China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
Stock Code: 001872/201872 Stock Name: CM Port Group, CM Port Group B Announcement No. 2019 -075
CHINA MERCHANTS PORT GROUP CO., LTD.
THE REPORT FOR THE THIRD QUARTER OF 2019
Date of Disclosure: 31 October 2019
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior manage ment 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 mate rial omissions therein.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
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.
Securities Times, Hong Kong Ta Kung Pao and the cninfo website are media designated by
the Company for information disclosure. All information disclosed by the Company on above
designated media shall prevail.
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.
1
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
Definitions
Term Definition
The “Company”, “CM Port” China M erchants Port Group Co., Ltd., formerly named as Shenzhen Chiwan Wharf Holdings
or “we” Limited
CMG China M erchants Group Co., Limited
China M erchants Investment Development Company Limited, the Chinese name is “招商局投
CM ID
资发展有限公司”
CMPort Holdings China M erchants Port Holdings Company Limited (00144.HK)
Zhanjiang Port Zhanjiang Port (Group) Co., Ltd.
Broadford Global Broadford Global Limited, a wholly-owned subsidiary of CMG Hong Kong
China M erchants Gangtong Development (Shenzhen) Co., Ltd., a Broadford Global
CMGD
wholly-owned subsidiary in Shenzhen
Lac Assal Lac Assal Investment Holding Company Limited
CM Qianhai Industrial Shenzhen China M erchants Qianhai Industrial Development Co., Ltd.
SIPG Shanghai International Port (Group) Co., Ltd.
TCP TCP Participaes S.A., Paranagua, Brazil
HIPG Hambantota International Port Group , Hambantota, Sri Lanka
Djibouti Asset Company KHOR AM BADO FZCO
SZSE Shenzhen Stock Exchange
CMG Finance China M erchants Group Finance Co., Ltd.
The “Articles of
The Articles of Association of China M erchants Port Group Co., Ltd.
Association”
The “Stock Listing Rules” The Stock Listing Rules of the Shenzhen Stock Exchange
The cninfo website www.cninfo.com.cn
TEU Twenty Foot Equivalent Unit
RM B Expressed in the Chinese currency of Renminbi
RM B’0,000 Expressed in tens of thousands of Renminbi
RM B’00,000,000 Expressed in hundreds of millions of Renminbi (unless otherwise specified)
2
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
Part II Key Corporate Information
I Key Accounting Data and Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reasons for the retrospective adjustments or restatements: 1. Changes to accounting policies. For details, please
refer to “XIII YoY Changes to Accounting Policies, Estimates and Methods” under “Part III Significant Events” in
this report; 2. A business combination under common control. The Company completed the issuance of shares to
the trading counterpart CMID on 25 December 2018 and took control of CMPort Holdings in form and in nature.
In accordance with the Accounting Standards for Business Enterprises No. 33-Consolidated Financial Statements,
the Company starts to include CMPort Holdings into the consolidated financial statements since December 2018.
Therefore, the Company adjusted the comparative financial data in the table below as required by the rules
governing business combinations under common control.
