experience, earnestly examine the
Company's annual audit, reviewing of financial statement, internal control, and other significant
financial information, providing the Board of Directors’ scientific and efficient decision-making
with professional support.
1. Particulars about the Meetings
132
China Merchants Port Group Co., Ltd. Annual Report 2018
During the Reporting Period, the Audit Committee of the Board held a total of five meetings, with
details as follows:
(1) The 1st Meeting of the Audit Committee of the 9th Board of Directors for 2018
On 5 March 2018, it held at Conference Room 2, 11/F., Chiwan Haiyun Building, Shenzhen, at
which the following proposals were reviewed and approved unanimously:
1) “Internal Auditing Report of the Company for 2017”;
2) Internal Control and Audit Office's Auditing Report of the Company for 2017 No. 01-04”;
3) “Anti-fraud Risk Assessment Report for 2017”;
4) “Internal Auditing Plan of the Company for 2018”;
5) “Working Report of the Audit Committee of the Board in 2017”;
6) “The Financial Statements of 2017 of the Company” was reviewed and approved and was
submitted to the Board of Directors of the Company for approval;
7) “The Work Report of Accounting Firm for 2017” was reviewed and approved and was submitted
to the Board of Directors of the Company for approval;
8) “Proposal on the Employment of the Accounting Firm for 2018” was reviewed and approved.
The Audit Committee continue employ Deloitte Touche Tohmatsu Certified Public Accountants
LLP to shoulder the audit of the annual financial statements and the internal audit for 2018. This
proposal was submitted to the Board of Directors of the Company for approval.
(2) The 2nd Meeting of the Audit Committee of the 9th Board of Directors for 2018
On 25 April 2018, it was held by communication voting at which the Internal Auditing Report of
the Company for the First Quarter of 2018 was reviewed and approved unanimously.
(3) The 3rd Meeting of the Audit Committee of the 9th Board of Directors for 2018
On 29 August 2018, it was held at Conference Room 2, 11/F., Chiwan Haiyun Building, Shenzhen,
at which the following Proposals were reviewed and approved unanimously:
1) “The Interim Financial Statements for 2018 of the Company” was reviewed and approved and
was submitted to the Board of Directors of the Company for approval;
2) “Internal Auditing Report of the Company for the Second Quarter of 2018”
3) Internal Control and Audit Office's Auditing Report of the Company for 2018 No. 1
(4) The 4th Meeting of the Audit Committee of the 9th Board of Directors for 2018
On 29 October 2018, it was held by communication voting at which the following proposals were
reviewed and approved unanimously:
1) “Internal Auditing Report of the Company for the Third Quarter of 2018”
2) Internal Control and Audit Office's Auditing Report of the Company for 2018 No. 2
(5) The 5th Meeting of the Audit Committee of the 9th Board of Directors for 2018
On 26 December 2018, it was held at Conference Room 25B, China Merchants Port Plaza, Shekou
Industry Third Road, Shenzhen, at which the Audit Report on the Company’s Finance and Internal
Control by Deloitte Touche Tohmatsu Certified Public Accountants LLP for 2018 were debriefed
133
China Merchants Port Group Co., Ltd. Annual Report 2018
by the Committee members.
2. Performance of Duties to the Audit Work of Financial Statements of the Company
In accordance with relevant requirements of CSRC and Shenzhen Stock Exchange, the specific
working rules and procedure for the Audit Committee, during the reporting period, the Audit
Committee of the Board of the Company oversaw the audit work of Financial Statements of the
Company for 2017 with due diligence, details of which are as follows:
(1) Before the auditors started their work, the Audit Committee discussed with the principal auditor
of the accounting firm and determined, inter alia, the timing schedule for the auditing work of the
financial statements for the year.
(2) The Audit Committee expressed its audit opinions two times on the financial statements of the
Company for 2017.
During the reporting period, the Audit Committee expressed its audit opinions two times on the
financial statements of the Company for 2017 in accordance with relevant requirements from
CSRC.
The Audit Committee reviewed the Financial Statements prepared by the Company and issued the
following opinions before the Auditors started their work: the Company was in full compliance with
relevant laws, regulations and the Articles of Association of the Company, the units and items of the
Company's financial statements to be consolidated were complete, and the consolidation basis
thereof was accurate and the information included in the Financial Statements submitted by the
Company was objective, comprehensive and true. The Company's accounting policies were
properly adopted and the accounting estimates made were reasonable. No significant mistake or
omission has been identified so far. Due to the time-lag between this review of Financial Statements
and the dates of the Auditors' Report, we suggest the Finance Department focus on and deal with
subsequent events properly in accordance with the New Enterprises Accounting Standards to ensure
the fairness, truthfulness and completeness of the Financial Statements.
After the Auditors issued their preliminary audit opinions, the Audit Committee reviewed the
Financial Statements again and issued the following opinions: the Company prepared the Financial
Statement in full compliance with the New Enterprise Accounting Standards and relevant provisions
of the financial control system of the Company, the procedures for the preparation of the Financial
Statements were reasonable and proper, which gave a true and fair view of the Company's assets,
liabilities, equity interests and operation results as at 31 December 2017. Information included in
the Financial Statements was objective and complete. Financial Statements for 2017 which was
preliminarily audited by Deloitte Touche Tohmatsu Certified Public Accountants LLP may be
submitted for review at the 3rd Meeting of the 9th Board of Directors.
(3) Supervision over the Auditing Work of the Accounting firm
During the Reporting Period, the Audit Committee issued letters to Deloitte Touche Tohmatsu
Certified Public Accountants LLP to urge them to produce their audit recommendation on the
financial statements and the summary statement of adjusting events in a timely manner to help our
financial staff finish the preparation of financial statements and related notes for 2017 as soon as
possible, so as to ensure the annual audit and information disclosure proceed as scheduled.
(4) Opinions on the Auditing Work Performed by the Accountants for the previous year
During the auditing period, the Audit Committee of the Board focused on the problems discovered
in process of audit, urged auditors to finish the preparation of their report within a prescribed period
134
China Merchants Port Group Co., Ltd. Annual Report 2018
of time and ensured the truthfulness, accuracy and completeness of the annual report. The Certified
Public Accountants issued a standard unqualified audit report on 5 March 2018. The Audit
Committee considered that the Certified Public Accountants conducted the audit work of 2017 in
accordance with China’s Independent Auditing Standards, the audit time was sufficient, the
deployment of the auditors was appropriate and their practicing capability was excellent, and that
the audit report issued sufficiently reflected the Company's financial condition as at 31 December
2017 and its operation results and cash flows for the year 2017 and the audit conclusion made was
in line with the actual situation of the Company.
3. Paying attention to the Internal Control and Internal Audit Work of the Company
During the reporting period, the Audit Committee made standards and requirements to the Audit
Office's report submitted, fully understood the sound establish and implementation of internal
control system, focused on problems and suggestions provided by the Audit Office. In addition, the
Audit Committee advised on the improvement for the work of the Audit Department and the
Company relating to internal control for the next year.
(II) Performance of the Nomination, Remuneration and Evaluation Committee
The members of Nomination, Remuneration and Evaluation Committee include independent
director Yuan Yuhui (Convener), director Yan Shuai, and independent director Su Qiyun During the
Reporting Period, the Nomination, Remuneration and Evaluation Committee earnestly performed
their duties, investigated the candidate of the manager and the directors, and examined the
remuneration of directors, supervisors and senior executives in term of the requirements and
stipulations of CSRC, Articles of Association, Working Rules of the Nomination, Remuneration
and Evaluation Committee and responsibilities and obligations empowered by the Board of
Directors.
During the Reporting Period, the Nomination, Remuneration and Evaluation Committee under the
Board of Directors held a total of three meetings, details of which are as follows:
1. On 5 March 2018, the 1st Meeting of the Nomination, Remuneration and Evaluation Committee
of the 9th Board of Directors for 2018 was held at Conference Room 2, 11/F., Chiwan Haiyun
Building, Shenzhen, at which the following proposals were reviewed and approved unanimously:
(1) “The Working Report of the Nomination, Remuneration and Evaluation Committee of the Board
for 2017”;
(2) “The Report on the Remuneration of the Directors, Supervisors and Senior Management Staff
for 2017”.
2. On 27 November 2018, the 2nd Meeting of the Nomination, Remuneration and Evaluation
Committee of the 9th Board of Directors for 2018 was held by communication voting at which the
Proposal on Examining Director Candidates was reviewed and approved unanimously. Upon review
by the Board, these director candidates would be elected at a meeting of shareholders.
3. On 13 December 2018, the 3rd Meeting of the Nomination, Remuneration and Evaluation
Committee of the 9th Board of Directors for 2018 was held at Conference Room 24D, China
Merchants Port Plaza, Shekou Industry Third Road, Shenzhen, at which the following Proposals
were reviewed and approved unanimously and was submitted to the Board for review.
(1) “The Proposal on Hiring CEO, COO, and General Manager of the Company”;
(2) “The Proposal on Hiring Deputy General Manager of the Company”;
(3) “The Proposal on Hiring CFO of the Company”;
135
China Merchants Port Group Co., Ltd. Annual Report 2018
(4) “The Proposal on Hiring Board Secretary”.
(III) Performance of the Strategy Committee
The members of Strategy Committee include vice Chairman of the Board Deng Renjie (Convener),
director and CEO Bai Jingtao, director Song Dexing, independent director Yuan Yuhui, and
independent director Li Changqing. During the Reporting Period, members of the Strategy
Committee in line with the requirements of CSRC, Article of Association, and the stipulation of
Working Rules of the Strategy Committee earnestly performed their duties, conducted research and
advised on the investment plans and assets operation projects related to the medium to long term
development strategy of the Company.
During the Reporting Period, the Strategy Committee under the Board of Directors held a total of
four meetings, details of which are as follows:
1. On 26 January 2018, the 1st Meeting of the Strategy Committee of the 9th Board of Directors for
2018 was held by communication voting at which the Proposal on Capital Increase to Zhoushan
Archipelago New Area SinoTrans & CSC RoRo Logistics Co., Ltd. was reviewed and approved
unanimously and was submitted to the Board for review.
2. On 5 March 2018, the 2nd Meeting of the Strategy Committee of the 9th Board of Directors for
2018 was held at Conference Room 1, 11/F, Chiwan Haiyun Building, Shenzhen, at which the
Proposal on 2017 Performance Report of Strategy Committee of the Board of Directors and
Five-year Business Development Planning from 2018-2022 were reviewed and approved
unanimously.
1. On 30 November 2018, the 3rd Meeting of the Strategy Committee of the 9th Board of Directors
for 2018 was held by communication voting at which the Proposal on Joint Investment and
Establishment of China Merchants Hainan Development Investment Co., Ltd was reviewed and
approved unanimously and was submitted to the Board for review.
4. On 13 December 2018, the 4th Meeting of the Strategy Committee of the 9th Board of Directors
for 2018 was held at Conference Room 24D, China Merchants Port Plaza, Shekou Industry Third
Road, Shenzhen, at which the Proposal on Election of Convener for the Strategy Committee under
the 9th Board of Directors was reviewed and approved unanimously and was submitted to the Board
for review.
VII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its
supervision in the Reporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Appraisal of and Incentive for Senior Management
The Company has a mature assessment mechanism and system covering all senior management
personnel. The annual comprehensive assessment combines qualitative and quantitative methods
with the dimensions including performance, competence, self-discipline, etc. The assessment results
of senior management serve as an important basis for appointment and motivation. The Company
adjusts and determines the post salary of senior managers based on the factors including operation
status, position served and assessment results, and determines the performance bonus of managers
136
China Merchants Port Group Co., Ltd. Annual Report 2018
through the factors including annual comprehensive ability assessment, annual key performance
indicators appraisal and three-year strategic appraisal results.
IX Internal Control
1. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
2. Internal Control Self-Evaluation Report
Disclosure date of the internal
30 March 2019
control self-evaluation report
Index to the disclosed internal
For details, see www.cninfo.com.cn
control self-evaluation report
Evaluated entities’ combined
assets as % of consolidated total 98%
assets
Evaluated entities’ combined
operating revenue as % of 94%
consolidated operating revenue
Identification standards for internal control weaknesses
Weaknesses in internal
Weaknesses in internal control not related to
Type control over financial
financial reporting
reporting
If a defect or defect group Great defect Significant
Common defect
give rise to the following defect
events which cannot be Development Development Development
direction direction partly direction
prevented or found and
substantially deviates from slightly deviates
made rectification, the deviates from the strategic from the
defect or defect group are the strategic goals, strategic goals,
recognized as significant goals, investment investment
investment direction, and direction, and
defects:
direction, and business business
(1) Malpractices of business structure, structure,
directors, supervisors and structure, commercial commercial
senior management: commercial modeled. which modeled. which
modeled. which unable to completely can't
Nature standard (2) The Company make
completely support the fully support
correction to the financial unable to realization of the realization
report issued; support the strategic goals of strategic
(3) Certified Public realization of at a larger goals
strategic goals extent
Accountant find that there
Strategy Strategy Strategy
is a significant error in the
implementation implementation implementation
financial report, however,
is blocked, is blocked, most is blocked, part
the internal control did not
almost all of indicators of of indicators of
discover it when
indicators of strategy strategy
conducting internal control;
strategy implementation implementation
(4) The Audit Committee
implementation cannot cannot
under the Board and
cannot completed as completed as
137
China Merchants Port Group Co., Ltd. Annual Report 2018
Internal Audit Service's completed as planned planned
supervision to the internal planned
control is invalid. Lead to break Lead to break Some daily
off of common off of common business is
business/service business/service influenced, lead
or it takes half or it takes three to break off of
year or above to months or half common
recover the year below to business/service
break off of recover the or it takes three
common break off of months below
business/service common to recover the
business/service break off of
common
business/service
Badly damage In a large damage the
the working extent, damage working
enthusiasm of the working enthusiasm of
all the enthusiasm of all the
employees, will all the employees,
give rise to employees, reduce work
large scale reduce work efficiency, have
group events or efficiency, have some adverse
heavy damage greatly adverse effect to
to enterprises effect to enterprises
culture and enterprises culture and
enterprises culture and enterprises
cohesion enterprises cohesion
cohesion
The employee's The employee's The employee's
ability and ability and ability and
professional professional professional
skills skills in some skills in some
universally significant fields cannot
cannot meet the fields cannot meet the
enterprise meet the enterprise
development enterprise development
needs by a large development
margin needs
Negative news Negative news Negative news
spread in the spread in the spread in the
field of the field of the field of the
entire business entire business, entire business,
(including or was paid have small
extending to attention or damage to the
industry reported by the reputation of
138
China Merchants Port Group Co., Ltd. Annual Report 2018
chain),or was local media the the enterprise,
paid attention recovery of the recovery of
by the national reputation will reputation will
media or public take three to six take three
media, the months months below
recovery of
reputation will
take more than
six months
The enterprise's The enterprise's The enterprise's
internal internal internal
confidential confidential confidential
information information information
leakage which leakage which leakage which
badly affect the affect the affect the
enterprise's enterprise's enterprise's
competitive competitive competitive
capacity in the capacity in the capacity in the
market, or market, or market, or
affect the affect the affect the
competitive competitive competitive
capacity in capacity in capacity in
management management in management in
a large extent a general
extent
The judging standard was the net profits
attributable to the parent Company's shareholders
The judging standard was
in the consolidated financial statements audited in
the net profits attributable
last year.
to the parent Company's
Significant
shareholders in the Great defect Common defect
defect
consolidated financial
Have a Have a greater Have an
statements audited in last
significant adverse impact adverse impact
year. Misstatement amount
adverse impact on the asset on the asset
≥ 5% above of judging
Quantitative standard on the asset turnover ability, turnover ability,
standard was great defect; turnover ability, which lead to which lead to
5% judging standard ＞1% which lead to total asset total asset
misstatement amount was total asset turnover rate turnover rate
significant defect; turnover rate lowed10% to lowed10%
misstatement amount ＜ lowed 20% 20% (Including below
1% below of judging above 10%）
standard was general (Including
standard. 20％）
Had significant Had larger Had adverse
139
China Merchants Port Group Co., Ltd. Annual Report 2018
adverse impact adverse impact impact to the
to the annual to the annual annual
operation operation operation
profits or cause profits or cause profits or cause
decrease of decrease of decrease of
annual annual annual
operation operation operation
profits when at profits when at profits when at
5% (including 1% (including 1% below of
5%) above of 1%) to 5% judging
judging judging standard
standard standard
Had significant Had larger Had adverse
adverse impact adverse impact impact to
to decrease of to decrease of decrease of
inflow of total inflow of total inflow of total
cash flow or cash flow or cash flow or
increase of increase of increase of
outflow total outflow total outflow total
cash flow when cash flow when cash flow when
at 10% at 5% at 5% below of
(including 10%) (including 5%) judging
above of to 10% above of standard
judging judging
standard standard
Great Larger Great
investment investment investment
mistake mistake mistake
incurred which incurred which incurred which
cause direct cause direct cause direct
economy losses economy losses economy losses
when at 5% when at 1% when at 1%
(including 5%) (including below of
above of 1%)to 5% of judging
judging judging standard or the
standard or the standard or the return on
return on return on investment less
investment investment less than 30% lower
more than 40% than than expected
lower than 30%(including
expected 30% to 40%)
lower than
expected
10 death or 3 deaths above less than 3
above , or 50 to 10 deaths deaths or
people serious below , or more above , or less
140
China Merchants Port Group Co., Ltd. Annual Report 2018
injury, or direct than 10 people than 10 people
economy losses but less than 50 serious injury,
when at 5% people serious or direct
(including 5%) injury, or direct economy losses
above of economy losses when at 1%
judging when at 1% below of
standard (including 1%) judging
to 5% of standard
judging
standard
Asset integrity Asset integrity Asset integrity
cannot be cannot be cannot be
ensured, when ensured, when ensured, when
assets losses at assets losses at assets losses at
5% (including 1% (including 1% below of
5%) above of 1%)to 5% of judging
judging judging standard
standard standard
A large number Several Irreconcilable
of great commercial commercial
commercial disputes, civil disputes, civil
disputes, civil lawsuits, and lawsuits
lawsuits and had obviously happened
negative influence in a sometimes,
influences can't certain area and cause a certain
eliminate in a period, may pay influences in
short period of compensation at local, may pay
time, may pay 1% (including compensation
compensation at 1%) to 5% of at 1% below of
5% (including judging judging
5%) above of standard standard
judging
standard
A serious A serious Violation of
violation of violation of laws and
laws and laws and regulations,
regulations, regulations, investigated by
investigated by investigated by government
government government department and
department and department and legal
legal legal department,
department, department, may pay
cause may pay compensation
prosecution and compensation at 0.5% below
class action, at 0.5% of judging
may pay (including standard
141
China Merchants Port Group Co., Ltd. Annual Report 2018
compensation 0.5%) to 2% of
at 2% judging
(including 2%) standard
above of
judging
standard
Number of material weaknesses
in internal control over financial 0
reporting
Number of material weaknesses
in internal control not related to 0
financial reporting
Number of serious weaknesses
in internal control over financial 0
reporting
Number of serious weaknesses
in internal control not related to 0
financial reporting
Notes: The Company acquired the actual control over CM Port (Zhoushan) RoRo Logistics Co., Ltd.
and its subsidiaries in August 2018 and over China Merchants Port Holdings Company Ltd. and its
subsidiaries in December 2018. The aforementioned companies (hereinafter referred to as “the
acquirees”) are all included in the consolidated financial statements for 2018. The Company does
not include the acquirees into the range of internal control evaluation pursuant to the relevant
waiver provisions in the Answers to Questions Regarding the Regulation of the Implementation of
Corporate Internal Control Standardization System of Listed Companies (Issue 1, 2011, General
Issue 1) issued by China Securities Regulatory Commission.
The financial data of the acquires was deducted for the percentage of evaluated entities’ total assets
and operating revenue to the total assets and operating revenue in consolidated financial statements
X Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
We believe that China Merchants Port Group Co., Ltd. has maintained effective internal control over financial
reporting in all material respects as of 31 December 2018 as per the Basic Rules for Enterprise Internal Control
and relevant regulations.
Independent auditor’s report
on internal control disclosed Disclosed
or not
Disclosure date 30 March 2019
Index to such report disclosed For details, see www.cninfo.com.cn
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in
internal control not related to None
financial reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report
142
China Merchants Port Group Co., Ltd. Annual Report 2018
on the Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is
consistent with the internal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
143
China Merchants Port Group Co., Ltd. Annual Report 2018
Part X Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were
outstanding before the date of this Report’s approval or were due but could not be redeemed in full?
No.
144
China Merchants Port Group Co., Ltd. Annual Report 2018
Section XI. Auditor’s Report (See attached)
Type of audit opinion Standard and unqualified auditor's report
Date of signing audit report 29 March 2019
Audit agency Deloitte Touche Tohmatsu Certified Public Accountants LLP
No. of audit report De Shi Bao (Shen) Zi (19) No. P01937
Name of CPA Huang Yue, Jiang Qishen
145
China Merchants Port Group Co., Ltd. Annual Report 2018
Section XII. Documents Available for Reference
I. Financial Statements carrying the signatures and stamps of the Company Principal, the
Chief Financial Officer and the person in charge of accounting firm;
II. Original copy of the Auditor's Report stamped by the accounting firm and signed and
stamped by registered accountants;
III. Original copies of all documents and the announcements thereof disclosed in the reporting
period on “Securities Times” and “Ta Kung Pao”;
For and on behalf of the Board
Bai Jingtao
Legal representative of
China Merchants Port Group Co., Ltd.
Dated 30 March 2019
146
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN
WHARF HOLDINGS LIMITED")
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2018
CONTENTS Pages
AUDITOR'S REPORT 1-6
THE CONSOLIDATED AND COMPANY BALANCE SHEETS 7 - 10
THE CONSOLIDATED AND COMPANY INCOME STATEMENTS 11 - 13
THE CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS 14 - 15
THE CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY 16 - 19
NOTES TO THE FINANCIAL STATEMENTS 20 - 153
AUDITOR'S REPORT
De Shi Bao (Shen) Zi (19) No. P01937
(Page 1, 6 pages)
To 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.
(formerly known as "Shenzhen Chiwan Wharf Holdings Limited", hereinafter referred to as "the
Company"), which comprise the consolidated and company balance sheets as at 31 December 2018,
and the consolidated and company income statements, the consolidated and company cash flow
statements and the consolidated and company 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 2018, the consolidated
and company's results of operations and cash flows for the year then ended in accordance with
Accounting Standards for Business Enterprises.
II. Basis for 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 period. 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) 9 to the consolidated financial statements, the Company has made equity
investment in several enterprises, over which the Company exercises joint control or has significant
influence. In 2018, the Company's income from investment in associates/joint ventures under equity
method amounts to RMB 3,913,864,538.60. As at 31 December 2018, the carrying amount of
long-term equity investment of the Company in associates/joint ventures amounts to RMB
50,176,577,263.40. Since the investment income from long-term equity investment in associates/joint
ventures is significant, with its accuracy depending on the investee's financial status and operation
results, we identified the aforesaid subsequent measurement of long-term equity investment in
associates/joint ventures as a key audit matter of the consolidated financial statements.
1
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (19) No. P01937
(Page 2, 6 pages)
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 major associates/joint ventures and their environment, and identified whether the
major associates/joint ventures were significant components in terms of financial importance and
business nature;
(2) Understood the certified public accountants of major associates/joint ventures and evaluated their
independence and professional competence;
(3) 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;
(4) 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;
(5) 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.
(6) 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
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (19) No. P01937
(Page 3, 6 pages)
III. Key Audit Matters - continued
2. Accounting treatment of business combinations involving enterprises not under common
control
As disclosed in Notes (VI) 1 to the consolidated financial statements, on 23 February 2018, the
Company acquired 90% of the shares of TCP Participaes SA (hereinafter referred to as "TCP")
at a price of BRL 2,811,941,923.95 (equivalent to RMB 5,468,066,151.65), and the consideration
paid in excess of the fair value of identifiable net assets of TCP on the acquisition date equivalent
to RMB 3,969,374,954.86 was recognized as goodwill. Since the business combinations not
involving enterprises under common control involves significant judgments and estimates in
determining the fair value of identifiable net assets on the acquisition date, the calculation of
goodwill, etc., we identified the accounting treatment of the business combinations involving
enterprises not under common control as a key audit matter of the consolidated financial
statements.
Principal audit procedures we performed for key audit matters are as follows:
(1) Evaluated the independence, objectiveness and professional competence of the third-party
evaluation organization hired by the management through interviews and quriers;
(2) Based on our understanding of the industry and business, judged whether the management's
methods and assumptions used in assessing the fair value of the identifiable net assets at the
acquisition date were reasonable; compared the gross profit margin of forecast period and the
historical gross profit margin, the income growth rate of forecast period and the historical income
growth rate, and the development planning of TCP, etc. to evaluate the reasonableness of
forecasted financial data and its evaluation results.
(3) Utilized the work of internal evaluation experts to assess the rationality of evaluation methods and
key assumptions used by third-party evaluation organization in the assessment of the fair value of
identifiable net assets at the acquisition date, the rationality of the discount rate used, and the
accuracy of calculation of the net present value of expected future cash flows.
3. Goodwill impairment
As disclosed in Notes (V) 16 to the consolidated financial statements, as at 31 December 2018,
the goodwill in the consolidated financial statements of the Company was RMB 8,335,895,842.35.
The management of the Company used 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, and the forecast of future cash flows 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.
3
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (19) No. P01937
(Page 4, 6 pages)
III. Key Audit Matters - continued
3. Goodwill impairment - continued
Principal audit procedures we performed for key audit matters are as follows:
(1) Tested the operation effectiveness of internal controls related to goodwill impairment;
(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) Compared the gross profit margin of the forecast period with the actual gross profit margin of
previous years to assess its appropriateness in combination with the business plan and industry
development trend;
(6) Understood the basis for management to determine the growth rate of the business in the
subsequent forecast period and assessed its appropriateness;
(7) Assessed the appropriateness of the discount rate adopted by the management in combination with
market risk-free interest rates, risk factors, etc.;
(8) Reviewed whether the calculation of the present value of future cash flows was correct.
IV. Other Information
The Company is responsible for the other information. The other information comprises the
information included in the 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.
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.
4
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (19) No. P01937
(Page 5, 6 pages)
V. Responsibilities of the Management and Those Charged with Governance for the Financial
Statements
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:
(1) Identified and assessed the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
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.
5
AUDITOR'S REPORT - continued
De Shi Bao (Shen) Zi (19) No. P01937
(Page 6, 6 pages)
VI. Auditor's Responsibilities for the Audit of the Financial Statements - continued
(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, structure and content of the financial statements (including
the disclosures), 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 the 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.
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 period 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
Huang Yue
Chinese Certified Public Accountant
Jiang Qishen
29 March 2019
6
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Balance Sheet
Unit: RMB
Item Notes 31/12/2018 01/01/2018 (restated) 31/12/2017 (restated)
Current assets:
Cash and bank balances (V)1 7,070,308,704.75 7,729,460,082.75 7,729,460,082.75
Notes and accounts
(V)2 1,120,839,172.51 909,326,662.63 871,370,660.21
receivable
Prepayments (V)3 124,404,862.87 71,668,202.51 71,668,202.51
Other receivables (V)4 799,559,226.45 938,579,424.96 938,786,831.94
Inventories (V)5 108,567,270.02 82,789,282.22 82,789,282.22
Assets held for sale (V)6 115,356,162.94 - -
Other current assets (V)7 1,195,421,189.12 1,199,446,613.69 1,200,476,091.74
Total current assets 10,534,456,588.66 10,931,270,268.76 10,894,551,151.37
Non-current Assets:
Available-for-sale financial
3,083,581,935.68
assets
Long-term receivables (V)8 793,046,240.11 9,659,365.32 9,669,034.35
Long-term equity
(V)9 50,176,577,263.40 43,160,849,807.48 43,160,849,807.48
investments
Other investments in equity
(V)10 247,848,314.30 233,483,968.79
instruments
Other non-current financial
(V)11 2,087,872,081.94 2,982,466,950.23
assets
Investment properties (V)12 5,890,146,989.51 6,060,625,982.13 6,060,625,982.13
Fixed assets (V)13 22,994,190,880.43 23,167,393,454.86 23,167,393,454.86
Construction in progress (V)14 5,499,426,090.06 2,308,007,330.50 2,308,007,330.50
Intangible assets (V)15 20,761,018,044.54 15,873,713,338.91 15,873,713,338.91
Goodwill (V)16 8,335,895,842.35 4,051,665,903.24 4,051,665,903.24
Long-term prepaid expenses (V)17 235,706,437.21 254,930,584.77 254,930,584.77
Deferred tax assets (V)18 66,708,157.19 42,425,905.07 42,425,905.07
Other non-current assets (V)19 395,191,485.98 227,749,831.65 227,749,831.65
Total non-current assets 117,483,627,827.02 98,372,972,422.95 98,240,613,108.64
TOTAL ASSETS 128,018,084,415.68 109,304,242,691.71 109,135,164,260.01
The accompanying notes form part of the financial statements.
The financial statements on pages 7 to 153 were signed by the following:
Bai Jingtao Wen Ling Sun Ligan
Legal Representative Chief Financial Officer Head of Accounting Department
7
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Balance Sheet - continued
Unit: RMB
Item Notes 31/12/2018 01/01/2018 (restated) 31/12/2017 (restated)
Current liabilities:
Short-term borrowings (V)20 3,425,291,312.62 2,580,000,000.00 2,580,000,000.00
Notes and accounts payable (V)21 429,120,690.97 331,606,335.81 331,606,335.81
Receipts in advance (V)22 29,170,709.86 31,959,751.17 106,944,420.75
Contract liabilities (V)23 49,993,895.50 43,926,190.25
Employee benefits payable (V)24 433,489,555.40 379,770,098.40 379,770,098.40
Taxes payable (V)25 345,183,422.42 258,555,167.79 258,555,167.79
Other payables (V)26 2,245,670,528.89 6,570,561,586.96 6,544,589,530.18
Non-current liabilities due
(V)27 2,349,849,449.96 2,393,237,748.47 2,393,237,748.47
within one year
Other current liabilities (V)28 602,659,721.80 385,472,328.45 385,472,328.45
Total current liabilities 9,910,429,287.42 12,975,089,207.30 12,980,175,629.85
Non-current Liabilities:
Long-term borrowings (V)29 6,971,479,842.18 7,670,516,491.15 7,670,516,491.15
Bonds payable (V)30 22,097,467,096.40 10,591,709,808.16 10,591,709,808.16
Long-term payables (V)31 1,294,190,118.18 1,290,782,441.94 1,290,782,441.94
Projected benefits obligation (V)32 375,325,127.65 350,750,123.90 350,750,123.90
Provisions (V)33 34,951,392.27 50,577,924.97 -
Deferred income (V)34 228,658,214.64 186,491,676.05 222,857,800.33
Deferred tax liabilities (V)18 2,911,074,941.27 2,015,175,104.46 1,984,303,944.46
Other non-current liabilities (V)35 3,777,582,522.86 83,594,525.96 54,763,901.68
Total non-current liabilities 37,690,729,255.45 22,239,598,096.59 22,165,684,511.62
TOTAL LIABILITIES 47,601,158,542.87 35,214,687,303.89 35,145,860,141.47
SHAREHOLDERS'
EQUITY:
Share capital (V)36 1,793,412,378.00 644,763,730.00 644,763,730.00
Capital reserve (V)37 19,426,912,957.05 18,845,899,356.20 18,845,899,356.20
Other comprehensive
(V)38 88,925,978.57 (729,621,208.40) (7,064,646.43)
income
Special reserve (V)39 8,231,080.43 4,767,373.45 4,767,373.45
Surplus reserve (V)40 527,175,908.67 520,074,434.56 520,074,434.56
Unappropriated profit (V)41 8,915,817,110.21 9,282,631,255.64 8,466,307,917.47
Total shareholders' equity
attributable to equity holders of 30,760,475,412.93 28,568,514,941.45 28,474,748,165.25
the parent
Minority interests 49,656,450,459.88 45,521,040,446.37 45,514,555,953.29
TOTAL SHAREHOLDERS'
80,416,925,872.81 74,089,555,387.82 73,989,304,118.54
EQUITY
TOTAL LIABILITIES AND
SHAREHOLDERS' 128,018,084,415.68 109,304,242,691.71 109,135,164,260.01
EQUITY
The accompanying notes form part of the financial statements.
8
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Balance Sheet of the Company
Unit: RMB
Item Notes 31/12/2018 01/01/2018 (restated) 31/12/2017
Current Assets:
Cash and bank balances 389,841,854.93 230,039,345.73 230,039,345.73
Notes and accounts
(XIV)1 23,444,175.65 12,987,394.84 12,987,394.84
receivable
Other receivables (XIV)2 651,050,233.08 1,172,569,336.18 1,172,569,336.18
Inventories 165,553.46 415,163.18 415,163.18
Other current assets 1,563,111.61 2,210,653.66 2,210,653.66
Total current assets 1,066,064,928.73 1,418,221,893.59 1,418,221,893.59
Non-current Assets:
Available-for-sale
23,759,200.00
financial assets
Long-term receivables 11,004,284.75 11,004,284.75 11,004,284.75
Long-term equity
(XIV)3 28,544,261,576.96 2,215,952,842.62 2,215,952,842.62
investments
Other investments in
151,746,700.00 147,243,840.00
equity instruments
Investment properties 12,685,959.06 13,116,783.72 13,116,783.72
Fixed assets 190,804,655.63 204,839,343.34 204,839,343.34
Construction in progress 2,500,843.87 10,631,762.77 10,631,762.77
Intangible assets 57,755,603.44 59,954,618.20 59,954,618.20
Long-term prepaid
3,785,801.32 3,976,969.45 3,976,969.45
expenses
Total non-current assets 28,974,545,425.03 2,666,720,444.85 2,543,235,804.85
TOTAL ASSETS 30,040,610,353.76 4,084,942,338.44 3,961,457,698.44
9
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Balance Sheet of the Company - continued
Unit: RMB
Item Notes 31/12/2018 01/01/2018 (restated) 31/12/2017
Current Liabilities:
Short-term borrowings 377,716,000.00 - -
Notes and accounts payable 13,125,624.29 18,376,556.53 18,376,556.53
Receipts in advance - - 98,400.00
Contract liabilities 92,003.00 98,400.00
Employee benefits payable 26,605,190.52 51,689,614.60 51,689,614.60
Taxes payable 18,826,587.50 1,578,674.01 1,578,674.01
Other payables 717,536,924.18 880,542,349.29 880,542,349.29
Non-current liabilities due
299,531,506.81 - -
within one year
Other current liabilities 200,000,000.00 100,000,000.00 100,000,000.00
Total current liabilities 1,653,433,836.30 1,052,285,594.43 1,052,285,594.43
Non-current Liabilities:
Bonds payable - 298,931,506.83 298,931,506.83
Long-term payables 151,710,000.00 150,098,000.00 150,098,000.00
Deferred tax liabilities 34,179,375.00 33,053,660.00 2,182,500.00
Total non-current liabilities 185,889,375.00 482,083,166.83 451,212,006.83
TOTAL LIABILITIES 1,839,323,211.30 1,534,368,761.26 1,503,497,601.26
SHAREHOLDERS'
EQUITY
Share capital 1,793,412,378.00 644,763,730.00 644,763,730.00
Capital reserve 25,517,647,180.04 240,001,254.59 240,001,254.59
Other comprehensive income 102,638,125.00 99,260,980.00 6,647,500.00
Special reserve 470,465.59 - -
Surplus reserve 527,175,908.67 520,074,434.56 520,074,434.56
Unappropriated profit 259,943,085.16 1,046,473,178.03 1,046,473,178.03
TOTAL SHAREHOLDERS'
28,201,287,142.46 2,550,573,577.18 2,457,960,097.18
EQUITY
TOTAL LIABILITIES AND
SHAREHOLDERS' 30,040,610,353.76 4,084,942,338.44 3,961,457,698.44
EQUITY
The accompanying notes form part of the financial statements.
10
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Income Statement
Unit: RMB
Amount incurred in Amount incurred in the
Item Notes the current period previous period (restated)
I. Operating income (V)42 9,703,394,622.58 7,544,635,284.96
Less: Operating costs (V)42 5,739,241,395.87 4,710,312,660.51
Business taxes and levies (V)43 235,953,803.51 71,984,283.55
Administrative expenses (V)44 1,251,865,675.45 853,900,889.90
Research and development expenses 121,989,097.82 95,247,274.67
Financial expenses (V)45 1,643,418,102.95 955,406,648.46
Including: Interest expense 1,634,101,331.80 1,129,672,527.80
Investment income 272,453,293.86 116,797,403.30
Impairment losses of assets (V)46 - 632,741,768.60
Impairment losses of credit (V)47 7,528,580.60
Add: Other income (V)48 56,180,127.64 44,158,463.01
Investment income (V)49 3,967,828,149.48 5,771,294,706.67
Including: Income from investments in
(V)49 3,913,864,538.60 4,681,582,632.76
associates and joint ventures
Gains (losses) from changes in fair value (V)50 (1,074,406,837.68) -
Gains (losses) on disposal of assets (V)51 19,258,495.33 (391,053.09)
II. Operating profit 3,672,257,901.15 6,040,103,875.86
Add: Non-operating income (V)52 67,128,689.98 23,505,578.15
Less: Non-operating expenses (V)53 125,031,298.57 45,601,286.22
III. Gross profit 3,614,355,292.56 6,018,008,167.79
Less: Income tax expenses (V)54 728,440,538.60 580,458,478.80
IV. Net profit 2,885,914,753.96 5,437,549,688.99
(I) Categorization by continuity of operation
1. Net profit of continued operation 2,885,914,753.96 5,437,549,688.99
2. Net profit of discontinued operation - -
(II) Categorization by attribution of ownership
1. Net profit attributable to shareholders of the 1,090,418,910.77 2,365,214,907.45
parent
2. Profit or loss attributable to minority shareholder 1,795,495,843.19 3,072,334,781.54
11
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Income Statement - continued
Unit: RMB
Amount incurred in Amount incurred in the
Item Notes the current period previous period (restated)
V. Amount of other comprehensive net income after
(V)56 204,602,785.68 642,605,602.46
tax
Amount of other comprehensive net income after tax
41,778,087.02 242,204,762.79
attributable to equity holders of the parent
(I) Other comprehensive income that will not be
(48,671,312.79) 65,863,882.85
reclassified to profit or loss
1. Change as a result of remeasurement of the net
(7,943,999.30) 5,313,793.20
defined benefit plan
2. Other comprehensive income under the equity
(46,138,662.23) 60,550,089.65
method that will not be reclassified to profit or loss
3. Fair value changes of other investments in equity
5,411,348.74
instruments
(II) Other comprehensive income that will be
90,449,399.81 176,340,879.94
reclassified subsequently to profit or loss
1. Other comprehensive income under the equity
(7,952,099.73) 175,630,117.53
method that will be reclassified to profit or loss
2. Gains or losses on changes in fair value of
87,348,744.15
available-for-sale financial assets
3. Translation differences of financial statements
98,401,499.54 (86,637,981.74)
denominated in foreign currencies
Amount of other comprehensive net income after tax
162,824,698.66 400,400,839.67
attributable to minority shareholders
VI. Total comprehensive income attributable to: 3,090,517,539.64 6,080,155,291.45
Shareholders of the parent 1,132,196,997.79 2,607,419,670.24
Minority shareholders 1,958,320,541.85 3,472,735,621.21
VII. Earnings per share
(I) Basic earnings per share 0.61 1.32
(II) Diluted earnings per share 0.61 1.32
Business combination involving enterprises under common control occurred during 2018, and the net
profit of the acquiree generated before the business combination is RMB 2,685,592,888.44. The net profit
of the acquiree generated in 2017 is RMB 4,928,289,403.49.
The accompanying notes form part of the financial statements.
12
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Income Statement of the Company
Unit: RMB
Amount incurred in Amount incurred in
Item Notes the current period the previous period
I. Operating income (XIV)4 243,899,253.07 262,128,083.88
Less: Operating costs (XIV)4 160,065,451.42 147,940,894.54
Business taxes and levies 47,542,310.81 2,028,572.84
Administrative expenses 122,905,018.75 70,514,131.56
Research and development expenses 742,954.48 264,150.94
Financial expenses 34,174,062.13 (8,048,217.56)
Including: Interest expense 36,872,089.57 23,359,008.38
Interest income 20,843,903.27 25,260,320.71
Impairment losses of assets - (7,730.22)
Impairment losses of credit -
Add: Other income 271,927.46 -
Investment income (XIV)5 193,138,161.44 648,579,235.35
Including: Income from investments in
associates and (XIV)5 63,015,142.10 49,683,858.86
joint ventures
Gains (losses) on disposal of assets (937,948.47) 304,464.57
II. Operating profit 70,941,595.91 698,319,981.70
Add: Non-operating income 1,336,230.70 33,035,528.92
Less: Non-operating expenses 867,312.18 241,366.11
III. Gross profit 71,410,514.43 731,114,144.51
Less: Income tax expenses 395,773.33 (396,443.74)
IV. Net profit 71,014,741.10 731,510,588.25
V. Amount of other comprehensive net income after tax 3,377,145.00 975,000.00
(I) Other comprehensive income that will not be reclassified
3,377,145.00 -
subsequently to profit or loss
1. Change as a result of remeasurement of the net defined
- -
benefit plan
2. Other comprehensive income under the equity method
- -
that will not be reclassified to profit or loss
3. Fair value changes of other investments in equity
3,377,145.00
instruments
(II) Other comprehensive income that will be reclassified to
- 975,000.00
profit or loss
1. Other comprehensive income under the equity method
- -
that will be reclassified to profit or loss
2. Gains or losses on changes in fair value of
975,000.00
available-for-sale financial assets
3. Translation differences of financial statements
- -
denominated in foreign currencies
VI. Total comprehensive income 74,391,886.10 732,485,588.25
The accompanying notes form part of the financial statements.
13
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Cash Flow Statement
Unit: RMB
Amount incurred in
Amount incurred in
Item Notes the previous period
the current period
(restated)
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services 9,581,481,387.06 7,491,616,295.63
Receipts of tax refunds 6,203,721.12 2,026,413.44
Other cash receipts relating to operating activities (V)57(1) 963,935,271.59 627,697,273.07
Sub-total of cash inflows 10,551,620,379.77 8,121,339,982.14
Cash payments for goods purchased and services received 2,647,715,026.47 2,127,952,256.75
Cash payments to and on behalf of employees 1,808,824,527.76 1,415,998,152.93
Payments of all types of taxes 762,131,488.97 514,231,751.73
Other cash payments relating to operating activities (V)57(2) 1,044,373,911.73 588,120,784.45
Sub-total of cash outflows 6,263,044,954.93 4,646,302,945.86
Net Cash Flows from Operating Activities (V)58(1) 4,288,575,424.84 3,475,037,036.28
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery of investments 200,000.00 342,998,439.88
Cash receipts from investments income 1,813,166,370.38 1,632,392,218.45
Net cash receipts from disposal of fixed assets, intangible
19,846,988.10 19,718,639.98
assets and other long-term assets
Net cash receipts from disposal of subsidiary and other
- 7,617,940,434.09
operating units
Other cash receipts relating to investing activities (V)57(3) 156,615,992.14 218,174,398.17
Sub-total of cash inflows 1,989,829,350.62 9,831,224,130.57
Cash payments to acquire or construct fixed assets, intangible
2,437,080,643.74 2,511,160,012.03
assets and other long-term assets
Cash payments to acquire investments 4,084,107,008.20 2,290,174,234.90
Net cash payment to acquire subsidiary and other operating
(V)57(5) 8,931,096,795.81 1,887,623,658.13
units
Other cash payments relating to investing activities (V)57(4) 1,686,107,391.23 1,058,395,077.56
Sub-total of cash outflows 17,138,391,838.98 7,747,352,982.62
Net Cash Flows from Investing Activities (15,148,562,488.36) 2,083,871,147.95
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 296,363,615.57 166,540,000.00
Including: cash receipts from capital contributions from
40,100,000.00 166,540,000.00
minority owners of subsidiary
Cash receipts from borrowings 21,763,411,408.42 7,719,939,575.00
Cash receipts from issue of bonds 10,621,000,000.00 2,599,850,000.00
Other cash receipts relating to financing activities (V)57(6) 3,876,395,683.27 -
Sub-total of cash inflows 36,557,170,707.26 10,486,329,575.00
Cash repayments of borrowings 23,593,666,839.99 6,729,078,966.70
Cash payments for distribution of dividends or profit or
3,942,108,074.86 4,462,491,329.19
interest
Including: Payments for distribution of dividends or profit to
1,929,962,094.72 349,393,736.16
minorities
Other cash payments relating to financing activities (V)57(7) 146,196,535.06 83,248,718.01
Sub-total of cash outflows 27,681,971,449.91 11,274,819,013.90
Net Cash Flows from Financing Activities 8,875,199,257.35 (788,489,438.90)
IV. Effect of Foreign Exchange Rate Changes on Cash and
(371,390,771.83) (294,425,747.23)
Cash Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents (2,356,178,578.00) 4,475,992,998.10
Add: Opening balance of Cash and Cash Equivalents (V)58(2) 7,729,460,082.75 3,253,467,084.65
VI. Closing Balance of Cash and Cash Equivalents (V)58(2) 5,373,281,504.75 7,729,460,082.75
The accompanying notes form part of the financial statements.
14
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Cash Flow Statement of the Company
Unit: RMB
Amount incurred in Amount incurred in
Item Notes the current period the previous period
I. Cash Flows from Operating Activities:
Cash receipts from sales of goods and rendering of services 229,302,378.14 269,045,995.41
Other cash receipts relating to operating activities 29,331,866.91 716,765,626.94
Sub-total of cash inflows 258,634,245.05 985,811,622.35
Cash payments for goods purchased and services received 74,086,330.85 78,023,594.34
Cash payments to and on behalf of employees 121,661,642.64 111,426,044.20
Payments of all types of taxes 9,401,709.94 10,127,012.26
Other cash payments relating to operating activities 279,797,604.56 247,511,704.35
Sub-total of cash outflows 484,947,287.99 447,088,355.15
Net Cash Flows from Operating Activities (226,313,042.94) 538,723,267.20
II. Cash Flows from Investing Activities:
Cash receipts from investments income 445,875,054.92 63,576,674.42
Net cash receipts from disposal of fixed assets, intangible assets
766,830.38 2,693,776.59
and other long-term assets
Other cash receipts relating to investing activities 635,013,754.63 683,875,000.00
Sub-total of cash inflows 1,081,655,639.93 750,145,451.01
Cash payments to acquire or construct fixed assets, intangible
162,248,840.21 19,183,612.16
assets and other long-term assets
Other cash payments relating to investing activities 374,513,229.40 685,067,880.47
Sub-total of cash outflows 536,762,069.61 704,251,492.63
Net Cash Flows from Investing Activities 544,893,570.32 45,893,958.38
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 256,263,615.57 -
Cash receipts from borrowings 566,016,000.00 163,436,000.00
Cash receipts from issue of bonds 200,000,000.00 99,850,000.00
Sub-total of cash inflows 1,022,279,615.57 263,286,000.00
Cash repayments of borrowings 300,000,000.00 380,000,000.00
Cash payments for distribution of dividends or profit or interest 873,011,086.61 333,589,040.71
Other cash payments relating to financing activities 1,497,344.37 402,325.25
Sub-total of cash outflows 1,174,508,430.98 713,991,365.96
Net Cash Flows from Financing Activities (152,228,815.41) (450,705,365.96)
IV. Effect of Foreign Exchange Rate Changes on Cash and
(6,549,202.77) (1,274,170.98)
Cash Equivalents
V. Net Increase (Decrease) in Cash and Cash Equivalents 159,802,509.20 132,637,688.64
Add: Opening balance of Cash and Cash Equivalents 230,039,345.73 97,401,657.09
VI. Closing Balance of Cash and Cash Equivalents 389,841,854.93 230,039,345.73
The accompanying notes form part of the financial statements.
15
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Statement of Changes in Shareholders' Equity
Unit: RMB
2018
Attributable to shareholders of the parent Total
Item Minority
Other comprehensive Special Surplus Unappropriated shareholders'
Share capital Capital reserve interests
income reserve reserve profit Others equity
I. Closing balance of the preceding year 644,763,730.00 167,480,381.24 19,800,344.49 4,767,373.45 520,074,434.56 3,566,083,142.17 - 1,644,073,503.71 6,567,042,909.62
Add: Changes in accounting policies - - (722,556,561.97) - - 816,323,338.17 - 6,484,493.08 100,251,269.28
Corrections of prior period errors - - - - - - - - -
Business combination involving
- 18,678,418,974.96 (26,864,990.92) - 4,900,224,775.30 - 43,870,482,449.58 67,422,261,208.92
enterprises under common control
Others - - - - - - - - -
II. Opening balance of the year 644,763,730.00 18,845,899,356.20 (729,621,208.40) 4,767,373.45 520,074,434.56 9,282,631,255.64 - 45,521,040,446.37 74,089,555,387.82
III. Changes for the year 1,148,648,648.00 581,013,600.85 818,547,186.97 3,463,706.98 7,101,474.11 (366,814,145.43) - 4,135,410,013.51 6,327,370,484.99
(I) Total comprehensive income - - 41,778,087.02 - - 1,090,418,910.77 - 1,958,320,541.85 3,090,517,539.64
(II) Owners' contributions and reduction in capital 1,148,648,648.00 581,013,600.85 776,769,099.95 - - - - 3,092,504,057.82 5,598,935,406.62
1．Capital contribution from
1,148,648,648.00 - - - - - - 1,594,806,295.50 2,743,454,943.50
shareholders
2．Capital contribution from other equity
- - - - - - - - -
investment holder
3．Share-based payment recognized in
- - - - - - - - -
shareholders' equity
4．Business combination involving
- (583,183,507.54) 776,769,099.95 - - - - - 193,585,592.41
enterprises under common control
5．Others - 1,164,197,108.39 - - - - - 1,497,697,762.32 2,661,894,870.71
(III) Profit distribution - - - - 7,101,474.11 (1,457,233,056.20) - (920,434,015.30) (2,370,565,597.39)
1．Transfer to surplus reserve - - - - 7,101,474.11 (7,101,474.11) - - -
2．Transfer to general reserve - - - - - - - - -
3．Distributions to shareholders - - - - - (850,443,359.86) - - (850,443,359.86)
4．Others - - - - - (599,688,222.23) - (920,434,015.30) (1,520,122,237.53)
(IV) Transfers within shareholders' equity - - - - - - - - -
1．Capitalization of capital reserve - - - - - - - - -
2．Capitalization of surplus reserve - - - - - - - - -
3．Loss made up by surplus reserve - - - - - - - - -
4．Others - - - - - - - - -
(V) Special reserve - - - 3,463,706.98 - - - 5,019,429.14 8,483,136.12
1．Withdrawn in the period - - - 24,165,961.75 - - - 49,870,501.76 74,036,463.51
2．Utilized in the period - - - (20,702,254.77) - - - (44,851,072.62) (65,553,327.39)
(VI) Others - - - - - - - - -
IV. Closing 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 8,915,817,110.21 - 49,656,450,459.88 80,416,925,872.81
16
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Statement of Changes in Shareholders' Equity - continued
Unit: RMB
2017
Attributable to shareholders of the parent
Item Other Total shareholders'
Minority interests
comprehensive Unappropriated equity
Share capital Capital reserve income Special reserve Surplus reserve profit Others
I. Closing balance of the preceding year 644,763,730.00 167,480,381.25 (8,039,646.43) 4,145,765.65 520,074,434.56 3,381,390,887.86 - 927,178,183.53 5,636,993,736.42
Add: Changes in accounting policies - - - - - - - - -
Corrections of prior period errors - - - - - - - - -
Business combination involving enterprises under
- 13,716,765,033.15 - - - 4,254,259,872.38 - 41,705,041,719.67 59,676,066,625.20
common control
Others - - - - - - - - -
II. Opening balance of the year 644,763,730.00 13,884,245,414.40 (8,039,646.43) 4,145,765.65 520,074,434.56 7,635,650,760.24 - 42,632,219,903.20 65,313,060,361.62
III. Changes for the year - 4,961,653,941.80 975,000.00 621,607.80 - 830,657,157.23 - 2,882,336,050.09 8,676,243,756.92
(I) Total comprehensive income - - 242,204,762.79 - - 2,365,214,907.45 - 3,472,735,621.21 6,080,155,291.45
(II) Owners' contributions and reduction in capital - 4,961,653,941.80 (241,229,762.79) - - - - 1,551,760,081.00 6,272,184,260.01
1．Capital contribution from
- - - - - - 131,153,105.53 131,153,105.53
shareholders
2．Capital contribution from other equity
- 4,790,837,053.25 - - - - - (4,790,837,053.25) -
investment holder
3．Share-based payment recognized in
- - - - - - - - -
shareholders' equity
4．Business combination involving
- 170,816,888.55 (241,229,762.79) - - - - - (70,412,874.24)
enterprises under common control
5．Others - - - - - - - 6,211,444,028.72 6,211,444,028.72
(III) Profit distribution - - - - - (1,534,557,750.22) - (2,145,447,695.86) (3,680,005,446.08)
1．Transfer to surplus reserve - - - - - - - - -
2．Transfer to general reserve - - - - - - - - -
3．Distributions to shareholders - - - - - (319,802,810.08) - (280,975,918.30) (600,778,728.38)
4．Others - - - - - (1,214,754,940.14) - (1,864,471,777.56) (3,079,226,717.70)
(IV) Transfers within shareholders' equity - - - - - - - - -
1．Capitalization of capital reserve - - - - - - - - -
2．Capitalization of surplus reserve - - - - - - - - -
3．Loss made up by surplus reserve - - - - - - - - -
4．Others - - - - - - - - -
(V) Special reserve - - - 621,607.80 - - - 3,288,043.74 3,909,651.54
1．Withdrawn in the period - - - 17,456,696.76 - - - 33,537,670.52 50,994,367.28
2．Utilized in the period - - - (16,835,088.96) - - - (30,249,626.78) (47,084,715.74)
(VI) Others - - - - - - - - -
IV. Closing balance of the year 644,763,730.00 18,845,899,356.20 (7,064,646.43) 4,767,373.45 520,074,434.56 8,466,307,917.47 - 45,514,555,953.29 73,989,304,118.54
The accompanying notes form part of the financial statements.
17
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Statement of Changes in Shareholders' Equity of the Company
Unit: RMB
2018
Item Other comprehensive
Share capital Capital reserve income Special reserve Surplus reserve Unappropriated profit Total shareholders' equity
I. Closing balance of the preceding year 644,763,730.00 240,001,254.59 6,647,500.00 - 520,074,434.56 1,046,473,178.03 2,457,960,097.18
Add: Changes in accounting policies - - 92,613,480.00 - - - 92,613,480.00
Corrections of prior period
- - - - - - -
errors
Others - - - - - - -
II. Opening balance of the year 644,763,730.00 240,001,254.59 99,260,980.00 - 520,074,434.56 1,046,473,178.03 2,550,573,577.18
III. Changes for the year 1,148,648,648.00 25,277,645,925.45 3,377,145.00 470,465.59 7,101,474.11 (786,530,092.87) 25,650,713,565.28
(I) Total comprehensive income - - 3,377,145.00 - - 71,014,741.10 74,391,886.10
(II) Owners' contributions and
1,148,648,648.00 25,277,645,925.45 - - - - 26,426,294,573.45
reduction in capital
1．Capital contribution from
1,148,648,648.00 25,276,764,780.38 - - - - 26,425,413,428.38
shareholders
2．Share-based payment recognized in
- - - - - - -
shareholders' equity
3．Others - 881,145.07 - - - - 881,145.07
(III) Profit distribution - - - - 7,101,474.11 (857,544,833.97) (850,443,359.86)
1．Transfer to surplus reserve - - - - 7,101,474.11 (7,101,474.11) -
2．Transfer to general reserve - - - - - - -
3．Distributions to shareholders - - - - - (850,443,359.86) (850,443,359.86)
4．Others - - - - - - -
(IV) Transfers within shareholders'
- - - - - - -
equity
1．Capitalization of capital reserve - - - - - - -
2．Capitalization of surplus reserve - - - - - - -
3．Loss made up by surplus reserve - - - - - - -
4．Others - - - - - - -
(V) Special reserve - - - 470,465.59 - - 470,465.59
1．Withdrawn in the period - - - 2,621,280.84 - - 2,621,280.84
2．Utilized in the period - - - (2,150,815.25) - - (2,150,815.25)
(VI) Others - - - - - - -
IV. Closing balance of the year 1,793,412,378.00 25,517,647,180.04 102,638,125.00 470,465.59 527,175,908.67 259,943,085.16 28,201,287,142.46
18
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Statement of Changes in Shareholders' Equity of the Company - continued
Unit: RMB
2017
Item Other comprehensive
Share capital Capital reserve income Special reserve Surplus reserve Unappropriated profit Total shareholders' equity
I. Closing balance of the preceding year 644,763,730.00 240,001,254.59 5,672,500.00 1,027,543.25 520,074,434.56 634,765,399.86 2,046,304,862.26
Add: Changes in accounting policies - - - - - - -
Corrections of prior period
- - - - - - -
errors
Others - - - - - - -
II. Opening balance of the year 644,763,730.00 240,001,254.59 5,672,500.00 1,027,543.25 520,074,434.56 634,765,399.86 2,046,304,862.26
III. Changes for the year - - 975,000.00 (1,027,543.25) - 411,707,778.17 411,655,234.92
(I) Total comprehensive income - - 975,000.00 - - 731,510,588.25 732,485,588.25
(II) Owners' contributions and
- - - - - - -
reduction in capital
1．Capital contribution from
- - - - - - -
shareholders
2．Share-based payment recognized in
- - - - - - -
shareholders' equity
3．Others - - - - - - -
(III) Profit distribution - - - - - (319,802,810.08) (319,802,810.08)
1．Transfer to surplus reserve - - - - - - -
2．Transfer to general reserve - - - - - - -
3．Distributions to shareholders - - - - - (319,802,810.08) (319,802,810.08)
4．Others - - - - - - -
(IV) Transfers within shareholders'
- - - - - - -
equity
1．Capitalization of capital reserve - - - - - - -
2．Capitalization of surplus reserve - - - - - - -
3．Loss made up by surplus reserve - - - - - - -
4．Others - - - - - - -
(V) Special reserve - - - (1,027,543.25) - - (1,027,543.25)
1．Withdrawn in the period - - - 2,239,851.36 - - 2,239,851.36
2．Utilized in the period - - - (3,267,394.61) - - (3,267,394.61)
(VI) Others - - - - - - -
IV. Closing balance of the year 644,763,730.00 240,001,254.59 6,647,500.00 - 520,074,434.56 1,046,473,178.03 2,457,960,097.18
The accompanying notes form part of the financial statements.
19
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(I) GENERAL INFORMATION OF THE COMPANY
China Merchants Port Holdings Company Limited (formerly known as "Shenzhen Chiwan Wharf
Holdings Limited", hereinafter referred to as the "Company") was a stock limited company
incorporated in Shenzhen, Guangdong Province, on 16 January 1993.
On 30 October 2018, as approved by the Reply on Approving Issuance of Shares to Purchase
Assets and Collection of Funds from Shenzhen Chiwan Wharf Holdings Limited to China
Merchants Investment Development Company Limited (Zheng Jian Xu Ke [2018] No. 1750)
issued by China Securities Regulatory Commission ("CSRC"), the Company issued
1,148,648,648 shares of A-stock to China Merchants Investment Development Company Limited
("CMID") to acquire 39.45% equity of China Merchants Port Holdings Company Limited
("CMPORT"). The Company has adopted this name since completion of the acquisition.
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 business such as property development and investment.
The Company's and consolidated financial statements have been approved by the Board of
Directors on 28 March 2019.
See Notes (VII) "Equity in other entities" for details of the scope of consolidated financial
statements in the current period are subsidiaries acquired through business combination under
common control. See Note (VI) "Changes in the consolidated scope" 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).
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.
20
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(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.
Going Concern
The Group assessed its ability to continue as a going concern for the 12 months from 31
December 2018 and did not notice any events or circumstances that may cast significant doubt
upon its ability to continue as a going concern. Therefore, the financial statements have been
prepared on a going concern basis.
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES
All the following significant accounting policies and accounting estimates are based on
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 2018, and the Company’s and consolidated results of operations and cash flows for the
year then ended.
21
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
2. Accounting period
The Group has adopted the calendar year as its accounting year, e.g. from 1 January to 31
December.
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 business such as
property development and investment with an operating cycle of one year.
4. Functional currency
Renminbi ("RMB") is the currency of the primary economic environment in which the Company
operates. Therefore, the Company chooses RMB as their functional currency. The Company's
subsidiaries chooses 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.
22
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S 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
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.
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.
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.
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 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.
23
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
6. Preparation of consolidated financial statements - continued
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.
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.
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.
24
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
6. Preparation of consolidated financial statements - continued
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.
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.
25
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
7. Types of joint arrangements and the accounting treatment of joint operation
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) 14.3.2, a long-term equity investment is subject to for using the equity
method.
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, 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. Foreign currency transactions
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.
26
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
9. Foreign currency transactions - continued
9.1 Transactions denominated in foreign currencies - continued
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.
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 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 exchange rates that approximate the actual spot exchange
rates on the dates of the transactions; 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 opening 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.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
9. Foreign currency transactions - 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 proportionate share of accumulated exchange differences arising on translation of
financial statements 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 "new standards for revenue"), 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.
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).
28
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
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 and accounts receivable and other
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.
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, which are
presented as held-for-trading financial assets other than derivative financial assets. Such financial
assets at FVTPL which may fall due more than one year since the balance sheet date and will be
held more than one year are presented as other non-current financial assets.
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.
29
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets -continued
A financial asset is classified as held for trading if one of the following conditions is satisfied:
It has been acquired principally for the purpose of selling in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that 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.
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.
Non-trading equity instrument investments are designated as financial assets at FVTOCI, 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.
30
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.1 Classification, recognition and measurement of financial assets -continued
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 instruments measured at amortized cost, financial
instruments classified as at FVTOCI, lease receivables and contract assets.
The Group makes a loss allowance against amount of lifetime ECL of the contract assets and
accounts receivable that exclude significant financing component or do not consider the financing
component in the contract within one year arising from transactions adopting New Standards for
Revenue, contract assets and accounts receivable that include significant financing component
and lease receivables arising from transactions adopting New Standards for Lease.
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.
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.
31
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S 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
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;
(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;
32
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2.1 Significant increase of credit risk - continued
(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.
At balance sheet date, if the Group judges that the financial instrument solely has lower credit risk,
the Group will assume that the credit risk of the financial instrument has not been significantly
increased since initial recognition.
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.
10.2.3 Determination of expected credit loss
The Group uses a provision matrix to determine the credit losses for accounts receivable, contract
assets and debt investment 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.
33
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.2 Impairment of financial assets - continued
10.2.3 Determination of expected credit loss - continued
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 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.
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.
34
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.3 Transfer of financial assets - continued
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.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, for
financial asset categorized into those measured at amortized cost and financial asset categorized
into those measured at FVTOCI, 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.
35
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S 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 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 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.
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.
36
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.1 Financial liabilities at FVTPL - continued
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.
10.4.1.2 Other financial liabilities
Other financial liabilities, except for financial liabilities arising from transfer of financial assets
does not satisfy derecognition criteria or continue involvement of transferred financial assets, 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.
37
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.4 Classification of financial liabilities equity instruments - continued
10.4.1 Classification, recognition and measurement of financial liabilities - continued
10.4.1.3 Financial guarantee contracts
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 are measured at the higher of: (1) amount of loss
provision; and (2) the amount initially recognized less cumulative amortization amount
determined based on new standards for revenue.
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.
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.
38
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
10. Financial instruments - continued
10.5 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.
11. Accounts receivable
The Group makes internal credit ratings on customers and determines expected losses rate of
accounts receivable. Basis for determining ratings and methods for bad debt provision are as
follows:
Average expected loss
Internal credit rating Basis for determining portfolio
rate (%)
Customers can make repayments within
credit term and have good credit records
A based on historical experience. The 0.00-0.10
probability of unpayment of due amount are
extremely low in the foreseeable future.
The customer may have overdue payment
B based on historical experience but they can 0.10-0.30
make repayments.
The evidences indicate that the overdue
credit risks of the customer are significantly
C 0.30-50.00
increased and there is probability of
unpayment and default.
The evidences indicate that the accounts
receivable are impaired and the customer
D has significant financial difficulty. The 50.00-100.00
amounts cannot be recovered in the
foreseeable future.
12. Inventories
12.1 Categories of inventories
Inventories include raw materials, merchandise and reusable materials and etc. 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.
39
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
12. Inventories - continued
12.2 Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the weighted average method.
12.3 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.
12.4 Inventory count system
The perpetual inventory system is maintained for stock system.
12.5 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.
13. 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.
40
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
13. Assets held for sale - continued
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.
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.
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.
14. Long-term equity investments
14.1 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.
41
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
14. Long-term equity investments - continued
14.2 Determination of 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.
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 of (ASBE No. 22) and the additional investment cost.
14.3 Subsequent measurement and recognition of profit or loss
14.3.1 A long-term equity investment 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.
42
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
14. Long-term equity investments - continued
14.3 Subsequent measurement and recognition of profit or loss - continued
14.3.2 A long-term equity investment 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.
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.
43
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
14. Long-term equity investments - continued
14.4 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.
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.
15. 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.
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.
44
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
16. Fixed assets
16.1 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.
16.2 Depreciation of each category of fixed assets
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 8 - 99 years 5.00 0.96 - 11.88
Buildings 10 - 50 years 5.00 1.90 - 9.50
Machinery and equipment, furniture
3 - 20 years 5.00 4.75 - 31.67
and 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.
16.3 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.
45
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
17. 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.
18. 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.
19. Intangible assets
Intangible assets include land use rights and port operating right.
An intangible asset is measured initially at cost. Upon being restructured into a stock company,
the intangible assets initial contributed by the state-owned shareholders are recognized based on
the valuation amounts confirmed by the state-owned assets administration department. When an
intangible asset with a finite useful life is available for use, its original cost is amortized over its
estimated useful life.
46
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
19. Intangible assets - continued
Estimated useful lives
Category Amortization method Residual value (%)
(years)
Land use rights Straight-line method 40 - 99 -
Port operating right 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 period, and makes adjustments when necessary.
20. 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 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.
47
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
21. 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.
22. Employee benefits
22.1 The 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.
22.2 The 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
48
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
22.2 The 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.
22.3 The 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.
23. 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.
24. 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.
49
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
24. 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 input 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.
Contract asset refers to the Group's right to consideration in exchange for goods or services that
the Group has transferred to a customer when that right is conditioned on something other than
the passage of time. The Group's unconditional (i.e., depending on the passage of time only) right
to receive consideration from the customer is separately presented as receivables. Contract
liabilities refers to the Group's obligation to transfer goods or services to a customer for which the
Group has received consideration from the customer. Contract assets and contract liabilities under
the same contract are set out on a net basis.
50
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
24. Revenue - continued
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.
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.
Principal and agent
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.
Costs to fulfill a contract
If the costs incurred in fulfilling a contract are not within the scope of other standard other than
new standards for revenue, 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.
51
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
24. Revenue - continued
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; less; 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.
25. 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.
25.1 The 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.
52
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
25. Government grants - continued
25.2 The 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.
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.
26. Deferred tax assets/ deferred tax liabilities
The income tax expenses include current income tax and deferred income tax.
26.1 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.
26.2 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 (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.
53
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
26. Deferred tax assets/ deferred tax liabilities - continued
26.2 Deferred tax assets and deferred tax liabilities - continued
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.
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.
26.3 Offset of income tax
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.
54
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
27. Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
27.1 The accounting treatment of operating leases
27.1.1 The Group as lessee under operating leases
Operating lease payments are recognized on a straight-line basis over the term of the relevant
lease, and are either included in the cost of related asset or charged to profit or loss for the period.
Initial direct costs incurred are charged to profit or loss for the period. Contingent rents are
charged to profit or loss in the period in which they are actually incurred.
27.1.2 The Group as lessor under operating leases
Rental income from operating leases is recognized in profit or loss on a straight-line basis over the
term of the relevant lease. Initial direct costs with more than an insignificant amount are
capitalized when incurred, and are recognized in profit or loss on the same basis as rental income
over the lease term. Other initial direct costs with an insignificant amount are charged in profit or
loss in the period in which they are incurred. Contingent rents are charged to profit or loss in the
period in which they actually arise.