Change (%)
30 September 2019 31 December 2018
Restated
Total assets (RMB) 152,633,216,405.25 128,018,084,415.68 19.23%
Equity attributable to the listed
33,006,062,129.65 30,760,475,412.93 7.30%
company’s shareholders (RM B)
Q3 2019 YoY change (%) Q1~Q3 2019 YoY change (%)
Operating revenue (RM B) 3,178,406,039.64 22.75% 9,012,759,460.97 24.11%
Net profit attributable to the listed
171,091,424.23 -38.20% 2,470,272,754.81 175.43%
company’s shareholders (RM B)
Net profit attributable to the listed
company’s shareholders before 155,647,010.17 14.46% 725,052,340.93 59.93%
exceptional items (RM B)
Net cash generated from/used in
-- -- 3,956,552,986.35 26.97%
operating activities (RM B)
Basic earnings per share
0.095 -38.31% 1.377 175.40%
(RM B/share)
Diluted earnings per share
0.095 -38.31% 1.377 175.40%
(RM B/share)
Weighted average return on equity
0.52% -0.43% 7.74% 4.63%
(%)
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China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
Total share capital up to the former trading date before the disclosure:
Total share capital up to the former trading date before the
1,793,412,378
disclosure (share)
Fully diluted EPS calculated by the newest share capital:
Fully diluted EPS calculated by the newest share capital
1.377
(RM B/share)
Exceptional gains and losses:
√ Applicable □ Not applicable
Unit: RM B
Item Q1-Q3 2019 Note
Gain or loss on disposal of non-current assets (inclusive of impairment
4,172,553,224.00 -
allowance write-offs)
Government subsidies charged to current profit or loss (exclusive of
government subsidies given in the Company’s ordinary course of
93,398,328.01 -
business at fixed quotas or amounts as per the government’s uniform
standards)
Capital occupation charges on non-financial enterprises that are
26,105,690.91 -
recorded into current profit or loss
Gain or loss on fair-value changes in trading financial assets and
Gain or loss on fair value
liabilities, as well as derivative financial assets and liabilities & income
changes in financial assets
from disposal of trading financial assets and liabilities, derivative
651,390,184.96 and liabilities at fair value
financial assets and liabilities, as well as investments in other debt
through profit or loss held in
obligations (exclusive of effective portion of hedges that arise in the
this year
Company’s ordinary course of business)
Reverse of bad debt provision of accounts receivable and contract
886,165.84 -
assets individually conducting impairment test
Non-operating income and expense other than the above 4,111,751.77 -
The Company realized its
control over Zhanjiang Port in
this year and recognized the
investment income by fair
Other gains and losses that meet definition of nonrecurring gain/loss 722,688,249.35
value regarding the original
long-term equity investment
in Zhanjiang Port under
equity method
Less: Income tax effects 1,213,811,582.86 -
M inority interests effects (after tax) 2,712,101,598.10 -
Total 1,745,220,413.88 --
Explanation of why the Company reclassifies as recurrent an 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:
□ Applicable √ Not applicable
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China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
No such cases for the Reporting Period.
II Total Number of Shareholders and Holdings of Top 10 Shareholders at 30 September 2019
1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders
34,452 (including 23,286 Number of preferred shareholders
Number of ordinary shareholders at the
A-shareholders and 11,166 with resumed voting rights at the 0
period-end
B-shareholders) period-end (if any)
Top 10 shareholders
Nature of Shareholding Restricted
Name of shareholder Total shares held Pledged or frozen shares
shareholder percentage shares held
China M erchants Investment Foreign
64.05% 1,148,648,648 1,148,648,648 0
Development Company Limited legal person
China M erchants Gangtong State-owned
20.68% 370,878,000 0 0
Development (Shenzhen) Co., Ltd. legal person
State-owned
Broadford Global Limited 3.08% 55,314,208 0 0
legal person
CM BLSA RE FTIF TEM PLETON Foreign
1.80% 32,276,393 0 Unknown
ASIAN GRW FD GTI 5496 legal person
Foreign
NORGES BANK 0.16% 2,802,863 0 Unknown
legal person
China M erchants Securities (HK) State-owned
0.14% 2,580,267 0 Unknown
Co., Ltd. legal person
Domestic
M ai Shuqing natural 0.13% 2,376,747 0 Unknown
person
Domestic
Shen Huailing natural 0.08% 1,519,849 0 Unknown
person
VANGUARD EM ERGING
Foreign
MARKETS STOCK INDEX 0.07% 1,326,082 0 Unknown
legal person
FUND
Domestic
Chen Zehong natural 0.07% 1,240,000 0 Unknown
person
Top 10 unrestricted shareholders
Shares by type
Name of shareholder Unrestricted shares held
Type Shares
5
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
China M erchants Gangtong Development RM B-denominated
370,878,000 370,878,000
(Shenzhen) Co., Ltd. ordinary stock
Domestically
Broadford Global Limited 55,314,208 55,314,208
listed foreign stock
CM BLSA RE FTIF TEM PLETON ASIAN Domestically
32,276,393 32,276,393
GRW FD GTI 5496 listed foreign stock
Domestically
NORGES BANK 2,802,863 2,802,863
listed foreign stock
Domestically
China M erchants Securities (HK) Co., Ltd. 2,580,267 2,580,267
listed foreign stock
RM B-denominated
M ai Shuqing 2,376,747 2,376,747
ordinary stock
Domestically
Shen Huailing 1,519,849 1,519,849
listed foreign stock
VANGUARD EM ERGING MARKETS STOCK Domestically
1,326,082 1,326,082
INDEX FUND listed foreign stock
RM B-denominated
Chen Zehong 1,240,000 1,240,000
ordinary stock
Industrial and Commercial Bank of
RM B-denominated
China-Fullgoal China Securities Dividend Index 1,128,901 1,128,901
ordinary stock
Enhanced Securities Investment Fund
China M erchants Gangtong Development (Shenzhen) Co., Ltd. is a wholly -owned
subsidiary of Broadford Global Limited, and Broadford Global Limited is the
Related or acting-in-concert parties among the
controlling shareholder of China M erchants Investment Development Company
shareholders above
Limited. The Company does not know whether the other unrestricted shareholders
are related parties or not.