28. 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.
29. 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.
55
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(III) THE COMPANY'S SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING
ESTIMATES - continued
30. 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.
Recognition of deferred tax
The Group calculates and makes provision for deferred income 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 income 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.
56
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Changes in significant accounting policies and accounting estimates
The Group has adopted the Accounting Standards for Business Enterprises No.22 – Recognition
and Measurement of Financial Instruments (Cai Kuai [2017] No. 7), the Accounting Standards
for Business Enterprises No.23—Transfer of Financial Assets (Cai Kuai [2017] No. 8), the
Accounting Standards for Business Enterprises No.24 – Hedging Accounting (Cai Kuai [2017] No.
9) and the Accounting Standards for Business Enterprises No.37 – Presentation of Financial
Instruments (Cai Kuai [2017] No. 14) (the four standards mentioned above are collectively
referred to as "New Standards of Financial Instruments" while the "Original Revenue Standard"
refers to the standards of financial instruments prior to amendment.) since 1 January 2018. At the
same time, the Group has adopted the New Revenue Standards revised by MoF in 2017 since 1
January 2018.
(1) New Standards for Revenue
The New Standards for Revenue have introduced the 5-step method for recognition and
measurement of revenue and added more instructions on specific transactions (or events). The
accounting policies for recognition and measurement of revenue is referred to Note III 24. The
New Standards for Revenue require the entity to adjust the retained earnings at the beginning of
initial adoption (i.e. 1 January 2018) of the new standards for the cumulative affected figures and
amounts of other relative items in the financial statements, and not to adjust information in
comparable period. At the adoption of New Standards Revenue, the Group solely adjusts the
cumulative affected figures in contract not yet been completed at the initial adoption date.
Compared to Original Standards for Revenue, effects of implementation of New Standards for
Revenue on relevant items of the consolidated financial statements for the year are as follows:
Unit: RMB
Item 31 December 2017 Reclassification 1 January 2018
Current assets:
Notes and accounts receivable 871,370,660.21 37,956,002.42 909,326,662.63
Current liabilities:
Receipts in advance 106,944,420.75 (74,984,669.58) 31,959,751.17
Contract liabilities 43,926,190.25 43,926,190.25
Other payables 6,544,589,530.18 25,972,056.78 6,570,561,586.96
Non-current liabilities:
Provisions - 50,577,924.97 50,577,924.97
Deferred income 222,857,800.33 (36,366,124.28) 186,491,676.05
Other non-current liabilities 54,763,901.68 28,830,624.28 83,594,525.96
57
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Changes in significant accounting policies and accounting estimates - continued
(1) New Standards for Revenue - continued
Compared to Original Standards for Revenue, effects of implementation of New Standards for
Revenue on relevant items of the Company's financial statements for the year are as follows:
RMB
Item 31 December 2017 Reclassification 1 January 2018
Current liabilities:
Receipts in advance 98,400.00 (98,400.00) -
Contract liabilities 98,400.00 98,400.00
(2) New Standards of Financial Instruments
In terms of the classification and measurement of financial assets, in accordance with the New
Standards of Financial Instruments, an entity shall classify financial assets as subsequently
measured at amortized cost, fair value through other comprehensive income or fair value through
profit or loss on the basis of the contractual cash flow characteristics of the financial assets and
the entity's business model for managing the financial assets. The original classifications of
financial assets, such as loans and receivables, held-to-maturity investments and-available-for-sale
financial assets in the Original Standards of Financial Instruments are no longer adopted. For
investments in non-tradable equity instruments, the entity shall generally classify them as
measured at fair value through profit or loss, and for investments in unquoted equity instruments,
the entity is allowed to designate them as measured at fair value through other comprehensive
income provided that such designation is irrevocable and the accumulated changes in fair value
initially recorded in other comprehensive income cannot be charged forward to profit or loss at
disposal.
In terms of the impairment of financial assets, financial assets classified as at amortized cost,
financial assets classified as at fair value through other comprehensive profit, and contract assets
are within the scope of New Standards of Financial Instruments. The New Standards of Financial
Instruments require to replace the previous incurred credit loss model with the expected credit
loss model. As required by the new impairment model, a three-phase model shall be adopted, so
that provisions for credit losses will be recognized as the expected credit losses within 12 months
or over the entire duration based on whether credit risks of relevant financial instruments have
been increased significantly from the initial recognition. Provisions for impairments of accounts
receivable, contract assets, and leasing receivables can be calculated at the expected credit losses
over the entire duration.
58
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Changes in significant accounting policies and accounting estimates - continued
(2) New Standards of Financial Instruments - continued
The Group made retrospective adjustment according to the New Standards of Financial
Instruments for the recognition and measurement of financial instruments prior to 1 January 2018.
The Group has not adjusted the comparative financial information. For the differences between
the original carrying amount of financial instruments and the carrying amount of financial
instruments measured by the New Standards of Financial Instruments, the Group adjusted the
retained earnings or other comprehensive income at 1 January 2018. As at 1 January 2018, impacts
of the New Standards of Financial Instruments to the consolidated financial statements are set out as
follows.
Summary of effects on the Group's initial implementation of New Standards of Financial
Instruments since 1 January 2018
Unit: RMB
Carrying amount impact Effects of implementation of New Standards for Financial Instruments on consolidated balance sheet
Carrying amount impact on
based on the original
Reclassification Remeasurement the New Standards of
Item standards of financial
Financial Instruments (1
instruments (31 December Transferred from available-for-sale Expected credit From measured at cost to
January 2018)
2017) financial assets losses measured at fair value
Other receivables 938,786,831.94 - (207,406.98) - 938,579,424.96
Other current assets 1,200,476,091.74 - (1,029,478.05) - 1,199,446,613.69
Available-for-sale
3,083,581,935.68 (3,083,581,935.68) - - -
financial assets (Note)
Long-term receivables 9,669,034.35 - (9,669.03) - 9,659,365.32
Investments in other
equity instruments - 109,999,328.79 - 123,484,640.00 233,483,968.79
(Note)
Other non-current
- 2,973,582,606.89 - 8,884,343.34 2,982,466,950.23
financial assets (Note)
Deferred tax liabilities 1,984,303,944.46 - - 30,871,160.00 2,015,175,104.46
Other comprehensive
(7,064,646.43) (815,170,041.97) - 92,613,480.00 (729,621,208.40)
income
Retained profits 8,466,307,917.47 815,170,041.97 (1,246,554.06) 2,399,850.26 9,282,631,255.64
Minority interest 45,514,555,953.29 - - 6,484,493.08 45,521,040,446.37
Note: The Group has implemented the New Standards of Financial Instruments since 1 January
2018. The original available-for-sale financial assets are reclassified as financial assets at
fair value through profit or loss and financial assets at fair value through other
comprehensive income, and are remeasured at fair value on 1 January, thereby adjusting the
investments in other equity instruments by RMB 233,483,968.79 and other non-current
financial assets by RMB 2,982,466,950.23.
59
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Changes in significant accounting policies and accounting estimates - continued
(2) New Standards of Financial Instruments - continued
Summary of effects on the Company's initial implementation of New Standards of Financial
Instruments since 1 January 2018
Unit: RMB
Effects of implementation of New Standards for Financial Instruments on consolidated balance sheet
Carrying amount impact
based on the original Reclassification Remeasurement Carrying amount impact on the
Item standards of financial New Standards of Financial
Transferred from
instruments (31 December Transferred from available-for-sale Expected credit Instruments (1 January 2018)
available-for-sale financial
2017) financial assets losses
assets
Available-for-sale -
23,759,200.00 (23,759,200.00) - -
financial assets
Investments in other -
equity instruments - 23,759,200.00 123,484,640.00 147,243,840.00
(Note)
Deferred tax liabilities 2,182,500.00 - - 30,871,160.00 33,053,660.00
Other comprehensive -
6,647,500.00 - 92,613,480.00 99,260,980.00
income
Note: The Group has implemented the New Standards of Financial Instruments since 1 January
2018. The original available-for-sale financial assets are reclassified as financial assets at
fair value through other comprehensive income, and are remeasured at fair value on 1
January, thereby adjusting the investments in other equity instruments by RMB
147,243,840.00.
Reconciliation of the Group's credit loss provision at 1 January 2018
Unit: RMB
Provision for credit loss Impairment provision
Remeasurement of
recognized based on recognized based on
Item expected loss
Original Standards of New Standards of
provision
Financial Instruments Financial Instruments
Provision for credit loss for financial assets:
Provision for credit loss for other receivables 24,816,684.83 207,406.98 25,024,091.81
Including: Provision for credit loss for
- 14,145.23 14,145.23
interest receivable
Provision for credit loss for dividend
- 193,261.75 193,261.75
receivable
Provision for credit loss for other receivable 24,816,684.83 - 24,816,684.83
Provision for credit loss for other current
- 1,029,478.05 1,029,478.05
assets
Provision for credit loss for long-term
- 9,669.03 9,669.03
receivables
Total 24,816,684.83 1,246,554.06 26,063,238.89
60
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
31. Changes in significant accounting policies and accounting estimates - continued
(3) Presentation of financial statements
The Group started adopting the Notice of the Revised Format of 2018 Financial Statements for
General Business Enterprise (Cai Kuai (2018) No. 15, hereinafter referred to as the "Cai Kuai
No.15 Document") released by the MoF on 15 June 2018 since the preparation of financial
statements for the year of 2018. Cai Kuai No.15 Document revised the presenting accounts in the
balance sheet and income statement, added line items of "Notes and Accounts Receivable",
"Notes and Accounts Payable" and "Research and Development Expenses", revised the presenting
contents of the line items of "Other Receivables", "Fixed Assets", "Construction in Progress",
"Other Payables", "Long-term Payables" and "Administrative Expenses", removed the line items
of "Notes Receivable", "Accounts Receivable", "Dividends Receivable", "Interest Receivable",
"Disposal of Fixed Assets", "Engineering Materials", "Notes Payable", "Accounts Payable",
"Interest Payable", "Dividends Payable" and "Special Payables", added line items of "Including:
Interest Expenses" and "Interest Income" under "Financial Expenses", and adjusted the presenting
location of some accounts in the income statement. The Company has accounted for the above
changes in presenting accounts retrospectively, and adjusted comparable data for prior year.
Above changes in accounting policies are approved in the 3rd session of the 9th board of directors
meeting of the Company.
32． Changes in significant accounting estimates
(1) Changes in accounting estimates and reasons
As at 27 November 2018, the Company held the 8th temporary session of the 9th board of
directors meeting in 2018 and the 5th temporary session of the 9th board of supervisors meeting
in 2018, and reviewed and approved the Proposal on Changes in Accounting Estimates of Fixed
Assets. The Company reviewed the estimated useful life and estimated net residual value of fixed
assets based on the current performance and use status of fixed assets. In order to more
objectively and fairly reflect the financial position and operating results of the Group, it is decided
to adjust the depreciation years of the Group's fixed assets and the net residual value rate of all
fixed assets within the scope of the Group's consolidation(expected new subsidiaries which
changes in the scope of consolidation). The details of adjustments are as follows:
(a) Adjustments of fixed assets in depreciation years
Category Useful life before adjustment Useful life after adjustment
Port and wharf equipment 5 – 50 years 5 - 40 years
Buildings 5 - 40 years 10 - 30 years
Machinery equipment, furniture and other equipment 5 - 15 years 3 - 20 years
Vehicles and vessels 5 - 20 years 5 - 25 years
(b) The net residual value of fixed assets is adjusted from 10% to 5%.
61
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES - continued
32． Changes in significant accounting estimates - continued
(2) Financial effect of changes in accounting estimates
The above adjustments of fixed assets in depreciation years and net residual rate have been
implemented since December 1, 2018.
According to the "Accounting Standards for Business Enterprises No. 28 - Changes in Accounting
Policies and Accounting Estimates, and Corrections of Errors", the adjustments of fixed assets in
the depreciation years and the net residual value rate are changes in accounting estimates, and
shall be treated using the prospective approach, which is not required to make retrospective
adjustments. Financial positions and operating results of the Group in prior years will not be
affected.
The Group increased the depreciation expense of fixed assets in 2018 by RMB 41,405,189.48,
reduced the consolidated net profit in 2018 by RMB 38,076,037.04, and reduced the
unconsolidated net assets by RMB 20,076,037.04 in the end of 2018, due to the above changes in
accounting estimates.
IV. TAXES
1. Major taxes and tax rates
Taxes Tax basis Tax rate
Taxable income 16.5%-34% (Note1)
Enterprise income tax
Dividend income tax 5%, 10%, 25% (Note2)
Income from sale of goods (Note 4) 10%-17%
Income from transportation, loading and unloading business and
Value-added Tax 6%
part of modern service industries
("VAT") (Note 3)
Income from sale of real estate, property management, real estate
5%
lease, etc.
Social contribution
Income 0.65%-7.6%
tax (Note 5)
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%
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 subsidiaries set up in China are subject to an enterprise income tax rate of 25%,
and the other overseas subsidiaries are subject to enterprise income tax rates between 28%
and 34%.
62
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
IV. TAXES - continued
1. Major taxes and tax rates - continued
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: Pursuant to the Notice of the Ministry of Finance and the State Administration of Taxation
on the Adjustment of VAT issued by the Ministry of Finance and the State Administration
of Taxation (Cai Shui [2018] No. 32 Document), effective from 1 May 2018, the taxable
sales or imports of goods at original applicable VAT rate of 17% and 11% shall be subject
to a VAT rate of 16% and 10% respectively.
Note 5: 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 subject to tax preference of "3-year exemption
followed by 3-year half reduction".
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.
63
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS
1. Cash and bank balances
Unit: RMB
Opening balance
Item Closing balance
(restated)
Cash 349,650.07 598,357.70
RMB 77,877.30 124,499.32
USD 29,909.14 35,736.85
HKD 57,342.60 45,542.09
BRL 11,402.34 -
Others 173,118.69 392,579.44
Bank deposit (Note1) 6,118,508,644.13 7,716,378,695.65
RMB 3,401,709,911.75 4,349,905,231.94
USD 1,326,034,833.97 795,546,066.36
HKD 432,603,546.37 2,330,366,650.86
EUR 359,682,134.06 218,799,953.75
BRL 539,493,644.44 -
Others 58,984,573.54 21,760,792.74
Other cash and bank balances (Note 2) 951,450,410.55 12,483,029.40
RMB 951,450,410.55 12,483,029.40
Total 7,070,308,704.75 7,729,460,082.75
Including: The total amount of funds deposited overseas 2,809,011,079.47 3,108,783,498.70
Note 1: The bank deposits of the Group deposited overseas and restricted for remittance to China
at the end of the year totaled RMB 1,002,027,200.00.
Note 2: The structured deposits that cannot be readily withdrawn on demand in the other cash and
bank balances of the Group totaled RMB 695,000,000.00, the structured deposits that can
be readily withdrawn on demand totaled RMB 240,119,139.15, the deposit totaled RMB
15,458,463.23, and the balance of the margin maintenance account was RMB 872,808.17.
2. Notes and accounts receivable
(1) Summary of notes and accounts receivable
Unit: RMB
Opening balance
Item Closing balance
(restated)
Notes receivable 11,608,669.43 16,910,891.14
Accounts receivable 1,109,230,503.08 892,415,771.49
Total 1,120,839,172.51 909,326,662.63
64
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Notes and accounts receivable - continued
(2) Notes receivable
(a) Classification of notes receivable
Unit: RMB
Opening balance
Category Closing balance
(restated)
Bank acceptance 11,608,669.43 16,910,891.14
Less: Provision for credit losses - -
Carrying amount 11,608,669.43 16,910,891.14
(b) As at 31 December 2018, there are no notes receivable pledged.
(c) As at 31 December 2018, there are no notes receivable endorsed or discounted which are not
yet due at the balance sheet date.
(d) As at 31 December 2018, there are no notes reclassified to accounts receivable due to the
drawers' inability to settle the note.
(3) Accounts receivable
(a) Disclosure of accounts receivable by categories
Unit: RMB
Expected credit Closing balance
Credit rating
loss rate (%) Carrying amount Provision Book value
A 0.00-0.10 323,319,258.26 32,331.93 323,286,926.33
B 0.10-0.30 614,037,476.13 1,144,038.38 612,893,437.75
C 0.30-50.00 155,462,941.77 2,079,476.01 153,383,465.76
D 50.00-100.00 59,928,872.52 40,262,199.28 19,666,673.24
Total 1,152,748,548.68 43,518,045.60 1,109,230,503.08
65
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
2. Notes and accounts receivable - continued
(3) Accounts receivable - continued
(b) Changes in provision for credit loss of accounts receivable
Unit: RMB
2018
Item Lifetime expected credit loss Lifetime expected credit loss
Total
(not credit-impaired) (credit-impaired)
At 31 December 2017 - 43,295,671.74 43,295,671.74
Remeasurement of provision for
- - -
expected credit loss
At 1 January 2018 - 43,295,671.74 43,295,671.74
Provision for expected credit loss 3,895,740.28 289,954.60 4,185,694.88
for the year
Reversal of expected credit loss for (3,780,327.65) (3,507,559.23) (7,287,886.88)
the year
Effect of changes in the scope of
3,572,789.46 - 3,572,789.46
consolidation
Effect of changes in foreign
(432,355.77) 184,132.17 (248,223.60)
exchange
At 31 December 2018 3,255,846.32 40,262,199.28 43,518,045.60
(c) The top five balances of accounts receivable classified by debtor
Unit: RMB
Proportion of
the amount to
Name of customer Carrying amount Aging the total
accounts
receivable (%)
More than 1 year but not
Client A 90,579,511.81 exceeding 2 years and more than 7.86
3 years
More than 1 year but not
Client B 69,081,097.25 exceeding 2 years, more than 2 5.99
year but not exceeding 3 years
More than 1 year but not
exceeding 2 years, more than 2
Client C 45,161,278.00 3.92
year but not exceeding 3 years,
more than 3 years
More than 1 year but not
Client D 38,820,531.88 3.37
exceeding 2 years
More than 1 year but not
Client E 34,756,078.85 3.02
exceeding 2 years
Total 278,398,497.79 24.16
66
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
3. Prepayments
(1) Aging analysis of prepayment
Unit: RMB
Closing balance Opening balance (restated)
Aging Proportion Proportion
Amount (%) Amount (%)
Within 1 year 124,276,781.51 99.90 71,176,428.52 99.32
More than 1 year but not exceeding 2 years 4,000.00 - 367,773.99 0.51
More than 2 years but not exceeding 3 years 81.36 - - -
More than 3 years 124,000.00 0.10 124,000.00 0.17
Total 124,404,862.87 100.00 71,668,202.51 100.00
(2) The Group has no significant prepayments aged more than one year.
(3) The top five balances of prepayments classified by entities
Unit: RMB
Proportion of the closing
Relationship with the
Entities balance to the total
Company
Closing balance prepayments (%)
Sri Lanka Ports Authority Non-related party 35,488,756.51 28.53
Judicial Insurance Non-related party 8,694,880.32 6.99
Shenzhen Administration of Transportation and
Non-related party 6,030,000.00 4.85
Public Services
Saham Assurance Togo S.A. Non-related party 4,571,510.40 3.67
Shenzhen Jet Technology Co., Ltd. Non-related party 3,829,746.60 3.08
Total 58,614,893.83 47.12
4. Other receivables
(1) Summary of other receivables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Interest receivable 33,041,147.73 14,131,083.11
Dividend receivable 259,804,145.16 193,068,488.25
Other receivables 506,713,933.56 731,379,853.60
Total 799,559,226.45 938,579,424.96
67
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Other receivables - continued
(2) Interest receivable
(a) Classification of interest receivable
Unit: RMB
Opening balance
Item Closing balance
(restated)
Interest receivable from related parties 25,986,030.98 7,002,104.12
Others 7,088,190.97 7,143,124.22
Total 33,074,221.95 14,145,228.34
Less: Provision for credit loss 33,074.22 14,145.23
Book value 33,041,147.73 14,131,083.11
(b) As at 31 December 2018, the Group has no significant overdue interest.
(3) Dividend receivable
(a) Presentation of dividend receivable
Unit: RMB
Opening balance
Name of investee Closing balance
(restated)
China Nanshan Development (Group) Incorporation
175,692,500.00 193,261,750.00
("Nanshan Group")
Shanghai International Port (Group) Co., Ltd. 50,118,027.14 -
Qingdao Qianwan United Container Terminal Co., Lt. 25,000,000.00 -
Zhanjiang Port (Group) Co., Ltd. 9,253,682.23 -
Total 260,064,209.37 193,261,750.00
Less: Provision for credit loss 260,064.21 193,261.75
Book value 259,804,145.16 193,068,488.25
(b) Significant dividend receivable aged more than 1 year
Unit: RMB
Name of investee Closing balance Aging Why unrecovered Impaired or not
Undergoing relevant
More than 1 year formalities and
Nanshan Group 70,277,000.00 but not exceeding 2 expected to be Not
years recovered at the end
of 2019
68
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Other receivables - continued
(4) Other receivables
(a) Disclosure of other receivables by categories
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.
As at 31 December 2018, the credit risk and expected credit loss of other receivables of each
category of customers are presented as below:
Unit: RMB
Closing balance
Expected
Credit rating credit loss Lifetime expected
Expected credit Lifetime expected credit
rate (%) credit loss (not Total
loss in 12 months loss (credit-impaired)
credit-impaired)
A 0.00-0.10 - - - -
B 0.10-0.30 506,719,623.66 - - 506,719,623.66
C 0.30-50.00 - - - -
D 50.00-100.00 - - 35,596,931.73 35,596,931.73
Carrying amount 506,719,623.66 - 35,596,931.73 542,316,555.39
Provision for
5,690.10 - 35,596,931.73 35,602,621.83
credit loss
Book value 506,713,933.56 - - 506,713,933.56
(b) Changes in provision for credit loss of other receivables
Unit: RMB
2018
Item Lifetime expected Lifetime expected
Expected credit loss
credit loss (not credit loss Total
in 12 months
credit-impaired) (credit-impaired)
At 31 December 2017 - - 24,816,684.83 24,816,684.83
Remeasurement of provision
- - - -
for expected credit loss
At 1 January 2018 - - 24,816,684.83 24,816,684.83
Provision for expected credit
5,690.10 - 9,955,180.00 9,960,870.10
loss for the year
Reversal of expected credit loss
- - (200,000.00) (200,000.00)
for the year
Effect of changes in the scope
- - 1,020,000.00 1,020,000.00
of consolidation
Effect of changes in foreign
- - 5,066.90 5,066.90
exchange
At 31 December 2018 5,690.10 - 35,596,931.73 35,602,621.83
69
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
4. Other receivables - continued
(4) Other receivables – continued
(c) Other payables presented by the nature
Unit: RMB
Item Closing balance Opening balance (restated)
Operation compensation(Note) 176,625,857.32 400,848,897.19
Temporary payments 187,153,302.95 130,219,643.59
Deposits 39,657,003.56 14,149,471.86
Others 138,880,391.56 210,978,525.79
Total 542,316,555.39 756,196,538.43
Less: Provision for credit loss 35,602,621.83 24,816,684.83
Book value 506,713,933.56 731,379,853.60
Note: It is the compensation paid by the holding company of the non-controlling shareholder of
the non-wholly owned subsidiary of the Group for the operation of the subsidiary.
(d) There are no other receivables that have been written off in 2018.
(e) The top five balances of other receivable classified by debtor
Unit: RMB
Proportion of the
amount to the Bad debt
Name of customer Nature Closing balance Aging
other receivable provision
(%)
More than 2 years
Operation
Global Terminal Limited 175,997,722.02 but not exceeding 32.45 -
compensation
3 years (inclusive)
Temporary
Chu Kong River Trade Terminal Co., Ltd. 59,975,890.00 More than 3 years 11.06 -
payments
Temporary
Shenzhen Qianhaiwan Bonded Port Area 43,796,162.41 More than 3 years 8.08 -
payments
Temporary
Tianjin Haitian Bonded Logistics Co., Ltd. 34,300,000.00 More than 3 years 6.32 -
payments
Temporary
Port de Djibouti S.A. 24,411,770.72 More than 3 years 4.50 -
payments
Total 338,481,545.15 62.41 -
5. Inventories
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance (restated)
Item Provision for Provision for
Carrying Carrying
decline in value Book value decline in value Book value
amount amount
of inventories of inventories
Raw materials 89,572,663.06 2,584,953.53 86,987,709.53 68,729,097.33 2,793,815.04 65,935,282.29
Finished goods 4,629,610.81 - 4,629,610.81 100,509.49 - 100,509.49
Others 16,949,949.68 - 16,949,949.68 16,753,490.44 - 16,753,490.44
Total 111,152,223.55 2,584,953.53 108,567,270.02 85,583,097.26 2,793,815.04 82,789,282.22
70
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
5. Inventories - continued
(2) Provision for decline in value of inventories
Unit: RMB
Opening balance Decrease Closing
Item Provision
(restated) Reversal Write-off balance
Raw materials 2,793,815.04 - - 208,861.51 2,584,953.53
(3) As at 31 December 2018, the Group has no capitalized borrowing cost in the balance of
inventories.
6. Assets held for sale
Unit: RMB
at
Carrying amount Fair value at Estimated
Item the end of the the end of the disposal Schedule
year year expenses
Removal before 29
Long-term assets held for sale 115,356,162.94 216,379,774.36 -
June 2019
Less: Provision for impairment of
-
assets held for sale
Carrying amount 115,356,162.94
Note: It is the land with an area about 133.61 mu and the attached buildings on the east side of
Zhuchi Deepwater Port on the south side of Zhongshan East Road in Shantou City held by
the Company's subsidiary Shantou CMPort Group Co., Ltd. (hereinafter referred to as
"Shantou CMPort"). On 29 December 2018, Shantou Land Reserve Center signed a land
acquisition agreement with Shantou CMPort, which stipulated that Shantou CMPort should
transfer the above-mentioned land and attached buildings to Shantou Land Reserve Center
at RMB 216,379,774.36, and the transfer of the above-mentioned land and attached
buildings should be completed within 6 months after the agreement is signed.
7. Other current assets
Unit: RMB
Opening
Item Closing balance
balance(restated)
Loan to the associates of related parties (Note 1) 1,029,478,047.00 980,134,545.00
Prepaid taxes 7,872,157.38 978,566.31
Entrusted loans - 120,000,000.00
Others (Note 2) 159,100,462.79 99,362,980.43
Total 1,196,450,667.17 1,200,476,091.74
Less: Provision for credit loss 1,029,478.05 1,029,478.05
Book value 1,195,421,189.12 1,199,446,613.69
Note 1: The closing balance is the Group's loan to Khor Ambado FZCo, an associate of China
Merchants Group Co., Ltd. (hereinafter referred to as "China Merchants Group"), which
is a floating rate loan due within one year, and is secured with the interests of associates
of the holding shareholder of Khor Ambado FZCo.
Note 2: Mainly for the year-end retained VAT amount of subsidiaries in China.
71
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Long-term receivables
(1) Long-term receivables
Unit: RMB
Closing balance Opening balance (restated)
Item Provision for Carrying Provision for
Carrying amount Book value Book value
credit loss amount credit loss
Advances to
793,840,080.19 793,840.08 793,046,240.11 9,669,034.35 9,669.03 9,659,365.32
shareholders
(2) There are no long-term receivables derecognized due to the transfer of financial assets at the
end of the year.
(3) There are no assets and liabilities arising from the transfer and further involvement of
long-term receivables at the end of the year.
72
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Long-term equity investments
Unit: RMB
Changes of this year
Effect of Effect of
changes in translation of Closing value of
Accountin 1 January 2018 Reconciling
Investees the scope of Investment profit Cash dividends or Provision financial 31 December 2018 provision for
g method (restated) items from other Other equity
consolidatio Increase Decrease or loss under equity profits announced for statements impairment
comprehensive movements
n method of issuance impairment denominated in
income
foreign
currencies
I. Joint ventures
Equity
Euro-Asia Oceangate S.àr.l. 2,543,905,022.59 - - - 108,552,693.45 31,873.27 - 111,712,525.45 - 128,082,970.46 2,668,860,034.32 -
method
Equity
Port of Newcastle (Note1) - - 2,160,442,453.52 - 8,870,390.98 (5,640,777.39) - 44,549,625.54 - 3,231,523.18 2,122,353,964.75 -
method
Equity
Zhanjiang Port（Group) Co., Ltd. 2,053,843,683.66 - - - (36,596,428.75) - - 9,740,718.14 - - 2,007,506,536.77 -
method
Qingdao Qianwan United Container Equity
1,523,008,583.00 - - - 141,704,248.41 - (2,550,500.00) 150,000,000.00 - - 1,512,162,331.41 -
Terminal Co., Lt. method
Equity
Laizhou Laiyin Port Business Co., Ltd. 783,668,303.84 - - - 48,450,765.57 - - 38,562,004.83 - - 793,557,064.58 -
method
Equity
Others 2,029,488,434.19 - 6,964,120.00 - 158,922,580.81 - - 76,500,000.00 - 6,987,087.43 2,125,862,222.43 -
method
Subtotal 8,933,914,027.28 - 2,167,406,573.52 - 429,904,250.47 (5,608,904.12) (2,550,500.00) 431,064,873.96 - 138,301,581.07 11,230,302,154.26 -
II. Associates
Shanghai International Port (Group) Co.,
Equity
Ltd. 20,140,460,412.59 - 453,700,695.53 - 2,571,370,986.64 (99,859,568.82) 180,954,063.75 1,059,194,508.74 - 127,990.00 22,187,560,070.95 -
method
(A Share) (Note 2)
Equity
Nanshan Group 3,437,393,142.72 - - - 220,478,175.60 (16,230,971.37) 1,530,681,674.94 111,041,999.99 - - 5,061,280,021.90 -
method
Equity
Terminal Link SAS 3,563,936,186.34 - - - 357,885,181.99 2,954,661.32 1,505,998.13 15,671,554.15 - 22,649,011.63 3,933,259,485.26 -
method
Dalian Port Co., Ltd.(A Share and H Equity
3,188,107,183.18 - - - 112,882,708.11 (4,941,315.60) 47,470.88 62,438,928.00 - (29,775,775.90) 3,203,881,342.67 647,382,998.60
Share) method
China Merchants Hainan Development Equity
- - 525,000,000.00 - - - - - - - 525,000,000.00 -
Investment Co., Ltd. (Note 3) method
Equity
Others 3,897,038,855.37 - 1,000,000.00 - 221,343,235.79 (13,426,099.03) 26,900,981.70 290,453,065.22 - 192,890,279.75 4,035,294,188.36 -
method
Subtotal 34,226,935,780.20 - 979,700,695.53 - 3,483,960,288.13 (131,503,293.50) 1,740,090,189.40 1,538,800,056.10 - 185,891,505.48 38,946,275,109.14 647,382,998.60
Total 43,160,849,807.48 - 3,147,107,269.05 - 3,913,864,538.60 (137,112,197.62) 1,737,539,689.40 1,969,864,930.06 - 324,193,086.55 50,176,577,263.40 647,382,998.60
73
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
V. NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
9. Long-term equity investments - continued
Note 1: As at 6 February 2018, China Merchants Union (BVI) Limited (hereinafter referred to as
"CMU"), a joint venture between the Group and China Merchants Group (Hong Kong)
Co., Ltd. (hereinafter referred to as "CMHK"), and its wholly-owned subsidiary Gold
Newcastle Property Holding Pty Limited (hereinafter referred to as "Gold Newcastle")
signed an acquisition agreement. The agreement stipulates that the Group will purchase
from CMU its wholly-owned subsidiaries Gold Newcastle and Gold Newcastle's joint
ventures Port of Newcastle Investments (Holdings) Pty Limited, Port of Newcastle
Investments (Property Holdings) Pty Limited, Port of Newcastle Investments ( Holdings)
Trust, Port of Newcastle Investments (Property Holdings) Trust (hereinafter collectively
referred to as "Port of Newcastle") is a 50% interest, and thus Port of Newcastle
becomes a joint venture of the Group.
Port of Newcastle is made up of several entities and trusts, and has acquired all the rights
and interests of the largest port on the east coast of Australia for about 98 years since 30
May 2014 via lease and sublease. Gold Newcastle is an entity established in Australia by
CMU in order to hold a number of assets, including Port of Newcastle. The remaining
50% equity of Port of Newcastle is held by independent third parties.
The transaction was completed this year with a final consideration of AUD 605 million
(RMB 2,944,265,945.15), including an interest-bearing shareholder loan of AUD 162.5
million (RMB 783,823,491.63) from CMU to Port of Newcastle.
The Group believes that the Group and other joint venture parties jointly control Port of
Newcastle. Therefore, the Group accounts for Port of Newcastle as a joint venture.
Note 2: In 2018, the Group purchased 72,199,132 shares of Shanghai International Port (Group)
Co., Ltd. directly from the open market. As of 31 December 2018, the equity held by the
Group in Shanghai International Port (Group) Co., Ltd. has increased from 26.45% to
26.77%.
Note 3: It was jointly established on 18 December 2018 by the Company’s subsidiary Chiwan
Wharf Holdings (Hong Kong) Limited and related parties CMHK, Jumbo Pacific
Holdings Limited, China Merchants Expressway Network & Technology Holdings Co.,
Ltd., China Merchants Industrial Investment Co., Ltd., and Sinotrans(HK)Logistics Co.,
Ltd. The registered capital is RMB 3,500 million, among which Chiwan Wharf Holdings
(Hong Kong) Limited subscribed and contributed RMB 525 million with shareholding
proportion of 15%.
74
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
10. Other investments in equity instruments
Unit: RMB
Opening balance Cash dividends
Investees Closing balance Nature
(restated) for this year
The intention of
China Ocean Shipping Agency holding is neither for
141,547,500.00 136,994,640.00 7,788,975.00
(Shenzhen) Co., Ltd sale nor profits in
short-term
The intention of
holding is neither for
Others 106,300,814.30 96,489,328.79 440,000.00
sale nor profits in
short-term
Total 247,848,314.30 233,483,968.79 8,228,975.00
Note: The Group implemented the new financial instruments standard from 1 January 2018, and
reclassified some of the equity instrument investments listed in available-for-sale financial
assets at the end of the previous year to this item.
(1) Investment in equity instruments
Unit: RMB
Item Closing balance Opening balance (restated)
Cost of equity instruments 108,289,950.79 104,397,628.79
Increase in the current year 3,892,322.00
Fair value 247,848,314.30 233,483,968.79
Changes of fair value included in OCI 139,558,363.51 129,086,340.00
11. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance (restated)
Financial assets measured at fair values and changes of
2,087,872,081.94 2,982,466,950.23
which are recorded into current period profit or loss
Including: Equity instrument investment 2,087,872,081.94 2,982,466,950.23
Note: The Group implemented the new financial instruments standard from 1 January 2018, and
reclassified some of the equity instrument investments listed in available-for-sale financial
assets at the end of the previous year to this item.
(1) Investment in equity instruments
Unit: RMB
Item Closing balance Opening balance (restated)
Cost of equity instruments 1,173,690,773.13 1,158,810,992.06
Fair value 2,087,872,081.94 2,982,466,950.23
Changes of fair value included in profit or loss of the
914,181,308.81 1,823,655,958.17
current period
75
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
12. Investment properties
(1) Investment properties measured under cost method
Unit: RMB
Item Land use rights Buildings Total
I. Total original carrying
amount
1.Opening balance (restated) 28,632,130.84 6,278,583,514.39 6,307,215,645.23
2.Increase in the current year - 14,022,292.33 14,022,292.33
(1)Purchase - 12,229,350.87 12,229,350.87
(2)Other increase - 1,792,941.46 1,792,941.46
3.Decrease in the current year - - -
4.Closing balance 28,632,130.84 6,292,605,806.72 6,321,237,937.56
II. Total accumulated
depreciation
1.Opening balance (restated) 14,982,319.41 231,607,343.69 246,589,663.10
2.Increase in the current year 513,472.44 183,987,812.51 184,501,284.95
(1)Accrual of depreciation 513,472.44 182,734,964.93 183,248,437.37
(2)Other increase - 1,252,847.58 1,252,847.58
3.Decrease in the current year - - -
4.Closing balance 15,495,791.85 415,595,156.20 431,090,948.05
III. Total accumulated amount of
provision for impairment losses
of investment property
1.Opening balance (restated) - - -
2.Increase in the current year - - -
3.Decrease in the current year - - -
4.Closing balance - - -
IV. Total book value of
investment property
1.Closing balance 13,136,338.99 5,877,010,650.52 5,890,146,989.51
2.Opening balance (restated) 13,649,811.43 6,046,976,170.70 6,060,625,982.13
(2) Investment properties without ownership certificates
Unit: RMB
Item Closing balance Opening balance(restated)
Buildings and land use rights 43,119,291.89 37,101,489.68
13. Fixed assets
Unit: RMB
Item Closing balance Opening balance (restated)
Fixed assets 22,994,155,151.43 23,167,379,576.44
Disposal of fixed assets 35,729.00 13,878.42
Total 22,994,190,880.43 23,167,393,454.86
76
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Fixed assets - continued
(1) Fixed assets
Unit: RMB
Mechanical
Port and terminal Motor vehicles, cargo
Item Buildings equipment, furniture Total
facilities ships and tugboats
and others
I. Total original carrying amount
1.Opening balance (restated) 21,717,431,562.53 1,109,711,967.12 9,556,587,164.50 1,202,757,027.75 33,586,487,721.90
2. Increase in the current year 1,444,412,678.73 49,885,407.01 1,268,003,739.58 186,161,101.23 2,948,462,926.55
(1)Purchase 17,188,457.11 1,525,213.89 92,428,334.50 26,960,609.63 138,102,615.13
(2)Transfer from construction in
71,825,427.47 42,131,895.04 358,429,373.77 148,125,344.43 620,512,040.71
progress
(3)Effect of changes in the scope
1,355,398,794.15 6,228,298.08 817,146,031.31 11,075,147.17 2,189,848,270.71
of consolidation
3.Decrease in the current year 1,619,698,235.98 22,009,112.14 234,172,039.22 49,119,866.78 1,924,999,254.12
(1)Disposal or retire 143,249,072.49 634,179.50 234,172,039.22 49,119,866.78 427,175,157.99
(2)Transfer to construction in
1,476,449,163.49 19,581,991.18 - - 1,496,031,154.67
progress
(3)Transfer to investment
- 1,792,941.46 - - 1,792,941.46
properties
4.Effect of changes in foreign
293,091,861.70 11,378,173.47 1,737,493.30 28,467,389.87 334,674,918.34
exchange
5.Closing balance 21,835,237,866.98 1,148,966,435.46 10,592,156,358.16 1,368,265,652.07 34,944,626,312.67
II. Total accumulated depreciation
1.Opening balance (restated) 4,286,051,154.44 208,977,381.63 5,392,312,327.64 474,303,769.96 10,361,644,633.67
2.Increase in the current year 854,950,356.83 39,456,897.49 977,003,813.94 73,149,393.38 1,944,560,461.64
(1)Accrual of depreciation 585,606,826.05 39,456,897.49 606,453,094.44 67,154,391.45 1,298,671,209.43
(2)Effect of changes in the scope
269,343,530.78 - 370,550,719.50 5,995,001.93 645,889,252.21
of consolidation
3.Decrease in the current year 182,416,870.31 2,837,281.84 169,430,690.69 35,400,272.26 390,085,115.10
(1)Disposal or retire 95,233,231.01 566,086.84 169,430,690.69 35,400,272.26 300,630,280.80
(2)Transfer to construction in
87,183,639.30 1,018,347.42 - - 88,201,986.72
progress
(3)Transfer to investment
- 1,252,847.58 - - 1,252,847.58
properties
4.Effect of changes in foreign
(11,415,084.52) 1,583,244.14 (16,454,108.66) 3,173,617.91 (23,112,331.13)
exchange
5.Closing balance 4,947,169,556.44 247,180,241.42 6,183,431,342.23 515,226,508.99 11,893,007,649.08
III. Total accumulated amount of
provision for impairment losses of
investment property
1.Opening balance (restated) 57,419,468.96 - 44,042.83 - 57,463,511.79
2.Increase in the current year - - 0.37 - 0.37
3.Decrease in the current year - - - - -
4.Closing balance 57,419,468.96 - 44,043.20 - 57,463,512.16
IV. Total book value of
investment property
(1) Closing balance 16,830,648,841.58 901,786,194.04 4,408,680,972.73 853,039,143.08 22,994,155,151.43
(2) Opening balance (restated) 17,373,960,939.13 900,734,585.49 4,164,230,794.03 728,453,257.79 23,167,379,576.44
77
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
13. Fixed assets - continued
(2) Fixed assets leased in through financial leasing
Unit: RMB
Accumulated
Item Carrying amount Book value
depreciation
Port and terminal facilities 5,318,357,246.96 85,260,010.27 5,233,097,236.69
Buildings 133,330,273.37 6,028,470.75 127,301,802.62
Mechanical equipment, furniture and
360,238,863.33 214,493,738.80 145,745,124.53
others
Motor vehicles, cargo ships and tugboats 38,350,000.00 28,100,712.71 10,249,287.29
Total 5,850,276,383.66 333,882,932.53 5,516,393,451.13
(3) Fixed assets leased out through finance leasing
Unit: RMB
Item Closing balance Opening balance (restated)
Port and terminal facilities 844,843,802.95 971,151,561.19
Buildings 242,804,849.53 289,588,337.69
Mechanical equipment, furniture and others 139,712.96 255,687.15
Total 1,087,788,365.44 1,260,995,586.03
(4) Fixed assets without ownership certificates
Unit: RMB
Item Closing balance Opening balance (restated)
Buildings, Port and terminal facilities 1,590,990,468.38 1,746,684,998.44
(5) Other issues
Unit: RMB
Item Amount Note
The original amounts of fixed assets fully depreciated
1,680,807,123.39
but still in use at 31 December 2018
Closing original amount of temporary idle fixed assets -
Fixed assets disposed or retired in the current period
Original amount of fixed assets disposed or retired in the
427,175,157.99
current period
Net book value of fixed assets disposed or retired in the
126,544,877.19
current period
Gains or losses on disposal or retire of fixed assets (13,944,505.56)
78
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Construction in progress
(1) Summary of construction in progress
Unit: RMB
Closing balance Opening balance(restated)
Item Provision for Provision for
Carrying amount impairment Book value Carrying amount impairment Book value
Port and terminal facilities 4,104,748,962.75 - 4,104,748,962.75 1,772,774,735.44 - 1,772,774,735.44
Berths and yards 1,023,331,798.30 - 1,023,331,798.30 12,388,194.50 - 12,388,194.50
Infrastructure 40,000,912.00 - 40,000,912.00 35,095,018.11 - 35,095,018.11
Ship under construction 22,985,373.73 - 22,985,373.73 142,411,112.12 - 142,411,112.12
Equipment - - - 213,801,119.70 - 213,801,119.70
Others 308,359,043.28 - 308,359,043.28 131,537,150.63 - 131,537,150.63
Total 5,499,426,090.06 - 5,499,426,090.06 2,308,007,330.50 - 2,308,007,330.50
79
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
14. Construction in progress - continued
(2) The top ten balances of construction in progress
Unit: RMB
Proportion of
Effect of accumulated Constructi Interest
Effect of Decrease in changes in construction on Amount of Including: capitalizati
Item Closing balance
changes in scope the current foreign investment in progress accumulated capitalized on rate for
Opening Increase in the of consolidation period exchange budget (%) capitalized interest for the the current Capital
Budget amount balance(restated) current period (%) interest current period period (%) source
Reconstruction Project of container, oil Self-fundin
2,776,464,530.76 - 1,334,002,333.13 - - 50,259,451.57 1,384,261,784.70 49.86 49.86 - - -
terminal and tank area, HIPG g
Self-fundin
Guangao project Phase II, Shantou Port 2,875,500,000.00 726,456,652.38 523,789,103.07 - - - 1,250,245,755.45 43.48 43.48 - - -
g
Self-fundin
TCP berth expansion project 1,071,009,228.80 - 590,710,536.81 456,392,978.15 - (80,506,818.84) 966,596,696.12 90.25 90.25 8,473,403.78 8,473,403.78 7.44
g and loan
Berth 3 of Houshigang District, Xiamen 56,757,132.8 Self-fundin
1,000,000,000.00 679,113,997.53 58,742,500.98 - 97,650.00 - 737,758,848.51 73.78 98.78 17,491,904.90 4.77
Port 9 g and loan
Reconstruction project of Berth 1#-4#, Self-fundin
1,174,090,000.00 210,348,590.96 206,977,637.18 - - - 417,326,228.14 35.54 35.54 - - -
Haixing Wharf g
Logistics park project Phase I, Djibouti Self-fundin
255,311,040.00 33,958,350.80 165,744,909.11 - - 5,684,437.02 205,387,696.93 80.45 85.00 - - -
international free trade zone g
Self-fundin
Reclamation project, Zhangzhou Wharf 57,855,731.00 - 56,809,343.00 - - - 56,809,343.00 98.19 98.00 - - -
g
Project of Grain Dispatch Warehouse at Self-fundin
680,000,000.00 1,760,873.59 53,039,774.09 - - - 54,800,647.68 8.06 8.06 - - -
Berth2#,3# Phase III , Machong Port g
Liaogeshou project, Guangdong Yide
105,357,118.22 4,499,011.90 39,495,974.81 - 642,881.78 - 43,352,104.93 41.15 41.15 880,381.52 880,381.52 4.66 Bank loan
Port
RTG remote control system Phase III, Self-fundin
34,726,400.00 24,057,992.68 6,544,920.51 - - - 30,602,913.19 88.13 88.13 - - -
Mawan Wharf g
66,110,918.1
Total 10,030,314,048.78 1,680,195,469.84 3,035,857,032.69 456,392,978.15 740,531.78 (24,562,930.26) 5,147,142,018.65 26,845,690.20
9
80
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
15. Intangible assets
(1) Summary of intangible assets
Unit: RMB
Terminal management
Land use rights Others Total
rights
I. Total original carrying amount
1.Opening balance (restated) 13,012,429,380.15 5,171,928,708.25 356,221,955.06 18,540,580,043.46
2.Increase in the current year 198,446,998.71 5,682,157,733.65 761,163,308.23 6,641,768,040.59
(1)Purchase - 20,653,099.07 38,786,280.95 59,439,380.02
(2)Effect of changes in the scope of
198,446,998.71 5,661,504,634.58 649,313,168.73 6,509,264,802.02
consolidation
(3)Other increase - - 73,063,858.55 73,063,858.55
3.Decrease in the current year 213,014,868.97 - 4,347,166.59 217,362,035.56
(1)Disposal 711,000.00 - 3,961,765.86 4,672,765.86
(2)Other decrease 212,303,868.97 - 385,400.73 212,689,269.70
4.Effect of changes in foreign
100,017,007.56 (342,565,782.79) 11,031,872.58 (231,516,902.65)
exchange
5.Closing balance 13,097,878,517.45 10,511,520,659.11 1,124,069,969.28 24,733,469,145.84
II. Accumulated amortization
1.Opening balance (restated) 2,180,627,622.16 336,212,844.34 150,026,238.05 2,666,866,704.55
2.Increase in the current year 276,118,161.35 1,023,071,295.99 133,128,803.32 1,432,318,260.66
(1)Accrual of amortization 256,213,827.21 217,063,102.49 53,717,661.08 526,994,590.78
(2)Effect of changes in the scope of
19,895,447.17 806,008,193.50 73,484,560.81 899,388,201.48
consolidation
(3)Other increase 8,886.97 - 5,926,581.43 5,935,468.40
3.Decrease in the current year 31,916,438.47 - 3,959,215.55 35,875,654.02
(1)Disposal 228,249.74 - 3,959,215.55 4,187,465.29
(2)Other decrease 31,688,188.73 - - 31,688,188.73
4.Effect of changes in foreign
9,068,369.38 (90,587,828.63) (9,338,750.64) (90,858,209.89)
exchange
5.Closing balance 2,433,897,714.42 1,268,696,311.70 269,857,075.18 3,972,451,101.30
III. Total provision for impairment losses
1.Opening balance - - - -
2.Increase in the current year - - - -
3.Decrease in the current year - - - -
4.Closing balance - - - -
IV. Total book value
1.Closing balance 10,663,980,803.03 9,242,824,347.41 854,212,894.10 20,761,018,044.54
2.Opening balance (restated) 10,831,801,757.99 4,835,715,863.91 206,195,717.01 15,873,713,338.91
(2) Land use rights without ownership certificates on 31 December 2018：
Unit: RMB
Item Closing balance Opening balance (restated)
Land use rights 1,383,494,095.83 2,202,883,733.38
81
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Goodwill
(1) Carrying amount of goodwill
Unit: RMB
Effect of changes
Opening balance
Investee Increase Decrease in foreign Closing balance
(restated)
exchange
TCP Participaes S.A.(hereinafter referred
- 3,969,374,954.86 - 314,854,984.25 4,284,229,939.11
as "TCP")(Note1)
Mega Shekou Container Terminals Limited
1,815,509,322.42 - - - 1,815,509,322.42
(Note2)
China Merchants Port Holdings Co.,
993,992,000.00 - - - 993,992,000.00
Ltd(Note3)
Shantou CMPort Group Co., Ltd. (Note4) 552,317,736.65 - - - 552,317,736.65
Shenzhen Mawan Project(Note5) 408,773,001.00 - - - 408,773,001.00
Others 281,073,843.17 - - - 281,073,843.17
Total 4,051,665,903.24 3,969,374,954.86 - 314,854,984.25 8,335,895,842.35
Note1: TCP is incorporated in Brazil, were included in the scope of consolidation from February
2018, refer to the details in Notes (VI) 1.
Note2: The goodwill recognized at the time of company reorganization consisting of Shekou
Container Terminals Limited., Shenzhen United Express Container Terminal Co., Ltd and
Anxun Express Container Terminal (Shenzhen) Co., Ltd by China Merchants Port
Holdings Co., Ltd.
Note3: In December 2018, the Group had the ownership of the goodwill formed when the
ultimate controlling shareholder merges with China Merchants Port Holdings based on
requirements of business combination involving enterprises under common control.
Note4: The goodwill formed in August 2018, when the Group merged with Shantou CMPort
Group Co., Ltd. under non common control.
Note5: Shenzhen Mawan Project including Shenzhen Mawan Wharf Co., Ltd., Shenzhen Mawan
Port Co., Ltd. and Shenzhen Mawan Terminals Co., Ltd.
82
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
16. Goodwill - continued
(2) Details of goodwill impairment
The Group conducts impairment testing on the entire group of subsidiaries that generate goodwill
as an asset group. The recoverable amount of each subsidiary that generates goodwill is
determined by the present value of the estimated future cash flows of each subsidiary. The
management of the Group estimates the future cash flows based on the 5-year detailed forecast
period and the 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 key assumptions used by the Group in estimating future cash flows
include growth in business volume, gross profit margin and discount rate. After the impairment
test, the management of the Group believes that any reasonable change in the above assumptions
will not result in the book value of the net assets of the subsidiaries generating the goodwill being
lower than the recoverable amount.
17. Long-term prepaid expenses
Unit: RMB
Opening balance Effect of changes in the Increase in the Amortization in the
Item Other decrease Closing balance
(restated) scope of consolidation current period curren period
Construction expenditure of Tonggu
177,084,607.57 - - 12,517,222.60 - 164,567,384.97
sea-route
Relocation project of Nanhai Rescue
41,165,331.01 - - 1,057,781.52 - 40,107,549.49
Bureau
Expenditures for the improvement of
21,819,104.34 - 1,812,481.57 2,468,047.74 - 21,163,538.17
leased fixed assets
Others 14,861,541.85 - 4,193,305.83 3,002,422.89 6,184,460.21 9,867,964.58
Total 254,930,584.77 - 6,005,787.40 19,045,474.75 6,184,460.21 235,706,437.21
18. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Unit: RMB
Closing balance Opening balance(restated)
Item Deductible temporary Deductible temporary
differences Deferred tax assets differences Deferred tax assets
Deductible losses 86,136,992.42 23,604,794.05 23,413,934.04 5,853,483.51
Deferred income 50,033,346.52 11,382,687.30 53,396,038.93 12,048,346.61
Provision for credit loss 32,805,128.88 8,213,219.45 31,601,788.61 7,859,088.01
Depreciation of fixed assets 22,036,522.49 4,514,995.56 8,969,515.16 2,236,628.81
Provisions 19,470,820.00 6,620,078.85 - -
Amortization of computer software 16,453,443.95 4,113,360.99 16,552,962.31 4,138,240.58
Organization costs 14,386,394.26 3,287,938.27 17,866,660.19 3,849,377.27
Provision for impairment losses of
2,258,081.96 481,468.22 4,319,993.78 811,641.14
assets
Others 17,635,287.26 4,489,614.50 26,630,589.20 5,629,099.14
Total 261,216,017.74 66,708,157.19 182,751,482.22 42,425,905.07
83
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Deferred tax assets and deferred tax liabilities - continued
(2) Deferred tax liabilities without offsetting
Unit: RMB
Closing balance Opening balance(restated)
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Withholding dividend income tax 17,819,027,902.41 1,138,273,886.12 13,476,065,349.28 730,874,825.97
Fair value adjustment of assets
6,415,001,869.22 1,431,954,458.35 4,836,948,279.07 874,093,308.95
acquired by business combination
Changes in fair value of other equity
136,717,500.00 34,179,375.00 132,214,640.00 33,053,660.00
investments
Changes in fair value of other
930,040,371.21 105,285,399.58 1,814,771,615.06 190,566,523.96
non-current financial assets
Depreciation of fixed assets 754,359,502.42 174,592,634.60 749,768,170.23 183,301,560.91
Others 114,027,794.35 26,789,187.62 13,140,901.85 3,285,224.67
Total 26,169,174,939.61 2,911,074,941.27 21,022,908,955.49 2,015,175,104.46
(3) Deferred tax assets or liabilities that are presented at the net amount after offsetting
Unit: RMB
Opening amount of
Closing amount of Closing amount of Opening amount of
deferred tax assets
deferred tax assets deferred tax assets deferred tax assets
Item or liabilities after
and liabilities that or liabilities after and liabilities that
offsetting
are offset offsetting are offset
(restated)
Deferred tax assets - 66,708,157.19 - 42,425,905.07
Deferred tax liabilities - 2,911,074,941.27 - 2,015,175,104.46
(4) Details of unrecognized deferred tax assets
Unit: RMB
Opening balance
Item Closing balance
(restated)
Deductible temporary differences 237,418,074.51 264,023,276.51
Deductible losses 1,291,865,454.88 674,971,756.09
Total 1,529,283,529.39 938,995,032.60
Note: The Group recognizes deferred income tax assets based on the future taxable income that is
probable to be used to offset the deductible temporary differences and deductible losses,
deferred income tax assets that are deductible for temporary differences and deductible
losses that exceed future taxable income.
84
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
18. Deferred tax assets and deferred tax liabilities - continued
(5) Deductible losses for unrecognized deferred tax assets will be expired in the following years
Unit: RMB
Opening balance
Year Closing balance Note
(restated)
2018 - 145,446,400.54
2019 132,642,333.11 168,593,695.34
2020 110,359,740.81 136,937,771.64
2021 151,793,398.29 97,773,769.06
2022 320,679,566.41 126,192,766.36
2023 576,351,741.67 -
No expiration date 38,674.59 27,353.15
Total 1,291,865,454.88 674,971,756.09
19. Other non-current assets
Unit: RMB
Opening balance
Item Closing balance
(restated)
Prepayments of land use rights 175,908,026.15 175,807,391.86
Prepayments of fixed assets 174,039,051.91 14,666,643.64
Prepayments of terminal franchise 30,383,609.79 29,974,884.20
Others 14,860,798.13 7,300,911.95
Total 395,191,485.98 227,749,831.65
20. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Opening balance
Item Closing balance
(restated)
Credit loan 3,425,291,312.62 2,540,000,000.00
Credit guaranteed loan (Note) - 40,000,000.00
Total 3,425,291,312.62 2,580,000,000.00
Note: The loan was guaranteed by Qingdao Port Merchants International Container Terminal Co.,
Ltd., which is a subsidiary of the Group.
(2) As at 31 December 2018, the Group has no short-term loans that were overdue.
85
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
21. Notes and accounts payable
(1) Summary of notes and accounts payable
Unit: RMB
Opening balance
Item Closing balance
(restated)
Notes payable - -
Accounts payable 429,120,690.97 331,606,335.81
Total 429,120,690.97 331,606,335.81
(2) Accounts payable
(a) Details of accounts payable are as follows:
Unit: RMB
Opening balance
Item Closing balance
(restated)
Service fee 132,946,488.81 63,471,208.22
Construction fee 115,371,240.88 120,248,846.99
Material purchase 76,365,058.49 81,737,391.88
Rental fee 10,564,893.93 18,658,503.66
Equipment payments 659,317.15 11,756,211.33
Others 93,213,691.71 35,734,173.73
Total 429,120,690.97 331,606,335.81
(b) Significant accounts payable aged more than one year
Unit: RMB
Item Amount Reason for outstanding
According to the contract, it has not been
CCCC Third Harbor Engineering Co., Ltd. 36,262,727.66
paid for the completion.
The government planning project has not
Shenzhen Land and Resources Bureau 21,642,795.50 been completed, and the certificates of
property rights has not been processed.
22. Receipts in advance
(1) Summary of receipts in advance
Unit: RMB
Opening balance
Item Closing balance
(restated)
Service fee receipt in advance 23,038,672.44 29,458,721.86
Rental fee receipt in advance 5,536,804.56 1,669,309.14
Other 595,232.86 831,720.17
Total 29,170,709.86 31,959,751.17
(2) There is no significant receipts in advance aged more than one year at the end of the year.
86
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
23. Contract liabilities
(1) Summary of contract liabilities
Unit: RMB
Opening balance
Item Closing balance
(restated)
Service fee received in advance 24,353,966.50 17,336,038.22
Port charges received in advance 11,657,235.81 13,053,987.04
Warehousing fee received in advance 8,705,589.57 9,628,695.56
Other 5,277,103.62 3,907,469.43
Total 49,993,895.50 43,926,190.25
(2) There is no significant contract liabilities aged more than one year at the end of the year.
(3) Statement of material changes in the contract liabilities:
The amount of revenue recognized in the book value of contract liabilities at the beginning
of 2018 is RMB 43,926,190.25, including contract liabilities arising from settled unfinished
funds resulting from the advance payment of labor contracts amounted to RMB
13,053,987.04, the contractual liabilities arising from the settled unfinished funds formed by
the pre-collection warehousing fee contract amounted to RMB 9,628,695.56, and the
contractual liabilities arising from the settlement of unfinished funds formed by other
contracts amounted to RMB 3,907,469.43.
(4) Qualitative and quantitative analysis of Contract liabilities
The contract liability is mainly the amount received by the Group to provide port services to
customers. The payment is collected according to the contract 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.
24. Employee benefits payable
(1) Details of employee benefits payable are as follows
Unit: RMB
Effect of changes in
Opening balance Increase in the Decrease in the
Item the scope of Closing balance
(restated) current year current year
consolidation
1.Short-term benefits 379,876,734.70 30,144,586.64 1,758,280,674.14 1,736,587,857.25 431,714,138.23
2.Post-employment benefits -
Projected benefits 299,320.00 2,131,376.20 146,194,303.52 146,338,349.81 2,286,649.91
obligation
3.Termination benefits - - 15,538,374.32 15,538,374.32 -
4.Others (405,956.30) - 4,113,746.06 4,219,022.50 (511,232.74)
Total 379,770,098.40 32,275,962.84 1,924,127,098.04 1,902,683,603.88 433,489,555.40
87
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
24. Employee benefits payable - continued
(2) Short-term benefits
Unit: RMB
Effect of changes in
Opening balance Increase in the Decrease in the
Item the scope of Closing balance
(restated) current year current year
consolidation
I. Wages and salaries, bonuses,
356,127,716.69 29,532,679.53 1,519,476,886.86 1,495,746,353.47 409,390,929.61
allowances and subsidies
II. Staff welfare - - 50,293,470.22 50,293,470.22 -
III. Social insurance charges 2,284,921.87 558,496.86 76,887,740.31 74,585,632.47 5,145,526.57
Including: Medical insurance 2,256,946.66 - 57,578,876.98 55,417,484.38 4,418,339.26
Work injury insurance - - 6,929,715.22 6,929,715.22 -
Maternity insurance - - 3,430,651.30 3,430,651.30 -
Others 27,975.21 558,496.86 8,948,496.81 8,807,781.57 727,187.31
IV. Housing funds - - 82,135,287.67 82,135,287.67 -
V. Labor union and employee
21,464,096.14 43,396.64 23,379,295.45 27,720,114.47 17,166,673.76
education funds
VI. Others - 10,013.61 6,107,993.63 6,106,998.95 11,008.29
Total 379,876,734.70 30,144,586.64 1,758,280,674.14 1,736,587,857.25 431,714,138.23
(3) Projected benefits obligation
Unit: RMB
Effect of changes in
Increase in the current Decrease in the
Item Opening balance the scope of
year current year
Closing balance
consolidation
I. Basic pension - 1,614,246.59 106,347,884.56 106,341,694.26 1,620,436.89
II. Unemployment
- 517,129.61 2,197,297.41 2,163,268.90 551,158.12
insurance
III. Enterprise
299,320.00 - 37,649,121.55 37,833,386.65 115,054.90
annuity plan
Total 299,320.00 2,131,376.20 146,194,303.52 146,338,349.81 2,286,649.91
Note: 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.
25. Taxes payable
Unit: RMB
Opening balance
Item Closing balance
(restated)
Enterprise income tax 271,954,754.74 218,660,609.24
VAT 8,200,265.65 9,363,588.24
Others 65,028,402.03 30,530,970.31
Total 345,183,422.42 258,555,167.79
88
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. Other payables
(1) Other payables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Interest payable 555,545,627.60 248,861,288.63
Dividends payable 66,052,207.09 207,240,883.54
Other payables 1,624,072,694.20 6,114,459,414.79
Total 2,245,670,528.89 6,570,561,586.96
(2) Interest payable
Unit: RMB
Opening balance
Item Closing balance
(restated)
Corporate bond interest 492,300,138.05 213,605,656.91
Long-term loan interest 57,176,593.29 29,371,285.14
Short-term loan interest 2,074,199.59 3,400,732.73
Others 3,994,696.67 2,483,613.85
Total 555,545,627.60 248,861,288.63
As at 31 December 2018, there is no significant other overdue interest payables.
(3) Dividends payable
Unit: RMB
Opening balance
Item Closing balance
(restated)
Ordinary share dividends 66,052,207.09 207,240,883.54
Including：Yihai Kerry Investment Co., Ltd. ("Yihai Kerry") 37,402,426.09 37,402,426.09
Sinotrans South China Co., Ltd 25,949,781.00 25,949,781.00
Qingdao Port (Group) Co., Ltd 2,700,000.00 15,336,000.00
Payable to Hongkong International Enterprise Co., Ltd.
- 128,552,676.45
("HK International")
As at 31 December 2018, the dividend payable for more than one year is RMB 63,352,207.09,
dividends not yet received by the investor.
89
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
26. Other payables - continued
(4) Other payables
(a) Disclosure of other payables by nature
Unit: RMB
Opening balance
Item Closing balance
(restated)
Amount payable for construction and quality warranty 660,870,685.70 737,770,664.40
Deposits 149,705,612.54 111,475,378.58
Prepaid expenses 140,305,423.54 63,222,555.07
Customer discount 128,787,894.63 130,349,250.94
Balance of land use rights transfer 93,258,350.90 93,258,350.90
Port construction and security fee 62,255,593.38 62,730,234.66
Equity acquisition(Note) - 4,473,272,642.90
Others 388,889,133.51 442,380,337.34
Total 1,624,072,694.20 6,114,459,414.79
Note: The amount at the beginning of the year was an unpaid purchase due to the acquisition of
the equity interest in Hambantota International Port Group (Private) Limited (hereinafter
referred to as "HIPG").
(b) Significant Other payables aged more than one year
Unit: RMB
Company name Closing balance Nature
China Merchants Zhangzhou Co., Payments to be paid after confirmation by both
93,258,350.90
Ltd. parties
Shanghai Zhenhua Heavy Industries Payments to be paid after confirmation by both
75,414,386.66
Co., Ltd. (ZPMC) parties
CCCC Third Harbor Engineering The contracted settlement condition has not
37,743,418.00
Co., Ltd. been reached
CCCC Fourth Harbor Engineering The contracted settlement condition has not
32,307,249.00
Co., Ltd. been reached
Payments to be paid after confirmation by both
Shantou Transportation Bureau 31,358,355.47
parties
Shenzhen Merchants Construction The contracted settlement condition has not
28,223,077.10
Co., Ltd. been reached
Qingdao Maritime Bureau 20,713,982.12 Outstanding port construction fee
China Merchants property Co., Ltd. 12,090,083.93 Outstanding property management fee
Payments to be paid after confirmation by both
Shantou Finance Bureau 10,000,000.00
parties
Guangdong Hengtai Tong Industrial The contracted settlement condition has not
10,000,000.00
Co., Ltd. been reached
China First Metallurgical Group The contracted settlement condition has not
8,175,706.55
Co., Ltd been reached
Harman Technology (Shenzhen) The contracted settlement condition has not
5,884,632.48
Co., Ltd. been reached
Ningbo Communications The contracted settlement condition has not
Engineering Construction Group 5,633,275.00 been reached
Co., Ltd.
Total 370,802,517.21
90
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
27. Non-current liabilities due within one year
Unit: RMB
Opening balance
Item Closing balance
(restated)
Long-term loans due within one year 1,913,116,720.26 773,035,147.51
Including：Credit loan 375,382,058.46 127,230,000.00
Guaranteed loan 1,090,500,000.00 338,000,000.00
Mortgage loan 447,234,661.80 307,805,147.51
Bonds payable due within one year 299,531,506.81 1,555,654,132.52
Long-term payable due within one year 30,635,607.84 45,068,468.44
Long-term employee benefits payable due within one year 19,100,000.00 19,480,000.00
Other non-current liabilities due within one year 87,465,615.05 -
Total 2,349,849,449.96 2,393,237,748.47
28. Other current liabilities
Unit: RMB
Opening balance
Item Closing balance
(restated)
Joint venture loan 241,927,341.05 230,331,618.08
Short-term bonds payable 200,000,000.00 100,000,000.00
Accrued professional agency fee 116,064,056.75 38,342,089.20
Others 44,668,324.00 16,798,621.17
Total 602,659,721.80 385,472,328.45
Changes of short-term bonds payable
Unit: RMB
Discount
Interest
Term Amount issued or Repayment in
Opening accrued at par
Name of bond Face value Date of issue of the Amount of issue in the current premium the current Closing balance
balance during the
bond period amortiza period
period
tion
4.740%, RMB 100
million, Super &
100,000,000.00 21/08/2017 270days 100,000,000.00 100,000,000.00 - 1,805,095.90 - 100,000,000.00 -
Short-term Commercial
Paper
4.730%, RMB 200
million, Super &
200,000,000.00 24/04/2018 267days 200,000,000.00 - 200,000,000.00 6,349,863.00 - - 200,000,000.00
Short-term Commercial
Paper
total 300,000,000.00 300,000,000.00 100,000,000.00 200,000,000.00 8,154,958.90 - 100,000,000.00 200,000,000.00
29. Long-term borrowings
(1) Classification of long-term loans
Unit: RMB
Opening balance
Item Closing balance
(restated)
Credit borrowings 2,032,494,533.83 741,493,000.00
Guaranteed borrowings (Note1) 3,657,846,864.58 4,121,000,000.00
Mortgage borrowings (Note2) 3,194,255,164.03 3,581,058,638.66
Total 8,884,596,562.44 8,443,551,638.66
Less: Long-term borrowings due within one year 1,913,116,720.26 773,035,147.51
Including: Credit borrowings 375,382,058.46 127,230,000.00
Guaranteed borrowings 1,090,500,000.00 338,000,000.00
Mortgage borrowings 447,234,661.80 307,805,147.51
Long-term borrowings due after one year 6,971,479,842.18 7,670,516,491.15
During the year, the annual interest rate of the borrowing is 1.20% to 8.29%.
91
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
29. Long-term borrowings - continued
(1) Classification of long-term loans - continued
Note1: The loan was guaranteed by Shenzhen Mawan Terminals Co., Ltd., China Merchants Port
Services (Shenzhen) Co., Ltd. ("CMPS"), and China Merchants Port Holdings Co., Ltd
("CMPH").