Top 10 ordinary shareholders involved in
N/A
securities margin trading (if any)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the
Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases for the Reporting Period.
2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
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China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
Part III Significant Events
I Changes in Major Accounting Data and Financial Indicators for the Reporting Pe riod，As
Well As Reasons for Such Changes
√ Applicable □ Not applicable
Item 30 September 2019 1 January 2019 Change (%) Explanation of changes
The inclusion of Zhanjiang Port as a new entity into
Notes receivable 183,280,331.85 11,608,669.43 1478.82%
the consolidated financial statements of this year
The inclusion of Zhanjiang Port as a new entity into
Accounts receivable 2,000,684,891.11 1,109,230,503.08 80.37%
the consolidated financial statements of this year
Recovery of shareholder loans provided for Djibouti
Other current assets 256,563,223.61 1,195,421,189.12 -78.54%
Asset Company in this year
Investments in other equity
576,268,518.53 247,848,314.30 132.51% An new investment in Lac Assal in this year
instruments
The execution of new standards governing leases in
this year and the inclusion of Zhanjiang Port as a
Right-of-use assets 7,800,820,483.13 6,549,564,031.55 19.10%
new entity into the consolidated financial statements
of this year
Comprehensively influenced by the inclusion of
Zhanjiang Port as a new entity into the consolidated
Fixed assets 25,876,417,875.48 17,477,797,429.30 48.05%
financial statements of this year and new standards
governing leases
Comprehensively influenced by the inclusion of
Zhanjiang Port as a new entity into the consolidated
Other non-current assets 2,090,965,196.70 395,191,485.98 429.10%
financial statements of this year and reclassification
of the land to be replaced located in Qianhaiwan
Comprehensively influenced by the inclusion of
Zhanjiang Port as a new entity into the consolidated
Short-term borrowings 9,508,679,077.29 3,427,365,512.21 177.43%
financial statements of this year and increase in
short-term borrowings out of operating capitals.
Recognition of taxes in relation to land integration
Taxes payable 1,589,840,943.85 345,183,422.42 360.58%
and reorganization in Qianhai in this year
Accrual of 2019 interim dividends for
Dividends payable 601,041,503.21 66,052,207.09 809.95% non-controlling interests by the main subsidiary
CMPort Holdings in this year
Comprehensively influenced by the inclusion of
Current portion of
5,331,155,487.58 2,903,320,877.97 83.62% Zhanjiang Port as a new entity into the consolidated
non-current liabilities
financial statements of this year and reclassification
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China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
of bonds payable due within one year.
Issue of SCP in this year and the inclusion of
Other current liabilities 1,462,750,847.15 602,659,721.80 142.72% Zhanjiang Port as a new entity into the consolidated
financial statements of this year
The execution of new standards governing leases in
this year and the inclusion of Zhanjiang Port as a
Leasing liabilities 1,703,624,315.56 1,020,239,824.73 66.98%
new entity into the consolidated financial statements
of this year
The inclusion of Zhanjiang Port as a new entity into
the consolidated financial statements of this year and
Deferred income 1,472,709,970.09 228,658,214.64 544.07%
a government subsidy for the western channel in the
current year
The inclusion of Zhanjiang Port as a new entity into
Deferred income tax
3,908,205,769.54 2,911,074,941.27 34.25% the consolidated financial statements of this year and
liabilities
withholding income tax from dividends in this year
Item Q1~Q3 2019 Q1~Q3 2018 Change (%) Explanation of changes
The inclusion of Zhanjiang Port as a new entity into
the consolidated financial statements of the current
Cost of sales 5,578,083,009.08 4,083,642,812.31 36.60% period, and the inclusion of TCP as a new entity in
the consolidation financial statements in February
2018
The inclusion of Zhanjiang Port as a new entity into
the consolidated financial statements of the current
Administrative expense 996,281,408.36 727,114,780.51 37.02% period, and the inclusion of TCP as a new entity in
the consolidation financial statements in February
2018
The Company took control of Zhanjiang Port in the
current period, and return on investment was
Investment income 3,437,560,891.43 2,334,080,699.12 47.28%
recognized and measured on the long-term equity
investment in Zhanjiang Port formerly at fair value
Gain on changes in fair Increase in net gains on fair value of trading
278,440,925.78 -682,729,854.10 140.78%
value financial assets held
Compensation income from land within the scope of
Asset disposal income 4,171,684,760.29 -3,636,782.41 114808.12%
land integration and reorganization in Qianhai
Income tax generated from the new land
Income tax expense 2,167,283,540.59 560,348,680.84 286.77%
compensation claims
Item Q1~Q3 2019 Q1~Q3 2018 Change (%) Explanation of changes
Cash received from other A government subsidy for the western channel in the
826,743,586.32 505,434,007.65 63.57%
operating activities current year
Payments for commodities The inclusion of Zhanjiang Port as a new entity into
2,607,802,429.06 1,938,269,025.06 34.54%
and services the consolidated financial statements of the current
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China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
period, and the inclusion of TCP as a new entity in
the consolidation financial statements in February
2018
The inclusion of Zhanjiang Port as a new entity into
the consolidated financial statements of the current
Cash paid to and for
1,884,322,010.85 1,299,781,660.28 44.97% period, and the inclusion of TCP as a new entity in
employees
the consolidation financial statements in February
2018
The inclusion of Zhanjiang Port as a new entity into
the consolidated financial statements of the current
Taxes paid 697,239,343.97 508,671,731.22 37.07% period, and the inclusion of TCP as a new entity in
the consolidation financial statements in February
2018
Difference in times for dividend of SIPG in two
Return on investment 1,409,672,809.32 460,620,212.63 206.04%
years
Cash received from the
disposal of fixed assets, Compensation income from land within the scope of
6,135,808,673.12 8,214,912.89 74591.10%
intangible assets and other land integration and reorganization in Qianhai
long-lived assets
Comprehensively influenced by recovery of
principal of structured deposits, by recovery of a
Cash received from other
4,062,782,125.98 121,000,000.00 3257.67% borrowing by shareholders and the inclusion of
investing activities
Zhanjiang Port as a new entity into the consolidated
financial statements of the current period
The inclusion of Zhanjiang Port as a new entity into
Payments for the
the consolidated financial statements of the current
acquisition of fixed assets,
2,451,110,448.40 1,647,474,893.85 48.78% period, and the inclusion of TCP as a new entity in
intangible assets and other
the consolidation financial statements in February
long-lived assets
2018
Payments for capital increase in CM Qianhai
Payments for investments 7,828,684,852.29 3,558,918,904.65 119.97%
Industrial in this year
Net payments for the
acquisition of subsidiaries - 9,317,382,826.55 -100.00% Payments for projects of TCP and HIPG last year
and other business units
Cash paid in other The purchase of structured deposits not repaid on
1,303,951,129.78 25,463,390.79 5020.89%
investing activities demand in this year
Borrowings obtained 12,838,230,272.62 30,277,177,842.54 -57.60% Decrease in borrowings obtained in this year
II Progress, Influence and Solutions with regard to Significant Events
√ Applicable □ Not applicable
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China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
1. Index to Information Disclosure
In the reporting period, the Company disclosed the following significant events on Securities Times, Ta Kung Pao
and http://www.cninfo.com.cn:
10
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
Announcement
No. Date Title
No.