Note2: As at 31 December 2018, the Group obtained the long-term loan amounted to RMB
3,194,255,164.03 is firm subject to the entire share capital of Colombo International
Container Terminals Limited and the entire interest of Thesar Maritime Limited, and the
land use rights, fixed assests and construction in progress held by Guangdong Yide Port
Co., Ltd. (hereinafter referred to as "Yide Port")(31 December 2017:RMB
3,581,058,638.66).
Details of mortgage loan are as follows:
Unit: RMB
Opening balance
Company name Closing balance collateral
(restated)
The entire equity of Colombo International
China Development Bank Corporation 1,543,473,787.28 1,839,649,776.16 Container Terminals Limited held by the
Group
International Finance Corporation 529,891,283.72 595,413,018.76
African Development Bank 243,463,562.79 273,568,143.76
Nederlandse Financierings-Maatschappij voor
200,499,404.66 225,291,412.50
Ontwikkelingslanden N.V.
The entire equity of Thesar Maritime
The Opec Fund For International Development 171,856,632.57 193,106,925.00 Limited held by the Group
Societe de Promotion et de Participation pour la
171,856,632.55 193,106,925.00
Cooperation Economique S.A
Deutsche Investitions-und Entwicklungsgesellschaft
143,213,860.46 160,922,437.48
MBH
Yide Port fixed assets and construction in
China Construction Bank Shunde Branch 190,000,000.00 100,000,000.00
progress (refer to the details in Notes (V) 55).
Total 3,194,255,164.03 3,581,058,638.66
30. Bonds payable
(1) Bonds payable
Unit: RMB
Program Closing balance Opening balance
(restated)
4.375%, USD 900 million corporate bond 6,126,655,733.91 -
5.000%, USD 600 million corporate bond 4,062,553,267.60 -
4.750%, USD 500 million corporate bond 3,414,652,244.84 3,249,996,583.73
5.000%, USD 500 million corporate bond 3,408,446,692.17 3,240,255,080.35
4.890%, RMB 2.5 billion corporate bond 2,500,000,000.00 2,500,000,000.00
3.500%, USD 200 million corporate bond 1,369,419,343.41 1,302,526,637.25
IPCA + 7.8164%,BRL 428 million corporate bond 715,739,814.47 -
5.150%, RMB 500 million corporate bond 500,000,000.00 -
2.970%, RMB 300 million corporate bond 299,531,506.81 298,931,506.83
7.125%, USD 200 million corporate bond - 1,305,654,132.52
6.380%, RMB 250 million corporate bond - 250,000,000.00
Total 22,396,998,603.21 12,147,363,940.68
Deduct :Bonds payable due within one year 299,531,506.81 1,555,654,132.52
Bonds payable due after one year 22,097,467,096.40 10,591,709,808.16
92
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
30. Bonds payable - continued
(2) Changes of bonds payable
Unit: RMB
Effect of Interest Effect of
Amount issued Discount or Discount or
Date of Term of Opening balance changes in accrued at par changes in
Name of bonds Face value Amount of issue in the current premium premium Closing balance
issue the bond (restated) scope of during the foreign
period amortization amortization
consolidation period exchange
4.375%, USD 900 million
USD 900,000,000.00 06/08/2018 5 USD 900,000,000.00 - - 5,901,408,380.77 104,784,513.81 3,708,529.28 - 221,538,823.86 6,126,655,733.91
corporate bond
5.000%, USD 600 million
USD 600,000,000.00 06/08/2018 10 USD 600,000,000.00 - - 3,913,954,048.05 79,835,819.95 1,697,641.11 - 146,901,578.44 4,062,553,267.60
corporate bond
4.750%, USD 500 million
USD 500,000,000.00 03/08/2015 10 USD 500,000,000.00 3,249,996,583.73 - - 157,143,889.47 1,969,224.45 - 162,686,436.66 3,414,652,244.84
corporate bond
5.000%, USD 500 million
USD 500,000,000.00 04/05/2012 10 USD 500,000,000.00 3,240,255,080.35 - - 165,413,763.15 5,848,608.07 - 162,343,003.75 3,408,446,692.17
corporate bond
4.890%, RMB 2.5 billion
RMB 2,500,000,000.00 21/04/2017 5 RMB 2,500,000,000.00 2,500,000,000.00 - - 122,743,557.86 - - - 2,500,000,000.00
corporate bond
3.500%, USD 200 million
USD 200,000,000.00 03/08/2015 5 USD 200,000,000.00 1,302,526,637.25 - - 46,316,093.76 1,659,288.43 - 65,233,417.73 1,369,419,343.41
corporate bond
IPCA + 7.8164%,BRL 428
BRL 428,047,000.00 07/11/2016 6 BRL 428,047,000.00 - 794,778,392.21 - 76,470,918.04 10,826,025.73 - (89,864,603.47) 715,739,814.47
million corporate bond
5.150%, RMB 500 million
RMB 500,000,000.00 06/02/2018 3 RMB 500,000,000.00 - - 500,000,000.00 23,561,925.18 - - - 500,000,000.00
corporate bond
2.970%, RMB 300 million
RMB 300,000,000.00 11/10/2016 3 RMB 300,000,000.00 298,931,506.83 - - 8,910,000.04 599,999.98 - - 299,531,506.81
corporate bond
7.125%, USD 200 million
USD 200,000,000.00 18/06/2008 10 USD 200,000,000.00 1,305,654,132.52 - - 43,833,617.64 1,392,506.05 1,322,800,000.00 15,753,361.43 -
corporate bond
6.380%, RMB 250 million
RMB 250,000,000.00 24/03/2015 3 RMB 250,000,000.00 250,000,000.00 - - 3,636,600.00 - 250,000,000.00 - -
corporate bond
CDI + 3.40%, BRL 100
BRL 100,000,000.00 07/11/2016 3 BRL 100,000,000.00 - 196,567,218.72 - 8,854,671.29 2,899,768.68 187,090,000.00 (12,376,987.40) -
million corporate bond
CDI + 3.90%, BRL 60 million
BRL 60,095,000.00 07/11/2016 5 BRL 60,095,000.00 - 117,291,020.45 - 7,124,061.79 2,526,023.19 112,431,735.50 (7,385,308.14) -
corporate bond
Total 12,147,363,940.68 1,108,636,631.38 10,315,362,428.82 848,629,431.98 33,127,614.97 1,872,321,735.50 664,829,722.86 22,396,998,603.21
Less: Bonds payable due
1,555,654,132.52 299,531,506.81
within one year
Bonds payable due after one
10,591,709,808.16 22,097,467,096.40
year
93
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
31. Long-term payables
(1) Summary of long-term payables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Long-term payables 1,285,984,226.34 1,292,874,742.87
Special payables 38,841,499.68 42,976,167.51
Total 1,324,825,726.02 1,335,850,910.38
Less: Long-term payables due within one year 30,635,607.84 45,068,468.44
Long-term payables due after one year 1,294,190,118.18 1,290,782,441.94
(2) Details of long-term payables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Terminal management rights (Note1) 823,360,554.03 788,587,599.72
Payable to minority shareholders of subsidiaries (Note2) 390,658,146.52 371,899,413.63
Financing lease payments 71,965,525.79 116,052,229.49
Rental of port land - 16,335,500.03
Total 1,285,984,226.34 1,292,874,742.87
Deduct :long-term payable due within one year 30,635,607.84 45,068,468.44
long-term payable due after one year 1,255,348,618.50 1,247,806,274.43
Note 1: As at 12 August 2011, the Group reached a 35-year construction, operation and transfer
agreement through the subsidiary Colombo International Container Terminals Limited and the
Sri Lanka Port Authority on the construction, 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 according to the current market interest rate according to the
BOT agreement. As at 31 December 2018 and 31 December 2017, the amount was RMB
823,360,554.03 and RMB 788,587,599.72 respectively.
Note2: It is an unsecured loan from minority shareholder of Thesar Maritime Limited, a
subsidiary of the Company, which has an annual interest rate of 4.65%.
(3) Special payables
Unit: RMB
Opening balance
Item Closing balance
(restated)
Refunds of Harbor Construction Fee(Note) 36,061,435.67 40,491,828.56
Employee housing fund 2,780,064.01 2,484,338.95
Total 38,841,499.68 42,976,167.51
Note: 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 refund of the construction fee collected by the Group from the
Shenzhen Municipal Transportation Bureau.
94
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
32. Long-term employee benefits payable
(1) Summary of long-term employee benefits payable
Unit: RMB
Opening balance
Item Closing balance
(restated)
Post-employment benefits-
385,323,310.21 358,010,123.90
net debt of projected benefits obligation(Note)
Termination benefits 9,101,817.44 12,220,000.00
Total 394,425,127.65 370,230,123.90
Less:
19,100,000.00 19,480,000.00
Long-term employee benefits payable due within one year
Long-term employee benefits payable due after one year 375,325,127.65 350,750,123.90
(2) Changes in projected benefits obligation
Present value of projected benefits obligation：
Unit: RMB
Item 2018 2017
I. Opening balance(restated) 358,010,123.90 835,963.38
II. Benefit cost included in current period income 10,313,678.43 10,084,051.60
1.Current service cost 2,163,678.43 3,934,051.60
2.Post service cost (7,460,000.00) -
3.Interest adjustment 15,610,000.00 6,150,000.00
III. Benefit cost included in other comprehensive income 34,693,502.67 (23,529,891.08)
1.Acturial gains (losses) 34,562,392.88 (23,510,000.00)
2.Effect of currency rate changes 131,109.79 (19,891.08)
IV. Others changes (17,693,994.79) 370,620,000.00
1.Benefits paid (17,693,994.79) (6,560,000.00)
2.Changes in the scope of consolidation - 377,180,000.00
V. Closing balance 385,323,310.21 358,010,123.90
Note: Shantou China Merchants Port Co., Ltd., a subsidiary of the Company, provides
supplementary post-employment benefit plans for retirees on 31 October 2016.
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.
95
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
33. Provisions
Unit: RMB
Opening balance
Item Closing balance Reason
(restated)
Pending litigation (Note) 19,470,820.72 - Note
Sales discount 15,480,571.55 50,577,924.97
Total 34,951,392.27 50,577,924.97
Note： Is the estimated amount of compensation expected by TCP, the company's subsidiary, due
to pending obligation.
34. Deferred income
Unit: RMB
Effect of changes
Opening balance
Item Increase in the scope of Decrease Closing balance
(restated)
consolidation
Government grants 186,491,676.05 3,534,716.00 48,183,333.33 9,551,510.74 228,658,214.64
Related to government grants：
Unit: RMB
Effect of Recognized in
Opening Related to assets
changes in Other Closing
Liabilities balance Increase comprehensive balance
/Related to
the scope of income
(restated) income
consolidation
Modern logistics special funds 116,000,000.00 - - 639,999.96 115,360,000.04 Related to assets
Ro-ro terminal subsidy - - 48,183,333.33 408,333.33 47,775,000.00 Related to assets
Qianwan Bonded Logistics Park Project 16,057,853.92 202,466.00 - 956,018.84 15,304,301.08 Related to assets
Subsidized grain transfer project subsidy 8,428,571.41 - - 285,714.29 8,142,857.12 Related to assets
Central budgetary support for bulk grain Related to assets
7,685,416.67 - - 212,500.00 7,472,916.67
transfer terminal projects
AMPI 7,709,657.14 - - 961,620.72 6,748,036.42 Related to assets
Oil to electricity project 6,801,927.59 - - 784,837.92 6,017,089.67 Related to assets
Automated terminal operation and Related to assets
3,802,263.98 3,300,000.00 - 1,939,793.67 5,162,470.31
dispatching system special support project
Research and development of fully Related to assets
automated intelligent terminal
3,984,700.64 - - 1,247,677.57 2,737,023.07
information investment based on cloud
platform architecture
Warfare gate subsidy 2,117,903.97 - - 262,008.73 1,855,895.24 Related to assets
Green low carbon port project 1,825,070.02 - - 421,170.00 1,403,900.02 Related to assets
Others 12,078,310.71 32,250.00 - 1,431,835.71 10,678,725.00 Related to assets
Total 186,491,676.05 3,534,716.00 48,183,333.33 9,551,510.74 228,658,214.64 Related to assets
96
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
35. Other non-current liabilities
Unit: RMB
Opening
Item Closing balances
balance(restated)
TCP Operating rights liability (Note1) 3,260,547,002.45 -
Obligation to minority shareholders due to acquisition (Note2) 579,195,304.56 -
Berth priority call right (Note3) 25,305,830.90 28,830,624.28
Others - 54,763,901.68
Total 3,865,048,137.91 83,594,525.96
Less: Other non-current liabilities due in one year 87,465,615.05 -
Including: TCP Operating rights liability 87,465,615.05 -
Other non-current liabilities due after one year 3,777,582,522.86 83,594,525.96
Note1: As Notes (VI) 1, As at 23 February 2018, CMPH, a subsidiary of the Company, acquired a
90% stake in TCP and incorporate it into the consolidated financial statements of the
Group. TCP has right to operate the port of paranagua The relevant concession
arrangement allows for operations in the relevant port for up to 2048. At the year end, with
the relevant authority, concession payment is payable on a monthly basis and is adjusted
from time to time, among other conditions, with reference to an official inflation index in
Brazil.
Note2: As Notes (VI) 1, in February 2018, CMPH, a subsidiary of the Company, acquired a 90%
stake in TCP. According to the agreement, TCP minority shareholders can choose to sell
their 10% stake in TCP to China Merchants Port Holdings at a higher price than the
market price or the BRL 320 million two years later. The Group recognizes the total
amount of obligations related to the purchase of minority interests as liabilities.
Note3: According to the berth priority call right agreed in the contract signed with the customer in
2003, the total amount is USD 14 million. The Group must give priority to the berthing
requirements of the contract customers during the contract period. The Group amortized
the berth priority right within 20 years. In 2018, the amount includes in operating income
is RMB 3,524,793.38.
97
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
36. Share capital
Unit: RMB
Changes for the period
Item Opening balance New issue of Bonus Capitalization of Closing balance
share issue surplus reserve Others Subtotal
2018
I. Restricted tradable shares
1 State-owned shares - - - - - - -
2. State-owned legal person shares - - - - - - -
3. Other domestic shares 160,106.00 - - - - - 160,106.00
4. Other foreign shares - 1,148,648,648.00 - - 52,050.00 1,148,700,698.00 1,148,700,698.00
Total restricted tradable shares 160,106.00 1,148,648,648.00 - - 52,050.00 1,148,700,698.00 1,148,860,804.00
II. Non-restricted tradable shares
1. Ordinary shares denominated in
464,859,300.00 - - - (3,976.00) (3,976.00) 464,855,324.00
RMB
2. Foreign capital shares listed
179,744,324.00 - - - (48,074.00) (48,074.00) 179,696,250.00
domestically
3. Foreign capital shares listed
- - - - - - -
overseas
4. Others - - - - - - -
Total non-restricted tradable shares 644,603,624.00 - - - (52,050.00) (52,050.00) 644,551,574.00
III. Total shares 644,763,730.00 1,148,648,648.00 - - - 1,148,648,648.00 1,793,412,378.00
2017
I. Restricted tradable shares
1 State-owned shares - - - - - - -
2. State-owned legal person shares - - - - - - -
3. Other domestic shares 305,100.00 - - - (144,994.00) (144,994.00) 160,106.00
4. Other foreign shares - - - - - - -
Total restricted tradable shares 305,100.00 - - - (144,994.00) (144,994.00) 160,106.00
II. Non-restricted tradable shares
1. Ordinary shares denominated in
464,866,050.00 - - - (6,750.00) (6,750.00) 464,859,300.00
RMB
2. Foreign capital shares listed
179,592,580.00 - - - 151,744.00 151,744.00 179,744,324.00
domestically
3. Foreign capital shares listed - - - - - - -
overseas
4. Others - - - - - - -
Total non-restricted tradable shares 644,458,630.00 - - - 144,994.00 144,994.00 644,603,624.00
III. Total shares 644,763,730.00 - - - - - 644,763,730.00
98
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS – continued
37. Capital Reserve
Unit: RMB
Opening balance
Item Increase Decrease Closing balance
(restated)
2018
Capital premium 18,848,680,489.20 1,164,197,108.39 583,183,507.54 19,429,694,090.05
Including：Capital contributed by investors 4,954,397,136.25 - - 4,954,397,136.25
Differences arising from business
13,894,283,352.95 - 583,183,507.54 13,311,099,845.41
combination involving enterprises under common control
Others(Note) - 1,164,197,108.39 - 1,164,197,108.39
Other capital reserve (2,781,133.00) - - (2,781,133.00)
Including: Transfer from capital reserve under the previous
(2,781,133.00) - - (2,781,133.00)
accounting system
Total 18,845,899,356.20 1,164,197,108.39 583,183,507.54 19,426,912,957.05
Note: The income generated by China Merchants Port Holdings in the disposal of the company's
equity in June 2018, referred to Notes (VI) 2.
Unit: RMB
Opening balance
Item Increase Decrease Closing balance
(restated)
2017
Capital premium 13,887,026,547.40 4,961,653,941.80 - 18,848,680,489.20
Including: Capital contributed by investors 163,560,083.00 4,790,837,053.25 - 4,954,397,136.25
Differences arising from business
13,723,466,464.40 170,816,888.55 - 13,894,283,352.95
combination involving enterprises under common control
Other capital reserve (2,781,133.00) - - (2,781,133.00)
Including: Transfer from capital reserve under the previous
(2,781,133.00) - - (2,781,133.00)
accounting system
Total 13,884,245,414.40 4,961,653,941.80 - 18,845,899,356.20
99
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
38. Other comprehensive income
Unit: RMB
Amount incurred in current year
Less: Amount
included in other
After-tax The impact of
Opening balance Amount before comprehensive After-tax income Closing
Item income business
(restated) income tax income in the Less: Income attributable to balance
attributable to combination
incurred in current prior periods that tax expense minority
the parent under common
year is transferred to shareholders
company owner control
profit or loss for
the period
2018:
I. Other comprehensive income that will not be
(742,874,052.89) (127,586,823.04) - 1,125,715.00 (48,671,312.79) (80,041,225.25) 867,218,499.76 75,673,134.08
reclassified subsequently to profit or loss
Including: Change as a result of remeasurement of the
- (20,136,880.35) - - (7,943,999.30) (12,192,881.05) 7,943,999.30 -
net defined benefit plan liability or asset
Share of other comprehensive income of the investee
under the equity method that will not be reclassified to - (116,954,783.85) - - (46,138,662.23) (70,816,121.62) 46,138,662.23 -
profit or loss
Changes in fair value of other equity instruments (742,874,052.89) 9,504,841.16 - 1,125,715.00 5,411,348.74 2,967,777.42 813,135,838.23 75,673,134.08
II. Other comprehensive income that will be reclassified
13,252,844.49 333,315,323.72 - - 90,449,399.81 242,865,923.91 (90,449,399.81) 13,252,844.49
subsequently to profit or loss
Including: Share of other comprehensive income of the
investee under the equity method that will be reclassified 100,000.00 (20,157,413.77) - - (7,952,099.73) (12,205,314.04) 7,952,099.73 100,000.00
to profit or loss
Translation differences of financial statements
13,152,844.49 353,472,737.49 - - 98,401,499.54 255,071,237.95 (98,401,499.54) 13,152,844.49
denominated in foreign currencies
Total (729,621,208.40) 205,728,500.68 - 1,125,715.00 41,778,087.02 162,824,698.66 776,769,099.95 88,925,978.57
100
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
39. Other comprehensive income – continued
Unit: RMB
Amount incurred in current year
Less: Amount
included in other
After-tax The impact of
Opening balance Amount before comprehensive After-tax income
Item income business Closing balance
(restated) income tax income in the Less: Income attributable to
attributable to combination
incurred in prior periods that tax expense minority
the parent under common
current year is transferred to shareholders
company owner control
profit or loss for
the period
2017:
I. Other comprehensive income that will not be
- 176,570,902.51 - - 65,863,882.85 110,707,019.66 (65,863,882.85) -
reclassified subsequently to profit or loss
Including: Change as a result of remeasurement of the
- 23,085,250.68 - - 5,313,793.20 17,771,457.48 (5,313,793.20) -
net defined benefit plan liability or asset
Share of other comprehensive income of the investee
under the equity method that will not be reclassified to - 153,485,651.83 - - 60,550,089.65 92,935,562.18 (60,550,089.65) -
profit or loss
II. Other comprehensive income that will be reclassified
(8,039,646.43) 759,286,170.35 265,589,702.16 27,661,768.24 176,340,879.94 289,693,820.01 (175,365,879.94) (7,064,646.43)
subsequently to profit or loss
Including: Share of other comprehensive income of the
investee under the equity method that will be reclassified 100,000.00 445,196,749.12 - - 175,630,117.53 269,566,631.59 (175,630,117.53) 100,000.00
to profit or loss
Gains or losses on change in fair value of
5,572,500.00 514,409,289.75 265,589,702.16 27,661,768.24 87,348,744.15 133,809,075.20 (86,373,744.15) 6,547,500.00
available-for-sale financial assets
Translation differences of financial statements
(13,712,146.43) (200,319,868.52) - - (86,637,981.74) (113,681,886.78) 86,637,981.74 (13,712,146.43)
denominated in foreign currencies
Total (8,039,646.43) 935,857,072.86 265,589,702.16 27,661,768.24 242,204,762.79 400,400,839.67 (241,229,762.79) (7,064,646.43)
101
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
40. Special reserve
Unit: RMB
Opening balance
Item (restated) Increase Decrease Closing balance
2018：
Production safety reserve 4,767,373.45 24,165,961.75 20,702,254.77 8,231,080.43
2017：
Production safety reserve 4,145,765.65 17,456,696.76 16,835,088.96 4,767,373.45
41. Surplus reserve
Unit: RMB
Item Opening balance Increase Decrease Closing balance
2018：
Statutory surplus reserve 520,074,434.56 7,101,474.11 - 527,175,908.67
2017：
Statutory surplus reserve 520,074,434.56 - - 520,074,434.56
Note：In accordance with the Company Law of the PRC and the Company's Articles of
Association, the Company should appropriate 10% of net profit for the year to the
statutory surplus reserve, and the Company can cease appropriation when the statutory
surplus reserve accumulates to more than 50% of the registered capital. The statutory
surplus reserve can be used to make up for the loss or increase the paid-in capital after
approval.
According to the resolution of the board of directors, the company appropriates a statutory
surplus reserve of RMB 7,101,474.11 based on 10% of net profit for 2018 (2017: zero
appropriation to surplus reserve).
42. Unappropriated profit
Unit: RMB
Proportion of
Item Amount appropriation or
allocation
2018:
Unappropriated profit at the end of prior year before adjustment 3,566,083,142.17
Adjustment of total unappropriated profit at the beginning of year 5,716,548,113.47 Note1
Unappropriated profit at the beginning of year after adjustment 9,282,631,255.64
Add: Net profit attributable to shareholders of the Company for the year 1,090,418,910.77
Less: Appropriation to statutory surplus reserve 7,101,474.11 Note2
Appropriation to discretionary surplus reserve -
Appropriation to risk preparation -
Ordinary shares' dividends payable 850,443,359.86 Note3
Ordinary shares' dividends converted into share capital -
Others 599,688,222.23 Note4
Unappropriated profit at the end of the year 8,915,817,110.21
102
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41. Unappropriated profit - continued
Unit: RMB
Proportion of
Item Amount
appropriation or allocation
2017:
Unappropriated profit at the end of prior year before adjustment 3,381,390,887.86
Adjustment of total unappropriated profit at the beginning of year 4,254,259,872.38 Note1
Unappropriated profit at the beginning of year after adjustment 7,635,650,760.24
Add: Net profit attributable to shareholders of the Company for the year 2,365,214,907.45
Less: Appropriation to statutory surplus reserve -
Appropriation to discretionary surplus reserve -
Appropriation to risk preparation -
Ordinary shares' dividends payable 319,802,810.08
Ordinary shares' dividends converted into share capital -
Others 1,214,754,940.14 Note4
Unappropriated profit at the end of the year 8,466,307,917.47
Note1: Details of adjustment to total unappropriated profit at the beginning of year：
As Notes (III) 31, due to the impact of changes in accounting policies, the Group increased
the unappropriated profit at the beginning of the year by RMB 816,323,338.17.
As Notes (VI) 2, due to the impact of business combination under common control, the
unappropriated profit at the beginning of the year was increased by RMB
4,900,224,775.30, and the unappropriated profit at the beginning of the previous year was
RMB 4,254,259,872.38.
Note2: Appropriation to statutory surplus reserve
According to the Articles of Association, the Company is required to transfer 10% of its
net profit to the statutory surplus reserve. The Company can cease appropriation when the
statutory surplus reserve accumulated to more than 50% of the register capital.
Note3: Profit distribution decided after the balance sheet date
According to the resolution of the shareholders' meeting of March 28, 2018, the company
will distribute cash dividends of RMB 13.19 (including tax) for every 10 shares based on
the total shares of 644,763,730 shares as of the end of 2017, and a total cash dividend of
RMB 850,443,359.86.
103
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
41. Unappropriated profit - continued
Note4: As Notes (VI) 2, on 25 December 2018, the Company acquired 39.45% equity of China
Merchants Port Holdings and included it as a subsidiary of the business combination under
the same control. The Group included the corresponding financial statements in the
preparation of the consolidated financial statements. The proportion of its shareholding of
39.45% is calculated and the amount of the profit distribution of the China Merchants Port
Holdings is calculated and reported.
Note5: Resolution of profit distribution after the balance sheet date
According to the 2018 annual profit distribution plan adopted by the Company at the 5th
meeting of the 9th Board of Directors held on March 28, 2019, the company distributed
cash dividends based on the total shares of 1,793,412,378 shares as of December 31, 2018.
RMB 204,449,011.09. The above dividend distribution plan has yet to be reviewed and
approved by the shareholders meeting.
43. Operating income and operating costs
Unit: RMB
2018 2017(restated)
Item
Income Cost Income Cost
Principal operating 9,570,796,336.11 5,517,782,669.86 7,460,150,682.76 4,481,568,589.16
Other operating 132,598,286.47 221,458,726.01 84,484,602.20 228,744,071.35
Total 9,703,394,622.58 5,739,241,395.87 7,544,635,284.96 4,710,312,660.51
44. Taxes and levies
Unit: RMB
Item 2018 2017(restated)
Property tax 50,993,199.89 28,897,407.11
Stamp duty 45,775,414.65 350,759.93
Land holding tax 15,095,001.85 13,874,451.73
City construction and maintenance tax 5,258,434.33 6,155,605.48
Education surcharges 4,059,161.54 4,014,776.21
Others(Note) 114,772,591.25 18,691,283.09
Total 235,953,803.51 71,984,283.55
Note: Others including: 1. Contribution for the financing of social security, a tax based on the
corporation's income, the amount is BRL 28,039,842.78; 2. Tax for service based on
services provided, the amount is BRL 23,229,627.12.
104
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
45. Administrative expenses
Unit: RMB
Item 2018 2017(restated)
Employee's salary 702,986,443.49 534,635,252.36
Fees paid to agencies 233,972,825.17 38,630,088.41
Depreciation expenses 42,634,581.68 28,699,209.39
Amortization of intangible assets 14,013,965.69 14,109,534.56
Others 258,257,859.42 237,826,805.18
Total 1,251,865,675.45 853,900,889.90
46. Financial expenses
Unit: RMB
Item 2018 2017(restated)
Interest expense 1,672,764,416.74 1,159,304,941.02
Less: Capitalized interest expenses 38,663,084.94 29,632,413.22
Less: Interest income 272,453,293.86 116,797,403.30
Exchange differences 235,825,068.78 (74,223,354.90)
Handling fee 37,531,206.16 9,788,095.70
Others 8,413,790.07 6,966,783.16
Total 1,643,418,102.95 955,406,648.46
47. Impairment losses of assets
Unit: RMB
Item 2018 2017(restated)
I. Bad debt losses (7,843,782.40)
II. Impairment on long-term equity investments - 640,585,551.00
Total - 632,741,768.60
48. Impairment credit loss
Unit: RMB
Item 2018 2017
I. Impairment of credit loss on notes receivable and accounts
(3,102,192.00)
receivable
II. Impairment of credit loss on other receivables 9,760,870.10
III. Impairment of credit loss on long-term receivables 784,171.05
IV. Others 85,731.45
Total 7,528,580.60
105
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
49. Other income
Unit: RMB
Related to assets
2017
Item 2018 / related to
(restated)
income
Recognition of deferred income 9,551,510.74 13,023,645.38 Related to assets
Shenzhen Municipal Finance Committee policy subsidy 5,767,400.00 - Related to income
2017 annual port business support subsidy 5,602,326.79 - Related to income
Central Infrastructure Investment--Brazil TCP Terminal Item
5,161,467.89 - Related to income
(Previous Work Part) Grant Fund
Electricity subsidy 4,040,714.30 - Related to income
2017 Port Container Throughput Business Increase Subsidy 3,500,000.00 - Related to income
Special fund for the development of modern logistics industry in
3,000,000.00 - Related to income
Shenzhen
Refund of withholding tax payment 2,334,770.36 Related to income
Financial subsidy of Container Throughput Trade 1,999,631.00 - Related to income
Shenzhen Economic, Trade and Information Technology
Committee 2017 Foreign Economic and Trade Development
1,904,900.00 - Related to income
Special funds (cross-border e-commerce) subsidies (trade
clearance facilitation platform)
Enterprise subsidy of Shenzhen Science and Technology
1,685,000.00 - Related to income
Innovation Committee (the first batch of the fourth batch)
Shenzhen Science and Technology Innovation Committee 2017
1,450,000.00 - Related to income
Corporate Research and Development Funding Fund
Research and development funding 1,239,000.00 881,000.00 Related to income
Shenzhen Science and Technology Innovation Committee - the
1,037,000.00 - Related to income
third batch of enterprise funding in the high-tech zone
Fujian Provincial Port and Shipping Development Special Fund 1,029,000.00 - Related to income
2017 International Capacity Cooperation Grant Fund - 15,000,000.00 Related to income
2016 port business subsidy funds - 5,058,295.00 Related to income
Qianhai cross-border e-commerce support funds - 4,920,000.00 Related to income
Funding for cross-border e-commerce projects for special funds
- 2,040,000.00 Related to income
for central foreign trade and economic development
Others 6,877,406.56 3,235,522.63 Related to income
Total 56,180,127.64 44,158,463.01
106
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
50. Investment income
(1) Details of investment income
Unit: RMB
Item 2018 2017(restated)
Long-term equity investments income under equity method 3,913,864,538.60 4,681,582,632.76
Investment income on sale of long-term equity investments - 750,788,928.68
Investment income on sale of available-for-sale financial assets 265,589,701.73
Investment income on available-for-sale financial assets 73,333,443.50
Investment income on other equity instruments 8,228,975.00
Investment income on other non-current financial assets 45,661,915.63
Others 72,720.25 -
Total 3,967,828,149.48 5,771,294,706.67
There are no major restrictions on the remittance of the Group's investment income.
(2) Details of long-term equity investments income under equity method
Unit: RMB
2017
Investee 2018 Reason for changes
(restated)
Shanghai International Port (Group) Co., Changes in net profit of investee
2,571,370,986.64 2,986,681,299.47
Ltd.
Terminal Link SAS 357,885,181.99 304,871,290.69 Changes in net profit of investee
Nanshan Group 220,478,175.60 380,486,882.72 Changes in net profit of investee
Qingdao Qianwan United Container Changes in net profit of investee
141,704,248.41 163,655,930.56
Terminal Co., Ltd.
Dalian Port Co., Ltd. 112,882,708.11 105,414,178.27 Changes in net profit of investee
Euro-Asia Oceangate, S.a` r.l. 108,552,693.45 74,107,255.10 Changes in net profit of investee
COHA (Laizhou) 48,450,765.57 42,846,672.03 Changes in net profit of investee
Port of Newcastle 8,870,390.98 - Changes in net profit of investee
China International Marine Containers Sales of long-term equity
- 165,369,876.99 investment
(Group) Shares Limited
Zhanjiang Port (Group) Co., Ltd. (36,596,428.75) (32,515,588.04) Changes in net profit of investee
Others 380,265,816.60 490,664,834.97 Changes in net profit of investee
Total 3,913,864,538.60 4,681,582,632.76
51. Gains(losses) on changes in fair value
Unit: RMB
Item 2018 2017(restated)
Other non-current financial assets (948,440,538.45) -
Including: Financial assets measured at fair value through
(948,440,538.45) -
profit or loss
other non-current liabilities (125,966,299.23) -
Including: Financial liabilities measured at fair value
(125,966,299.23) -
through profit or loss
Total (1,074,406,837.68) -
107
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
52. Gains (losses) on disposal of assets
Unit: RMB
Amount recognized as
2017 non-recurring gain and
Item 2018
(restated) loss in the current
period
Gains (losses) on disposal of non-current assets 19,258,495.33 (391,053.09) 19,258,495.33
Including: Gains (losses) on disposal of fixed
18,151,195.97 (3,719,537.83) 18,151,195.97
assets
Others 1,107,299.36 3,328,484.74 1,107,299.36
53. Non-operating income
Unit: RMB
Amount recognized as
2017 non-recurring gain and
Item 2018
(restated) loss in the current
period
Compensation received for contracts
945,809.03 633,155.24 945,809.03
violation
Insurance compensation received 540,000.00 - 540,000.00
Government grants 634,505.42 482,082.82 634,505.42
Others 65,008,375.53 22,390,340.09 65,008,375.53
Total 67,128,689.98 23,505,578.15 67,128,689.98
53. Non-operating expenses
Unit: RMB
Amount recognized as
2017 non-recurring gain and
Item 2018
(restated) loss in the current
period
Penalties 49,204,874.59 276,000.00 49,204,874.59
Losses on retirement of non-current assets 32,095,701.53 44,424.51 32,095,701.53
Donation 12,070,408.91 42,165,120.27 12,070,408.91
Others 31,660,313.54 3,115,741.44 31,660,313.54
Total 125,031,298.57 45,601,286.22 125,031,298.57
54. Income tax expenses
Unit: RMB
Item 2018 2017(restated)
Current tax expenses 510,367,919.37 488,899,010.45
Deferred income tax 218,072,619.23 91,559,468.35
Total 728,440,538.60 580,458,478.80
108
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
54. Income tax expenses - continued
Reconciliation of income tax expenses to the accounting profit is as follows:
Unit: RMB
2017
Item 2018
(restated)
Accounting profit 3,614,355,292.56 6,018,008,167.79
Income tax expenses calculated at 25% 903,588,823.14 1,504,502,041.95
Effect of non-deductible expenses and losses 317,900,855.16 252,110,058.94
Accrued income tax expenses 509,742,164.89 337,151,647.63
Effect of previous deductible losses and deductible temporary
118,205,066.38 78,120,672.31
differences unrecognized as deferred tax assets
Effect of tax-free income (Note) (682,015,134.39) (898,437,828.02)
Effect of tax preference policy (309,855,093.00) (325,608,548.39)
Effect of different tax rates of subsidiaries operating in other
(137,300,892.53) (325,633,891.21)
jurisdictions
Effect of recognition of deductible losses of
(44,825,432.51) (26,783,743.21)
previously-unrecognized deferred tax assets
Effect of adjustments to previous year income tax (3,138,487.61) 95,154.17
Tax adjustments result in changes in the opening deferred tax assets
- 395,301.67
/ liabilities balance
Others 56,138,669.07 (15,452,387.04)
Income tax expenses 728,440,538.60 580,458,478.80
Note： Effect of tax-free income is mainly effect on income tax on gain of investments in joint
venture and associates.