1 2019-054 3 July 2019 Announcement on Implementation of Equity Assignation of 2018
2 2019-055 11 July 2019 Announcement on Semi-annual Performance Estimation of 2019
3 2019-056 16 July 2019 Announcement on Voluntary Disclosure of the Business Volume Data of June 2019
4 2019-057 16 August 2019 Announcement on Voluntary Disclosure of the Business Volume Data of July 2019
5 2019-058 16 August 2019 Announcement on Resignation of Securities Affairs Representative
Announcement on Voluntary Disclosure of Signing the Strategic Cooperation Frame
6 2019-059 30 August 2019
Agreement
7 2019-060 31 August 2019 Announcement on the Resolutions of the 6th M eeting of the 9th Board of Directors
8 2019-061 31August 2019 Announcement on the Resolutions of the 6th M eeting of the 9th Supervisory Committee
2019-062 31August 2019 Abstract of Interim Report of 2019
9
2019-062 31August 2019 Abstract of Interim Report of 2019 (English version)
10 2019-063 31August 2019 Announcement on Changes in Accounting Policies
11 2019-064 31August 2019 Announcement on Issuing the Interim Results of Controlled Subsidiaries in 2019
Announcement on Online Investor Seminar of Semi-annual Performance in 2019 and
12 2019-065 31August 2019
Participating in a Unified Investor Day for the Listed Companies of 2019 in Shenzhen
Announcement on Resolutions of the 8 th Extraordinary M eeting of 9th Board of
13 2019-066 7 September 2019
Directors in 2019
Announcement on Providing Financial Aid and Connected transaction to Holding
14 2019-067 7 September 2019
Subsidiaries
15 2019-068 16 September 2019 Announcement on Voluntary Disclosure of the Business Volume Data of August 2019
Progress of any share repurchase:
□ Applicable √ Not applicable
Progress of any reduction of the repurchased shares through centralized bidding:
□ Applicable √ Not applicable
III Commitments that the Company’s Actual Controller, Shareholders, Related Parties,
Acquirers, the Company Itself or Other Parties, Failed to Fulfill on Time during the
Reporting Period
No such cases in the Reporting Period.
11
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
IV Operating Performance Forecast for 2019
Warning of a forecast loss on or a forecast significant year-on-year change in the net profit made during the period from the
beginning of the year to the end of the next reporting period, as well as explanation of why:
□ Applicable √ Not applicable
V Securities Investments
√ Applicable □ Not applicable
Unit: RM B
Gain/loss on Cumulative
Purchased Sold in
Variety Accounting fair value fair value Gain/loss in
Code of Name of Initial Beginning in the the Ending carrying Accounting Funding
of measurement changes in the changes the Reporting
securities securities investment cost carrying value Reporting Reporting value item resources
securities model Reporting recorded P eriod
P eriod P eriod
P eriod into equity
Trading
Fair value
601018 Ningbo Port 592,183,095.14 1,361,414,474.58 114,517,739.90 - 0.00 0.00 38,672,165.11 1,520,382,032.52 financial Self-owned
Stock
method
assets
Trading
Fair value
06198 Qingdao Port 124,405,138.80 190,401,046.01 -16,959,420.50 - 0.00 0.00 15,697,928.28 178,625,688.00 financial Self-owned
Stock method
assets
Trading
Fair value
601298 Qingdao Port 331,404,250.30 413,280,000.00 253,120,000.00 - 0.00 0.00 42,526,400.00 666,400,000.00 financial Self-owned
Stock method
assets
Investments
Ninghu Fair value in other
600377 1,120,000.00 9,800,000.00 - 442,500.00 0.00 0.00 460,000.00 10,390,000.00 Self-owned
Stock Expressway method equity
instruments
Investments
P etrochemical Fair value in other
400032 3,500,000.00 382,200.00 - - 0.00 0.00 - 382,200.00 Self-owned
Stock A1 method equity
instruments
Investments
Fair value in other
400009 Guang Jian 1 27,500.00 17,000.00 - - 0.00 0.00 - 17,000.00 Self-owned
Stock
method equity
instruments
Other investment securities at the
- -- - - - - - - - -- --
period-end
Total 1,052,639,984.24 -- 1,975,294,720.59 350,678,319.40 442,500.00 0.00 0.00 97,356,493.39 2,376,196,920.52 -- --
VI Wealth Manage ment Entrustment
□ Applicable √ Not applicable
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China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
No such cases in the Reporting Period.