55. Assets with restricted ownership or usage right
Unit: RMB
Opening
Item Closing balance
balance(restated)
Cash and bank balances (Note 1) 1,697,027,200.00 -
Fixed assets (Note 2.Note 3) 5,825,207,339.57 6,990,903,829.37
Equity investment in Colombo International Container Terminals
1,526,241,901.61 1,436,892,458.07
Limited (Note 4)
Equity investment in Thesar Maritime Limited (Note 4) 767,331,789.70 729,773,420.12
Intangible assets (Note 3) 161,408,030.71 164,783,981.14
Construction in process (Note 3) 43,352,104.93 4,499,011.90
Total 10,020,568,366.52 9,326,852,700.60
Note1: See Notes (V) 1 for restrict cash.
Note2: See Notes (V) 13 financial leased fixed assets.
109
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
55. Assets with restricted ownership or usage right - continued
Note3: Guangdong Yide Port Co. Ltd. acquired mortgage loans by pledged land with use right and
property right, fixed assets and construction in process, details referred to notes (V) 29.
As at December 31, 2018, the book value of the mortgage land use right in the Port of Suide
was RMB 161,408,030.71, the book value of the mortgaged fixed assets was RMB
307,836,672.27, and the book value of the mortgaged construction in progress was RMB
43,352,104.93. TCP purchases fixed assets by way of a mortgage, and the book value of the
fixed assets is RMB 977,216.17.
Note4: See notes (V) 29 pledged equity and equity investment.
56. Other comprehensive income
See notes (V) 38.
57. Notes to items in cash flow statement
(1) Operating cash inflow
Unit: RMB
Item 2018 2017(restated)
Contract compensation received 218,843,719.69 -
Interest income 214,787,250.36 114,433,142.20
Government grants 50,797,838.32 126,835,841.58
Guarantees and deposits 27,953,110.71 20,857,890.37
Insurance compensation received 16,320,537.80 7,700,961.48
Rentals 13,313,831.31 15,735,989.64
Refunds of harbor construction fee 96,876,815.04 91,598,931.94
Refunds of river channel occupation fee - 14,469,500.00
Others 325,042,168.36 236,065,015.86
Total 963,935,271.59 627,697,273.07
(2) Operating cash outflow
Unit: RMB
Item 2018 2017(restated)
Administration expense and other operating expenses 255,069,427.76 110,684,200.65
Advance payment 155,172,493.64 40,679,722.24
Port construction fee 83,269,723.00 96,836,232.93
Berth dredging fee 73,263,986.30 15,853,578.00
Rentals 70,806,355.26 28,980,691.46
Port expenses 53,236,125.23 37,680,224.61
Guarantees and deposits 16,514,731.00 9,835,356.07
Cargo fee 2,668,097.85 3,006,275.75
Others 334,372,971.69 244,564,502.74
Total 1,044,373,911.73 588,120,784.45
110
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
57. Notes to items in cash flow statement - continued
(3) Investment cash inflow
Unit: RMB
Item 2018 2017(restated)
Cash borrowings repayment received 120,500,000.00 96,868,451.25
Interests received from structured deposit 36,115,992.14 -
Cash received from acquisition of subsidiaries - 121,305,946.92
Total 156,615,992.14 218,174,398.17
(4) Investment cash outflow
Unit: RMB
Item 2018 2017(restated)
Restricted cash due to acquisition of HIPG 965,644,000.00 -
Structured cash deposit 695,000,000.00 -
Income tax expenses on disposal of other equity
25,463,391.23 44,950,077.56
instruments
Cash borrowings - 1,013,445,000.00
Total 1,686,107,391.23 1,058,395,077.56
(5) Net cash payment for acquisition of subsidiaries
Unit: RMB
Item 2018
Cash and cash equivalents paid for merge and acquisition in current period 5,468,066,151.65
Including: TCP 5,468,066,151.65
Less: Cash and cash equivalents of subsidiaries on acquisition date 896,117,055.37
Including: TCP 896,117,055.37
Add: Cash and cash equivalents paid this year for previous merge and
4,359,147,699.53
acquisition
Including: HIPG 4,359,147,699.53
Net cash payment for acquisition of subsidiaries 8,931,096,795.81
(6) Financing cash inflow
Unit: RMB
Item 2018 2017(restated)
CMPH disposes stock equity of the company 3,876,395,683.27 -
Note：See Notes (VI) 2.
(7) Financing cash outflow
Unit: RMB
Item 2018 2017(restated)
Debt issue costs 104,284,657.11 3,788,342.21
Payment for financial lease 39,828,477.15 28,196,148.11
Repayment to stock holders 1,833,400.80 51,264,227.69
Others 250,000.00 -
Total 146,196,535.06 83,248,718.01
111
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
58. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Unit: RMB
Opening balance
Supplementary information Closing balance
(restated)
1. Reconciliation of net profit to cash flows from operating
activities:
Net profit 2,885,914,753.96 5,437,549,688.99
Add: Provision for impairment losses of assets - 632,741,768.60
Impairment of credit loss 7,528,580.60
Depreciation of fixed assets 1,298,671,209.43 997,765,905.13
Depreciation of investment property 183,248,437.37 196,198,784.24
Amortization of intangible assets 526,994,590.78 334,246,119.42
Amortization of long-term prepaid expenses 19,045,474.75 19,088,228.38
Losses (Gains) on disposal of fixed assets , intangible assets and
(19,258,495.33) 391,053.09
other long-term assets
Losses on retirement of fixed assets , intangible assets and
32,095,701.53 44,424.51
other long-term assets
Losses on changes in fair value 1,074,406,837.68 -
Financial expenses 1,869,926,400.58 1,080,537,549.18
Losses (Gains) arising from investments (3,967,828,149.48) (5,771,294,706.67)
Decrease (Increase) in deferred tax assets (24,282,252.12) 1,398,127.04
Increase in deferred tax liabilities 242,354,871.34 378,486,734.05
Decrease in inventories (25,110,483.47) 2,771,127.20
Decrease(Increase) in operating receivables (261,424,216.35) (19,560,328.96)
Increase in operating payables 446,292,163.57 184,672,562.08
Net cash flows from operating activities 4,288,575,424.84 3,475,037,036.28
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 5,373,281,504.75 7,729,460,082.75
Less: Opening balance of cash 7,729,460,082.75 3,253,467,084.65
Add: Closing balance of cash equivalents - -
Less: Opening balance of cash equivalents - -
Net increase (Decrease) in cash and cash equivalents (2,356,178,578.00) 4,475,992,998.10
(2) Composition of cash and cash equivalents
Unit: RMB
Opening
Item Closing balance
balance(restated)
I. Cash 5,373,281,504.75 7,729,460,082.75
Including: Cash on hand 349,650.07 598,357.70
Bank deposits 5,116,481,444.13 7,716,378,695.65
Other monetary funds 256,450,410.55 12,483,029.40
II. Cash equivalents - -
III. Closing balance of cash and cash equivalents 5,373,281,504.75 7,729,460,082.75
112
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(V) NOTES TO ITEMS IN THE CONSOLIDATED FINANCIAL STATEMENTS - continued
59. Foreign currency monetary items
Closing balance of Closing amount in
Item Exchange rate
foreign currency RMB
Cash and bank balances 2,134,538,905.15
Including: HKD 388,017,311.40 0.8762 339,980,768.25
USD 181,063,964.19 6.8632 1,242,678,199.03
EUR 45,380,138.82 7.8473 356,111,563.36
RMB 195,768,374.51 1.0000 195,768,374.51
Accounts receivable 159,141,161.37
Including: HKD 10,874,226.31 0.8762 9,527,997.09
USD 7,793,262.71 6.8632 53,486,720.63
EUR 12,249,620.08 7.8473 96,126,443.65
Other receivables 574,646,768.14
Including: HKD 1,980,078.38 0.8762 1,734,944.68
USD 2,868,796.66 6.8632 19,689,125.24
EUR 27,528,800.67 7.8473 216,026,757.50
RMB 337,195,940.72 1.0000 337,195,940.72
Short-term borrowings 1,825,358,000.00
Including: HKD 830,000,000.00 0.8762 727,246,000.00
USD 160,000,000.00 6.8632 1,098,112,000.00
Notes and accounts payables 45,071,940.89
Including: HKD 1,614,214.78 0.8762 1,414,374.99
USD 98,070.00 6.8632 673,074.02
EUR 5,477,615.47 7.8473 42,984,491.88
Other payables 512,625,788.26
Including: HKD 20,347,108.99 0.8762 17,828,136.90
USD 44,990,560.79 6.8632 308,779,216.81
EUR 9,864,946.28 7.8473 77,413,192.94
RMB 108,605,241.61 1.0000 108,605,241.61
Non-current liabilities due within one year 220,116,765.00
EUR 28,050,000.00 7.8473 220,116,765.00
Long-term borrowings 1,926,978,130.00
USD 100,000,000.00 6.8632 686,320,000.00
EUR 158,100,000.00 7.8473 1,240,658,130.00
Bonds payable 21,384,578,670.28
RMB 3,000,000,000.00 1.0000 3,000,000,000.00
USD 2,678,718,188.35 6.8632 18,384,578,670.28
Long-term payables 423,754,200.00
EUR 54,000,000.00 7.8473 423,754,200.00
113
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VI) CHANGES IN SCOPE OF CONSOLIDATION
1. Business combination involving enterprises not under common control
(1) Business combination involving enterprises not under common control
Unit: RMB
Proporti
on of
equity Revenue from the Net profit from
Basis for
Name of acquired Acquisition beginning of the the beginning of
Acquisition Date Acquisition Cost Purchase Date determining the
acquiree by Method period to the the period to the
acquisition date
business combination date combination date
combina
tion (%)
Cash Transfer of
TCP 23 February 2018 5,622,128,181.38 90.00 23 February 2018 1,256,737,392.95 69,660,138.47
Payment control
Note： As at 4 September 2017, the Group signed an agreement with TCP and its subsidiaries
("TCP Group") and multiple independent third parties who were former TCP shareholders.
Pursuant to the agreement, the Group subscribed for 90% of the issued share capital of
TCP at a price of BRL 2,811,941,923.95 (equivalent to RMB 5,468,066,151.65), and the
Group issued a put option to the minority shareholders of the TCP group (hereinafter
referred to as "option holders"). The relevant rights may be exercised two years after
February 23, 2018. The option holder has the right to sell the stocks of TCP Group it holds
in cash during the exercise period and to require the Group to purchase all remaining
shares of the TCP Group it holds. At recognition, the fair value of the put option on the
date of purchase is equivalent to RMB 154,062,029.73. The Group also acquires call
options to purchase the entire remaining equity of the TCP Group held by the option
holder. The above transaction was completed on February 23, 2018. Since then, the Group
has been authorized to assign most of the board members of the TCP Board of Directors,
and the Board of Directors is the authority that dominates the TCP-related business.
Therefore, the Group is able to control TCP and incorporate it into the consolidated
financial statements of the Group.
(2) Acquisition cost and goodwill
Unit: RMB
Acquisition cost TCP
Consideration 5,622,128,181.38
Less: Fair value per share of acquired net identifiable assets 1,652,753,226.52
Goodwill 3,969,374,954.86
114
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
1. Business combination involving enterprises not under common control - continued
(3) Carrying amount of the acquiree's assets and liabilities on the combination date
Unit: RMB
TCP
Fair Value on Book Value on
Combination Date Combination Date
Assets:
Current Assets 1,136,212,899.49 1,136,212,899.49
Fixed Assets 1,405,437,560.59 1,195,347,281.14
Construction in progress 468,950,467.03 468,950,467.03
Intangible assets 5,386,643,891.15 3,830,786,653.38
Deferred tax assets 31,600,449.30 31,600,449.30
Liabilities:
Current liabilities 686,328,006.23 686,328,006.23
Long-term borrowings 763,828,636.10 763,828,636.10
Bonds payable 1,108,636,631.38 1,108,636,631.38
Long-term payables 3,425,767,336.76 3,425,767,336.76
Provisions 20,880,330.98 20,880,330.98
Deferred tax liabilities 587,011,852.20 126,850,494.80
Net assets 1,836,392,473.91 530,606,314.09
Less: Minority interests 183,639,247.39 53,060,631.41
Net assets acquired 1,652,753,226.52 477,545,682.68
2. Business combination involving enterprises under common control
(1) Business combination involving enterprises under common control
Unit: RMB
Basis for Basis for
Revenue from the Net profit from the
formation of determining
Acquired Equity beginning of the beginning of the Revenue in the Net profit in the
Name of merged party combination Combination date the
in proportion period to the period to the comparative period comparative period
under the same combinatio
combination date combination date
control n date
CMPH 39.45 Note 1 25 December 2018 Note 1 7,729,738,537.45 2,685,592,888.44 5,668,455,620.87 4,928,289,403.49
Note: The Company and the acquiree are ultimately controlled by China Merchants Group
Limited ("CMG") both before and after the combination, and that control is not transitory.
Prior to June 8, 2018, CMPH indirectly held 33.58% of the company's shares, and at the
same time entrusted to manage 32.52% of the shares held by Nanshan Group, and held a
total of 66.10% of the voting rights of the company, which can control the company. Due
to the existence of a certain degree of horizontal competition between CMPH and the
Company, in order to completely solve the problem of horizontal competition, the
Company, CMPH and related parties implemented major asset restructuring transactions
during the year.
115
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
2. Business combination involving enterprises under common control - continued
(1) Business combination involving enterprises under common control - continued
As at 5 February 2018, CMPH and its wholly-owned subsidiary Malai warehousing
(Shenzhen) Co., Ltd. (hereinafter referred to as "Malai warehousing") and China
Merchants Port Development (Shenzhen) Co., Ltd. signed a share transfer agreement, sale
of 161,190,933 shares of A common stock shares of the Company held by China
Merchants Holdings Limited (Shenzhen) Co., Ltd., representing approximately 25% of the
total issued shares of the Company on the date of the agreement; CMPH has a
wholly-owned subsidiary Feng Enterprise Co., Ltd. and Broadford International Co., Ltd.
signed a share transfer agreement to sell 55,314,208 shares of B common stock shares of
the Company to Broadford International Co., Ltd., accounting for 8.58% of the total issued
shares of the company on the date of the agreement; Nanshan Group, a joint venture of the
Port Holdings, signed a share transfer agreement with China Merchants Kongtong
Development (Shenzhen) Co., Ltd., and sold 209,687,067 A common stock shares of its
shares to China Merchants Gangtong Development (Shenzhen) Co., Ltd. 32.52% of all
issued shares of the company on the date of signing the agreement. On the same day,
CMPH and Nanshan Group signed an agreement to terminate the agreement to host the A
common stock shares of the Company held by Nanshan Group. As at June 8, 2018, the
above equity transaction was completed, and CMPH was no longer the parent company of
the company.
As at 19 June 2018, the company and CMID signed the "issuing shares to purchase assets
agreement", according to the agreement. The company purchased 1,313,541,560 ordinary
shares of CMPH held by CMID, representing approximately 39.45% of the issued shares
of CMPH (hereinafter referred to as "Target assets"), the transaction amount is RMB
246.50 million. On 16 November 2018, the company's shares issued to CMID were
completed in China Securities Depository and Clearing Co., Ltd. Shenzhen Branch, and
CMID officially became a shareholder of the Company. On the same day, the "Consensus
Action Agreement on China Merchants Port Holdings Limited" signed by the Company
and CMHK came into effect. According to the agreement, CMHK has voting rights on
22.64% of CMPH, which it is entrusted to exercise. China Merchants Port Controlling
Shareholders' Meeting held unanimous agreement with the Company when voting on the
deliberation matters, and voted based on the opinions of the Company. After the
completion of the above transaction, CMID acquired 64.05% of the shares of the Company;
the Company holds a total of 62.09% of the voting rights of CMPH, which can control it.
Therefore, starting from December 25, 2018, the Company refers to the accounting
treatment method of business combination under the common control, and incorporates
CMPH into the consolidated scope of the Company's consolidated financial statements
from the beginning of the comparative financial statements.
116
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
2. Business combination involving enterprises under common control - continued
(2) Acquisition cost
Unit: RMB
Acquisition cost CMPH
Face value of issued equity securities 1,148,648,648.00
Contingent consideration -
Total 1,148,648,648.00
(3) Contingent consideration
As at 19 June 2018 and 9 July 2018, the Company and CMID signed the "Compensation
Agreement for the Issuance of Shares to Purchase Assets" and the "Supplemental Agreement for
the Issuance of Assets for Impairment Compensation Agreement". It is agreed that the company
will conduct an impairment test in the year of completion of the transaction of the CMPH Shares
held by CMID by way of issuance of shares (hereinafter referred to as "impairment compensation
period"). During the period of the value compensation period, the value at the end of any
accounting year is less than the purchase price, and CMID compensates the company for the
impairment of the company's shares.
The valuation method of the underlying asset value adopts the comparable company method and
the comparable transaction method, and combines the value of the underlying asset's net asset
value and asset status, profit level, and industry status as reference.
As at 31 December 2018, after calculation and estimation, the management of the Company
considered that there was no impairment of the underlying assets during the year and the fair
value of the contingent consideration was zero.
117
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
2. Business combination involving enterprises under common control - continued
(4) Carrying amount of the acquiree's assets and liabilities on the combination date
Unit: RMB
Combining date At the end of last year
Assets:
Cash and bank balances 6,286,625,388.23 7,010,046,720.27
Notes and accounts receivable 886,192,452.65 687,058,097.67
Prepayments 120,136,139.67 68,274,723.92
Other receivables 784,384,329.86 1,102,454,504.60
Inventories 94,885,983.62 67,967,109.18
Assets held for sale 115,356,162.94 -
Other current assets 1,165,966,118.29 1,169,773,192.59
Available-for-sale financial assets 3,059,822,735.68
Long-term receivables 793,840,080.19 9,669,034.35
Long-term equity investments 49,203,721,619.70 42,671,121,909.29
Other equity investments 96,101,614.30
Other non-current financial assets 2,087,872,081.94
Investment properties 5,868,106,799.88 6,037,804,900.44
Fixed assets 19,873,743,830.72 19,999,622,807.44
Construction in progress 5,323,807,106.87 2,256,101,893.73
Intangible assets 19,631,243,508.67 14,899,396,341.07
Goodwill 7,331,044,944.18 3,046,815,005.07
Long-term prepaid expenses 184,721,499.76 202,064,891.53
Deferred tax assets 52,289,927.47 31,672,836.18
Other non-current assets 247,632,416.27 95,415,126.79
Liabilities:
Short-term borrowings 2,478,045,312.62 2,580,000,000.00
Notes and accounts payable 347,093,777.13 236,483,248.53
Receipts in advance 28,185,109.50 61,659,604.71
Contract liabilities 47,581,489.59
Employee benefits payable 379,272,707.40 295,466,425.37
Taxes payable 256,463,960.76 168,341,559.91
Other payables 2,075,705,657.54 6,357,346,447.29
Non-current liabilities due within one year 2,002,817,943.15 2,393,237,748.47
Other current liabilities 402,659,721.80 285,472,328.45
Long-term borrowings 6,971,479,842.18 7,670,516,491.15
Bonds payable 22,097,467,096.40 10,292,778,301.33
Long-term payable 1,266,057,088.66 1,247,806,274.43
Long-term employee benefits payable 375,325,127.65 350,750,123.90
Provisions 28,276,275.75 -
Deferred income 55,520,260.40 66,808,802.84
Special payables - 10,412,745.10
Deferred tax liabilities 2,666,838,286.93 1,982,121,444.46
Other non-current liabilities 3,752,276,691.95 54,763,901.68
Net assets 74,916,605,655.80 68,361,116,382.18
Less: Minority interests 49,740,467,883.87 45,770,803,019.72
Net assets acquired 25,176,137,771.93 22,590,313,362.46
118
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VI) CHANGES IN SCOPE OF CONSOLIDATION - continued
3. Changes in scope of consolidation due to other reasons
(1) New subsidiaries due to assets acquisition in this period
Unit: RMB
Name of subsidiaries Closing balance of net assets
Shenzhen Haixing Xiaoyetian Logistics Development Co., Ltd. 10,378,526.33
China Merchants Port (Zhoushan) RoRo Terminal Co., Ltd. 49,755,188.46
China Merchants Port (Zhoushan) RoRo Logistics Co., Ltd. 24,178,813.68
Note: As at 23 July 2018, Shenzhen Haixing Port Development Co., Ltd., a subsidiary of the
Company, acquired 79.57% equity of Shenzhen Haixing Xiaoyetian Logistics
Development Co., Ltd. for RMB 132,453,913.00.
As at 29 August 2018, the Company acquired 51% equity of China Merchants Port
(Zhoushan) RoRo Logistics Co., Ltd. and 100% equity of China Merchants Port
(Zhoushan) RoRo Terminal Co., Ltd. for RMB 149,709,800.00.
The above acquisitions are asset acquisitions and do not form a business combination.
119
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VII) EQUITY IN OTHER ENTITIES
1. Interests in subsidiaries
(1) Composition of the Group
Proportion of
Registered Capital (in ten ownership Interest (%)
Principal place of Place of Proportion of ownership Interest
Full name of the subsidiary Nature of business thousand Yuan unless Direct Direct
business incorporation (%)
otherwise stated) ownership ownership
interest interest
Shenzhen Chiwan International Freight Agency Co., Logistics support
Shenzhen, PRC Shenzhen, PRC 550.00 100.00 - Established through investment
Ltd. services
Hong Kong SAR, Hong Kong SAR,
Chiwan Wharf Holdings (Hong Kong) Limited. Investment HKD 1,000,000.00 100.00 - Established through investment
PRC PRC
Logistics support
Dongguan Chiwan Warf Co., Ltd. ("DGW") Dongguan, PRC Dongguan, PRC 45,000.00 85.00 - Established through investment
services
Logistics support
DGT. Dongguan, PRC Dongguan, PRC 40,000.00 100.00 - Established through investment
services
Hong Kong SAR, Hong Kong SAR,
Hinwin Development Limited Investment HKD 10,000.00 100.00 - Established through investment
PRC PRC
Logistics support Combination involving enterprises
CHCC Shenzhen, PRC Shenzhen, PRC 28,820.00 100.00 -
services under common control
Logistics support Combination involving enterprises
Shenzhen Chiwan Transportation Co., Ltd. Shenzhen, PRC Shenzhen, PRC 1,500.00 100.00 -
services under common control
Logistics support Combination involving enterprises
CCT Shenzhen, PRC Shenzhen, PRC USD 95,300,000.00 55.00 20.00
services under common control
Logistics support Combination involving enterprises
Shenzhen Chiwan Tugboat Co., Ltd. Shenzhen, PRC Shenzhen, PRC 2,400.00 100.00 -
services under common control
Hong Kong SAR, Hong Kong SAR, Logistics support Combination involving enterprises
Chiwan Shipping (Hong Kong) Limited HKD 800,000.00 100.00 -
PRC PRC services under common control
Hong Kong SAR, Hong Kong SAR, Combination involving enterprises
China Merchants Port Holdings (Note 1) Investment HKD39,070.13million 39.45 -
PRC PRC under common control
Logistics support Combination involving enterprises
CMBL. Shenzhen, PRC Shenzhen, PRC 70,000.00 40.00 60.00
services under common control
China Merchants International Information Information Combination involving enterprises
Shenzhen, PRC Shenzhen, PRC 5,000.00 23.16 76.84
Technology Co., Ltd. Technology under common control
China Merchants International (China) Investment Combination involving enterprises
Shenzhen, PRC Shenzhen, PRC Investment USD 30,000,000.00 - 100.00
Co., Ltd. under common control
Logistics support Combination involving enterprises
CMT Qingdao PRC Qingdao PRC USD 206.30 million - 100.00
services under common control
Hong Kong SAR, Hong Kong SAR, Logistics support Combination involving enterprises
CMHIT HKD 500,000.00 - 100.00
PRC PRC services under common control
Logistics support Combination involving enterprises
China Merchants Port (Shenzhen) Co., Ltd. Shenzhen, PRC Shenzhen, PRC 55,000.00 - 100.00
services under common control
Engineering Combination involving enterprises
SZHQ. Shenzhen, PRC Shenzhen, PRC 300.00 - 100.00
supervision under common control
Combination involving enterprises
ATJ Shenzhen, PRC Shenzhen, PRC Storage HKD 100.00 million - 100.00
under common control
Combination involving enterprises
ASJ Shenzhen, PRC Shenzhen, PRC Storage HKD 100.00 million - 100.00
under common control
China Merchants International Terminal (Qingdao) Logistics support Combination involving enterprises
Qingdao PRC Qingdao PRC USD 44.00 million - 90.10
Co., Ltd. services under common control
Logistics support Combination involving enterprises
Colombo International Container Terminals Limited Sri Lanka Sri Lanka USD 150.00 million - 85.00
services under common control
Logistics support Combination involving enterprises
SMPS Shenzhen, PRC Shenzhen, PRC 20,000.00 - 100.00
services under common control
Logistics support Combination involving enterprises
SMTC Shenzhen, PRC Shenzhen, PRC 33,500.00 - 100.00
services under common control
Logistics support Combination involving enterprises
SMWC Shenzhen, PRC Shenzhen, PRC 20,000.00 - 100.00
services under common control
Logistics support Combination involving enterprises
Zhangzhou China Merchants Tugboat Co Ltd. Zhangzhou, PRC Zhangzhou, PRC 1,500.00 - 70.00
services under common control
Logistics support Combination involving enterprises
Zhangzhou China Merchants Port Co Ltd. Zhangzhou, PRC Zhangzhou, PRC 100,000.00 - 60.00
services under common control
Logistics support Combination involving enterprises
ZCMG(Note2) Zhangzhou, PRC Zhangzhou, PRC 44,450.00 - 31.00
services under common control
Logistics support Combination involving enterprises
China Merchants (SCT) Holdings Company Limited Shenzhen, PRC Shenzhen, PRC HKD 618.20 million - 80.00
services under common control
Logistics support Combination involving enterprises
Shekou Container Terminals (Phase II) Co., Ltd. Shenzhen, PRC Shenzhen, PRC 60,854.90 - 80.00
services under common control
Logistics support Combination involving enterprises
SCT3 Shenzhen, PRC Shenzhen, PRC 127,600.00 - 80.00
services under common control
Combination involving enterprises
AYJ Shenzhen, PRC Shenzhen, PRC Storage 6,060.00 - 80.00
under common control
Logistics support Combination involving enterprises
Shenzhen Haixing Port Development Co., Ltd. Shenzhen, PRC Shenzhen, PRC 53,072.92 - 67.00
services under common control
Logistics support Combination involving enterprises
YDG Foshan, PRC Foshan, PRC 21,600.00 - 51.00
services under common control
British Virgin British Virgin Combination involving enterprises
Mega Shekou Container Terminals Limited Investment USD 120.00 - 85.42
Islands Islands under common control
Combination involving enterprises
Thesar Maritime Limited Cyprus Cyprus Investment EUR 5,000.00 - 50.00
under common control
Logistics support Combination involving enterprises
LoméContainer Terminal S. A. (Note3) Togolese Republic Togolese Republic FCFA 200.00 million - 35.00
services under common control
Logistics support Combination involving enterprises
HIPG Sri Lanka Sri Lanka USD 794.00 million - 85.00
services under common control
Logistics support Combination involving enterprises
Shantou China Merchants Port Co., Ltd. Shantou, PRC Shantou, PRC 12,500.00 - 60.00
services under common control
Property rental Combination involving enterprises
JYRT Shenzhen, PRC Shenzhen, PRC 80,000.00 - 100.00
services under common control
120
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VII) EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(1) Composition of the Group - continued
Proportion of
Registered Capital (in ten ownership Interest (%)
Principal place of Place of Proportion of ownership Interest
Full name of the subsidiary Nature of business thousand Yuan unless Direct Direct
business incorporation (%)
otherwise stated) ownership ownership
interest interest
Property rental Combination involving enterprises
QHW Shenzhen, PRC Shenzhen, PRC 20,000.00 - 100.00
services under common control
Investment Combination involving enterprises
JZZ Shenzhen, PRC Shenzhen, PRC 4,000 - 75.00
Consulting under common control
Logistics support Combination involving enterprises
Shenzhen Lianda Tugboat Co., Ltd. Shenzhen, PRC Shenzhen, PRC 200 - 60.29
services under common control
Logistics support Combination involving enterprises
Zhangzhou Zhongli Outer Wheel Tally Co., Ltd Zhangzhou, PRC Zhangzhou, PRC 200 - 84.00
services under common control
China Merchants Holdings Logistics support Combination involving enterprises
Djibouti Djibouti USD 38.14 million - 100.00
(Djibouti) FZE services under common control
Logistics support Combination involving enterprises
TCP(Note1) Brazil Brazil BRL 68.85 million - 90.00
services not under common control
China Merchants Port (Zhoushan) RoRo Logistics Logistics support
Shantou, PRC Shantou, PRC 17,307.86 51.00 - Assets Acquisition
Co., Ltd. (Note1) services
China Merchants Port (Zhoushan) RoRo Terminal Logistics support
Shantou, PRC Shantou, PRC 5,000.00 - 51.00 Assets Acquisition
Co., Ltd. (Note1) services
Shenzhen Haixing Xiaoyetian Logistics Logistics support
Shenzhen, PRC Shenzhen, PRC 7,066.79 - 79.57 Assets Acquisition
Development Co., Ltd. (Note1) services
Note 1: See notes (VI).
Note 2: The Group and China Merchants Zhangzhou Development Zone Co., Ltd. signed the
"Equity Custody Agreement". China Merchants Zhangzhou Development Zone Co., Ltd.
entrusted 29% of its equity in ZCMG to the Group's operations and management.
Therefore, the Group's voting rights to ZCMG is 60%, which included in the
consolidation scope of the Group.
Note 3: The Group has the right to appoint the majority of Executive Committee members of
LoméContainer Terminal S.A., so the Group has included the company in the
consolidated financial statements.
(2) Material non-wholly-owned subsidiaries
Unit: RMB
Proportion of
Profit or loss
ownership Payments for
attributable to
interest held dividends to
minority Closing balance of
Name of the subsidiary by the minority
shareholders at minority interest
minority shareholders in
the end of the
shareholders the current period
period
(%)
CMPH 60.55 1,795,466,614.72 1,801,409,418.27 49,740,467,883.83
121
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VII). EQUITY IN OTHER ENTITIES - continued
1. Interests in subsidiaries - continued
(3) Significant financial information of material non-wholly-owned subsidiaries
Unit: RMB
Closing balance Opening balance
Name of the
subsidiary Non-current Non-current Non-current
Current assets Total assets Current liabilities Total liabilities Current assets Non-current assets Total assets Current liabilities Total liabilities
assets liabilities liabilities
CMPH 9,453,546,575.26 110,694,125,429.95 120,147,672,005.21 8,017,825,679.49 37,213,240,669.92 45,231,066,349.41 10,105,574,348.23 92,309,507,481.57 102,415,081,829.80 12,378,007,362.73 21,675,958,084.89 34,053,965,447.62
Unit: RMB
2018 2017
Name of the subsidiary Cash flows from operating
Operating income Net profit Total comprehensive income activities Operating income Net profit Total comprehensive income Operating cash flows
CMPH 7,729,738,537.45 2,685,592,888.44 2,886,818,529.12 3,595,234,888.15 5,668,455,620.87 4,928,289,403.49 5,569,920,005.94 2,495,218,955.91
122
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VII) EQUITY IN OTHER ENTITIES - continued
2. Interests in joint ventures and associates
(1) Material joint ventures or associates
Unit: RMB
Proportion of ownership interests held by
the Group (%) Accounting method of
Investee investments in joint
Principal place of Place of ventures and associates
Directly Indirectly
business incorporation Nature of business
Joint ventures
Port and container
Shanghai International Port (Group) Co., Ltd. Shanghai, PRC Shanghai, PRC - 26.77 Equity method
terminal business
(2) Financial information of material joint venture
Unit: RMB
Shanghai International Port (Group) Co., Ltd.
Item
Closing balance/2018 Opening balance/2017
Current assets 47,842,620,837.32 50,265,638,309.88
Including: cash and cash equivalent 27,935,157,994.83 20,246,034,398.90
Non-current assets 96,524,413,178.58 90,969,266,684.14
Total assets 144,367,034,015.90 141,234,904,994.02
Current liabilities 31,676,398,710.35 38,083,862,202.13
Non-current liabilities 30,340,320,855.30 26,094,575,871.54
Total liabilities 62,016,719,565.65 64,178,438,073.67
Minority interests 6,802,318,747.82 7,572,086,010.64
Total equity attributable to shareholders of the parent company 75,547,995,702.43 69,484,380,909.71
Net assets calculated based on the proportion of ownership
interest
20,216,643,649.97 18,378,618,750.62
Adjustments
- Goodwill 2,076,585,747.12 1,834,571,145.21
- Others (105,669,326.14) (72,729,483.24)
Carrying amounts of equity investments in Joint Ventures 22,187,560,070.95 20,140,460,412.59
Fair value of joint venture equity investment with public
32,129,272,123.48 40,766,914,309.10
quotation
Income tax expenses 38,042,544,621.37 37,423,946,226.91
Net profit 11,472,021,103.16 12,846,413,455.93
Other comprehensive income (954,348,960.96) 1,525,862,566.50
Total comprehensive income 10,517,672,142.20 14,372,276,022.43
Dividends received from joint ventures in the current year 1,059,194,508.74 913,488,707.16
123
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VII) EQUITY IN OTHER ENTITIES - continued
2. Interests in joint ventures and associates - continued
(3) Summarized financial information of immaterial associates and joint ventures
Unit: RMB
Closing balance/2018 Opening balance/2017
Joint ventures:
Total carrying amounts of investment 11,230,302,154.26 8,933,914,027.28
Aggregate of following items calculated based on
the proportion of ownership interest
- Net profit 429,904,250.47 376,916,082.57
- Other comprehensive income (5,608,904.12) 22,002,683.51
- Total comprehensive income 424,295,346.35 398,918,766.08
Associates:
Total carrying amounts of investment 16,758,715,038.19 14,086,475,367.61
Aggregate of following items calculated based on
the proportion of ownership interest
- Net profit 912,589,301.49 1,317,985,250.72
- Other comprehensive income (31,643,724.68) 77,536,453.90
- Total comprehensive income 880,945,576.81 1,395,521,704.62
(4) As at 31 December 2018, the long-term equity investments of the Group were not subject to
restriction on disposal or remittance of return on investments.