VII Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Communications with the Investment Community such as Researches, Inquiries and
Inte rvie ws during the Reporting Period
√ Applicable □ Not applicable
Type of
Way of
Date communication Index to main information communicated
communication
party
1 July 2019 to By phone/
Individual M ain inquiry: basic business condition, investments and
30 September 2019 written inquiry
financial condition of the Company;
M eeting in
5 September 2019 Institution M aterials provided: brochure of the Company;
Investment Bank
Index: SZSE EasyIR
By one-on-one
25 September 2019 Institution (http://irm.cninfo.com.cn/ssessgs/S001872/index.html)
meeting
Times of communications 25
Number of institutions communicated with 2
Number of individuals communicated with 23
Number of other communication parties 0
Tip-offs or leakages of substantial confidential information
No
during the communications
IX Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties
for Non-Ope rating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Progress Made on Internal Control
13
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
The focuses of risk control for Q3 2019 are as follows:
1. Establishment and Evaluation of Internal Control System
(1) Establishment of internal control system
In Q3 2019, the Company issued the Rules for Audit Committee under the Board of Directors of China Merchants
Port Group Co., Ltd., among others, improved its management level control and compliance requirements for the
Company and finished the first draft of the eighteen-business-process involved in the management of the
headquarters of the Company. Currently, the Company is seeking for opinions on the said first draft from all
departments and plans to publish it at the end of the year.
(2) Carrying out the establishment and evaluation of internal control system on a regular basis
In Q3 2019, all units conducted system carding and self-evaluation by sampling regarding internal control
pursuant to the annual internal control system establishment and evaluation work program. The Company’s work
group of risk control reexamined all units’ working papers regarding internal control and reported problems in risk
control for the Q2 2019 so as to continuously promote all units’ internal control system establishment and
evaluation more regulated. As of now, the Company and its subsidiaries completed the amendments to 129
systems, increased 109 systems and found 38 defects of internal control among which 35 have been rectified. For
the three defects not rectified, the rectification plan has been formulated.
(3) Popping up online of the risk control information system platform
In accordance with the work program of risk control information system, the headquarters of the Company
completed the entry of initial data including the risk database, progress system, self-evaluation papers, internal
control defects and risk issues. Moreover, the Company also put forward advices about optimizing the risk control
information platform and feedbacks, which provided strong supports for the formal popping up online of the
system at the end of the year.
2. Risk Management
(1) Major risks for 2019 were monitored
According to the divis ion of risk responsibility and fixed risk management strategies (solutions), combined the
risk matters and annual emphasis of the Company together, tracked and monitored the top ten risks for 2019
timely, no significant risk matter was occurred in the third quarter of the Company.
(2) The top ten risks assessment of 2020 was carried out.
14
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
The units included in the risk management system shall carry out the top ten risks assessment of 2020. Based on
the top ten risks list formed through the completion of the top ten risks selection in every unit respectively, China
Merchants Port Group Co., Ltd. gave scores in two rounds through organizing the leaders of the Company, all
departments in headquarters and management layer in subsidiaries, and selected the risks ranking top ten of 2020.
The Company completed the division of responsibility and has drawn the management strategies and measures for
risk matters.
(3) Specific prevention and control for risks
As for the third quarter of 2019, underscoring the specific prevention and control and investigation of risks
matters, the Company tracked dynamic risks of six innovation-type investment projects and control the risk
exposure strictly; and investigated the headquarters of ports and financing trading business of all management and
control enterprises, which there is no financing trading business yet.