(VIII) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's major financial instruments include cash and bank balances, notes receivable,
account receivables, interest receivable, other receivables, available-for-sale financial assets,
account payables, interest payable, dividends payable, other payables, other current liabilities,
bonds payable and long-term payables. Details of these financial instruments are disclosed in
Notes (V). The risks associated with these financial instruments and the policies on how to
mitigate these risks are set out below. Management manages and monitors these exposures to
ensure the risks are monitored at a certain level.
The Group adopts sensitivity analysis techniques to analyze how the entity's profit or loss and for
the period and shareholders' equity would have been affected by changes in the relevant risk
variables that were reasonably possible. As it is unlikely that risk variables will change in an
isolated manner, and the interdependence between risk variables will have significant effect on
the amount ultimately influenced by the changes in a single risk variable, the following items are
based on the assumption that each risk variable has changes on a stand-alone basis.
124
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VIII) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
1．Risk management objectives and policies
The Group's risk management objectives are to achieve proper balance between risks and yield,
minimize the adverse impacts of risks on the Group's operation performance, and maximize the
benefits of the shareholders and other equity investors. Based on these risk management
objectives, the Group's basic risk management strategy is to identify and analyze the industry's
exposure to various risks, establish appropriate bottom line for risk tolerance, implement risk
management, and monitors these exposures to ensure the risks are monitored at a certain level.
1.1 Market risk
1.1.1 Currency risk
Currency risk is the risk that losses will occur because of changes in foreign exchange rates. The
Group's exposure to the currency risk is primarily associated with FCFA and HKD. Several of the
Group's subsidiaries have purchases and sales denominated in HKD while the Group's other
principal activities are denominated and settled in RMB. As at 31 December 2018, the balance of
the Group's assets and liabilities are both denominated in functional currency, except that balance
of assets set out below is in HKD and USD. Currency risk arising from the foreign currency
balance of assets and liabilities may have impact on the Group's performance.
Unit: RMB
Opening
Item Closing balance
balance(restated)
Cash and bank balances 2,134,538,905.15 900,731,401.82
Notes and accounts receivable 159,141,161.37 24,592,272.50
Other receivables 574,646,768.14 3,446,717,477.66
Short-term borrowings 1,825,358,000.00 -
Notes and accounts payable 45,071,940.89 6,767,235.27
Other payables 512,625,788.26 53,024,698.55
Non-current liabilities due within one year 220,116,765.00 -
Long-term borrowings 1,926,978,130.00 -
Bonds payable 21,384,578,670.28 2,500,000,000.00
Long-term payables 423,754,200.00 423,754,200.00
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 the probable heavy loss resulted from foreign exchange
rate fluctuation to be fairly low.
125
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VIII) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
1．Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.1 Currency risk - continued
Sensitivity analysis on currency risk
The assumption for the sensitivity analysis on currency risk is that all the cash flow hedges 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 or
equity:
Unit: RMB
Closing balance Opening balance (restated)
Item Effect on shareholders' Effect on shareholders'
Changes in exchange rate Effect on profits equity Effect on profits equity
All foreign
5% increase against RMB (11,394,591.45) (11,394,591.45) 23,982,328.89 23,982,328.89
currencies
All foreign
5% decrease against RMB 11,394,591.45 11,394,591.45 (23,982,328.89) (23,982,328.89)
currencies
All foreign
5% increase against USD 17,324.20 17,324.20 322,074.56 322,074.56
currencies
All foreign
5% decrease against USD (17,324.20) (17,324.20) (322,074.56) (322,074.56)
currencies
All foreign
5% increase against HKD (1,098,658,981.68) (1,098,658,981.68) (67,627,776.68) (67,627,776.68)
currencies
All foreign
5% decrease against HKD 1,098,658,981.68 1,098,658,981.68 67,627,776.68 67,627,776.68
currencies
All foreign
5% increase against FCFA (63,413,556.92) (63,413,556.92) 1,410,777.82 1,410,777.82
currencies
All foreign
5% decrease against FCFA 63,413,556.92 63,413,556.92 (1,410,777.82) (1,410,777.82)
currencies
1.1.2 Interest rate risk - changes in cash flows
Risk derived from changes in cash flows of financial instruments is mainly related to bank loans
with floating interest rate. (See Notes (V) 20 and Notes (V) 29). This Group takes the measure of
maintaining the floating interest rate of the bank loans, as a way to reduce the interest rate risk
arising from changes in fair value.
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 recognized as hedging instrument, the fluctuations of market
interest rate affects its fair value and interest rate hedging estimation are effective and efficient.
Market interest rate at the balance sheet date is adopted to calculate fair value changes of derivative
financial instruments and other financial assets and liabilities under discounted cash flow method.
126
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VIII) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
1．Risk management objectives and policies - continued
1.1 Market risk - continued
1.1.2 Interest rate risk - changes in cash flows - continued
Given that other variables unchanged on the basis of above assumptions, the pre-tax effect on the
profit or loss for the current period from possible and reasonable changes of interest rate are as
follows:
Unit: RMB
Closing balance Opening balance (restated)
Changes in Effect on shareholders' Effect on
Item interest rate Effect on profits equity Effect on profits shareholders' equity
Short-term & Long-term
borrowings
1% increase (119,061,442.29 ) (119,061,442.29 ) (102,505,164.91) (102,505,164.91)
Short-term & Long-term
borrowings
1% decrease 119,061,442.29 119,061,442.29 102,505,164.91 102,505,164.91
1.1.3 Other price risk
Available-for-sale financial assets are measured at fair value by the Group at the balance sheet
date. Hence the Group takes risk of changes in the securities market. The Group closely monitors
the effects of changes in the foreign exchange prices on the Group's equity investment securities.
The Group has not taken any measures to reduce prices risk of equity investment securities.
1.2 Credit risk
As at 31 December 2018, the Group's maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties and
financial guarantees issued by the Group is arising from the carrying amount of the respective
recognized financial assets as stated in the consolidated balance sheet. For financial instruments
measured at fair value, the carrying amount reflects the exposure to risks but not the maximum
exposure to risks; the maximum exposure to risks would vary according to the future changes in
fair value.
In order to minimize the credit risk, the Group has delegated a team responsible for determination
of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action
is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each
individual trade debt at each balance sheet date to ensure that adequate impairment losses are
made for irrecoverable amounts. In this regard, the management of the Group considers that the
Group's credit risk is significantly reduced.
The credit risk on liquid funds is limited because the counterparties are banks with high credit
ratings.
The Group adopted necessary policies to make sure that all clients and customers are attributed
with merit credit records.
127
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(VIII) FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
1. Risk management objectives and policies - continued
1.3 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 utilization of
bank loans and ensures compliance with loans covenants.
The following is the maturity analysis for financial assets and financial liabilities held by the
Group which is based on undiscounted remaining contractual obligations:
Unit: RMB
Item Carrying amount Total amount Within 1 year 1-5 years More than 5 years
The non-derivative financial liabilities
Short-term borrowings 3,425,291,312.62 3,478,169,207.83 3,478,169,207.83 - -
Notes and accounts payable 429,120,690.97 429,120,690.97 429,120,690.97 - -
Other payables 2,245,670,528.89 2,245,670,528.89 2,245,670,528.89 - -
Non-current liabilities due
2,243,283,834.91 2,660,121,708.86 2,660,121,708.86 - -
within one year
Other current liabilities 602,659,721.80 608,495,040.88 608,495,040.88 - -
Long-term borrowings 6,971,479,842.18 7,796,930,369.38 - 6,538,562,313.75 1,258,368,055.63
Bonds payable 22,097,467,096.40 27,296,882,971.12 605,139,169.55 18,009,414,364.38 8,682,329,437.19
Long-term payables 431,988,064.47 433,111,346.10 - 42,453,199.58 390,658,146.52
The derivative financial liabilities
Other non-current liabilities 579,195,304.56 579,195,304.56 - 579,195,304.56 -
(IX) FAIR VALUE
1. Closing balance of assets and liabilities measured at fair value
Unit: RMB
Closing Balance
Item
Level 1 Level 2 Level 3 Total
Measurements at fair value
continuously
Other investments in equity instruments 9,800,000.00 - 238,048,314.30 247,848,314.30
Other non-current financial assets 1,551,815,520.48 - 536,056,561.46 2,087,872,081.94
Total assets measured at fair value
1,561,615,520.48 - 774,104,875.76 2,335,720,396.24
continuously
Other non-current liabilities - 3,839,742,307.01 3,839,742,307.01
Total liabilities measured at fair value
- 3,839,742,307.01 3,839,742,307.01
continuously
128
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(IX) FAIR VALUE - continued
2. Basis for determining the market price measured at fair value at level I continuously
The market price of assets and liabilities measured at fair value at level I continuously is
determined by the Shanghai stock exchange and the Stock Exchange of Hong Kong Ltd. closing
price of equity instruments at 29 December 2018.
3. Level 3 continuously fair value measure instruments, using valuation method and
qualitative and quantitative information on important parameters.
Unit: RMB
Closing Balance Fair Opening Balance Fair
Item Valuation method Input
Value Value
Other investments in
238,048,314.30 223,633,968.79 Net assets method Net asset value
equity instruments
Other non-current Discounted cash
2,000,000.00 - Discount rate
financial assets flow method
Other non-current
689,901.07 644,549.67 Net assets method Net asset value
financial assets
Other non-current Comparative method
533,366,660.39 602,632,149.19 Stock Price
financial assets of listed company
Other non-current Discounted cash
3,260,547,002.45 - Discount rate
liabilities flow method
Executive price,
Other non-current Option pricing
579,195,304.56 - expected volatility,
liabilities method
etc.
The fair value of other investments in equity instruments that are measured at fair value through
profit or loss or other comprehensive income is determined using valuation methods such as
discounted cash flow method, net assets method, and comparative method of listed company. At
the time of valuation, the Group needs to estimate future cash flows, credit risk, market volatility
and correlation, select an appropriate discount rate and consider the discount premium adjustment.
4. Information of financial assets and financial liabilities that are not measured at fair
value
Financial assets and financial liabilities that are not measured at fair value include notes and
accounts receivable, other receivables, Short-term borrowings, notes and accounts payable, other
receivables, long-term borrowings, bonds payable, long-term payables.
The management considers that the carrying amount of financial assets and liabilities measured at
amortized cost is approximately equal to the fair value of financial assets and liabilities.
The fair value of note payable which has active market price should be determined by the active
market price. The fair value of long-term borrowings, long-term payable and note payable without
active market price, should be determined by the net present value of cash flow stated in contract
and the discount rate which has the same rank of credit.
129
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
1. Parent of the Company
Proportion of the entity's Proportion of the entity's
Related party Type of the Place of Legal Nature of ownership interests held by voting power held by the
Name of the parent relationship entity incorporation representative business Issued share capital the parent (%) parent (%)
Private limited
Broadford Global Investment
Parent company company (share Hong Kong Deng Weidong HKD21,120,986,262 3.08%- 87.81 (Note)
Limited holding
limited)
Note: Broadford directly obtained 3.08% equity of the Company, 20.68% equity via its subsidiary
China Merchants Port Development (Shenzhen) Co., Ltd., and obtained another 64.05%
( details in Notes (VI) 6) equity by its subsidiary CMID, as at 28 December 2018, CMID
entrusts its rights on the board of directors to through agreement arrangements. Therefore,
Broadford totally held the Company's 87.81% of the voting shares, becoming the parent
company of the Company.
The ultimate actual controller of the Company is CMG.
2． Subsidiaries of the Company
The general background and other related information of subsidiaries are set out in Notes (VII) 1.
3. Associates and joint ventures of the Company
The general background and other related information of the significant associates and joint
ventures are set out in Notes (VII) 2.
Other joint ventures or joint ventures that occurred related party transactions and formed balances
with the Group this year are as follows:
Relationships between other related
Name of other related parties
parties and the Company
Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim irketi Joint venture
Port of Newcastle and its subsidiaries Joint venture
Ningbo Daxie Merchants International Wharf Co., Ltd. Joint venture
Qingdao Qianwan United Container Terminal Co., Ltd. Joint venture
Qingdao Qianwan West Port United Wharf Co., Ltd. Joint venture
Qingdao Qianwan New United Container Terminal Co., Ltd. Joint venture
Zhanjiang Port (Group) Co., Ltd. Joint venture
China Overseas Harbour Affaris (Laizhou) Co., Ltd. Joint venture
Great Horn Development Company FZCO Associate Company
International Djibouti Industrial Parks Operation FZCO Associate Company
Port de Djibouti S.A. Associate Company
Terminal Link SAS Associate Company
Nanshan Group and its subsidiaries Associate Company
Shanghai International Port (Group) Co., Ltd. Associate Company
Shenzhen Globex e-Service Inc Associate Company
Shenzhen Baohong Trade Service Co., Ltd. Associate Company
Tianjin Haitian Bonded Logistics Co., Ltd. Associate Company
Modern Terminals Limited Associate Company
130
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
4. Other related parties of the Company
Unit: RMB
Relationships between other related
Name of other related parties
parties and the Company
Zhangzhou COSCO Shipping Agency Co., Ltd Associate Company
COFCO Merchants Bureau (Shenzhen) Grain Electronic Trading Center Co., Ltd. Associate Company
CHU KONG RIVER TRADE TERMINAL CO. LTD. Associate Company
Qingdao Port International Co., Ltd minority shareholders of subsidiaries
Hong Kong International Enterprises Limited minority shareholders of subsidiaries
YiHai Kerry Investment Company Limited minority shareholders of subsidiaries
CMHK Controlled by the same ultimate actual controller
Sinotrans(NZ)Limited Controlled by the same ultimate actual controller
Sinoway Shipping Limited Controlled by the same ultimate actual controller
Guangzhou International Ocean Shipping Agency Co., Ltd. Controlled by the same ultimate actual controller
Hoi Tung (Shanghai) Co., Ltd. Controlled by the same ultimate actual controller
EuroAsia Dockyard Enterprise and development Ltd Controlled by the same ultimate actual controller
Qingdao Bonded Logistics Park Sino-foreign Transport Warehousing Logistics Co., Ltd. Controlled by the same ultimate actual controller
Qingdao Sino-foreign Transport Supply Chain Management Co., Ltd Controlled by the same ultimate actual controller
Shenzhen Science and Technology University Phase II Real Estate Management Co., Ltd Controlled by the same ultimate actual controller
Shenzhen Nanyou (Holdings) Ltd Controlled by the same ultimate actual controller
Shenzhen Waidai Warehousing Co., Ltd. Controlled by the same ultimate actual controller
China Merchants Landmark (Shenzhen) Co ., Ltd Controlled by the same ultimate actual controller
China Merchants Ocean Shipping Agency Shenzhen Controlled by the same ultimate actual controller
Shenzhen Merchants Qianhai Industrial Development Co., Ltd. Controlled by the same ultimate actual controller
CSC RoRo Logistics Co., Ltd Controlled by the same ultimate actual controller
China Merchants (Shenzhen) Power Supply., Ltd Controlled by the same ultimate actual controller
Shenzhen Merchants Construction Co., Ltd. Controlled by the same ultimate actual controller
Shenzhen Merchants Commercial Property Investment Co., Ltd Controlled by the same ultimate actual controller
Shenzhen Merchants Culture Industry Co., Ltd. Controlled by the same ultimate actual controller
Shenzhen Investment Promotion Real Estate Management Co., Ltd.. Controlled by the same ultimate actual controller
China Ocean Shipping Tally Shenzhen CO., Ltd Controlled by the same ultimate actual controller
China Marine Shipping Agency,Shenzhen Company Limited Controlled by the same ultimate actual controller
Yiu Lian Dockyards (Shekou) Limited Controlled by the same ultimate actual controller
Yiu Lian Dockyards Limited Controlled by the same ultimate actual controller
Cm Houlder Insurance Brokers Limited Controlled by the same ultimate actual controller
Investment Promotion Bureau Zhangzhou Development Zone Power Supply Co., Ltd.. Controlled by the same ultimate actual controller
China Merchants Godown, Wharf Transportation Company Limited Controlled by the same ultimate actual controller
Huanan Refrigeration Ice Making(Shenzhen)Co., Ltd.. Controlled by the same ultimate actual controller
China Merchants Group Finance Company Limited Controlled by the same ultimate actual controller
China Merchants Steam Navigation Company Limited Controlled by the same ultimate actual controller
China Merchants Shekou Industrial Zone Holdings Co., Ltd. Controlled by the same ultimate actual controller
China Merchants Bureau Logistics Group Fujian Co., Ltd. Controlled by the same ultimate actual controller
China Merchants Bureau Logistics Group Qingdao Co., Ltd Controlled by the same ultimate actual controller
China Merchants Property Management Co., Ltd.. Controlled by the same ultimate actual controller
China Merchants Bureau Zhangzhou Development Zone Co., Ltd. Controlled by the same ultimate actual controller
China Merchants Bureau Zhongbai Commercial Logistics Co., Ltd. Controlled by the same ultimate actual controller
China Merchants Securities Co., Ltd. Controlled by the same ultimate actual controller
China Communications Import & Export Co., Ltd Controlled by the same ultimate actual controller
China Ocean Shipping Agency Shenzhen Controlled by the same ultimate actual controller
Sinotrans Co., Ltd.. Controlled by the same ultimate actual controller
China Outbound Air Transport Co., Ltd. Controlled by the same ultimate actual controller
Sinotrans Container Lines (Hong Kong) Company Limited Controlled by the same ultimate actual controller
Sinotrans Container Lines Co., Ltd.. Controlled by the same ultimate actual controller
China Merchants Bureau Food (Shenzhen) Co., Ltd Controlled by the same ultimate actual controller
China Merchants Union (BVI) Limited Controlled by the same ultimate actual controller
Khor Ambado FZCo Controlled by the same ultimate actual controller
China Merchants Bank Company Limited Controlled by the same ultimate actual controller
131
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transaction
(1) Provision and receipt of services
Unit: RMB
Pricing and
Content of related decision-making Opening balance
Related party Closing balance
party transaction procedures of related party (restated)
transactions
Receipt of services：
China Merchants Securities Co., Ltd Service expenditure Negotiation 22,641,509.43 -
Qingdao Qianwan West Port United Terminal Co.,
Service expenditure Negotiation 15,358,571.88 16,832,662.07
Ltd
Shenzhen China Merchants Shangzhi Investment
Service expenditure Negotiation 10,707,148.03 15,012,063.63
Co., Ltd
Yiu Lian Dockyards Limited Service expenditure Negotiation 10,019,922.18 9,182,821.83
China Merchants Bureau Zhangzhou Development
Service expenditure Negotiation 5,681,278.30 5,395,042.75
Zone Co., Ltd.
China Merchants Bureau Logistics Group Qingdao
Service expenditure Negotiation 3,751,785.75 2,015,655.27
Co., Ltd
China Ocean Shipping Agency Shenzhen Service expenditure Negotiation 3,539,104.80 4,072,313.14
Hoi Tung (Shanghai) Co., Ltd. Service expenditure Negotiation 3,461,147.79 1,432,378.81
China Merchants (Shenzhen) Power Supply Co.,
Service expenditure Negotiation 2,908,847.34 -
Ltd.
China Outbound Air Transport Co., Ltd. Service expenditure Negotiation 2,199,064.60 -
Cm Houlder Insurance Brokers Limited Service expenditure Negotiation 2,102,764.12 1,903,741.43
China Merchants Property Management Co., Ltd. Service expenditure Negotiation 1,764,315.36 2,015,655.27
China Ocean Shipping Tally Shenzhen CO., Ltd Service expenditure Negotiation 1,240,537.34 1,126,870.35
Nanshan Group and Its Subsidiary Service expenditure Negotiation 1,080,269.25 2,288,324.92
Sinoway Shipping Limited Service expenditure Negotiation 760,244.19 7,861,796.11
Shenzhen Merchants Culture Industry Co., Ltd. Service expenditure Negotiation 461,390.46 1,824,228.26
Other related parties Service expenditure Negotiation 3,695,383.53 3,818,846.42
China Merchants Group Finance Company Limited Interest expense Negotiation 51,574,070.78 43,521,750.00
Port de Djibouti S.A. Interest expense Negotiation 24,719,148.38 2,364,694.82
China Merchants Steam Navigation Company
Interest expense Negotiation 3,961,479.45 8,246,884.93
Limited
China Merchant Bank Co., Ltd Interest expense Negotiation 104,400.00 5,762,005.73
China Merchants Group Interest expense Negotiation - 4,318,767.12
Total 171,732,382.96 138,996,502.86
132
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transaction - continued
(1) Provision and receipt of services - continued
Unit: RMB
Pricing and
Content of related decision-making Opening balance
Related party Closing balance
party transaction procedures of related party (restated)
transactions
Provision of service：
Qingdao Qianwan United Container Terminal Co., Ltd Service revenue Negotiation 59,871,312.19 52,831,836.74
China Ocean Shipping Agency Shenzhen Service revenue Negotiation 26,678,580.24 25,783,328.94
Khor Ambado FZCo Service revenue Negotiation 22,976,552.15 -
Qingdao Qianwan West Port United Terminal Co., Ltd. Service revenue Negotiation 14,667,866.59 15,378,330.78
Globex e-Services Co., Ltd. Service revenue Negotiation 13,954,183.68 8,174,128.49
China Marine Shipping Agency,Shenzhen Company Limited Service revenue Negotiation 11,339,084.02 8,393,115.04
Sinotrans Container Lines Co., Ltd. Service revenue Negotiation 10,699,341.99 3,489,366.88
Huanan Refrigeration Ice Making (Shenzhen) Co., Ltd. Service revenue Negotiation 6,422,615.01 6,226,134.87
Zhangzhou COSCO Shipping Agency Co., Ltd Service revenue Negotiation 5,804,690.70 5,417,274.27
Zhanjiang Port (Group) Co., Ltd Service revenue Negotiation 5,568,651.21 1,356,499.96
Qingdao Bonded Logistics Park Sino-foreign Transport
Service revenue Negotiation 5,085,762.32 3,154,879.91
Warehousing Logistics Co., Ltd.
Port de Djibouti S.A. Service revenue Negotiation 4,640,763.43 5,686,674.06
Great Horn Development Company FZCO Service revenue Negotiation 3,985,900.36 9,947,871.61
Ningbo Daxie Merchants International Wharf Co., Ltd Service revenue Negotiation 3,929,015.11 4,537,052.85
Qingdao Qianwan New United Container Terminal Co., Ltd. Service revenue Negotiation 3,411,057.43 3,179,265.03
Yiu Lian Dockyards (Shekou) Limited Service revenue Negotiation 3,319,608.63 1,274,969.05
International Djibouti Industrial Parks Operation
Service revenue Negotiation 3,054,612.36 5,725,098.14
FZCO
China Merchants Ocean Shipping Agency Shenzhen Service revenue Negotiation 3,013,980.25 4,402,744.18
China Merchants Shekou Industrial Zone Holdings Co., Ltd Service revenue Negotiation 2,496,490.06 3,140,643.98
China Merchants Bureau Zhongbai Commercial Logistics Co., Ltd. Service revenue Negotiation 2,484,304.00 1,764,574.00
Sinotrans Container Lines (Hong Kong) Company Limited Service revenue Negotiation 2,182,888.92 1,809,539.25
China Outbound Air Transport Co., Ltd. Service revenue Negotiation 1,993,291.26 -
CMHK Service revenue Negotiation 1,600,000.00 20,274.29
Shanghai International Port (Group) Co., Ltd. Service revenue Negotiation 1,588,035.85 1,331,677.32
Laizhou Laiyin Port Business Co., Ltd. Service revenue Negotiation 1,574,244.92 1,776,636.76
Terminal Link SAS Service revenue Negotiation 1,378,437.57 1,315,926.11
Guangzhou International Ocean Shipping Agency Co., Ltd Service revenue Negotiation 1,312,017.95 1,049,904.69
Kumport Liman Hizmetleri ve Lojistik Sanayi ve Ticaret Anonim
Service revenue Negotiation 1,119,436.15 1,693,185.98
irketi
Qingdao Qianwan West Port United Wharf Co., Ltd. Service revenue Negotiation 1,071,100.78 -
Shenzhen Waidai Warehousing Co., Ltd. Service revenue Negotiation 690,687.40 2,581,013.80
China Merchants Group Service revenue Negotiation 407,655.62 1,173,935.66
COFCO Merchants Bureau (Shenzhen) Grain Electronic Trading
Service revenue Negotiation 17,134.90 1,529,032.53
Center Co., Ltd.
Shenzhen Baohong Trade Service Co., Ltd Service revenue Negotiation - 11,018,134.42
Sinotrans(NZ)Limited Service revenue Negotiation - 8,994,813.95
Other related parties Service revenue Negotiation 7,990,585.72 15,969,731.66
Khor Ambado FZCo Interest income Negotiation 51,599,386.03 7,097,464.46
Port of Newcastle and its Subsidiaries Interest income Negotiation 34,416,578.56 -
China Merchant Bank Co., Ltd Interest income Negotiation 34,629,531.08 31,155,058.39
China Merchants Group Finance Company Limited Interest income Negotiation 14,042,476.82 3,299,729.55
Morden Terminals Limited Interest income Negotiation 1,193,424.67 736,667.48
Other related parties Interest income Negotiation 1,443,994.71 7,181,287.74
Total 373,655,280.64 269,597,802.82
133
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transaction - continued
(2) Leases with related parties
The Group as the lessor：
Unit：RMB
Pricing and
Lease income Lease income
decision-making
recognized in recognized in the
Name of lessee Type of leased assets procedures of
the current previous year
related party
year (restated)
transactions
Nanshan Group and its Subsidiaries Buildings Negotiation 3,506,398.00 -
China Merchants Bureau Food
Buildings Negotiation 3,393,457.47 143,124.29
(Shenzhen) Co., Ltd
China Communications Import and
Buildings Negotiation 2,699,223.60 1,965,231.30
Export Co., Ltd.
Shenzhen Nanyou (Holdings) Ltd Buildings Negotiation 2,400,571.43 2,400,571.43
Yiu Lian Dockyards (Shekou) Limited Buildings Negotiation 2,025,218.14 2,439,540.40
Buildings and
Other related parties Negotiation 1,573,182.07 3,355,566.56
Land use right
Total 15,598,050.71 10,304,033.98
The Group as the lessee:
Unit：RMB
Pricing and Lease payment
Lease payment
decision-making recognized in the
Name of lessor Type of leased assets recognized in
procedures of related previous year
the current year
party transactions (restated)
Nanshan Group and its Subsidiaries Buildings Negotiation 70,044,701.50 71,986,357.12
China Merchants Bureau Shekou
Buildings Negotiation 40,961,038.60 41,973,260.20
Industrial Zone Holding Co., Ltd.
China Merchants Property Management
Buildings Negotiation 13,814,358.72 20,284,937.94
Co., Ltd.
Euro Asia Dockyard Enterprise and Buildings and
Negotiation 13,057,843.61 12,938,008.64
development Ltd Land use right
Shenzhen China Merchants Shangzhi
Buildings Negotiation 8,342,789.84 9,905,500.99
Investment Co., Ltd
Shenzhen Nanyou (Holdings) Ltd Buildings Negotiation 3,558,233.30 1,978,376.12
Shenzhen Science and Technology
University Phase II Real Estate Buildings Negotiation 3,541,404.00 3,305,310.00
Management Co., Ltd.
China Merchants Property Management
Buildings Negotiation 3,250,687.11 -
Co., Ltd
China Merchants Godown, Wharf &
Other equipment Negotiation 1,395,479.12 1,433,677.44
Transportation Company Limited
China Merchants Landmark (Shenzhen)
Buildings Negotiation 1,147,441.22 1,038,371.81
Co., Ltd
China Merchants Bureau Logistics
Buildings Negotiation 731,132.08 4,386,792.48
Group Fujian Co., Ltd
Buildings,
Other related parties Land use right and Negotiation 3,142,604.46 2,100,185.74
others
Total 162,987,713.56 171,330,778.48
134
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transaction - continued
(3) The Group as the guarantor
Unit: RMB
Guarantee Starting Guarantee maturity The guarantee has been
Warrantee Credit Line Guarantee amount
Date date completed
2018 year
CMA CGM S.A.(Note) 82,195,789.24 82,195,789.24 June 2013 2033 No
CMA CGM S.A.(Note) 24,982,114.97 12,241,236.33 June 2013 2033 No
Port de Djibouti S.A. 343,160,000.00 24,192,780.00 14 June 2016 14 June 2019 No
Total 450,337,904.21 118,629,805.57
2017 year
CMA CGM S.A. 81,962,196.99 81,962,196.99 June 2013 2033 No
CMA CGM S.A. 27,941,438.37 27,941,438.37 June 2013 2033 No
Port de Djibouti S.A. 76,776,850.00 53,743,795.00 14 June 2016 14 June 2019 No
Total 186,680,485.36 163,647,430.36
Note: CMA CGM S.A. is the other shareholder of Terminal Link SAS which is our group's
associate. Our group has made a commitment for CMA CGM S.A. according to the
guarantee made by CMA CGM S.A to Terminal Link SAS's bank loan and other debt.
The commitment is limited to the 49% interest that our group has in Terminal Link SAS
and the commitment amount is RMB 94,437,025.57. If any other guarantee fees occurred,
our group would make the an compensation.
(4) Relevant party funds borrowing
Unit: RMB
Related parties Loan Amount Starting date Due date Instructions
2018 Year
Borrowings
China Merchants Group Fixed Annual Interest
270,000,000.00 23 April 2018 22 April 2019
Finance Company Limited Rate4.35%
China Merchants Group Fixed Annual Interest
220,000,000.00 17 May 2018 16 May 2019
Finance Company Limited Rate4.35%
China Merchants Group Fixed Annual Interest
80,000,000.00 11 December 2018 10 December 2028
Finance Company Limited Rate4.802%
China Merchants Group Fixed Annual Interest
60,000,000.00 19 June 2018 20 June 2019
Finance Company Limited Rate4.35%
China Merchants Group Fixed Annual Interest
40,000,000.00 20 May 2018 21 May 2019
Finance Company Limited Rate4.35%
China Merchants Group Fixed Annual Interest
30,000,000.00 7 December 2018 6 December 2019
Finance Company Limited Rate4.35%
China Merchants Group Fixed Annual Interest
30,000,000.00 20 December 2018 19 December 2021
Finance Company Limited Rate4.275%
China Merchants Group Fixed Annual Interest
25,000,000.00 6 December 2018 5 October 2021
Finance Company Limited Rate4.75%
China Merchants Group Fixed Annual Interest
20,000,000.00 17 December 2018 16 December 2019
Finance Company Limited Rate4.35%
Total 775,000,000.00
135
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
5. Related party transaction - continued
(4) Relevant Party Funds Borrowing - continued
Unit: RMB
Related Parties Amount From To Remarks
Lending money to
Port of Newcastle and subsidiaries 784,057,712.75 14 June 2018 29 May 2020 Fixed rate at 8.00%
Year 2017
Borrowing money from
CMFC 1,000,000,000.00 24 March 2017 23 March 2018 Fixed rate at 3.83%
CMFC 300,000,000.00 21 April 2017 20 April 2018 Fixed rate at 4.35%
Port de Djibouti S.A. 230,331,618.08 12 November 2017 11 June 2019 Floating rate
CMFC 200,000,000.00 29 September 2017 28 September 2018 Fixed rate at 4.35%
CMFC 150,000,000.00 16 November 2017 15 November 2018 Fixed rate at 4.35%
CMFC 100,000,000.00 14 September 2017 13 September 2018 Fixed rate at 4.35%
CMFC 80,000,000.00 18 December 2017 18 December 2018 Fixed rate at 4.35%
CMFC 30,000,000.00 18 December 2017 18 December 2018 Fixed rate at 4.35%
CMFC 30,000,000.00 22 June 2017 21 June 2018 Fixed rate at 4.35%
Total 2,120,331,618.08
Lending money to
Khor Ambado FZCo 980,134,545.00 10 November 2017 9 November 2018 Floating rate
(5) Compensation for key management personnel
Unit: RMB
Opening balance
Item Closing balance (restated)
Compensation for key management personnel 19,243,010.16 19,437,529.56
6. Amounts due from/to related parties
(1) Amounts due from related parties
Unit: RMB
Opening balance
Item Related parties Closing balance (restated)
Cash and bank CMB 1,274,536,476.91 928,934,746.51
balances CMFC 494,131,151.34 605,402,768.43
Nanshan Group and Its Subsidiary - 1,192,728.52
Total 1,768,667,628.25 1,535,530,243.46
136
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(1) Amounts due from related parties - continued
Unit: RMB
Opening balance
Item Related parties Closing balance (restated)
Notes and accounts Shenzhen Globex e-service Inc. 7,222,351.10 3,508,011.61
receivable Port de Djibouti S.A. 6,387,923.40 1,423,786.05
Qingdao Qianwan United Container Terminal Co., Ltd. 5,112,134.91 4,929,217.77
Ocean Shipping Agency 4,678,761.75 4,983,931.70
China Overseas Harbor Affaris(LAIZHOU) Co., Ltd 1,490,941.09 -
Sinotrans Container Lines Co., Ltd. 1,156,769.47 817,413.49
Great Horn Development Company FZCO 1,486,615.75 2,315,470.86
China Marine Shipping Agency,Shenzhen Company Limited 1,115,972.50 1,350,887.20
China Merchants Shekou Industrial Zone Holdings Co., Ltd. 1,029,573.58 115,180.72
Qingdao Qianwan West Port United Wharf Co., Ltd. 74,485.74 4,371,957.66
Nanshan Group and its subsidiaries - 279,645.50
Other related parties 4,564,416.46 6,137,476.38
Total 34,319,945.75 30,232,978.94
Other receivables Nanshan Group and its subsidiaries 175,976,941.31 194,710,379.10
CHU KONG RIVER TRADE TERMINAL CO., LTD. 59,975,890.00 57,217,355.00
Shanghai International Port (Group) Co., Ltd 50,118,027.14 -
Tianjin Haitian Bonded Logistics Co., Ltd. 34,300,000.00 34,300,000.00
Qingdao Qianwan United Container Terminal Co., Ltd. 25,000,000.00 -
Port de Djibouti S.A 24,411,770.72 23,197,515.92
Port of Newcastle and its subsidiaries 15,858,848.40 -
Zhanjiang Port (Group) Co., Ltd. 9,253,682.23 -
Khor Ambado FZCo 7,332,144.82 6,848,478.86
CSC RoRo Logistics Co., Ltd. 2,899,163.95 -
CMFC 2,565,333.33 -
Euro Asia Dockyard Enterprise and development Ltd. 1,481,149.51 1,413,025.42
Shenzhen Merchants Commercial Property Investment Co.,
1,051,801.58 1,206,519.60
Ltd.