(4) Construction of risk management tools
According to the work plan, the work program of risk preference degree and tolerance was implemented, and the
risk limitation index (including six business sectors, such as market, credit, management, operation, debt paying
ability and investment, and 15 specific indexes) was further formulated. From two dimensions between index
conforming to the Company’s actual operation and index able to put into operation (the index assess is unified
with the existing system assess), the internal control audit department, finance management department and
operation management department have made the second-round discussion and communication, and the quota
index of risk preference degree of China Merchants Port Group Co., Ltd. (first draft) was taken shape, further
improving the construction of risk management and control in advance of the Company.
XII Deposits in and Loans Provided by a Finance Co mpany
The Proposal on Signing Financial Service Agreement with Sinotrans & CSC Finance Co., Ltd. was reviewed and
approved on the 2nd Meeting of the 9th Board of Directors held by the Company on 23 August 2017, in which, the
Company was agreed to signed the Financial Service Agreement with Sinotrans & CSC Finance Co., Ltd.
(renamed China Merchants Group Finance Co., Ltd. from August 2017) with the period of three years.
The Proposal on Adjusting Limit of Deposits and Loans and Signing Supplementary Agreement to Financial
Service Agreement with China Merchants Group Finance Co., Ltd and the Related-party Transactions was
th th
reviewed and approved on the 5 Meeting of the 9 Board of Directors held by the Company on 28 March 2019,
in which, the Company was agreed to signed Supplementary Agreement to Financial Service Agreement with
15
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
China Merchants Group Finance Co., Ltd.
At the end of the Reporting Period, deposits in and loans provided by China Merchants Group Finance Co., Ltd.
were as follows:
Unit: RMB’0,000
Item Beginning balance Increase Decrease Ending balance
I. Deposits in China M erchants Group Finance Co.,
Ltd. 49,413.12 610,048.94 608,092.64 51,369.41
II. Loans provided by China M erchants Group
Finance Co., Ltd. 77,500.00 129,248.39 125,800.00 80,948.39
XIII Explain Change of the Accounting Policy, Accounting Estimate and Measure ment
Methods as Compared with the Financial Reporting of Last Year
The Accounting Standards for Business Enterprises No. 21 – Lease (hereinafter referred to as “New lease
standard”) revised and issued by Ministry of Finance on 7 December 2018 required that enterprises listed both
domestically and overseas and enterprises listed overseas who prepare the financial statements by International
Financial Reporting Standards or Accounting Standards for Business Enterprises shall implement it form 1
January 2019, and other enterprises implementing the Accounting Standards for Business Enterprises shall
implement it from 1 January 2021. According to the requirements of Ministry of Finance, enterprises whose
subsidiaries are listed overseas and prepare the financial statements by International Financial Reporting
Standards or Accounting Standards for Business Enterprises can implement the new lease standard in advance.
The Company, in accordance with the requirements of Ministry of Finance, implemented the new lease standard
from 1 January 2019. For details, see Announcement on Changes in Accounting Policies (Announcement No.:
2019-031) published by the Company on http://www.cninfo.com.cn dated 30 March 2019. According to the
regulations of the new standards, the Company did not adjust the information during comparative period, executed
the accumulative influence number of the standard for the first time, and adjusted the beginning retained earnings
and the amount of other related items in financial statements.
On 30 April 2019, Ministry of Finance revised and issued the Format of Financial Statements of General
Enterprises in 2019 with partial adjustment to the format of the financial statements. The alternation of format of
the financial statements of the Company was executed in the interim report of 2019. For details, see the
Announcement on Changes in Accounting Policies (Announcement No.: 2019-063) published by the Company on
http://www.cninfo.com.cn dated 31 August 2019.
16
China M erchants Port Group Co., Ltd. The Report for the Third Quarter of 2019
On 19 September 2019, Ministry of Finance revised and issued the Format of Consolidated Financial Statements
(2019 edition) with partial adjustment to the format of the financial statements based on the Format of Financial
Statements of General Enterprises in 2019 and Format of Financial Statements of Financial Enterprises in 2018.
The alternation of format of the financial statements of the Company was executed in the report for the third
quarter on 30 September 2019. For details, see the Announcement on Changes in Accounting Policies
(Announcement No.: 2019-076) published by the Company on http://www.cninfo.com.cn dated 31 October 2019.
The Board of Directors
China Merchants Port Group Co., Ltd
31 October 2019
17