Terminal Link SAS 346,490.00 1,210,417.79
Other related parties 3,293,911.53 4,131,562.24
Total 413,865,154.52 324,235,253.93
Other current assets Khor Ambado FZCo 1,029,478,047.00 980,134,545.00
Modern Terminals Limited - 120,000,000.00
Total 1,029,478,047.00 1,100,134,545.00
Long-term Port of Newcastle and its subsidiaries 784,057,712.75 -
receivables Terminal Link SAS 9,782,367.44 9,669,034.35
Total 793,840,080.19 9,669,034.35
Other non-current
China Merchants Shekou Industrial Zone Holdings Co., Ltd. 43,472,687.00 43,472,687.00
assets
137
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
6. Amounts due from/to related parties - continued
(2) Amounts due to related parties
Unit: RMB
Opening balance
Item Related parties Closing balance (restated)
Short-term borrowings CMFC 640,000,000.00 1,890,000,000.00
Notes and accounts payable Nanshan Group and Its Subsidiary 11,631,575.13 16,968,830.09
Qingdao Qianwan United Container Terminal
5,196,134.76 4,069,171.94
Co., Ltd.
Euro Asia Dockyard Enterprise and
3,698,897.16 3,265,979.26
development Ltd.
Yiu Lian Dockyards Limited 2,204,328.63 1,619,449.67
Other related parties 3,252,253.36 2,521,076.36
Total 25,983,189.04 28,444,507.32
Contract liabilities Zhanjiang Port (Group) Co., Ltd. 1,287,452.83
Other related parties 803,584.16
Total 2,091,036.99
Receipts in advance Other related parties 66,799.01 917,915.58
Other payables China Merchants Zhangzhou 93,258,350.90 93,258,350.90
Terminal Link SAS 46,506,416.54 57,593,466.16
Yihai Kerry investment Co., Ltd. 37,402,426.09 37,402,426.09
Shenzhen Merchants Construction Co., Ltd. 28,379,667.10 36,991,325.43
Sinotrans Co., Ltd. 25,949,781.00 25,949,781.00
Sinotrans Co., Ltd. 22,641,509.43 -
Shenzhen Investment Promotion Real Estate
18,294,814.64 12,999,683.93
Management Co., Ltd.
Shenzhen Merchants Commercial Property
9,355,392.43 9,786,880.69
Investment Co., Ltd.
Port de Djibouti S.A. 2,951,170.40 2,286,980.61
Qingdao Port International Co., Ltd. 2,700,000.00 15,336,000.00
Modern Terminals Limited 1,286,962.56 409,256.64
China Merchants Bureau Food (Shenzhen) Co.,
1,254,271.10 -
Ltd.
CMFC 1,043,521.17 2,304,775.02
China Communications Import & Export Co.,
495,944.18 1,246,375.78
Ltd.
Hong Kong International Enterprises Limited - 128,552,676.45
Shenzhen Merchants Qianhai Industrial
- 1,255,800.00
Development Co., Ltd.
Other related parties 5,840,795.87 5,708,791.51
Total 297,361,023.41 431,082,570.21
Non-current liabilities within China Merchants Steam Navigation Company
- 100,000,000.00
one year Limited
Other current liabilities Port de Djibouti S.A. 241,927,341.05 230,331,618.08
Long-term borrowings China Merchants Steam Navigation Company
- 50,000,000.00
Limited
CMFC 135,000,000.00 -
Total 135,000,000.00 50,000,000.00
138
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(X) RELATED PARTY RELATIONSHIPS AND TRANSACTIONS - continued
7. Other related parties transactions
As Notes (V) 9 stated, the Group signed acquisition agreement with CMU and Gold Newcastle,
the associated company and wholly-owned subsidiary of CMHK respectively. The agreement
stipulates that the Group will purchase from CMU a 50% interest in Gold Newcastle and Gold
Newcastle's joint venture Port of Newcastle, with a final consideration of 605 million Australian
dollars (equivalent to RMB 2,944,265,945.15), including CMU providing the principal to Port of
Newcastle. Interest-bearing shareholder loans of 162.5 million Australian dollars (equivalent to
RMB 788,823,491.63).
(XI) COMMITMENTS AND CONTINGENCIES
1. Significant commitments
(1) Capital commitments
Unit: RMB
Opening balance
Item Closing balance (restated)
Capital commitments that have been entered into but have not been
recognized in the financial statements:
-Commitment to acquisition of long-term assets 3,971,730,917.34 2,635,299,294.22
-Commitment to port construction investment 5,490,560.00 6,047,217,548.20
-Other 26,115,744.09 50,882,109.61
Total 4,003,337,221.43 8,733,398,952.03
(2) Operating lease commitments
As of the balance sheet date, the Group had the following commitments in respect of
non-cancellable operating leases:
Unit: RMB
Opening balance
Item Closing balance (restated)
Minimum lease payments under non-cancellable operating
1,756,853,448.93 1,851,844,563.15
leases:
1st year subsequent to the balance sheet date 125,780,272.12 185,070,168.27
2nd year subsequent to the balance sheet date 51,145,934.81 118,949,570.41
3rd year subsequent to the balance sheet date 43,017,965.02 43,589,813.97
More than 3 years 1,536,909,276.98 1,504,235,010.50
Total 1,756,853,448.93 1,851,844,563.15
139
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
（XI) COMMITMENTS AND CONTINGENCIES – continued
2. Contingencies
Unit: RMB
Opening balance
Item Closing balance (restated)
Contingent liabilities (Note 1) 323,559,335.68 -
Guarantees for associates (Note 2) 118,629,805.57 163,647,430.36
Total 442,189,141.25 163,647,430.36
Note 1:As at 31 December 2018, the TCP Group had significant contingent liabilities arising from
pending legal proceedings in Brazil in respect of disputes with local tax authorities,
employees or former employees of TCP Group and other parties, amounting to
RMB323,559,335.68 (31 December 2017: nil), which, based on the latest estimates of the
management of the Group, is not probable that outflows of resources embodying economic
benefits will be required to settle these obligations. Accordingly, no provision for
litigation claims in respect of the above cases has been made in the condensed
consolidated interim financial information. A counter indemnity in favor of the Group is
executed by the Selling Shareholders pursuant to which the latter indemnify to the Group
for the above contingent liabilities for and up to predetermined amounts and specified
length of time.
Note 2:As at 31 December 2018, the other shareholder of an associate of which the Group held as
to 49% of its issued share capital provided corporate guarantees to the full amount for
certain loan facilities granted by banks to and other obligations borne by the relevant
associate. A counter indemnity in favor of the other shareholder of the associate is
executed pursuant to which the Group undertakes to indemnify the other shareholder 49%
of the liabilities in the aggregate amount of RMB 94,437,025.00 arising from the above
loan facilities and other obligations.
In addition to above, the Group also provides guarantees for banking facilities granted to
and other obligations borne by associates of the Group. The total amount guaranteed by
the Group is RMB 343,160,000.00 and the aggregate amount utilized by the relevant
associates amounted to RMB 24,192,780.00 specified in Notes (V) 9.
During the year ended 31 December 2018, the directors assessed the risk of default of the
associates in serving the aforesaid loan facilities and other obligations at the end of the
reporting period and considered the risk to be insignificant and it is not likely that any
guaranteed amount will be claimed.
In addition to above, no material contingencies that should be disclosed by the Group as at 31
December 2018.
140
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XII) EVENTS AFTER THE BALANCE SHEET
1. Profit appropriation
Unit: RMB
Item Amount
Proposed distribution of profits or dividends (Note) 204,449,011.09
Subject to approval by shareholders'
Profits or dividends declared to be distributed
general meeting
Note: Please refer to Notes (V) 41.
2. Qianhai land restructuring and Joint venture issues
In order to comprehensively promote the industrial development, institutional innovation and new
city construction of Qianhai Shekou Free Trade Zone, the ultimate controlling shareholder of
China Merchants Group signed a framework agreement with Shenzhen-Hong Kong Modern
Services Commission on June 18, 2016. The agreement was established on the formation of a
joint venture to promote the innovation of the management system and mechanism of the Qianhai
Shekou Free Trade Zone, and establishing a cooperation platform to promote the construction of
the free trade zone.
As at 24 December 2018, Shenzhen Urban Planning, Land and Resources Commission, Shenzhen
Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone Administration, China
Merchants Group and other related parties signed the Land Restructuring Agreement, which
clarified the Qianhai Land Specific content such as the implementation scheme, compensation
value, and land use property exchange plan. The Land Restructuring Agreement shall take effect
after being approved by the relevant shareholders' meeting.
An extraordinary meeting of the shareholders of the Company was held on 25 February 2019 and
has approved the disposal of certain parts of the land in Qianhai, Shenzhen, the PRC, which is
held by two subsidiaries of the Group for the purpose of developing the Qianhai-Shekou Free
Trade Zone with affiliates of Shenzhen Qianhai Shenzhen-Hong Kong Modern Services
Commission through the establishment of another joint venture company. The consideration for
the disposal is approximately RMB 5,693,000,000.00.
Up to date of this report, the disposal has not yet been completed.
141
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XII) EVENTS AFTER THE BALANCE SHEET - continued
3. Merge under non-identical control issues
As at 2 January 2019, the Company and Guangdong Sinotrans Co., Ltd. signed the "Share
Transfer Agreement on Zhanjiang Port (Group) Co., Ltd." and transferred the shares of Zhanjiang
Port (Group) held by Guangdong Sinotrans Co., Ltd. 201,034,548 common shares of the company,
accounting for 5% of the total number of issued shares of Zhanjiang Port (Group) Co., Ltd. on the
date of signing the agreement, the consideration for the conversion is RMB 375,334,390.00.
As at 8 January2019, Chiwan Port (Hong Kong) Co., Ltd., a subsidiary of the Company, and
Zhanjiang Infrastructure Construction Investment Group Co., Ltd. and Zhanjiang Port (Group)
Co., Ltd. signed the "Zhejiang Port (Group) Co., Ltd. Limited The Capital Increase Agreement of
the Company (Group) Co., Ltd., the agreement stipulates that Zhanjiang Port (Group) Co., Ltd.
intends to issue 1,853,518,190 common shares at a price of RMB 1.867 per share or equivalent
foreign currency (determined according to the capital exchange rate). Its registered capital
increased to RMB 5,874,209,145.00. Among them, Chiwan Port (Hong Kong) Co., Ltd. intends to
subscribe for 1,606,855,919 ordinary shares, accounting for 27.73544% of the issued shares of
Zhanjiang Port (Group) Co., Ltd. on the date of issue of the subscription shares. The total is RMB
3,000,000,000.77 or the equivalent foreign currency (determined according to the capital
contribution rate).
The above transaction was completed on February 3, 2019. After the transaction, the company
directly holds 3.4223% of the shares of Zhanjiang Port (Group) Co., Ltd., and indirectly holds
Zhanjiang Port through the subsidiary China Merchants International Terminal (Zhanjiang) Co.,
Ltd. 27.5782% of the shares of the Group Co., Ltd., indirectly through the subsidiary Chiwan Port
(Hong Kong) Co., Ltd., holding 27.3544% of Zhanjiang Port (Group) Co., Ltd., and enjoying a
total of 58.3549% of Zhanjiang Port (Group) Co., Ltd. Voting rights.
Except for the subsequent events that need to be disclosed above, the Group has no other
significant issues after the balance sheet date.
(XIII) OTHER SIGNIFICANT EVENTS
1．Significant equity entrusted management matters
As at 13 December 2018, the 10th Extraordinary Meeting of the 9th Board of Directors of the
Company reviewed and approved the signing of the "Equity Custody Agreement of Liaoning Port
Group Co., Ltd." with the China Merchants (Liaoning) Port Development Co., Ltd. The "Proposal"
agrees that the China Merchants Group (Liaoning) Port Development Co., Ltd., a wholly-owned
subsidiary of China Merchants Group, entrusts its 49.9% stake in Liaoning Port Group Co., Ltd. to
the company for management. The China Merchants (Liaoning) Port Development Co., Ltd. The
company pays the company a fixed custodian fee of RMB 1,000,000.00 per year.
142
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIII) OTHER SIGNIFICANT EVENTS - continued
2． Segment reporting
(1) Basis for determining and accounting treatments of reporting segments
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.
From business and financial perspectives, management assesses the performance of the Group's
business operations including ports operation, bonded logistics operation, port-related
manufacturing 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
Bonded logistics operation
Bonded logistics operation includes logistic park operation, ports transportation and airport cargo
handling operated by the Group and its associates.
Other operations
Other operations mainly includes property development and investment and construction of
modular housing operated by the Group's associate, property investment operated by the Group
and corporate function.
143
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIII) OTHER SIGNIFICANT EVENTS - continued
2. Segment reporting - continued
(1) Basis for determining and accounting treatments of reporting segments - continued
Each of the segments under ports operation include the operations of a number of ports in various
locations within the geographic locations, 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 2018, around 64% of The Group's non-current assets other than financial
instruments and deferred tax assets are located in Mainland China.
144
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIII) OTHER SIGNIFICANT EVENTS - continued
2 Segment reporting - continued
(2) Segment financial information
Segment financial information in 2018 as following:
Unit：RMB
Ports operation
Item Mainland China, Hong Kong and Taiwan Unallocated Total
Bonded logistics
Yangtze River Other locations Sub-total Others
Pearl River Delta Bohai Rim Others operation
Delta
Revenue 5,303,465,225.60 - 69,907,311.12 747,571,785.87 3,063,582,986.50 9,184,527,309.09 386,269,027.02 132,598,286.47 - 9,703,394,622.58
Cost 3,093,917,475.00 - 55,661,268.67 631,405,970.58 1,522,302,179.06 5,303,286,893.31 214,495,776.55 221,458,726.01 - 5,739,241,395.87
Segment operating
2,209,547,750.60 - 14,246,042.45 116,165,815.29 1,541,280,807.44 3,881,240,415.78 171,773,250.47 (88,860,439.54) - 3,964,153,226.71
profit (loss)
Adjustment：
Taxes and levies 71,372,197.96 284,627.70 1,160,781.85 10,778,344.95 112,983,856.21 196,579,808.67 32,621,484.27 6,211,213.84 541,296.73 235,953,803.51
Administrative expenses 390,753,695.03 3,749,372.10 9,930,005.82 97,317,524.40 193,183,913.13 694,934,510.48 36,924,775.16 28,852.77 519,977,537.04 1,251,865,675.45
Research and
118,865,768.66 - - - - 118,865,768.66 - - 3,123,329.16 121,989,097.82
development expenses
Financial expenses 33,812,457.43 82,614,789.19 (406,546.82) 19,344.58 419,088,994.19 535,129,038.57 38,623,819.16 51,653,121.27 1,018,012,123.95 1,643,418,102.95
Impairment losses of
- - - - - - - - - -
assets
Impairment of credit
10,760,473.33 - - 10,616.21 (3,410,788.03) 7,360,301.51 168,279.09 - - 7,528,580.60
loss
Other income 32,901,021.72 408,333.33 113,998.17 12,684,291.81 - 46,107,645.03 1,411,014.72 - 8,661,467.89 56,180,127.64
Investment income 143,206,331.48 2,706,435,143.32 322,968,785.89 (21,733,692.03) 592,367,561.64 3,743,244,130.30 17,758,667.43 207,255,360.07 (430,008.32) 3,967,828,149.48
Gains (losses) from
45,351.40 (873,891,271.63) (74,594,618.22) - (125,966,299.23) (1,074,406,837.68) - - - (1,074,406,837.68)
changes in fair value
Gains on disposal of
9,216,008.49 - - (418,481.28) 10,450,227.43 19,247,754.64 26,746.03 - (16,005.34) 19,258,495.33
assets
Operating profit 1,769,351,871.28 1,746,303,416.03 252,049,967.44 (1,427,896.35) 1,296,286,321.78 5,062,563,680.18 82,631,320.97 60,501,732.65 (1,533,438,832.65) 3,672,257,901.15
145
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIII) OTHER SIGNIFICANT EVENTS - continued
2. Segment reporting - continued
(2) Segment financial information - continued
Segment financial information in 2018 as following:
Unit：RMB
Ports operation
Mainland China, Hong Kong and Taiwan Bonded logistics
Item Others Unallocated Total
Other locations Sub-total operation
Yangtze River
Pearl River Delta Bohai Rim Others
Delta
Non-operating income 34,351,337.85 - 424,231.58 1,931,244.58 24,074,268.10 60,781,082.11 1,216,591.28 943,208.69 4,187,807.90 67,128,689.98
Non-operating expenses 40,405,962.28 4,010.31 400,000.00 1,057,097.28 65,315,693.08 107,182,762.95 6,240,627.54 200,000.00 11,407,908.08 125,031,298.57
Gross profit 1,763,297,246.85 1,746,299,405.72 252,074,199.02 (553,749.05) 1,255,044,896.80 5,016,161,999.34 77,607,284.71 61,244,941.34 (1,540,658,932.83) 3,614,355,292.56
Income tax expenses 294,544,209.66 43,364,189.75 12,909,324.23 16,064,881.66 94,332,207.91 461,214,813.21 14,785,763.43 49,933,513.49 202,506,448.47 728,440,538.60
Net profit 1,468,753,037.19 1,702,935,215.97 239,164,874.79 (16,618,630.71) 1,160,712,688.89 4,554,947,186.13 62,821,521.28 11,311,427.85 (1,743,165,381.30) 2,885,914,753.96
Segment assets 24,361,542,350.83 24,738,700,129.24 6,498,939,975.26 11,975,384,175.20 43,137,915,507.68 110,712,482,138.21 2,768,799,649.68 10,986,223,834.86 3,550,578,792.93 128,018,084,415.68
Total assets in the financial statements 128,018,084,415.68
Segment liabilities 3,716,328,520.15 620,013,763.67 108,999,946.50 2,399,865,586.89 11,874,203,103.78 18,719,410,920.99 809,775,291.61 1,161,920,752.31 26,910,051,577.96 47,601,158,542.87
Total liabilities in the financial statements 47,601,158,542.87
Supplementary
information:
Depreciation and 777,378,984.84 - 2,030,173.13 287,332,851.66 698,620,897.88 1,765,362,907.51 80,463,924.42 165,229,175.14 16,903,705.26 2,027,959,712.33
Amortization
Interest income 21,954,329.37 508,539.88 438,043.11 40,225,269.81 84,159,789.64 147,285,971.81 1,052,104.99 828,268.56 123,286,948.50 272,453,293.86
Interest expense 44,507,286.38 1,009,944.96 - 39,664,933.55 398,730,346.09 483,912,510.98 32,382,213.72 39,755,069.06 1,078,051,538.04 1,634,101,331.80
Investment income
from long-term equity
134,907,307.68 2,674,327,364.23 309,435,330.98 (21,882,199.10) 592,062,707.31 3,688,850,511.10 17,758,667.43 207,255,360.07 - 3,913,864,538.60
investment under equity
method
Long-term equity
investment under equity 2,629,326,400.75 23,003,406,812.98 5,696,221,052.02 2,540,719,065.34 10,818,356,531.61 44,688,029,862.70 340,969,759.95 5,147,577,640.75 - 50,176,577,263.40
method
Non-current assets
other than long-term 18,136,739,566.92 296,477,731.85 29,099,361.17 7,816,817,366.31 29,571,968,313.58 55,851,102,339.83 2,206,436,654.13 5,573,444,649.09 480,592,127.03 64,111,575,770.08
equity investment
146
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIII) OTHER SIGNIFICANT EVENTS - continued
2. 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:
Unit：RMB
Opening balance
Revenue from external transactions
Closing balance (restated)
Mainland China, Hong Kong and Taiwan 6,635,924,788.34 6,036,330,920.53
Pearl River Delta 5,705,075,363.71 5,408,964,837.46
Yangtze River Delta - -
Bohai Rim 183,277,638.76 172,188,112.13
Others 747,571,785.87 455,177,970.94
Other locations 3,067,469,834.24 1,508,304,364.43
Total 9,703,394,622.58 7,544,635,284.96
Unit：RMB
Opening balance
Non-current assets
Closing balance (restated)
Mainland China, Hong Kong and Taiwan 73,602,488,004.01 69,066,842,626.11
Pearl River Delta 33,618,069,629.60 31,673,369,539.45
Yangtze River Delta 23,299,884,544.83 21,204,548,605.13
Bohai Rim 6,316,574,360.92 6,271,516,876.96
Others 10,367,959,468.66 9,917,407,604.57
Other locations 40,685,665,029.47 26,038,093,607.43
Total 114,288,153,033.48 95,104,936,233.54
(3) Degree of reliance on major customers
The total operating income derived from the top five clients of the Group is RMB
2,771,538,285.20, occupying 28.56% of the Group's total operating income.
(XIV). NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS
1. Notes and Accounts receivable
(1) Total of notes and accounts receivable
Unit: RMB
Opening balance
Item
Closing balance (restated)
Notes receivable - -
Accounts receivable 23,444,175.65 12,987,394.84
Total 23,444,175.65 12,987,394.84
147
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIV). NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
1. Notes and Accounts receivable - continued
(2) Accounts receivable
(a) Disclosure of accounts receivable by categories - continued
Unit: RMB
Expected credit loss rate Closing balance
Categories
(%) Carrying amount Provision Book value
A 0.00-0.10 23,444,175.65 - 23,444,175.65
B 0.10-0.30 - - -
C 0.30-50.00 - - -
D 50.00-100.00 - - -
Total 23,444,175.65 - 23,444,175.65
(b) In year 2018, the company has no actual write-off of accounts receivable.
(c) The top five balances of accounts receivable classified by debtor
Unit: RMB
Proportion of the
amount to the total
Name of customer Amount Aging
accounts receivable
(%)
Client F 5,566,248.78 Within 1 year 23.74
Client G 3,872,340.00 Within 1 year 16.52
Client H 3,056,777.34 Within 1 year 13.04
Client I 2,910,036.03 Within 1 year 12.41
Client J 1,502,541.05 Within 1 year 6.41
Total 16,907,943.20 72.12
2. Other receivables
(1) Disclosure of other receivables by nature
Unit: RMB
Opening
Item Closing balance
balance(restated)
Interest receivable 34,899.02 -
Dividends receivable 329,153,465.74 589,478,376.49
Other receivables 321,861,868.32 583,090,959.69
Total 651,050,233.08 1,172,569,336.18
148
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS –
continued
2. Other receivables – continued
(2) Interest receivable
(a) Disclosure of interest receivable by categories
Unit: RMB
Opening balance
Category Closing balance
(restated)
Fixed term deposit 34,899.02 -
(b) As at 31 December 31 2018, the Group has no significant overdue interest.
(3) Dividend receivable
(a) Disclosure of dividend receivable by categories
Unit: RMB
Entities Closing balance Opening balance (restated)
Dongguan Chiwan Warf Co., Ltd. ("DGW") 103,355,370.74 103,355,370.74
CHCC 96,378,106.61 97,455,574.40
DGT 88,196,930.66 88,196,930.66
Shenzhen Chiwan Tugboat Co., Ltd 21,929,842.24 21,606,823.62
CMBL 15,707,120.00 -
Shenzhen Chiwan Transportation Co., Ltd 3,299,252.31 2,619,884.81
Shenzhen Chiwan International Freight Agency
286,843.18 193,834.42
Co., Ltd
CCT - 276,049,957.84
Total 329,153,465.74 589,478,376.49
Net: provision of credit loss - -
Book value 329,153,465.74 589,478,376.49
(b) Significant dividend receivable aging more than one year
Unit: RMB
Category Closing balance Outstanding Reason Provision or not
Dongguan Chiwan Warf Working on and expected to be received by
103,355,370.74 No
Co., Ltd. ("DGW") the end of 2019
Working on and expected to be received by
DGT 88,196,930.66 No
the end of 2019
149
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS –
continued
2. Other receivables - continued
(4) Other receivables
(a) Disclosure of other receivables by categories
As a part of cooperate credit risk management, the company rank the credit risk of its client, and
determine the average expected loss rate of each internal credit rating level. These average
expected loss rates are determined by considering the historical actual loss and the current and
future economic situation.
As at 31 December 2018, the credit risk and expected credit loss of other receivables of each
category of customers are presented as below:
Unit: RMB
Closing balance
Expected Loss
Internal credit rating Expected credit loss Lifetime expected credit loss Lifetime expected credit loss Total
Rate (% )
in 12 months (not credit-impaired) (credit-impaired)
A 0.00-0.10 321,861,868.32 - - 321,861,868.32
B 0.10-0.30 - - - -
C 0.30-50.00 - - - -
D 50.00-100.00 - - 383,456.60 383,456.60
Carrying amount 321,861,868.32 - 383,456.60 322,245,324.92
Provision of credit loss - - 383,456.60 383,456.60
Book value 321,861,868.32 - - 321,861,868.32
(a) Changes in provision for credit loss of other receivables
Unit: RMB
2018
Category Expected credit loss in 12 Lifetime expected credit loss Lifetime expected credit loss
months (not credit-impaired) (credit-impaired)
Total
31 Dec 2017 - - 383,456.60 383,456.60
Remeasurement of provision for
- - - -
expected credit loss
1 Jan 2018 - - 383,456.60 383,456.60
Provision for expected credit loss
- - - -
for the year
Reversal of expected credit loss for
- - - -
the year
Effect of changes in the scope of
- - - -
consolidation
Effect of changes in foreign
- - - -
exchange
31 Dec 2018 - - 383,456.60 383,456.60
150
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS –
continued
2. Other receivables - continued
(3) Other receivables - continued
(b) Disclosure of other receivables by nature
Unit: RMB
Nature Closing balance Opening balance (restated)
Amounts due from related parties 316,567,355.24 482,067,880.47
Temporary payments 4,785,167.82 4,360,323.59
Deposits 372,042.31 1,571,309.30
Others 520,759.55 95,474,902.93
Total 322,245,324.92 583,474,416.29
Net: provision of credit loss 383,456.60 383,456.60
Book value 321,861,868.32 583,090,959.69
(c) There is no other receivables write-off during this year.
(d) The top five balances of other receivables classified by debtor
Unit: RMB
Closing
Proportion of the
Entities
Nature of the Closing balance Aging amount to the total
balance of
fund provision for
other receivable (%)
credit loss
DGT Loan to related
165,500,000.00 Within 1 year 51.36 -
parties
Dongguan Chiwan Warf Co., Ltd. Loan to related
151,067,355.24 Within 1 year 46.88 -
("DGW") parties
Chiwan Wharf Holdings (Hong Temporary Within 1 year to 2 year and
2,955,962.35 0.92 -
Kong) Limited payments over 3 year
CCT Temporary Within 1 year
736,080.69 0.23 -
payments
CHCC Temporary Within 1 year
320,239.46 0.10 -
payments
Total 320,579,637.74 99.49 -
151
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS – continued
3. Long-term equity investments
Unit: RMB
Changes
Reconciling items
Investees Opening balance Investment income Cash dividends or
from other Other equity Provision for Closing balance of
under equity profits announced Others
comprehensive movements impairment provision for
method of issuance
Increase Decrease income Closing balance impairment
I. Subsidiaries
Shenzhen Chiwan International Freight
5,500,000.00 - - - - - - - - 5,500,000.00 -
Agency Co., Ltd
CHCC 250,920,000.00 - - - - - - - - 250,920,000.00 -
Shenzhen Chiwan Transportation Co., Ltd 7,000,000.00 - - - - - - - - 7,000,000.00 -
Chiwan Wharf Holdings (Hong Kong)
1,070,000.00 - - - - - - - - 1,070,000.00 -
Limited
Shenzhen Chiwan Tugboat Co., Ltd 24,000,000.00 - - - - - - - - 24,000,000.00 -
CCT 421,023,199.85 - - - - - - - - 421,023,199.85 -
Dongguan Chiwan Warf Co., Ltd. ("DGW") 186,525,000.00 - - - - - - - - 186,525,000.00 -
DGT 175,000,000.00 - - - - - - - - 175,000,000.00 -
Chiwan Shipping (Hong Kong) Limited 1,051,789.43 - - - - - - - - 1,051,789.43 -
CMPORT (note) - 26,170,129,771.99 - - - - - - - 26,170,129,771.99 -
China merchants port (zhoushan) roller
- 149,709,800.00 - - - - - - - 149,709,800.00 -
loading logistics co. LTD
Subtotal 1,072,089,989.28 26,319,839,571.99 - - - - - - - 27,391,929,561.27 -
II. Associates
China Merchants Holdings (International)
16,875,997.65 - - 2,556,570.73 - - 1,158,000.00 - - 18,274,568.38 -
Information Technology Co., Ltd
CMBL 343,318,551.85 - - 12,007,805.81 - 881,145.07 15,707,120.00 - - 340,500,382.73 -
Subtotal 360,194,549.50 - - 14,564,376.54 - 881,145.07 16,865,120.00 - - 358,774,951.11 -
III. Joint ventures
COHA (Laizhou) 783,668,303.84 - - 48,450,765.57 - - 38,562,004.83 - - 793,557,064.58 -
Total 2,215,952,842.62 26,319,839,571.99 - 63,015,142.11 - 881,145.07 55,427,124.83 - - 28,544,261,576.96 -
Note: Details are set out in Notes (VI) 2(2)。
152
CHINA MERCHANTS PORT GROUP CO., LTD.
(FORMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2018
(XIV) NOTES TO THE KEY ITEMS IN THE COMPANY'S FINANCIAL STATEMENTS -
continued
4. Operating income and operating costs
Unit: RMB
2018 2017
Item
Income Cost Income Cost
Principal operating 211,782,804.61 158,561,191.30 230,376,600.39 147,184,443.19
Other operating 32,116,448.46 1,504,260.12 31,751,483.49 756,451.35
Total 243,899,253.07 160,065,451.42 262,128,083.88 147,940,894.54
5. Investment income
(1) Details of investment income
Unit: RMB
Item 2018 2017
Income from long-term equity investments under cost method 121,894,044.34 589,478,376.49
Income from long-term equity investments under equity
63,015,142.10 49,683,858.86
method
Income from Other investments in equity instruments 8,228,975.00
Investment income on available-for-sale financial assets, etc. 9,417,000.00
Total 193,138,161.44 648,579,235.35
(2) Income from long-term equity investments under cost method
Unit: RMB
Reasons for increases or decreases
Investment 2018 2017 in the current compared to the prior
period
The profits distributed by
CHCC 96,378,106.61 97,455,574.40
investee fluctuate
The profits distributed by
Shenzhen Chiwan Tugboat Co., Ltd 21,929,842.24 21,606,823.62
investee fluctuate
Shenzhen Chiwan Transportation Co., The profits distributed by
3,299,252.31 2,619,884.81
Ltd investee fluctuate
Shenzhen Chiwan International The profits distributed by
286,843.18 193,834.42
Freight Agency Co., Ltd investee fluctuate
The profits distributed by
CCT - 276,049,957.84
investee fluctuate
Dongguan Chiwan Warf Co., Ltd. The profits distributed by
- 103,355,370.74
("DGW") investee fluctuate
The profits distributed by
DGT - 88,196,930.66
investee fluctuate
Total 121,894,044.34 589,478,376.49
153
CHINA MERCHANTS PORT GROUP CO., LTD.
(FOMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2018
1. BREAKDOWN OF EXTRAORDINARY GAINS AND LOSSES
Unit: RMB
Item Amounts Remarks
Gains or losses on disposal of non-current assets 6,512,480.64
Tax refunds or reductions with ultra vires approval or without official approval
-
documents
Government grants recognized in profit or loss (except for grants that are closely
related to the Company's business and are in amounts and quantities fixed in 14,050,544.16
accordance with the national standard)
Money lending income earned from non-financial institutions in profit 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 2,685,592,888.44
business combination date (Note)
Gains or losses arising from contingencies other than those related to normal
-
operating business
Gains or losses on changes in the fair value of financial assets and financial
liabilities held for trading and investment income on disposal of held-for-trading
financial assets, held-for-trading financial liabilities and available-for-sale -
financial assets, other than the effective hedging activities relating to normal
operating business
Reversal of provision for accounts receivable that are tested for credit 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 -
Other non-operating income or expenses other than above (3,767,817.73)
Other profit or loss that meets the definition of non-recurring profit or loss(note) (121,311,211.59)
Tax effects (3,010,149.89)
Effects of minority interest (after tax) (2,003,803,627.07)
Total 574,263,106.96
Note: The main amount is the agent fees of China Merchants Port Group Co., Ltd. (formally known as
"Shenzhen Chiwan Wharf Holdings Limited" (hereinafter referred to as "the company"), resulted
from business combination of enterprises under common control.
154
CHINA MERCHANTS PORT GROUP CO., LTD.
(FOMERLY KNOWN AS "SHENZHEN CHIWAN WHARF HOLDINGS LIMITED")
SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2018
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.
Unit: RMB
Weighted average ESP
Category
return on net assets (%) Basic ESP Diluted EPS
Net profit for the current period attributable to ordinary
3.8830 0.6080 0.6080
shareholders
Net profit attributable to ordinary shareholders after
1.8380 0.2878 0.2878
deducting extraordinary gains and losses
155
